EXHIBIT 10.1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is entered into as
of the 21st day of November, 2000, by and among Comercis, Inc., a Delaware
corporation ("Comercis") and Rocky Mountain Financial Enterprises, Inc., a
Colorado corporation ("RMFE")
WHEREAS, Comercis is authorized to issue up to 50,000,000 shares of
common stock ("Comercis Common Stock") of which 21,452,712 shares are issued and
outstanding; and
WHEREAS, RMFE is authorized to issue up to 20,000,000 shares of common
stock ("RMFE Stock") of which 19,737,432 shares are issued and outstanding; and
WHEREAS, the respective Boards of Directors of RMFE and Comercis
believe it to be in the best interests of their respective corporations and
shareholders for Comercis to merge with and into RMFE (Comercis and RMFE
sometimes referred to as the "Constituent Corporations") upon the terms and
conditions herein contained; and in connection therewith have each adopted,
approved and authorized the execution and delivery of this Agreement and Plan of
Merger (the "Agreement"); and
WHEREAS, the Board of Directors of Comercis has submitted this
Agreement and the subject merger to Comercis shareholders for approval as
required by the corporate law of the State of Delaware.
NOW THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements herein contained, the
parties hereto do hereby agree as follows:
I. MERGER
1.01 EFFECTIVE TIME. The merger contemplated by this Agreement shall be
effective on the date and time that the Certificate of Merger is filed with the
Secretary of State of the State of Delaware (the "Effective Time").
1.02 MERGER. Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with the General Corporation Law of the State
of Delaware (the "GCL"), Comercis shall be merged with and into RMFE at the
Effective Time (the "Merger"). As of the Effective Time, the separate corporate
existence of Comercis shall cease and RMFE shall continue as the surviving
corporation (the "Surviving Corporation") in Colorado and shall succeed to and
assume all the rights and obligations of Comercis in accordance with the
Colorado Revised Statutes. Without limiting the generality of the foregoing:
(a) RMFE, as the surviving corporation shall continue its
corporate existence under the laws of the State of Colorado and shall possess
all of the rights, privileges, immunities, powers, franchises and authority
(both public and private) of, and be subject to all of the restrictions,
disabilities and duties of RMFE and Comercis;
(b) all the assets and property of Comercis of every kind,
nature and description (real, personal and mixed and both tangible and
intangible) and every interest therein, wheresoever located, including without
limitation all debts or other obligations belonging or due to Comercis, all
stock subscriptions, options, warrants, claims and chooses in action shall be
and be deemed to be vested, absolutely and unconditionally in RMFE (to the same
extent, degree and manner as previously vested in Comercis);
(c) all debts and obligations of Comercis, all rights of
creditors of Comercis and all liens encumbering any of the property of RMFE
vested in Comercis shall remain in full force and effect without modification or
impairment and shall be and be deemed to be enforceable against RMFE and its
assets and properties with the same full force and effect as if such debts,
obligations or liens had been originally incurred or created by RMFE in its own
name and for its own behalf.
1.03 CLOSING. Subject to the satisfaction or waiver of the last of the
conditions set forth in Article VI hereof, the closing of the Merger will take
place at 10:00 am on December 14, 2000, at the offices of RMFE, at the offices
of Comercis, Inc., or at such other time and place as the parties to this
Agreement shall agree (the "Closing Date"). Subject to the terms and conditions
of this Agreement, on the Closing Date: (a) the parties hereto shall each
deliver to the other the documents, agreements, payments and consideration
required to be delivered by each to the other party hereto as herein expressly
provided and (b) the Constituent Corporations shall execute two originals of a
Certificate of Merger in the forms required for filing with the Secretary's of
State of Delaware and Colorado, which Certificates of Merger shall be filed by
the parties with the Secretary's of State of Delaware and Colorado immediately
after execution on the Closing Date. Subsequent to the Closing the parties
hereto shall thereafter execute, acknowledge, deliver and/or record such other
and further instruments, documents or certificates and/or take an perform such
other and further actions as may be required to effect and/or implement the
merger.
1.04 NAME. The name of the Surviving Corporation shall be "Rocky
Mountain Financial Enterprises, Inc."
1.05 CONSTITUTIONAL DOCUMENTS, DIRECTORS AND OFFICERS. On and as of the
Effective Time:
(a) The Certificate of Incorporation of RMFE on such date in
full force and effect shall be the Certificate of Incorporation of RMFE, as the
surviving corporation, until the same shall be altered, amended, modified,
terminated or rescinded in the manner provided by the Colorado Revised Statutes;
which rights of alteration, amendment, modification, termination and/or
rescission are hereby expressly reserved by RMFE;
(b) The By-Laws of RMFE on such date in full force and effect,
shall be the By-Laws of RMFE, as the surviving corporation, until the same shall
be altered, amended, modified, terminated or rescinded in the manner provided in
the Certificate of Incorporation and/or the laws of Colorado; which rights of
alteration, amendment, modification, termination and/or rescission are hereby
expressly reserved by RMFE;
(c) The members of the Board of Directors, and the officers of
RMFE, the Surviving Corporation, shall consist of the directors and officers of
RMFE immediately prior to the Effective Time; each to serve in such capacity
until the earlier of their resignation or removal or until their successors are
duly elected and qualified.
1.06 PRINCIPAL OFFICE. The principal office of the Surviving
Corporation shall be 000 X. Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, Xxxxx 00000.
II. EFFECT OF MERGER ON CAPITAL STOCK OF CONSTITUENT CORPORATIONS
- EXCHANGE OF CERTIFICATES
2.01 CONVERSION OF CAPITAL STOCK OF COMERCIS. As of the Effective Time,
the shares of Comercis Stock shall be converted and exchanged into shares of
RMFE Common Stock and cash consideration in the following manner:
(a) Each issued and outstanding share of Comercis Stock shall, by
virtue of the merger and without any action on the part of the holder thereof,
be converted and exchanged into a unit consisting of .85 fully paid and
nonassessable shares of RMFE Common Stock and a warrant to purchase .25 shares
of RMFE at $0.01 exercisable when the Company has authorized sufficient number
of shares to cover all options, warrants and any other convertible instruments;
(b) After the Effective Time, each holder, other than a Dissenting
Shareholder, of an outstanding certificate which prior to the Effective Time
represented shares of Comercis Stock shall surrender such certificate ("Old
Certificate") to RMFE, and such holder shall be entitled upon such surrender to
receive in exchange therefore a certificate for that number of shares of RMFE
Common Stock which such holder is entitled to receive under Section 2.01(a) of
this Agreement. Until surrendered as contemplated by this sub-section, each Old
Certificate for shares of Comercis Stock shall be deemed at all times after the
Effective Time to represent and evidence (for all corporate purposes) that
number of shares of RMFE Common Stock into which the
shares of Comercis Stock theretofore represented by such Old Certificate shall
have been converted pursuant to Section 2.01(a) hereof. From and after the
Effective Time the sole rights of the holders of Old Certificates representing
shares of Comercis Stock shall be those to which they are entitled as owners of
RMFE Common Stock into which the shares of Comercis Stock evidenced by such Old
Certificates have been converted as herein provided;
(c) Notwithstanding anything in this Agreement to the contrary, any
issued and outstanding shares of Comercis Stock held by a person who complies
with all of the provisions of Delaware law concerning the rights of holders of
Comercis Stock to object to the Merger and require appraisal of their shares
("Dissenting Shares" and "Dissenting Shareholders", as the case may be) shall
not be converted as described in Section 2.01(a) but shall, instead entitle the
holder thereof to receive such consideration as may be determined to be due to
such Dissenting Shareholder pursuant to Delaware law. If, after the Effective
Time, such Dissenting Shareholder withdraws his demand for appraisal or fails to
perfect or otherwise loses his right of appraisal pursuant to Delaware law, each
of his shares shall be deemed to be converted as of the Effective time into the
RMFE Common Stock specified in ss.2.01(a).
III. REPRESENTATIONS AND WARRANTIES OF RMFE
In order to induce Comercis to execute and perform this Agreement, RMFE
does hereby represent, warrant, covenant and agree (which representations,
warranties, covenants and agreements shall be and be deemed to be continuing and
survive the execution and delivery of this Agreement, the Closing and the
Effective Time) as follows:
3.01 ORGANIZATION AND QUALIFICATION
(a) RMFE is a corporation duly organized, validly existing,
and in good standing under the laws of Colorado, with all requisite power and
authority to own, lease, license, and use its properties and assets and to carry
on the business in which it is now engaged. RMFE is duly qualified to transact
the business in which it is engaged and is in good standing as a foreign
corporation in every jurisdiction in which its ownership, leasing, licensing, or
use of property or assets or the conduct of its business makes such
qualification necessary.
(b) RMFE has furnished to Comercis its Certificate of
Incorporation and By-Laws, as presently in effect, certified by the Secretary of
the corporation. RMFE is not in material violation or breach of, or in default
with respect to, any term of its Certificate of Incorporation or By-Laws.
3.02 CAPITALIZATION The authorized capital stock of RMFE consists of
20,000,000 shares of RMFE Common Stock of which 19,737,432 shares were issued
and outstanding as of October 20, 2000.
3.03 AUTHORITY RMFE has all requisite power and authority to execute,
deliver, and perform this Agreement. All necessary corporate proceedings of RMFE
have been or as of the Effective Time will have been duly taken to authorize the
execution, delivery, and performance of this Agreement by RMFE. This Agreement
has been duly authorized, executed, and delivered by RMFE, constitutes the
legal, valid, and binding obligation of, RMFE, and is enforceable as to RMFE in
accordance with its terms subject, as to enforcement of remedies, to applicable
bankruptcy, insolvency, reorganization, moratorium and other laws affecting the
rights of creditors generally and the discretion of courts in granting equitable
remedies. Except for the provisions of the Colorado Revised Statutes governing
the filing of the Certificate of Merger, no consent, authorization, approval,
order, license, certificate, or permit of or from, or declaration or filing
with, any federal, state, local, or other governmental authority or any court or
other tribunal is required by RMFE for the execution, delivery, or performance
of this Agreement by RMFE.
3.04 RMFE COMMON STOCK All of the shares of RMFE Common Stock to be
issued by RMFE pursuant to this Agreement shall be and be deemed to be duly and
validly authorized and, when issued to the shareholders of Comercis in exchange
for their Comercis Stock, duly and validly issued, fully paid and nonassessable
and free and clear of all federal and state issuance, stock and/or company
taxes, liens, claims, encumbrances and charges.
3.05 CERTIFICATE The representations, warranties, covenants and
agreements of RMFE contained in this Agreement, including, without limitation,
those contained in this Article III, are true, accurate and correct in all
respects as of the date hereof and shall be true, accurate and correct and
complete, in all respects, as of the Closing; and at the Closing RMFE shall
deliver to Comercis a certificate, executed by the chief executive officer of
RMFE remaking, on behalf of RMFE, each of the representations, warranties,
covenants and agreements of RMFE set forth in this Agreement, including without
limitation, those set forth in this Article III hereof.
3.06 FINANCIAL STATEMENTS AND CONDITION
(a) RMFE has delivered to Comercis a true, correct, and
complete copy of its 10-KSB for December 31, 1999 ("Registration Statement")
filed pursuant to the Securities Exchange Act of 1934, as amended (the "34 Act")
which contains therein the audited balance sheet, statement of income, statement
of retained earnings, and statement of cash flows of RMFE for the fiscal year
ended December 31, 1999 (the "Audited Financial Statements").
(b) At or prior to Closing, RMFE shall have filed its Form 10Q
for the period ended September 30, 2000, including unaudited financial
statements ("Interim Statements," the Audited Financial Statements and
collectively the "Financial Statements").
(c) The Financial Statements were prepared in accordance with
generally accepted accounting principles ("GAAP") consistently applied
throughout the period involved, are true, correct, and complete in all material
respects, are in accordance with the books and records of RMFE and fairly
present together with the notes thereto, the financial position and results of
operations of RMFE for the periods therein indicated.
(d) Since the dates of the Financial Statements, there have
not been, nor prior to closing will there be, any material adverse changes in
the business or condition, financial or otherwise, of RMFE.
3.07 FILINGS RMFE has delivered (or will deliver, prior to the Closing)
to Comercis true, correct, and complete copies of the Registration Statement
(including exhibits) together with each of its other reports to shareholders and
filings with the Commission for the year ended December 31, 1999 and through the
date of the Closing, RMFE has duly and timely filed (and will, prior to the
Closing, duly and timely file) all reports required to be filed by it under the
Securities Act of 1933, as amended ("33 Act") and the 34 Act (collectively the
"Federal Securities Laws"). None of the foregoing reports nor any reports sent
to the shareholders of RMFE contained any untrue statement of material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements in such reports, in light of the circumstances under which
they were made, not misleading.
3.08 BOARD ACTION During the period from the date hereof until the
Closing, there shall not be taken any action by the Board of Directors of
Comercis without the prior written consent of RMFE in each instance.
IV. REPRESENTATIONS AND WARRANTIES OF COMERCIS
In order to induce RMFE to execute and perform this Agreement, Comercis
does hereby represent, warrant, covenant and agree (which representations,
warranties, covenants and agreements shall be and be deemed to be continuing and
survive the execution and delivery of this Agreement, the Closing and the
Effective Time) as follows:
4.01 ORGANIZATION AND GOOD STANDING Comercis is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware with full power and authority to own or lease its properties and to
carry on its business as presently being conducted and enter into and perform
each of the transactions, covenants and agreements provided for in this
Agreement.
4.02 EXECUTION AND PERFORMANCE AUTHORIZED The execution, delivery and
performance of this Agreement and all other documents and related agreements
contemplated hereunder, have been duly approved by Comercis' board of directors
and shareholders; such execution and delivery and the consummation by Comercis
of the transactions, covenants and agreements contemplated hereunder have been
duly authorized by the taking of all necessary corporate action; and no further
action is required to be taken by law and/or pursuant to the certificate of
incorporation, by-laws or otherwise of Comercis to authorize the execution,
delivery and/or performance of this Agreement, and/or the taking of all action
required to be taken by Comercis with respect to this Agreement and the
consummation of the transactions and performance of this Agreement and the other
agreements contemplated hereunder. The Agreement and the other documents
contemplated hereunder, are valid and binding and fully enforceable against
Comercis in accordance with their respective terms, subject, as to enforcement
of remedies, to applicable bankruptcy, insolvency, reorganization, moratorium
and other laws affecting the rights of creditors generally and the discretion of
courts in granting equitable remedies. No consent, authorization, approval,
order, license, certificate, or permit of or from, or declaration or filing
with, any federal, state, local, or other governmental authority or any court or
other tribunal is required by Comercis for the execution, delivery, or
performance of this Agreement and the other agreements referred to herein.
4.03 ABSENCE OF LITIGATION There is no action, lawsuit, proceeding or
investigation of any kind or nature pending or, to its knowledge, threatened
against Comercis before any court, tribunal or administrative agency or board
which it reasonably expects, individually or in the aggregate, to materially and
adversely: (a) affect the solvency of Comercis, (b) affect its ability to
perform hereunder, or (c) render any one or more of this Agreement and/or any of
the agreements referred to herein and/or the transactions contemplated hereunder
void or voidable.
4.04 NO OTHER DEFAULT The execution and delivery of this Agreement and
the other agreements referred to herein, and the consummation of the
transactions contemplated hereunder will not conflict with or violate or require
any consent under and will not result in any breach or termination of
certificate of incorporation or by-laws of Comercis, or any other agreement to
which Comercis is a party or by which its properties are subject or by which it
is bound. Comercis is not in violation of, or in default under, (i) any term or
provision of its constitutional documents; (ii) any material term or provision
or any financial covenant of any indenture, mortgage, contract, commitment or
other agreement or instrument to which it is a party or by which it or any or
its properties or business is or may be bound or affected; or (iii) any existing
applicable law, rule, regulation, judgment, order or decree of any governmental
agency or court, domestic or foreign, having jurisdiction over it or any of its
properties or business. Comercis owns, possesses or has obtained all
governmental and other licenses, permits, certifications, registrations,
approvals or consents and other authorizations necessary to own or lease, as the
case may be, and to operate its properties and to conduct its business or
operations as presently conducted and all such governmental and other licenses,
permits, certifications, registrations, approvals, consents and other
authorizations are outstanding and in good standing, and there are no
proceedings pending or, to the best of its knowledge, threatened, or any basis
therefor existing, seeking to cancel, terminate or limit such licenses, permits,
certifications, registrations, approvals or consents or authorizations, or
related to the breach or failure to comply of Comercis with any law, rule,
regulation, judgment, order or decree;
4.05 PERMITS AND FILINGS Except for the filing of the Certificate of
Merger, there is no requirement applicable to Comercis to make any further
filing with, or to obtain any permit, authorization, consent or approval of, any
governmental or other regulatory authority as a condition of the lawful
consummation of the transactions contemplated under this Agreement.
4.06 CORPORATE DOCUMENTS Comercis has furnished to RMFE true, correct
and complete copies of its certificate of incorporation, by-laws and minute
book, and a certificate of good standing from the State of Delaware dated within
thirty (30) days of the Closing Date. The minute book contains a record, which
is complete and accurate in all material respects, of all meetings and all
corporate actions of the shareholders and Board of Directors of Comercis.
Comercis is not in material violation or breach of, or in default with respect
to, (a) any term of its constitutional documents or any agreement to which it is
a party or by which its assets are bound, or (b) any law, rule, regulation,
judgment, order or decree of any governmental agency or court having
jurisdiction over it or its assets.
4.07 CAPITALIZATION The authorized capital stock of Comercis consists
of 50,000,000 shares of common stock ("Comercis Stock") of which 21,452,712
shares are issued and outstanding ("Outstanding Comercis Stock"). The shares of
Outstanding Comercis Stock are duly authorized, validly issued, fully paid, and
nonassessable. There are no commitments, plans, arrangements to issue, options,
warrants, security, or other rights calling for the issuance of, any shares of
capital stock or other ownership interest in Comercis or any security or other
instrument convertible into, exercisable for, or for capital stock of or
ownership in Comercis other than those disclosed in Schedule 4.07 attached
hereto.
4.08 TAX AND OTHER LIABILITIES Comercis has no liability of any nature,
accrued, absolute or contingent, secured or unsecured including without
limitation liabilities for payroll and other employee taxes, federal, state,
local, or foreign taxes or liabilities to customers or suppliers, other than
liabilities which are reflected on the Financial Statement. Except for the
liabilities included on the Financial Statement, as of the date of such
Financial Statement, Comercis had no liabilities, either fixed or contingent,
which would have been required to be recorded under GAAP as of such date, and to
the knowledge of Comercis no such liabilities, other than liabilities arising in
the ordinary course of business and/or pursuant to this Agreement have accrued
and/or will accrue between such date and the Effective Time. Comercis has filed
all federal, state, municipal and local tax returns (whether relating to income,
sales, franchise, withholding, real or personal property or otherwise) required
to be filed under the laws of the United States and all applicable states, and
has paid in full all taxes which are due pursuant to such returns or claimed to
be due by any taxing authority or otherwise due and owing. No penalties or other
charges are or will become due with respect to the late filing of any such
return. To the best of the knowledge of Comercis, after due investigation, each
such tax return heretofore filed by Comercis correctly and accurately reflects
the amount of its tax liability thereunder. Comercis has withheld, collected and
paid all other levies, assessments, license fees and taxes to the extent
required and, with respect to payments, to the extent that the same have become
due and payable;
4.09 LITIGATION AND CLAIMS There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or investigation pending
or, or to the knowledge of Comercis threatened, with respect to Comercis or any
of its business, properties, or assets other than those disclosed on Schedule
4.9 attached hereto.
4.10 PROPERTIES As of the Effective Time, Comercis will have good title
to all properties and assets used in its business or owned by it free and clear
of all liens, claims, mortgages, security interests, pledges, charges, and
encumbrances other than those disclosed on Schedule 4.10 attached hereto.
4.11 CONTRACTS AND OTHER INSTRUMENTS Comercis is not a party to nor it
or its assets bound by any agreement of any kind, nature or description except
as set forth in Schedule 4.11 attached hereto. Comercis is not in breach or
violation of or default under any contract or instrument to which Comercis is a
party and/or by which its assets are bound; and no event has occurred which with
the lapse of time or action by a third party could result in a breach or
violation of or default by Comercis under any contract or other instrument to
which Comercis is a party of by which it or any of its assets are bound or
affected, nor is there any court or regulatory order pending against or
affecting Comercis and/or any of its assets. Comercis is not a party to any
agreement performable in the future
4.12 EMPLOYEES Comercis has no employees and no welfare benefit plans
(as defined in Section 3(3) of the Employee Retirement Income Security Act of
1974 ("ERISA") or otherwise of any kind, nature or description.
4.13 PRE CLOSING ACTIVITY Comercis shall not enter into or consummate
any transactions prior to the Closing other than in the ordinary course of
business and will pay no dividend, or increase the compensation of any officer,
director or employee and will not enter into any transaction or agreement which
would adversely affects its financial condition. Comercis shall deliver to RMFE
at or prior to the Closing copies of any and all reports relating to the
financial and/or business condition of Comercis which are created or published
subsequent to the date hereof together with any reports or communications sent
to the stockholders of Comercis subsequent to the date hereof.
4.14 ACCURACY No statement, representation or warranty contained
herein, in any certificate delivered pursuant to this Agreement, or in any
report filed with the Securities Exchange Commission (the "Commission") contains
or will contain any untrue statement of a material fact or omits to state any
material fact necessary to make such statement, representation or warranty not
misleading.
4.15 PURCHASE FOR INVESTMENT PURPOSES ONLY The shareholders of Comercis
are acquiring the RMFE Common Stock as a result of the Merger for investment
purposes only and not with the view to the resale or distribution thereof. Each
of the shareholders of Comercis is an "accredited investor" under the
regulations promulgated under the 33 Act or otherwise meets one of the
definitions for persons entitled to acquire unregistered securities pursuant to
an exemption from registration under the 33 Act. Neither Comercis nor its
shareholders have received and/or relied upon any representations or warranties
from RMFE other than those contained in this Agreement and the attached
schedules or exhibits hereto. Comercis represents and warrants that it and its
shareholders have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of its investment in
RMFE Common Stock. Comercis and its shareholders understand and acknowledge that
the RMFE Common Stock has not been registered under the Act or under any state
securities act and are being issued to the shareholders of Comercis pursuant to
an exemption from registration under the Act. The reliance by RMFE upon such
exemption is predicated upon the representations and warranties of Comercis
contained herein. In this regard, Comercis and its shareholders understand and
agrees that there may be affixed to the certificates representing the shares of
RMFE Common Stock acquired by the shareholders of Comercis hereunder a legend
advising of the unregistered, restricted nature of the shares.
4.16 CERTIFICATE The representations, warranties, covenants and
agreements of Comercis contained in this Agreement, including, without
limitation, those contained in this Article IV, are true, accurate and correct
in all respects as of the date hereof and shall be true, accurate and correct
and complete, in all respects, as of the Closing; and at the Closing Comercis
shall deliver to RMFE a certificate, executed by the chief executive officer of
Comercis remaking, on behalf of Comercis each of the representations,
warranties, covenants and agreements set forth in this Agreement, including
without limitation, those set forth in this Article IV hereof.
V. COVENANTS AND OTHER AGREEMENTS
5.01 CONDUCT OF BUSINESS OF COMERCIS Except as herein expressly
provided to the contrary or as otherwise agreed to in writing by RMFE, during
the period from the execution of this Agreement until the earlier to occur of
the Effective Time or the termination of this Agreement as herein provided,
Comercis will conduct its operations according to its ordinary and usual course
of business and consistent with past practice. In this regard, except as
expressly provided in this Agreement to the contrary or otherwise agreed to by
RMFE in writing or as required by law or agreement, Comercis will not, between
the date of this Agreement and the earlier to occur of the Effective Time or the
termination of this Agreement as herein provided:
(a) Make or become obligated to make, any payment to any director, officer,
employee, or agent;
(b) Declare any dividend or make any other distribution to shareholders;
(c) Incur any indebtedness for borrowed money except in the ordinary course
of business;
(d) Sell, lease, license, encumber or dispose of any material portion of
its properties or assets except in the ordinary course of business;
(e) Expend funds for any individual capital expenditure in excess of
$25,0000 or aggregate capital expenditures in excess of $100,000;
(f) Amend its certificate of incorporation or by-laws.
(g) Change its business, operations or financial condition, or the manner
of managing or conducting its business and operations if such changes,
if any, have a material adverse effect on such business, operations or
financial condition, taken as a whole;
(h) Change its accounting methods or practices (including, without
limitation, any change in depreciation, amortization and/or goodwill
policies or rates);
(i) Incur any damage, destruction or loss (whether or not covered by
insurance) which materially and adversely affects its assets, business,
operations or financial condition; or
(j) Waive or release any right or claim;
5.02 TRANSACTION COSTS AND EXPENSES Each of the parties hereto shall
pay its own respective costs incurred in connection with this transaction
including, without limitation, all legal, accounting, auditing and appraisal
fees in negotiating and preparing this Agreement and in consummating, closing
and implementing the transactions contemplated hereby.
5.03 SUBSEQUENT EVENTS Each of the parties hereto shall promptly advise
the other parties hereto, in writing of (a) the occurrence of any event which
renders any of the representations or warranties of such party set forth herein
inaccurate in any material respect, and (b) the failure of such party to comply
with or accomplish, in any material respect, any of the covenants or agreements
of such party set forth herein.
5.04 INDEMNITY
(a) Comercis does hereby agree to indemnify and hold harmless
RMFE and its employees, officers, directors and successors against and in
respect of any and all claims, suits, actions, proceedings (formal or informal),
governmental investigations, judgments, deficiencies, set-offs, damages,
settlements, liabilities, and reasonable legal and other expenses (including
reasonable attorneys' fees and defense costs) as and when incurred arising out
of or based upon any breach by Comercis of any representation, warranty,
covenant, or agreement of Comercis contained in this Agreement;
(b) RMFE does hereby agree to indemnify and hold harmless
Comercis and its employees, officers, directors and successors against and in
respect of any and all claims, suits, actions, proceedings (formal or informal),
governmental investigations, judgments, deficiencies, set-offs, damages,
settlements, liabilities, and reasonable legal and other expenses (including
reasonable attorneys' fees and costs of defense) as and when incurred arising
out of or based upon any breach of any representation, warranty, covenant, or
agreement of RMFE contained in this Agreement.
(c) The parties' respective indemnity obligations hereunder
shall be subject to the following terms, limitations and conditions:
(i) A person claiming the right to indemnity coverage
under this Section 5.04 ("indemnitee") shall give the party from whom
he or it seeks indemnity coverage ("indemnitor") prompt notice of the
assertion of any indemnified claim on the basis of which an indemnitee
intends to seek indemnification from an indemnitor as provided herein;
provided, however, that the obligation of an indemnitor shall be
reduced for the failure to give timely notice at any particular time
only to the extent that the indemnitor has been actually prejudiced
thereby;
(ii) The indemnitor shall have the duty to zealously
and competently defend, with counsel selected by indemnitor after
consultation with the primary indemnitee, any matter subject to
indemnity coverage under subparagraphs (a) or (b) of this section and
to pay all costs of such defense. In any case where indemnitor's
obligation to provide a zealous defense is compromised by conflict of
interest between itself and an indemnitee or between indemnitees, the
indemnitor shall, upon the request of an indemnitee, provide separate
legal representation to obviate the conflict of interest. When
indemnitor has assumed the defense obligations of this section,
indemnitor shall have the right to settle the matter without the
indemnitees' consent, provided indemnitor in fact commits sufficient
funds to satisfy the settlement in full. In the event that an
indemnitor fails to defend as provided in this section, any indemnitee
shall have the right (but not the obligation) to select and be
represented by counsel of its choice, to manage its own legal
representation or defense and to settle any claim, debt or other
indemnified matter hereunder, and the indemnitor shall be liable to
such indemnitee for all costs, expenses, damages and settlements
incurred by such indemnitee;
(iii) With respect to any claim for which an
indemnitor shall indemnify any indemnitee, the indemnitor shall be
subrogated to all rights of any indemnitee against any and all third
parties up to the amount paid by indemnitor to indemnitees or set off
by such indemnity against an indemnitor;
(iv) No indemnitor shall be liable for that portion
of any claim for which an indemnitee actually receives from any
insurance, the defense, cost of defense or insurance proceeds covering
such claim (the deductible pertaining to any such insurance shall not
be considered to be insurance proceeds or cost of defense).
5.05 RELATED AGREEMENTS Each of the parties shall execute and deliver
at Closing the related agreements, instruments and documents specified for
delivery at Closing or the Effective Time in Sections 6.02 and 6.03 and
elsewhere in this agreement or in a related agreement to which each,
respectively, is a party.
5.06 INSPECTION At all times prior to the Closing, during normal
business hours an upon reasonable notice, each party will permit the other to
examine its books and records and the books and records of its subsidiaries, to
discuss the same with such party's authorized representative and to make copies
thereof and abstracts there from. It is recognized that each party may provide
the other with information (including, without limitation, information contained
in its books and records and/or pursuant to the inspection described in the
preceding sentence) which is confidential or proprietary information. During the
period from the date hereof until the fourth annual anniversary of the Closing
(or the termination of this Agreement if the Merger is abandoned) the recipient
of any such information shall protect such information from disclosure to
persons, other than members of its own organization and its professional
advisers, in the same manner as it protects its own confidential or proprietary
information from unauthorized disclosure, and not use such information to the
competitive detriment of the disclosing party. In addition if this Agreement is
terminated for any reason, each party shall promptly return or cause to be
returned all documents or other written records of such confidential or
proprietary information, together with all copies of such writings and, in
addition, shall either furnish or cause to be furnished, or shall destroy, or
shall maintain with such standard of care as is exercised with respect to its
own confidential or proprietary information, all copies of all documents or
other written records developed or prepared by such party on the basis of such
confidential or proprietary information. No information shall be considered
confidential or proprietary if it is (a) information already in the possession
of the party to whom disclosure is made, (b) information acquired by the party
to whom disclosure is made from other sources, or (c) information in the public
domain or generally available to interested persons or which at a later date
passes into the public domain or becomes available to the party to whom
disclosure is made without any wrongdoing by the party to whom the disclosure is
made.
VI. CONDITIONS
6.01 CONDITIONS TO OBLIGATION TO EFFECT THE MERGER The respective
obligations of each party to consummate the Merger shall be subject to and
conditioned upon the satisfaction at or prior to the Closing Date of the
following conditions:
(a) To the extent required by the Delaware GCL and/or Colorado
law or the party's certificate of incorporation or by-laws, shareholder approval
shall have been obtained;
(b) No statute, rule, regulation, executive order, decree,
temporary restraining order, preliminary or permanent injunction or other order
issued by any court or competent jurisdiction or other governmental entity
preventing the consummation of the Merger shall be in effect; provided that each
of the parties shall have used reasonable efforts to prevent the entry of any
such injunction or other order and to appeal as promptly as possible any
injunction or other order that may be entered;
(c) There shall not have occurred or been discovered any
material breach or inaccuracy of any representation or warranty made by any
other party in this Agreement, and there shall not have occurred any material
breach of any covenant or obligation required by this Agreement or by law to
have been performed by any other party prior to the Effective Time; and
(d) Each party shall have received all documents and
agreements required to be delivered to it at or before the Closing.
6.02 COMERCIS' OBLIGATIONS AT CLOSING At the Closing, Comercis shall
deliver or cause to be delivered to RMFE, in form satisfactory to RMFE,
the following:
(a) A true copy of the minutes of the meeting of Comercis' Board
of Directors approving the Plan of Merger and the Merger and
authorizing the execution, delivery and performance of this
Agreement;
(b) A certificate of good standing for Comercis issued within
thirty (30) days prior to the Closing Date by the Secretary of
State of Delaware;
(c) All other schedules, certificates and other documents required
by this Agreement or by law to be delivered by Comercis on or
before Closing or the Effective Time; and
(d) A true copy of the notice of shareholders meeting and proof of
service thereof upon all Comercis' shareholders of record in
accordance with the Delaware law together with the minutes of
the shareholder's meeting evidencing shareholder approval of
the Plan of Merger and the execution, delivery and performance
of this Agreement.
6.03 RMFE'S OBLIGATIONS AT CLOSING At or prior to the Closing, RMFE
shall deliver or cause to be delivered to Comercis, in form satisfactory to
Comercis, the following:
(a) A true copy of the minutes of the meeting of the Board of
Directors of RMFE adopting the Agreement and Plan of Merger
and Merger.
(b) An opinion of counsel to Comercis reasonably acceptable to
RMFE with respect to such matters and in such form as shall be
reasonably requested by and acceptable to Comercis;
(c) All of the books and records of RMFE;
(d) A certificate of good standing for RMFE issued within thirty
(30) days prior to the Closing Date by the Secretary of State
of Colorado; and
(e) All other schedules, certificates and other documents required
by this Agreement to be delivered by RMFE on or before Closing
or the Effective Time;
VII. ABANDONMENT
7.01 ABANDONMENT OF MERGER The rights and obligations of the
Constituent Corporations under this Agreement may be terminated and the Merger
abandoned prior to the Effective Time by the mutual agreement of the Board of
Directors of both of the Constituent Corporations.
VIII. MISCELLANEOUS
8.01 BROKERAGE FEES No party to this Agreement has consented to or
authorized any broker or agent to act on its behalf, directly or indirectly, as
a broker or finder in connection with the transaction contemplated by this
Agreement. In the event any claim is made for a broker's or finder's fee in
connection with the transactions contemplated hereunder, the party responsible
for retaining or securing said broker or finder shall be solely responsible for
the payment of any broker's or finder's fees incurred as a result thereof.
Further, the responsible party or parties shall indemnify the other parties
against any loss or liabilities by reason of such broker's or finder's fees.
8.02 FURTHER ACTIONS At any time and from time to time, each party
agrees, at its expense, to take such actions and to execute and deliver such
documents as may be reasonably necessary to effectuate the purposes of this
Agreement.
a) RMFE agrees that as soon as it is practicable after the merger is
completed it will take all steps necessary to increase the number of
authorized shares so that there will be sufficient shares so that all
outstanding options, warrants, and convertible securities will be able
to be exercised or converted into shares of RMFE.
8.03 SURVIVAL Except as otherwise provided herein, the covenants,
agreements, representations, and warranties contained in or made pursuant to
this Agreement shall survive the Effective Time and any delivery of
consideration at Closing or the Effective Time irrespective of any investigation
made by or on behalf of any party.
8.04 MODIFICATION This Agreement and the related instruments and
agreements hereto set forth the entire understanding of the parties with respect
to the subject matter hereof, supersede all existing agreements among them
concerning such subject matter, and may be modified only by a written instrument
duly executed by all of the parties hereto.
8.05 NOTICES All notices, elections, reports or other correspondence
required or permitted hereunder shall be in writing and deemed to have been
properly given or delivered when mailed by certified mail, return receipt
requested, postage prepaid, delivered by overnight express courier, delivery
fees prepaid, or transmitted by fax with receipt confirmed, to the party to whom
directed at the below specified addresses:
If to RMFE:
Xxxxxxx X. Xxxxxxx, Esq.
0000 Xxxxxxx Xxxx
Xxxxxx, XX 00000
If to Comercis:
Xxxxx Xxxxx, President and CEO
Comercis, Inc.
000 Xxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxx 00000
With a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Comercis, Inc
000 Xxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxx 00000
Any such notice shall be deemed given three days after deposit with the mail,
one day following delivery thereof to an overnight express courier or upon
confirmation of receipt when sent by fax. The address of a party may be changed
in accordance with the notice provisions of this section.
8.06 WAIVER Any waiver by any party of a breach of any provision of
this Agreement shall not operate as or be construed to be a waiver of any other
breach of that provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions will not be considered a waiver, or
deprive that party, of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.
8.07 BINDING EFFECT The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, and in addition shall inure to the benefit of the
indemnitees and their respective successors, assigns, heirs, and personal
representatives.
8.08 NO THIRD-PARTY BENEFICIARIES This Agreement does not create, and
shall not be construed as creating, any rights enforceable by any person not a
party to this Agreement (except as provided in Section 8.07).
8.09 SEVERABILITY AND REFORMATION If any provision of this Agreement is
invalid, illegal, or unenforceable, the balance of this Agreement shall remain
in effect, and if any provision is inapplicable to any person or circumstance,
it shall nevertheless remain applicable to all other persons and circumstances,
in either case unless the result thereof would preclude the consummation in all
material respects of the Merger contemplated by this Agreement and the
associated transactions or result in an unjust modification of the balance of
rights and obligations hereunder. To the extent provided in this section, a
court having jurisdiction of a matter involving the interpretation of this
Agreement shall be authorized to reform this Agreement to the minimum extent
necessary to accomplish the objectives of this section.
8.10 HEADINGS The headings of this Agreement are solely for convenience
of reference and shall be given no effect in the construction or interpretation
of this Agreement.
8.11 GOVERNING LAW To the extent permitted by law, this Agreement shall
be governed by and construed in accordance with the laws of the state of
Colorado giving effect to conflict of laws. To the maximum extent permitted by
law and subject to the provisions of Section 8.14 hereof, any action or
proceeding initiated by any party to this Agreement, any indemnitee or any other
person claiming rights under this Agreement shall be brought in an appropriate
state or federal court in Denver County, Colorado, and any person claiming
rights under this agreement consents to the jurisdiction and proper venue of
such forum.
8.12 SEPARATE COUNTERPARTS This Agreement may be executed in several
identical counterparts, each one of which shall be considered an original and
all of which when taken together shall constitute but one instrument.
8.13 INCORPORATION OF RECITALS, EXHIBITS AND SCHEDULES All related
instruments and agreements executed in connection herewith are incorporated
herein by this reference and expressly made a part of this Agreement.
8.14 ARBITRATION Except in cases where the remedy of preliminary
injunction is reasonably sought by a party because of the irreparability and
immediacy of the harm alleged to be caused or threatened, in the event there
shall arise any dispute or claim in law or equity arising out of this Agreement
or any breach thereof or any resulting transaction between the parties under
this Agreement and if such dispute cannot be resolved through negotiation, the
parties agree that such dispute shall be submitted to arbitration under the
rules and regulations of the American Arbitration Association then obtaining.
The arbitration shall be held in Dallas, Texas before a single arbitrator.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date of the day and year first above written.
ROCKY MOUNTAIN FINANCIAL ENTERPRISES, INC.
By/s/Xxxxx Xxxxx
Xxxxx Xxxxx, President
COMERCIS, INC.
By/s/Xxxxx Xxxxx
Xxxxx Xxxxx, President
Schedule 4.07 Capitalization
Provided
Schedule 4.09 Litigation
Provided
Schedule 4.10 Properties
Provided
Schedule 4.11 Contracts
Provided
