EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION ("AGREEMENT") dated as of December 27,
2002, by and among ONEDENTIST RESOURCES, INC., a Colorado corporation
("Parent"), XXXXXXXX MERGER CORP., a Colorado corporation and a wholly-owned
subsidiary of Parent ("Merger Sub"), Xxxx X. Agron and Xxxxxx X. Xxxxx, who are
the principal shareholders of Parent ("Parent Principal Shareholders") and
XXXXXXXX HOMES, INC., a Colorado corporation ("Xxxxxxxx").
RECITALS:
The parties intend that, subject to the terms and conditions of this
Agreement:
Merger Sub will merge with and into Xxxxxxxx in a statutory merger
("Merger"), with Xxxxxxxx to be the corporation surviving the Merger, all
pursuant to the terms and conditions of this Agreement and the applicable
provisions of the laws of the State of Colorado.
Upon the effectiveness of the Merger, all of the outstanding capital stock
of Xxxxxxxx will be converted into shares of Parent Common Stock, as provided in
this Agreement. This Merger is intended to be treated as a tax-free
reorganization pursuant to the provisions of Section 368(a)(1)(A) of the
Internal Revenue Code of 1986, as amended (the "Code") by virtue of the
provisions of Section 368(a)(2)(E) of the Code.
NOW, THEREFORE, in consideration of the foregoing recitals, which shall be
considered an integral part of this Agreement, and the covenants, conditions,
representations and warranties hereinafter set forth, the parties hereby agree
as follows:
ARTICLE I
THE MERGER
1.1 The Merger.
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At the Effective Time (as hereinafter defined), Merger Sub shall be merged
with and into Xxxxxxxx (Merger Sub and Xxxxxxxx are sometimes referred to herein
as the "Constituent Corporations"), the separate corporate existence of Merger
Sub shall cease and Xxxxxxxx shall continue as the surviving corporation under
the corporate name "Xxxxxxxx Homes, Inc." (the "Surviving Corporation") all upon
the terms and subject to the conditions provided for in this Agreement and
pursuant to the Colorado Business Corporation Act (the "CBCA"). For federal
income tax purposes, it is intended that the Merger shall constitute a
reorganization within the meaning of Section 368 of the Code.
1.2 Closing and Effective Time.
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Subject to the provisions of this Agreement, the parties shall hold a
closing (the "Closing") on (i) the first business day on which the last of the
conditions set forth in Article V to be fulfilled prior to the Closing is
fulfilled or waived or (ii) such other date as the parties hereto may agree (the
"Closing Date"), at such time and place as the parties hereto may agree. The
Merger shall become effective upon the filing of the Articles of Merger with the
Secretary of State of the State of Colorado or at such later time on the Closing
Date as is provided in the Articles of Merger (the "Effective Time"). As a
result of the Merger, Xxxxxxxx shall become a wholly owned subsidiary of Parent.
1.3 Effects of the Merger.
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The Merger shall have the effects specified in the CBCA and, at the
Effective Time, the Surviving Corporation shall possess all the rights,
privileges, powers and franchises, and be subject to all the restrictions,
disabilities and duties of each of the Constituent Corporations; and all
singular rights, privileges, powers and franchises of each of the Constituent
Corporations, and all property, real, personal and mixed, and all debts due to
either of the Constituent Corporations on whatever account, and all other things
in action or 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 the property of
the Surviving Corporation as though they were of the Constituent Corporations;
but all rights of creditors and all liens upon any property of either of the
Constituent Corporations shall be preserved unimpaired, and all debts,
liabilities and duties of the Constituent Corporations shall thereafter attach
to the Surviving Corporation, and may be enforced against it to the same extent
as if said debts and liabilities had been incurred by it.
1.4 Articles of Incorporation, By-Laws and Directors and Officers.
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The Articles of Incorporation of Xxxxxxxx in effect immediately prior to
the Effective Time shall be and remain the Articles of Incorporation of the
Surviving Corporation, until thereafter amended in accordance with the
provisions therein and as provided by the CBCA. The By-Laws of Xxxxxxxx in
effect immediately prior to the Effective Time shall be the By-Laws of the
Surviving Corporation until thereafter amended in accordance with its terms. The
directors and officers of Xxxxxxxx immediately prior to the Effective time shall
be the directors and officers of the Surviving Corporation, in each case until
their successors are duly elected and qualified.
1.5 Issuance and Cancellation of Shares in the Merger.
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At the Closing, Parent shall issue an aggregate of 50,064,210 shares of its
Common Stock (being an aggregate of 90% of the Common Stock of Parent
outstanding immediately after the Closing) to the shareholders of Xxxxxxxx.
Prior to the closing, Xxxxxxxx shall provide Parent with a list of its
shareholders and the pro rata allocation of the Parent stock to be issued at
Closing. As of the Effective Time, by virtue of the Merger and the foregoing
share issuance and without any additional action on the part of Merger Sub,
Xxxxxxxx or the holder of any shares of any of them:
(a) Capital Stock of Merger Sub.
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Each issued and outstanding share of the capital stock of Merger Sub
shall be converted into and become one fully paid and nonassessable share
of Common Stock, no par value, of the Surviving Corporation.
(b) Capital Stock of Xxxxxxxx.
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Each issued and outstanding share of the common stock of Xxxxxxxx
shall be converted into the right to receive three and one-half shares of
Common Stock, no par value per share, of Parent and each issued and
outstanding share of preferred stock of Xxxxxxxx shall be converted into
the right to receive one share of preferred stock of Parent (the "Merger
Shares") with the result that after the Effective Time, Xxxxxxxx will
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become a wholly owned subsidiary of Parent. All such converted shares of
Xxxxxxxx shall no longer be outstanding and shall automatically be canceled
and retired and shall cease to exist, and each holder of a certificate
representing any such shares shall cease to have any rights with respect
thereto, except the right to receive a pro rata portion of the Merger
Shares.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Parent.
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Parent, Merger Sub and the Parent Principal Shareholders represent and
warrant to Xxxxxxxx as follows:
(a) Organization, Standing and Power.
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Parent is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado, has all requisite power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted, and is duly qualified and in good standing
to do business in each jurisdiction in which the nature of its business or
the ownership or leasing of its properties makes such qualification
necessary other than in such jurisdictions where the failure to so qualify
would not have a material adverse affect on Parent taken as a whole. Merger
Sub is a corporation duly organized, validly existing and in good standing
under the laws of the State of Colorado and has the corporate power and
authority to own, operate and lease its properties and carry on its
business as now conducted and as proposed to be conducted. Merger Sub was
formed in December of 2002, and has conducted no business or operations
prior to the date hereof.
(b) Capital Structure.
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The authorized capital stock of Parent consists of 100,000,000 shares
of Common Stock, no par value per share and 10,000,000 shares of Preferred
Stock, no par value per share. As of the date hereof, 5,562,690 shares of
Parent Common Stock are outstanding; no shares of Parent Common Stock are
held by Parent in its treasury, and no shares of Parent Preferred Stock are
issued or outstanding. All outstanding shares of Parent Common Stock are,
and the Merger Shares to be issued pursuant to this Agreement will be when
issued pursuant to the terms of the resolution of the Board of Directors of
Parent approving such issuance, validly issued, fully paid and
non-assessable and not subject to preemptive rights. All of the issued and
outstanding shares of Parent Common Stock were issued, and the Merger
Shares will be issued, in compliance with all Federal and state securities
laws. Except for options described in Schedule 2.1(b) hereto, there are no
options, warrants, calls, agreements or other rights to purchase or
otherwise acquire from Parent at any time, or upon the happening of any
stated event, any shares of the capital stock of Parent, whether or not
presently issued or outstanding. There are a total of 100,000 authorized
shares of Common Stock without par value per share for Merger Sub, 10,000
of which are validly issued, outstanding, fully paid and non-assessable.
There are no outstanding options, warrants, rights (including conversion of
preemptive rights) or agreements for the purchase or acquisition from
Merger Sub of any shares of its capital stock or any securities convertible
into or ultimately exchangeable or exercisable for any shares of Merger
Sub's capital stock.
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(c) Articles of Incorporation, By-Laws, and Minute Books.
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The copies of the Articles of Incorporation and of the By-Laws of
Parent as well as the Articles of Incorporation and By-Laws of Merger Sub
which have been delivered to Xxxxxxxx are true, correct and complete copies
thereof. The minute books of Parent and Merger Sub which have been made
available for inspection contain accurate minutes of all meetings and
accurate consents in lieu of meetings of the Board of Directors (and any
committee thereof) and of the shareholders of Parent and Merger Sub since
the respective dates of incorporation and accurately reflect all
transactions referred to in such minutes and consents in lieu of meetings.
(d) Authority.
--------------
Both Parent and Merger Sub have all requisite power and authority to
enter into and to perform their obligations under this Agreement and all
agreements to which Parent or Merger Sub is or will be a party that will be
required at the Closing (the "Parent Ancillary Agreements"). The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by the Boards of
Directors of Parent and Merger Sub. No other corporate or shareholder
proceedings on the part of Parent are necessary to authorize the Merger, or
the other transactions contemplated hereby and thereby. This Agreement and
the Parent Ancillary Agreements have been or will be duly executed and
delivered by Parent and/or Merger Sub and constitute valid and binding
obligations of Parent and Merger Sub enforceable in accordance with their
terms, except as to the effect, if any, of (i) applicable bankruptcy and
other similar laws affecting the rights of creditors generally and (ii)
rules of law governing specific performance, injunctive relief and other
equitable remedies; provided, however, that the Articles of Merger will not
be effective until the Effective Time.
(e) Conflict with Other Agreements; Approvals.
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The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not, result in
any violation of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or the loss of a material benefit under, or
the creation of a lien, pledge, security interest or other encumbrance on
assets (any such conflict, violation, default, right of termination,
cancellation or acceleration, loss or creation, a "Violation") pursuant to
any provision of the Articles of Incorporation or By-Laws or any
organizational document of Parent or Merger Sub, or result in any Violation
of any loan or credit agreement, note, mortgage, indenture, lease, benefit
plan or other agreement, obligation, instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance, rule
or regulation applicable to Parent or Merger Sub, which Violation would
have a material adverse effect on Parent or Merger Sub taken as a whole. No
consent, approval, order or authorization of, or registration, declaration
or filing with, any court, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign (a
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"Governmental Entity") is required by or with respect to Parent or Merger
Sub in connection with the execution and delivery of this Agreement by
Parent or Merger Sub, or the consummation by Parent or Merger Sub of the
transactions contemplated hereby, the failure to obtain which would have a
material adverse effect on Parent or Merger Sub, taken as a whole, except
for (i) the filing of such documents with, and the obtaining of such orders
from, the Securities and Exchange Commission (the "SEC"), the various state
authorities, including state securities authorities, that are required in
connection with the transactions contemplated by this Agreement; and (ii)
the filing of Articles of Merger with the Secretary of State of Colorado.
(f) SEC Documents.
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Parent has furnished Xxxxxxxx with a true and complete copy of each
report, schedule, registration statement and definitive proxy statement
filed by Parent with the SEC since inception (as such documents have since
the time of their filing been amended, the "Parent SEC Documents") and
since that date, Parent has filed with the SEC all documents required to be
filed pursuant to Section 13(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). As of their respective dates, the Parent SEC
Documents complied in all material respects with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), or the Exchange
Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such Parent SEC Documents, and none of the Parent
SEC Documents contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of Parent included in the
Parent SEC Documents comply as to form in all material respects with
applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, are accurate and in accordance
with the books and records of Parent, have been prepared in accordance with
generally accepted accounting principles 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 by Form
10-QSB of the SEC) and fairly present (subject, in the case of the
unaudited statements, to normal, recurring audit adjustments) the
consolidated financial position of Parent as at the dates thereof and the
consolidated results of its operations and cash flows for the periods then
ended.
(g) Books and Records.
----------------------
Parent and Merger Sub have made and will make available for inspection
by Xxxxxxxx upon reasonable request all the books of Parent relating to the
business of Parent. Such books of Parent have been maintained in the
ordinary course of business. All documents furnished or caused to be
furnished to Xxxxxxxx by Parent are true and correct copies, and there are
no amendments or modifications thereto except as set forth in such
documents.
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(h) Compliance with Laws.
-------------------------
Parent and Merger Sub are and have been in compliance in all material
respects with all laws, regulations, rules, orders, judgments, decrees and
other requirements and policies imposed by any Governmental Entity
applicable to them, their properties or the operation of their businesses.
(i) Absence of Certain Changes or Events.
-----------------------------------------
Except as disclosed in the Parent SEC Documents filed prior to the
date of this Agreement or in the audited balance sheet of Parent and the
related statements of income, cash flows and changes in shareholders'
equity as of and for the period ended December 31, 2001 (the "Parent
Audited Financials"), true and correct copies of which have been delivered
to Xxxxxxxx, or except as contemplated by this Agreement or except as set
forth on Schedule 2.1(i) or the interim financial statements prepared since
the date of the Parent Audited Financials (the "Parent Interim Financial
Statements"), true and correct copies of which have been delivered to
Xxxxxxxx, Parent has conducted its business only in the ordinary course,
and, as of the date of this Agreement, there has not been (i) any material
adverse change, alone or in the aggregate, in the business, assets,
liabilities, condition (financial or otherwise), results of operations or
prospects of Parent; or (ii) any declaration, setting aside or payment of
any dividend or other distribution (whether in cash, stock or property)
with respect to any of Parent's capital stock.
(j) Assets, Liabilities and Obligations.
----------------------------------------
Except as set forth on Schedule 2.1(j), as of the Closing Date,
neither Parent nor Merger Sub will have any assets, liabilities or
obligations of any kind or nature at any time existing or asserted, whether
fixed, contingent or otherwise.
(k) Litigation.
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There is no action, proceeding, claim or investigation pending against
either Parent or Merger Sub before any federal, state, municipal, foreign
or other court or administrative agency, department, board or
instrumentality that, if concluded adversely to either Parent or Merger
Sub, would have a material adverse effect, and no such action, proceeding,
claim or investigation has been threatened.
(l) Taxes.
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Parent has filed or will file within the time prescribed by law and
(including extension of time approved by the appropriate taxing authority)
all tax returns and reports required to be filed with the United States
Internal Revenue Service and with all other jurisdictions where such filing
is required by law or where the failure to file would have a material
adverse effect on Parent; and Parent has paid, or has made adequate
provision in the Parent Interim Financial Statements for the payment of all
taxes, interest, penalties, assessments or deficiencies shown due and
payable on, and with respect to all periods ending prior to December 31,
2002. Parent knows of (i) no other tax returns or reports which are
required to be filed which have not been so filed or where the failure to
file would have a material adverse effect on Parent and (ii) no unpaid
assessment for additional taxes for any fiscal period or any basis
therefor.
(m) Contracts.
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Neither parent nor Merger Sub is a party to any contract, obligation,
commitment, plan, agreement, loan agreement, lease, mortgage, instrument,
arrangement or license ("Material Parent Contracts"), which cannot be
terminated by Parent or Merger Sub without penalty within 30 days after
written notice.
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(n) Benefit Plans.
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Parent has complied with all applicable agreements, laws, rules and
regulations relating to the employment of labor, including those related to
wages, hours and payroll taxes. Parent has withheld and remitted to the
proper Governmental Authorities all amounts required by law or agreement to
be withheld from wages or salaries of its employees and is not liable for
any arrearage of wages or any taxes or penalties for failure to comply with
any of the foregoing. Parent has had no labor troubles in the sense that
within the last 12 months there have been no strikes, work stoppages,
slowdowns, threatened unfair labor practice charges or other material
controversies pending or threatened by any of its employees; and Parent has
not entered into any collective bargaining agreement and no union
represents, or in the past twelve (12) months has demanded or requested to
represent or, to the knowledge of Parent, is currently attempting to
represent any of the employees of Parent. Except as set forth on Schedule
2.1(n), Xxxxxxxx has not promulgated any policy or entered into any
agreement relating to the payment of any medical insurance premium,
retirement pay, severance pay, vacation pay or sick leave to any present or
former employees of Parent.
All employee profit-sharing, incentive, deferred compensation,
welfare, pension, retirement, group insurance, bonus, severance and other
employee benefit plans, arrangements or agreements (oral or written),
regardless of whether any such plan, arrangement or agreement is an
"employee benefit plan" within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), maintained or
previously maintained or contributed to or previously contributed to by
Parent for the benefit of current or former personnel ("Employee Plans"),
by their terms and operation are in material compliance with all applicable
laws (including, but not limited to, ERISA and the Code). There are no
actions, suits or claims pending or threatened (other than routine
noncontested claims for benefits) or, to the knowledge of Parent, no set of
circumstances exist which may reasonably give rise to such a claim against
any Employee Plan or administrator or fiduciary of any such Employee Plan.
To the knowledge of Parent, and except for matters which would not
have a material adverse effect, no employee of Parent is in violation of
any term of any employment contract, patent disclosure agreement,
noncompetition agreement, or any other contract or written agreement, or
any restrictive covenant contained in any such agreement relating to the
right of any such employee to be employed thereby, or to use trade secrets
or proprietary information of others, and the employment of such employees
does not subject Parent to any material liability.
(o) Licenses, Permits; Intellectual Property.
---------------------------------------------
(i) Parent owns all right, title or interest in, or has the
rights to use, sell or license, all intellectual property rights
necessary or required for the conduct of, or used in, its business as
presently conducted (such intellectual property rights being
hereinafter collectively referred to as the "Parent IP Rights"); and
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such rights to use, sell or license are reasonably sufficient for the
conduct of its business as presently conducted. Except for matters
which would not have a material adverse effect, neither the
manufacture, marketing, license, sale or intended use of any product
currently licensed or sold by Parent or currently under development by
Parent violates any license or agreement between Parent and any third
party or infringes on the intellectual property right of any other
party; and, except for matters which would not have a material adverse
effect, there is no pending or threatened claim or litigation
contesting the validity, ownership or right to use, sell, license or
dispose of any Parent IP Right, nor is there any basis for any such
claim; nor has Parent received any noticed asserting that any Parent
IP Right or the proposed use, sale, license, or disposition thereof
conflicts or will conflict with the rights of any other third party,
nor is there any basis for any such assertion.
(ii) Parent does not hold or use any patents or use any trade
names, trademarks, or servicemarks except as described on Schedule
2.1(o).
(p) Brokerage.
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No broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the Merger based
upon arrangements made by or on behalf of Parent.
2.2 Representations and Warranties of Xxxxxxxx.
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Xxxxxxxx represents and warrants to Parent and Merger Sub as follows:
(a) Organization, Standing and Power.
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(i) Xxxxxxxx is a corporation duly organized, validly existing
and in good standing under the laws of the state of Colorado, has all
requisite power and authority to own, lease and operate its properties
and to carry on its business as now being conducted, and is duly
qualified and in good standing to do business in each jurisdiction in
which the nature of its business or the ownership or leasing of its
properties makes such qualification necessary other than in such
jurisdictions where the failure to so qualify would not have a
material adverse effect on Xxxxxxxx and the Xxxxxxxx Entities (as
hereinafter defined) taken as a whole.
(ii) Schedule 2.2(a) hereto lists each of the direct and indirect
subsidiaries of Xxxxxxxx and each limited liability company or other
entity in which Xxxxxxxx has an interest as of the date hereof, along
with a description of the interest held by Xxxxxxxx in such entity
(individually, an "Xxxxxxxx Entity" and together, the "Xxxxxxxx
Entities"). All shares of capital stock or ownership interests of each
Xxxxxxxx Entity held by Xxxxxxxx or another Xxxxxxxx Entity have been
duly authorized, are fully paid and nonassessable, and are lawfully
owned of record and beneficially by Xxxxxxxx or another Xxxxxxxx
Entity.
(iii) Each Xxxxxxxx Entity is duly organized, validly existing,
in good standing and qualified to do business in each jurisdiction in
which the nature of its business or the ownership or leasing of its
properties makes such qualification necessary other than in such
jurisdictions where the failure to so qualify would not have a
material adverse effect on Xxxxxxxx and the Xxxxxxxx Entities taken as
a whole.
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(b) Capital Structure.
----------------------
As of the date hereof, the authorized capital stock of Xxxxxxxx
consists of 90,000,000 shares of Common Stock, no par value per share and
10,000,000 shares of Preferred Stock, no par value per share. As of the
date of this Agreement, 6,690,458 shares of Xxxxxxxx Common Stock were
outstanding and no shares of Xxxxxxxx Common Stock were held by Xxxxxxxx in
treasury. All outstanding shares of Xxxxxxxx Common Stock are validly
issued, fully paid and non-assessable and not subject to preemptive rights
or other restrictions on transfer. Except as disclosed in Schedule 2.2(b),
all of the issued and outstanding shares of Xxxxxxxx Common Stock were
issued in compliance with all Federal and state securities laws. There are
no options, warrants, calls, agreements or other rights to purchase or
otherwise acquire from Xxxxxxxx at any time, or upon the happening of any
stated event, any shares of the capital stock of Xxxxxxxx, whether or not
presently issued or outstanding.
(c) Articles of Incorporation, By-Laws and Minute Books.
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The copies of the Articles of Incorporation and of the By-Laws of
Xxxxxxxx which have been delivered to Parent are true, correct and complete
copies thereof. The minute books of Xxxxxxxx which have been made available
for inspection contain accurate minutes of all meetings and accurate
consents in lieu of meetings of the Board of Directors (and any committee
thereof) and of the shareholders of Xxxxxxxx since the respective dates of
incorporation and accurately reflect all transactions referred to in such
minutes and consents in lieu of meetings.
(d) Authority.
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Xxxxxxxx has all requisite power and authority to enter into and to
perform its obligations under this Agreement and all agreements to which
Xxxxxxxx is or will be a party that will be required at the Closing (the
"Xxxxxxxx Ancillary Agreements"). The execution and delivery of this
Agreement and the Xxxxxxxx Ancillary Agreements and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by
the Board of Directors of Xxxxxxxx, and no other corporate or shareholder
proceedings on the part of Xxxxxxxx are necessary to authorize the Merger
and the other transactions contemplated hereby and thereby, except approval
of the shareholders of Xxxxxxxx. This Agreement and the Xxxxxxxx Ancillary
Agreements have been duly executed and delivered by Xxxxxxxx and
constitutes a valid and binding obligation of Xxxxxxxx enforceable in
accordance with its terms, except as to the effect, if any, of (i)
applicable bankruptcy and other similar laws affecting the rights of
creditors generally and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies; provided, however, that the
Articles of Merger will not be effective until the Effective Time.
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(e) Conflict with Agreements; Approvals.
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The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby and thereby will not,
conflict with, or result in any violation pursuant to any provision of the
Articles of Incorporation or By-Laws of Xxxxxxxx or, except as set forth on
Schedule 2.2(e) hereto, result in any violation of any loan or credit
agreement, note, mortgage, indenture, lease, benefit plan or other
agreement, obligation, instrument, permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Xxxxxxxx, or its respective properties or assets, which
violation would have a material adverse effect on Xxxxxxxx. Except as set
forth on Schedule 2.2(e) hereto, no consent, approval, order or
authorization of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to Xxxxxxxx in
connection with the execution and delivery of this Agreement by Xxxxxxxx,
or the consummation by Xxxxxxxx of the transactions contemplated hereby,
the failure to obtain which would have a material adverse effect on
Xxxxxxxx except for the filing of the Articles of Merger with the Secretary
of State of Colorado.
(f) Financial Statements.
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Xxxxxxxx has furnished Parent as Schedule 2.2(f), its unaudited
balance sheet as of December 31, 2001and statement of income for the period
then ended (the "Xxxxxxxx Financial Statements"). The Xxxxxxxx Financial
Statements have been prepared in accordance with the books and records of
Xxxxxxxx, have been prepared on an income tax basis applied consistently
during the period involved and fairly presents the consolidated financial
position of Xxxxxxxx as of the date thereof and the consolidated results of
its operations for the period then ended, except as such Xxxxxxxx Financial
Statements may be revised or restated following the audit to be undertaken
by Xxxxxxxx. Xxxxxxxx is unable to furnish financial statements for any
period ending in 2002 as of the execution of this Agreement. In recognition
of this fact, Xxxxxxxx agrees to deliver to Parent prior to the Closing its
unaudited financial statements for a period ending not earlier than
September 30,2002 and proforma financial statements for the period ended
December 31, 2002. It shall be a condition precedent to the Closing that
Parent shall have received and reviewed to its sole satisfaction these 2002
financial statements.
(g) Books and Records.
----------------------
Xxxxxxxx has made and will make available for inspection by Parent,
upon reasonable request, all the books of account relating to the business
of Xxxxxxxx. Such books of account of Xxxxxxxx have been maintained in the
ordinary course of business. All documents furnished to Parent by Xxxxxxxx
are true and correct copies, and there are no amendments or modifications
thereto except as set forth in such documents.
(h) Compliance with Laws.
-------------------------
Except as disclosed in Schedule 2.2(h), Xxxxxxxx is and has been in
compliance in all material respects with all laws, regulations, rules,
orders, judgments, decrees and other requirements and policies imposed by
any Governmental Entity applicable to it, its properties or the operation
of its businesses.
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(i) Absence of Certain Changes or Events.
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Except as disclosed in the Xxxxxxxx Financial Statements, as
contemplated by this Agreement, or as set forth on Schedule 2.2(i) as the
same may be supplemented after the date hereof, since December 31, 2001,
except as required or contemplated by this Agreement, Xxxxxxxx has
conducted its business only in the ordinary course, and, as of the date of
this Agreement, there has not been (i) any material adverse change, alone
or in the aggregate, in the business, assets, liabilities, condition
(financial or otherwise), results of operations or prospects; or (ii) any
declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to any of Xxxxxxxx'x
capital stock.
(j) Litigation.
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Except as set forth in Schedule 2.2(j) or routine matters incident to
the normal operation of its business, there is no action, suit, proceeding,
claim or investigation pending against Xxxxxxxx before any federal, state,
municipal, foreign or other court or administrative agency, department,
board or instrumentality that, if concluded adversely to Xxxxxxxx, would
have a material adverse effect, and no such action, proceeding, claim or
investigation has been threatened.
(k) Taxes.
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Xxxxxxxx has filed or will file within the time prescribed by law
(including extension of time approved by the appropriate taxing authority)
all tax returns and reports required to be filed with the United States
Internal Revenue Service and with all other jurisdictions where such filing
is required by law; and Xxxxxxxx has paid, or has made adequate provision
for the payment of all taxes, interest, penalties, assessments or
deficiencies due and payable on, and with respect to all periods ending
prior to December 31, 2001 except property taxes that may be paid in
connection with the sale of its inventory in the future. Xxxxxxxx knows of
(i) no other tax returns or reports which are required to be filed which
have not been so filed and (ii) no unpaid assessment for additional taxes
for any fiscal period or any basis therefor.
(l) Assets.
-----------
Except as described in Schedule 2.2(l), Xxxxxxxx has good and
marketable title to all its real and personal property and assets reflected
in the Xxxxxxxx Financial Statements, free and clear of all mortgages,
liens, pledges, charges or encumbrances or other third party interests of
any nature whatsoever, except (i) the lien of current taxes not yet due and
payable, (ii) properties, interests, and assets disposed of by Xxxxxxxx in
the ordinary course of business or in contemplation of its reorganization;
(iii) such imperfections of title, easements and encumbrances, if any, as
are not substantial in character, amount or extent and do not materially
detract from the value, or interfere with the present or proposed use, of
the properties subject thereto.
(m) Benefit Plans.
------------------
Xxxxxxxx has complied with all applicable agreements, laws, rules and
regulations relating to the employment of labor, including those related to
wages, hours and payroll taxes. Xxxxxxxx has withheld and remitted to the
proper Governmental Authorities all amounts required by law or agreement to
be withheld from wages or salaries of its employees and is not liable for
any arrearage of wages or any Taxes or penalties for failure to comply with
any of the foregoing. Xxxxxxxx has had no labor troubles in the sense that
within the last 12 months there have been no strikes, work stoppages,
slowdowns, threatened unfair labor practice charges or other material
11
controversies pending or threatened by any of its employees; and Xxxxxxxx
has not entered into any collective bargaining agreement and no union
represents, or in the past twelve (12) months has demanded or requested to
represent or, to the knowledge of Xxxxxxxx, is currently attempting to
represent any of the employees of Xxxxxxxx. Except as set forth on Schedule
2.2(m), Xxxxxxxx has not promulgated any policy or entered into any
agreement relating to the payment of any medical insurance premium,
retirement pay, severance pay, vacation pay or sick leave to any present or
former employees of Xxxxxxxx.
All employee profit-sharing, incentive, deferred compensation,
welfare, pension, retirement, group insurance, bonus, severance and other
employee benefit plans, arrangements or agreements (oral or written),
regardless of whether any such plan, arrangement or agreement is an
"employee benefit plan" within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), maintained or
previously maintained or contributed to or previously contributed to by
Xxxxxxxx for the benefit of current or former personnel ("Employee Plans"),
by their terms and operation are in material compliance with all applicable
laws (including, but not limited to, ERISA and the Code). There are no
actions, suits or claims pending or threatened (other than routine
noncontested claims for benefits) or, to the knowledge of Xxxxxxxx, no set
of circumstances exist which may reasonably give rise to such a claim
against any Employee Plan or administrator or fiduciary of any such
Employee Plan.
To the knowledge of Xxxxxxxx, and except for matters which would not
have a material adverse effect, no employee of Xxxxxxxx is in violation of
any term of any employment contract, patent disclosure agreement,
noncompetition agreement, or any other contract or written agreement, or
any restrictive covenant contained in any such agreement relating to the
right of any such employee to be employed thereby, or to use trade secrets
or proprietary information of others, and the employment of such employees
does not subject Xxxxxxxx to any material liability.
(n) Licenses, Permits; Intellectual Property.
---------------------------------------------
(i) Xxxxxxxx owns all right, title or interest in, or has the
rights to use, sell or license, all intellectual property rights
necessary or required for the conduct of, or used in, its business as
presently conducted (such intellectual property rights being
hereinafter collectively referred to as the "Xxxxxxxx IP Rights"); and
such rights to use, sell or license are reasonably sufficient for the
conduct of its business as presently conducted. Except for matters
which would not have a material adverse effect, neither the
manufacture, marketing, license, sale or intended use of any product
currently licensed or sold by Xxxxxxxx or currently under development
by Xxxxxxxx violates any license or agreement between Xxxxxxxx and any
third party or infringes on the intellectual property right of any
other party; and, except for matters which would not have a material
adverse effect, there is no pending or threatened claim or litigation
contesting the validity, ownership or right to use, sell, license or
dispose of any Xxxxxxxx IP Right, nor is there any basis for any such
claim; nor has Xxxxxxxx received any noticed asserting that any
Xxxxxxxx IP Right or the proposed use, sale, license, or disposition
thereof conflicts or will conflict with the rights of any other third
party, nor is there any basis for any such assertion.
12
(ii) Xxxxxxxx does not hold or use any patents or use any trade
names, trademarks, or servicemarks except as described on Schedule
2.2(n).
(o) Environmental Matters.
--------------------------
Except as set forth on Schedule 2.2(o), and to the best of its
knowledge, Xxxxxxxx is in compliance with all environmental laws and except
as disclosed in Schedule 2.2(o), has no knowledge of any existing or
potential claim.
(p) Brokers.
------------
No broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the Exchange based
upon arrangements made by or on behalf of Xxxxxxxx.
ARTICLE III
COVENANTS RELATING TO CONDUCT OF BUSINESS
3.1 Covenants of Xxxxxxxx, Parent and Merger Sub.
-------------------------------------------------
During the period from the date of this Agreement and continuing until the
Effective Time, Xxxxxxxx, Parent and Merger Sub each agree as to itself and its
related entities and subsidiaries that except as expressly contemplated or
permitted by this Agreement, or to the extent that the other party shall
otherwise consent in writing:
(a) Ordinary Course.
--------------------
Each party and their respective entities and subsidiaries shall carry
on their respective businesses in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted; provided, however,
that the parties contemplate that Xxxxxxxx intends to reorganize its
corporate structure and operations, which reorganization may include, by
way of example only and not by way of limitation, the acquisition of other
businesses or entities, the disposition of some of its assets, issuance of
additional stock, appointment of additional officers and employees,
execution of additional agreements and creation of additional indebtedness.
This activity is herein referred to as the "Reorganization of Xxxxxxxx."
(b) Dividends; Changes in Stock.
--------------------------------
Except as may be required to effectuate the Reorganization of
Xxxxxxxx, no party shall, nor shall any party permit any of its
subsidiaries to, nor shall any party propose to, (i) declare or pay any
dividends on or make other distributions in respect of any of its capital
stock, (ii) split, combine or reclassify any of its capital stock or issue
or authorize or propose the issuance of any other securities in respect of,
in lieu of or in substitution for shares of its capital stock or (iii)
repurchase or otherwise acquire, or permit any subsidiary to purchase or
otherwise acquire, any shares of its capital stock.
13
(c) Issuance of Securities.
---------------------------
Except as may be required to effectuate the Reorganization of
Xxxxxxxx, no party shall, nor shall any party permit any of its
subsidiaries to, issue, deliver or sell, or authorize or propose the
issuance, delivery or sale of, any shares of its capital stock of any
class, any voting debt or any securities convertible into, or any rights,
warrants or options to acquire, any such shares, voting debt or convertible
securities.
(d) Governing Documents.
------------------------
Except as may be required to effectuate the Reorganization of
Xxxxxxxx, no party shall amend or propose to amend its Articles of
Incorporation or By-Laws.
(e) No Solicitations.
---------------------
No party shall, nor shall any party permit any of its related entities
or subsidiaries to, nor shall it authorize or permit any of its officers,
directors or employees or any investment banker, financial advisor,
attorney, accountant or other representative retained by it or any of its
related entities or subsidiaries to, solicit or encourage (including by way
of furnishing information), or take any other action to facilitate, any
inquiries or the making of any proposal which constitutes, or may
reasonably be expected to lead to, any takeover proposal, or agree to or
endorse any takeover proposal. Each party shall promptly advise the other
orally and in writing of any such inquiries or proposals. As used in this
Agreement, "takeover proposal" shall mean any tender or exchange offer,
proposal for an exchange, consolidation or other business combination
involving a party hereto or any related entity or subsidiary of such party
or any proposal or offer to acquire in any manner a substantial equity
interest in, or a substantial portion of the assets of, such party or
related entity or any of its subsidiaries other than the transactions
contemplated by this Agreement.
(f) No Acquisitions.
--------------------
Except as may be required to effectuate the Reorganization of
Xxxxxxxx, no party shall, nor shall any party permit any of its related
entities or subsidiaries to, acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial equity interest in or a
substantial portion of the assets of, or by any other manner, any business
or any corporation, partnership, association or other business organization
or division thereof or otherwise acquire or agree to acquire any assets in
each case which are material, individually or in the aggregate, to such
party and related entities and its subsidiaries taken as a whole.
(g) No Dispositions.
--------------------
Except for the transfer of assets in the ordinary course of business
consistent with prior practice, or except as may be required in connection
with the Reorganization of Xxxxxxxx, no party shall, nor shall any party
permit any of its related entities or subsidiaries to, sell, lease,
encumber or otherwise dispose of, or agree to sell, lease, encumber or
otherwise dispose of, any of its assets, which are material, individually
or in the aggregate, to such party, its related entities and its
subsidiaries taken as a whole.
(h) Indebtedness.
-----------------
Except as may be required in connection with the Reorganization of
Xxxxxxxx, no party shall, nor shall any party permit any of its related
entities or subsidiaries to, incur any indebtedness for borrowed money or
guarantee any such indebtedness or issue or sell any debt securities or
warrants or rights to acquire any debt securities of such party or related
entities or any of its subsidiaries or guarantee any debt securities of
others other than in each case in the ordinary course of business
consistent with prior practice.
14
(i) Compensation.
-----------------
Except as may be required or appropriate in connection with the
Reorganization of Xxxxxxxx, no party shall grant any increase in the salary
or other compensation of its officers or other employees or grant any bonus
to any officer or other employee or enter into any employment agreement or
make any loan to or enter into any material transaction of any other nature
with any officer or other employee of such party.
(j) No New Severance.
---------------------
Except as may be required in connection with the Reorganization of
Xxxxxxxx, no party shall take any action to institute any new severance or
termination pay practices with respect to any directors or officers or
other employees of such party or to increase the benefits payable under its
severance or termination pay practices.
(k) Benefit Plans.
------------------
Except as may be required or appropriate in connection with the
Reorganization of Xxxxxxxx, no party shall adopt or amend, in any respect,
except as may be required by applicable law or regulation, any bonus,
profit sharing, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment or other employee benefit
plan, agreement, trust, fund, plan or arrangement for the benefit or
welfare of any directors or officers or other employees except as otherwise
contemplated by this Agreement.
3.2 Other Actions.
------------------
No party shall, nor shall any party permit any of its related entities
subsidiaries to, take any action other than that set forth above that would or
is reasonably likely to result in any of its representations and warranties set
forth in this Agreement being untrue as of the date made (to the extent so
limited), or in any of the conditions to the Merger set forth in Article V not
being satisfied.
3.3 Advice of Changes; Filings.
-------------------------------
Each party shall confer on a regular and frequent basis with the other,
report on operational matters and promptly advise the other orally and in
writing of any change or event having, or which, insofar as can reasonably be
foreseen, could have, a material adverse effect on such party and its related
entities and subsidiaries taken as a whole. Each party shall promptly provide
the other (or its counsel) copies of all filings made by such party with any
state or federal governmental entity in connection with this Agreement and the
transactions contemplated hereby and thereby.
ARTICLE IV
ADDITIONAL AGREEMENTS
4.1 Shareholder Approval.
-------------------------
(i) The Board of Directors of Xxxxxxxx agrees to submit the proposed Merger
to the shareholders of Xxxxxxxx for approval in accordance with the provisions
of the CBCA, and to recommend to the shareholders the approval of the Merger.
(ii) The Board of Directors of Merger Sub agrees to submit the proposed Merger
to the shareholders of Merger Sub for approval in accordance with the provisions
of the CBCA, and to recommend to the shareholders the approval of the Merger.
15
4.2 Restricted Parent Shares.
-----------------------------
The Merger Shares will not be registered under the Securities Act, but will
be issued pursuant to an exemption from such registration requirements based
upon representations and warranties made by the shareholders of Xxxxxxxx.
Accordingly, the Merger Shares will constitute "restricted securities" for
purposes of the Securities Act and applicable state securities laws and
Shareholders will not be able to transfer such Merger Shares except upon
compliance with the registration requirements of the Securities Act and
applicable state securities laws or an exemption there from. The certificates
evidencing the Merger Shares shall contain a legend to the foregoing effect and
the Shareholders shall deliver at Closing an Investment Letter in substantially
the form of Exhibit 4.2 hereto acknowledging the fact that the Shares are
restricted securities and agreeing to the foregoing transfer restrictions.
4.3 Access to Information.
--------------------------
Upon reasonable notice, Parent and Xxxxxxxx shall each afford to the
officers, employees, accountants, counsel and other representatives of the
other, access, during normal business hours during the period prior to the
Effective Time, to all its properties, books, contracts, commitments and
records. During such period, each of Parent and Xxxxxxxx shall furnish promptly
to the other (a) a copy of each report, schedule, registration statement and
other document filed or received by it during such period pursuant to the
requirements of Federal or state securities laws and (b) all other information
concerning its business, properties and personnel as such other party may
reasonably request. Unless otherwise required by law, the parties will hold any
such information which is nonpublic in confidence until such time as such
information otherwise becomes publicly available through no wrongful act of
either party, and in the event of termination of this Agreement for any reason
each party shall promptly return all nonpublic documents obtained from any other
party, and any copies made of such documents, to such other party.
4.4 Legal Conditions to Merger.
-------------------------------
Each of Parent, Xxxxxxxx and Merger Sub will take all reasonable actions
necessary to comply promptly with all legal requirements which may be imposed on
itself with respect to the Merger and will promptly cooperate with and furnish
information to each other in connection with any such requirements imposed upon
any of them or any of their related entities or subsidiaries in connection with
the Merger. Each party will, and will cause its related entities or subsidiaries
to, take all reasonable actions necessary to obtain (and will cooperate with
each other in obtaining) any consent, authorization, order or approval of, or
any exemption by, any Governmental Entity or other public or private third
party, required to be obtained or made by Parent, Xxxxxxxx or Merger Sub or any
of their related entities or subsidiaries in connection with the Merger or the
taking of any action contemplated thereby or by this Agreement.
4.5 Parent Board of Directors and Officers.
-------------------------------------------
All of the officers and directors of Parent shall resign as of the Closing
Date, except Xxxxxx Xxxxx, who shall appoint Xxxxxxx X. Xxxx, Xxx Xxxxx, Xxxxx
Xxxxxxx, Xxxx Xxxx, Xxxxx Xxxxxxxxx, Xxxxx Xxxxxx and Xxxxx Xxxxxxx (or one or
more substitutes, if necessary) to the Board of Directors, and then immediately
resign.
16
4.6 Expenses.
-------------
Subject to Sections 6.3 and 7.2, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such expense.
4.7 Lock-up and Registration Rights.
------------------------------------
(a) In the event, subsequent to the Closing Date, Parent shall file a
registration statement with the SEC for the purpose of registering the
resale of any shares owned by Xxxxxxxx shareholders, Parent agrees to
include certain shares owned by the Parent Principal Shareholders in such
registration. The amount of shares to be included for registration on
behalf of the Parent Principal Shareholders shall be determined by dividing
the number of shares proposed to be registered on behalf of the Xxxxxxxx
shareholders by the total number of shares owned by such shareholders and
multiplying the resulting quotient by the number of shares owned by the
Parent Principal Shareholders. Parent shall keep the registration statement
effective for so long as it may determine in its reasonable discretion and
shall pay all costs incurred in such registration.
(b) In consideration for the registration rights granted above, the
Parent Principal Shareholders agree to comply with any resale lock-up
provisions negotiated by Xxxxxxxx with its unaffiliated shareholders and to
execute any documents necessary to confirm those lock-up provisions.
4.8 Schedule 14-F.
------------------
Following execution of this Agreement, Parent and Xxxxxxxx shall cooperate
to prepare and file with the SEC and mail to all shareholders of record of
Parent an information statement on Schedule 14-F pursuant to Rule 14f-1 of the
Securities Exchange Act of 1934. Such Schedule shall be prepared in accordance
with the provisions of such rule and shall be filed by Parent with the SEC and
transmitted to its shareholders of record not less than 10 days prior to the
scheduled Closing Date.
4.9 Consulting Arrangements.
----------------------------
The Parent Principal Shareholders agree to assist Parent, its officers and
directors on a consulting basis for a period of one year from the date of
Closing for no additional compensation or remuneration (other than reimbursement
of reasonable expenses agreed in advance) to help ensure a smooth transition in
the management of Parent and to promote the business and prospects of Parent
during that time. Such consulting services shall be provided at the reasonable
request of Parent, shall be performed from the offices of the Shareholders
unless otherwise agreed and shall be scheduled so as to not interfere with the
other business pursuits of the Shareholders.
4.10 Subsequent SEC Filings.
----------------------------
After the Closing Date, the following documents shall be filed by Parent
with the SEC and/or the National Association of Securities Dealers, Inc.:
17
(a) Within the time required by the Rules of the Commission, a current
report on Form 8-K containing the information required in such rules of
form;
(b) Within sixty (60) days from the filing of the Form 8-K reporting
the acquisition, Parent shall file under cover of Form 8-K, audited
financial statements of Xxxxxxxx, proforma financial information and other
disclosures as required by Form 8-K of the Exchange Act and Regulation S-X
of the 1933 Act;
(c) Parent shall cause to be filed such other reports as may be
required to be filed by Sections 13 or 15(d) of the Exchange Act or
necessary to maintain listing of the Common Stock on the OTCBB.
4.11 Release of Parent.
-----------------------
Except as otherwise specifically set forth herein, from and after the
Effective Time, the Parent Principal Shareholders shall release and forever
discharge Parent, its then officers, directors, shareholders, subsidiaries,
affiliates, agents, representatives, attorneys, employees, servants,
successors-in-interest and assigns, of and from any and all claims, actions,
causes of action, damages, liabilities, demands, costs and expenses, including
attorneys' fees, known or unknown, suspected or unsuspected, accrued or
contingent, that they or either of them may have as of the Effective Time, or
claim at any future time to have after the Effective Time.
ARTICLE V
CONDITIONS PRECEDENT
5.1 Conditions to Each Party's Obligation To Effect the Merger.
---------------------------------------------------------------
The respective obligation of each party to effect the Merger shall be
subject to the satisfaction prior to the Closing Date of the following
conditions:
(a) Necessary Approvals.
------------------------
All authorizations, consents, orders or approvals of, or declarations
or filings with, or expirations of waiting periods imposed by, any
Governmental Entity, the failure to obtain which would have a material
adverse effect on Parent, Merger Sub, Xxxxxxxx, or any of their
subsidiaries or related entities, taken as a whole, shall have been filed,
occurred or been obtained. Parent shall have received all state securities
or "Blue Sky" permits and other authorizations necessary to issue the
Merger Shares and to consummate the Merger.
5.2 Conditions of Obligations of Parent.
----------------------------------------
The obligations of Parent and Merger Sub to effect the Merger are subject
to the satisfaction of the following conditions on or before the Closing Date
unless waived by Parent:
(a) Representations and Warranties.
-----------------------------------
The representations and warranties of Xxxxxxxx set forth in this
Agreement shall be true and correct in all material respects as of the date
of this Agreement and (except to the extent such representations and
warranties speak as of an earlier date) as of the Closing Date as though
made on and as of the Closing Date, except as otherwise contemplated by
this Agreement, and Parent shall have received a certificate signed on
behalf of Xxxxxxxx by the President of Xxxxxxxx to such effect.
18
(b) Performance of Obligations of Xxxxxxxx.
-------------------------------------------
Xxxxxxxx shall have performed in all material respects all obligations
required to be performed by it under this Agreement at or prior to the
Closing Date, and Parent shall have received a certificate signed on behalf
of Xxxxxxxx by the President to such effect.
(c) Opinion of Counsel for Xxxxxxxx.
------------------------------------
Parent shall have received an opinion dated the Closing Date of
Xxxxxxx & Xxxxx, P.C., counsel for Xxxxxxxx, in form and substance
reasonably satisfactory to Parent and its counsel relating to such matters
as are customarily delivered in connection with a merger transaction,
including an opinion that the Merger has been approved by all requisite
action of Xxxxxxxx and its shareholders.
(d) Closing Documents.
----------------------
Parent shall have received executed subscription agreements from each
of the Xxxxxxxx shareholders acknowledging their status as accredited
investors and shall have received such certificates and other closing
documents as counsel for Parent shall have reasonably requested.
(e) Consents.
-------------
Xxxxxxxx shall have obtained the consent or approval of each person
whose consent or approval shall be required in connection with the
transactions contemplated hereby under any loan or credit agreement, note,
mortgage, indenture, lease or other agreement or instrument, except those
for which failure to obtain such consents and approvals would not, in the
reasonable opinion of Parent, individually or in the aggregate, have a
material adverse effect on Xxxxxxxx and its subsidiaries and related
entities taken as a whole upon the consummation of the transactions
contemplated hereby. Xxxxxxxx shall also have delivered to Parent the
financial statements contemplated by Section 2.2(f) hereof and Parent shall
not have objected to the content of such financial statements.
(f) Parent Review.
------------------
Parent shall have completed to its reasonable satisfaction a review of
the business, operations, finances, assets and liabilities of Xxxxxxxx and
shall not have determined that any of the representations or warranties of
Xxxxxxxx contained herein are, as of the date hereof or the Closing Date,
inaccurate in any material respect or that Xxxxxxxx is otherwise in
violation of any of the provisions of this Agreement.
(g) Pending Litigation.
-----------------------
There shall not be any litigation or other proceeding pending or
threatened to restrain or invalidate the transactions contemplated by this
Agreement, which, in the sole reasonable judgment of Parent, made in good
faith, would make the consummation of the Merger imprudent. In addition,
there shall not be any other litigation or other proceeding pending or
threatened against Xxxxxxxx, the consequences of which, in the sole
reasonable judgment of Parent, made in good faith, could be materially
adverse to Xxxxxxxx.
19
5.3 Conditions of Obligations of Xxxxxxxx.
------------------------------------------
The obligation of Xxxxxxxx to effect the Merger is subject to the
satisfaction of the following conditions unless waived by Xxxxxxxx:
(a) Representations and Warranties.
-----------------------------------
The representations and warranties of Parent and Merger Sub set forth
in this Agreement shall be true and correct in all material respects as of
the date of this Agreement and (except to the extent such representations
speak as of an earlier date) as of the Closing Date as though made on and
as of the Closing Date, except as otherwise contemplated by this Agreement,
and Xxxxxxxx shall have received a certificate signed on behalf of Parent
by the Chief Executive Officer to such effect.
(b) Performance of Obligations of Parent and Merger Sub.
--------------------------------------------------------
Parent and Merger Sub shall have performed in all material respects
all obligations required to be performed by them under this Agreement at or
prior to the Closing Date, and Xxxxxxxx shall have received a certificate
signed on behalf of Parent by the Chief Executive Officer to such effect.
(c) Opinion of Counsel for Parent and Merger Sub.
-------------------------------------------------
Xxxxxxxx shall have received an opinion dated the Closing Date of
Xxxxxxx X. Xxxxxx, Esq., counsel for Parent and Merger Sub, in form and
substance reasonably satisfactory to Xxxxxxxx and its counsel relating to
such matters as are customarily delivered in connection with a Merger
transaction, including, but not limited to (i) an opinion that the Merger
has been approved by all requisite action of Merger Sub and its
shareholders; (ii) that the Merger Shares will be issued in accordance with
all applicable securities laws; (iii) that the reverse stock split recently
effected by Parent has been effected in accordance with all applicable law
and has been implemented by the NASD and the transfer agent for Parent; and
(iv) that all shares of stock owned by the shareholders of Parent, other
than shares owned by the Parent Principal Shareholders, may be reissued
free of any restrictive legend otherwise required by the Securities Act.
(d) Closing Documents.
----------------------
Xxxxxxxx shall have received such certificates and other closing
documents as counsel for Xxxxxxxx shall reasonably request.
(e) Consents.
-------------
Parent, Merger Sub and Xxxxxxxx shall have obtained the consent or
approval of each person whose consent or approval shall be required in
connection with the transactions contemplated hereby under any loan or
credit agreement, note, mortgage, indenture, lease or other agreement or
instrument, except those for which failure to obtain such consents and
approvals would not, in the reasonable opinion of Xxxxxxxx, individually or
in the aggregate, have a material adverse effect on Parent, Merger Sub, or
their subsidiaries and related entities taken as a whole upon the
consummation of the transactions contemplated hereby. Merger Sub shall also
have received the approval of its shareholders in accordance with
applicable law.
20
(f) Xxxxxxxx Review.
--------------------
Xxxxxxxx shall have completed to its reasonable satisfaction a review
of the business, operations, finances, assets and liabilities of Parent and
Merger Sub and shall not have determined that any of the representations or
warranties of Parent and Merger Sub contained herein are, as of the date
hereof or the Closing Date, inaccurate in any material respect or that
Parent is otherwise in violation of any of the provisions of this
Agreement.
(g) Pending Litigation.
-----------------------
There shall not be any litigation or other proceeding pending or
threatened to restrain or invalidate the transactions contemplated by this
Agreement, which, in the sole reasonable judgment of Xxxxxxxx, made in good
faith, would make the consummation of the Merger imprudent. In addition,
there shall not be any other litigation or other proceeding pending or
threatened against Parent or Merger Sub, the consequences of which, in the
sole reasonable judgment of Xxxxxxxx, made in good faith, could be
materially adverse to Parent or Merger Sub.
(h) No Convertible Securities Outstanding.
------------------------------------------
Parent shall have secured the cancellation, on terms and conditions
reasonably satisfactory to Xxxxxxxx, of all outstanding stock purchase
warrants, and except as listed in Schedule 2.1(b), no options, rights,
convertible securities or other instruments exercisable for equity
securities of Parent shall be outstanding.
(i) Resignation of Officers and Directors.
------------------------------------------
Each officer and director of Parent shall have delivered his written
resignation as a director and/or officer of Parent effective as of the
Closing Date of the Merger in accordance with Section 4.5.
(j) Dissenter's Rights.
-----------------------
Xxxxxxxx shall not have received a notice from any of its shareholders
asserting dissenter's rights under applicable provisions of the CBCA.
ARTICLE VI
INDEMNIFICATION
6.1 Indemnification Obligations of Parent Shareholders.
-------------------------------------------------------
From and after the Effective Time, the Parent Principal Shareholders,
jointly and severally, shall reimburse, indemnify and hold harmless Parent,
Xxxxxxxx and their directors, officers, shareholders, employees, representatives
and agents (each such person and its or his heirs, executors, administrators,
successors and assigns is referred to herein as "Xxxxxxxx Indemnified Party")
against and in respect of:
(a) Any and all damages, losses, settlement payments, deficiencies,
liabilities, costs, expenses and claims suffered, sustained, incurred or
required to be paid by any Xxxxxxxx Indemnified Party because of or that
result from, relate to or arise out of the business, operations or assets
of Parent prior to the Effective Time or the actions or omissions of any
officers, director, shareholder, employee or agent of Parent prior to the
Effective Time, regardless of the date that any claim, suit or other cause
of action related to any of the foregoing is filed or otherwise instituted
against Parent or any Xxxxxxxx Indemnified Party; and
21
(b) Any and all actions, suits, claims or legal, administrative,
arbitration, governmental or other procedures or investigation against any
Xxxxxxxx Indemnified Party that relate to the business, operations or
assets of Parent in which the event giving rise thereto occurred prior to
the Effective Time or which results from or arises out of any action or
inaction prior to the Effective Time of Parent or any director, officer,
employee, agent or representative of Parent; and
(c) Any and all actions, suits, claims, proceedings, investigations,
allegations, demands, assessments, audits, fines, judgments, costs and
other expenses (including without limitation reasonable legal fees and
expenses) incident to any of the foregoing or to the enforcement of this
Section 6.1.
6.2 Indemnification Obligations of Xxxxxxxx and Parent.
---------------------------------------------------------
From and after the Effective Time, Xxxxxxxx and Parent jointly and
severally shall reimburse, indemnify and hold harmless the Parent Principal
Shareholders and their representatives and agents (each such person and its or
his heirs, executors, administrators, successors and assigns is referred to
herein as a "Parent Shareholder Indemnified Party") against and in respect of:
(a) Any and all damages, losses, settlement payments, deficiencies,
liabilities, costs, expenses and claims suffered, sustained, incurred or
required to be paid by any Parent Shareholder Indemnified Party because of
or that result from, relate to or arise out of the business, operations or
assets of Parent or Xxxxxxxx after the Effective Time or the actions or
omissions of any officer, director, shareholder, employee or agent of
Parent or Xxxxxxxx after the Effective Time; and
(b) Any and all actions, suits, claims, or legal, administrative,
arbitration, governmental or other procedures or investigation against any
Parent Shareholder Indemnified Party that relate to the business,
operations or assets of Parent or Xxxxxxxx in which the event giving rise
thereto occurred after the Effective Time or which results from or arises
out of any action or inaction after the Effective Time of Parent or
Xxxxxxxx or any director, officer, employee, agent, representative of
Parent or Xxxxxxxx after the Effective Time; and
(c) Any and all actions, suits, claims, proceedings, investigations,
allegations, demands, assessments, audits, fines, judgments, costs and
other expenses (including without limitation reasonable legal fees and
expenses) incident to any of the foregoing or to the enforcement of this
Section 6.2.
22
6.3 Limitation on Indemnification Obligations of Parent Principal
---------------------------------------------------------------------------
Shareholders.
-------------
Except for liabilities of the Parent, defined as monetary claims against the
Parent not reflected on the Parent's most recent balance sheet prior to the
Closing Date, which shall be unlimited, obligations of the Parent Principal
Shareholders set forth above shall be limited to the value of any Parent stock
owned by the Parent Principal Shareholders plus the amount of any stock sold by
the Parent Principal Shareholders, all as of the date judgment is entered on an
indemnifiable claim. Parent shall be entitled, during the time that any
proceedings on an indemnifiable claim may be pending against it, to request
reimbursement for costs and expenses incurred by Parent on a quarterly basis and
such expenses shall be paid by the Parent Principal Shareholders pursuant to
Section 6.4 below. At such time as such expenses aggregate an amount equal to
the maximum indemnification set forth above, no additional payments shall be due
from the Parent Principal Shareholders. The Parent Principal Shareholders shall
have the option to pay any indemnifiable claim due to Parent hereunder in cash
or in Parent's common stock, which common stock shall be valued at its closing
bid price on the date the claim is communicated by Parent in writing to the
Parent Principal Shareholders.
6.4 Payment of Indemnification Obligations.
-------------------------------------------
Each party agrees to pay promptly to any other indemnified party the amount
of all damages, losses, settlement payments, deficiencies, liabilities, costs,
expenses, claims and other obligations to which the indemnity set forth in
Section 6.1 or 6.2 relates. If all or part of any such obligation is not paid
when due, then the indemnifying party shall also pay the indemnified party
interest on the unpaid amount of the obligation for each day from the date the
amount became due until payment in full, payable on demand, at the fluctuating
rate per annum which at all times shall be four percentage points in excess of
the "prime rate" identified in The Wall Street Journal as the base rate on
corporate loans at large U.S. money center commercial banks.
6.5 Other Remedies.
-------------------
The indemnification rights of any indemnified party under this Article VI
are independent of and in addition to such rights and remedies as such
indemnified party may have at law, in equity or otherwise for any
misrepresentation, breach of warranty or failure to fulfill any covenant or
agreement under or in connection with this Agreement, including without
limitation the right to seek specific performance, rescission or restitution,
none of which rights or remedies shall be affected or diminished hereby.
ARTICLE VII
TERMINATION AND AMENDMENT
7.1 Termination.
----------------
This Agreement may be terminated at any time prior to the Effective Time:
(a) by mutual consent of Parent and Xxxxxxxx;
(b) by either Parent or Xxxxxxxx if there has been a material breach
of any representation, warranty, covenant or agreement on the part of the
other set forth in this Agreement which breach has not been cured within 5
business days following receipt by the breaching party of notice of such
breach, or if any federal or state court of competent jurisdiction or other
Governmental Entity shall have issued an order, decree or ruling, or taken
any other action permanently restraining, enjoining or otherwise
prohibiting the Merger, and such order, decree, ruling or other action
shall have become final and non-appealable; or
23
(c) by either Parent or Xxxxxxxx if the Merger shall not have been
consummated before January 31, 2003.
7.2 Effect of Termination.
--------------------------
In the event of termination of this Agreement by either Xxxxxxxx or Parent
as provided in Section 7.1, this Agreement shall forthwith become void and there
shall be no liability or obligation on the part of any party hereto; provided,
however, that nothing in this Section 7.2 shall relieve any party to this
Agreement of liability for any willful or intentional breach of this Agreement.
Except as provided in Section 6.3, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expenses.
7.3 Amendment.
--------------
This Agreement may be amended by the parties hereto, by action taken or
authorized by their respective Boards of Directors, provided no amendment shall
be made which by law requires approval by the shareholders of any party without
such further approval. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties hereto.
7.4 Extension; Waiver.
----------------------
At any time prior to the Effective Time, the parties hereto, by action
taken or authorized by their respective Board of Directors, may, to the extent
legally allowed, (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in a
written instrument signed on behalf of such party.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Nonsurvival of Representations, Warranties and Agreements.
--------------------------------------------------------------
None of the representations, warranties and agreements in this Agreement or
in any instrument delivered pursuant to this Agreement shall survive the
Effective Time, except for the provisions contained in Sections 4.1, 4.2, 4.6,
4.7, 4.9, 4.10, 4.11, 4.12, 6.1, 6.2, 6.3, 7.2 and 8.1.
8.2 Notices.
------------
All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally, telecopied (which is confirmed)
or mailed by registered or certified mail (return receipt requested) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
24
(a) If to Parent or Merger Sub, to:
One Dentist Resources, Inc.
0000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
ATTENTION: Xxxxxx X. Xxxxx
Fax No. (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxx, Esq.
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Fax No. (000) 000-0000
and
(b) if to Xxxxxxxx, to:
Xxxxxxxx Homes, Inc.
00 Xxxxxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx, President
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxx, P.C.
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000)-000-0000
8.3 Interpretation.
-------------------
When a reference is made in this Agreement to Sections, such reference
shall be to a Section of this Agreement unless otherwise indicated. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation". The phrase "made
available" in this Agreement shall mean that the information referred to has
been made available if requested by the party to whom such information is to be
made available.
25
8.4 Counterparts.
-----------------
This Agreement may be executed in two or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when
two or more counterparts have been signed by each of the parties and delivered
to the other parties, it being understood that all parties need not sign the
same counterpart.
8.5 Entire Agreement; No Third Party Beneficiaries; Rights of Ownership.
------------------------------------------------------------------------
This Agreement (including the documents and the instruments referred to
herein) constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, and is not intended to confer upon any person other than
the parties hereto any rights or remedies hereunder.
8.6 Governing Law.
------------------
This Agreement shall be governed and construed in accordance with the laws
of the State of Colorado without regard to principles of conflicts of law. Each
party hereby irrevocably submits to the jurisdiction of any Colorado state court
or any federal court in the State of Colorado in respect of any suit, action or
proceeding arising out of or relating to this Agreement, and irrevocably accept
for themselves and in respect of their property, generally and unconditionally,
the jurisdiction of the aforesaid courts.
8.7 No Remedy in Certain Circumstances.
---------------------------------------
Each party agrees that, should any court or other competent authority hold
any provision of this Agreement or part hereof or thereof to be null, void or
unenforceable, or order any party to take any action inconsistent herewith or
not to take any action required herein, the other party shall not be entitled to
specific performance of such provision or part hereof or thereof or to any other
remedy, including but not limited to money damages, for breach hereof or thereof
or of any other provision of this Agreement or part hereof or thereof as a
result of such holding or order.
8.8 Publicity.
--------------
Except as otherwise required by law or the rules of the SEC, so long as
this Agreement is in effect, no party shall issue or cause the publication of
any press release or other public announcement with respect to the transactions
contemplated by this Agreement without the written consent of the other party,
which consent shall not be unreasonably withheld.
8.9 Assignment.
---------------
Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto (whether by operation
of law or otherwise) without the prior written consent of the other parties,
except that Parent or Xxxxxxxx may assign, in its sole discretion, any or all of
its rights, interests and obligations hereunder to any direct or indirect wholly
owned subsidiary of such company. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
IN WITNESS WHEREOF, this Agreement has been signed by the parties set forth
below as of the date set forth above.
26
(Signature page follows)
27
ONEDENTIST RESOURCES, INC.
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Xxxxxx X. Xxxxx, Chief Executive Officer
XXXXXXXX MERGER CORP.
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Xxxxxx X. Xxxxx, President
XXXXXXXX HOMES, INC.
By: /s/ Xxxxxxx X. Xxxx
----------------------------------------
Xxxxxxx X. Xxxx, President
PARENT
SHAREHOLDERS
/s/ Xxxx X. Agron
----------------------------------------
Xxxx X. Agron
/s/ Xxxxxx X. Xxxxx
----------------------------------------
Xxxxxx X. Xxxxx
28
Schedule 1.1
To Agreement and Plan of Reorganization
Exchange Shares
-----------------------------------------------------------------------------------------------------------
XXXXXXXX HOMES, INC. EXCHANGE SHARES
Name Total Current Shares Common Shares from OneDentist
Xxxxxxx X. Xxxx 2,017,271 2,017,271
Xxxxxx X. Xxxx 2,017,271 2,017,271
Xxxxx X. Xxxxxxxxx 120,000 120,000
Advanced Floor Concepts, LLC 4,256 4,256
Angel's Plastering, Inc. 24,500 24,500
Bee-Xxx Iron, Inc. 3,159 3,159
Builders Applicance Center, Inc. 12,028 12,028
Xxxx Xxxx 19,725 19,725
Eagle Flooring, Inc. 61,246 61,246
Xxxx Xxxxxxxx 8,153 8,153
Xxxxxxx & Xxxxx Xxxxxxx, JTROS 8,867 8,867
Guy's Floor Service, Inc. 30,000 30,000
Horizon Drywall, Inc. 123,533 123,533
JB Concrete & Construction, Inc. 56,764 56,764
Xxxxx X. & Xxxxxx X. Xxx, JTROS 38,366 38,366
Xxxxxx Concrete Forming, Inc. 21,525 21,525
Specialties Supply Co., Inc. 30,939 30,939
X.Xxxxx Face Rock & Brick, LLC 33,114 33,114
Xxxxxx Painting, Inc. 29,023 29,023
Versa Tech of Denver, Inc. 60,106 60,106
York Engineering Services, Inc. 5,155 5,155
Xxxxxx Xxxxx 25,000 25,000
Total 4,750,001 4,750,001
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
STONEGATE CAPITAL CORPORATION
Name Total Current Shares Common Shares from OneDentist
The Xxxxx Xxxxxx Xxxxxxx Living Trust 108,883 108,883
Willamette Group Trust 108,883 108,883
PowerUp International, LLC 108,883 108,883
Xxxxxxx X. Xxxxxxx 108,883 108,883
Regatta Capital, LTD. 694,126 694,126
Xxxxxx X. Xxxxx 1,197,707 1,197,707
Xxxxx X. Xxxxxxxx 1,197,707 1,197,707
Xxxxx Xxxx-Xxxxxxx 653,295 653,295
Carlton International Investments 571,633 571,633
Total 4,750,000 4,750,000
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
WEST GOLD HOLDINGS, INC.
Name Total Current Shares Series A Convertible Preferred
Shares from OneDentist
Xxxxxxx X. Xxxx 50,000 675,000
Xxxxxx X. Xxxx 50,000 675,000
Total 100,000 1,350,000
--------------------------------------------------------------------------------------------------------------------
NOTHING IN ANY SCHEDULE SHALL BE AN ADMISSION OF WHAT
IS MATERIAL FOR PURPOSES OF THE AGREEMENT
S-1
-------------------------------------------------------------------------------------------------------------------------
PEREGRINE SANCTUARY, LLC
Name Total Current Interest Common Shares from OneDentist
Xxxxxxx X. Xxxx 87.21% 1,704,059
Xxxxxx X. Xxxxxxx 12.79% 250,000
Total 100.00% 1,954,059
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
TESORO HOMES @ TALLYN'S REACH, LLC
Name Total Current Interest Common Shares from OneDentist
Xxxxxxx X. Xxxx 50% 375,000
Xxxxxxx X. Xxxxxx 50% 375,000
Total 100% 750,000
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
ABSOLUTE CONSTRUCTION SERVICES, LLC
Name Total Current Interest Common Shares from OneDentist
Xxxxxxx X. Xxxx 50% 375,000
Xxxxxxx X. Xxxxxx 50% 375,000
Total 100% 750,000
-------------------------------------------------------------------------------------------------------------------------
TOTAL EXCHANGE SHARES TO ISSUE: 14,304,060
NOTHING IN ANY SCHEDULE SHALL BE AN ADMISSION OF WHAT
IS MATERIAL FOR PURPOSES OF THE AGREEMENT
S-2
Schedule 1.4
To Agreement and Plan of Reorganization
Series B Convertible Preferred Stock Recipients
None.
NOTHING IN ANY SCHEDULE SHALL BE AN ADMISSION OF WHAT
IS MATERIAL FOR PURPOSES OF THE AGREEMENT
S-3
Schedule 2.1(b)
To Agreement and Plan of Reorganization
Capital Structure
(OneDentist Options)
None.
NOTHING IN ANY SCHEDULE SHALL BE AN ADMISSION OF WHAT
IS MATERIAL FOR PURPOSES OF THE AGREEMENT
S-4
Schedule 2.1(i)
To Agreement and Plan of Reorganization
Absence of Certain Changes or Events
(OneDentist)
None.
NOTHING IN ANY SCHEDULE SHALL BE AN ADMISSION OF WHAT
IS MATERIAL FOR PURPOSES OF THE AGREEMENT
S-5
Schedule 2.1(j)
To Agreement and Plan of Reorganization
Assets, Liabilities and Obligations
(OneDentist)
None, except as set forth on the attached Exhibit of OneDentist entitled
Accounts Payable, 12/31/02.
NOTHING IN ANY SCHEDULE SHALL BE AN ADMISSION OF WHAT
IS MATERIAL FOR PURPOSES OF THE AGREEMENT
S-6
OneDentist
Accounts Payable
12/31/02
A/P 2002 A/P
12/31/01 Paid in 2002 Written Off Expenses 12/31/02
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
Xxxx Xxxxx 680.39 680.39
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
AEP 162.03 162.03
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
Ameritech 227.87 227.87
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
Xxxxxx & Xxxxxxx 7,935.15 (4,000.00) (3,935.15)
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
Xxxxx & Xxxxxxxxx LLP 2,167.00 2,167.00
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
Bank One 175.73 175.73
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
BWC 7.61 7.61
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
Columbia Gas 101.27 101.27
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
Corecomm 444.94 444.94
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
Corporate Stock Transfer 1,881.22 (2,650.24) 1,835.19 1,066.17 (Paid in 2003)
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
CUSIP Service Bureau 157.00 14.00 171.00 (Paid in 2003)
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
Definitive Data Solutions 69.95 69.95
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
Fed Ex 1,338.65 1,338.65
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
H+T 22,937.05 (21,723.40) (13,937.00) 13,148.40 425.05 (Paid in 2003)
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
Innerworks 2,725.00 (2,287.50) (437.50) 2,812.00 2,812.00
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
Xxxxx Day 3,886.71 3,886.71
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
Xxxxxxxx financial printer 2,590.32 (1,139.00) 1,451.32
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
Quest 442.92 442.92
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
Sprint 622.91 622.91
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
Staples 833.14 833.14
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
Time Warner 440.75 440.75
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
Xxxxxx Xxxxxx 500.00 500.00
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
ADP shareholder service 74.21 74.21 (Paid in 2003)
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
Gemisys proxy mailing 701.93 701.93 (Paid in 2003)
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
Xxxxxxx Xxxxxx legal 1,892.50 1,892.50 (Paid in 2003)
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
$50,327.61 ($31,800.14) ($18,309.65) $20,478.23 $20,696.05
-------------------------- ------------ ------------- ---------------- ----------------- ------------ ----------------
Summary of expenses
------------------------------- ------------------ ---------------
Miscellaneous 2,625.33
------------------------------- ------------------ ---------------
Accounting 15,960.40
------------------------------- ------------------ ---------------
Legal 1,892.50
------------------------------- ------------------ ---------------
Total 20,478.23
------------------------------- ------------------ ---------------
Paid subsequent to year end 1,066.17
------------------------------- ------------------ ---------------
171.00
------------------------------- ------------------ ---------------
425.05
------------------------------- ------------------ ---------------
74.21
------------------------------- ------------------ ---------------
701.93
------------------------------- ------------------ ---------------
1,892.50
------------------------------- ------------------ ---------------
Total 4,330.86
------------------------------- ------------------ ---------------
------------------------------- ------------------ ---------------
Total paid in 2002 and 2003 (36,131.00)
------------------------------- ------------------ ---------------
Schedule 2.1(n)
To Agreement and Plan of Reorganization
Benefit Plans
(OneDentist)
None.
NOTHING IN ANY SCHEDULE SHALL BE AN ADMISSION OF WHAT
IS MATERIAL FOR PURPOSES OF THE AGREEMENT
S-7
Schedule 2.1(o)
To Agreement and Plan of Reorganization
Licenses, Permits; Intellectual Property
(OneDentist)
None.
NOTHING IN ANY SCHEDULE SHALL BE AN ADMISSION OF WHAT
IS MATERIAL FOR PURPOSES OF THE AGREEMENT
S-8
Schedule 2.2(b)
To Agreement and Plan of Reorganization
Capital Structure
(Xxxxxxxx-Non-Compliant Common Stock)
None.
NOTHING IN ANY SCHEDULE SHALL BE AN ADMISSION OF WHAT
IS MATERIAL FOR PURPOSES OF THE AGREEMENT
S-9
Schedule 2.2(e)
To Agreement and Plan of Reorganization
No Conflict with Agreements; Government Approvals
(Xxxxxxxx)
1. That certain Office Lease between Loup Management Company, as Landlord, and
Peregrine Properties, Inc., as Tenant, dated May 10, 1999, as amended, and
as assigned to Xxxxxxxx Homes, Inc. on May 27, 2002.
2. In the normal course of its real estate development business, Xxxxxxxx has
entered into numerous loans with numerous lenders secured by an interest in
the real property that Xxxxxxxx is developing with respect to Xxxxxxxx'x
business. Many of the loan documents with these different lenders contain
language that could be interpreted in such a manner that the Exchange
contemplated hereby would cause Xxxxxxxx to be in default of these various
loan documents. The lenders with which Xxxxxxxx has entered into such loan
documents are as follows: (1) Acamar Investments, Inc.; (2) Bank West; (3)
First State Bank of Fort Xxxxxxx; (4) The First National Bank of Strasburg;
(5) Liberty Savings Association, FSA; (6) Ohio Savings Bank; (7) Stockton
National Bank; (8) Ute Mortgage Company; (9) Centennial Bank of the West;
(10) People's National Bank; and (11) WRI Opportunity Loans II LLC.
NOTHING IN ANY SCHEDULE SHALL BE AN ADMISSION OF WHAT
IS MATERIAL FOR PURPOSES OF THE AGREEMENT
S-10
Schedule 2.2(f)
To Agreement and Plan of Reorganization
Financial Statements
(Xxxxxxxx - Unaudited - December 31, 2002)
While the Agreement called for Unaudited Financial Statements dated December 31,
2001, the parties have agreed to attach the Unaudited Financial Statements dated
December 21, 2002 to this Schedule 2.2(f), as they are more current. Please see
attached Unaudited Financial Statements dated December 21, 2002.
[NOTE: THESE UNAUDITED FINANCIAL STATEMENTS
HAVE BEEN INTENTIONALLY OMITTED PENDING THE
FILING OF AUDITED FINANCIAL STATEMENTS]
NOTHING IN ANY SCHEDULE SHALL BE AN ADMISSION OF WHAT
IS MATERIAL FOR PURPOSES OF THE AGREEMENT
S-11
Schedule 2.2(h)
To Agreement and Plan of Reorganization
Compliance with Laws
(Xxxxxxxx)
None.
NOTHING IN ANY SCHEDULE SHALL BE AN ADMISSION OF WHAT
IS MATERIAL FOR PURPOSES OF THE AGREEMENT
S-12
Schedule 2.2(i)
To Agreement and Plan of Reorganization
Absence of Changes or Events
(Xxxxxxxx)
None.
NOTHING IN ANY SCHEDULE SHALL BE AN ADMISSION OF WHAT
IS MATERIAL FOR PURPOSES OF THE AGREEMENT
S-13
Schedule 2.2(j)
To Agreement and Plan of Reorganization
Litigation
(Xxxxxxxx)
That certain Case No. 02CV1408, filed in the District Court of Arapahoe County,
Colorado by Xxxxxxx and Xxxx Xxxxx Xxxxxxx against Xxxxxxxx Homes, Inc. on April
30, 2002. Xxxxxxxx is confident that its exposure on this matter is limited to
the amount of its deductible on its General Commercial Liability insurance
policy.
NOTHING IN ANY SCHEDULE SHALL BE AN ADMISSION OF WHAT
IS MATERIAL FOR PURPOSES OF THE AGREEMENT
S-14
Schedule 2.2(l)
To Agreement and Plan of Reorganization
Assets
(Xxxxxxxx-Encumbered Assets)
The following real property assets were encumbered as of 12/31/2002:
-----------------------------------------------------------------------------------------
Creditor: Lot(s): Development:
-----------------------------------------------------------------------------------------
1st National CR 24-29 Tallyn's Reach
-----------------------------------------------------------------------------------------
X. Xxxxxxx Invstmnt 15 Overlook at Bear Creek
-----------------------------------------------------------------------------------------
Bank West 12 Tallyn's Reach
-----------------------------------------------------------------------------------------
Centennial Bank 4 Water Valley
-----------------------------------------------------------------------------------------
Colonial Bank 1-6 Tallyn's Reach
-----------------------------------------------------------------------------------------
Colonial Bank 8,9,12,13,34 Tallyn's Reach
-----------------------------------------------------------------------------------------
CSNB 2 Tallyn's Reach
-----------------------------------------------------------------------------------------
First State Bank 5 Water Valley
-----------------------------------------------------------------------------------------
Liberty Savings 17 Overlook at Bear Creek
-----------------------------------------------------------------------------------------
Liberty Savings 22 Antlers at Sage Port
-----------------------------------------------------------------------------------------
Ohio Savings 8,16 Tallyn's Reach
-----------------------------------------------------------------------------------------
People's Nat'l 00 Xxxxxxxx Xxxx
-----------------------------------------------------------------------------------------
People's Nat'l 16,20,33,41,43 Fox Pines
-----------------------------------------------------------------------------------------
Regatta Capital 1,3,4,10,11,20,26-31,40-43 Antlers at Sage Port
-----------------------------------------------------------------------------------------
Unisyn 15 Water Valley
-----------------------------------------------------------------------------------------
US Bank 47 Sanctuary at Peregrine
-----------------------------------------------------------------------------------------
US Bank 00 Xxx Xxxxx
-----------------------------------------------------------------------------------------
US Bank 55,72 Sprires Broadmoar
-----------------------------------------------------------------------------------------
Ute Mortgage 45 Antlers at Sage Port
-----------------------------------------------------------------------------------------
Ute Mortgage 43,44,54 Serenity at Northgate
-----------------------------------------------------------------------------------------
Ute/1st National 15 Overlook at Bear Creek
-----------------------------------------------------------------------------------------
Ute/Frmrs&Mrch 9 Antlers at Sage Port
-----------------------------------------------------------------------------------------
Ute/Home Savings 2,16 Overlook at Bear Creek
-----------------------------------------------------------------------------------------
Ute/Home Savings 13,24 Antlers at Sage Port
-----------------------------------------------------------------------------------------
Ute/Stockton 19 Antlers at Sage Port
-----------------------------------------------------------------------------------------
NOTHING IN ANY SCHEDULE SHALL BE AN ADMISSION OF WHAT
IS MATERIAL FOR PURPOSES OF THE AGREEMENT
S-15
Schedule 2.2(m)
To Agreement and Plan of Reorganization
Benefit Plans
(Xxxxxxxx)
1. The terms and conditions contained in that certain Employment Agreement by
and between Xxxxxxxx Homes, Inc. and Xxxx X. Xxxxxxxxx, dated February 1,
2003.
2. The terms and conditions contained in that certain Employment Agreement by
and between Xxxxxxxx Homes, Inc. and Xxxxxx X. Xxxxxxxx, dated February 1,
2003, as amended.
3. The terms and conditions contained in that certain Employment Agreement by
and between Xxxxxxxx Homes, Inc. and Xxxxxx X. Xxxxx, dated February 1,
2003, as amended.
4. The terms and conditions contained in that certain Employment Agreement by
and between Xxxxxxxx Homes, Inc. and Xxxxx X. Xxxxxxx, dated February 1,
2003.
5. The terms and conditions contained in that certain Employment Agreement by
and between Xxxxxxxx Homes, Inc. and Xxxxx X. Xxxxxxxx, dated February 1,
2003.
6. The terms and conditions contained in that certain Employment Agreement by
and between Xxxxxxxx Homes, Inc. and Xxxxxx X. Xxxxxxx, dated February 1,
2003.
7. The terms and conditions contained in that certain Employment Agreement by
and between Xxxxxxxx Homes, Inc. and Xxxxxxx X. Xxxx, dated February 1,
2003, as amended.
8. The terms and conditions contained in that certain Employment Agreement by
and between Xxxxxxxx Homes, Inc. and Xxxxxxx X. Xxxxxx, dated February 1,
2003.
9. The terms and conditions contained in the Employee Manual of Xxxxxxxx
Homes, revised on January 1, 1999.
NOTHING IN ANY SCHEDULE SHALL BE AN ADMISSION OF WHAT
IS MATERIAL FOR PURPOSES OF THE AGREEMENT
S-16
Schedule 2.2(n)
To Agreement and Plan of Reorganization
Licenses, Permits; Intellectual Property
(Xxxxxxxx)
Xxxxxxxx has not formally registered any trademarks at either the State or
Federal level. However, Xxxxxxxx does use certain logos and graphical elements
on its marketing materials, letterhead, etc. for which it does claim substantial
common law intellectual property protection, including the text "As Unique As
You Are".
NOTHING IN ANY SCHEDULE SHALL BE AN ADMISSION OF WHAT
IS MATERIAL FOR PURPOSES OF THE AGREEMENT
S-17
Schedule 2.2(o)
To Agreement and Plan of Reorganization
Environmental Matters
(Xxxxxxxx)
None.
NOTHING IN ANY SCHEDULE SHALL BE AN ADMISSION OF WHAT
IS MATERIAL FOR PURPOSES OF THE AGREEMENT
S-18
Schedule 2.3(f)
To Agreement and Plan of Reorganization
Compliance with Agreements
(Xxxxxxxx Entities)
1. See Schedule 2.2(e) with respect to the agreements of Xxxxxxxx Homes, Inc.
2. In the normal course of its business, the Xxxxxxxx Entities have entered
into numerous loans with numerous lenders. Many of the loan documents with
these different lenders contain language that could be interpreted in such
a manner that the Exchange contemplated hereby would cause the respective
Xxxxxxxx Entities to be in default of these various loan documents. The
lenders with which Xxxxxxxx has entered into such loan documents are as
follows: (1) Acamar Investments, Inc.; (2) Bank Midwest, N.A.; (3) Colonial
Bank; (4) The First National Bank of Strasburg; (5) First United Bank; (6)
Liberty Savings Association, FSA; (7) Respond Corp.; and (8) Ute Mortgage
Company.
NOTHING IN ANY SCHEDULE SHALL BE AN ADMISSION OF WHAT
IS MATERIAL FOR PURPOSES OF THE AGREEMENT
S-19
Schedule 2.3(h)
To Agreement and Plan of Reorganization
Litigation
(Xxxxxxxx Entities)
That certain Case No. 01CV0594, filed in the District Court of El Paso County,
Colorado by Xxxxxxx Xxxxxxx and Xxxxxxxx Xxxxxxx, d/b/a Dundee Tree Service
against Xxxxxxxx Homes, Inc., West Gold Holdings, Inc., et al. on December 23,
2002. Xxxxxxxx and West Gold are confident that its exposure on this matter is
limited to the amount of its deductible on its General Commercial Liability
insurance policy.
NOTHING IN ANY SCHEDULE SHALL BE AN ADMISSION OF WHAT
IS MATERIAL FOR PURPOSES OF THE AGREEMENT
S-20
