AGREEMENT AND PLAN OF MERGER
AGREEMENT
AND PLAN OF MERGER
AGREEMENT
AND PLAN OF MERGER dated as of June 19, 2007 (this "Agreement")
by and between CyberSentry, Inc, a Delaware Corporation and Xxxxxx Capital,
Inc, a Delaware Corporation the ("Surviving Corporation").
WHEREAS,
CyberSentry, Inc and Xxxxxx Capital, Inc desire to merge pursuant to
the
terms and conditions of this Agreement and in accordance with Delaware
Corporation
Law and have adopted and approved this Agreement in accordance with such
law;
and
WHEREAS,
the majority of the stockholders of CyberSentry, Inc and Xxxxxx Capital,
Inc have adopted and approved this Agreement in accordance with Delaware
Law.
NOW,
THEREFORE, in consideration of the premises and agreements contained
herein,
and for other good and valuable consideration, the receipt and sufficiency
of
which
are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE
I
THE
MERGER
Section
1.1. The Merger. CyberSentry, Inc shall merge with and into Xxxxxx Capital,
Inc (the "Merger"). Xxxxxx Capital, Inc shall be the surviving corporation
in
the Merger,
and at the Effective Time (as defined below), the separate existence of
CyberSentry,
Inc shall cease. The corporate existence of Xxxxxx Capital, Inc with its
purposes,
powers and objects, shall continue unaffected and unimpaired by the Merger,
and
as
the surviving corporation it shall succeed to all rights and assets of
CyberSentry, Inc,
as
and to the extent provided under Delaware Corporation Law.
Section
1.2. The Effective Time. The Merger shall become effective (the "Effective
Time") upon the filing of (i) a certificate of merger executed by Xxxxxx
Capital,
Inc with the Secretary of State of the State of Delaware in the form of which
is
attached
as Annex A and (ii) this Agreement and Plan of Merger executed by CyberSentry,
Inc and Xxxxxx Capital, Inc to be effective June 29, 2007.
Section
1.3. Certificate of Incorporation. The Certificate of Incorporation of
Xxxxxx
Capital, Inc shall, as of the Effective Time, be the Certificate of
Incorporation of the
Surviving Corporation until duly amended.
Section
1.4. By-Laws. The By-Laws of Xxxxxx Capital, Inc shall, as of the Effective
Time, be the By-Laws of the Surviving Corporation until duly
amended.
Section
1.5. Officers and Directors. At the Effective Time, the directors and
officers
of the Surviving Corporation shall be as follows:
|
Name
|
Position(s)
|
|
Xxxxx
Xxxxxxx
|
Chairman
of the Board of Directors
|
|
President
and Chief Executive Officer
|
|
|
Xxxxx
Xxxxxxx
|
Secretary
and Treasurer
|
The
terms
and classes of the directors shall be determined by the Board of Directors
of the Surviving Corporation.
Section
1.6 Advisors. Xxxxxx Nominees Pty Ltd shall be the sole and exclusive
advisor
to Xxxxxx Capital, Inc.
Section
1.7. Required Approvals. This Agreement has been adopted and approved
by
the
majority of the stockholders of Xxxxxx Capital, Inc and CyberSentry, Inc
in
accordance
with Delaware Law.
Section
1.8. Corporate Name. The name under which Xxxxxx Capital, Inc was originally
formed in Delaware was "Xxxxxx Capital, Inc.".
Section
1.9. Financial Statements. The Financial Statements for the merged Xxxxxx
Capital, Inc are hereby incorporated by reference.
ARTICLE
II
CONVERSION
OF SHARES
Section
2.1. Effect of the Merger on Capital Stock. At the Effective Time, by
virtue
of
the Merger and without any action on the part of the Constituent Corporations
or
the
holders of any capital stock thereof:
(a)
Cancellation of Outstanding Capital Stock of CyberSentry, Inc. All issued
and
outstanding
shares of capital stock of CyberSentry, Inc and all treasury stock owned
by
them,
shall be canceled and cease to exist.
(b)
Issuance of Common Shares. Four Thousand Six Hundred and Fifty Five Thousand
(4,655) Common Shares of the Surviving Corporation will be issued to the
holders
of CyberSentry shares pursuant to this agreement In the event that a
CyberSentry
shareholder receives less than One Hundred (100) shares in the exchange,
the
shareholder shall be rounded up to receive One Hundred (100) shares. Four
Hundred Thousand
(400,000) common shares shall be issued to Xxxxxx Nominees Pty Ltd for the
benefit
of CyberSentry creditors and assumption of liabilities of CyberSentry,
Inc.
(c)
Continuance of Capital Stock of Xxxxxx Capital. Each Xxxxxx Capital, Inc
Common
Share that is issued and outstanding immediately prior to the Effective Time
shall
continue to be issued and outstanding.
Section
2.2. Closing of Transfer Books. From and after the Effective Time, the
stock
transfer books of CyberSentry, Inc shall be closed and no transfer of any
capital stock
shall thereafter be made.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
Section
3.1. Representations and Warranties. Each party hereby represents and
warrants
to the other that such party: (i) is a corporation duly organized and in
good
standing
in its jurisdiction of incorporation; (ii) has obtained the approval of its
board of directors
to effect the Merger; and (iii) has full power and authority to execute,
deliver
and
perform this Agreement.
ARTICLE
IV
CLOSING
CONDITIONS; THE CLOSING
Section
4.1. Closing Conditions. (a) The consummation of the Merger and the other
transactions provided herein is conditioned upon the satisfaction of the
following conditions:
(i) Xxxxxx Capital, Inc shall have provided the payment to the State of
Delaware
for fees, taxes and outstanding obligations, in certified funds as evidence
of
sufficient
capital to effect the Merger and (ii) the Effective Date of the Order shall
have
occurred.
The parties shall use their commercially reasonable efforts to satisfy the
foregoing
conditions.
ARTICLE
V
TERMINATION
OR ABANDONMENT OF MERGER
Section
5.1. Termination. This Agreement may not be terminated or the Merger
abandoned
at any time prior to the Effective Time by the Board of Directors of Xxxxxx
Capital,
Inc unless the Board of Directors of Xxxxxx Capital, Inc shall determine
for any
reason
that the consummation of the transactions contemplated hereby would be
inadvisable
or not in the best interests of Xxxxxx Capital, Inc or its
shareholders.
ARTICLE
VI
AMENDMENTS
Section
6.1. Amendments. At any time prior to the Effective Time, the parties
hereto
may by written agreement amend, modify or supplement any provision of this
Agreement,
provided that no such amendment, modification or supplement may be made
if,
in
the sole judgment of the Board of Directors of Xxxxxx Capital, Inc it would
adversely
affect the rights and interests of Xxxxxx Capital Inc's shareholders in any
material
respect.
ARTICLE
VII
ACCOMPLISHMENT
OF MERGER
Section
7.1. Further Assurances. The parties hereto each agree to execute such
documents
and instruments and to take whatever action may be necessary or desirable
to
consummate
the Merger.
ARTICLE
VIII
MISCELLANEOUS
PROVISIONS
Section
8.1. Governing Law. This Agreement shall be construed under and in accordance
with the laws of the State of Delaware applicable to contracts to be fully
performed
in such State, without giving effect to choice of law principles.
Section
8.2. Headings. The headings set forth herein are for convenience only and
shall
not
be used in interpreting the text of the section in which they
appear.
Section
8.3. Binding Effect; Successors and Assigns. This Agreement may not be
assigned
by either party without the written consent of the other party; this Agreement
shall
be
binding upon and inure to the benefit of the respective successors and permitted
assigns
of the parties hereto.
Section
8.4. Counterparts. This Agreement may be executed in separate counterparts,
each of which, when so executed, shall be deemed to be an original, and
such
counterparts when taken together shall constitute but one and the same
instrument.
Section
8.5. Extensions of Time. At any time prior to the Effective Time, the
parties
hereto may, by written agreement, extend time for the performance of any
of the
obligations
or other acts of the parties hereto.
Section
8.6. Merger Agreement. A copy of this Agreement is on file at the principal
place of business of Xxxxxx Capital, Inc, 504 Xxxxxx Xxxxxxx, Xxxxxxxxxxxx,
Xxxxxxxx
00000 and will be furnished by the Surviving Corporation, on request and
without
cost, to any stockholder or shareholder of either Constituent
Corporation.
Section
8.7. Reimbursement of Expenses. Upon closing of the Merger under this
Agreement,
the Surviving Corporation shall reimburse the officers, directors and
shareholders
of Xxxxxx Capital, Inc as the case may be, for all costs and expenses
incurred
by any of such persons in connection with the Merger, including without
limitation,
all legal fees and expenses.
IN
WITNESS WHEREOF, the Trustee, the Debtor and Xxxxxx Capital, Inc have
caused
this Agreement to be signed by their respective officers thereunto duly
authorized as
of the
day first above written.
XXXXXX
CAPITAL, INC.
By:
/s/ Xxxxx
Xxxxxxx
Name:
Xxxxx Xxxxxxx
Title:
President
CYBERSENTRY,
INC.
By:
/s/ Xxx
Xxxxxxxxx
Name:
Xxx
Xxxxxxxxx
Title:
Chief Executive Officer
EXHIBIT
FINANCIAL
INFORMATION
The
Financial Statements of the Company filed with this report were prepared by
management and commence on the following page, together with related Notes.
In
the opinion of management, the Financial Statement fairly present the financial
condition of the Company.
Xxxxxx
Capital, Inc
As
of
March 31, 2007
|
ASSETS
|
||||
|
ASSETS
|
||||
|
Cash
and Cash Equivalents
|
$
|
37,254
|
||
|
Investments
at Fair Value
|
||||
|
Control
Investments at cost
|
9,178,769
|
|||
|
TOTAL
ASSETS
|
$
|
9,216,023
|
||
|
LIABILITIES
and STOCKHOLDERS' EQUITY
|
||||
|
CURRENT
LIABILITIES
|
||||
|
Accounts
Payable
|
$
|
8,500
|
||
|
TOTAL
LIABILITIES
|
$
|
8,500
|
||
|
STOCKHOLDERS'
EQUITY
|
||||
|
Common
stock, $0.001 par value; 100,000,000 shares
|
||||
|
Authorized
and 20,000,000 shares issued;
|
||||
|
|
||||
|
Opening
Balance Equity
|
$
|
9,178,769
|
||
|
Additional
paid in capital
|
28,754
|
|||
|
TOTAL
STOCKHOLDERS' EQUITY
|
$
|
9,207,523
|
||
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
9,216,023
|
||
The
accompanying notes are an integral part of financial
statements.
Xxxxxx
Capital, Inc
Notes
To
Financial Statements
As
of
March 31, 2007
NOTE
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
| A. |
Organization
and Business Operations
|
Xxxxxx
Capital, Inc as the successor company by merger to Patriot Advisors, Inc, and
Templar Corporation("the Company") was incorporated in the State of Delaware
on
October 20,2006 to serve as a vehicle to effect the Agreement and Plan of Merger
in United States Bankruptcy Court in the District of Maine in Case
No.04-20328.
On
November 8, 2006, the Company began business operations, and all activity prior
to that date relates to the Company's formation and implementation of the
Agreement and Plan of merger.
The
Company's fiscal year end is June 30, 2007.
| B. |
Basis
of Presentation
|
The
accompanying financial statements have been prepared by the Company in
accordance with generally accepted accounting principles in the United States.
Certain information and footnote disclosures normally included in financial
statements, prepared in accordance with generally accepted accounting
principles, have been condensed or omitted pursuant to such rules and
regulations. The Company believes that the disclosures in these financial
statements are adequate and not misleading.
In
the
opinion of management, the financial statements contain all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation of the Company's financial position as of March 31, 2007 and is
not
necessarily indicative of the results for any future period.
| C. |
Cash
and Cash Equivalents
|
For
purposes of the statement of cash flows, the Company considers all highly liquid
investments purchased with an original maturity of three months or less to
be
cash equivalents.
| D. |
Investments
at Fair Value
|
The
Investments consist of the cost basis for the investments in real estate, ACRE,
Avenger Boats, Child Support Payment Corporation and Patriot Growth Fund, LP.
The Investments at Fair Value also include the holdings of Patriot Advisors,
Inc
and Templar Corporation as they specifically relate to loans to Unitech
Industries, Inc, holdings in Prepaid Systems Inc and investment in the Patriot
Growth Fund.
| E. |
Income
Taxes
|
The
Company accounts for income taxes under the Financial Accounting Standards
Board
of Financial Accounting Standards No. 109, "Accounting for Income Taxes"
("Statement 109"). Under Statement 109, deferred tax assets and liabilities
are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities
and
their respective tax basis. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled.
Under
Statement 109, the effect on deferred tax assets and liabilities of a change
in
tax rates is recognized in income in the period that includes the enactment
date.
The
company has $11,526,091 in tax loss carry forwards consisting of a tax loss
carry forward of:
(i)
$
8,426,091 on the Cybersentry investment,
(ii)
$
2,000,000 on the Prepaid Systems, Inc investment,
(iii)
$
600,000 on the Unitech Industries, Inc investment and
(iv)
$
500,000 on the Patriot Growth Fund Partnership interest.
NOTE
2. STOCKHOLDERS' EQUITY
| A. |
Preferred
Stock
|
The
Company is not authorized to issue shares of preferred stock.
| B. |
Common
Stock
|
The
Company is authorized to issue 100,000,000 shares of common stock at $0.001
par
value.
| C. |
Warrant
and Options
|
There
are
no warrants or options outstanding to issue any additional shares of common
stock.
| D. |
Subsequent
Events
|
Not
applicable
NOTE
3. Management's Discussion and Analysis - Plan of
Operation.
The
following discussion should be read in conjunction with the information
contained in the financial statements of the Company and the Notes thereto
appearing elsewhere herein.
Results
of Operations - As of March 31, 2007
The
Company is considered to be in the development stage as defined in Statement
of
Financial Accounting Standards No. 7. There have been no operations since
inception until November 8, 2006. The company commenced limited operations
on
November 8, 2006.
The
operations of Xxxxxx Capital, Inc (“LCI”) will include making investments in
public and private companies. LCI will provide long-term equity and debt
investment capital to fund growth, acquisitions and recapitalizations of small
and middle-market companies in a variety of industries primarily located in
the
U.S. LCI will make active or passive investments in common and preferred
stock and warrants or rights to acquire equity interests; in addition to senior
and subordinated loans; or convertible securities. Xxxxxx Capital will serve
as
a lead investor for transactions, as well as a co-investor in
companies along with other private equity sponsors.
The
Company has $37,254 in cash and cash equivalents as of March 31, 2007 and
investments of $9,178,769.
STATEMENT
REGARDING FORWARD-LOOKING INFORMATION
This
report contains various forward-looking statements that are based on the
Company's beliefs as well as assumptions made by and information currently
available to the Company. When used in this report, the words "believe,"
"expect," "anticipate," "estimate" and similar expressions are intended to
identify forward-looking statements. Such statements may include statements
regarding seeking business opportunities, payment of operating expenses,
and
the
like,
and are subject to certain risks, uncertainties and assumptions which could
cause actual results to differ materially from projections or estimates
contained herein. Factors which could cause actual results to differ materially
include, among others, unanticipated delays or difficulties in location of
a
suitable business acquisition candidate, unanticipated or unexpected costs
and
expenses, competition and changes in market conditions,lack of adequate
management personnel and the like. Should one or more of
these
risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially form those anticipated, estimated
or projected. The Company cautions again placing undue reliance on
forward-looking statements all of that speak only as of the date
made.
NOTE
4. Controls and Procedures.
The
Company maintains a system of controls and procedures designed to provide
reasonable assurance as to the reliability of the financial statements and
other
disclosures included in this report, as well as to safeguard assets from
unauthorized use or disposition. As of March 31, 2007, the Company's Chief
Executive Officer and principal financial officer has evaluated the
effectiveness of the design and operation of the Company's disclosure controls
and procedures. Based upon that evaluation, the Company's Chief Executive
Officer and principal financial officer concluded that the Company's disclosure
controls and procedures are effective. There have been no significant changes
in
the Company's internal controls or in other factors which could significantly
affect internal controls subsequent to the date the Company carried out its
evaluation.
PART
II
-- OTHER INFORMATION
Item
1.
Legal Proceedings.
The
company may become involved in legal proceedings in the normal course of
business. The Company is unaware of any legal proceedings against it that would
materially affect its operations.
Item
2.
Changes in Securities.
Not
applicable.
Item
3.
Defaults upon Senior Securities.
Not
applicable.
Item
4.
Submission of Matters to a Vote of Security Holders.
Not
applicable.
Item
5.
Other Information.
Not
applicable.
Item
6.
Exhibits and Reports
None
SIGNATURES
The
company caused this financial report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Xxxxxx
Capital, Inc
(Company)
By:
/s/ Xxxxx X Xxxxxxx
Name:
Xxxxx X. Xxxxxxx
Title:
President
Dated:
March 31, 2007.
