EXHIBIT 7.5
Plan of Reorganization and Exchange Agreement
This Plan of Reorganization and Exchange Agreement (the "Agreement") is
made and entered into as of the 1st day of July 1999 by and between Commercial
Labor Management, Inc., a Nevada corporation ("CLMI"), Zeros & Ones, Inc., a
Delaware corporation ("ZOI"), Xxxxxx Xxxxx, an individual ("Xxxxx"), and EKO
Corporation, a Delaware corporation ("EKO"), with respect to the following
facts:
RECITALS
A. This Agreement hereby supercedes and replaces the Plan of
Reorganization and Exchange Agreement made and entered into as
of March 26, 1999 by and between ZOI, Xxxxx, and EKO.
X. Xxxxx owns 50% of the total issued and outstanding capital
stock of EKO and ZOI owns 50% of the total issued and
outstanding capital stock of EKO.
C. EKO is an Internet based commerce oriented online service and
virtual community for entertainment professionals.
D. ZOI is engaged in the business of providing Internet and media
consulting services, in designing and operating Internet
websites, building and licensing Internet core technology, and
providing software consulting services.
E. CLMI is a public reporting company trading on the OTC Bulletin
Board. CLMI was incorporated for the purpose of engaging in
any lawful business.
F. CLMI desires to acquire the 50% of the total issued and
outstanding stock of EKO owned by Xxxxx in exchange for 5,000
shares of the Common Stock of CLMI, to be issued to Xxxxx in
accordance with this Agreement.
G. The plan of reorganization evidenced by this Agreement is
intended to be a tax free reorganization under Section 368 of
the Internal Revenue Code of 1986, as amended. It is part of
an overall tax free plan of reorganization pursuant to which
CLMI is also acquiring 100% of the assets of ZOI and 100% of
the total issued and outstanding stock of Quantum Arts, Inc.
Wood Ranch Technology Group, Inc., Kidvision, Inc, Pillar West
Entertainment, Inc. and Polygonal Research Corporation.
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency to which are hereby acknowledged by the parties to this Agreement,
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and in light of the above recitals to this Agreement, the parties to this
Agreement hereby agree as follows:
1. Exchange of Equity Interests
----------------------------
In consideration for the issuance of a total of 5,000 shares of the
Common Stock, par value $.001 per share, of CLMI to Xxxxx and the other
covenants of CLMI in this Agreement, Xxxxx hereby agrees to convey to CLMI all
of Xxxxx'x capital stock and right, title and interest in and to EKO, effective
as of the date first above written.
2. Closing and Further Acts
------------------------
The closing of the exchange (the "Closing") will occur as soon
practicable after the execution of this Agreement by all parties hereto, but not
later than July 1, 1999 ("Closing Date"). At the Closing, Xxxxx will tender to
CLMI certificates and any other documents evidencing 100% of Xxxxx'x ownership
in EKO, and CLMI will deliver to Xxxxx a stock certificate evidencing 5,000
shares of the Common Stock, par value $.001 per share, of CLMI being issued to
Xxxxx pursuant to this Agreement. All parties to this Agreement hereby agree to
execute all other documents and take all other action which are reasonably
necessary or appropriate in order to effect all of the transactions contemplated
by this Agreement.
3. Covenants of CLMI
-----------------
3.1 Management of CLMI and EKO After Closing.
----------------------------------------
After the Closing, Xxxxx will be a director of CLMI and the Chairman of
the Board of Directors of EKO. It is expected that Xxxxxxx Xxxxxxxxx will be the
Chief Executive Officer of EKO. CLMI agrees that for the first year after the
Closing, EKO will have a Board of Directors consisting of three to five members,
all of whom will be designated by Xxxxx.
3.2 Percentage Ownership in CLMI.
----------------------------
After the Closing and after the acquisition by CLMI of the assets or
outstanding stock of Polygonal Research Corporation, Zeros & Ones, Inc.,
Kidvision, Inc., Wood Ranch Technology Group, Inc., Quantum Arts, Inc., and
Pillar West Entertainment, Inc., CLMI will have a total of 7,000,000 shares
of its Common Stock outstanding, and 320,000 warrants to purchase an additional
320,000 shares of CLMI's Common Stock for a purchase price of $3.00 per share
for a period of three years from the date of issue of the Warrants, which is
expected to occur on or about July 1, 1999. CLMI will have no other equity
securities or securities convertible into equity securities of CLMI outstanding
on the Closing Date.
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4. Representations and Warranties of Xxxxx, EKO and ZOI.
----------------------------------------------------
EKO, ZOI and Xxxxx represent and warrant to CLMI as follows:
4.1 Power and Authority; Binding Nature of Agreement.
------------------------------------------------
EKO, ZOI and Xxxxx have full power and authority to enter into this
Agreement and to perform their obligations hereunder. The execution, delivery
and performance of this Agreement by them has been duly authorized by all
necessary action on their part. Assuming that this Agreement is a valid and
binding obligation of each of the other parties hereto, this Agreement is a
valid and binding obligation of EKO, ZOI and Xxxxx.
4.2 Subsidiaries.
------------
There is no corporation, general partnership, limited partnership,
joint venture, association, trust or other entity or organization which EKO
directly or indirectly controls or in which EKO directly or indirectly owns any
equity or other interest.
4.3 Good Standing.
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EKO (i) is duly organized, validly existing and in good standing under
the laws of the jurisdiction in which it is incorporated, (ii) has all necessary
power and authority to own its assets and to conduct its business as it is
currently being conducted, and (iii) is duly qualified or licensed to do
business and is in good standing in every jurisdiction (both domestic and
foreign) where such qualification or licensing is required.
4.4 Charter Documents and Corporate Records.
---------------------------------------
EKO has delivered to CLMI complete and correct copies of (i) the
articles of incorporation, bylaws and other charter or organizational documents
of EKO, including all amendments thereto, (ii) the stock records of EKO, and
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(iii) the minutes and other records of the meetings and other proceedings of the
shareholders and directors of EKO. EKO is not in violation or breach of (i) any
of the provisions of its articles of incorporation, bylaws or other charter or
organizational documents, or (ii) any resolution adopted by its shareholders or
directors. There have been no meetings or other proceedings of the shareholders
or directors of EKO that are not fully reflected in the appropriate minute books
or other written records of EKO.
4.5 Capitalization.
--------------
The authorized capital stock of EKO consists of fifteen hundred (1,500)
shares of common stock, no par value, of which 1,500 shares are issued and
outstanding. All of the outstanding shares of the capital stock of EKO are
validly issued, fully paid and nonassessable, and have been issued in full
compliance with all applicable federal, state, local and foreign securities laws
and other laws. There are no (i) outstanding options, warrants or rights to
acquire any shares of the capital stock or other securities of EKO, (ii)
outstanding securities or obligations which are convertible into or exchangeable
for any shares of the capital stock or other securities of EKO, or (iii)
contracts or arrangements under which EKO is or may become bound to sell or
otherwise issue any shares of its capital stock or any other securities.
4.6 Financial Statements.
--------------------
EKO has delivered to CLMI the following financial statements (the "EKO
Financial Statements"): the balance sheet of EKO as of December 31, 1998 (the
"December 31, 1998 Balance Sheet"). Except as stated therein or in the notes
thereto, the EKO Financial Statements: (a) present fairly the financial position
of EKO as of the respective dates thereof; and (b) have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods covered.
4.7 Absence of Changes.
------------------
Except as otherwise disclosed to CLMI in writing in Exhibit A to this
Agreement, since December 31, 1998:
(a) There has not been any material adverse change in the
business, condition, assets, operations or prospects of EKO and no
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event has occurred that might have an adverse effect on the business,
condition, assets, operations or prospects of EKO.
(b) EKO has not (i) declared, set aside or paid any dividend
or made any other contribution in respect of any shares of capital
stock, nor (ii) repurchased, redeemed or otherwise reacquired any
shares of capital stock or other securities.
(c) EKO has not sold or otherwise issued any shares of capital
stock or any other securities.
(d) EKO has not amended its articles of incorporation, bylaws
or other charter or organizational documents, nor has it effected or
been a party to any merger, recapitalization, reclassification of
shares, stock split, reverse stock split, reorganization or similar
transaction.
(e) EKO has not formed any subsidiary or contributed any funds
or other assets to any subsidiary.
(f) EKO has not purchased or otherwise acquired any assets,
nor has it leased any assets from any other person, except in the
ordinary course of business consistent with past practice.
(g) EKO has not made any capital expenditure outside the
ordinary course of business or inconsistent with past practice, or in
an amount exceeding three thousand dollars ($3,000), and the total
amount of the capital expenditures made by EKO has not exceeded ten
thousand dollars ($10,000).
(h) EKO has not sold or otherwise transferred any assets to
any other person, except in the ordinary course of business consistent
with past practice and at a price equal to the fair market value of the
assets transferred.
(i) There has not been any loss, damage or destruction to any
of the properties or assets of EKO (whether or not covered by
insurance).
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(j) EKO has not written off as uncollectible any indebtedness
or accounts receivable, except for write-offs that were made in the
ordinary course of business consistent with past practice and that
involved less than one hundred dollars ($100) singly and less than one
thousand dollars ($1,000) in the aggregate.
(k) EKO has not leased any assets to any other person except
in the ordinary course of business consistent with past practice and at
a rental rate equal to the fair rental value of the leased assets.
(l) EKO has not mortgaged, pledged, hypothecated or otherwise
encumbered any assets, except in the ordinary course of business
consistent with past practice.
(m) EKO has not entered into any contract or incurred any
debt, liability or other obligation (whether absolute, accrued,
contingent or otherwise), except for (i) contracts that were entered
into in the ordinary course of business consistent with past practice
and that have terms of less than six months and do not contemplate
payments by or to EKO which will exceed, over the term of the contract,
three thousand dollars ($3,000) in the aggregate, and (ii) current
liabilities incurred in the ordinary course of business consistent with
the past practice.
(n) EKO has not made any loan or advance to any other person,
except for advances that have been made to customers in the ordinary
course of business consistent with past practice and that have been
properly reflected as "accounts receivables."
(o) EKO has not paid any bonus to, or increased the amount of
the salary, fringe benefits or other compensation or remuneration
payable to, any of the directors, officers or employees of EKO.
(p) No contract or other instrument to which EKO is or was a
party or by which EKO or any of EKO's assets are or were bound has been
amended or terminated, except in the ordinary course of business
consistent with past practice.
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(q) EKO has not discharged any lien or discharged or paid any
indebtedness, liability or other obligation, except for current
liabilities that (i) are reflected in the December 31, 1998 Balance
Sheet or have been incurred since December 31, 1998 in the ordinary
course of business consistent with past practice, and (ii) have been
discharged or paid in the ordinary course of business consistent with
past practice.
(r) EKO has not forgiven any debt or otherwise released or
waived any right or claim, except in the ordinary course of business
consistent with past practice.
(s) EKO has not changed its methods of accounting or its
accounting practices in any respect.
(t) EKO has not entered into any transaction outside the
ordinary course of business or inconsistent with past practice.
(u) EKO has not agreed or committed (orally or in writing) to
do any of the things described in clauses (b) through (t) of this
Section 4.7.
4.8 Absence of Undisclosed Liabilities.
----------------------------------
EKO has no debt, liability or other obligation of any nature (whether
due or to become due and whether absolute, accrued, contingent or otherwise)
that is not reflected or reserved against in the December 31, 1998 Balance
Sheet, except for obligations incurred since December 31, 1998 in the ordinary
course of business consistent with past practice.
4.9 Contracts.
---------
EKO has delivered to CLMI complete and correct copies of all of the
contracts and other instruments including all amendment hereto. All of such
contracts and other instruments are valid and in full force and effect, and are
enforceable in accordance with their terms. There is no existing default by any
person under any of said contracts or other instruments, and there exists no
condition or set of circumstance which, with notice or lapse of time or both,
would constitute such a default.
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4.10 Title to Personal Property.
--------------------------
EKO has good, valid and marketable title to all of its personal
property (both tangible and intangible) and interests therein, including without
limitation all of the personal property reflected in the December 31, 1998
Balance Sheet. All of such personal property and interests therein are owned
free and clear of any liens, pledges, security interests, claims, equities,
options, charges, encumbrances or restrictions.
4.11 Tax Matters.
-----------
All federal, state, local and foreign tax returns required to be filed
by EKO have been properly prepared and duly filed, and all taxes required to be
paid by, or claimed by any federal, state, local or foreign taxing authority to
be payable by, the Company have been paid in full. The provisions for taxes
reflected in the December 31, 1998 Balance Sheet are adequate for all taxes
payable with respect to the period prior to December 31, 1998. There is no (i)
pending audit or examination of EKO (or of any of the tax returns thereof) being
conducted by any federal, state, local or foreign taxing authority, (ii) pending
or threatened claim or dispute relating to the payment of any taxes by EKO,
(iii) basis upon which any federal, state, local or foreign taxing authority may
make any claim for the payment of additional taxes by EKO, or (iv) outstanding
agreement or waiver extending the statutory limitations period applicable to the
payment of any taxes by EKO.
4.12. Compliance With Laws; Licenses and Permits.
------------------------------------------
EKO, to its knowledge, is not in violation of, nor has it failed to
conduct its business in full compliance with, any applicable federal, state,
local or foreign laws, regulations, rules, treaties, rulings, orders, directives
or decrees. EKO has delivered to CLMI complete and correct copies of all of the
licenses, permits, authorizations and franchises to which EKO is subject and all
said licenses, permits, authorizations and franchises are valid and in full
force and effect. Said licenses, permits, authorizations and franchises
constitute all of the licenses, permits, authorizations and franchises necessary
to permit EKO to conduct its business in the manner in which it is now being
conducted, and EKO is not in violation or breach of any of the terms,
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requirements or conditions of any of said licenses, permits, authorizations or
franchises.
4.13. Title to Xxxxx'x Stock.
----------------------
Xxxxx has good, valid and marketable title to all of Xxxxx'x stock in
EKO, and can convey good title to said stock to CLMI free and clear of any
liens, claims, encumbrances or security interests.
4.14. Litigation.
----------
There is no action, suit, proceeding, dispute, litigation, claim,
complaint or investigation by or before any court, tribunal, governmental body,
governmental agency or arbitrator pending or, to EKO's knowledge, threatened
against or with respect to EKO which (i) if adversely determined would have an
adverse effect on the business, condition, assets, operations or prospects of
EKO, or (ii) challenges or would challenge any of the actions required to be
taken by the EKO under this Agreement. There exists no basis for any such
action, suit, proceeding, dispute, litigation, claim, complaint or
investigation.
4.15 Non-Contravention.
-----------------
Neither (a) the execution and delivery of this Agreement, nor (b) the
performance of this Agreement will: (i) contravene or result in a violation of
any of the provisions of the articles of incorporation, bylaws or other charter
or organizational documents of EKO; (ii) contravene or result in a violation of
any resolution adopted by the shareholders or directors of EKO; (iii) result in
a violation or breach of, or give any person the right to declare (whether with
or without notice or lapse of time) a default under or to terminate, any
agreement or other instrument to which EKO or Xxxxx are a party or by which EKO
or any of its assets or Xxxxx are bound; (iv) give any person the right to
accelerate the maturity of any indebtedness or other obligation of EKO; (v)
result in the loss of any license or other contractual right of EKO; (vi) result
in the loss of, or in a violation of any of the terms, provisions or conditions
of, any governmental license, permit, authorization or franchise of EKO; (vii)
result in the creation or imposition of any lien, charge, encumbrance or
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restriction on any of the assets of EKO or on Xxxxx'x stock in EKO; (viii)
result in the reassessment or revaluation of any property of EKO or by any
taxing authority or other governmental authority; (ix) result in the imposition
of, or subject EKO to any liability for, any conveyance or transfer tax or any
similar tax; or (x) result in a violation of any law, rule, regulation, treaty,
ruling, directive, order, arbitration award, judgment or decree to which EKO or
any of its assets or any of Xxxxx'x stock in EKO is subject.
4.16. Approvals.
---------
No authorization, consent or approval of, or registration or filing
with, any governmental authority or any other person is required to be obtained
or made by EKO or Xxxxx in connection with the execution, delivery or
performance of this Agreement, including the sale to CLMI of the shares of
Xxxxx'x stock in EKO being acquired by CLMI hereunder.
4.17. Brokers.
-------
EKO has not agreed to pay any brokerage fees, finder's fees or other
fees or commissions with respect to the transactions contemplated by this
Agreement, and, to EKO's knowledge, no person is entitled, or intends to claim
that it is entitled, to receive any such fees or commissions in connection with
such transaction.
4.18. Full Disclosure.
---------------
Neither this Agreement (including the exhibits hereto) nor any
statement, certificate or other document delivered to CLMI by or on behalf of
EKO or Xxxxx contains any untrue statement of a material fact or omits to state
a material fact necessary to make the representations and other statements
contained herein and therein not misleading.
4.19. Representations True on Closing Date.
------------------------------------
The representations and warranties of EKO and Xxxxx set forth in this
Agreement are true and correct on the date hereof, and will be true and correct
on the Closing Date as though such representations and warranties were made as
of the Closing Date.
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4.20 Non-Distributive Intent.
-----------------------
The shares of CLMI stock being acquired by Xxxxx pursuant to this
Agreement are not being acquired by Xxxxx with a view to the public distribution
of them. Xxxxx acknowledges and agrees that the CLMI stock acquired by him
pursuant to this Agreement has not been registered or qualified under federal or
state securities laws, and may not be sold, conveyed, transferred, assigned or
hypothecated without being registered under the Securities Act of 1933, as
amended, and applicable state law, or in the alternative submission of evidence
reasonably satisfactory to CLMI that an exemption from registration is
available.
5. Representations and Warranties of CLMI.
--------------------------------------
CLMI represents and warrants to EKO and Xxxxx as follows:
5.1 Power and Authority; Binding Nature of Agreement.
------------------------------------------------
CLMI has full power and authority to enter into this Agreement and to
perform its obligations hereunder. The execution, delivery and performance of
this Agreement by CLMI has been duly authorized by all necessary action on its
part. Assuming that this Agreement is a valid and binding obligation of each of
the other parties hereto, this Agreement is a valid and binding obligation of
CLMI.
5.2 Good Standing.
-------------
CLMI (i) is duly organized, validly existing and in good standing under
the laws of the jurisdiction in which it is incorporated, (ii) has all necessary
power and authority to own its assets and to conduct its business as it is
currently being conducted, and (iii) is duly qualified or licensed to do
business and is in good standing in every jurisdiction (both domestic and
foreign) where such qualification or licensing is required.
5.3 Charter Documents and Corporate Records.
---------------------------------------
CLMI has delivered to Xxxxx and EKO complete and correct copies of (i)
the articles of incorporation, bylaws and other charter or organizational
documents of CLMI, including all amendments thereto, (ii) the stock records of
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CLMI, and (iii) the minutes and other records of the meetings and other
proceedings of the shareholders and directors of CLMI. CLMI is not in violation
or breach of (i) any of the provisions of its articles of incorporation, bylaws
or other charter or organizational documents, or (ii) any resolution adopted by
its shareholders or directors. There have been no meetings or other proceedings
of the shareholders or directors of CLMI that are not fully reflected in the
appropriate minute books or other written records of the Company.
5.4 Capitalization.
--------------
The authorized capital stock of CLMI consists of 50,000,000 shares of
common stock, par value $.001 per share, of which 7,000,000 shares will be
issued and outstanding as indicated in Section 3.2 of this Agreement, and
2,000,000 shares of preferred stock par value $.001 per share, none of which is
issued and outstanding. All of the outstanding shares of the capital stock of
CLMI are validly issued, fully paid and nonassessable, and have been issued in
full compliance with all applicable federal, state, local and foreign securities
laws and other laws. Except as disclosed in Section 3.2 or pursuant to Section
5.5 or elsewhere in this Agreement, there are no (i) outstanding options,
warrants or rights to acquire any shares of the capital stock or other
securities of CLMI, (ii) outstanding securities or obligations which are
convertible into or exchangeable for any shares of the capital stock or other
securities of CLMI, or (iii) contracts or arrangements under which CLMI is or
may become bound to sell or otherwise issue any shares of its capital stock or
any other securities.
5.5 Financial Statements.
--------------------
CLMI has delivered to Xxxxx and EKO the following financial statements
(the "CLMI Financial Statements"): (i) the balance sheet of CLMI as of December
31, 1998; and (ii) the statements of income and retained earnings, stockholders'
equity and changes in financial position of CLMI for the year ended December 31,
1998; and (iii) supporting supplemental schedules. Except as stated therein or
in the notes thereto, the CLMI Financial Statements: (a) present fairly the
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financial position of CLMI as of the respective dates thereof and the results of
operations and changes in financial position of CLMI for the respective periods
covered thereby; and (b) have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods covered.
5.6 Absence of Changes.
------------------
Except as otherwise disclosed to Xxxxx or EKO in writing in Exhibit A
to this Agreement, since December 31, 1998, there has not been any material
adverse change in the business, condition, assets, operations or prospects of
CLMI and no event has occurred that might have an adverse effect on the
business, condition, assets, operations or prospects of CLMI.
5.7 Absence of Undisclosed Liabilities.
----------------------------------
CLMI has no debt, liability or other obligation of any nature (whether
due or to become due and whether absolute, accrued, contingent or otherwise)
that is not reflected or reserved against in the December 31, 1998 Balance
Sheet, except for obligations incurred since December 31, 1998 in the ordinary
course of business consistent with past practice.
5.8 Litigation.
----------
There is no action, suit, proceeding, dispute, litigation, claim,
complaint or investigation by or before any court, tribunal, governmental body,
governmental agency or arbitrator pending or, to CLMI's knowledge, threatened
against or with respect to CLMI which (i) if adversely determined would have an
adverse effect on the business, condition, assets, operations or prospects of
CLMI, or (ii) challenges or would challenge any of the actions required to be
taken by CLMI under this Agreement. There exists no basis for any such action,
suit, proceeding, dispute, litigation, claim, complaint or investigation.
5.9 Non-Contravention.
-----------------
Neither (a) the execution and delivery of this Agreement, nor (b) the
performance of this Agreement will: (i) contravene or result in a violation of
any of the provisions of the articles of incorporation, bylaws or other charter
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or organizational documents of CLMI; (ii) contravene or result in a violation of
any resolution adopted by the shareholders or directors of CLMI; (iii) result in
a violation or breach of, or give any person the right to declare (whether with
or without notice or lapse of time) a default under or to terminate, any
agreement or other instrument to which CLMI is a party or by which CLMI or any
of its assets are bound; (iv) give any person the right to accelerate the
maturity of any indebtedness or other obligation of CLMI; (v) result in the loss
of any license or other contractual right of CLMI; (vi) result in the loss of,
or in a violation of any of the terms, provisions or conditions of, any
governmental license, permit, authorization or franchise of CLMI; (vii) result
in the creation or imposition of any lien, charge, encumbrance or restriction on
any of the assets of CLMI; (viii) result in the reassessment or revaluation of
any property of CLMI by any taxing authority or other governmental authority;
(ix) result in the imposition of, or subject CLMI to any liability for, any
conveyance or transfer tax or any similar tax; or (x) result in a violation of
any law, rule, regulation, treaty, ruling, directive, order, arbitration award,
judgment or decree to which CLMI or any of its assets is subject.
5.10 Approvals.
---------
No authorization, consent or approval of, or registration or filing
with, any governmental authority or any other person is required to be obtained
or made by CLMI in connection with the execution, delivery or performance of
this Agreement.
5.11 Brokers.
-------
CLMI has not agreed to pay any brokerage fees, finder's fees or other
fees or commissions with respect to the transactions contemplated by this
Agreement, and, to CLMI's knowledge, no person is entitled, or intends to claim
that it is entitled, to receive any such fees or commissions in connection with
such transactions.
5.12 Full Disclosure.
---------------
Neither this Agreement (including the exhibits hereto) nor any
statement, certificate or other document delivered to Xxxxx or EKO by or on
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behalf of CLMI contains any untrue statement of a material fact or omits to
state a material fact necessary to make the representations and other statements
contained herein and therein not misleading.
5.13 Representations True on Closing Date.
------------------------------------
The representations and warranties of CLMI set forth in this Agreement
are true and correct on the date hereof, and will be true and correct on the
Closing Date as though such representations and warranties were made as of the
Closing Date.
6. Injunctive Relief
-----------------
6.1. Damages Inadequate.
------------------
Each party acknowledges that it would be impossible to measure in money
the damages to the other party if there is a failure to comply with any
covenants and provisions of this Agreement, and agrees that in the event of any
breach of any covenant or provision, the other party to this Agreement will not
have an adequate remedy at law.
6.2. Injunctive Relief.
-----------------
It is therefore agreed that the other party to this Agreement who is
entitled to the benefit of the covenants and provisions of this Agreement which
have been breached, in addition to any other rights or remedies which they may
have, shall be entitled to immediate injunctive relief to enforce such covenants
and provisions, and that in the event that any such action or proceeding is
brought in equity to enforce them, the defaulting or breaching party will not
urge a defense that there is an adequate remedy at law.
7. Waivers.
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If any party shall at any time waive any rights hereunder resulting
from any breach by the other party of any of the provisions of this Agreement,
such waiver is not to be construed as a continuing waiver of other breaches of
the same or other provisions of this Agreement. Resort to any remedies referred
to herein shall not be construed as a waiver of any other rights and remedies to
which such party is entitled under this Agreement or otherwise.
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8. Successors and Assigns.
----------------------
Each covenant and representation of this Agreement shall inure to the
benefit of and be binding upon each of the parties, their personal
representatives, assigns and other successors in interest.
9. Entire and Sole Agreement.
-------------------------
This Agreement supercedes and replaces the Plan of Reorganization and
Exchange Agreement made and entered into on March 26, 1999 by and between ZOI,
Xxxxx, and EKO. This Agreement constitutes the entire agreement between the
parties and supersedes all other agreements, representations, warranties,
statements, promises and undertakings, whether oral or written, with respect to
the subject matter of this Agreement. This Agreement may be modified or amended
only by a written agreement signed by the parties against whom the amendment is
sought to be enforced.
10. Governing Law.
-------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of California, and the venue for any action hereunder
shall be in the appropriate forum in the County of Los Angeles, State of
California.
11. Counterparts.
------------
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
12. Attorneys' Fees and Costs.
-------------------------
In the event that either party must resort to legal action in order to
enforce the provisions of this Agreement or to defend such action, the
prevailing party shall be entitled to receive reimbursement from the
nonprevailing party for all reasonable attorneys' fees and all other costs
incurred in commencing or defending such action, or in enforcing this Agreement,
including but not limited to post judgment costs.
13. Assignment.
----------
This Agreement shall not be assignable by any party without prior
written consent of the other parties.
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14. Remedies.
--------
Except as otherwise expressly provided herein, none of the remedies set
forth in this Agreement are intended to be exclusive, and each party shall have
all other remedies now or hereafter existing at law, in equity, by statute or
otherwise. The election of any one or more remedies shall not constitute a
waiver of the right to pursue other available remedies.
15. Section Headings.
----------------
The section headings in this Agreement are included for convenience
only, are not a part of this Agreement and shall not be used in construing it.
16. Severability.
------------
In the event that any provision or any part of this Agreement is held
to be illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall not affect the validity or enforceability of any other
provision or part of this Agreement.
17. Notices.
-------
Each notice or other communication hereunder shall be in writing and
shall be deemed to have been duly given on the earlier of (i) the date on which
such notice or other communication is actually received by the intended
recipient thereof, or (ii) the date five (5) days after the date such notice or
other communication is mailed by registered or certified mail (postage prepaid)
to the intended recipient at the following address (or at such other address as
the intended recipient shall have specified in a written notice given to the
other parties hereto);
If to ZOI:
---------
Zeros & Ones, Inc.
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
-17-
If to EKO or Xxxxx:
------------------
Xxxxxx Xxxxx
EKO Corporation
000 Xxxxxxx Xxxxxx Xxxx, #000
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to CLMI:
----------
Commercial Labor Management, Inc.
c/o Richardson & Associates
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
18. Publicity.
---------
No press release, notice to any third party or other publicity
concerning the transactions contemplated by this Agreement shall be issued,
given or otherwise disseminated without the prior approval of each of the
parties hereto; provided, however, that such approval shall not be unreasonably
withheld.
-18-
IN WITNESS WHEREOF, this Agreement has been entered into as of the date
first above written.
CLMI: COMMERCIAL LABOR MANAGEMENT, INC.
By: --------------------------------
Xxxxxx X. Xxxxxx, President
ZOI: ZEROS & ONES, INC.
By: --------------------------------
Xxxxxx Xxxxx, President
Xxxxx: By: --------------------------------
Xxxxxx Xxxxx
EKO: EKO CORPORATION
By: --------------------------------
Xxxxxx Xxxxx, President
-19-
EXHIBIT A
MATERIAL CHANGES
None.
