AGREEMENT AND PLAN OF MERGER AND REORGANIZATION dated as of October 1, 2000
(the "Agreement") by and among First Irving Strategic Group, Inc., a Florida
corporation ("First Irving") and PC Universe Inc., a Florida corporation ("your
name").
R E C I T A L S
The respective Boards of Directors of First Irving and PC Universe deem it
desirable and in the best interests of their respective corporations, and of
their respective shareholders, subject to, among other things, the approval of
the shareholders of First Irving and PC Universe, PC Universe shall merge with
and into First Irving; as a result of which the holders of shares of capital
stock of PC Universe will, in the aggregate, receive the consideration
hereinafter set forth (collectively, the "Merger"). Upon the terms and subject
to the conditions of this Agreement, at the Effective Date (as defined in
Section 2.3 of this Agreement) in accordance with the merger laws of the state
of Florida ("Merger Laws"), PC Universe shall be merged with and into First
Irving and the separate existence of PC Universe shall thereupon cease. First
Irving shall be the surviving corporation in the Merger and is hereinafter
sometimes referred to as the "Surviving Corporation."
NOW, THEREFORE, in consideration of the terms, conditions, agreements and
covenants contained herein, and in reliance upon the representations and
warranties contained in this Agreement, the parties hereto agree as follows:
I. RECITALS; TRUE AND CORRECT
The above stated recitals are true and correct and are incorporated into
this Agreement.
II. MERGER
2.1 Merger. In the manner and subject to the terms and conditions set forth
herein, PC Universe shall merge with and into First Irving, and First Irving
shall be the surviving corporation after the Merger and shall continue to exist
as a corporation governed by the laws of Florida.
2.2 Incorporation and Name Change. Prior to the closing of the merger,
First Irving shall change its state of incorporation to Florida and in so doing
adopt PC Universe's Articles of Incorporation and Bylaws (the
"Reincorporation"). Upon the Closing of the Merger, First Irving shall change
its name to PC Universe, Inc. (the "Name Change").
2.3 Effective Date. If all of the conditions precedent to the obligations
of each of the parties hereto as hereinafter set forth shall have been satisfied
or shall have been waived, the Merger shall become effective on the date (the
"Effective Date") the Articles of Merger, together with Plans of Merger
reflecting the Merger, shall be accepted for filing by the Secretary of State of
Florida.
2.4 Securities of the Corporations. The authorized capital stock of PC
Universe is comprised of 100,000,000 shares of Common Stock, (the "PC Universe
Stock"), of which 8,550,000 shares are issued and outstanding.
The authorized capital stock of First Irving is comprised of 50,000,000 shares
of Common Stock, no par value per share (the "First Irving Stock"), of which
450,000 shares will be issued and outstanding as of the date of closing of the
Merger. In addition, First Irving has authorized but unissued 20,000,000 shares
of no par value Preferred Stock
There are option agreements with Xx. Xxxxxxxx and Xx. Xxxx, current management
of First Irving, that provide that First Irving, currently and as the surviving
corporation, may purchase the shares retained by Xx. Xxxxxxxx and Xx. Xxxx,
equally from each, as follows:
------------------------------------ ----------------------------------- ---------------------------------
When Number of Shares Price per Share
------------------------------------ ----------------------------------- ---------------------------------
------------------------------------ ----------------------------------- ---------------------------------
First calendar month after first 225,000 $1.00
trade on Bulletin Board
------------------------------------ ----------------------------------- ---------------------------------
------------------------------------ ----------------------------------- ---------------------------------
Second calendar month after first 150,000 $1.50
trade on Bulletin Board
------------------------------------ ----------------------------------- ---------------------------------
------------------------------------ ----------------------------------- ---------------------------------
Third calendar month after first 75,000 $2.00
trade on Bulletin Board
------------------------------------ ----------------------------------- ---------------------------------
Any shares not purchased within these time periods will be retained by Xx.
Xxxxxxxx and Xx. Xxxx.
PC Universe has issued certain options to two investors, Lambo Investments, Ltd.
and XX Xxxxx, Ltd. These options will be exchanged for options of First Irving
having the same terms on a one-for-one basis when the merger closes.
The option agreement with Lambo Investments, Ltd. and XX Xxxxx, Ltd. provide
they may purchase shares from PC Universe as follows:
------------------------------------ ----------------------------------- ---------------------------------
When Number of Shares Price per Share
------------------------------------ ----------------------------------- ---------------------------------
------------------------------------ ----------------------------------- ---------------------------------
First calendar month after first 75,000 $3.00
trade on Bulletin Board
------------------------------------ ----------------------------------- ---------------------------------
------------------------------------ ----------------------------------- ---------------------------------
Second calendar month after first 50,000 $4.50
trade on Bulletin Board
------------------------------------ ----------------------------------- ---------------------------------
------------------------------------ ----------------------------------- ---------------------------------
Third calendar month after first 25,000 $6.00
trade on Bulletin Board
------------------------------------ ----------------------------------- ---------------------------------
First Irving will to register the shares of Xx. Xxxxxxxx and Xx. Xxxx and those
underlying these options on Form SB-2, which will be filed before the effective
date of the registration statement.
2.5 Shares of the Constituent and Surviving Corporations. The manner and
basis of converting the shares of PC Universe Stock into shares of First Irving
Stock shall be as follows:
At the effective date, by virtue of the Merger and without any action on the
part of any holder of any capital stock or options of either First Irving or PC
Universe, each share of PC Universe Stock issued and outstanding shall be
converted into the right to receive one share of First Irving Stock and each
option shall be exchanged for an option of First Irving having the same terms
(the "Exchange Ratio").
2.5 Shares of the Constituent and Surviving Corporations. The manner and
basis of converting the shares of PC Universe Stock into shares of First Irving
Stock shall be as follows:
At the effective date, by virtue of the Merger and without any action on the
part of any holder of any capital stock or options of either First Irving or PC
Universe, each share of PC Universe Stock issued and outstanding shall be
converted into the right to receive one share of First Irving Stock and each
option shall be exchanged for an option of First Irving having the same terms
(the "Exchange Ratio").
2.6 Effect of the Merger. As of the Effective Date, all of the following
shall occur:
(a) The separate existence and corporate organization of PC Universe
shall cease (except insofar as it may be continued by statute),
First Irving shall exist as a surviving corporation.
(b) Except as otherwise specifically set forth herein, the corporate
identity, existence, purposes, powers, franchises, rights and
immunities of First Irving shall continue unaffected and
unimpaired by the Merger, and the corporate identity, existence,
purposes, powers, franchises and immunities of PC Universe shall
be merged with and into First Irving as the surviving corporation,
shall be fully vested therewith.
(c) Neither the rights of creditors nor any liens upon or security
interests in the property of PC Universe shall be impaired by the
Merger.
(d) All corporate acts, plans, policies, agreements approvals and
authorizations of the shareholders and Board of Directors of PC
Universe and of its respective officers, directors and agents,
which were valid and effective immediately prior to the Effective
Date, shall be the acts, plans, policies, agreements, approvals
and authorizations of First Irving and shall be as effective and
binding on First Irving as the same were on PC Universe.
(e) First Irving shall be liable for all of the obligations and
liabilities of PC Universe.
(f) The rights, privileges, goodwill, inchoate rights, franchises and
property, real, personal and mixed, and debts due on whatever
account and all other things in action belonging to PC Universe,
shall be, and they hereby are, bargained, conveyed, granted,
confirmed, transferred, assigned and set over to and vested in
First Irving, without further act or deed.
(g) No claim pending at the Effective Date by or against any of PC
Universe, or any stockholder, officer or director thereof, shall
xxxxx or be discontinued by the Merger, but may be enforced,
prosecuted, settled or compromised as if the Merger had not
occurred.
(h) All rights of employees and creditors and all liens upon the
property of PC Universe shall be preserved unimpaired, limited
in lien to the property affected by such liens at the Effective
Date, and all the debts, liabilities and duties of PC Universe
shall attach to First Irving and shall be enforceable against
First Irving to the same extent as if all such debts, liabilities
and duties had been incurred or contracted by PC Universe.
(i) The Articles of Incorporation of First Irving, as in effect on the
Effective Date, shall continue to be the Articles of Incorporation
of First Irving without change or amendment.
(j) The Bylaws of First Irving, as in effect on the Effective Date,
shall continue to be the Bylaws of First Irving without change
or amendment until such time, if ever, as it is amended thereafter
in accordance with the provisions thereof and applicable laws.
(k) Upon the Effective Date, the Board of Directors of First Irving
shall consist of those persons set forth in the registration
statement, and the officers of First Irving shall be the officers
specified in the registration statement.
2.7. Merger Fee. PC Universe shall pay First Irving a merger fee of $75,000
for this transaction. It is payable $25,000 upon any agreement, formal or
informal, written or oral, to proceed with the transaction, $25,000 when the
registration statement is filed and $25,000 immediately prior to the date the
registration statement is declared effective.
As First Irving goes through the due diligence and filing process, facts and
circumstances not known to it when it started the process leading to closing the
merger may come to light that make proceeding with the transaction inadvisable
in the opinion of First Irving. If this occurs or if PC Universe cancels the
agreement after paying the first installment, all fees previously received by
First Irving will be retained.
III. CONDUCT OF BUSINESS PENDING CLOSING; STOCKHOLDER APPROVAL
PC Universe and First Irving covenant that between the date hereof and the
date of the Closing:
3.1 Access to PC Universe. PC Universe shall (a) give to First Irving and
to First Irving's counsel, accountants and other representatives reasonable
access, during normal business hours, throughout the period prior to the Closing
Date (as defined in Section 6.1), to all of the books, contracts, commitments
and other records of PC Universe and shall furnish First Irving during such
period with all information concerning PC Universe that First Irving may
reasonably request; and (b) afford to First Irving and to First Irving's
representatives, agents, employees and independent contractors reasonable
access, during normal business hours, to the properties of PC Universe, in order
to conduct inspections at First Irving's expense to determine that PC Universe
is operating in compliance with all applicable federal, state, local and foreign
statutes, rules and regulations, and all material building, fire and zoning laws
or regulations and that the assets of PC Universe are substantially in the
condition and of the capacities represented and warranted in this Agreement;
provided, however, that in every instance described in (a) and (b), First Irving
shall make arrangements with PC Universe reasonably in advance and shall use its
best efforts to avoid interruption and to minimize interference with the normal
business and operations of PC Universe. Any such investigation or inspection by
First Irving shall not be deemed a waiver of, or otherwise limit, the
representations, warranties or covenants of PC Universe contained herein.
3.2 Conduct of Business. During the period from the date hereof to the
Closing Date, PC Universe shall and shall use reasonable efforts, to the extent
such efforts are within PC Universe's control, to cause its business to be
operated in the usual and ordinary course of business and in material compliance
with the terms of this Agreement.
3.3 Exclusivity to First Irving. Until either the merger agreement is
terminated or the merger closed, PC Universe agrees not to solicit any other
inquiries, proposals or offers to purchase or otherwise acquire, in a merger
transaction or another type of transaction, the business of PC Universe or the
shares of capital stock of PC Universe. Any person inquiring as to the
availability of the business or shares of capital stock of PC Universe or making
an offer therefore shall be told that PC Universe is bound by the provisions of
this Agreement. PC Universe as well as its officers, directors, representatives
or agents further agree to advise First Irving promptly of any such inquiry or
offer.
3.4 Access to First Irving. First Irving shall (a) give to PC Universe and
to PC Universe's counsel, accountants and other representatives reasonable
access, during normal business hours, throughout the period prior to the Closing
Date, to all of the books, contracts, commitments and other records of First
Irving and shall furnish PC Universe during such period with all information
concerning First Irving that PC Universe may reasonably request; and (b) afford
to PC Universe and to PC Universe's representatives, agents, employees and
independent contractors reasonable access, during normal business hours, to the
properties of First Irving in order to conduct inspections at PC Universe's
expense to determine that First Irving is operating in compliance with all
applicable federal, state, local and foreign statutes, rules and regulations,
and all material building, fire and zoning laws or regulations and that the
assets of First Irving are substantially in the condition and of the capacities
represented and warranted in this Agreement; provided, however, that in every
instance described in (a) and (b), PC Universe shall make arrangements with
First Irving reasonably in advance and shall use its best efforts to avoid
interruption and to minimize interference with the normal business and
operations of First Irving. Any such investigation or inspection by PC Universe
shall not be deemed a waiver of, or otherwise limit, the representations,
warranties or covenants of First Irving contained herein.
3.5 Conduct of Business. During the period from the date hereof to the
Closing Date, the business of First Irving shall be operated by First Irving in
the usual and ordinary course of such business and in material compliance with
the terms of this Agreement.
3.6 Exclusivity to PC Universe. Until either the merger agreement is
terminated or the merger closed, First Irving has agreed not to make any other
inquiries, proposals or offers to purchase or otherwise acquire, in a merger
transaction or another type of transaction, the business or the shares of
capital stock of any other company. Any person inquiring as to the possibility
of being acquired by First Irving or making an offer therefore shall be told
that First Irving is bound by the provisions of this Agreement. Each of First
Irving and its officers, directors, representatives or agents further agree to
advise PC Universe promptly of any such inquiry or offer.
3.7 Stockholder Approval.
(a) As promptly as reasonably practicable following the date of this
Agreement, First Irving shall take all action reasonably necessary
in accordance with the laws of the State of Florida and its Articles
of Incorporation and Bylaws to secure written consents for the
approval and adoption of the Merger and the Merger Agreement,
as well as the Reincorporation and Name Change. The Board of
Directors of First Irving shall unanimously recommend that First
Irving's shareholders vote to approve and adopt the Merger, this
Agreement and any other matters to be submitted to First Irving's
shareholders in connection therewith. First Irving shall, subject as
aforesaid, use its best efforts to solicit and secure from
shareholders of First Irving such approval and adoption.
(b) As promptly as reasonably practicable following the date of this
Agreement, First Irving shall prepare and file with the SEC under the
Securities Act of 1933, as amended (the "Securities Act"), and the
rules and regulations promulgated by the SEC thereunder a registration
statement on Form S-4 (or other form of registration statement as
agreed by the parties) (the "registration statement") covering all
shares of First Irving Stock issuable as a consequence of the Merger.
First Irving may also register shares of existing shareholders for
resale on a companion S-1 or SB-2 filing. PC Universe shall cooperate
fully with First Irving in the preparation and filing of the
Registration Statement and any amendments and supplements thereto,
including, without limitation, the furnishing to First Irving of such
information regarding PC Universe as shall be required by each of the
Securities Act and the Exchange Act and the respective rules and
regulations promulgated by the SEC thereunder.
(d) As promptly as practicable but in no event later than the Effective
Date, First Irving shall prepare and forward to a market maker to file
with the NASD OTC Bulletin Board ("BB"), an application to have the
First Irving Stock listed for trading on BB.
IV. REPRESENTATIONS AND WARRANTIES OF PC Universe
PC Universe represents and warrants to First Irving as follows, with the
knowledge and understanding that First Irving is relying materially upon such
representations and warranties:
4.1 Organization and Standing. PC Universe is a corporation duly organized,
validly existing and in good standing under the laws of the state of Florida. PC
Universe has all requisite corporate power to carry on its business as it is now
being conducted and is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction where such qualification is
necessary under applicable law, except where the failure to qualify
(individually or in the aggregate) does not have any material adverse effect on
the assets, business or financial condition of PC Universe, and all states in
which each is qualified to do business as of the date hereof, are listed in the
information in the registration statement concerning PC Universe. The copies of
the Articles of Incorporation and Bylaws of PC Universe, as amended to date,
delivered to First Irving, are true and complete copies of these documents as
now in effect. Except as otherwise set forth in the information in the
registration statement concerning PC Universe, PC Universe does not own any
interest in any other corporation, business trust or similar entity. The minute
book of PC Universe contains accurate records of all meetings of its respective
Board of Directors and shareholders since its incorporation.
4.2 Capitalization. The authorized capital stock of PC Universe, the number
of shares of capital stock which are issued and outstanding and par value
thereof are as set forth in the Registration Statement. All of such shares of
capital stock are duly authorized, validly issued and outstanding, fully paid
and nonassessable, and were not issued in violation of the preemptive rights of
any person. There are no subscriptions, options, warrants, rights or calls or
other commitments or agreements to which PC Universe is a party or by which it
is bound, calling for any issuance, transfer, sale or other disposition of any
class of securities of PC Universe. There are no outstanding securities
convertible or exchangeable, actually or contingently, into shares of common
stock or any other securities of PC Universe. PC Universe has no subsidiaries.
4.3 Authority. This Agreement constitutes, and all other agreements
contemplated hereby will constitute, when executed and delivered by PC Universe
in accordance therewith (and assuming due execution and delivery by the other
parties hereto), the valid and binding obligation of PC Universe, enforceable in
accordance with their respective terms, subject to general principles of equity
and bankruptcy or other laws relating to or affecting the rights of creditors
generally.
4.4 Properties. Except as set forth on the information in the registration
statement concerning PC Universe, PC Universe has good title to all of the
assets and properties which it purports to own as reflected on the balance sheet
included in the Financial Statements (as hereinafter defined), or thereafter
acquired. PC Universe has a valid leasehold interest in all material property of
which it is the lessee and each such lease is valid, binding and enforceable
against PC Universe, as the case may be, and, to the knowledge of PC Universe,
the other parties thereto in accordance with its terms. Neither PC Universe nor
the other parties thereto are in material default in the performance of any
material provisions thereunder. Neither the whole nor any material portion of
the assets of PC Universe is subject to any governmental decree or order to be
sold or is being condemned, expropriated or otherwise taken by any public
authority with or without payment of compensation therefore, nor, to the
knowledge of PC Universe, any such condemnation, expropriation or taking been
proposed. None of the assets of PC Universe is subject to any restriction which
would prevent continuation of the use currently made thereof or materially
adversely affect the value thereof.
4.5 Contracts Listed; No Default. All contracts, agreements, licenses,
leases, easements, permits, rights of way, commitments, and understandings,
written or oral, connected with or relating in any respect to present or
proposed future operations of PC Universe (except employment or other agreements
terminable at will and other agreements which, in the aggregate, are not
material to the business, properties or prospects of PC Universe and except
governmental licenses, permits, authorizations, approvals and other matters
referred to in Section 4.17), which would be required to be listed as exhibits
to a Registration Statement on Form S-4 or an Annual Report on Form 10-K if PC
Universe were subject to the reporting requirements of the Exchange Act
(individually, the "PC Universe Contract" and collectively, the "PC Universe
Contracts"), are listed and described in the information in the registration
statement concerning PC Universe. PC Universe is the holder of, or party to, all
of the PC Universe Contracts. To the knowledge of PC Universe, the PC Universe
Contracts are valid, binding and enforceable by the signatory thereto against
the other parties thereto in accordance with their terms. Neither PC Universe
nor any signatory thereto is in default or breach of any material provision of
the PC Universe Contracts. PC Universe's operation of its business has been, is,
and will, between the date hereof and the Closing Date, continue to be,
consistent with the material terms and conditions of the PC Universe Contracts.
4.6 Litigation. Except as disclosed in the information in the registration
statement concerning PC Universe, there is no claim, action, proceeding or
investigation pending or, to the knowledge of PC Universe, threatened against or
affecting PC Universe before or by any court, arbitrator or governmental agency
or authority which, in the reasonable judgment of PC Universe, could have any
materially adverse effect on PC Universe. There are no decrees, injunctions or
orders of any court, governmental department, agency or arbitration outstanding
against PC Universe.
4.7 Taxes. For purposes of this Agreement, (A) "Tax" (and, with correlative
meaning, "Taxes") shall mean any federal, state, local or foreign income,
alternative or add-on minimum, business, employment, franchise, occupancy,
payroll, property, sales, transfer, use, value added, withholding or other tax,
levy, impost, fee, imposition, assessment or similar charge, together with any
related addition to tax, interest, penalty or fine thereon; and (B) "Returns"
shall mean all returns (including, without limitation, information returns and
other material information), reports and forms relating to Taxes or to any
benefit plans.
PC Universe has duly filed all Returns required by any law or regulation to be
filed by it, except for extensions duly obtained. All such Returns were, when
filed, and to the knowledge of PC Universe are, accurate and complete in all
material respects and were prepared in conformity with applicable laws and
regulations in all material respects. PC Universe has paid or will pay in full
or has adequately reserved against all Taxes otherwise assessed against it
through the Closing Date, and the assessment of any material amount of
additional Taxes in excess of those paid and reported is not reasonably
expected.
PC Universe is not a party to any pending action or proceeding by any
governmental authority for the assessment of any Tax, and no claim for
assessment or collection of any Tax has been asserted against PC Universe that
has not been paid. There are no Tax liens upon the assets (other than the lien
of property taxes not yet due and payable) of PC Universe. There is no valid
basis, to the knowledge of PC Universe, except as set forth in the information
in the registration statement concerning PC Universe, for any assessment,
deficiency, notice, 30-day letter or similar intention to assess any Tax to be
issued to PC Universe by any governmental authority.
4.8 Compliance with Laws and Regulations. To its knowledge, PC Universe is
in compliance, in all material respects, with all laws, rules, regulations,
orders and requirements (federal, state and local) applicable to it in all
jurisdictions where the business of PC Universe is currently conducted or to
which PC Universe is currently subject which has a material impact on PC
Universe, including, without limitation, all applicable civil rights and equal
opportunity employment laws and regulations, and all state and federal antitrust
and fair trade practice laws and the Federal Occupational Health and Safety Act.
PC Universe knows of no assertion by any party that PC Universe is in violation
of any such laws, rules, regulations, orders, restrictions or requirements with
respect to its current operations, and no notice in that regard has been
received by PC Universe. To the knowledge of PC Universe, there is not presently
pending any proceeding, hearing or investigation with respect to the adoption of
amendments or modifications to existing laws, rules, regulations, orders,
restrictions or requirements which, if adopted, would materially adversely
affect the current operations of PC Universe.
4.9 Compliance with Laws.
(a) To its knowledge, the business, operations, property and assets of PC
Universe (and, to the knowledge of PC Universe, the business of any
sub-tenant or licensee which is occupying or has occupied any space
on any premises of PC Universe and the activities of which could result
in any material adverse liability to PC Universe) (i) conform with
and are in compliance in all material respects with all, and are not in
material violation of any applicable federal, state and local laws,
rules and regulations, including, but not limited to, the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as
amended (including the 1986 Amendments thereto and the Superfund
Amendments and Reauthorization Act) ("CERCLA"), and the Resource
Conservation and Recovery Act ("RCRA"), as well as any other laws,
rules or regulations relating to tax, product liability, controlled
substances, product registration, environmental protection, hazardous
or toxic waste, employment, or occupational safety matters; and (ii)
have been conducted and operated in a manner such that, to PC
Universe's knowledge, PC Universe has foreseeable potential
liabilities for environmental clean-up under CERCLA, RCRA or under any
other law, rule, regulation or common or civil law doctrine.
(b) To its knowledge, no predecessor-in-title to any real property now or
previously owned or operated by PC Universe, nor any predecessor
operator thereof conducted its business or operated such property in
violation of CERCLA and RCRA or any other applicable federal, state
and local laws, rules and regulations relating to environmental
protection or hazardous or toxic waste matters.
(c) Except as disclosed in the information in the registration statement
concerning PC Universe, no suit, action, claim, proceeding, nor
investigation, review or inquiry by any court or federal, state,
county, municipal or local governmental department, commission,
board, bureau, agency or instrumentality, including, without
limitation, any state or local health department (all of the foregoing
collectively referred to as "Governmental Entity") concerning any such
possible violations by PC Universe is pending or, to the knowledge
of PC Universe, threatened, including, but not limited to, matters
relating to diagnostic tests and products and product liability,
environmental protection, hazardous or toxic waste, controlled
substances, employment, occupational safety or tax matters. PC Universe
does not know of any reasonable basis or ground for any such suit,
claim, investigation, inquiry or proceeding. For purposes of this
Section 4.9, the term "inquiry" includes, without limitation, all
pending regulatory issues (whether before federal, state, local or
inter-governmental regulatory authorities) concerning any regulated
product, including, without limitation, any diagnostic drugs and
products.
4.10 Information. PC Universe has furnished First Irving all information
necessary to prepare the registration statement.
4.11 Condition of Assets. The equipment, fixtures and other personal
property of PC Universe, taken as a whole, is in good operating condition and
repair (ordinary wear and tear excepted) for the conduct of the business of PC
Universe as is contemplated to be conducted.
4.12 No Breaches. To its knowledge, the making and performance of this
Agreement and the other agreements contemplated hereby by PC Universe will not
(i) conflict with or violate the Articles of Incorporation or the Bylaws of PC
Universe; (ii) violate any material laws, ordinances, rules or regulations, or
any order, writ, injunction or decree to which PC Universe is a party or by
which PC Universe or any of its respective assets, businesses, or operations may
be bound or affected; or (iii) result in any breach or termination of, or
constitute a default under, or constitute an event which, with notice or lapse
of time, or both, would become a default under, or result in the creation of any
encumbrance upon any asset of PC Universe under, or create any rights of
termination, cancellation or acceleration in any person under, any PC Universe
Contract.
4.13 Employees. Except as set forth in the information in the registration
statement concerning PC Universe, none of the employees of PC Universe is
represented by any labor union or collective bargaining unit and, to the
knowledge of PC Universe, no discussions are taking place with respect to such
representation.
4.14 Financial Statements. To its knowledge, the information in the
registration statement concerning PC Universe contains, as to PC Universe,
certain financial statements (the "Financial Statements"). The Financial
Statements present fairly, in all respects, the consolidated financial position
and results of operations of PC Universe as of the dates and periods indicated,
prepared in accordance with generally accepted accounting principles
consistently applied ("GAAP"). The Financial Statements, when submitted to First
Irving for inclusion in the Registration Statement, will have been prepared in
accordance with Regulation S-X of the SEC and, in particular, Rules 1-02 and
3-05 promulgated thereunder. Without limiting the generality of the foregoing,
(i) there is no basis for any assertion against PC Universe as of the date of
the Financial Statements of any debt, liability or obligation of any nature not
fully reflected or reserved against in the Financial Statements; and (ii) there
are no assets of PC Universe as of the date of the Financial Statements, the
value of which is overstated in the Financial Statements. Except as disclosed in
the Financial Statements, PC Universe has no known contingent liabilities
(including liabilities for Taxes), forward or long-term commitments or
unrealized or anticipated losses from unfavorable commitments other than in the
ordinary course of business. PC Universe is not a party to any contract or
agreement for the forward purchase or sale of any foreign currency that is
material to PC Universe taken as a whole.
4.15 Absence of Certain Changes or Events. Except as set forth in the
information in the registration statement concerning PC Universe, since the date
of the last financial statement included in the registration statement, there
has not been:
(a) Any material adverse change in the financial condition, properties,
assets, liabilities or business of PC Universe;
(b) Any material damage, destruction or loss of any material properties
of PC Universe, whether or not covered by insurance;
(c) Any material change in the manner in which the business of PC
Universe has been conducted;
(d) Any material change in the treatment and protection of trade
secrets or other confidential information of PC Universe;
(e) Any material change in the business or contractual relationship of
PC Universe with any customer or supplier which might reasonably
be expected to materially and adversely affect the business or
prospects of PC Universe;
(f) Any agreement by PC Universe, whether written or oral, to do any
of the foregoing; and
(g) Any occurrence not included in paragraphs (a) through (f) of this
Section 4.16 which has resulted, or which PC Universe has reason
to believe, in its reasonable judgment, might be expected to
result, in a material adverse change in the business or prospects
of PC Universe.
4.16 Governmental Licenses, Permits, Etc. To its knowledge, PC Universe has
all governmental licenses, permits, authorizations and approvals necessary for
the conduct of its business as currently conducted ("Licenses and Permits"). The
information in the registration statement concerning PC Universe includes a list
of all Licenses and Permits. All Licenses and Permits are in full force and
effect, and no proceedings for the suspension or cancellation of any thereof is
pending or threatened.
4.17 Employee Agreements. (a) For purposes of this Agreement, the following
definitions apply:
(1) "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any regulations promulgated thereunder.
(2) "Multi-employer Plan" means a plan, as defined in ERISA Section
3(37), to which PC Universe contributes or is required to contribute.
(3) "Employee Plan" means any pension, retirement, profit sharing,
deferred compensation, vacation, bonus, incentive, medical, vision, dental,
disability, life insurance or any other employee benefit plan as defined in
Section 3(3) of ERISA other than a Multi-employer Plan to which PC Universe
contributes, sponsors, maintains or otherwise is bound to with regard to any
benefits on behalf of the employees of PC Universe.
(4) "Employee Pension Plan" means any Employee Plan for the provision
of retirement income to employees or which results in the deferral of income by
employees extending to the termination of covered employment or beyond as
defined in Section 3(2) of ERISA.
(5) "Employee Welfare Plan" means any Employee Plan other than an
Employee Pension Plan.
(6) "Compensation Arrangement" means any plan or compensation
arrangement other than an Employee Plan, whether written or unwritten, which
provides to employees of PC Universe, former employees, officers, directors or
shareholders of PC Universe any compensation or other benefits, whether deferred
or not, in excess of base salary or wages, including, but not limited to, any
bonus or incentive plan, stock rights plan, deferred compensation arrangement,
life insurance, stock purchase plan, severance pay plan and any other employee
fringe benefit plan.
(b) The information in the registration statement concerning PC Universe
lists, all (1) employment agreements and collective bargaining
agreements to which PC Universe is a party; (2) Compensation
Arrangements of PC Universe; (3) Employee Welfare Plans; (4) Employee
Pension Plans; and (5) consulting agreements under which PC Universe
has or may have any monetary obligations to employees or consultants
of PC Universe or their beneficiaries or legal representatives or
under which any such persons may have any rights. PC Universe has
previously made available to First Irving true and complete copies of
all of the foregoing employment contracts, collective bargaining
agreements, Employee Plans and Compensation Arrangements, including
descriptions of any unwritten contracts, agreements, Compensation
Arrangements or Employee Plans, as amended to date. In addition, with
respect to any Employee Plan which continues after the Closing Date,
PC Universe has previously delivered or made available to First
Irving (1) any related trust agreements, master trust agreements,
annuity ontracts or insurance contracts; (2) certified copies of
all Board of Directors' resolutions adopting such plans and trust
documents and amendments thereto; (3) current investment management
agreements; (4) custodial agreements; (5) fiduciary liability insurance
policies; (6) indemnification agreements; (7) the most recent
determination letter (and underlying application thereof and
correspondence and supplemental material related thereto) issued by the
Internal Revenue Service with respect to the qualification of each
Employee Plan under the provisions of Section 401(a) of the Code;
(8) copies of all "advisory opinion letters," "private letter rulings,"
"no action letters," and any similar correspondence (and the underlying
applications therefore and correspondence and supplemental material
related thereto) that was issued by any governmental or
quasigovernmental agency with respect to the last plan year; (9)
Annual Reports (Form 5500 Series) and Schedules A and B thereto for
the last plan year; (10) all actuarial reports prepared for the last
plan year; (11) all certified Financial Statements for the last plan
year; and (12 ) all current Summary Plan Descriptions, Summaries of
Material Modifications and Summary Annual Reports. All documents
delivered by PC Universe to First Irving as photocopies faithfully
reproduce the originals thereof, such originals are authentic and were,
to the extent execution was required, duly executed.
(c) Except as otherwise disclosed in the information in the registration
statement concerning PC Universe:
(1) It is not a party to and has, in effect or to become effective
after the date of this Agreement, any bonus, cash or deferred compensation,
severance, medical, health or hospitalization, pension, profit sharing or
thrift, retirement, stock option, employee stock ownership, life or group
insurance, death benefit, welfare, incentive, vacation, sick leave, cafeteria,
so-called "golden parachute" payment, disability or trust agreement or
arrangement.
4.18 Brokers. PC Universe has not made any agreement or taken any action
with any person or taken any action which would cause any person to be entitled
to any agent's, broker's or finder's fee or commission in connection with the
transactions contemplated by this Agreement.
4.19 Business Locations. PC Universe does not nor does it own or lease any
real or personal property in any state except as set forth on the information in
the registration statement concerning PC Universe. PC Universe does not have a
place of business (including, without limitation, PC Universe's executive
offices or place where PC Universe's books and records are kept) except as
otherwise set forth on the information in the registration statement concerning
PC Universe.
4.20 Intellectual Property. The information in the registration statement
concerning PC Universe lists all of the Intellectual Property (as hereinafter
defined) used by PC Universe which constitutes a material patent, trade name,
trademark, service xxxx or application for any of the foregoing. "Intellectual
Property" means all of PC Universe's right, title and interest in and to all
patents, trade names, assumed names, trademarks, service marks, and proprietary
names, copyrights (including any registration and pending applications for any
such registration for any of them), together with all the goodwill relating
thereto and all other intellectual property of PC Universe. Other than as
disclosed in the information in the registration statement concerning PC
Universe, PC Universe does not have any licenses granted by or to it or other
agreements to which it is a party, relating in whole or in part to any
Intellectual Property, whether owned by PC Universe or otherwise. All of the
patents, trademark registrations and copyrights listed in the information in the
registration statement concerning PC Universe that are owned by PC Universe are
valid and in full force and effect. To the knowledge of PC Universe, it is not
infringing upon, or otherwise violating, the rights of any third party with
respect to any Intellectual Property. No proceedings have been instituted
against or claims received by PC Universe, nor to its knowledge are any
proceedings threatened alleging any such violation, nor does PC Universe know of
any valid basis for any such proceeding or claim. To the knowledge of PC
Universe, there is no infringement or other adverse claims against any of the
Intellectual Property owned or used by PC Universe. To the knowledge of PC
Universe, its use of software does not violate or otherwise infringe the rights
of any third party.
4.21 Warranties. The information in the registration statement concerning PC
Universe sets forth a true and complete list of the forms of all express
warranties and guaranties made by PC Universe to third parties with respect to
any services rendered by PC Universe.
4.22 Suppliers. Except as set forth in the information in the registration
statement concerning PC Universe, PC Universe knows and has no reason to believe
that, either as a result of the transactions contemplated hereby or for any
other reason (exclusive of expiration of a contract upon the passage of time),
any present material supplier of PC Universe will not continue to conduct
business with PC Universe after the Closing Date in substantially the same
manner as it has conducted business prior thereto.
4.23 Accounts Receivable. The accounts receivable reflected on the balance
sheets included in the Financial Statements, or thereafter acquired by PC
Universe, consists, in the aggregate in all material respects, of items which
are collectible in the ordinary and usual course of business.
4.24 Governmental Approvals. To its knowledge, other than as set forth
herein, no authorization, license, permit, franchise, approval, order or consent
of, and no registration, declaration or filing by PC Universe with, any
governmental authority, federal, state or local, is required in connection with
PC Universe's execution, delivery and performance of this Agreement.
4.25 No Omissions or Untrue Statements. None of the information relating to
PC Universe supplied or to be supplied in writing by it specifically for
inclusion in the Registration Statement, at the respective times that the
Registration Statement becomes effective (or any registration statement included
therein), the Proxy Statement is first mailed to First Irving's shareholders and
the meeting of First Irving's shareholders takes place, as the case may be,
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. First Irving shall give notice to PC Universe in
advance of the dates of such effectiveness, mailing and meeting sufficient to
permit PC Universe to fulfill its obligations under the second sentence of this
Section.
4.26 Information in the Registration Statement concerning PC Universe
Complete. PC Universe shall promptly provide to First Irving notice concerning
any of the information in the registration statement concerning PC Universe if
events occur prior to the Closing Date that would have been required to be
disclosed had they existed at the time of executing this Agreement. The
information provided to First Irving concerning PC Universe, as supplemented
prior to the Closing Date, will contain a true, correct and complete list and
description of all items required to be set forth therein. The information
provided to First Irving for inclusion in the registration statement concerning
PC Universe, as supplemented prior to the Closing Date, is expressly
incorporated herein by reference. Notwithstanding the foregoing, any such
supplement to the information in the registration statement concerning PC
Universe following the date hereof shall not in any way affect First Irving's
right not to consummate the transactions contemplated hereby as set forth in
Section 8.2 hereof.
V. REPRESENTATIONS AND WARRANTIES OF First Irving
First Irving represents and warrants to PC Universe as follows, with the
knowledge and understanding that PC Universe is relying materially on such
representations and warranties:
5.1 Organization and Standing of First Irving. First Irving is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Florida, and has the corporate power to carry on its business as
now conducted and to own its assets and it not required to qualify to transact
business as a foreign corporation in any state or other jurisdiction. The copies
of the Articles of Incorporation and Bylaws of First Irving, delivered to PC
Universe, are true and complete copies of those documents as now in effect.
First Irving does not own any capital stock in any other corporation, business
trust or similar entity, and is not engaged in a partnership, joint venture or
similar arrangement with any person or entity. The minute books of First Irving
contain accurate records of all meetings of its incorporator, shareholders and
Board of Directors since its date of incorporation.
5.2 First Irving's Authority. First Irving's Board of Directors has
approved and adopted this Agreement and the Merger and has resolved to recommend
approval and adoption of this Agreement and the Merger by First Irving's
shareholders.
5.3 Due Execution. This Agreement constitutes, and all other agreements
contemplated hereby will constitute, when executed and delivered by First Irving
in accordance herewith (and assuming due execution and delivery by the other
parties hereto), the valid and binding obligations of First Irving, enforceable
in accordance with their respective terms, subject to general principles of
equity and bankruptcy or other laws relating to or affecting the rights of
creditors generally.
5.4 No Breaches. To its knowledge, the making and performance of this
Agreement (including, without limitation, the issuance of the First Irving
Stock) by First Irving will not (i) conflict with the Articles of Incorporation
or the Bylaws of First Irving; (ii) violate any order, writ, injunction, or
decree applicable to First Irving; or (iii) result in any breach or termination
of, or constitute a default under, or constitute an event which, with notice or
lapse of time, or both, would become a default under, or result in the creation
of any encumbrance upon any asset of First Irving under, or create any rights of
termination, cancellation or acceleration in any person under, any agreement,
arrangement or commitment, or violate any provisions of any laws, ordinances,
rules or regulations or any order, writ, injunction or decree to which First
Irving is a party or by which First Irving or any of its assets may be bound.
5.5 Capitalization. All of the outstanding First Irving Stock is duly
authorized, validly issued, fully paid and nonassessable, and was not issued in
violation of the preemptive rights of any person. The First Irving Stock to be
issued upon effectiveness of the Merger, when issued in accordance with the
terms of this Agreement shall be duly authorized, validly issued, fully paid and
nonassessable. Other than as stated in this Section 5.5, there are no
outstanding subscriptions, options, warrants, calls or rights of any kind issued
or granted by, or binding upon, First Irving, to purchase or otherwise acquire
any shares of capital stock of First Irving, or other equity securities or
equity interests of First Irving or any debt securities of First Irving. There
are no outstanding securities convertible or exchangeable, actually or
contingently, into shares of First Irving Stock or other stock of First Irving.
5.6 Business. First Irving, since its formation, has engaged in no business
other than to seek to serve as a vehicle for the acquisition of an operating
business, and, except for this Agreement, is not a party to any contract or
agreement for the acquisition of an operating business.
5.7 Governmental Approval; Consents. To its knowledge, except for the
reports required to be filed in the future by First Irving, as a reporting
company, under the Exchange Act, and under the Securities Act with respect to
the shares of First Irving Stock issuable upon exercise of the First Irving
Warrants, the filing of the Registration Statement under the Securities Act, the
Proxy Statement under the Exchange Act for the purpose of seeking stockholder
approval of the Merger referred to in Section 2.1 and the issuance of the First
Irving Stock pursuant to the Merger and the filing of the S-4 Registration
Statement (or other form of registration statement as agreed by the parties), no
authorization, license, permit, franchise, approval, order or consent of, and no
registration, declaration or filing by First Irving with, any governmental
authority, federal, state or local, is required in connection with First
Irving's execution, delivery and performance of this Agreement. No consents of
any other parties are required to be received by or on the part of First Irving
to enable First Irving to enter into and carry out this Agreement.
5.8 Financial Statements. To its knowledge, the financial statements of
First Irving previously furnished to PC Universe (collectively, the "First
Irving Financial Statements") present fairly, in all material respects, the
financial position of First Irving as of the respective dates and the results of
its operations for the periods covered in accordance with GAAP. Without limiting
the generality of the foregoing, (i) except as set forth in the First Irving
Disclosure Schedule, there is no basis for any assertion against First Irving as
of the date of said balance sheets of any material debt, liability or obligation
of any nature not fully reflected or reserved against in such balance sheets or
in the notes thereto; and (ii) there are no assets of First Irving, the value of
which (in the reasonable judgment of First Irving) is materially overstated in
said balance sheets. Except as disclosed therein, First Irving has no known
material contingent liabilities (including liabilities for taxes), unusual
forward or long-term commitments or unrealized or anticipated losses from
unfavorable commitments. First Irving is not a party to any contract or
agreement for the forward purchase or sale of any foreign currency.
5.9 Adverse Developments. Except as expressly provided or set forth in, or
required by, this Agreement, or as set forth in the First Irving Financial
Statements, since the last date of its financial information in the registration
statement, there have been no materially adverse changes in the assets,
liabilities, properties, operations or financial condition of First Irving, and
no event has occurred other than in the ordinary and usual course of business or
as set forth in First Irving's Registration statement or in the First Irving
Financial Statements which could be reasonably expected to have a materially
adverse effect upon First Irving, and First Irving does not know of any
development or threatened development of a nature that will, or which could be
reasonably expected to, have a materially adverse effect upon First Irving's
operations or future prospects.
5.10 Contracts Listed. All material contracts, agreements, licenses,
leases, easements, permits, rights of way, commitments, and understandings,
written or oral, connected with or relating in any respect to the present
operations of First Irving are, with the exception of this Agreement, described
in First Irving's Registration statement.
5.11; No Default. All of the contracts, agreements, leases, commitments and
understandings, written or oral, and any other contract, agreement, lease,
commitment or understanding, written or oral, binding upon First Irving referred
to in section 5.10 above, are listed in the First Irving Disclosure Schedule
(the "First Irving Contracts"). To the knowledge of First Irving, the First
Irving Contracts are valid, binding and enforceable by First Irving against the
other parties thereto in accordance with their terms. Neither First Irving nor,
to the knowledge of First Irving, any of the other parties thereto is in default
or breach of any material provision of the First Irving Contracts. First Irving
has furnished PC Universe with a true and complete copy of each First Irving
Contract, as amended.
5.12 Taxes. First Irving has duly filed all Returns required by any law or
regulation to be filed by it except for extensions duly obtained. All such
Returns were, when filed, and to the best of First Irving's knowledge are,
accurate and complete in all material respects and were prepared in conformity
with applicable laws and regulations. First Irving has paid or will pay in full
or has adequately reserved against all Taxes otherwise assessed against it
through the Closing Date, and the assessment of any material amount of
additional Taxes in excess of those paid and reported is not reasonably
expected.
First Irving is not a party to any pending action or proceeding by any
governmental authority for the assessment of any Tax, and no claim for
assessment or collection of any Tax has been asserted against First Irving that
has not been paid. There are no Tax liens upon the assets of First Irving (other
than the lien of personal property taxes not yet due and payable). There is no
valid basis, to the best of First Irving's knowledge, except as set forth in the
First Irving Disclosure Schedule, for any assessment, deficiency, notice, 30-day
letter or similar intention to assess any Tax to be issued to First Irving by
any governmental authority.
5.13 Litigation. Except as disclosed in the First Irving Disclosure
Schedule, there is no claim, action, proceeding or investigation pending or, to
First Irving's knowledge, threatened against or affecting First Irving before or
by any court, arbitrator or governmental agency or authority which, in the
reasonable judgment of First Irving, could have a materially adverse effect on
First Irving. There are no decrees, injunctions or orders of any court,
governmental department, agency or arbitration outstanding against First Irving.
5.14 Compliance with Laws and Regulations. To its knowledge, First Irving
is in compliance, in all material respects, with all laws, rules, regulations,
orders and requirements (federal, state and local) applicable to it in all
jurisdictions in which the business of First Irving is currently conducted or to
which First Irving is currently subject, which may have a material impact on
First Irving, including, without limitation, all applicable civil rights and
equal opportunity employment laws and regulations, all state and federal
antitrust and fair trade practice laws and the Federal Occupational Health and
Safety Act. First Irving does not know of any assertion by any party that First
Irving is in violation of any such laws, rules, regulations, orders,
restrictions or requirements with respect to its current operations, and no
notice in that regard has been received by First Irving. To First Irving's
knowledge, there is not presently pending any proceeding, hearing or
investigation with respect to the adoption of amendments or modifications of
existing laws, rules, regulations, orders, restrictions or requirements which,
if adopted, would materially adversely affect the current operations of First
Irving.
5.15 Compliance with Laws. (a) To its knowledge, the business operations,
property and assets of First Irving (and to the knowledge of First Irving, the
business of any sub-tenant or license which is occupying or has occupied any
space on any premises of First Irving and the activities of which could result
in any material adverse liability to First Irving) (i) conform with and are in
compliance in all material respects with all, and are not in material violation
of any applicable federal, state and local laws, rules and regulations,
including, but not limited to, CERCLA and RCRA, as well as any other laws, rules
or regulations relating to tax, product liability, controlled substances,
product registration, environmental protection, hazardous or toxic waste,
employment, or occupational safety matters; and (ii) have been conducted and
operated in a manner such that, to First Irving's knowledge, First Irving has no
foreseeable potential liabilities for environmental clean-up under CERCLA, RCRA
or under any law, rule, regulation or common or civil law doctrine.
(b) To its knowledge, no predecessor-in-title to any real property now or
previously owned or operated by First Irving, nor any predecessor
operator thereof conducted its business or operated such property in
violation of CERCLA and RCRA or any other applicable, federal, state
and local laws, rules and regulations relating to environmental
protection or hazardous or toxic waste matters.
(c) Except as disclosed in the First Irving Disclosure Schedule, no suit,
action, claim, proceeding nor investigation review or inquiry by any
Government Entity (as defined in Section 4.9) concerning any such
possible violations by First Irving is pending or, to First Irving's
knowledge, threatened, including, but not limited to, matters
relating to diagnostic tests and products and product liability,
environmental protection, hazardous or toxic waste, controlled
substances, employment, occupational safety or tax matters. First
Irving does not know of any reasonable basis or ground for any such
suit, claim, investigation, inquiry or proceeding.
5.16 Governmental Licenses, Permits, Etc. To its knowledge, First Irving
has all governmental licenses, permits, authorizations and approvals necessary
for the conduct of its business as currently conducted. All such licenses,
permits, authorizations and approvals are in full force and effect, and no
proceedings for the suspension or cancellation of any thereof is pending or
threatened.
5.17 Brokers. First Irving has not made any agreement or taken any action with
any person or taken any action which would cause any person to be entitled to
any agent's, broker's or finder's fee or commission in connection with the
transactions contemplated by this Agreement.
5.18 Employee Plans. Except as listed in First Irving's Registration
statement, First Irving has no employees, consultants or agents, and First
Irving has no Employee Plans or Compensation Arrangements.
VI. STOCKHOLDER APPROVAL; CLOSING DELIVERIES
6.1 Stockholder Approval. PC Universe shall submit the Merger and this
Agreement to its shareholders for approval and adoption at the Meeting or by
written consent as soon as practicable following the date the SEC declares the
registration statement effective in accordance with Section 3.7 hereof. Subject
to the Merger and this Agreement receiving all approvals of PC Universe and PC
Universe shareholders and regulatory approvals and the absence of 99+% or more
of the non-affiliated shareholders of PC Universe (i) voting against the Merger;
and (ii) requesting redemption of their shares of PC Universe Stock in the
manner to be set forth in the Information Statement, and subject to the other
provisions of this Agreement, the parties shall hold a closing (the "Closing")
no later than the fifth business day (or such later date as the parties hereto
may agree) following the later of (a) the date of the Meeting of Shareholders of
PC Universe to consider and vote upon the Merger and this Agreement or the
receipt of the requisite percentage of written consents or (b) the business day
on which the last of the conditions set forth in Articles VII and VIII hereof is
fulfilled or waived (such later date, the "Closing Date"), at 10:00 A.M. at the
offices of XXXXXXXX LAW GROUP, P.A., or at such other time and place as the
parties may agree upon.
6.2 Closing Deliveries of PC Universe. At the Closing, PC Universe shall
deliver, or cause to be delivered, to First Irving:
(a) A certificate dated as of the Closing Date, to the effect that the
representations and warranties of PC Universe contained in this
Agreement are true and correct in all material respects at and as
of the Closing Date and that PC Universe has complied with or
performed in all material respects all terms, covenants and
conditions to be complied with or performed by PC Universe on or
prior to the Closing Date;
(b) An opinion of PC Universe's counsel, in form and substance
reasonably satisfactory to First Irving, in a form to be mutually
agreed to prior to the Closing;
(c) a certificate, dated as of the Closing Date, certifying as to the
Articles of Incorporation and Bylaws of PC Universe, the
incumbency and signatures of the officers of each of PC Universe
and copies of the directors' and shareholders' resolutions of
PC Universe approving and authorizing the execution and delivery
of this Agreement, and the consummation of the transactions
contemplated hereby;
(d) Such other documents, at the Closing or subsequently, as may be
reasonably requested by First Irving as necessary for the
implementation and consummation of this Agreement and the
transactions contemplated hereby.
6.3 Closing Deliveries of First Irving. At the Closing, First Irving shall
deliver to PC Universe:
(a) A certificate of First Irving, dated as of the Closing Date, to
the effect that the representations and warranties of First
Irving contained in this Agreement are true and correct in all
material respects and that First Irving has complied with or
performed in all material respects all terms, covenants and
conditions to be complied with or performed by First Irving on or
prior to the Closing Date;
(b) A certificate, dated as of the Closing Date, executed by the
Secretary of First Irving, certifying the Articles of
Incorporation, Bylaws, incumbency and signatures of officers
of First Irving and copies of First Irving's directors' and
shareholders' resolutions approving and authorizing the execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby;
(c) An opinion of First Irving's counsel, XXXXXXXX LAW GROUP, P.A., in
form and substance reasonably satisfactory to PC Universe, in
a form to be mutually agreed to prior to the Closing;
(d) The written resignations of all officers, and all directors of
First Irving.
(e) Certificates representing the First Irving Stock issuable upon
consummation of the Merger;
(f) The books and records of First Irving; and
(h) Documentation satisfactory to PC Universe evidencing the fact that
the signatories on all relevant bank accounts of First Irving have
been changed to signatories designated by PC Universe.
VII. CONDITIONS TO OBLIGATIONS OF PC Universe
The obligation of PC Universe to consummate the Closing is subject to the
following conditions, any of which may be waived by PC Universe in its sole
discretion:
7.1 Compliance by First Irving. First Irving shall have performed and
complied in all material respects with all agreements and conditions required by
this Agreement to be performed or complied with by First Irving prior to or on
the Closing Date.
7.2 Accuracy of First Irving's Representations. First Irving's
representations and warranties contained in this Agreement (including the First
Irving Disclosure Schedule) or any schedule, certificate or other instrument
delivered pursuant to the provisions hereof or in connection with the
transactions contemplated hereby shall be true and correct in all material
respects at and as of the Closing Date (except for such changes permitted by
this Agreement) and shall be deemed to be made again as of the Closing Date.
7.3 Material Adverse Change. No material adverse change shall have occurred
subsequent to the date of the last financial information in the registration
statement in the financial position, results of operations, assets, liabilities
or prospects of First Irving, nor shall any event or circumstance have occurred
which would result in a material adverse change in the financial position,
results of operations, assets, liabilities or prospects of First Irving within
the reasonable discretion of PC Universe.
7.4 Documents. All documents and instruments delivered by First Irving to
PC Universe at the Closing shall be in form and substance reasonably
satisfactory to PC Universe and its counsel.
7.5 Capitalization. At the Closing Date, First Irving shall have not more
than 5 shares of First Irving Stock issued and outstanding.
7.6 Effectiveness of Registration Statement; No Stop Order. The
Registration Statement shall be effective under the Securities Act and shall not
be subject to a stop order or any threatened stop order.
7.7 Reorganization. The Merger shall qualify as a tax-free reorganization
under Section 368 of the Code.
7.8 Litigation. No litigation seeking to enjoin the transactions
contemplated by this Agreement or to obtain damages on account hereof shall be
pending or, to PC Universe's knowledge, be threatened.
7.9 Dissenters' Rights. It is a condition to PC Universe's obligations to
consummate the merger that the holders of no more than 10% of the outstanding
shares of PC Universe's common stock are entitled to dissenters' rights. If
demands for payment are made with respect to more than 10%, of the outstanding
shares of PC Universe's common stock, and, as a consequence more than 10% of the
shareholders of PC Universe's become entitled to exercise dissenters' rights,
then PC Universe will not be obligated to consummate the merger.
VIII. CONDITIONS TO FIRST IRVING'S OBLIGATIONS
First Irving's obligation to consummate the closing is subject to the
following conditions, any of which may be waived by First Irving in its sole
discretion:
8.1 Compliance by PC Universe. PC Universe shall have performed and
complied in all material respects with all agreements and conditions required by
this Agreement to be performed or complied with prior to or on the Closing Date.
8.2 Accuracy of PC Universe's Representations. PC Universe's
representations and warranties contained in this Agreement (including the
exhibits hereto and the First Irving Disclosure Schedule) or any schedule,
certificate or other instrument delivered pursuant to the provisions hereof or
in connection with the transactions contemplated hereby shall be true and
correct in all material respects at and as of the Closing Date (except for such
changes permitted by this Agreement) and shall be deemed to be made again as of
the Closing Date.
8.3 Material Adverse Change. No material adverse change shall have occurred
subsequent to the last date of the financial statement of PC Universe in the
registration statement in the financial position, results of operations, assets,
liabilities or prospects of PC Universe taken as a whole, nor shall any event or
circumstance have occurred which would result in a material adverse change in
the business, assets or condition, financial or otherwise, of PC Universe taken
as a whole, within reasonable discretion of First Irving.
8.4 Litigation. No litigation seeking to enjoin the transactions
contemplated by this Agreement or to obtain damages on account hereof shall be
pending or, to First Irving's knowledge, be threatened.
8.5 Reorganization. The Merger shall qualify as a tax-free reorganization
under Section 368 of the Code and there are no material adverse tax consequences
to the Merger.
8.6 Documents. All documents and instruments delivered by PC Universe to
First Irving at the Closing shall be in form and substance reasonably
satisfactory to First Irving and its counsel.
IX. INDEMNIFICATION
9.1 By PC Universe. Subject to Section 9.4, PC Universe shall indemnify,
defend and hold First Irving, its directors, officers, shareholders, attorneys,
agents and affiliates, harmless from and against any and all losses, costs,
liabilities, damages, and expenses (including legal and other expenses incident
thereto) of every kind, nature and description, including any undisclosed
liabilities (collectively, "Losses") that result from or arise out of (i) the
breach of any representation or warranty of PC Universe set forth in this
Agreement or in any certificate delivered to First Irving pursuant hereto; or
(ii) the breach of any of the covenants of PC Universe contained in or arising
out of this Agreement or the transactions contemplated hereby.
9.2 By First Irving. Subject to Section 9.4, First Irving shall indemnify,
defend, and hold PC Universe its directors, officers, shareholders, attorneys,
agents and affiliates harmless from and against any and all Losses that arise
out of (i) the breach of any representation or warranty of First Irving set
forth in this Agreement or in any certificate delivered to PC Universe pursuant
hereto; or (ii) the breach of any of the covenants of First Irving contained in
or arising out of this Agreement or the transactions contemplated hereby.
9.3 Claims Procedure. Should any claim covered by Sections 9.1 or 9.2 be
asserted against a party entitled to indemnification under this Article (the
"Indemnitee"), the Indemnitee shall promptly notify the party obligated to make
indemnification (the "Indemnitor"); provided, however, that any delay or failure
in notifying the Indemnitor shall not affect the Indemnitor's liability under
this Article if such delay or failure was not prejudicial to the Indemnitor. The
Indemnitor upon receipt of such notice shall assume the defense thereof with
counsel reasonably satisfactory to the Indemnitee and the Indemnitee shall
extend reasonable cooperation to the Indemnitor in connection with such defense.
No settlement of any such claim shall be made without the consent of the
Indemnitor and Indemnitee, such consent not to be unreasonably withheld or
delayed, nor shall any such settlement be made by the Indemnitor which does not
provide for the absolute, complete and unconditional release of the Indemnitee
from such claim. In the event that the Indemnitor shall fail, within a
reasonable time, to defend a claim, the Indemnitee shall have the right to
assume the defense thereof without prejudice to its rights to indemnification
hereunder.
9.4 Limitations on Liability. Neither PC Universe nor First Irving shall be
liable hereunder as a result of any misrepresentation or breach of such party's
representations, warranties or covenants contained in this Agreement unless and
until the Losses incurred by each, as the case may be, as a result of such
misrepresentations or breaches under this Agreement shall exceed, in the
aggregate, $200,000 (in which case the party liable therefore shall be liable
for the entire amount of such claims, including the first $200,000).
X. TERMINATION
10.1 Termination Prior to Closing.
(a) If the Closing has not occurred by any date as mutually agreed upon by
the parties (the "Termination Date"), any of the parties hereto may
terminate this Agreement at any time thereafter by giving written
notice of termination to the other parties; provided, however, that no
party may terminate this Agreement if such party has willfully or
materially breached any of the terms and conditions hereof.
(b) Prior to the Termination Date either party to this Agreement may
terminate this Agreement following the insolvency or bankruptcy of the
other, or if any one or more of the conditions to Closing set forth in
Article VI, Article VII or Article VIII shall become incapable of
fulfillment and shall not have been waived by the party for whose
benefit the condition was established, then either party may
terminate this Agreement.
10.2 Consequences of Termination. Upon termination of this Agreement
pursuant to this Article X or any other express right of termination provided
elsewhere in this Agreement, the parties shall be relieved of any further
obligation to the others except as follows: As First Irving goes through the due
diligence and filing process, facts and circumstances not known to it when it
started the process leading to closing the merger may come to light that make
proceeding with the transaction inadvisable in the opinion of First Irving. If
this occurs or if PC Universe cancels the agreement after paying the first
installment, all fees previously received by First Irving will be retained. No
termination of this Agreement, however, whether pursuant to this Article X
hereof or under any other express right of termination provided elsewhere in
this Agreement, shall operate to release any party from any liability to any
other party incurred before the date of such termination or from any liability
resulting from any willful misrepresentation made in connection with this
Agreement or willful breach hereof.
XI. ADDITIONAL COVENANTS
11.1 Mutual Cooperation. The parties hereto will cooperate with each other,
and will use all reasonable efforts to cause the fulfillment of the conditions
to the parties' obligations hereunder and to obtain as promptly as possible all
consents, authorizations, orders or approvals from each and every third party,
whether private or governmental, required in connection with the transactions
contemplated by this Agreement.
11.2 Changes in Representations and Warranties of PC Universe. Between the
date of this Agreement and the Closing Date, PC Universe shall not, directly or
indirectly, except as contemplated in the information in the registration
statement concerning PC Universe, enter into any transaction, take any action,
or by inaction permit an event to occur, which would result in any of the
representations and warranties of PC Universe herein contained not being true
and correct at and as of (a) the time immediately following the occurrence of
such transaction or event or (b) the Closing Date. PC Universe shall promptly
give written notice to First Irving upon becoming aware of (i) any fact which,
if known on the date hereof, would have been required to be set forth or
disclosed pursuant to this Agreement and (ii) any impending or threatened breach
in any material respect of any of the representations and warranties of PC
Universe contained in this Agreement and with respect to the latter shall use
all reasonable efforts to remedy same.
11.3 Changes in Representations and Warranties of First Irving. Between the
date of this Agreement and the Closing Date, First Irving shall not, directly or
indirectly, enter into any transaction, take any action, or by inaction permit
an event to occur, which would result in any of the representations and
warranties of First Irving herein contained not being true and correct at and as
of (a) the time immediately following the occurrence of such transaction or
event or (b) the Closing Date. First Irving shall promptly give written notice
to PC Universe upon becoming aware of (i) any fact which, if known on the date
hereof, would have been required to be set forth or disclosed pursuant to this
Agreement and (ii) any impending or threatened breach in any material respect of
any of the representations and warranties of First Irving contained in this
Agreement and with respect to the latter shall use all reasonable efforts to
remedy same.
XII. MISCELLANEOUS
12.1 Expenses. First Irving will pay for its counsel and financial
consultant and all their costs. PC Universe will pay for your accountants and
attorneys and all their costs. PC Universe will be responsible for paying the
SEC filing fee, and state filing fees and all costs of converting your documents
to they can be filed with the SEC.
.
12.2 Survival of Representations, Warranties and Covenants. All statements
contained in this Agreement or in any certificate delivered by or on behalf of
PC Universe or First Irving pursuant hereto or in connection with the
transactions contemplated hereby shall be deemed representations, warranties and
covenants by PC Universe or First Irving, as the case may be, hereunder. All
representations, warranties and covenants made by PC Universe and by First
Irving in this Agreement, or pursuant hereto, shall survive through the Closing
Date.
12.3 Nondisclosure. First Irving will not at any time after the date of
this Agreement, without PC Universe' consent, divulge, furnish to or make
accessible to anyone (other than to its representatives as part of its due
diligence or corporate investigation) any knowledge or information with respect
to confidential or secret processes, inventions, discoveries, improvements,
formulae, plans, material, devices or ideas or know-how, whether patentable or
not, with respect to any confidential or secret aspects (including, without
limitation, customers or suppliers) ("Confidential Information") of PC Universe.
PC Universe will not at any time after the date of this Agreement, without
First Irving's consent (except as may be required by law), use, divulge, furnish
to or make accessible to anyone any Confidential Information (other than to its
representatives as part of its due diligence or corporate investigation) with
respect to First Irving. The undertakings set forth in the preceding two
paragraphs of this Section 12.3 shall lapse if the Closing takes place as to
First Irving and PC Universe, but shall not lapse as to the officers and
directors of First Irving, individually.
Any information, which (i) at or prior to the time of disclosure by either
of PC Universe or First Irving was generally available to the public through no
breach of this covenant, (ii) was available to the public on a non-confidential
basis prior to its disclosure by either of PC Universe or First Irving or (iii)
was made available to the public from a third party, provided that such third
party did not obtain or disseminate such information in breach of any legal
obligation to PC Universe or First Irving, shall not be deemed Confidential
Information for purposes hereof, and the undertakings in this covenant with
respect to Confidential Information shall not apply thereto.
12.4 Succession and Assignments; Third Party Beneficiaries. This Agreement
may not be assigned (either voluntarily or involuntarily) by any party hereto
without the express written consent of the other party. Any attempted assignment
in violation of this Section shall be void and ineffective for all purposes. In
the event of an assignment permitted by this Section, this Agreement shall be
binding upon the heirs, successors and assigns of the parties hereto. Except as
expressly set forth in this Section, there shall be no third party beneficiaries
of this Agreement.
12.5 Notices. All notices, requests, demands or other communications with
respect to this Agreement shall be in writing and shall be (i) sent by facsimile
transmission, (ii) sent by the United States Postal Service, registered or
certified mail, return receipt requested, or (iii) personally delivered by a
nationally recognized express overnight courier service, charges prepaid, to the
addresses specified in writing by each party.
Any such notice shall, when sent in accordance with the preceding sentence,
be deemed to have been given and received on the earliest of (i) the day
delivered to such address or sent by facsimile transmission, (ii) the fifth
(5th) business day following the date deposited with the United States Postal
Service, or (iii) twenty-four (24) hours after shipment by such courier service.
12.6 Construction. This Agreement shall be construed and enforced in accordance
with the internal laws of the State of Florida without giving effect to the
principles of conflicts of law thereof, except to the extent that the Securities
Act or the Exchange Act applies to the Registration Statements and the Proxy
Statement.
12.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same Agreement.
12.8 No Implied Waiver; Remedies. No failure or delay on the part of the
parties hereto to exercise any right, power or privilege hereunder or under any
instrument executed pursuant hereto shall operate as a waiver, nor shall any
single or partial exercise of any right, power or privilege preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. All rights, powers and privileges granted herein shall be in addition
to other rights and remedies to which the parties may be entitled at law or in
equity.
12.9 Entire Agreement. This Agreement, including the Exhibits and Schedules
attached hereto, sets forth the entire understandings of the parties with
respect to the subject matter hereof, and it incorporates and merges any and all
previous communications, understandings, oral or written, as to the subject
matter hereof, and cannot be amended or changed except in writing, signed by the
parties.
12.10 Headings. The headings of the Sections of this Agreement, where
employed, are for the convenience of reference only and do not form a part
hereof and in no way modify, interpret or construe the meanings of the parties.
12.11 Severability. To the extent that any provision of this Agreement
shall be invalid or unenforceable, it shall be considered deleted herefrom and
the remainder of such provision and of this Agreement shall be unaffected and
shall continue in full force and effect.
12.12 Public Disclosure. From and after the date hereof through the Closing
Date, First Irving shall not issue a press release or any other public
announcement with respect to the transactions contemplated hereby without the
prior consent of PC Universe, which consent shall not be unreasonably withheld
or delayed. It is understood by PC Universe that First Irving is required under
the Exchange Act to make prompt disclosure of any material transaction.
THE PARTIES TO THIS AGREEMENT HAVE READ THIS AGREEMENT, HAVE HAD THE
OPPORTUNITY TO CONSULT WITH INDEPENDENT COUNSEL OF THEIR OWN CHOICE, AND
UNDERSTAND EACH OF THE PROVISIONS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above written.
First Irving Strategic Group, Inc.
By:____________________________
Its:_____________________________
PC Universe, Inc.
By:____________________________
Its:____________________________
