SHARE EXCHANGE AGREEMENT by and among EXTREME MOBILE COATINGS, INC., KEYSTONE CAPITAL RESOURCES, LLC, XIOM CORP., BLUEGRASS MOBILE POWER COATINGS, LLC, FALCON MEDIA SERVICES, LTD., MICHAEL S. KROME, and JAMES LYONS SEPTEMBER 16, 2008
EXHIBIT
2.1
by
and among
EXTREME
MOBILE COATINGS, INC.,
KEYSTONE
CAPITAL RESOURCES, LLC,
XIOM
CORP.,
BLUEGRASS
MOBILE POWER COATINGS, LLC,
FALCON
MEDIA SERVICES, LTD.,
XXXXXXX
X. XXXXX, and
XXXXX
XXXXX
SEPTEMBER
16, 2008
TABLE
OF CONTENTS
Page
|
||
1.
|
The
Share Exchange
|
1
|
1.1
Manner and Basis of Share Exchange.
|
1
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|
1.2
Closing.
|
1
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|
1.3
Falcon Ordinary Shares
|
2
|
|
2.
|
Representations
and Warranties of Extreme and the Extreme Stockholders
|
2
|
2.1
Organization, Standing, Subsidiaries, Etc.
|
2
|
|
2.2
Qualification
|
2
|
|
2.3
Capitalization
|
2
|
|
2.4
Extreme Stockholders
|
2
|
|
2.5
Corporate Acts and Proceedings
|
3
|
|
2.6
Compliance with Laws and Instruments
|
3
|
|
2.7
Binding Obligations
|
3
|
|
2.8
Broker’s and Finder’s Fees
|
3
|
|
2.9
Financial Statements
|
3
|
|
2.10
Absence of Undisclosed Liabilities
|
4
|
|
2.11
Changes
|
4
|
|
2.12
Employees
|
4
|
|
2.13
Tax Returns and Audits
|
5
|
|
2.14
Patents and Other Intangible Assets
|
5
|
|
2.15
Employee Benefit Plans; ERISA
|
5
|
|
2.16
Title to Property and Encumbrances
|
5
|
|
2.17
Condition of Properties
|
5
|
|
2.18
Litigation
|
5
|
|
2.19
Licenses
|
6
|
|
2.20
Interested Party Transactions
|
6
|
|
2.21
Environmental Matters
|
6
|
|
2.22
Questionable Payments
|
6
|
|
2.23
Obligations to or by Shareholders
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6
|
|
2.24
Obligations to or by Shareholders
|
7
|
|
3.
|
Representations
and Warranties of Falcon.
|
7
|
3.1
Organization and Standing
|
7
|
|
3.2
Corporate Authority
|
7
|
|
3.3
Broker’s and Finder’s Fees
|
7
|
|
3.4
Capitalization of Falcon
|
8
|
|
3.5
Validity of Shares
|
8
|
|
3.6
SEC Reports
|
8
|
|
3.7
Governmental Consents
|
8
|
|
3.8
Compliance with Laws and Other Instruments
|
9
|
|
3.9
Binding Obligations
|
9
|
|
3.10
Absence of Undisclosed Liabilities
|
9
|
|
3.11
Changes
|
9
|
i
3.12
Tax Returns and Audits
|
10
|
|
3.13
Litigation
|
10
|
|
3.14
Interested Party Transactions
|
10
|
|
3.15
Questionable Payments
|
10
|
|
3.16
Obligations to or by Shareholders
|
11
|
|
3.17
Schedule of Assets and Contracts
|
11
|
|
3.18
Employees
|
11
|
|
3.19
Disclosure
|
11
|
|
4.
|
Conduct
of Businesses Pending the Share Exchange
|
12
|
4.1
Conduct of Business by Extreme Pending the Share Exchange
|
12
|
|
4.2
Conduct of Business by Falcon Pending the Share Exchange
|
12
|
|
5.
|
Additional
Agreements
|
13
|
5.1
Access and Information
|
13
|
|
5.2
Additional Agreements
|
14
|
|
5.3
Publicity
|
14
|
|
5.4
Appointment of Directors
|
14
|
|
5.5
Falcon Name Change
|
14
|
|
6.
|
Conditions
of Parties’ Obligations
|
15
|
6.1
Falcon Obligations
|
15
|
|
6.2
Obligations of Extreme
|
16
|
|
7.
|
Non-Survival
of Representations and Warranties
|
17
|
8.
|
Amendment
of Agreement
|
17
|
9.
|
Definitions
|
17
|
10.
|
Termination
Prior to Closing.
|
20
|
10.1
Termination of Agreement
|
20
|
|
10.2
Termination of Obligations
|
21
|
|
11.
|
Miscellaneous
|
21
|
11.1
Notices
|
21
|
|
11.2
Entire Agreement
|
22
|
|
11.3
Expenses
|
22
|
|
11.4
Time
|
22
|
|
11.5
Severability
|
22
|
|
11.6
Successors and Assigns
|
23
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11.7
No Third Parties Benefited
|
23
|
|
11.8
Counterparts
|
23
|
|
11.9
Recitals, Schedules and Exhibits
|
23
|
|
11.10
Section Headings and Gender
|
23
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11.11
Governing Law
|
23
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ii
THIS
SHARE EXCHANGE AGREEMENT is made and entered into on September 16, 2008,
by and
among EXTREME MOBILE COATINGS, INC., a Delaware corporation (“Extreme”),
KEYSTONE CAPITAL RESOURCES, LLC, XIOM CORP., BLUEGRASS MOBILE POWER COATINGS,
LLC. XXXXXXX X. XXXXX AND XXXXX XXXXX (collectively with Keystone Capital
Resources, LLC, Xiom Corp. AND XXXXXXX X. XXXXX, the “Extreme
Stockholders”),
and
FALCON MEDIA SERVICES, LTD., a United Kingdom private limited company
(“Falcon”).
WITNESSETH
:
WHEREAS,
the Board of Directors of Extreme and Falcon, respectively, have determined
that
it is fair to and in the best interests of their respective corporations
and
stockholders for the Extreme Stockholders to transfer all of their shares
of
common stock of Extreme, $.001 par value per share (“Extreme
Common Stock”),
to
Falcon in exchange for ordinary shares of Falcon (“Falcon
Ordinary Shares”)
upon
the terms and subject to the conditions set forth herein;
NOW,
THEREFORE, in consideration of the mutual agreements and covenants hereinafter
set forth, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
1. The
Share Exchange.
1.1 Manner
and Basis of Share Exchange.
Falcon
and each of the Extreme Stockholders hereby agrees that at the Closing
(as
defined in Section 1.2 below):
(i) each
Extreme Stockholder shall transfer to Falcon certificates representing
all of
the shares of Extreme Common Stock held by each such Extreme Stockholder
immediately prior to the Closing, accompanied by stock powers or other
instruments of transfer, so that immediately following the Closing, Falcon
shall
be the holder of all of the issued and outstanding shares of Extreme Common
Stock; and
(ii) Falcon
shall issue to each Extreme Stockholder one (1) Falcon Ordinary Share in
exchange for each share of Extreme Common Stock received by Falcon from
each
such Extreme Stockholder.
1.2 Closing.
The
closing of the transactions contemplated by this Agreement (the “Closing”)
shall
take place at the offices of Xxxxxxx X. Xxxxx, Esq. located at 0 Xxxx Xxxxx,
Xxxx Xxxxx, Xxx Xxxx, 00000 within five (5) business days after the date
when
each of the conditions set forth in Section 6 shall have been fulfilled
(or
waived by the party entitled to waive such condition) or such other time
or date
or such other location as the parties may mutually agree (the “Closing
Date”),
but
no later than September 30, 2008 unless the date of closing is extended
by
written agreement between the parties.
1
1.3 Falcon
Ordinary Shares.
Falcon
agrees that it will cause the Falcon Ordinary Shares for which the Extreme
Common Stock shall be exchanged at the Closing pursuant to Section 1.1(a)(ii)
to
be available for issuance. Falcon further covenants that immediately prior
to
the Closing there will be no more than 4,409,600 Falcon Ordinary Shares
issued
and outstanding and that no other ordinary shares or equity securities
or any
options, warrants, rights or other agreements or instruments convertible,
exchangeable or exercisable into ordinary shares shall be issued or outstanding,
except as described herein.T
2.
Representations
and Warranties of Extreme and the Extreme Stockholders.
Each of
the Extreme Stockholders and Extreme (the “Extreme Parties”) hereby represents
and warrants to Falcon as follows:
2.1 Organization,
Standing, Subsidiaries, Etc.
(a) Extreme
is a corporation duly organized and existing in good standing under the
laws of
the State of Delaware, and has all requisite power and authority (corporate
and
other) to carry on its business, to own or lease its properties and assets,
to
enter into this Agreement and to carry out the terms hereof. Copies of
the
Certificate of Incorporation and By-laws of Extreme that have been delivered
to
Falcon prior to the execution of this Agreement are true and complete and
have
not since been amended or repealed.
(b) Extreme
has no subsidiaries or direct or indirect interest (by way of stock ownership
or
otherwise) in any firm, corporation, limited liability company, partnership,
association or business, except as set forth on Schedule 2.1.
2.2 Qualification.
Extreme
is duly qualified to conduct business as a foreign corporation and is in
good
standing in each jurisdiction wherein the nature of its activities or its
properties owned or leased makes such qualification necessary, except where
the
failure to be so qualified would not have a material adverse effect on
the
condition (financial or otherwise), properties, assets, liabilities, business
operations or results of operations of Extreme taken as a whole (the
“Condition
of Extreme”).
2.3 Capitalization.
The
authorized capital stock of Extreme consists of 20,000,000 shares of Extreme
Common Stock, and Extreme has no authority to issue any other capital stock.
There are 13,505,085 shares of Extreme Common Stock issued and outstanding,
and
such issued shares are duly authorized, validly issued, fully paid and
nonassessable, and none of such shares have been issued in violation of
the
preemptive rights of any person. Extreme has no outstanding options, rights
or
commitments to issue Extreme Common Stock or other Equity Securities of
Extreme,
and there are no outstanding securities convertible or exercisable into
or
exchangeable for Extreme Common Stock or other Equity Securities of Extreme.
2.4 Extreme
Stockholders. Schedule
2.4
hereto
contains a true and complete list of the record owners of all of the outstanding
shares of Extreme Common Stock together with the number of shares held.
There is
no voting trust, agreement or arrangement among any of the beneficial holders
of
Extreme Common Stock affecting the nomination or election of directors
or the
exercise of the voting rights of Extreme Common Stock. On the Closing Date,
each
Extreme Stockholder will own its respective shares of Extreme Common Stock
free
and clear of any lien, charge, claim encumbrance, security interest mortgage,
pledge, assessment or other adverse interest of any kind or nature
whatsoever.
2
2.5 Corporate
Acts and Proceedings.
The
execution, delivery and performance of this Agreement has been duly authorized
by the Board of Directors of Extreme, and all of the corporate acts and
other
proceedings required for the due and valid authorization, execution, delivery
and performance of this Agreement and the consummation of the Share Exchange
have been validly and appropriately taken.
2.6 Compliance
with Laws and Instruments.
The
business, products and operations of Extreme have been and are being conducted
in compliance in all material respects with all applicable laws, rules
and
regulations, except for such violations thereof for which the penalties,
in the
aggregate, would not have a material adverse effect on the Condition of
Extreme.
The execution, delivery and performance by Extreme and the Extreme Stockholders
of this Agreement and the consummation by Extreme and the Extreme Stockholders
of the transactions contemplated by this Agreement: (a) will not require
any
authorization, consent or approval of, or filing or registration with,
any court
or governmental agency or instrumentality, except such as shall have been
obtained prior to the Closing, (b) will not cause Extreme or any Extreme
Stockholder to violate or contravene (i) any provision of law, (ii) any
rule or
regulation of any agency or government, (iii) any order, judgment or decree
of
any court, or (iv) any provision of the Certificate of Incorporation or
By-laws
of Extreme, (c) will not violate or be in conflict with, result in a breach
of
or constitute (with or without notice or lapse of time, or both) a default
under, any indenture, loan or credit agreement, deed of trust, mortgage,
security agreement or other contract, agreement or instrument to which
Extreme
or any Extreme Stockholder is a party or by which Extreme or any Extreme
Stockholder or any of their respective properties are bound or affected,
except
as would not have a material adverse effect on the Condition of Extreme
and (d)
will not result in the creation or imposition of any Lien upon any property
or
asset of Extreme. Extreme is not in violation of, or (with or without notice
or
lapse of time, or both) in default under, any term or provision of its
Certificate of Incorporation or By-laws or of any indenture, loan or credit
agreement, deed of trust, mortgage, security agreement or, except as would
not
materially and adversely affect the Condition of Extreme, or any other
material
agreement or instrument to which Extreme is a party or by which Extreme
or any
of its properties is bound or affected.
2.7 Binding
Obligations.
This
Agreement constitutes the legal, valid and binding obligation of Extreme
and
each of the Extreme Stockholders and is enforceable against Extreme and
each of
the Extreme Stockholders in accordance with its terms, except as such
enforcement is limited by bankruptcy, insolvency and other similar laws
affecting the enforcement of creditors’ rights generally and by general
principles of equity.
2.8 Broker’s
and Finder’s Fees.
No
Person has, or as a result of the transactions contemplated or described
herein
will have, any right or valid claim against Extreme or any Extreme Stockholder
for any commission, fee or other compensation as a finder or broker, or
in any
similar capacity.
2.9 Financial
Statements.
Extreme
has delivered to Falcon Extreme’s audited statement of operations for the year
ended December 31, 2007 and balance sheet (the “Audited Balance Sheet”) as of
December 31, 2007 and its unaudited statement of operations for the six
months
ended June 30, 2008 and balance sheet as of June 30, 2008 (the “Balance Sheet
Date”). Such financial statements (the “Extreme Financial Statements”) (i) are
in accordance with the books and records of Extreme, (ii) present fairly
in all
material respects the financial condition of Extreme at the dates therein
specified and the results of its operations and changes in financial position
for the periods therein specified, and (iii) have been prepared in accordance
with generally accepted accounting principles (“GAAP”)
applied on a basis consistent with prior accounting periods.
3
2.10 Absence
of Undisclosed Liabilities.
Extreme
has no material obligation or liability (whether accrued, absolute, contingent,
liquidated or otherwise, whether due or to become due), arising out of
any
transaction entered into at or prior to the Closing, except (a) as disclosed
in
Schedule
2.10
and/or
Schedule
2.11
hereto,
(b) to the extent set forth on or reserved against in the Balance Sheet
or the
Notes to the Financial Statements, (c) current liabilities incurred and
obligations under agreements entered into in the usual and ordinary course
of
business since the Balance Sheet Date, none of which (individually or in
the
aggregate) has had or will have a material adverse effect on the Condition
of
Extreme, and (d) by the specific terms of any written agreement, document
or
arrangement identified in the Schedules.
2.11 Changes.
Since
the Balance Sheet Date, except as disclosed in Schedule
2.11
hereto,
Extreme has not (a) incurred any debts, obligations or liabilities, absolute,
accrued, contingent or otherwise, whether due or to become due, except
for fees,
expenses and liabilities incurred in connection with the Share Exchange
and
related transactions and current liabilities incurred in the usual and
ordinary
course of business, (b) discharged or satisfied any Liens other than those
securing, or paid any obligation or liability other than, current liabilities
shown on the Balance Sheet and current liabilities incurred since the Balance
Sheet Date, in each case in the usual and ordinary course of business,
(c)
mortgaged, pledged or subjected to Lien any of its assets, tangible or
intangible other than in the usual and ordinary course of business, (d)
sold,
transferred or leased any of its assets, except in the usual and ordinary
course
of business, (e) cancelled or compromised any debt or claim, or waived
or
released any right, of material value, (f) suffered any physical damage,
destruction or loss (whether or not covered by insurance) materially and
adversely affecting the Condition of Extreme, (g) entered into any transaction
other than in the usual and ordinary course of business, (h) encountered
any
labor union difficulties, (i) declared or paid any dividends on or made
any
other distributions with respect to, or purchased or redeemed, any of its
outstanding capital stock, (j) suffered or experienced any change in, or
condition affecting, the Condition of Extreme other than changes, events
or
conditions in the usual and ordinary course of its business, none of which
(either by itself or in conjunction with all such other changes, events
and
conditions) has been materially adverse, (k) made any change in the accounting
principles, methods or practices followed by it or depreciation or amortization
policies or rates theretofore adopted, (l) made or permitted any amendment
or
termination of any material contract, agreement or license to which it
is a
party, (m) suffered any material loss not reflected in the Balance Sheet
or its
statement of income for the year ended on the Balance Sheet Date, or (n)
entered
into any agreement, or otherwise obligated itself, to do any of the
foregoing.
2.12 Employees.
Extreme
has complied in all material respects with all laws relating to the employment
of labor, and Extreme has encountered no material labor union difficulties.
Other than pursuant to ordinary arrangements of employment compensation,
Extreme
is not under any obligation or liability to any officer, director or employee
of
Extreme.
4
2.13 Tax
Returns and Audits.
All
required federal, state and local Tax Returns of Extreme have been accurately
prepared and duly and timely filed or extensions with respect thereto have
been
granted, and all federal, state and local Taxes required to be paid with
respect
to the periods covered by such returns have been paid. Extreme is not and
has
not been delinquent in the payment of any Tax.
2.14 Patents
and Other Intangible Assets.
Except
as set forth in Schedule
2.14,
Extreme
(i) owns or has the right to use, free and clear of all Liens, claims and
restrictions, all patents, trademarks, service marks, trade names, copyrights,
licenses and rights with respect to the foregoing used in or necessary
for the
conduct of its business as now conducted or proposed to be conducted without
infringing upon or otherwise acting adversely to the right or claimed right
of
any Person under or with respect to any of the foregoing and (ii) is not
obligated or under any liability to make any payments by way of royalties,
fees
or otherwise to any owner or licensor of, or other claimant to, any patent,
trademark, service xxxx, trade name, copyright or other intangible asset,
with
respect to the use thereof or in connection with the conduct of its business
or
otherwise.
2.15 Employee
Benefit Plans; ERISA.
Extreme
has no “employee benefit plans” (within the meaning of Section 3(3) of the
ERISA) nor any other employee benefit or fringe benefit arrangements, practices,
contracts, policies or programs of any type other than programs merely
involving
the regular payment of wages, commissions, or bonuses established, maintained
or
contributed to by Extreme, whether written or unwritten and whether or
not
funded.
2.16 Title
to Property and Encumbrances.
Extreme
has good, valid and indefeasible marketable title to all properties and
assets
used in the conduct of its business (except for property held under valid
and
subsisting leases which are in full force and effect and which are not
in
default) free of all Liens and other encumbrances, except Permitted Liens
and
such ordinary and customary imperfections of title, restrictions and
encumbrances as do not, individually or in the aggregate, materially detract
from the value of the property or assets or materially impair the use made
thereof by Extreme in its business. Without limiting the generality of
the
foregoing, except as indicated in the notes to the Extreme Financial Statements,
Extreme has good and indefeasible title to all of its properties and assets
reflected in the Balance Sheet, except for property disposed of in the
usual and
ordinary course of business since the Balance Sheet Date and for property
held
under valid and subsisting leases which are in full force and effect and
which
are not in default.
2.17 Condition
of Properties.
All
facilities, machinery, equipment, fixtures and other properties owned,
leased or
used by Extreme are in operating condition and repair, subject to ordinary
wear
and tear, and are adequate and sufficient for Extreme’s business.
2.18 Litigation.
There is
no legal action, suit, arbitration or other legal, administrative or other
governmental proceeding pending or, to the best knowledge of Extreme, threatened
against or affecting Extreme or its properties, assets or business, and
after
reasonable investigation, Extreme is not aware of any incident, transaction,
occurrence or circumstance that might reasonably be expected to result
in or
form the basis for any such action, suit, arbitration or other proceeding.
Extreme is not in default with respect to any order, writ, judgment, injunction,
decree, determination or award of any court or any governmental agency
or
instrumentality or arbitration authority.
5
2.19 Licenses.
Extreme
possesses from all appropriate governmental authorities all licenses, permits,
authorizations, approvals, franchises and rights (collectively “Permits”)
necessary for Extreme to engage in the business currently conducted by
it, all
of which are in full force and effect, except for such Permits the absence
of
which would not have a material adverse effect on the Condition of
Extreme.
2.20 Interested
Party Transactions.
Except
as disclosed in Schedule
2.20
hereto,
no officer, director or stockholder of Extreme or any Affiliate or “associate”
(as such term is defined in Rule 405 under the Securities Act) of any such
Person or Extreme has or has had, either directly or indirectly, (a) an
interest
in any Person that (i) furnishes or sells services or products that are
furnished or sold or are proposed to be furnished or sold by Extreme or
(ii)
purchases from or sells or furnishes to Extreme any goods or services,
or (b) a
beneficial interest in any contract or agreement to which Extreme is a
party or
by which it may be bound or affected.
2.21 Environmental
Matters.
(a) To
the
knowledge of Extreme, Extreme has never generated, used, handled, treated,
released, stored or disposed of any Hazardous Materials on any real property
on
which it now has or previously had any leasehold or ownership interest,
except
in compliance with all applicable Environmental Laws.
(b) To
the
knowledge of Extreme, the historical and present operations of the business
of
Extreme are in compliance with all applicable Environmental Laws, except
where
any non-compliance has not had and would not reasonably be expected to
have a
material adverse effect on the Condition of Extreme.
(c) There
are
no material pending or, to the knowledge of Extreme, threatened, demands,
claims, information requests or notices of noncompliance or violation against
or
to Extreme relating to any Environmental Law; and, to the knowledge of
Extreme,
there are no conditions or occurrences on any of the real property used
by
Extreme in connection with its business that would reasonably be expected
to
lead to any such demands, claims or notices against or to Extreme, except
such
as have not had, and would not reasonably be expected to have, a material
adverse effect on the Condition of Extreme.
2.22 Questionable
Payments.
Neither
Extreme nor any director, officer or, to the best knowledge of Extreme,
agent,
employee or other Person associated with or acting on behalf of Extreme,
has
used any corporate funds for unlawful contributions, gifts, entertainment
or
other unlawful expenses relating to political activity; made any direct
or
indirect unlawful payments to government officials or employees from corporate
funds; established or maintained any unlawful or unrecorded fund of corporate
monies or other assets; made any false or fictitious entries on the books
of
record of any such corporations; or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
2.23 Obligations
to or by Shareholders.
Except
as disclosed in Schedule
2.23,
other
than for accrued salary of employees of Extreme who are Affiliates of Extreme
Stockholders, Extreme has no liability or obligation or commitment to any
Extreme Stockholder or any Affiliate or “associate” (as such term is defined in
Rule 405 under the Securities Act) of any Extreme Stockholder, nor does
any
Extreme Stockholder or any such Affiliate or associate have any liability,
obligation or commitment to Extreme.
6
2.24 Obligations
to or by Shareholders.
(a) The
Falcon Ordinary Shares are being acquired for investment and not with a
view to
the resale or distribution. The Falcon Ordinary Shares are being acquired
by
each of the Extreme Stockholders for its own account.
(b) Each
of
the Extreme Stockholders is an “accredited investor “ as that term is defined in
Rule 501 promulgated under the Securities Act.
(c) Each
of
the Extreme Stockholders has adequate net worth to bear the risks of the
investment contemplated by this Agreement and adequate means of providing
for
its current needs and foreseeable contingencies.
(d) Each
of
the Extreme Stockholders understands that the Falcon Ordinary Shares have
not
been registered under the Securities Act in reliance on an exemption for
private
offerings. The Extreme Stockholders may have to continue to bear the economic
risk of its investment in the Falcon Ordinary Shares for an indefinite
period.
3. Representations
and Warranties of Falcon.
Falcon
represents and warrants to Extreme and to each of the Extreme Stockholders
as
follows:
3.1 Organization
and Standing.
Falcon
is a private limited company duly organized and existing in good standing
under
the laws of the United Kingdom. Falcon has heretofore delivered to Extreme
complete and correct copies of Falcon’s Certificate of Incorporation and By-laws
as now in effect. Falcon has full corporate power and authority to carry
on its
business as it is now being conducted and as now proposed to be conducted
and to
own or lease its properties and assets. Falcon has no subsidiaries or direct
or
indirect interest (by way of stock ownership or otherwise) in any firm,
corporation, limited liability company, partnership, association or business.
3.2 Corporate
Authority.
Falcon
has full corporate power and authority to enter into this Agreement and
to carry
out the transactions contemplated hereby. All corporate acts and proceedings
required for the authorization, execution, delivery and performance of
this
Agreement have been duly and validly taken or will have been so taken prior
to
the Closing. The Agreement constitutes a legal, valid and binding obligation
of
Falcon, enforceable against Falcon in accordance its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization or
other
similar laws affecting creditors’ rights generally and by general principles of
equity.
3.3 Broker’s
and Finder’s Fees.
No
person, firm, corporation or other entity is entitled by reason of any
act or
omission of Falcon to any broker’s or finder’s fees, commission or other similar
compensation with respect to the execution and delivery of this Agreement,
or
with respect to the consummation of the transactions contemplated hereby
or
thereby.
3.4 Capitalization
of Falcon.
The
authorized capital stock of Falcon consists of 500,000,000 ordinary shares,
of
which not more than 4,409,600 shares will be, prior to the Closing, issued
and
outstanding. Falcon has no outstanding options, rights or commitments to
issue
Falcon Ordinary Shares or any other Equity Security of Falcon, and there
are no
outstanding securities convertible or exercisable into or exchangeable
for
Falcon Ordinary Shares or any other Equity Security of Falcon. There is
no
voting trust, agreement or arrangement among any of the beneficial holders
of
Falcon Ordinary Shares affecting the nomination or election of directors
or the
exercise of the voting rights of Falcon Ordinary Shares. All outstanding
shares
of the capital stock of Falcon are validly issued and outstanding, fully
paid
and nonassessable, and none of such shares have been issued in violation
of the
preemptive rights of any person.
7
3.5 Validity
of Shares.
The
Falcon Ordinary Shares to be issued at the Closing pursuant to Section
1.1(ii)
hereof, when issued and delivered in accordance with the terms hereof,
shall be
duly and validly issued, fully paid and nonassessable. Based in part on
the
representations and warranties of the Extreme Stockholders as contemplated
by
Section 4 hereof and assuming the accuracy thereof, the issuance of the
Falcon
Ordinary Shares upon the Share Exchange pursuant to Section 1.1(ii) will
be
exempt from the registration and prospectus delivery requirements of the
Securities Act and from the qualification or registration requirements
of any
applicable state blue sky or securities laws.
3.6 SEC
Reports.
Since
January 2, 2008, Falcon has filed with the Securities and Exchange Commission
(the “Commission”)
all
forms, reports, schedules, statements and other documents required to be
filed
by it under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)
or the
Securities Act (as such documents have been amended since the time of their
filing, collectively, the "Falcon
SEC Documents").
The
Falcon SEC Documents, including without limitation any financial statements
and
schedules included therein, at the time filed or, if subsequently amended,
as so
amended, (i) did not contain any untrue statement of a material fact or
omit to
state a material fact required to be stated therein or necessary in order
to
make the statements therein, in light of the circumstances under which
they were
made, not misleading and (ii) complied in all material respects with the
applicable requirements of the Exchange Act and the Securities Act, as
the case
may be, and the applicable rules and regulations of the Commission thereunder.
The financial statements of Falcon (the "Falcon
Financial Statements")
included in the Falcon SEC Documents comply as to form in all material
respects
with the published rules and regulations of the Commission with respect
thereto,
have been prepared in accordance with GAAP applied on a consistent basis
during
the periods involved (except as may be indicated in the notes thereto or,
in the
case of the unaudited statements, as permitted under Regulation S-X and/or
Item
310 of Regulation S-K promulgated by the Commission) and fairly present
(subject, in the case of the unaudited statements, to customary year-end
audit
adjustments) the financial position of Falcon as at the dates thereof and
the
results of its operations and cash flows for the periods indicated.
3.7 Governmental
Consents.
All
material consents, approvals, orders, or authorizations of, or registrations,
qualifications, designations, declarations, or filings with any federal
or state
governmental authority on the part of Falcon required in connection with
the
consummation of the Share Exchange shall have been obtained prior to, and
be
effective as of, the Closing.
3.8 Compliance
with Laws and Other Instruments.
The
execution, delivery and performance by Falcon of this Agreement and the
consummation by Falcon of the transactions contemplated herein will not
cause
Falcon to violate or contravene (i) any provision of law, (ii) any rule
or
regulation of any agency or government, (iii) any order, judgment or decree
of
any court, or (iv) any provision of its certificate of incorporation or
by-laws
as amended and in effect on and as of the Closing Date and will not violate
or
be in conflict with, result in a breach of or constitute (with or without
notice
or lapse of time, or both) a default under any indenture, loan or credit
agreement, deed of trust, mortgage, security agreement or other agreement
or
contract to which Falcon is a party or by which Falcon or any of its properties
is bound.
8
3.9 Binding
Obligations.
This
Agreement constitutes the legal, valid and binding obligations of Falcon,
and is
enforceable against Falcon in accordance with its respective terms, except
as
such enforcement is limited by bankruptcy, insolvency and other similar
laws
affecting the enforcement of creditors’ rights generally and by general
principles of equity.
3.10 Absence
of Undisclosed Liabilities.
Falcon
has no material obligation or liability (whether accrued, absolute, contingent,
liquidated or otherwise, whether due or to become due), arising out of
any
transaction entered into at or prior to the Closing, except (a) to the
extent
set forth on or reserved against in the balance sheet of Falcon as of April
30,
2008 (the “Falcon
Balance Sheet”)
or the
Notes to the Falcon Financial Statements, and (b) current liabilities incurred
and obligations under agreements entered into in the usual and ordinary
course
of business since April 30, 2008 (the “Falcon
Balance Sheet Date”),
none
of which (individually or in the aggregate) materially and adversely affects
the
condition (financial or otherwise), properties, assets, liabilities, business
operations, results of operations or prospects of Falcon, taken as a whole
(the
“Condition
of Falcon”).
3.11 Changes.
Since
the Falcon Balance Sheet Date, except as disclosed in the Falcon SEC Documents,
Falcon has not (a) incurred any debts, obligations or liabilities, absolute,
accrued or, to Falcon’s knowledge, contingent, whether due or to become due,
except for current liabilities incurred in the usual and ordinary course
of
business, (b) discharged or satisfied any Liens other than those securing,
or
paid any obligation or liability other than, current liabilities shown
on the
Falcon Balance Sheet and current liabilities incurred since the Falcon
Balance
Sheet Date, in each case in the usual and ordinary course of business,
(c)
mortgaged, pledged or subjected to Lien any of its assets, tangible or
intangible, other than in the usual and ordinary course of business, (d)
sold,
transferred or leased any of its assets, except in the usual and ordinary
course
of business, (e) cancelled or compromised any debt or claim, or waived
or
released any right of material value, (f) suffered any physical damage,
destruction or loss (whether or not covered by insurance) which could reasonably
be expected to have a material adverse effect on the Condition of Falcon,
(g)
entered into any transaction other than in the usual and ordinary course
of
business, (h) encountered any labor union difficulties, (i) made or granted
any
wage or salary increase or made any increase in the amounts payable under
any
profit sharing, bonus, deferred compensation, severance pay, insurance,
pension,
retirement or other employee benefit plan, agreement or arrangement, or
entered
into any employment agreement, (j) issued or sold any shares of capital
stock,
bonds, notes, debentures or other securities or granted any options (including
employee stock options), warrants or other rights with respect thereto,
(k)
declared or paid any dividends on or made any other distributions with
respect
to, or purchased or redeemed, any of its outstanding capital stock, (l)
suffered
or experienced any change in, or condition affecting, the financial condition
of
Falcon other than changes, events or conditions in the usual and ordinary
course
of its business, none of which (either by itself or in conjunction with
all such
other changes, events and conditions) could reasonably be expected to have
a
material adverse effect on the Condition of Falcon, (m) made any change
in the
accounting principles, methods or practices followed by it or depreciation
or
amortization policies or rates theretofore adopted, (n) made or permitted
any
amendment or termination of any material contract, agreement or license
to which
it is a party, (o) suffered any material loss not reflected in the Falcon
Balance Sheet or its statement of income for the year ended on the Falcon
Balance Sheet Date, (p) paid, or made any accrual or arrangement for payment
of,
bonuses or special compensation of any kind or any severance or termination
pay
to any present or former officer, director, employee, shareholder or consultant,
(q) made or agreed to make any charitable contributions or incurred any
non-business expenses, or (r) entered into any agreement, or otherwise
obligated
itself, to do any of the foregoing.
9
3.12 Tax
Returns and Audits.
All
required federal, state and local Tax Returns of Falcon required by applicable
laws of the United Kingdom, the United States and any provinces or states
thereof, have been accurately prepared in all material respects and duly
and
timely filed, and all Taxes required to be paid with respect to the periods
covered by such returns have been paid to the extent that the same are
material
and have become due, except where the failure so to file or pay could not
reasonably be expected to have a material adverse effect upon the Condition
of
Falcon. Falcon is not and has not been delinquent in the payment of any
Tax.
Falcon has not had a Tax deficiency assessed against it. None of the Falcon’s
income tax returns nor any income or franchise tax returns have been audited
by
governmental authorities. The reserves for Taxes reflected on the Falcon
Balance
Sheet are sufficient for the payment of all unpaid Taxes payable by Falcon
with
respect to the period ended on Falcon Balance Sheet Date. There are no
or
foreign audits, actions, suits, proceedings, investigations, claims or
administrative proceedings by any United Kingdom or foreign governmental,
administrative or regulatory authority relating to Taxes or any Tax Returns
of
Falcon now pending, and Falcon has not received any notice of any proposed
audits, investigations, claims or administrative proceedings relating to
Taxes
or any Tax Returns.
3.13 Litigation.
There is
no legal action, suit, arbitration or other legal, administrative or other
governmental proceeding pending or, to the knowledge of Falcon, threatened
against or affecting Falcon or its properties, assets or business. To the
knowledge of Falcon, Falcon is not in default with respect to any order,
writ,
judgment, injunction, decree, determination or award of any court or any
governmental agency or instrumentality or arbitration authority.
3.14 Interested
Party Transactions.
No
officer, director or shareholder of Falcon or any Affiliate or “associate” (as
such term is defined in Rule 405 under the Securities Act) of any such
Person or
Falcon has or has had, either directly or indirectly, (a) an interest in
any
Person that (i) furnishes or sells services or products that are furnished
or
sold or are proposed to be furnished or sold by Falcon through Extreme
following
the consummation of the Share Exchange or (ii) purchases from or sells
or
furnishes to Falcon any goods or services, or (b) a beneficial interest
in any
contract or agreement to which Falcon is a party or by which it may be
bound or
affected.
3.15 Questionable
Payments.
Falcon
has not used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity;
made
any direct or indirect unlawful payments to government officials or employees
from corporate funds; established or maintained any unlawful or unrecorded
fund
of corporate monies or other assets; made any false or fictitious entries
on the
books of record of any such corporations; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
10
3.16 Obligations
to or by Shareholders.
Falcon
has no liability or obligation or commitment to any shareholder of Falcon
or any
Affiliate or “associate” (as such term is defined in Rule 405 under the
Securities Act) of any shareholder of Falcon, nor does any shareholder
of Falcon
or any such Affiliate or associate have any liability, obligation or commitment
to Falcon.
3.17 Schedule
of Assets and Contracts.
Except
as expressly set forth in this Agreement, the Falcon Balance Sheet or the
notes
thereto, Falcon is not a party to any written or oral agreement not made
in the
ordinary course of business that is material to Falcon. Falcon does not
own any
real property. Falcon is not a party to or otherwise barred by any written
or
oral (a) agreement with any labor union, (b) agreement for the purchase
of fixed
assets or for the purchase of materials, supplies or equipment in excess
of
normal operating requirements, (c) agreement for the employment of any
officer,
individual employee or other Person on a full-time basis or any agreement
with
any Person for consulting services, (d) bonus, pension, profit sharing,
retirement, stock purchase, stock option, deferred compensation, medical,
hospitalization or life insurance or similar plan, contract or understanding
with respect to any or all of the employees of Falcon or any other Person,
(e)
indenture, loan or credit agreement, note agreement, deed of trust, mortgage,
security agreement, promissory note or other agreement or instrument relating
to
or evidencing Indebtedness for Borrowed Money or subjecting any asset or
property of Falcon to any Lien or evidencing any Indebtedness, (f) guaranty
of
any Indebtedness, (g) lease or agreement under which Falcon is lessee of
or
holds or operates any property, real or personal, owned by any other Person,
(h)
lease or agreement under which Falcon is lessor or permits any Person to
hold or
operate any property, real or personal, owned or controlled by Falcon,
(i)
agreement granting any preemptive right, right of first refusal or similar
right
to any Person, (j) agreement or arrangement with any Affiliate or any
“associate” (as such term is defined in Rule 405 under the Securities Act) of
Falcon or any present or former officer, director or shareholder of Falcon,
(k)
agreement obligating Falcon to pay any royalty or similar charge for the
use or
exploitation of any tangible or intangible property, (1) covenant not to
compete
or other restriction on its ability to conduct a business or engage in
any other
activity, (m) distributor, dealer, manufacturer’s representative, sales agency,
franchise or advertising contract or commitment, (n) agreement to register
securities under the Securities Act, (o) collective bargaining agreement,
or (p)
agreement or other commitment or arrangement with any Person continuing
for a
period of more than three months from the Closing Date that involves an
expenditure or receipt by Falcon in excess of $1,000. Falcon maintains
no
insurance policies and insurance coverage of any kind with respect to Falcon,
its business, premises, properties, assets, employees and agents. Falcon
has
furnished to Extreme true and complete copies of all agreements and other
documents disclosed or referred to in Schedule
3.17,
as well
as any additional agreements or documents, requested by Extreme.
3.18 Employees.
Falcon
is not under any obligation or liability to any officer, director, employee
or
Affiliate of Falcon.
3.19 Disclosure.
There is
no fact relating to Falcon that Falcon has not disclosed to Extreme in
writing
that materially and adversely affects nor, insofar as Falcon can now foresee,
will materially and adversely affect, the condition (financial or otherwise),
properties, assets, liabilities, business operations, results of operations
or
prospects of Falcon. No representation or warranty by Falcon herein and
no
information disclosed in the schedules or exhibits hereto by Falcon contains
any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements contained herein or therein misleading.
11
4.Conduct
of Businesses Pending the Share Exchange.
4.1 Conduct
of Business by Extreme Pending the Share Exchange.
Prior to
the Effective Time, unless Falcon shall otherwise agree in writing or as
otherwise contemplated by this Agreement:
(i) the
business of Extreme shall be conducted only in the ordinary course;
(ii) Extreme
shall not (A) directly or indirectly redeem, purchase or otherwise acquire
or
agree to redeem, purchase or otherwise acquire any shares of its capital
stock;
(B) amend its Certificate of Incorporation or By-laws; or (C) split, combine
or
reclassify the outstanding Extreme Common Stock or declare, set aside or
pay any
dividend payable in cash, stock or property or make any distribution with
respect to any such stock.
(iii) Extreme
shall not (A) issue or agree to issue any additional shares of, or options,
warrants or rights of any kind to acquire any shares of, Extreme Common
Stock;
(B) acquire or dispose of any fixed assets or acquire or dispose of any
other
substantial assets other than in the ordinary course of business; (C) incur
additional Indebtedness or any other liabilities or enter into any other
transaction other than in the ordinary course of business; (D) enter into
any
contract, agreement, commitment or arrangement with respect to any of the
foregoing; or (E) except as contemplated by this Agreement, enter into
any
contract, agreement, commitment or arrangement to dissolve, merge, consolidate
or enter into any other material business combination;
(iv) Extreme
shall use its best efforts to preserve intact the business organization
of
Extreme, to keep available the service of its present officers and key
employees, and to preserve the good will of those having business relationships
with it; and
(v) Extreme
will not, nor will it authorize any director or authorize or permit any
officer
or employee or any attorney, accountant or other representative retained
by it
to, make, solicit, encourage any inquiries with respect to, or engage in
any
negotiations concerning, any Acquisition Proposal (as defined below). Extreme
will promptly advise Falcon orally and in writing of any such inquiries
or
proposals (or requests for information) and the substance thereof. As used
in
this paragraph, “Acquisition
Proposal”
shall
mean any proposal for a merger or other business combination involving
Extreme
or for the acquisition of a substantial equity interest in it or any material
assets of it other than as contemplated by this Agreement. Extreme will
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any person conducted heretofore with respect
to
any of the foregoing.
4.2 Conduct
of Business by Falcon Pending the Share Exchange.
Prior to
the Effective Time, unless Extreme shall otherwise agree in writing or
as
otherwise contemplated by this Agreement:
(i) the
business of Falcon shall be conducted only in the ordinary course; provided,
however,
that
Falcon shall take the steps necessary to have discontinued its existing
business
without liability to Falcon as of the Closing Date;
12
(ii) Falcon
shall not (A) directly or indirectly redeem, purchase or otherwise acquire
or
agree to redeem, purchase or otherwise acquire any shares of its capital
stock;
(B) amend its certificate of incorporation or by-laws other than as provided
in
this Agreement; or (C) split, combine or reclassify its capital stock or
declare, set aside or pay any dividend payable in cash, stock or property
or
make any distribution with respect to such stock;
(iii) Falcon
shall not (A) issue or agree to issue any additional shares of, or options,
warrants or rights of any kind to acquire shares of, its capital stock;
(B)
acquire or dispose of any assets other than in the ordinary course of business
(except for dispositions in connection with Section 4.2(i) hereof); (C)
incur
additional Indebtedness or any other liabilities or enter into any other
transaction except in the ordinary course of business; (D) enter into any
contract, agreement, commitment or arrangement with respect to any of the
foregoing, or (E) except as contemplated by this Agreement, enter into
any
contract, agreement, commitment or arrangement to dissolve, merge; consolidate
or enter into any other material business contract or enter into any
negotiations in connection therewith;
(iv) Falcon
will not, and will not authorize any director or authorize or permit any
officer
or employee or any attorney, accountant or other representative retained
by them
to, make, solicit, encourage any inquiries with respect to, or engage in
any
negotiations concerning, any Acquisition Proposal. Falcon will promptly
advise
Extreme orally and in writing of any such inquiries or proposals (or requests
for information) and the substance thereof. Falcon will immediately cease
and
cause to be terminated any existing activities, discussions or negotiations
with
any person conducted heretofore with respect to any of the foregoing;
and
(v) Falcon
will not enter into any new employment agreements with any of its officers
or
employees or grant any increases in the compensation or benefits of its
officers
and employees.
5.Additional
Agreements.
5.1 Access
and Information.
Extreme
and Falcon shall each afford to the other and to the other’s accountants,
counsel and other representatives full access during normal business hours
throughout the period prior to the Effective Time of all of its properties,
books, contracts, commitments and records (including but not limited to
tax
returns) and during such period, each shall furnish promptly to the other
all
information concerning its business, properties and personnel as such other
party may reasonably request, provided
that no
investigation pursuant to this Section 5.1 shall affect any representations
or
warranties made herein. Each party shall hold, and shall cause its employees
and
agents to hold, in confidence all such information (other than such information
which (i) is already in such party’s possession or (ii) becomes generally
available to the public other than as a result of a disclosure by such
party or
its directors, officers, managers, employees, agents or advisors, or (iii)
becomes available to such party on a non-confidential basis from a source
other
than a party hereto or its advisors, provided that such source is not known
by
such party to be bound by a confidentiality agreement with or other obligation
of secrecy to a party hereto or another party until such time as such
information is otherwise publicly available; provided,
however,
that
(A) any such information may be disclosed to such party’s directors, officers,
employees and representatives of such party’s advisors who need to know such
information for the purpose of evaluating the transactions contemplated
hereby
(it being understood that such directors, officers, employees and
representatives shall be informed by such party of the confidential nature
of
such information), (B) any disclosure of such information may be made as
to
which the party hereto furnishing such information has consented in writing,
and
(C) any such information may be disclosed pursuant to a judicial, administrative
or governmental order or request; provided,
however,
that
the requested party will promptly so notify the other party so that the
other
party may seek a protective order or appropriate remedy and/or waive compliance
with this Agreement and if such protective order or other remedy is not
obtained
or the other party waives compliance with this provision, the requested
party
will furnish only that portion of such information which is legally required
and
will exercise its best efforts to obtain a protective order or other reliable
assurance that confidential treatment will be accorded the information
furnished). If this Agreement is terminated, each party will deliver to
the
other all documents and other materials (including copies) obtained by
such
party or on its behalf from the other party as a result of this Agreement
or in
connection herewith, whether so obtained before or after the execution
hereof.
13
5.2 Additional
Agreements.
Subject
to the terms and conditions herein provided, each of the parties hereto
agrees
to use its commercially reasonable efforts to take, or cause to be taken,
all
action and to do, or cause to be done, all things necessary, proper or
advisable
under applicable laws and regulations to consummate and make effective
the
transactions contemplated by this Agreement, including using its commercially
reasonable efforts to satisfy the conditions precedent to the obligations
of any
of the parties hereto to obtain all necessary waivers, and to lift any
injunction or other legal bar to the Share Exchange (and, in such case,
to
proceed with the Share Exchange as expeditiously as possible). In order
to
obtain any necessary governmental or regulatory action or non-action, waiver,
consent, extension or approval, each of Falcon and Extreme agrees to take
all
reasonable actions and to enter into all reasonable agreements as may be
necessary to obtain timely governmental or regulatory approvals and to
take such
further action in connection therewith as may be necessary. In case at
any time
after the Effective Time any further action is necessary or desirable to
carry
out the purposes of this Agreement, the proper officers and/or directors
of
Falcon and Extreme shall take all such necessary action.
5.3 Publicity.
No party
shall issue any press release or public announcement pertaining to the
Share
Exchange that has not been agreed upon in advance by Falcon and
Extreme.
5.4 Appointment
of Directors.
On the
Closing Date, Falcon shall obtain the resignations of the current officers
and
directors of Falcon as provided by Section 6.2(f)(4) hereof, and shall
cause the
persons listed as directors in Exhibit
A
hereto
to be elected to the Board of Directors of Falcon.
5.5 Falcon
Name Change.
On the
Closing Date, Falcon shall take all required legal actions to change its
form of
organization to a public limited company.
6.Conditions
of Parties’ Obligations.
6.1 Falcon
Obligations.
The
obligations of Falcon under this Agreement are subject to the fulfillment
at or
prior to the Closing of the following conditions, any of which may be waived
in
whole or in part by Falcon.
14
(a) No
Errors, etc.
The
representations and warranties of Extreme and the Extreme Stockholders
under
this Agreement shall be deemed to have been made again on the Closing Date
and
shall then be true and correct in all material respects.
(b) Compliance
with Agreement.
The
Extreme Parties shall have performed and complied in all material respects
with
all agreements and covenants required by this Agreement to be performed
or
complied with by them on or before the Closing Date.
(c) No
Default or Adverse Change.
There
shall not exist on the Closing Date any Default or any event or condition
that,
with the giving of notice or lapse of time, or both, would constitute a
Default,
and since the Balance Sheet Date, there shall have been no material adverse
change in the Condition of Extreme.
(d) Certificate
of Officers.
Extreme
shall have delivered to Falcon a certificate dated the Closing Date, executed
on
its behalf by the Chief Executive Officer and Chief Financial Officer of
Extreme, certifying the satisfaction of the conditions specified in paragraphs
(a), (b) and (c) of this Section 6.1.
(e) No
Restraining Action.
No
action or proceeding before any court, governmental body or agency shall
have
been threatened, asserted or instituted to restrain or prohibit, or to
obtain
substantial damages in respect of, this Agreement or the carrying out of
the
transactions contemplated herein.
(f) Supporting
Documents.
Falcon
shall have received the following:
(1) Copies
of
resolutions of the Board of Directors of Extreme and the of the Extreme
Stockholders, certified by the Secretary of Extreme, authorizing and approving
the execution, delivery and performance of this Agreement and all other
documents and instruments to be delivered pursuant hereto and
thereto.
(2) A
certificate of incumbency executed by the Secretary of Extreme certifying
the
names, titles and signatures of the officers authorized to execute any
documents
referred to in this Agreement and further certifying that the Certificate
of
Incorporation and By-laws of Extreme delivered to Falcon at or prior to
the time
of the execution of this Agreement have been validly adopted and have not
been
amended or modified.
(3) Evidence
as of a recent date of the good standing and corporate existence of Extreme
issued by the Secretary of State of the State of Delaware and evidence
that
Extreme is qualified to transact business as a foreign corporation and
is in
good standing in each state of the United States and in each other jurisdiction
where the character of the property owned or leased by it or the nature
of its
activities makes such qualification necessary.
(4) Such
additional supporting documentation and other information with respect
to the
transactions contemplated hereby as Falcon may reasonably request.
15
(g) Proceedings
and Documents.
All
corporate and other proceedings and actions taken by Extreme in connection
with
the transactions contemplated hereby and all certificates, opinions, agreements,
instruments and documents mentioned herein or incident to any such transactions
shall be reasonably satisfactory in form and substance to Falcon. Extreme
shall
furnish to Falcon such supporting documentation and evidence of the satisfaction
of any or all of the conditions precedent specified in this Section 6.1
as
Falcon or its counsel may reasonably request.
6.2 Obligations
of Extreme.
The
obligations of Extreme under this Agreement are subject to the fulfillment
at or
prior to the Closing of the following conditions:
(a) No
Errors, etc.
The
representations and warranties of Falcon under this Agreement shall be
deemed to
have been made again on the Closing Date and shall then be true and correct
in
all material respects.
(b) Compliance
with Agreement.
Falcon
shall have performed and complied in all material respects with all agreements
and covenants required by this Agreement to be performed or complied with
by
Falcon on or before the Closing Date.
(c) No
Default or Adverse Change.
There
shall not exist on the Closing Date any Default or any event or condition,
that
with the giving of notice or lapse of time, or both, would constitute a
Default,
and since the Falcon Balance Sheet Date, there shall have been no material
adverse change in the Condition of Falcon.
(d) Certificate
of Officers.
Falcon
shall have delivered to Extreme a certificate dated the Closing Date, executed
on Falcon’s behalf by Falcon’s President or other duly authorized officer,
certifying the satisfaction of the conditions specified in paragraphs (a),
(b),
and (c) of this Section 6.2.
(e) Opinion
of Falcon’s Counsel.
Extreme
shall have received from counsel for Falcon, a favorable opinion dated
the
Closing Date to the effect set forth in Exhibit
B
hereto.
(f) Supporting
Documents.
Extreme
shall have received the following:
(1) Copies
of
resolutions of Falcon’s board of directors, certified by Falcon’s Secretary,
authorizing and approving, to the extent applicable, the execution, delivery
and
performance of this Agreement and all other documents and instruments to
be
delivered by Falcon pursuant hereto and thereto.
(2) A
certificate of incumbency executed by the Secretary of Falcon certifying
the
names, titles and signatures of the officers authorized to execute the
documents
referred to in paragraph (i) above and further certifying that the Certificate
of Incorporation and By-laws of Falcon appended thereto have not been amended
or
modified.
(3) A
certificate of Falcon’s transfer agent and registrar, certifying as of the
business day prior to the Closing Date, and a true and complete list of
the
names and addresses of the record owners of all of the outstanding Falcon
Ordinary Shares, together with the number of Falcon Ordinary Shares held
by each
record owner.
16
(4) The
executed resignation of each of the individuals whose names are set forth
on
Schedule
6.2(f)(4)
of their
positions as directors or officers of Falcon, as the case may be, which
resignations are to take effect as of the Closing Date.
(5) Such
additional supporting documentation and other information with respect
to the
transactions contemplated hereby as Extreme may reasonably request.
7.Non-Survival
of Representations and Warranties.
The
representations and warranties of the parties made in Sections 2 and 3
of this
Agreement (including the Schedules to the Agreement which are hereby
incorporated by reference) shall not survive beyond the Closing Date. This
Section 7 shall not limit any claim for fraud or any covenant or agreement
of
the parties which by its terms contemplates performance after the Effective
Time.
8.Amendment
of Agreement.
This
Agreement may be amended or modified at any time in all respects by an
instrument in writing executed in the case of this Agreement by the parties
hereto.
9.Definitions.
Unless
the context otherwise requires, the terms defined in this Section 9 shall
have
the meanings herein specified for all purposes of this Agreement, applicable
to
both the singular and plural forms of any of the terms herein
defined.
“Affiliate”
shall
mean any Person that directly or indirectly controls, is controlled by,
or is
under common control with, the indicated Person.
“Agreement”
shall
mean this Agreement.
“Audited
Balance Sheet” shall have the meaning assigned in Section 2.10
hereof.
“Balance
Sheet”
and
“Balance
Sheet Date”
shall
have the meanings assigned to such terms in Section 2.10 hereof.
“Closing”
and
“Closing
Date”
shall
have the meanings assigned to such terms in Section 10 hereof.
“Code”
shall
mean the Internal Revenue Code of 1986, as amended.
“Commission”
shall
mean the U.S. Securities and Exchange Commission.
“Condition
of Extreme”
shall
have the meaning assigned to it in Section 2.2 hereof.
“Condition
of Falcon”
shall
have the meaning assigned to it in Section 3.10 hereof.
“Default”
shall
mean a default or failure in the due observance or performance of any covenant,
condition or agreement on the part of Extreme to be observed or performed
under
the terms of this Agreement, if such default or failure in performance
shall
remain unremedied for five (5) days.
17
“Employee
Benefit Plans”
shall
have the meaning assigned to it in Section 2.15 hereof.
“Environmental
Laws”
means
the Comprehensive Environmental Response, Compensation and Liability Act,
42
U.S.C. §§ 9601, et seq.; the Emergency Planning and Community Right-to-Know Act
of 1986, 42 U.S.C. §§ 11001, et seq.; the Resource Conservation and Recovery
Act, 42 U.S.C. §§ 6901, et seq.; the Toxic Substances Control Act, 15 U.S.C. §§
2601 et seq.; the Federal Insecticide, Fungicide, and Rodenticide Act,
7 U.S.C.
§§ 136, et seq. and comparable state statutes dealing with the registration,
labeling and use of pesticides and herbicides; the Clean Air Act, 42 U.S.C.
§§
7401 et seq.; the Clean Water Act (Federal Water Pollution Control Act),
33
U.S.C. §§ 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C. §§ 300f, et seq.;
the Hazardous Materials Transportation Act, 49 U.S.C. §§ 1801, et seq.; as any
of the above statutes have been amended as of the date hereof, all rules,
regulations and policies promulgated pursuant to any of the above statutes,
and
any other foreign, federal, state or local law, statute, ordinance, rule,
regulation or policy governing environmental matters, as the same have
been
amended as of the date hereof.
“Equity
Security”
shall
mean any stock or similar security of an issuer or any security (whether
stock
or Indebtedness for Borrowed Money) convertible, with or without consideration,
into any stock or similar equity security, or any security (whether stock
or
Indebtedness for Borrowed Money) carrying any warrant or right to subscribe
to
or purchase any stock or similar security, or any such warrant or
right.
“ERISA”
shall
mean the Employee Retirement Income Securities Act of 1974, as
amended.
“Exchange
Act”
shall
mean the Securities Exchange Act of 1934, as amended.
“DGCL”
means
the Delaware General Corporation Law, as amended.
“Extreme”
shall
mean Extreme Mobile Coatings, Inc., a Delaware corporation.
“Extreme
Common Stock”
shall
mean the common stock of Extreme, $.001 par value per share.
“Extreme
Stockholders”
shall
have the meaning assigned in the introductory paragraph of this
Agreement.
“Falcon”
shall
mean Falcon Media, Ltd., a United Kingdom private limited company.
“Falcon
Balance Sheet”
shall
have the meaning assigned to it in Section 3.10 hereof.
“Falcon
Balance Sheet Date”
shall
have the meaning assigned to it in Section 3.10 hereof.
“Falcon
Financial Statements”
shall
have the meaning assigned to it in Section 3.6 hereof.
18
“Falcon
Ordinary Shares”
shall
mean ordinary shares of Falcon.
“GAAP”
shall
mean generally accepted accounting principles in the United States, as
in effect
from time to time.
“Hazardous
Material”
means
any substance or material meeting any one or more of the following criteria:
(a)
it is or contains a substance designated as or meeting the characteristics
of a
hazardous waste, hazardous substance, hazardous material, pollutant, contaminant
or toxic substance under any Environmental Law; (b) its presence at some
quantity requires investigation, notification or remediation under any
Environmental Law; or (c) it contains, without limiting the foregoing,
asbestos,
polychlorinated biphenyls, petroleum hydrocarbons, petroleum derived substances
or waste, pesticides, herbicides, crude oil or any fraction thereof, nuclear
fuel, natural gas or synthetic gas.
“Indebtedness”
shall
mean any obligation of Extremewhich under generally accepted accounting
principles is required to be shown on the balance sheet of Extreme as a
liability. Any obligation secured by a Lien on, or payable out of the proceeds
of production from, property of Extremeshall be deemed to be Indebtedness
even
though such obligation is not assumed by Extreme.
“Indebtedness
for Borrowed Money”
shall
mean (a) all Indebtedness in respect of money borrowed including, without
limitation, Indebtedness which represents the unpaid amount of the purchase
price of any property and is incurred in lieu of borrowing money or using
available funds to pay such amounts and not constituting an account payable
or
expense accrual incurred or assumed in the ordinary course of business
of
Extreme, (b) all Indebtedness evidenced by a promissory note, bond or similar
written obligation to pay money, or (c) all such Indebtedness guaranteed
by
Extremeor for which Extremeis otherwise contingently liable.
“knowledge”
and
“know”
means,
when referring to any person or entity, the actual knowledge of such person
or
entity of a particular matter or fact, and what that person or entity would
have
reasonably known after due inquiry. An entity will be deemed to have “knowledge”
of a particular fact or other matter if any individual who is serving,
or who
has served, as an executive officer of such entity has actual “knowledge” of
such fact or other matter, or had actual “knowledge” during the time of such
service of such fact or other matter, or would have had “knowledge” of such
particular fact or matter after due inquiry.
“Lien”
shall
mean any mortgage, pledge, security interest, encumbrance, lien or charge
of any
kind, including, without limitation, any conditional sale or other title
retention agreement, any lease in the nature thereof and the filing of
or
agreement to give any financing statement under the Uniform Commercial
Code of
any jurisdiction and including any lien or charge arising by statute or
other
law.
“Permitted
Liens”
shall
mean (a) Liens for taxes and assessments or governmental charges or levies
not
at the time due or in respect of which the validity thereof shall currently
be
contested in good faith by appropriate proceedings; (b) Liens in respect
of
pledges or deposits under workmen’s compensation laws or similar legislation,
carriers’, warehousemen’s, mechanics’, laborers’ and materialmens’ and similar
Liens, if the obligations secured by such Liens are not then delinquent
or are
being contested in good faith by appropriate proceedings; and (c) Liens
incidental to the conduct of the business of Extreme that were not incurred
in
connection with the borrowing of money or the obtaining of advances or
credits
and which do not in the aggregate materially detract from the value of
its
property or materially impair the use made thereof by Extreme in its
business.
19
“Person”
shall
include all natural persons, corporations, business trusts, associations,
limited liability companies, partnerships, joint ventures and other entities
and
governments and agencies and political subdivisions.
“Securities
Act”
shall
mean the Securities Act of 1933, as amended.
“Tax”
or
“Taxes”
shall
mean (a) any and all taxes, assessments, customs, duties, levies, fees,
tariffs,
imposts, deficiencies and other governmental charges of any kind whatsoever
(including, but not limited to, taxes on or with respect to net or gross
income,
franchise, profits, gross receipts, capital, sales, use, ad valorem, value
added, transfer, real property transfer, transfer gains, transfer taxes,
inventory, capital stock, license, payroll, employment, social security,
unemployment, severance, occupation, real or personal property, estimated
taxes,
rent, excise, occupancy, recordation, bulk transfer, intangibles, alternative
minimum, doing business, withholding and stamp), together with any interest
thereon, penalties, fines, damages costs, fees, additions to tax or additional
amounts with respect thereto, imposed by the United States (federal, state
or
local), the United Kingdom or other applicable jurisdiction; (b) any liability
for the payment of any amounts described in clause (a) as a result of being
a
member of an affiliated, consolidated, combined, unitary or similar group
or as
a result of transferor or successor liability, including, without limitation,
by
reason of Regulation section 1.1502-6; and (c) any liability for the payments
of
any amounts as a result of being a party to any Tax Sharing Agreement or
as a
result of any express or implied obligation to indemnify any other Person
with
respect to the payment of any amounts of the type described in clause (a)
or
(b).
“Tax
Return”
shall
include all returns and reports (including elections, declarations, disclosures,
schedules, estimates and information returns (including Form 1099 and
partnership returns filed on Form 1065) required to be supplied to a Tax
authority relating to Taxes.
10. Termination
Prior to Closing.
10.1 Termination
of Agreement.
This
Agreement may be terminated at any time prior to the Closing:
(a) By
the
mutual written consent of Extreme and Falcon;
(b) By
Extreme, if Falcon (i) fails to perform in any material respect any of
its
agreements contained herein required to be performed by it on or prior
to the
Closing Date, (ii) materially breaches any of its representations, warranties
or
covenants contained herein, which failure or breach is not cured within
thirty
(30) days after Extreme has notified Falcon of its intent to terminate
this
Agreement pursuant to this paragraph (b);
20
(c) By
Falcon, if Extreme (i) fails to perform in any material respect any of
its
agreements contained herein required to be performed by it on or prior
to the
Closing Date, (ii) materially breach any of its representations, warranties
or
covenants contained herein, which failure or breach is not cured within
thirty
(30) days after Falcon has notified Extreme of its intent to terminate
this
Agreement pursuant to this paragraph (c);
(d) By
either
Extreme, on the one hand, or Falcon, on the other hand, if there shall
be any
order, writ, injunction or decree of any court or governmental or regulatory
agency binding on Falcon or Extreme, which prohibits or materially restrains
any
of them from consummating the transactions contemplated hereby, provided
that the
parties hereto shall have used their best efforts to have any such order,
writ,
injunction or decree lifted and the same shall not have been lifted within
ninety (90) days after entry, by any such court or governmental or regulatory
agency; or
10.2 Termination
of Obligations.
Termination of this Agreement pursuant to this Section 10 shall terminate
all
obligations of the parties hereunder, except for the obligations under
Sections
5.1, 11.3 and 11.11; provided,
however,
that
termination pursuant to paragraphs (b) or (c) of Section 10.1 shall not
relieve
the defaulting or breaching party or parties from any liability to the
other
parties hereto.
11.Miscellaneous.
11.1 Notices.
Any
notice, request or other communication hereunder shall be given in writing
and
shall be served either personally by overnight delivery or delivered by
mail,
certified return receipt and addressed to the following addresses:
If
to Falcon:
|
Falcon
Media, Ltd.
|
00
Xxxxxxxxx Xxxxxxx
|
|
Xxxxxx,
XXXXXXX
|
|
Xxxxxx
Xxxxxxx x000000000000
|
|
With
a copy to:
|
Xxxxxxx
X. Xxxxx, Esq.
|
0
Xxxx Xxxxx
|
|
Xxxx
Xxxxx, Xxx Xxxx 00000
|
|
If
to Extreme:
|
|
Extreme
Mobile Coatings, Inc.
|
|
000
Xxx Xxxx Xxxxx
|
|
Xxxxxxxxxxxxx,
Xxxxxxxx 00000
Attention:
Xxxxxxx
Xxxxxxxx
|
21
With
a copy to:
|
Xxxxxxxx,
Xxxxxxxx & Xxxxxx, P.C.
|
000
Xxxx Xxxx Xxxx, Xxxxx 000
|
|
X.X.
Xxx 000
|
|
Xxxxxxxxxx,
Xxx Xxxxxx 00000
|
|
Attention:
Xxxxxx X. Xxxxxxxx, Esq.
|
|
If
to Keystone Capital
|
Keystone
Capital Resources, LLC
|
Resources,
LLC:
|
0000
Xxxx Xxxx
|
Xxxxx
Xxxxx, XX 00000
|
|
Attention:
Xxxxx X. Xxxxxxx
|
|
If
to Xiom Corp.:
|
Xiom
Corp.
|
00
Xxxxx Xxxxxx
|
|
Xxxx
Xxxxxxx, Xxx Xxxx
|
|
Attention:
Xxxxxx Xxxxxxx
|
|
If
to Bluegrass Power
|
Blue
Grass Power Coatings, LLC
|
Coatings,
LLC:
|
000
Xxx Xxxx Xxxxx
|
Xxxxxxxxxxxxx,
Xxxxxxxx 00000
|
|
Attention:
Xxxxxxx Xxxxxxxx
|
|
If
to Xxxxxxx X. Xxxxx
|
Xxxxxxx
X. Xxxxx, Esq.
|
or
Xxxxx Xxxxx:
|
0
Xxxx Xxxxx
|
Xxxx
Xxxxx, Xxx Xxxx 00000
|
Notices
shall be deemed received at the earlier of actual receipt or three (3)
business
days following mailing. Counsel for a party (or any authorized representative)
shall have authority to accept delivery of any notice on behalf of such
party.
11.2 Entire
Agreement.
This
Agreement, including the schedules and exhibits attached hereto and other
documents referred to herein, contains the entire understanding of the
parties
hereto with respect to the subject matter hereof. This Agreement supersedes
all
prior agreements and undertakings between the parties with respect to such
subject matter.
11.3 Expenses.
Each
party shall bear and pay all of the legal, accounting and other expenses
incurred by it in connection with the transactions contemplated by this
Agreement. Expenses of Falcon prior to the Effective Time shall be satisfied
by
Falcon immediately prior to the Effective Time and Falcon shall not be
liable
for such expenses after the Effective Time.
11.4 Time.
Time is
of the essence in the performance of the parties’ respective obligations herein
contained.
11.5 Severability.
Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision
in any
other jurisdiction.
22
11.6 Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties
hereto
and their respective successors, assigns and heirs; provided,
however,
that
neither party shall directly or indirectly transfer or assign any of its
rights
hereunder in whole or in part without the written consent of the others,
which
may be withheld in its sole discretion , and any such transfer or assignment
without said consent shall be void.
11.7 No
Third Parties Benefited.
This
Agreement is made and entered into for the sole protection and benefit
of the
parties hereto, their successors, assigns and heirs, and no other Person
shall
have any right or action under this Agreement.
11.8 Counterparts.
This
Agreement may be executed in one or more counterparts, with the same effect
as
if all parties had signed the same document. Each such counterpart shall
be an
original, but all such counterparts together shall constitute a single
agreement.
11.9 Recitals,
Schedules and Exhibits.
The
Recitals, Schedules and Exhibits to this Agreement are incorporated herein
and,
by this reference, made a part hereof as if fully set forth herein.
11.10 Section
Headings and Gender.
The
Section headings used herein are inserted for reference purposes only and
shall
not in any way affect the meaning or interpretation of this Agreement.
All
personal pronouns used in this Agreement shall include the other genders,
whether used in the masculine, feminine or neuter gender, and the singular
shall
include the plural, and vice versa, whenever and as often as may be
appropriate.
11.11 Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance
with the
laws of the State of Delaware, without giving affect to the conflict of
laws
provisions thereof. This Agreement and the transactions contemplated hereby
shall be subject to the exclusive jurisdiction of the courts of the State
of
Delaware. The parties to this Agreement agree that any breach of any term
or
condition of this Agreement or the transactions contemplated hereby shall
be
deemed to be a breach occurring in the State of Delaware by virtue of a
failure
to perform an act required to be performed in the State of Delaware. The
parties
to this Agreement irrevocably and expressly agree to submit to the jurisdiction
of the courts of the State of Delaware for the purpose of resolving any
disputes
among the parties relating to this Agreement or the transactions contemplated
hereby. The parties irrevocably waive, to the fullest extent permitted
by law,
any objection which they may now or hereafter have to the laying of venue
of any
suit, action or proceeding arising out of or relating to this Agreement
and the
transactions contemplated hereby, or any judgment entered by any court
in
prospect hereof brought in the State of Delaware, and further irrevocably
waive
any claim that any suit, action or proceeding brought in the State of
Delawarehas been brought in an inconvenient forum. With respect to any
action
before the above courts, the parties hereto agree to service of process
by
certified or registered United States mail, postage prepaid, addressed
to the
party in question.
[Signature
Page Follows.]
23
IN
WITNESS WHEREOF, the parties hereto have executed this Share Exchange Agreement
to be binding and effective as of the day and year first above
written.
FALCON:
|
||
FALCON
MEDIA SERVICES, LTD.
|
||
By:
|
||
Name:
|
||
Title:
|
||
EXTREME:
|
||
EXTREME
MOBILE COATINGS, INC.
|
||
By:
|
||
Name:
|
||
Title:
|
||
KEYSTONE
CAPITAL RESOURCES, LLC
|
||
By:
|
||
Name:
|
||
Title:
|
||
XIOM
CORP.
|
||
By:
|
||
Name:
|
||
Title:
|
24
BLUEGRASS
MOBILE POWER
COATINGS,
LLC
|
||
By:
|
||
Name:
|
||
Title:
|
||
Xxxxxxx
X. Xxxxx
|
||
Xxxxx
Xxxxx
|
The
exhibits and schedules to this agreement have been omitted but shall be
made
available upon the request of the Securities and Exchange
Commission.
::ODMA\PCDOCS\GHCDOCS\646211\1
25