AGREEMENT
THIS
AGREEMENT (this “Agreement”)
is
made and entered into on May 7, 2008, by and among NORTH COAST PARTNERS, INC.,
a
Delaware corporation (“Parent”),
NORTH
COAST ACQUISITION CORP., a Delaware corporation (“Acquisition
Corp.”),
which
is a wholly-owned subsidiary of Parent, and MONTAVO, INC., a Washington
corporation (the “Company”).
WITNESSETH:
WHEREAS,
the Board of Directors of each of Acquisition Corp., Parent and the Company
have
determined that it is fair and in the best interests of their respective
stockholders for Acquisition Corp. to be merged with and into the Company (the
“Merger”)
upon
the terms and subject to the conditions set forth herein;
WHEREAS,
the Board of Directors of each of Parent, Acquisition Corp. and the Company
have
approved the Merger in accordance with the General Corporation Law of the State
of Delaware (the “DGCL”),
and
Washington Business Corporation Act (the “RCW”),
and
upon the terms and subject to the conditions set forth herein and in the
Delaware Certificate of Merger (the “DE
Certificate of Merger”)
and
Washington Articles of Merger (the “WA
Articles of Merger”,
each
of which is attached as Exhibit
A
hereto
(the DE Certificate of Merger and the WA Articles of Merger, together are
referred herein as the “Merger
Certificates”);
WHEREAS,
the requisite stockholders of the Company (the “Stockholders”)
have
approved by written consent pursuant to Section 23.11.030(2)(b) of the RCW,
this
Agreement, the Merger Certificates and the transactions contemplated and
described hereby and thereby, including, without limitation, the Merger, and
Parent, as the sole stockholder of Acquisition Corp., has approved by written
consent pursuant to Section 228(a) of the DGCL, this Agreement, the Merger
Certificates and the transactions contemplated and described hereby and thereby,
including, without limitation, the Merger;
WHEREAS,
pursuant to the terms and conditions of this Agreement, all
of
the issued and outstanding common stock of the Company immediately prior to
the
Effective Time (as hereinafter defined), other than the common stock held by
stockholders who are entitled to demand and properly demand an appraisal of
their shares (“Dissenting
Stockholders”),
shall
exchange the shares owned by them in accordance with the provisions contained
herein for newly issued restricted shares of common stock of Parent
(the
“Exchange
Shares”);
WHEREAS,
the parties hereto intend that the Merger contemplated herein shall qualify
as a
reorganization within the meaning of Section 368(a)(1)(A) of the Internal
Revenue Code of 1986, as amended (the “Code”),
by
reason of Section 368(a)(2)(E) of the Code.
NOW,
THEREFORE, in consideration of the covenants, promises and representations
set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the parties agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.1 Certain
Definitions.
As used
in this Agreement and the schedules hereto, the following terms have the
respective meanings set forth below.
(a)
“Action”
means
any administrative, regulatory, judicial or other proceeding by or before any
Governmental Authority or arbitrator.
(b)
“Affiliate”
means,
with respect to any Person, any other Person that, directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such Person. The term “control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise, including the ability to elect the members
of the board of directors or other governing body of a Person, and the terms
“controlled” and “controlling” have correlative meanings.
(c)
“Business
Day”
means
a
day on which banks are open for business in Seattle, Washington.
(d)
“Claims”
means
any and all claims, demands or causes of action, relating to or resulting from
an Action.
(e)
“Contract”
means
any contract, agreement, indenture, deed of trust, license, note, bond,
mortgage, lease, guarantee and any similar understanding or arrangement, whether
written or oral.
(f)
“Employees”
means
individuals who provide employment or employment-type services to Parent as
of
the date hereof, other than any such individuals who cease such employment
prior
to the Closing, but including any such individuals hired after the date hereof
and prior to the Closing.
(g)
“Employee
Benefit Plan”
means
any employee benefit plan, program, policy, practices, or other arrangement
providing benefits to any current or former employee, officer or director of
Parent or any beneficiary or dependent thereof that is sponsored or maintained
by Parent or contribute or are obligated to contribute, whether or not written,
including without limitation any employee welfare benefit plan within the
meaning of Section 3(1) of ERISA, any employee pension benefit plan within
the
meaning of Section 3(2) of ERISA (whether or not such plan is subject to ERISA)
and any bonus, incentive, deferred compensation, vacation, stock purchase,
stock
option, severance, employment, change of control or fringe benefit plan, program
or policy.
(h)
“Employment
Agreement”
means
a
written Contract or offer letter with or addressed to any Employee or Former
Employee pursuant to which Parent shall, directly or indirectly, have any actual
or contingent liability or obligation to provide compensation and/or benefits
on
or after the Closing Date in consideration for past, present or future services.
(i)
“Encumbrances”
means
security interests, liens, Claims, charges, title defects, deficiencies or
exceptions (including, with respect to Real Property, defects, deficiencies
or
exceptions in, or relating to, marketability of title, or leases, subleases
or
the like affecting title), mortgages, pledges, easements, encroachments,
restrictions on use, rights of-way, rights of first refusal, conditional sales
or other title retention agreements, covenants, conditions or other similar
restrictions (including restrictions on transfer) or other encumbrances of
any
nature whatsoever.
(j)
“ERISA”
means
the Employee Retirement Income Security Act of 1974, as amended.
(k)
“ERISA
Affiliate”
means
any entity which would be aggregated with Parent under Section 414 of the Code
or Section 4001(b) of ERISA.
(l)
“Former
Employee”
means
individuals who, prior to the Closing, provided employment or employment-type
services to Parent.
(m)
“GAAP”
means
United States generally accepted accounting principles.
(n) “Governmental
Authority”
means
any supranational, national, federal, state or local government, foreign or
domestic, or the government of any political subdivision of any of the
foregoing, or any entity, authority, agency, ministry or other similar body
exercising executive, legislative, judicial, regulatory or administrative
authority or functions of or pertaining to government, including any authority
or other quasi-governmental entity established by a Governmental Authority
to
perform any of such functions.
(o)
“Indebtedness”
of
any
Person means, without duplication, (i) all obligations of such Person for money
borrowed; (ii) all obligations of such Person evidenced by notes, debentures,
bonds or other similar instruments for the payment of which such Person is
responsible or liable; (iii) all obligations of such Person issued or assumed
for deferred purchase price payments associated with acquisitions, divestments
or other transactions; (iv) all obligations of such Person under leases required
to be capitalized in accordance with GAAP, as consistently applied by such
Person, (v) all obligations of such Person for the reimbursement of any obligor
on any letter of credit, banker's acceptance, guarantees or similar credit
transaction, excluding in all cases in clauses (i) through (v) current accounts
payable, trade payables and accrued liabilities incurred in the ordinary course
of business.
(p)
“IRS”
means
the Internal Revenue Service of the United States of America.
(q)
“Laws”
means
all United States federal, state or local or foreign laws, constitutions,
statutes, codes, rules, regulations, ordinances, executive orders, decrees
or
edicts by a Governmental Authority having the force of law.
(r)
“Leased
Real Property”
means
any real property leased or subleased to the Parent and set forth (and
designated as leased) in Schedule
4.08.
(s)
“Liabilities”
means
any and all debts, liabilities, commitments and obligations, whether or not
fixed, contingent or absolute, matured or unmatured, direct or indirect,
liquidated or unliquidated, accrued or unaccrued, known or unknown, whether
or
not required by GAAP to be reflected in financial statements or disclosed in
the
notes thereto.
(t)
“Material
Adverse Effect”
means,
with respect to a Person, any change, effect, event, occurrence or state of
facts which would reasonably be expected to be materially adverse to the
business, operations or financial condition of such Person, and its
Subsidiaries, taken as a whole, or on the ability of such Person to consummate
the transactions contemplated by this Agreement, other than any change, effect,
event, occurrence or state of facts (1) that is generally applicable in the
economy of the United States, (2) that is generally applicable in the United
States securities markets, (3) generally affecting the industry in which the
Company operates, (4) arising from or related to an act of international
terrorism, or (5) relating to the announcement or disclosure of this Agreement
and the transactions contemplated hereby.
(u)
“Person”
means
an individual, partnership, corporation, limited liability company, joint stock
company, unincorporated organization or association, trust, joint venture or
Governmental Authority.
(v)
“Regulated
Substances”
means
any substance which is listed, defined or regulated as a pollutant, contaminant,
hazardous, dangerous or toxic substance, material or waste, or is otherwise
classified as hazardous, dangerous or toxic in or pursuant to any Environmental
Law or which is or contains any explosives, radon, radioactive materials,
asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls,
petroleum and petroleum products (including waste petroleum and petroleum
products) as regulated under any applicable Environmental Law.
(w)
“Release”
means
any release, spill, emission, discharge, leaking, pumping, injection, deposit,
disposal, dispersal, leaching or migration into the indoor or outdoor
environment (including ambient air, surface water, groundwater and surface
or
subsurface strata) or into or out of any property, including the movement of
Regulated Substances through or in the air, soil, surface water, groundwater
or
property.
(x)
“Required
Consents”
means,
collectively, (1) each consent or novation with respect to any Contract to
which
the Parent, Acquisition Corp. or Company is a party or by which any of its
assets are bound required to be obtained from the other parties thereto by
virtue of the execution and delivery of this Agreement or the consummation
of
the transactions contemplated hereby in order to avoid the invalidity of the
transfer of such Contract, the termination or acceleration thereof, giving
rise
to any obligation to make a payment thereunder or to any increased, additional
or guaranteed rights of any person thereunder, a breach or default thereunder
or
any other change or modification to the terms thereof, and (2) each
registration, filing, application, notice, transfer, consent, approval, order,
qualification and waiver required from any third party or Governmental Authority
by virtue of the execution and delivery of this Agreement or the consummation
of
the transactions contemplated hereby.
(y)
“SEC”
means
the Securities and Exchange Commission.
(z) “Securities
Act”
means
the Securities Act of 1933, as amended.
(aa) “Subsidiaries”
of
any
entity means, at any date, any Person (a) the accounts of which would be
consolidated with those of the applicable entity in such entity's consolidated
financial statements if such financial statements were prepared in accordance
with GAAP as of such date, or (b) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests or more than 50% of the profits or losses of
which
are, as of such date, owned, controlled or held by the applicable entity or
one
or more subsidiaries of such entity.
(bb)
“Tax”
means
any federal, state, local or foreign taxes, including but not limited to any
income, gross receipts, payroll, employment, excise, severance, stamp, business,
premium, windfall profits, environmental (including taxes under section 59A
of
the Code), capital stock, franchise, profits, withholding, social security
(or
similar), unemployment, disability, real property, personal property, sales,
use, service, service use, lease, lease use, transfer, registration, value
added
tax, or similar tax, any alternative or add-on minimum tax, and any estimated
tax, in each case, including any interest, penalty, or addition thereto, whether
disputed or not.
(cc)
“Tax
Benefit”
means
the Tax effect of any item of loss, deduction or credit or any other item
(including increases in Tax basis) which decreases Taxes paid or required to
be
paid, including any interest with respect thereto or interest that would have
been payable but for such item.
(dd)
“Tax
Returns”
means
all returns, declarations, reports, estimates, information returns and
statements required to be filed in respect of Taxes.
(ee)
“Taxing
Authority”
means
any Governmental Authority having jurisdiction over the assessment,
determination, collection or other imposition of Taxes.
Section
1.2 References
and Title.
All
references in this Agreement to articles, sections, subsections and other
subdivisions refer to the articles, sections, subsections and other subdivisions
of this Agreement unless expressly provided otherwise. Titles appearing at
the
beginning of any section or subdivision are for convenience only and do not
constitute any part of such subdivisions and shall be disregarded in construing
the language contained in such subdivisions. The words “this Agreement,” “this
instrument,” “herein,” “hereof,” “hereby,” “hereunder” and words of similar
import refer to this Agreement as a whole and not to any particular subdivision
unless expressly so limited. The phrases “this Section” and “this subsection”
and similar phrases refer only to the sections or subsections hereof in which
such phrases occur. Pronouns in masculine, feminine and neutral genders shall
be
construed to include any other gender, and words in the singular form shall
be
construed to include the plural and vice versa, unless the context otherwise
requires.
ARTICLE
II
THE
MERGER
Section
2.1 Merger.
Subject
to the terms and conditions of this Agreement and the Merger Certificates,
Acquisition Corp. shall be merged with and into the Company in accordance with
Section 252 of the DGCL and Section 23.11.070 of the RCW. At the Effective
Time
(as defined below), the separate legal existence of Acquisition Corp. shall
cease, and the Company shall be the surviving corporation in the Merger
(sometimes hereinafter referred to as the “Surviving
Corporation”)
and
shall continue its corporate existence under the laws of the State of Washington
under the name “Montavo, Inc.” At and after the Effective Time, the Company
shall become a wholly-owned subsidiary of Parent.
Section
2.2 Effective
Time.
The
Merger shall become effective upon the filing of the WA Articles of Merger
with
the Secretary of State of Washington in accordance with Section 23.11.070 of
the
RCW and all other filings or recordings required by the DGCL and the RCW in
connection with the Merger are made. The time at which the Merger shall become
effective as aforesaid is referred to hereinafter as the “Effective
Time”.
Section
2.3 Closing.
The
closing of the Merger (the “Closing”)
shall
occur with the filing of the Merger Certificates (the “Closing
Date”).
The
Closing shall occur at the offices of Xxxxx Xxxxx & Associates, PLLC at the
address referred to in Section 11.1 hereof. At the Closing, all of the
documents, certificates, agreements, opinions and instruments referenced in
this
Article II will be executed and delivered as described therein. At the Effective
Time, all actions to be taken at Closing shall be deemed to be taken
simultaneously.
Section
2.4 Deliveries.
At or
prior to the Closing: (a) the Company shall deliver to Parent unaudited
financial statements and such other documents as may be reasonably requested
by
Parent, including without limitation, any consents required by those contracts
listed on Schedule 6.4, and (b) Parent will deliver to the Company evidence
that
the Parent’s Certificate of Incorporation has been amended, and that all filings
required by SEC and Law have been made, to increase the number of authorized
shares of Parent in order to issue the Exchange Shares at Closing, and any
documents as may be reasonably requested by the Company, including without
limitation, any Parent Required Consents.
Section
2.5 Deliveries
after Closing.
Promptly after the Closing representatives of the Parent and the Company shall
coordinate the exchange of certificates evidencing all the shares of common
stock of the Company (the “Company’s
Common Stock”)
beneficially owned by the Stockholders of the Company, duly endorsed in blank
or
accompanied by stock powers duly executed in blank, in proper form for transfer
to Acquisition Corp. or an affidavit and indemnification in form reasonably
acceptable to counsel for Parent stating that such Stockholder has lost its
certificate or certificates or that such have been destroyed. The Exchange
Shares issued upon the surrender of the Company’s Common Stock in accordance
with the terms hereof shall be deemed to have been issued in full satisfaction
of all rights of each of the respective Stockholders pertaining to their rights
in and to their respective shares of the Company’s Common Stock.
Section
2.6 Dissenters’
Rights.
Any
Dissenting Stockholder shall not be entitled to receive Exchange Shares, as
applicable, with respect to the shares of common stock owned by such Dissenting
Stockholder unless and until such Dissenting Stockholder shall have failed
to
perfect or shall effectively withdrawn or lost such holder’s right to dissent
from the Merger under the RCW. Each Dissenting Stockholder shall be entitled
to
receive only the payment provided by Section 23.13 of the RCW with respect
to
the shares of common stock owned by such Dissenting Stockholder and as to which
dissenters’ rights have been properly perfected. The Company shall give Parent
notice of any written demands for appraisal, attempted withdrawals of such
demands, and any other instruments served pursuant to applicable Law received
by
the Company relating to stockholders’ rights of appraisal.
Section
2.7 Restrictive
Legends.
Certificates evidencing the Exchange Shares pursuant to this Agreement may
bear
one or more of the following legends, including without limitation, any legend
required by the laws of any jurisdiction in which a holder of Exchange Shares
resides, and any legend required by applicable law, including without
limitation, any legend that will be useful to aid compliance with Regulation
D
or other regulations adopted by the SEC under the Securities Act:
“THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE
ABSENSE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED OR UNLESS TRANSFERRED PURSUANT TO A VALID EXEMPTION
FROM REGISTRATION AVAILABLE UNDER SUCH ACT.”
Section
2.8 Articles
of Incorporation, Bylaws, Directors and Officers.
(a) The
Articles of Incorporation of the Company, as in effect immediately prior to
the
Effective Time, attached as Exhibit
B
hereto,
shall be the Articles of Incorporation of the Surviving Corporation from and
after the Effective Time until amended in accordance with applicable law and
such Articles of Incorporation.
(b) The
Bylaws of the Company, as in effect immediately prior to the Effective Time,
attached as Exhibit
C
hereto,
shall be the Bylaws of the Surviving Corporation from and after the Effective
Time until amended in accordance with applicable law, the Articles of
Incorporation of the Surviving Corporation and such Bylaws.
Section
2.8 Assets
and Liabilities. At
the
Effective Time, the Surviving Corporation shall possess all the rights,
privileges, powers and franchises of a public as well as of a private nature,
and be subject to all the restrictions, disabilities and duties of each of
Acquisition Corp. and the Company (collectively, the “Constituent
Corporations”);
and
all the rights, privileges, powers and franchises of each of the Constituent
Corporations on whatever account, as well as all other things in action
belonging to each of the Constituent Corporations, shall be vested in the
Surviving Corporation; and all property, rights, privileges, powers and
franchises, and all and every other interest shall be thereafter as effectively
the property of the Surviving Corporation as they were of the several and
respective Constituent Corporations, and the title to any real estate vested
by
deed or otherwise in either of such Constituent Corporations shall not revert
or
be in any way impaired by the Merger; but all rights of creditors and all liens
upon any property of any of the Constituent Corporations shall be preserved
unimpaired, and all debts, liabilities and duties of the Constituent
Corporations shall thenceforth attach to the Surviving Corporation, and may
be
enforced against it to the same extent as if said debts, liabilities and duties
had been incurred or contracted by it.
Section
2.9 Operation
of Surviving Corporation.
The
Company acknowledges that upon effectiveness of the Merger, and the material
compliance by Parent and Acquisition Corp. with their respective duties and
obligations hereunder, the Surviving Corporation shall become a wholly-owned
subsidiary of Parent.
Section
2.10 Further
Assurances.
From
time to time, from and after the Effective Time, as and when reasonably
requested by Parent, the proper officers and directors of the Company as of
the
Effective Time shall, for and on behalf and in the name of the Company or
otherwise, execute and deliver all such deeds, bills of sale, assignments and
other instruments and shall take or cause to be taken such further actions
as
Parent, Acquisition Corp. or their respective successors or assigns reasonably
may deem necessary or desirable in order to confirm or record or otherwise
transfer to the Surviving Corporation title to and possession of all of the
properties, rights, privileges, powers, franchises and immunities of the Company
or otherwise to carry out fully the provisions and purposes of this Agreement
and Merger Certificates.
Section
2.11 Tax
Consequences.
It is
intended by the parties hereto that the transactions contemplated by this
Agreement shall constitute a tax-free reorganization within the meaning of
Section 368 of the Code. The parties hereto adopt this Agreement as a “plan of
reorganization” within the meaning of Sections 1.368-2(g) and 1.338-3(a) of the
regulations promulgated under the Code.
ARTICLE
III
THE
EXCHANGE SHARES
Section
3.1 Amount
of Exchange Shares.
The
aggregate amount of Exchange Shares to be issued to the Stockholders upon
Closing, and to be reserved for shares of the Company to be issued pursuant
to
its capital structure obligations as of the date hereof , shall be 11,700,000
shares. The number of shares to be reserved for shares of the Company to be
issued does not include any shares to be issued in accordance with the
requirements of Section 3.2 below.
Section
3.2 Post
Closing Adjustments.
In the
event that, the Parent does not consummate a merger or another business
combination with another company within 90 days of the Closing Date, the
Stockholders of the Company shall be entitled to receive additional shares,
in
excess to the Exchange Shares (the “Additional Shares”). Upon the issuance of
the Additional Shares, the Stockholders of the Company shall beneficially own,
in the aggregate, sixty percent (60%) of the issued and outstanding shares
of
common stock of the Parent, on a fully diluted basis.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF PARENT
As
an
inducement to the Company and the Stockholders to enter into this Agreement
and
to consummate the transactions contemplated herein, Parent represents and
warrants, as of the date of this Agreement and as of the Closing Date, unless
stated otherwise below, to the Company and Stockholders as follows:
Section
4.1 Organization.
Parent
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Delaware. Parent has all requisite power to own,
operate and lease its business and assets and carry on its business as the
same
is now being conducted.
Section
4.2 Capital
Structure.
As of
the Closing, Parent’s authorized capital will consist of (a) 100,000,000 shares
of common stock, $.001 par value per share, authorized, of which 13,900,000
shares are issued and outstanding, (i) with each holder thereof being entitled
to cast one vote for each share held on all matters properly submitted to the
shareholders for their vote; and (ii) there being no pre-preemptive rights
and
no cumulative voting; and (b) 5,000,000 shares of preferred stock, $.001 par
value per share, of which no shares are issued and outstanding. Parent has
no
shares reserved for issuance pursuant to a stock option plan or pursuant to
securities exercisable for, or convertible into or exchangeable for shares
of
common stock. All of the issued and outstanding shares of capital stock of
Parent are duly authorized, validly issued, fully paid and nonassessable. No
shares of capital stock of Parent are subject to preemptive rights or any other
similar rights. There are (i) no outstanding options, warrants, scrip, rights
to
subscribe for, puts, calls, rights of first refusal, agreements, understandings,
claims or other commitments or rights of any character whatsoever relating
to,
or securities or rights convertible into or exchangeable for any shares of
capital stock of Parent or arrangements by which Parent is or may become bound
to issue additional shares of capital stock of Parent, (ii) no agreements or
arrangements under which the Parent is obligated to register the sale of any
of
its or their securities under the Securities Act, and (iii) no anti-dilution
or
price adjustment provisions contained in any security issued by Parent (or
any
agreement providing any such rights).
Section
4.3
Corporate
Power and Authority.
Parent
has all requisite power and authority to enter into and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution, delivery,
and performance of this Agreement by Parent and the consummation by it of the
transactions contemplated hereby, and the execution, delivery and performance
of
the other agreements, documents and instruments to be executed and delivered
in
connection with this Agreement by Parent and the consummation of the
transactions contemplated thereby, have been duly authorized by all necessary
action on the part of Parent and no other action or corporate proceeding on
the
part of Parent is necessary to authorize the execution, delivery, and
performance by Parent of this Agreement and the consummation of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Parent and constitutes the legal, valid and binding obligation of Parent,
enforceable against Parent in accordance with its terms.
Section
4.4 Conflicts;
Consents and Approvals.
Neither
the execution and delivery by Parent of this Agreement and the other agreements,
documents and instruments to be executed and delivered by any of them in
connection with this Agreement, nor the consummation of the transactions
contemplated hereby and thereby, will:
(a)
conflict
with, or result in a breach of any provision of, the organizational documents
of
Parent;
(b)
violate,
or conflict with, or result in a breach of any provision of, or constitute
a
default (or an event that, with the giving of notice, the passage of time or
otherwise, would constitute a default) under, or entitle any Person (with the
giving of notice, the passage of time or otherwise) to terminate, accelerate,
modify or call a default under, or give rise to any obligation to make a payment
under, or to any increased, additional or guaranteed rights of any Person under,
or result in the creation of any Encumbrance upon any of the properties or
assets of Parent or the Exchange Shares under any of the terms, conditions
or
provisions of (1) the organizational documents of Parent, (2) any Contract
to
which Parent is a party or to which any of their respective properties or assets
may be bound which, if so affected, would either have a Material Adverse Effect
or be reasonably likely to prevent the consummation of the transactions
contemplated herein, or (3) any permit, registration, approval, license or
other
authorization or filing to which Parent is subject or to which any of its
properties or assets may be subject;
(c)
require
any action, consent or approval of any non-governmental third party, other
than
the Parent Required Consents listed on Schedule
4.4,
including without limitation, the approval of the Amendment to the Certificate
of Incorporation of Parent in the form attached hereto as Exhibit D;
(d)
violate
any order, writ, or injunction, or any material decree, or material Law
applicable to Parent or any of its, business, properties, or assets;
or
(e)
require
any action, consent or approval of, or review by, or registration or filing
by
Parent with any Governmental Authority other than the filing of the Merger
Certificates and compliance with applicable rules of the SEC.
Section
4.5 Exchange
Shares.
As of
the Closing, all of the Exchange Shares shall be duly authorized, validly
issued, fully paid and nonassessable, and not issued in violation of any
preemptive or similar rights. Upon delivery to the Company of the certificates
representing the Exchange Shares, the Stockholders will acquire good and valid
title to such shares, free and clear of any Encumbrances, other than
restrictions under applicable securities laws.
Section
4.6 Subsidiaries.
Other
than Acquisition Corp., Parent does not own, directly or indirectly, nor have
entered into any agreement, arrangement or understanding to purchase or sell
any
capital stock or other equity interests in any Person or is a member of or
participant in any Person or have any Subsidiaries.
Section
4.7 No
Material Adverse Effect.
As of
the date of this Agreement, (a) Parent has (1) maintained its books and records
in accordance with past accounting practice, and (2) used all reasonable
commercial efforts to preserve intact the assets and the business organization
and operations of Parent, to keep available the services of its employees and
to
preserve its relationships with customers, suppliers, licensors, licensees,
contractors and other persons with whom Parent have business relations, (b)
no
Material Adverse Effect on Parent has occurred, and (c) there has been no event,
occurrence or development that has had, or would reasonably be expected to
have,
a material adverse effect on the ability of the Company or Parent to timely
consummate the transactions contemplated hereby.
Section
4.8 Title
to Properties.
Schedule
4.8
lists
all properties and assets of Parent. Parent has good and marketable title to
all
of its properties and assets, real and personal, free and clear of all
Encumbrances. All equipment used by Parent is generally in good operating
condition and repair, and is adequate for the uses to which it is being
put.
Section
4.9 Compliance
with Law.
Parent
and each of the officers, managers, directors, employees and agents of Parent
has complied in all respects with all Laws applicable to Parent and its products
and operations. Neither Parent nor any of its officers, managers, directors,
employees, or agents has received any notice from any Governmental Authority
that Parent has been or is being conducted in violation of any applicable Law
or
that an investigation or inquiry into any noncompliance with any applicable
Law
is ongoing, pending or threatened.
Section
4.10 Litigation.
There
is no Action pending or threatened against Parent, or any executive officer,
member, manager or director thereof in each case that (a) relates to Parent,
its
assets, or its business, or (b) as of the date hereof, seeks, or could
reasonably be expected, to prohibit or restrain the ability of Parent to enter
into this Agreement or to timely consummate any of the transactions contemplated
hereby, and there is no reasonable basis for any such Action. There are no
judgments, decrees, agreements, memoranda of understanding or orders of any
Governmental Authority outstanding against Parent.
Section
4.11 Contracts.
Schedule
4.11
contains
a complete list, as of the date hereof, of all Contracts to which Parent is,
or
will be at Closing, a party or bound, or that otherwise relate to its business
or assets. Parent has made available to the Company or its representatives
correct and complete copies of all such Contracts with all amendments thereof.
Each such Contract is, and will at Closing be, valid, binding, and enforceable
against Parent and the other parties thereto in accordance with its terms,
and
is, and will at Closing be, in full force and effect. Parent is not in default
under or in breach of or is, or as of the Closing will be, otherwise delinquent
in performance under any such Contract, and no event has occurred, or will
as of
the Closing occur, that, with notice or lapse of time, or both, would constitute
such a default. Each of the other parties thereto has performed in all respects
all of the obligations required to be performed by it under, and is not in
default under, any such Contract and no event has occurred that, with notice
or
lapse of time, or both, would constitute such a default. There are no disputes
pending or threatened in writing with respect to any such Contracts. Neither
Parent nor any other party to any such Contract has exercised any option granted
to it to terminate or shorten or extend the term of such Contract, and Parent
has not given notice or received notice to such effect. All of such Contracts
will continue to be valid, binding, enforceable and in full force and effect
on
substantially identical terms following the consummation of the transactions
contemplated hereby.
Section
4.12 Labor
and Employment Matters.
(a)
There
are
no collective bargaining agreements, union contracts or similar agreements
or
arrangements in effect that cover any Employee or Former Employee (each, a
"Collective
Bargaining Agreement").
With
respect to any Employee, (a) there is no labor strike, dispute, slowdown,
lockout or stoppage pending or threatened against Parent or with respect to
any
Employees, and Parent has not experienced any labor strike, dispute, slowdown,
lockout or stoppage; (b) there is no unfair labor practice charge or complaint
against Parent or threatened before the National Labor Relations Board or before
any similar state or foreign agency; (c) there is no grievance or arbitration
arising out of any Collective Bargaining Agreement or other grievance procedure;
and (d) no charges are pending before the Equal Employment Opportunity
Commission or any other agency responsible for the prevention of unlawful
employment practices.
(b)
Parent
is
in compliance in all respects with all Laws, regulations and orders relating
to
the employment of labor, including all such Laws, regulations and orders
relating to wages, hours, and any similar state or local "mass layoff" or "plant
closing" Law, collective bargaining, discrimination, civil rights, safety and
health, workers' compensation and the collection and payment of withholding
and/or social security taxes and any similar tax.
Section
4.13 Permits;
Compliance.
Parent
is in possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, approvals and orders
necessary to own, lease and operate its properties and assets and to carry
on
its business as it is now being conducted and as it will be conducted through
to
the Closing (collectively, the “Permits”).
There
is no Action pending, or threatened, regarding any of the Permits and each
such
Permit is in full force and effect. Parent is not in conflict with, or in
material default (or would be in default with the giving of notice, the passage
of time, or both) with, or in violation of, any of the Permits.
Section
4.14 Debts
and Guaranties.
As of
the Closing, Parent has no debts, liabilities, obligations, direct, indirect,
absolute or contingent, whether accrued, vested or otherwise, whether known
or
unknown. In
addition, Parent is not directly or indirectly (a) liable, by guarantee or
otherwise, upon or with respect to, (b) obligated to provide funds with respect
to, or to guarantee or assume, any Indebtedness or other obligation of any
Person.
Section
4.15 Full
Disclosure.
No
representation or warranty of Parent in this Agreement omits to state a material
fact necessary to make the statements herein, in light of the circumstances
in
which they were made, not misleading. There is no fact known to Parent that
has
specific application to the Company or Stockholders and that materially
adversely affects or, as far as can be reasonably foreseen, materially
threatens, the assets, business, prospects, financial condition, or results
of
operations of Parent that has not been set forth in this Agreement.
Section
4.16 SEC
Documents.
Parent
has timely filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements
of the Securities Exchange Act of 1934, as amended (the “1934
Act”)
(all
of the foregoing filed prior to the date hereof and all exhibits included
therein and financial statements and schedules thereto and documents (other
than
exhibits to such documents) incorporated by reference therein, being hereinafter
referred to herein as the “SEC
Documents”).
As of
their respective dates, the SEC Documents complied in all material respects
with
the requirements of the 1934 Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to
be
stated therein or necessary in order to make the statements therein, in light
of
the circumstances under which they were made, not misleading. None of the
statements made in any such SEC Documents is, or has been, required to be
amended or updated under applicable law (except for such statements as have
been
amended or updated in subsequent filings prior the date hereof). Parent has
not
received any communication from the SEC, FINRA or any other regulatory authority
regarding any SEC Document or any disclosure contained therein. As of their
respective dates, the financial statements of Parent included in the SEC
Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC
with
respect thereto. Such financial statements have been prepared in accordance
with
United States generally accepted accounting principles, consistently applied,
during the periods involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto, or (ii) in the case of unaudited
interim statements, to the extent they may not include footnotes or may be
condensed or summary statements) and fairly present in all material respects
the
financial position of Parent as of the dates thereof and the results of their
operations and cash flows for the periods then ended (subject, in the case
of
unaudited statements, to normal year-end audit adjustments).
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES OF ACQUISTION CORP.
As
an
inducement to the Company and the Stockholders to enter into this Agreement
and
to consummate the transactions contemplated herein, Parent and Acquisition
Corp.
represent and warrant, as of the date of this Agreement and as of the Closing
Date, to the Company and Stockholders as follows:
Section
5.1 Organization.
Acquisition Corp. is a corporation duly organized, validly existing, and in
good
standing under the laws of the State of Delaware. Acquisition Corp. has all
requisite power to own, operate and lease its business and assets and carry
on
its business as the same is now being conducted.
Section
5.2 Capital
Structure.
All of
the issued and outstanding capital stock of Acquisition Corp. is, and at the
Effective Time will be, owned by Parent or a direct or indirect wholly-owned
Subsidiary of Parent. Acquisition Corp. has not conducted any business prior
to
the date hereof and has no, and prior to the Effective Time will have no,
assets, liabilities or obligations of any nature other than those incident
to
its formation and pursuant to this Agreement and the Merger and the other
transactions contemplated by this Agreement.
Section
5.3 Corporate
Power and Authority.
Acquisition Corp. has all requisite corporate power and authority to enter
into
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery, and performance of this Agreement by
Acquisition Corp. and the consummation of the transactions contemplated hereby,
have been duly authorized by all necessary action and no other corporate action
or corporate proceeding on the part of Acquisition Corp. is necessary to
authorize the execution, delivery, and performance by Acquisition Corp. of
this
Agreement and the consummation by Acquisition Corp. of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Acquisition Corp. and constitutes the legal, valid and binding obligation of
Acquisition Corp., enforceable against Acquisition Corp. in accordance with
its
terms.
Section
5.4 Conflicts;
Consents and Approvals.
Neither
the execution and delivery by Acquisition Corp. of this Agreement and the other
agreements, documents and instruments to be executed and delivered by any of
them in connection with this Agreement, nor the consummation of the transactions
contemplated hereby and thereby, will:
(a)
conflict
with, or result in a breach of any provision of, the organizational documents
of
Acquisition Corp.;
(b)
violate,
or conflict with, or result in a breach of any provision of, or constitute
a
default (or an event that, with the giving of notice, the passage of time or
otherwise, would constitute a default) under, or entitle any Person (with the
giving of notice, the passage of time or otherwise) to terminate, accelerate,
modify or call a default under, or give rise to any obligation to make a payment
under, or to any increased, additional or guaranteed rights of any Person under,
or result in the creation of any Encumbrance upon any of the properties or
assets of the Acquisition Corp. under any of the terms, conditions or provisions
of (1) the organizational documents of Acquisition Corp., (2) any Contract
to
which Acquisition Corp. is a party or to which any of their respective
properties or assets may be bound which, if so affected, would either have
a
Material Adverse Effect or be reasonably likely to prevent the consummation
of
the transactions contemplated herein, or (3) any permit, registration, approval,
license or other authorization or filing to which Acquisition Corp. is subject
or to which any of its properties or assets may be subject;
(c)
require
any action, consent or approval of any non-governmental third party other than
the Acquisition Corp. Required Consents listed in Schedule
5.4;
(d)
violate
any order, writ, or injunction, or any material decree, or material Law
applicable to the Company or any of its, business, properties, or assets;
or
(e)
require
any action, consent or approval of, or review by, or registration or filing
by
Acquisition Corp. with any Governmental Authority other than the filing of
the
Merger Certificates and compliance with applicable rules of the
SEC.
Section
5.5 Subsidiaries.
Acquisition Corp. does not own, directly or indirectly, nor have entered into
any agreement, arrangement or understanding to purchase or sell any capital
stock or other equity interest in any Person or is a member of or participant
in
any Person. Acquisition Corp. does not have any subsidiaries.
ARTICLE
VI
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
As
an
inducement to Parent to enter into this Agreement and to consummate the
transactions contemplated herein, the Company represents and warrants, as of
the
date of this Agreement and as of the Closing Date, to the Parent as
follows:
Section
6.1 Organization.
The
Company is a corporation duly organized and validly existing under the laws
of
the State of Washington. The Company has all requisite power to own, operate
and
lease its business and assets and carry on its business as the same is now
being
conducted.
Section
6.2 Corporate
Power and Authority.
The
Company has all requisite corporate power and authority to enter into and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution, delivery, and performance of this Agreement by the Company and
the consummation of the transactions contemplated hereby, have been duly
authorized by all necessary action and no other corporate action or corporate
proceeding on the part of the Company is necessary to authorize the execution,
delivery, and performance by the Company of this Agreement and the consummation
by the Company of the transactions contemplated hereby. This Agreement has
been
duly executed and delivered by the Company and constitutes the legal, valid
and
binding obligation of the Company, enforceable against the Company in accordance
with its terms.
Section
6.3 Conflicts;
Consents and Approvals.
Neither
the execution and delivery by the Company of this Agreement and the other
agreements, documents and instruments to be executed and delivered by any of
them in connection with this Agreement, nor the consummation of the transactions
contemplated hereby and thereby, will:
(a)
conflict
with, or result in a breach of any provision of, the organizational documents
of
the Company;
(b)
violate,
or conflict with, or result in a breach of any provision of, or constitute
a
default (or an event that, with the giving of notice, the passage of time or
otherwise, would constitute a default) under, or entitle any Person (with the
giving of notice, the passage of time or otherwise) to terminate, accelerate,
modify or call a default under, or give rise to any obligation to make a payment
under, or to any increased, additional or guaranteed rights of any Person under,
or result in the creation of any Encumbrance upon any of the properties or
assets of the Company or the Exchange Shares under any of the terms, conditions
or provisions of (1) the organizational documents of Company, (2) any Contract
to which the Company is a party or to which any of their respective properties
or assets may be bound which, if so affected, would either have a Material
Adverse Effect or be reasonably likely to prevent the consummation of the
transactions contemplated herein, or (3) any permit, registration, approval,
license or other authorization or filing to which the Company is subject or
to
which any of its properties or assets may be subject;
(c)
require
any action, consent or approval of any non-governmental third party, other
than
as may be provided pursuant to the contracts listed on Schedule 6.4;
(d)
violate
any order, writ, or injunction, or any material decree, or material Law
applicable to the Company or any of its, business, properties, or assets;
or
(e)
require
any action, consent or approval of, or review by, or registration or filing
by
the Company with any Governmental Authority.
Section
6.4 Intellectual
Property.
(a)
For
the
purposes of this Agreement, the following terms have the following
definitions:
“Intellectual
Property”
shall
mean any or all of the following and all rights in, arising out of, or
associated therewith: (i) all patents and applications therefor throughout
the
world, and all reissues, divisions, renewals, extensions, provisionals,
continuations and continuations-in-part thereof; (ii) all inventions (whether
patentable or not), invention disclosures, improvements, trade secrets,
proprietary information, know how, technology, technical data and customer
lists, and all documentation relating to any of the foregoing; (iii) all
copyrights, copyrights registrations and applications therefor, and all other
rights corresponding thereto throughout the world; (iv) all industrial designs
and any registrations and applications therefor throughout the world, (v) all
trade names, logos, URLs, common law trademarks and service marks, trademark
and
service xxxx registrations and applications therefor throughout the world;
(vi)
all databases and data collections and all rights therein throughout the world;
(vii) all moral and economic rights of authors and inventors, however
denominated, throughout the world, and (viii) any similar or equivalent rights
to any of the foregoing anywhere in the world.
“Registered
Intellectual Property”
means
all: (i) registered patents and applications for patent registration (including
provisional applications); (ii) registered trademarks, applications to register
trademarks, intent-to-use applications, or other registrations or applications
related to trademarks; (iii) registered copyrights and applications for
copyright registration; and (iv) any other Intellectual Property that is the
subject of an application, certificate, filing, registration or other document
issued, filed with, or recorded by any state, government or other public legal
authority.
“Company
Intellectual Property”
shall
mean any Intellectual Property or Registered Intellectual Property that is
owned
by, or licensed to the Company.
(b) To
the
Company’s knowledge, no Company Intellectual Property or product or service of
the Company is subject to any Action or Claim, agreement, or stipulation
restricting in any manner the use, transfer, or licensing thereof by the
Company, or which may affect the validity, use or enforceability of such Company
Intellectual Property.
(c) Schedule
6.4
is a
complete and accurate list of all the Company Intellectual Property and
specifies, where applicable, the jurisdictions in which each such item of the
Registered Intellectual Property has been issued or registered or in which
an
application for such issuance and registration have been filed, including the
respective registration or application numbers, to the Company’s knowledge. To
the Company’s knowledge, each item of the Company Intellectual Property is valid
and subsisting, and to the extent registration of Company Intellectual Property
has been sought, all necessary registration, maintenance and renewal fees
currently due in connection with such Intellectual Property have been made
and
all necessary documents, recordations and certificates in connection with such
Company Intellectual Property have been filed with the relevant patent,
copyright, trademark or other authorities in the United States or foreign
jurisdictions, as the case may be, for the purposes of maintaining such Company
Intellectual Property.
(d) the
Company owns and has good and exclusive title to, or has license (sufficient
for
the conduct of its business as currently conducted) to, each item of the Company
Intellectual Property free and clear of any Encumbrances (excluding licenses
and
related restrictions).
(e) Schedule
6.4
lists
all Contracts to which the Company is a party (i) with respect to the Company
Intellectual Property licensed or transferred to any Person or (ii) pursuant
to
which a Person has licensed or transferred any Intellectual Property to
Company.
(f) All
Contracts relating to the Company Intellectual Property are in full force and
effect. The consummation of the transactions contemplated by this Agreement
will
neither violate nor result in the breach, modification, cancellation,
termination, or suspension of such Contracts. The Company is in compliance
with,
and has not breached any term of such Contracts and, to the knowledge of the
Company, all other parties to such Contracts are in compliance with, and have
not breached any term of, such Contracts, to the Company’s knowledge. To the
Company’s knowledge, following the Closing, the Company will be permitted to
exercise all the rights under such Contracts to the same extent Company would
have been able to had the transactions contemplated by this Agreement not
occurred and without the payment of any additional amounts or consideration
other than ongoing fees, royalties or payments.
(g)
The
Company possesses all the Intellectual Property rights necessary to effectuate
its business and operations, as currently conducted. To the Company’s knowledge,
the Company has not infringed or misappropriated any Intellectual Property
of
any third Person or engaged in unfair competition or any unlawful trade
practice. Company has not received notice from any third party that the
operation of its business, or any act, product or service of the Company,
infringes or misappropriates the Intellectual Property of any third party or
constitutes unfair competition or trade practices under the laws of any
jurisdiction. To the Company’s knowledge, no Person has infringed or
misappropriated or is infringing or misappropriating any of the Company
Intellectual Property.
(h)
The
Company has taken reasonable steps to protect the rights of the Company in
its
confidential information and trade secrets that it wishes to protect or any
trade secrets or confidential information of third parties provided to the
Company.
ARTICLE
VII
ADDITIONAL
AGREEMENTS AND COVENANTS
Section
7.1 Access
and Information.
Prior
to the Closing, except to the extent prohibited by applicable Law, Parent,
on
one hand, and the Company, on the other hand, shall permit representatives
of
the other to have reasonable access during normal business hours and upon
reasonable notice to all premises, properties, personnel, books, records,
Company Intellectual Property, technology, technical support, Contracts,
commitments, reports of examination and documents of or pertaining to, as may
be
necessary to permit the other to, at its sole expense, make, or cause to be
made, such investigations thereof as the other reasonably deems necessary or
advisable in connection with the consummation of the transactions contemplated
by this Agreement, and Parent and the Company shall reasonably cooperate with
any such investigations. No investigation by a party or its representatives
or
advisors prior to or after the date of this Agreement (including any information
obtained by a party pursuant to this Section 7.1) shall diminish, obviate or
cure any breach of any representation, warranty, covenant or agreement contained
in this Agreement nor shall the conduct or completion of any such investigation
be a condition to any of such party's obligations under this Agreement.
Section
7.2 Confidentiality.
Each of
the parties shall use reasonable efforts to cause their respective Affiliates,
officers, directors, employees, auditors, attorneys, consultants, advisors
and
agents, to treat as confidential and hold in strict confidence, unless compelled
to disclose by judicial or administrative process or, in the opinion of its
counsel, by other requirements of Law, and after prior written notice to the
other parties, all confidential information of Parent or the Company, as the
case may be, that is made available in connection with this Agreement, and
will
not release or disclose such confidential information to any other Person,
except their respective auditors, attorneys, financial advisors and other
consultants, agents, and advisors in connection with this Agreement. If the
Closing does not occur (a) such confidence shall be maintained by the Parties
and each Party shall use reasonable efforts to cause its officers, directors,
Affiliates and such other Persons to maintain such confidence, except to the
extent such information comes into the public domain (other than as a result
of
an action by such Party, its officers, directors or such other Persons in
contravention of this Agreement), and (b) upon the request of any Party, the
other Party shall promptly return to the requesting Party any written materials
remaining in its possession, which materials it has received from the requesting
Party or its representatives, together with any analyses or other written
materials based upon the materials provided.
Section
7.3 Conduct
of Business.
From
and after the date hereof until the Closing, except as otherwise expressly
contemplated by this Agreement, or as consented to in writing by the Parent
in
the case of an action by Company, or by the Company in the case of an action
by
Parent, in either event such consent not to be unreasonably withheld, each
of
Parent and the Company shall:
(a)
use
reasonable commercial efforts to preserve its business, operations, physical
facilities, working conditions and its business relationships with customers,
suppliers, licensors, licensees, contractors and other persons with whom it
has
significant business relations;
(b)
not
take
any action that would cause a material breach of the representations and
warranties contained here;
(c)
not
amend
its Articles of Incorporation or Bylaws (or other similar governing
instrument);
(d)
not
split, combine or reclassify any of its shares, declare, set aside or pay any
dividend or other distribution (whether in cash, stock or property or any
combination thereof) in respect of its equity interests, make any other actual
or constructive distribution in respect of its interests or otherwise make
any
payments to holders in their capacity as such, or redeem or otherwise acquire
any of its securities or any other securities;
(e)
not
adopt
a plan of complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization or otherwise permit
its
corporate existence to be suspended, lapsed or revoked;
(f)
not
create or form any Subsidiary (other than Acquisition Corp.);
(g)
other
than in the ordinary course of its business, (1) incur or assume any Liability
in excess of $10,000; (2) assume, guarantee, endorse or otherwise become liable
or responsible (whether directly, contingently or otherwise) for the obligations
of any other Person; (3) make any loans, advances or capital contributions
to or
investments in any other Person; nor (4) pledge or otherwise Encumber its
shares;
(h)
not
acquire, sell, lease, license, transfer or otherwise dispose of any assets
in
any single transaction or series of related transactions having a fair market
value in excess of $1,000 in the aggregate or that are otherwise material to
it
other than in the ordinary course of business;
(i)
not
(1)
acquire (by merger, consolidation or acquisition of stock or assets) any
corporation, partnership or other entity or division thereof or any equity
interest therein; (2) amend, modify, waive or terminate any right under any
material contract in any material way; nor (3) authorize any new capital
expenditure or expenditures that individually is in excess of $5,000 or in
the
aggregate are in excess of $10,000;
(j)
not
enter
into any Contract; or
(k)
other
than in the ordinary course of its business, not make any change with respect
to
the compensation or benefits of any officer, director or Employee or Former
Employee.
Section
7.4 Efforts
to Consummate.
Subject
to the terms and conditions of this Agreement, each party hereto shall use
all
reasonable commercial efforts to take, or to cause to be taken, all actions
and
to do, or to cause to be done, all things necessary, proper or advisable as
promptly as practicable to satisfy the conditions set forth in Article VIII,
including, without limitation, obtaining any shareholder and director consents
and completing all filings required by the State of Delaware and the Securities
and Exchange Commission, to amend its Certificate of Incorporation in order
to
increase its authorized share capital, and to consummate the transactions
contemplated hereby.
Section
7.5 No-Shop.
From
the date hereof until the later of the Closing Date or the date of the Effective
Time of this Agreement in accordance with the terms hereof, neither Parent
nor
its officers, managers, directors, employees, agents, representatives and
Affiliates, shall, directly or indirectly, make, solicit, initiate or encourage
submission of proposals or offers from any Persons relating to an Acquisition
Proposal (as defined below). As used herein, “Acquisition Proposal” means any
proposal or offer involving a liquidation, dissolution, re-capitalization,
merger, consolidation or acquisition or purchase of all or substantially all
of
the assets of, or equity interest in, Parent or any other similar transaction
or
business combination involving the same. Parent shall immediately cease and
cause to be terminated all discussions or negotiations with third parties with
respect to any Acquisition Proposal, if any, exiting on the date hereof.
Section
7.6 Notification
by the Parties.
Each
party hereto shall use its reasonable commercial efforts to as promptly as
practicable inform the other parties hereto in writing if, prior to the
consummation of the Closing, it obtains knowledge that any of the
representations and warranties made by such party in this Agreement ceases
to be
accurate and complete in any material respect (except for any representation
and
warranty that is qualified hereunder as to materiality or Material Adverse
Effect, as to which such notification shall be given if the notifying party
obtains knowledge that such representation and warranty ceases to be accurate
and complete in any respect). Each party hereto shall also use its reasonable
commercial efforts to promptly inform the other parties hereto in writing if,
prior to the consummation of the Closing, it becomes aware of any fact or
condition that constitutes, in its reasonable judgment, a breach of any covenant
of such party as of the date of this Agreement or that would reasonably be
expected to cause any of its covenants to be breached as of the Closing Date.
Any such notification shall not be deemed to have cured any breach of any
representation, warranty, covenant or agreement made in this Agreement for
any
purposes of this Agreement.
Section
7.7 Cooperation
with Respect to Financial Reporting.
After
the date of this Agreement, the Company shall reasonably cooperate with Parent
in connection with Parent’s preparation of historical financial statements and
other information as required for Parent’s filings under the 1934
Act.
ARTICLE
VIII
CONDITIONS
TO CLOSING
Section
8.1 Conditions
to Company’s Obligation to Close.
All
obligations of the Company to consummate the transactions contemplated hereunder
are subject to the fulfillment or waiver prior to or at the Closing of each
of
the following conditions:
(a)
All
representations and warranties of Parent and Acquisition Corp. contained in
this
Agreement shall be true and correct in all respects when made and shall be
deemed to have been made again at and as of the Closing and shall then be true
and correct in all respects (except that representations and warranties made
as
of a specified date, shall be true and correct only as of such specified
date);
If
requested by the Company, it shall have received a certificate, executed by
an
officer or director of Parent, dated as of the Closing Date, to the foregoing
effect and as to such other matters as may be reasonably requested by the
Company.
(b)
Prior
to
or at the Closing, Parent shall have delivered to the Company the items to
be
delivered pursuant to Section 2.4;
(c)
Parent
shall have performed in all material respects each obligation and agreement
to
be performed by it, and shall have complied in all material respects with each
covenant required by this Agreement to be performed or complied with by it at or
prior to the Closing;
(d)
The
Company shall have completed to its reasonable satisfaction its business and
legal due diligence investigation of Parent, shall not have discovered any
facts, circumstances, liabilities or conditions that, in the Company’s
reasonable discretion, may adversely affect the value or prospects of Parent
or
that may expose Parent to any liability not heretofore fully disclosed to the
Company;
(e) The
Parent shall file with the Secretary of State of Delaware, an amendment to
its
Certificate of Incorporation, in order to increase its authorized share capital
and all filings required under the DGCL and applicable securities
law.
(f)
The
Parent and Acquisition Corp. shall have provided to the Company a certificate
of
good standing from the Secretary of State of Delaware and copies of its
Certificates of Incorporation for each such corporation;
(g) The
Parent shall have prepared the Current Report on Form 8-K required as a result
on the consummation of the transactions contemplated hereby; and
(h) The
stockholders of Parent shall have approved the amendment to the Certificate
of
Incorporation in the form attached hereto as Exhibit D.
Section
8.2 Conditions
to Parent’s Obligations to Close.
All
obligations of Parent to consummate the transactions contemplated hereunder
are
subject to the fulfillment or waiver prior to or at the Closing of each of
the
following conditions:
(a)
All
representations and warranties of the Company contained in this Agreement shall
be true and correct in all respects when made and shall be deemed to have been
made again at and as of the Closing and shall then be true and correct in all
respects (except that representations and warranties made as of a specified
date, shall be true and correct only as of such specified date);
Parent
shall have received a certificate, executed by the President of the Company,
dated as of the Closing Date, to the foregoing effect and as to such other
matters as may be requested by Parent.
(b)
Prior
to
or at the Closing, the Company shall have delivered to Parent the items to
be
delivered pursuant to Section 2.4, including without limitation, financial
statements and other information required under the rules of the SEC for
purposes of inclusion in Parent’s filing of a Current Report on Form 8-K
disclosing the consummation of the Merger;
(c)
The
Company shall have performed in all respects each obligation and agreement
to be
performed by it, and shall have complied in all respects with each covenant
required by this Agreement to be performed or complied with by it at or prior
to
the Closing;
(d)
The
Company shall have provided to Parent copies of its Articles of Incorporation;
(e) Parent
shall have completed to its reasonable satisfaction its business and legal
due
diligence investigation of the Company, its property, business and subsidiaries,
shall not have discovered any facts, circumstances, liabilities or conditions
that, in Parent’s discretion, may adversely affect the value or prospects of the
Company or that may expose the Company to any liability not heretofore fully
disclosed to Parent; and
(f) Parent
shall have received representations from each of the shareholders of the Company
regarding the restrictive nature of the Exchange Shares, substantially in the
form attached hereto as Exhibit E.
ARTICLE
IX
TERMINATION
Section
9.1 Termination.
This
Agreement may be terminated at any time prior to the consummation of the Closing
under the following circumstances:
(a)
by
mutual
written consent of Parent and the Company or a majority of the
Stockholders;
(b)
by
Parent, the Company or by a majority of the Stockholders, if the Merger shall
not have been consummated on or before June 20, 2008.
(c) by
any
party, if there shall be in effect a final, non-appealable order of a court
or
government administrative agency of competent jurisdiction permanently
prohibiting the consummation of the transactions contemplated hereby.
Section
9.2 Termination
Procedure.
Written
notice of any termination (“Termination
Notice”)
pursuant to this Article IX shall be given by the party electing termination
of
this Agreement (“Terminating
Party”)
to the
other parties (collectively, the “Terminated
Party”),
and
such notice shall state the reason for termination.
Section
9.3 Effect
of Termination.
Upon
termination of this Agreement prior to the consummation of the Closing and
in
accordance with the terms hereof, this Agreement shall become void and of no
effect, and none of the parties shall have any liability to the others.
Section
9.4 Expenses.
The
parties shall each bear their own respective expenses incurred in connection
with this Agreement and the contemplated Merger.
ARTICLE
X
INDEMNIFICATION;
SURVIVAL
Section
10.1 Indemnification
by Parent.
The
Parent shall indemnify and hold harmless the Company and its Affiliates,
officers, directors, stockholders, employees and agents and the successors
and
assigns of all of them (the “Company
Indemnified Parties”),
and
shall reimburse the Company Indemnified Parties for, any loss, liability, claim,
damage, expense (including, but not limited to, costs of investigation and
defense and attorneys’ fees) (collectively, “Damages”),
arising from or in connection with (a) any inaccuracy or breach of any of the
representations and warranties of Parent and/or Acquisition Corp. in this
Agreement or in any certificate or document delivered by or on behalf of Parent
pursuant to this Agreement, or any actions, omissions or statements of fact
inconsistent with in any respect any such representation or warranty, (b) any
inaccuracy, misstatement, or omission in any disclosures documents made
available to or filed by Parent with the SEC, (c) any failure by Parent to
perform or comply with any agreement, covenant or obligation in this Agreement
or in any certificate or document delivered by or on behalf of Parent pursuant
to this Agreement to be performed by or complied with by or on behalf of Parent,
(d) any claims made by a third Person against a Company Indemnified Party based
upon a Contractual obligation of Parent and/or Acquisition Corp. for services
performed prior to the Effective Time, (e) Taxes attributable to the ownership
of Parent prior to the Effective Time, (f) Taxes attributable to the conduct
by
Parent of the business of Parent and/or Acquisition Corp. or the operation
or
ownership of its assets, (h) any claims for severance or any other compensation
made by an Employees or Former Employee, (i) any claim made at any time by
any
Governmental Authority in respect of the business of Parent for all periods
prior to the Effective Time, (j) any Liability or obligation of Parent arising
or relating to the periods prior to the Effective Time or (k) any Action or
investigation by any Person relating to or arising out of the business or
operations of Parent prior to the Effective Time.
Section
10.2 Survival.
All
representations, warranties, covenants and agreements of the parties contained
herein or in any other certificate or document delivered pursuant hereto shall
survive the Closing until the expiration of the applicable statute of
limitations.
ARTICLE
XI
MISCELLANEOUS
Section
11.1 Notices.
All
notices or other communications required or permitted hereunder shall be in
writing. Any notice, request, demand, claim or other communication hereunder
shall be deemed duly given (a) if by personal delivery, when so delivered,
(b)
if mailed, three (3) Business Days after having been sent by registered or
certified mail, return receipt requested, postage prepaid and addressed to
the
intended recipient as set forth below, or (c) if sent through an overnight
delivery service in circumstances to which such service guarantees next day
delivery, the day following being so sent:
| (1) |
If
to Parent:
|
North
Coast Partners, Inc.
000
Xxxxx
Xxxxxx, Xxxxx 0X,
Xxxxxx,
Xxxxxxxx
Attn:
Xxxxxx Xxxxxxxxx
| (2) |
If
to the Company:
|
Montavo,
Inc.
0000
Xxxxxxxx Xxxx, XX
X-0
Xxxxx
000
Xxxxxxxx,
XX 00000
Attn:
Xxxxx Xxxx
Any
party
may change the address to which notices and other communications hereunder
are
to be delivered by giving the other parties notice in the manner herein set
forth.
Section
11.2 Choice
of Law.
This
Agreement shall be governed, construed and enforced in accordance with the
laws
of the State of Washington, without giving effect to principles of conflicts
of
law.
Section
11.3 Jurisdiction.
The
parties hereby irrevocably consent to the in personam jurisdiction of the state
or federal courts located in the State of Washington, in connection with any
action or proceeding arising out of or relating to this Agreement or the
transactions and the relationships established thereunder. The parties hereby
agree that such courts shall be the venue and exclusive and proper forum in
which to adjudicate such matters and that they will not contest or challenge
the
jurisdiction or venue of these courts.
Section
11.4 Entire
Agreement.
This
Agreement and such other agreements related to this transaction executed
simultaneously herewith set forth the entire agreement and understanding of
the
parties in respect of the transactions contemplated hereby and supersedes all
prior agreements, arrangements and understandings of the parties relating to
the
subject matter hereof. No representation, promise, inducement, waiver of rights,
agreement or statement of intention has been made by any of the parties which
is
not expressly embodied in this Agreement, such other agreements, notes or
instruments related to this transaction executed simultaneously herewith, or
the
written statements, certificates, schedules or other documents delivered
pursuant to this Agreement or in connection with the transactions contemplated
hereby.
Section
11.5 Assignment.
Each
party's rights and obligations under this Agreement shall not be assigned or
delegated, by operation of law or otherwise, without the other party's prior
consent, and any such assignment or attempted assignment shall be void, of
no
force or effect, and shall constitute a material default by such party.
Section
11.6 Amendments.
This
Agreement may be amended, modified, superseded or cancelled, and any of the
terms, covenants, representations, warranties or conditions hereof may be
waived, only by a written instrument executed by Parent and the
Company.
Section
11.7 Waivers.
The
failure of any party at any time or times to require performance of any
provision hereof shall in no manner affect the right at a later time to enforce
the same. No waiver by any party of any condition, or the breach of any term,
covenant, representation or warranty contained in this Agreement, whether by
conduct or otherwise, in any one or more instances shall be deemed to be or
construed as a further or continuing waiver of any such condition or breach
or a
waiver of any other term, covenant, representation or warranty of this
Agreement.
Section
11.8 Counterparts.
This
Agreement may be executed simultaneously in two or more counterparts and by
facsimile, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
Section
11.9 Brokers.
The
parties hereto, covenant, represent, and warrant that they have not dealt with
any broker or finder in connection with this Agreement or the transactions
contemplated hereby, and no broker is entitled to receive any brokerage
commission, finder's fee, or similar compensation in connection with this
Agreement or the transactions contemplated hereby. Each of the parties shall
indemnify and hold the other parties harmless from and against all liability,
claim, loss, damage, or expense, including reasonable attorney's fees,
pertaining to any broker, finder, or other person with whom such party has
dealt.
Section
11.10 Severability.
If any
term, provisions, covenant or restriction of this Agreement is held by a court
of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby be consummated as originally
contemplated to the fullest extent possible.
Section
11.11 Interpretation.
The
parties agree that this Agreement shall be deemed to have been jointly and
equally drafted by them, and that the provisions of this Agreement therefore
shall not be construed against a party or parties on the ground that such party
or parties drafted or was more responsible for the drafting of any such
provision(s). The parties further agree that they have each carefully read
the
terms and conditions of this Agreement, that they know and understand the
contents and effect of this Agreement and that the legal effect of this
Agreement has been fully explained to its satisfaction by counsel of its own
choosing.
[Remainder
of page intentionally left blank]
IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.
|
NORTH
COAST PARTNERS, INC.
By:
/s/
Xxxxxx Xxxxxxxxx
Name:
Xxxxxx Xxxxxxxxx
Title:
President
|
NORTH
COAST ACQUISITION CORP.
By:
/s/
Xxxxxx Xxxxxxxxx
Name:
Xxxxxx Xxxxxxxxx
Title:
President
|
|
|
MONTAVO,
INC.
By:
/s/
Xxxxx Xxxx
Name:
Xxxxx Xxxx
Title:
Chief Executive Officer
|
||
Exhibit
A
Certificates
of Merger
| 1. |
Certificate
of Merger to be filed with the Secretary of State of
Delaware
|
| 2. |
Articles
of Merger to be filed with the Secretary of State of
Washington
|
Exhibit
B
Articles
of Incorporation of Surviving Corporation
Exhibit
C
Bylaws
of
the Surviving Corporation
Exhibit
D
Amendment
to the Certificate of Incorporation of the Parent
To
be
provided prior to the Closing Date
CERTIFICATE
OF AMENDMENT
TO
THE
CERTIFICATE OF INCORPORATION
OF
NORTH
COAST PARTNERS, INC.
The
undersigned, for purposes of amending the Certificate of Incorporation (the
“Certificate”)
of
North Coast Partners, Inc., a corporation organized and existing under and
by
virtue of the General Corporation Law of the State of Delaware, does hereby
certify as follows:
FIRST: The
name
of the corporation is North Coast Partners, Inc. (the “Corporation”),
and
the date of incorporation was April 20, 1994.
SECOND:
That
at a
meeting of the Board of Directors of the Corporation, resolutions were duly
adopted setting forth a proposed amendment to the Certificate to increase the
number of authorized capital stock of the Corporation, and declaring that said
amendment to be advisable and calling a meeting of the stockholders of the
Corporation for consideration thereof. The resolution setting forth the proposed
amendment is as follows:
RESOLVED,
that
the Certificate of Incorporation of the Corporation be amended by deleting
Article FOURTH and replacing it in its entirety so that, as amended said Article
shall be read as follows:
“FOURTH: The
total
number of shares of stock which the Cor-poration shall have authority to issue
is 100,000,000, which shall
consist of (i) 99,000,000 shares of common stock, $.0001 par value per share
(the "Common Stock"), and (ii) 1,000,000 shares of preferred stock, $.0001
par
value per share (the "Preferred Stock").
The
Preferred Stock may be issued in one or more series, from time to time, with
each such series to have such designation, relative rights, preferences or
limitations, as shall be stated and expressed in the resolution or resolutions
providing for the issue of such series adopted by the Board of Directors of
the
Corporation (the "Board"), subject to the limitations prescribed by law and
in
accordance with the provisions hereof, the Board being hereby expressly vested
with authority to adopt any such resolution or resolutions. The authority of
the
Board with respect to each series of Preferred Stock shall include, but not
be
limited to, the determination or fixing of the following:
(i)
The
distinctive designation and number of shares comprising such series, which
number may (except where otherwise provided by the Board increasing such series)
be increased or decreased (but not below the number of shares then outstanding)
from time to time by like action of the Board;
(ii)
The
dividend rate of such series, the conditions and time upon which such dividends
shall be payable, the relation which such dividends shall bear to the dividends
payable on any other class or classes of Stock or series thereof, or any other
series of the same class, and whether such dividends shall be cumulative or
non-cumulative;
(iii)
The
conditions upon which the shares of such series shall be subject to redemption
by the Corporation and the times, prices and other terms and provisions upon
which the shares of the series may be redeemed;
(iv)
Whether or not the shares of the series shall be subject to the operation of
a
retirement or sinking fund to be applied to the purchase or redemption of such
shares and, if such retirement or sinking fund be established, the annual amount
thereof and the terms and provisions relative to the operation
thereof;
(v)
Whether or not the shares of the series shall be convertible into or
exchangeable for shares of any other class or classes, with or without par
value, or of any other series of the same class, and, if provision is made
for
conversion or exchange, the times, prices, rates, adjustments and other terms
and conditions of such conversion or exchange;
(vi)
Whether or not the shares of the series shall have voting rights, in addition
to
the voting rights provided by law, and, if so, the terms of such voting
rights;
(vii)
The
rights of the shares of the series in the event of voluntary or involuntary
liquidation, dissolution or upon the distribution of assets of the Corporation;
and
(viii)
Any other powers, preferences and relative participating, optional or other
special rights, and qualifications, limitations or restrictions thereof, of
the
shares of such series, as the Board may deem advisable and as shall not be
inconsistent with the provisions of this Articles of Incorporation.
The
holders of shares of the Preferred Stock of each series shall be entitled to
receive, when and as declared by the Board, out of funds legally available
for
the payment of dividends, dividends (if any) at the rates fixed by the Board
for
such series before any cash dividends shall be declared and paid or set apart
for payment, on the Common Stock with respect to the same dividend
period.
The
holders of shares of the Preferred Stock of each series shall be entitled,
upon
liquidation or dissolution or upon the distribution of the assets of the
Corporation, to such preferences as provided in the resolution or resolutions
creating such series of Preferred Stock, and no more, before any distribution
of
the assets of the Corporation shall be made to the holders of shares of the
Common Stock. Whenever the holders of shares of the Preferred Stock shall have
been paid the full amounts to which they shall be entitled, the holders of
shares of the Common Stock shall be entitled to share ratably in all remaining
assets of the Corporation.”
THIRD:
That
the foregoing amendment was duly adopted by the Board of Directors and by the
stockholders of the Corporation in accordance with the applicable provisions
of
Section 242 of the General Corporation Law of the State of
Delaware.
IN
WITNESS WHEREOF,
the
undersigned, being a duly authorized officer of the Corporation, does hereby
execute this Amendment to the Certificate this ___
day of
__________, 2008.
|
By:
______________________
|
|
|
Name:
|
|
|
Title:
|
Exhibit
E
Form
of
Seller’s Representation Letter
Schedule
4.4
Parent’s
Required Consents
|
1.
|
Resolutions
of the Board of Directors of the Parent authorizing the
Merger.
|
|
2.
|
Resolutions
of the Board of Directors of the Parent adopting the Amendment to
the
Certificate of Incorporation of the Parent to increase the authorized
capital stock of the Parent and, calling a special meeting of the
stockholders entitled to vote in respect thereof for the consideration
of
such amendment.
|
|
3.
|
Minutes
of the meeting of the stockholders of the Parent adopting the Amendment
to
the Certificate of Incorporation to increase the authorized capital
stock
of the Parent.
|
Schedule
4.8
Properties
& Assets of Parent
To
be
provided prior to Closing
Schedule
4.11
Parent
Contracts
| 1. |
Employment
Agreement, dated November 6, 2007, between the Parent and Xxxxx
Xxxxx.
|
Schedule
5.4
Acquisition
Corp. Consents
|
1.
|
Joint
Resolutions of the Sole Director and Sole Stockholder of Acquisition
Corp., authorizing the Merger.
|
Schedule
6.4
Company
Intellectual Property
Patent
Serial No.: 11/053,095
Trademark
- “Montavo”(Serial No.: 78,/560,555)
Trademark
-“mDeal-Finder” (Serial No.: 77/1019,131)
Company
Contracts
Widget
Agreement, dated March 5, 2008, between Montavo, Inc. and uLocate Communication,
Inc.
Software
Development Agreement, commencing November 1, 2005, between Montavo, Inc. and
Fast Track Team, Inc.
