Exhibit 2.2
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement"), entered into
effective the 4th day of April 2000, is by, between, and among Zycom, Inc., a
Colorado corporation (hereinafter "Zycom"), Xxxxxxxx.xxx, Inc., a Delaware
corporation (hereinafter "Xxxxxxxx.xxx"), and the shareholders of Xxxxxxxx.xxx
who are listed on Schedule "A" hereto and have executed Subscription Agreements
in the form attached in Schedule "B" hereto (the "Shareholders").
RECITALS:
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WHEREAS, Zycom wishes to acquire, and the Shareholders, by executing
Schedule "B" hereto, are willing to sell, at least a majority of the outstanding
stock of Xxxxxxxx.xxx in exchange solely for a part of the voting stock of Zycom
whereby the Shareholders would acquire a controlling interest of Zycom;
WHEREAS, the parties wish to provide for the acquisition of the remaining
outstanding shares of Xxxxxxxx.xxx following the closing of this transaction
pursuant to the same terms and conditions set forth herein; and
WHEREAS, the parties hereto intend to qualify such transaction as a tax-
free exchange pursuant to Section 351 or 368(a)(1)(B) of the Internal Revenue
Code of 1986, as amended;
NOW, THEREFORE, based upon the stated premises, which are incorporated
herein by reference, and for and in consideration of the mutual covenants and
agreements set forth herein, the mutual benefits to the parties to be derived
herefrom, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto approve and adopt this
Agreement and Plan of Reorganization and mutually covenant and agree with each
other as follows:
1. Reverse Acquisition Transaction
1.1 Transfer of Xxxxxxxx.xxx Shares. On the Closing Date the
Shareholders shall transfer to Zycom certificates for the number of shares of
the class A common stock of Xxxxxxxx.xxx described in Schedule "A," attached
hereto and incorporated herein, which in the aggregate shall represent not less
than a majority of the issued and outstanding shares of the class A common stock
of Xxxxxxxx.xxx. at Closing. In addition, on the Closing Date Shareholders
shall transfer to Zycom certificates representing all of the outstanding shares
of class B common stock of Xxxxxxxx.xxx.
1.2 Issuance of Zycom Shares.
a. Series A Common Stock. In exchange for the transfer of the
class A common stock of Xxxxxxxx.xxx pursuant to subsection 1.1. hereof, Zycom
shall on the Closing Date, and contemporaneously with such transfer of the class
A common stock of Xxxxxxxx.xxx to it by the
Shareholders, issue and deliver to the Shareholders certificates representing
one share of series A common stock of Zycom for each outstanding share of class
A common stock of Xxxxxxxx.xxx to be exchanged at Closing. Such shares of Zycom
shall only be issued and delivered to persons who are accredited investors as
defined in Rule 501 of Regulation D promulgated by the Securities and Exchange
Commission.
b. Series B Common Stock. In exchange for the transfer of
the class B common stock of Xxxxxxxx.xxx pursuant to subsection 1.1. hereof,
Zycom shall on the Closing Date, and contemporaneously with such transfer of the
class B common stock of Xxxxxxxx.xxx to it by the Shareholders, issue and
deliver to the Shareholders certificates representing one share of series B
common stock of Zycom for each outstanding share of class B common stock of
Xxxxxxxx.xxx to be exchanged at Closing. Such shares of Zycom shall only be
issued and delivered to persons who are accredited investors as defined in Rule
501 of Regulation D promulgated by the Securities and Exchange Commission.
c. Aggregate Shares to be Issued. The aggregate number of
shares of common stock of Zycom to be delivered at Closing is set forth in
Schedule "A" hereof.
d. Filing of Registration Statement. As soon as practical
following the funding pursuant to subsection 1.7 below and the acquisition of a
reporting company pursuant to subsection 1.8 below, Zycom shall prepare and file
a registration statement with the Securities and Exchange Commission, and the
appropriate state securities agencies, to offer to exchange shares of Zycom with
the remaining shareholders of Xxxxxxxx.xxx at the same exchange rate as set
forth in this Agreement. Zycom shall include in such registration statement (i)
the shares to be issued to the shareholders of Xxxxxxxx.xxx pursuant to this
Agreement, (ii) the shares received upon exercise of the options set forth in
subsection 1.3 below and exercised twenty days before the filing of the
registration statement, (iii) the shares to be issued in the private offering as
set forth in subsection 1.7 below, (iv) the shares to be issued pursuant to
subsection 1.7 below, and (v) any outstanding shares of Zycom for which Zycom
has granted registration rights.
1.3 Assumption of Stock Options. Effective as of the Closing Date,
each outstanding option of Xxxxxxxx.xxx shall be converted into and thereafter
constitute an option to acquire shares of Zycom common stock pursuant to Zycom's
stock option plan existing at Closing, on the same terms and conditions as were
applicable under the option plan of Xxxxxxxx.xxx based on the same number of
shares of Zycom common stock as the holder of such option would have been
entitled to receive pursuant to the exchange ratio set forth in subsection 1.2
above had such holder exercised such stock option in full immediately prior to
the Closing of this Agreement. At Closing Xxxxxxxx.xxx shall deliver a
conversion document from each option holder converting such options as set forth
in this subsection.
1.4 Stock Dividend. On or before the Closing Date Zycom shall
authorize a stock dividend of the common stock of Zycom at the rate of six
shares for each one share outstanding at
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the time of Closing, excluding the shares to be issued pursuant to this
Agreement. All shares to be issued pursuant to this Agreement shall be post-
forward split shares, unless otherwise designated.
1.5 Name Change and Change of Domicile. On or before the Closing
Date Zycom shall authorize an amendment to the articles of incorporation to
change the name of Zycom to Xxxxxxxx.xxx Group, Inc. and shall authorize a
change of domicile of Zycom to the State of Delaware.
1.6 Call for Meeting of Shareholders. On or before the Closing Date
the Board of Directors of Zycom shall hold a special meeting of the shareholders
of Zycom to seek approval of the items set forth in subsections 1.4 and 1.5
above.
1.7 Private Funding. Xxxxxxxx.xxx hereby acknowledges receipt of
$500,000 as bridge financing provided from Business Development Corporation
pursuant to a written agreement dated March 24, 2000. Such agreement is
incorporated herein as Schedule "C" attached hereto. Effective as of the
Closing Date, each outstanding warrant to purchase class A common stock of
Xxxxxxxx.xxx issued in connection with such bridge financing transaction shall
be converted into and thereafter constitute warrants to acquire shares of Zycom
class A common stock, on the same terms and conditions as were applicable under
the existing warrant certificate, based on the same number of shares of Zycom
common stock as the holder of such option would have been entitled to receive
pursuant to the exercise ratio set forth in such warrant certificate. At
Closing Zycom shall deliver a warrant certificate and a conversion document from
each warrant holder converting such warrants as set forth in this subsection.
1.8 Reporting Company Agreement. At Closing Zycom shall deliver a
reporting company agreement to Zycom in the form set forth in Schedule "D"
attached hereto, to provide for the acquisition of a company subject to the
reporting requirements of Section 13 of the Securities Exchange Act.
1.9 Facilitation Fee. At Closing Zycom shall deliver a certificate
representing 31,682 shares of restricted common stock of Zycom, and a warrant to
purchase 31,682 shares of common stock of Zycom at $9.15 per share, to Business
Development Corporation, a company controlled by Van X. Xxxxxxx, an officer and
director of Zycom, as a fee in connection with the facilitation of the
transaction set forth in this Agreement. A copy of the form of warrant
certificate to be delivered pursuant to this subsection is set forth in Schedule
"E" attached hereto.
2. Representations and Warranties of Xxxxxxxx.xxx. Xxxxxxxx.xxx
represents and warrants to Zycom as set forth below. These representations and
warranties are made as an inducement for Zycom to enter into this Agreement and,
but for the making of such representations and warranties and their accuracy,
Zycom would not be a party hereto.
2.1 Organization and Authority. Xxxxxxxx.xxx is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware with full power and
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authority to enter into and perform the transactions contemplated by this
Agreement. Set forth in Schedule "F" attached hereto is a list of each and every
subsidiary of Xxxxxxxx.xxx and any other entity in which Xxxxxxxx.xxx owns any
interest. Each such subsidiary or other entity is validly existing and in good
standing under the laws of its state or other jurisdiction of incorporation or
formation.
2.2 Capitalization. As of the date of the Closing, Xxxxxxxx.xxx will
have a total of no more than 31,898,644 shares of class A common stock and
4,750,000 shares of class B common stock issued and outstanding. All of the
shares will have been duly authorized and validly issued and will be fully paid
and nonassessable. There is, and at Closing there shall be, no other class or
series of equity securities authorized or outstanding. Except as set forth in
Schedule "G" attached hereto, there are presently, and will be at Closing, no
options, warrants, debentures, conversion privileges, or other rights,
agreements, or commitments obligating Xxxxxxxx.xxx to issue or to transfer from
treasury any additional shares of capital stock of any class. Except as set
forth in this Agreement, and in the agreement between the Company and Primus
Telecommunications, Inc. dated June 10, 1999, there are presently, and will be
at Closing, no other rights of any person to demand registration of his, her, or
its shares, shares which may be issuable, or the shares to be received pursuant
to this Agreement. As of the Closing, the Articles of Incorporation, as
amended, of Xxxxxxxx.xxx and as currently in effect shall remain unchanged,
except as provided herein.
2.3 Directors and Officers. The names and titles of all directors
and officers of Xxxxxxxx.xxx as of the date of this Agreement are as follows:
Euburn X.X. Xxxxx Chairman, President, and CEO
Xxxxx Xxxxx Executive Vice-president, secretary, and
treasurer
2.4 Performance of This Agreement; Existing Agreements.
a. Board Approval. The execution and performance of this
Agreement and the transfer of stock contemplated hereby have been authorized by
the board of directors of Xxxxxxxx.xxx.
b. Noncontravention. The execution and delivery of this
Agreement does not, and the consummation of the transaction contemplated hereby
will not, violate any provision of the certificate of incorporation or by-laws
of Xxxxxxxx.xxx, or any provisions of, or result in the acceleration of any
obligation under, any mortgage, lien, lease, agreement, instrument, court order,
arbitration award, judgment or decree to which Xxxxxxxx.xxx, or any of its
subsidiaries, is a party, or by which it is bound, and will not violate any
other restriction of any kind or character to which it is subject.
c. Material Contracts; No Defaults. Each material agreement,
contract, arrangement, or commitment of Xxxxxxxx.xxx is, and after the Closing
on identical terms will be,
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legal, valid, binding, enforceable, and in full force and effect. No event or
condition has occurred or become known to Xxxxxxxx.xxx, or is alleged to have
occurred, that constitutes or, with notice or the passage of time, or both,
would constitute a default or other claim of excusable delay, termination,
nonperformance, or accelerated or increased rights by Xxxxxxxx.xxx or any other
person under any material contract, agreement, arrangement, commitment, or other
understanding, written or oral. No person with whom Xxxxxxxx.xxx has such a
contract, agreement, arrangement, commitment or other understanding is in
default thereunder or has failed to perform fully thereunder by reason of claim
of excusable delay, termination, or nonperformance thereunder, the delay,
termination, or nonperformance of which, or default under which, has had or may
have a material adverse effect on Xxxxxxxx.xxx
2.5 Financials. True copies of the unaudited financial statements
of Xxxxxxxx.xxx for the years ended December 31, 1998 and 1999, have been
furnished to Zycom, or will be furnished prior to Closing. Said financial
statements are prepared in accordance with generally accepted accounting
principles applied on a consistent basis, are true and correct in all material
respects, and present an accurate and complete disclosure of the financial
condition of Xxxxxxxx.xxx as of December 31, 1999, and the earnings for the
periods covered. Xxxxxxxx.xxx has good and marketable title to all of its
assets, business and properties including, without limitation, all such
properties reflected in the aforementioned balance sheet as of December 31,
1999, except as disposed of in the normal course of business, free and clear of
any mortgage, lien, pledge, charge, claim or encumbrance, except as shown on
said balance sheet as of December 31, 1999, and, in the case of real properties,
except for rights-of-way and easements which do not adversely affect the use of
such property.
2.6 Liabilities. There are no material liabilities of Xxxxxxxx.xxx,
whether accrued, absolute, contingent or otherwise, which arose or relate to any
transaction of Xxxxxxxx.xxx, its agents or servants occurring prior to December
31, 1999, which are not disclosed by or reflected in said financial statements.
As of the date hereof, there are no known circumstances, conditions, happenings,
events or arrangements, contractual or otherwise, which may hereafter give rise
to liabilities, except in the normal course of business of Xxxxxxxx.xxx.
2.7 Absence of Certain Changes or Events. Except as set forth in
this Agreement, since December 31, 1999, there has not been (i) any material
adverse change in the business, operations, properties, level of inventory,
assets, or condition of Xxxxxxxx.xxx, or (ii) any damage, destruction, or loss
to Xxxxxxxx.xxx (whether or not covered by insurance) materially and adversely
affecting the business, operations, properties, assets, or conditions of
Xxxxxxxx.xxx.
2.8 Litigation. To the best knowledge and reasonable belief of
Xxxxxxxx.xxx, there are no legal, administrative or other proceedings,
investigations or inquiries, product liability or other claims, judgments,
injunctions or restrictions, either threatened, pending, or outstanding against
or involving Xxxxxxxx.xxx or its subsidiaries, if any, or their assets,
properties, or business, nor does Xxxxxxxx.xxx or its subsidiaries know, or have
reasonable grounds to know, of any basis for any such proceedings,
investigations or inquiries, product liability or other claims, judgments,
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injunctions or restrictions, except as follows: Xxxxx vs. Xxxxxxxx.xxx; Xxxxx
vs. Xxxxxxxx.xxx; and Xxxxxxxxx vs. Xxxxxxxx.xxx. In addition, there are no
material proceedings existing, pending or reasonably contemplated to which any
officer, director, or affiliate of Xxxxxxxx.xxx or as to which any of the
Shareholders is a party adverse to Xxxxxxxx.xxx or any of its subsidiaries or
has a material interest adverse to Xxxxxxxx.xxx or any of its subsidiaries.
2.9 Taxes. All federal, state, foreign, county and local income,
profits, franchise, occupation, property, sales, use, gross receipts and other
taxes (including any interest or penalties relating thereto) and assessments
which are due and payable have been duly reported, fully paid and discharged as
reported by Xxxxxxxx.xxx, and there are no unpaid taxes which are, or could
become a lien on the properties and assets of Xxxxxxxx.xxx, except as provided
for in the financial statements of Xxxxxxxx.xxx, or have been incurred in the
normal course of business of Xxxxxxxx.xxx since that date. All tax returns of
any kind required to be filed have been filed and the taxes paid or accrued.
There are no disputes as to taxes of any nature payable by Xxxxxxxx.xxx.
2.10 Hazardous Materials. No hazardous material has been released,
placed, stored, generated, used, manufactured, treated, deposited, spilled,
discharged, released, or disposed of on or under any real property currently or
previously owned or leased by Xxxxxxxx.xxx or any of its subsidiaries.
2.11 Accuracy of All Statements Made by Xxxxxxxx.xxx. No
representation or warranty by Xxxxxxxx.xxx in this Agreement, nor any statement,
certificate, schedule, or exhibit hereto furnished or to be furnished by or on
behalf of Xxxxxxxx.xxx pursuant to this Agreement, nor any document or
certificate delivered to Zycom by Xxxxxxxx.xxx pursuant to this Agreement or in
connection with actions contemplated hereby, contains or shall contain any
untrue statement of material fact or omits or shall omit a material fact
necessary to make the statements contained therein not misleading.
3. Representations and Warranties of Zycom. Zycom represents and
warrants to Xxxxxxxx.xxx as set forth below. These representations and
warranties are made as an inducement for Xxxxxxxx.xxx to enter into this
Agreement and, but for the making of such representations and warranties and
their accuracy, Xxxxxxxx.xxx would not be parties hereto.
3.1 Organization and Good Standing. Zycom is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Colorado with full power and authority to enter into and perform the
transactions contemplated by this Agreement. Zycom does not have any
subsidiaries or own any interest in any other entity.
3.2 Capitalization. As of the date of the Closing, Zycom will have a
total of no more than 1,793,505 shares of series A common stock issued and
outstanding and no shares of series B common shares (excluding the shares to be
issued pursuant to this Agreement). All of the shares will have been duly
authorized and validly issued and will be fully paid and nonassessable. Except
for Zycom's obligations hereunder with respect to the shares to be issued
pursuant to subsection 1.2
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hereof, there are no options, warrants, debentures, conversion privileges, or
other rights, agreements, or commitments obligating Zycom to issue or to
transfer from treasury any additional shares of capital stock of any class. Of
the total shares outstanding, Zycom has granted registration rights to
shareholders owning 1,570,023 of such shares.
3.3 Performance of This Agreement. The execution and performance of
this Agreement and the issuance of stock contemplated hereby have been
authorized by the board of directors of Zycom.
3.4 Financials. True copies of the financial statements of Zycom
consisting of the balance sheets as of the fiscal years ended December 31, 1999
and 1998 (audited), and statements of income, cash flow and changes in
stockholder's equity for each of the periods from inception until December 31,
1999, have been delivered by Zycom to Xxxxxxxx.xxx. These statements have been
examined and certified by Xxxxx Legal, Certified Public Accountant. Said
financial statements are true and correct in all material respects and present
an accurate and complete disclosure of the financial condition of Zycom as of
December 31, 1999, and the earnings for the periods covered, in accordance with
generally accepted accounting principles applied on a consistent basis.
3.5 Liabilities. There are no material liabilities of Zycom, whether
accrued, absolute, contingent or otherwise, which arose or relate to any
transaction of Zycom, its agents or servants which are not disclosed by or
reflected in said financial statements. As of the date hereof, there are no
known circumstances, conditions, happenings, events or arrangements, contractual
or otherwise, which may hereafter give rise to liabilities, except in the normal
course of business of Zycom.
3.6 Litigation. To the best knowledge and reasonable belief of
Zycom, there are no legal, administrative or other proceedings, investigations
or inquiries, product liability or other claims, judgments, injunctions or
restrictions, either threatened, pending, or outstanding against or involving
Zycom, its assets, properties, or business, nor does Zycom know, or have
reasonable grounds to know, of any basis for any such proceedings,
investigations or inquiries, product liability or other claims, judgments,
injunctions or restrictions. In addition, there are no material proceedings
existing, pending or reasonably contemplated to which any officer, director, or
affiliate of Zycom is a party adverse to Zycom or has a material interest
adverse to Zycom.
3.7 Taxes. All federal, state, foreign, county and local income,
profits, franchise, occupation, property, sales, use, gross receipts and other
taxes (including any interest or penalties relating thereto) and assessments
which are due and payable for the years commencing 1996 have been duly reported,
fully paid and discharged as reported by Zycom, and there are no unpaid taxes
which are, or could become a lien on the properties and assets of Zycom, except
as provided for in the financial statements of Zycom, or have been incurred in
the normal course of business of Zycom since that date. All tax returns of any
kind required to be filed for the years commencing 1996 have been filed and the
taxes paid or accrued. There are no disputes as to taxes of any nature payable
by Zycom.
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3.8 Hazardous Materials. No hazardous material has been released,
placed, stored, generated, used, manufactured, treated, deposited, spilled,
discharged, released, or disposed of on or under any real property currently or
previously owned or leased by Zycom or any of its subsidiaries.
3.9 Legality of Shares to be Issued. The shares of common stock of
Zycom to be issued by Zycom pursuant to this Agreement, when so issued and
delivered, will have been duly and validly authorized and issued by Zycom and
will be fully paid and nonassessable.
3.10 Accuracy of All Statements Made by Zycom. No representation or
warranty by Zycom in this Agreement, nor any statement, certificate, schedule,
or exhibit hereto furnished or to be furnished by Zycom pursuant to this
Agreement, nor any document or certificate delivered to Xxxxxxxx.xxx pursuant to
this Agreement or in connection with actions contemplated hereby, contains or
shall contain any untrue statement of material fact or omits to state or shall
omit to state a material fact necessary to make the statements contained therein
not misleading.
4. Covenants of the Parties.
4.1 Corporate Records.
a. Simultaneous with the execution of this Agreement by
Xxxxxxxx.xxx, if not previously furnished, such entity shall deliver to Zycom
copies of the articles of incorporation, as amended, and the current bylaws of
Xxxxxxxx.xxx, and copies of the resolutions duly adopted by the board of
directors of Xxxxxxxx.xxx approving this Agreement and the transactions herein
contemplated.
b. Simultaneous with the execution of this Agreement by Zycom,
if not previously furnished, such entity shall deliver to Xxxxxxxx.xxx copies of
the articles of incorporation, as amended, and the current bylaws of Zycom, and
copies of the resolutions duly adopted by the board of directors of Zycom
approving this Agreement and the transactions herein contemplated.
4.2 Access to Information.
a. Zycom and its authorized representatives shall have full
access during normal business hours to all properties, books, records,
contracts, and documents of Xxxxxxxx.xxx, and Xxxxxxxx.xxx shall furnish or
cause to be furnished to Zycom and its authorized representatives all
information with respect to its affairs and business as Zycom may reasonably
request. Zycom shall hold, and shall cause its representatives to hold
confidential, all such information and documents, other than information that
(i) is in the public domain at the time of its disclosure to Zycom; (ii) becomes
part of the public domain after disclosure through no fault of Zycom; (iii) is
known to Zycom or any of its officers or directors prior to disclosure; or (iv)
is disclosed in accordance with the written consent of Xxxxxxxx.xxx. In the
event this Agreement is terminated
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prior to Closing, Zycom shall, upon the written request of Xxxxxxxx.xxx,
promptly return all copies of all documentation and information provided by
Xxxxxxxx.xxx hereunder.
b. Xxxxxxxx.xxx and its authorized representatives shall
have full access during normal business hours to all properties, books, records,
contracts, and documents of Zycom, and Zycom shall furnish or cause to be
furnished to Xxxxxxxx.xxx and its authorized representatives all information
with respect to its affairs and business Xxxxxxxx.xxx may reasonably request.
Xxxxxxxx.xxx shall hold, and shall cause its representatives to hold
confidential, all such information and documents, other than information that
(i) is in the public domain at the time of its disclosure to Xxxxxxxx.xxx; (ii)
becomes part of the public domain after disclosure through no fault of
Xxxxxxxx.xxx; (iii) is known to Xxxxxxxx.xxx or any of its officers or directors
prior to disclosure; or (iv) is disclosed in accordance with the written consent
of Zycom. In the event this Agreement is terminated prior to Closing,
Xxxxxxxx.xxx shall, upon the written request of Zycom, promptly return all
copies of all documentation and information provided by Zycom hereunder.
4.3 Actions Prior to Closing. From and after the date of this
Agreement and until the Closing Date:
a. Zycom and Xxxxxxxx.xxx shall each carry on its business
diligently and substantially in the same manner as heretofore, and neither party
shall make or institute any unusual or novel methods of purchase, sale,
management, accounting or operation.
b. Neither Zycom nor Xxxxxxxx.xxx shall enter into any
contract or commitment, or engage in any transaction not in the usual and
ordinary course of business and consistent with its business practices.
c. Neither Zycom nor Xxxxxxxx.xxx shall amend its articles of
incorporation or bylaws or make any changes in authorized or issued capital
stock, except as provided in this Agreement.
d. Neither Zycom nor Xxxxxxxx.xxx shall grant any options,
warrants, or other rights to purchase stock of such entity, except as provided
in this Agreement.
e. Zycom and Xxxxxxxx.xxx shall each use its best efforts
(without making any commitments on behalf of the company) to preserve its
business organization intact.
f. Neither Zycom nor Xxxxxxxx.xxx shall do any act or omit to
do any act, or permit any act or omission to act, which will cause a material
breach of any material contract, commitment, or obligation of such party.
g. Zycom and Xxxxxxxx.xxx shall each duly comply with all
applicable laws as may be required for the valid and effective issuance or
transfer of stock contemplated by this Agreement.
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h. Neither Zycom nor Xxxxxxxx.xxx shall sell or dispose of any
property or assets, except products sold in the ordinary course of business.
i. Zycom and Xxxxxxxx.xxx shall each promptly notify the other
of any lawsuits, claims, proceedings, or investigations that may be threatened,
brought, asserted, or commenced against it, its officers or directors involving
in any way the business, properties, or assets of such party.
4.4 No Covenant as to Tax or Accounting Consequences. It is
expressly understood and agreed that neither Zycom nor its officers or agents
has made any warranty or agreement, expressed or implied, as to the tax or
accounting consequences of the transactions contemplated by this Agreement or
the tax or accounting consequences of any action pursuant to or growing out of
this Agreement.
4.5 Indemnification. Xxxxxxxx.xxx shall indemnify Zycom for any
loss, cost, expense, or other damage (including, without limitation, attorneys'
fees and expenses) suffered by Zycom resulting from, arising out of, or incurred
with respect to the falsity or the breach of any representation, warranty, or
covenant made by Xxxxxxxx.xxx herein, and any claims arising from the operations
of Xxxxxxxx.xxx prior to the Closing Date. Zycom shall indemnify and hold
Xxxxxxxx.xxx harmless from and against any loss, cost, expense, or other damage
(including, without limitation, attorneys' fees and expenses) resulting from,
arising out of, or incurred with respect to, or alleged to result from, arise
out of or have been incurred with respect to, the falsity or the breach of any
representation, covenant, warranty, or agreement made by Zycom herein, and any
claims arising from the operations of Zycom prior to the Closing Date. The
indemnity agreement contained herein shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any party
and shall survive the consummation of the transactions contemplated by this
Agreement.
4.6 Publicity. The parties agree that no publicity, release, or
other public announcement concerning this Agreement or the transactions
contemplated by this Agreement shall be issued by any party hereto without the
advance approval of both the form and substance of the same by the other parties
and their counsel, which approval, in the case of any publicity, release, or
other public announcement required by applicable law, shall not be unreasonably
withheld or delayed.
4.7 Expenses. Except as otherwise expressly provided herein, each
party to this Agreement shall bear its own respective expenses incurred in
connection with the negotiation and preparation of this Agreement, in the
consummation of the transactions contemplated hereby, and in connection with all
duties and obligations required to be performed by each of them under this
Agreement.
4.8 Further Actions. Each of the parties hereto shall take all such
further action, and execute and deliver such further documents, as may be
necessary to carry out the transactions contemplated by this Agreement.
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4.9 Finders. Except as provided herein, no finder's fees or other
compensation has been paid or is due or payable in connection with this
transaction by either party.
5. Conditions Precedent to Zycom's Obligations. Each and every
obligation of Zycom to be performed on the Closing Date shall be subject to the
satisfaction prior thereto of the following conditions:
5.1 Truth of Representations and Warranties. The representations and
warranties made by Xxxxxxxx.xxx in this Agreement or given on its behalf
hereunder shall be substantially accurate in all material respects on and as of
the Closing Date with the same effect as though such representations and
warranties had been made or given on and as of the Closing Date.
5.2 Performance of Obligations and Covenants. Xxxxxxxx.xxx shall
have performed and complied with all obligations and covenants required by this
Agreement to be performed or complied with by it prior to or at the Closing.
5.3 Officer's Certificate. Zycom shall have been furnished with a
certificate (dated as of the Closing Date and in form and substance reasonably
satisfactory to Zycom), executed by an executive officer of Xxxxxxxx.xxx,
certifying to the fulfillment of the conditions specified in subsections 5.1 and
5.2 hereof.
5.4 No Litigation or Proceedings. There shall be no litigation or
any proceeding by or before any governmental agency or instrumentality pending
or threatened against any party hereto that seeks to restrain or enjoin or
otherwise questions the legality or validity of the transactions contemplated by
this Agreement or which seeks substantial damages in respect thereof.
5.5 No Material Adverse Change. As of the Closing Date there shall
not have occurred any material adverse change, financially or otherwise, which
materially impairs the ability of Xxxxxxxx.xxx to conduct its business or the
earning power thereof on the same basis as in the past.
5.6 Shareholders' Execution of Subscription Agreement. Each of the
Shareholders shall have duly executed and delivered a Subscription Agreement in
the form as set forth in Schedule "B" as of the Closing Date and shall have
represented therein that he, she, or it is an accredited investor as set forth
in such form.
6. Conditions Precedent to Obligations of Xxxxxxxx.xxx. Each and every
obligation of Xxxxxxxx.xxx to be performed on the Closing Date shall be subject
to the satisfaction prior thereto of the following conditions:
6.1 Truth of Representations and Warranties. The representations and
warranties made by Zycom in this Agreement or given on its behalf hereunder
shall be substantially accurate
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in all material respects on and as of the Closing Date with the same effect as
though such representations and warranties had been made or given on and as of
the Closing Date.
6.2 Performance of Obligations and Covenants. Zycom shall have
performed and complied with all obligations and covenants required by this
Agreement to be performed or complied with by it prior to or at the Closing.
6.3 Officer's Certificate. Xxxxxxxx.xxx shall have been furnished
with a certificate (dated as of the Closing Date and in form and substance
reasonably satisfactory to Xxxxxxxx.xxx), executed by an executive officer of
Zycom, certifying to the fulfillment of the conditions specified in subsections
6.1 and 6.2 hereof.
6.4 No Litigation or Proceedings. There shall be no litigation or
any proceeding by or before any governmental agency or instrumentality pending
or threatened against any party hereto that seeks to restrain or enjoin or
otherwise questions the legality or validity of the transactions contemplated by
this Agreement or which seeks substantial damages in respect thereof.
6.5 No Material Adverse Change. As of the Closing Date there shall
not have occurred any material adverse change, financially or otherwise, which
materially impairs the ability of Zycom to conduct its business.
6.6 No Liabilities. As of the Closing Date Zycom shall not have
aggregate liabilities in excess of $1,000.
7. Change of Management. Upon and as a condition of Closing this
Agreement:
7.1 At Closing Zycom will present the resignations of each and every
officer and director of Zycom effective as of the completion of the Closing,
together with a duly adopted appointment of Euburn Xxxxxxx X. Xxxxx and Xxxxx
Xxxxx as directors of Zycom effective immediately following the Closing of this
Agreement. Prior to Closing Xxxxxxxx.xxx will furnish material information of
Euburn Xxxxxxx X. Xxxxx and Xxxxx Xxxxx as nominees to be appointed by the Board
of Directors of Zycom. Zycom reserves the right to refuse to cause the
appointment of any or all such persons as directors of Zycom if, after review of
the foregoing information concerning said persons, it is the opinion of Zycom
that the election of such persons would not be in the best interests of Zycom.
7.2 Xxxxxxxx.xxx reserves the right to terminate this Agreement if
nominees selected by it are not appointed as set forth above.
8. Closing.
8.1 Time and Place. The Closing of this transaction ("Closing")
shall take place at 00 Xxxx 000 Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx, at 10:00
am, on Monday, April 24, 2000, or
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at such other time and place as the parties hereto shall agree upon. Such date
is referred to in this Agreement as the "Closing Date."
8.2 Documents To Be Delivered by Xxxxxxxx.xxx. At the Closing
Xxxxxxxx.xxx shall deliver to Zycom the following documents:
a. Copies of Schedule "B" executed by each of the Shareholders
of Xxxxxxxx.xxx and the certificates for the number of shares of class A and B
common stock of Xxxxxxxx.xxx in the manner and form required by subsection 1.1
hereof.
b. Stock certificates in the name of Zycom representing all of
the outstanding class A and B common shares of stock of Xxxxxxxx.xxx. tendered
by the Shareholders.
c. The certificate required pursuant to subsection 5.3 hereof.
d. A certificate of good standing from the State of Delaware
dated not more than twenty days prior to Closing.
e. A signed consent and/or minutes of Xxxxxxxx.xxx's directors
approving this Agreement and each matter to be approved under this Agreement.
f. Stock option conversion forms required pursuant to
subsection 1.3 hereof.
g. Such other documents of transfer, certificates of authority,
and other documents as Zycom may reasonably request.
8.3 Documents To Be Delivered by Zycom. At the Closing Zycom shall
deliver to Xxxxxxxx.xxx the following documents:
a. Certificates for the number of shares of series A and B
common stock of Zycom as determined in subsection 1.2 hereof, or a single
certificate in the name of Xxxxxxxx.xxx for the aggregate number of shares.
b. The certificate required pursuant to subsection 6.3 hereof.
c. A certificate of good standing from the State of Colorado
dated not more than twenty days prior to Closing, provided that if the change of
domicile shall be effected prior to Closing, a copy of the certificate of
incorporation and certificate of merger shall be sufficient.
d. A signed consent and/or minutes of Zycom's directors
approving this Agreement, and each matter to be approved under this Agreement,
approving the stock dividend and
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change of domicile as required by subsection 1.4 hereof, approving the amendment
to the articles of incorporation as required pursuant to subsection 1.5 hereof,
calling a meeting of the shareholders as required pursuant to subsection 1.6
hereof, and appointing new directors as required pursuant to subsection 7.1
hereof.
e. The resignations of each and every officer and director of
Zycom as required pursuant to subsection 7.1 hereof.
f. A duly adopted and executed stock option plan and such stock
option conversion documents as required pursuant to subsection 1.3 hereof.
g. A form of the reporting company agreement as required
pursuant to subsection 1.8 hereof.
h. Warrant certificates for 2,500,000 shares each to Business
Development Corporation and GJM Trading Partners Ltd. as required pursuant to
subsection 1.7 hereof.
i. A stock certificate and warrant certificate for 31,682
shares each to Business Development Corporation as required pursuant to
subsection 1.9 hereof.
j. Such other documents of transfer, certificates of authority,
and other documents as Xxxxxxxx.xxx may reasonably request.
9. Termination. This Agreement may be terminated by Zycom or
Xxxxxxxx.xxx by notice to the other if, (i) at any time prior to the Closing
Date any event shall have occurred or any state of facts shall exist that
renders any of the conditions to its or their obligations to consummate the
transactions contemplated by this Agreement incapable of fulfillment, or (ii) on
April 28, 2000, if the Closing shall not have occurred.
10. Liquidated Damages. Notwithstanding anything in this Agreement to the
contrary, if, on the Closing Date, either Zycom or Xxxxxxxx.xxx (i) has complied
with all of the conditions to Closing contained in this Agreement; (ii) has
notified the other party of the intention to consummate the transactions
contemplated under this Agreement; and (iii) is ready and able to close the
transactions and furnishes evidence to that effect to the other party, and if
the Closing does not then occur due to the refusal of the other party to so
consummate the transactions contemplated under this Agreement, then the party
refusing to Close shall immediately pay to the other party liquidated damages of
$100,000.
11. Miscellaneous.
11.1 Notices. All communications provided for herein shall be in
writing and shall be deemed to be given or made when served personally or when
deposited in the United States mail, certified return receipt requested,
addressed as follows, or at such other address as shall be
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designated by any party hereto in written notice to the other party hereto
delivered pursuant to this subsection:
Zycom: Van X. Xxxxxxx, President
000 Xxxxxx Xxxxx
Xxxxx 0000
Xx. Xxxxxxxxxx, XX 00000
With Copy to: Xxxxxx X. Xxxxx, P.C.
Attorney at Law
00 Xxxx 000 Xxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
Xxxxxxxx.xxx Euburn X.X. Xxxxx, President
11410 Xxxxx Xxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
11.2 Default. Should any party to this Agreement default in any of
the covenants, conditions, or promises contained herein, the defaulting party
shall pay all costs and expenses, including a reasonable attorney's fee, which
may arise or accrue from enforcing this Agreement, or in pursuing any remedy
provided hereunder or by the statutes of any state.
11.3 Assignment. This Agreement may not be assigned in whole or in
part by the parties hereto without the prior written consent of the other party
or parties, which consent shall not be unreasonably withheld.
11.4 Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto, their heirs, executors,
administrators, successors and assigns.
11.5 Partial Invalidity. If any term, covenant, condition, or
provision of this Agreement or the application thereof to any person or
circumstance shall to any extent be invalid or unenforceable, the remainder of
this Agreement or application of such term or provision to persons or
circumstances other than those as to which it is held to be invalid or
unenforceable shall not be affected thereby and each term, covenant, condition,
or provision of this Agreement shall be valid and shall be enforceable to the
fullest extent permitted by law.
11.6 Entire Agreement. This Agreement, including the schedules
attached hereto and incorporated herein, constitutes the entire understanding
between the parties hereto with respect to the subject matter hereof and
supersedes all negotiations, representations, prior discussions, letters
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of intent, and preliminary agreements between the parties hereto relating to the
subject matter of this Agreement.
11.7 Interpretation of Agreement. This Agreement shall be
interpreted and construed as if equally drafted by all parties hereto.
11.8 Survival of Covenants, Etc. All covenants, representations, and
warranties made herein to any party, or in any statement or document delivered
to any party hereto, shall survive the making of this Agreement and shall remain
in full force and effect until the obligations of such party hereunder have been
fully satisfied.
11.9 Further Action. The parties hereto agree to execute and deliver
such additional documents and to take such other and further action as may be
required to carry out fully the transactions contemplated herein.
11.10 Amendment. This Agreement or any provision hereof may not be
changed, waived, terminated, or discharged except by means of a written
supplemental instrument signed by the party or parties against whom enforcement
of the change, waiver, termination, or discharge is sought.
11.11 Full Knowledge. By their signatures, the parties acknowledge
that they have carefully read and fully understand the terms and conditions of
this Agreement, that each party has had the benefit of counsel, or has been
advised to obtain counsel, and that each party has freely agreed to be bound by
the terms and conditions of this Agreement.
11.12 Headings. The descriptive headings of the various sections or
parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
11.13 Counterparts. This Agreement may be executed in two or more
partially or fully executed counterparts, each of which shall be deemed an
original and shall bind the signatory, but all of which together shall
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto executed the foregoing Agreement and
Plan of Reorganization on the _____ day of April 2000, to be effective as of the
day and year first above written.
Zycom, Inc.
By /s/ Van X. Xxxxxxx
-----------------------------
Van X. Xxxxxxx, President
Xxxxxxxx.xxx, Inc.
By /s/ Euburn X.X. Xxxxx
-----------------------------
Euburn X.X. Xxxxx, President
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INDEX OF SCHEDULES
Schedule "A" List of Xxxxxxxx.xxx Shareholders exchanging shares
Schedule "B" Form of Subscription Agreement
Schedule "C" Bridge financing agreement dated March 24, 2000
Schedule "D" Form of reporting company agreement
Schedule "E" Form of warrant certificate
Schedule "F" List of Xxxxxxxx.xxx subsidiaries
Schedule "G" List of outstanding Xxxxxxxx.xxx options, warrants,
etc.
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SCHEDULE "A"
TO THE
AGREEMENT AND PLAN OF REORGANIZATION
NO. OF CLASS A SHARES NO. OF SERIES A SHARES
NAME OF OF XXXXXXXX.XXX OF ZYCOM
SHAREHOLDER TO BE TRANSFERRED TO BE ISSUED
----------- ---------------------- --------------------
Xxxx Xx Xxxxxxx 49,509 49,509
Xxxx Xxxxx 325,000 325,000
Xxxxxx X. Xxxxx 200,000 200,000
Xxxx Xxxxxx 75,000 75,000
Xxxxx Xxxxx 1,516,666 1,516,666
Xxxxx Dates 150,000 150,000
Euburn Xxxxxxx X. Xxxxx 8,000,000 8,000,000
Xxxxxx Gold 652,000 652,000
Xxxxxxxxx Xxxxx 35,000 35,000
Xxxxxx Xxxxxx 180,000 180,000
Lost Lake Enterprises Trust 720,452 720,452
Lynnwood Leasing Services 662,650 662,650
Xxxx X. & Xxxxxxxxx X. Xxxxxx 205,000 205,000
Xxxxx Xxxxxx 50,000 50,000
Xxxxxx X. Xxxxx 647,579 647,579
Xxxxx X. Xxxxx 1,027,600 1,027,600
National Security Analysts, Inc. 198,218 198,218
Xxxxxxx X. Xxxxxxxx 100,000 100,000
Xxx Xxxxxxxx 180,000 180,000
Xxxxxx Xxx 1,000,000 1,000,000
Xxxxxx Xxxxxxx-Xxxxxx 300,000 300,000
---------- ----------
TOTAL 16,274,674 16,274,674
NO. OF CLASS B SHARES NO. OF SERIES B SHARES
NAME OF OF XXXXXXXX.XXX OF ZYCOM
SHAREHOLDER TO BE TRANSFERRED TO BE ISSUED
----------- ------------------- --------------
Euburn X.X. Xxxxx 3,500,000 3,500,000
Xxxxx Xxxxx 1,250,000 1,250,000
---------- ----------
TOTAL 4,750,000 4,750,000
---------- ----------
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