EXHIBIT NO. 2.1
AGREEMENT AND PLAN OF MERGER
BETWEEN
DIGITAL BRIDGE, INC.
AND
24X7 XXXXXXXXXXX.XXX, INC.
AGREEMENT AND PLAN OF MERGER ("Agreement"), dated as of July 31, 2000,
between Digital Bridge, Inc., a Nevada corporation whose address is 0000 Xx
Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxx 00000 ("DGBI"), such corporation being
herein sometimes called the "Surviving Corporation," and 24x7 Xxxxxxxxxxx.xxx,
Inc., a Delaware corporation whose address is 00000 X. Xxxxxxxxx, Xxxxx 000,
Xxxxxx, Xxxxxxx 00000 ("24x7"), such corporation being herein sometimes called
the "Disappearing Corporation," with DGBI and 24x7 being herein sometimes
collectively called the "Constituent Corporations."
I. NAME OF SURVIVING CORPORATION; ARTICLES OF INCORPORATION AND BY-LAWS; BOARD
OF DIRECTORS; OFFICERS
1.01 Name of Surviving Corporation
The corporation which shall survive the merger ("Merger") contemplated
hereby is Digital Bridge, Inc., a Nevada corporation. The name of the
Surviving Corporation shall continue to be "Digital Bridge, Inc."
1.02 Articles of Incorporation and By-laws
The articles of incorporation (as defined in Chapter 78 of the Nevada
Revised Statutes) and the by-laws of DGBI as in effect at the Effective
Time (as defined in Section 3.02 hereof) shall from and after the Effective
Time be the articles of incorporation and the by-laws of the Surviving
Corporation until they are amended.
1.03 Board of Directors and Officers
The directors of DGBI at the Effective Time shall be the directors, and the
officers of DGBI at the Effective Time shall be the officers, of the
Surviving Corporation, each to serve, in each case until his respective
successor shall have been elected and qualified; provided, however, that
Xxxx X. Xxxxxxxx, Xx. shall be elected to the offices of Director and Chief
Executive Officer of DGBI at the closing of this transaction.
II. STATUS AND CONVERSION OF SECURITIES
2.01 Stock of Disappearing Corporation
(a) 24x7 Common Stock. Each share of common stock, par value $ 0.001 per
share, of 24x7 ("24x7 Common Stock") outstanding at the Effective Time
shall, subject to compliance with Section 2.01(d), be converted into
and exchanged for 0.40 shares of common stock, par value $ 0.001 per
share, of DGBI ("DGBI Common Stock"), except that shares of 24x7
Common Stock held in 24x7's treasury at the Effective Time, if any,
shall be cancelled.
(b) Dissenter's Rights. Notwithstanding Section 2.01(a), no share of DGBI
Common Stock shall be issued in respect of any shares of 24x7 Common
Stock, the holders of which shall object to the Merger in writing and
demand payment of the value of their shares pursuant to Section 262 of
the General Corporation Law of the State of Delaware and as a result
payment therefore is made, such holders to have only the rights
provided by such Section 262.
(c) Surrender and Exchange of 24x7 Common Stock. Subject to the provisions
of Section 2.01(a) and 2.01(d), after the Effective Time, each holder
of an outstanding certificate or certificates ("Old Certificates")
theretofore representing shares of 24x7 Common Stock, upon surrender
thereof to Signature Stock Transfer, Inc. ("Exchange Agent"), at 00000
Xxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, shall be entitled to
receive in exchange therefore a certificate or certificates ("New
Certificates"), which DGBI agrees to make available to the Exchange
Agent as soon as practicable after the Effective Time, representing
the number of whole shares of DGBI Common Stock into and for which the
shares of 24x7 Common Stock theretofore represented by such
surrendered Old Certificates have been converted. No certificates or
scrip for fractional shares of DGBI Common Stock will be issued, no
DGBI stock split or dividend shall relate to any fractional share
interest, and no such fractional share interest shall entitle the
owner thereof to vote or to any rights of a shareholder of DGBI. In
lieu of the issuance or recognition of fractional shares of DGBI
Common Stock or interests or rights therein, the Exchange Agent shall
pay [subject to the last sentence of this Section 2.01(c)] to each
holder of an Old Certificate, upon surrender thereof as aforesaid, an
amount of cash equal to the fair market value of any fractional share
of DGBI Common Stock to which such holder would be entitled but for
this Section 2.01(c), without interest. For purposes of such payment,
the fair market value of any fractional share of DGBI Common Stock
shall be determined by taking the average closing price on the OTC: BB
of DGBI Common Stock on the twenty (20) trading days immediately
preceding the Effective Time.
(d) Endorsement of Shares of 24x7 Common Stock. The Old Certificates to be
surrendered by the holders of 24x7 Common Stock shall be properly
endorsed and otherwise in proper form for transfer in accordance with
the share exchange instructions provided to the holders of such
securities.
(e) Stock Transfers. As of the Effective Time, no transfer of the shares
of 24x7 Common Stock outstanding prior to the Effective Time shall be
made on the stock transfer book of the Surviving Corporation. If,
after the Effective Time, Old Certificates are presented to the
Surviving Corporation, they shall be exchanged pursuant to Section
2.01 (c).
2.02 Nonassumption or Nonrecognition of 24x7Options. On and after the
Effective Time, DGBI shall neither assume nor recognize any stock options
outstanding with respect to 24x7 Common Stock. It is the intention of the
24x7 to cause all outstanding stock options to be cancelled or exercised
prior to the Effective Time.
2.03 Capital Stock of DGBI. All issued shares of DGBI Common Stock
outstanding prior to the Effective Time shall continue unchanged as
securities of the Surviving Corporation.
III. STOCKHOLDER APPROVALS; BOARDS OF DIRECTORS' RECOMMENDATIONS; FILING;
EFFECTIVE TIME
3.01 Stockholder Approvals; Boards of Directors' Recommendations
Meetings of the stockholders of 24x7 and DGBI shall be held in accordance
with the General Corporation Law of the States of Delaware and the
corporation laws of the State of Nevada, respectively, as promptly as
possible, after at least 20 days' prior written notice thereof to the
stockholders of the respective Constituent Corporations, in each case,
among other things, to consider and vote upon the adoption and approval of
this Agreement, the Merger and the other transactions, if any, contemplated
hereby. In the event that either party hereto is able to obtain the written
consent of the owners of a majority of its outstanding shares of capital
stock in favor of the Merger, then no notice of a stockholders' meeting
need be given to such party's stockholders and no proxies need to be
solicited from such stockholders to accomplish the Merger. Subject to its
fiduciary duty to its stockholders, the Board of Directors of DGBI shall
recommend to its stockholders that this Agreement, the Merger and the other
transactions contemplated hereby, if any, be adopted and approved. Subject
to its fiduciary duties to its stockholders, the Board of Directors of 24x7
shall recommend to its stockholders that this Agreement, the Merger and the
other transactions contemplated hereby, if any, be adopted and approved.
3.02 Filing; Effective Time
As soon as practicable after the adoption and approval of this Agreement,
the Merger and the other transactions contemplated hereby, if any, by the
respective stockholders of each of the Constituent Corporations (unless one
or more of the conditions contained in Articles VII and VIII have not then
been fulfilled or waived, then as soon as practicable after the fulfillment
or waiver of all such conditions), an appropriate certificate of merger in
the form required by Nevada law shall be executed and filed in the office
of the Secretary of State of the State of Nevada, at which time the Merger
shall become effective ("Effective Time").
3.03 Consent to Service
Upon the effectiveness of the Merger, 24x7, the Disappearing Corporation:
(a) agrees that it may be served with process in the State of Delaware in
accordance with the requirements of law in any proceeding for the
enforcement of any obligation of 24x7;
(b) irrevocably appoints the Secretary of State of the State of Delaware
as its agent to accept service of process in any such proceeding; and
(c) agrees that the courts of the State of Delaware shall retain
jurisdiction over that part of the corporate property within the
limits of the State of Delaware in all matters which may arise as if
the Merger had not taken place.
IV. CERTAIN EFFECTS OF THE MERGER
When the Merger becomes effective, the separate existence of 24x7 shall
cease, 24x7 shall be merged into DGBI, and the Surviving Corporation shall
possess all the rights, privileges, powers and franchises of a public or
private nature, and shall be subject to all the restrictions, disabilities
and duties of each of the Constituent Corporations; and all and singular,
the rights, privileges, powers and franchises of each of the Constituent
Corporations, and all property, real, personal and mixed, and all debts due
to either of the Constituent Corporations on whatever account, as well for
stock subscriptions as all other things in action or belonging to each of
the Constituent Corporations shall be vested in the Surviving Corporation;
and all property, rights, privileges, powers and franchises, and all and
every other interest shall be thereafter as effectively as possible the
property of the Surviving Corporation as they were of the several and
respective Constituent Corporations; and the title to any real estate
vested by deed or otherwise, under the laws of any jurisdiction, in either
of the Constituent Corporations, shall not revert or be in any way impaired
by reason of the Merger; but all rights of creditors and all liens upon any
property of either of the Constituent Corporations shall be preserved
unimpaired, and all debts, liabilities and duties of the respective
Constituent Corporations shall thenceforth attach to the Surviving
Corporation, and may be enforced against it to the same extent as if such
debts, liabilities and duties had been incurred or contracted by it.
V. COVENANTS
5.01 Covenants of 24x7
24x7 agrees that, unless DGBI otherwise agrees in writing:
(a) Certificate of Incorporation and Bylaws. Until the earlier of the
Effective Time or the rightful abandonment or termination of the
Merger pursuant to Article VII or Article VIII or otherwise ("Release
Time"), no amendment will be made in the certificate of incorporation
or bylaws of 24x7;
(b) Shares and Options. Until the Release Time, no shares of capital stock
of 24x7, options or warrants for such shares, rights to subscribe to
or purchase such shares, or securities convertible into or
exchangeable for such shares, shall be issued, granted or sold by
24x7, otherwise than as may be required upon the exercise of 24x7
stock options that were outstanding on the date this Agreement was
signed.
(c) Dividends and Purchases of Stock. Until the Release Time, no dividend
or liquidating or other distribution or stock split shall be
authorized, declared, paid or effected by 24x7 in respect of the
outstanding shares of 24x7 Common Stock.
(d) Borrowing of Money. Until the Release Time, 24x7 shall not borrow
money, guarantee the borrowing of money, engage in any transaction or
enter into any material agreement, except in the ordinary course of
business.
(e) Access. Until the Release Time, 24x7 will afford the officers,
directors, employees, counsel, agents, investment bankers accountants
and other representatives of DGBI free and full access to the plants,
premises, properties, books and records of 24x7, will permit them to
make extracts from and copies of such books and records, and will from
time to time furnish DGBI with such additional financial and operating
data and other information as to the financial condition, results of
operations, business, properties, assets, liabilities or future
prospects of 24x7 as DGBI from time to time may request.
(f) Conduct of Business. Until the Release Time, 24x7 shall conduct its
affairs so that at the Effective Time no representation or warranty of
24x7 will be inaccurate, no covenant or agreement of 24x7 will be
breached, and no condition of this Agreement will remain unfulfilled
by reason of the actions or omissions of 24x7. Except as otherwise
requested by DGBI in writing, until the Release Time, 24x7 will use
its best efforts to preserve the business operations of 24x7 intact,
to keep available the services of its present personnel, to preserve
in full force and effect the contracts, agreements, instruments,
leases, licenses, arrangements and understandings of 24x7, and to
preserve the good will of its suppliers, customers and others having
business relations with any of them. Until the Release Time, 24x7 will
conduct its business and operations in all respects only in the
ordinary course.
(g) Advice of Changes. Until the Release Time, 24x7 will immediately
advise DGBI in a detailed written notice of any fact or occurrence or
any pending or threatened occurrence of which it obtains knowledge and
which (if existing and known at the date of the execution of this
Agreement) would have been required to be set forth or disclosed in or
pursuant to this Agreement or the 24x7 Disclosure Letter (as defined
in Section 6.01 (a) ), which (if existing and known at any time prior
to or at the Effective Time) would make the performance by any party
of a covenant contained in this Agreement impossible or make such
performance materially more difficult than in the absence of such fact
or occurrence, or which (if existing and known at the time of the
Effective Time) would cause a condition to any party's obligations
under this Agreement not to be fully satisfied.
(h) Confidentiality. 24x7 shall insure that all confidential information
which 24x7 or any of its respective officers, directors, employees,
counsel, agents, investment bankers, or accountants may now possess or
may hereafter create or obtain relating to the financial condition,
results of operation, business, properties, assets, liabilities or
future prospects of DGBI, any DGBI affiliate, or any customer or
supplier of DGBI or any such affiliate shall not be published,
disclosed, or made accessible by any of them to any other person or
entity at any time or used by any of them except pending the Effective
Time in the business and for the benefit of 24x7, in each case without
the prior written consent of DGBI; provided, however, that the
restrictions of this sentence shall not apply (i) after the Merger is
rightfully abandoned or terminated pursuant to Article VII or Article
VIII or otherwise, but only to the extent such confidential
information relates to the financial condition, results of operations,
business, properties, assets, liabilities or future prospects of 24x7,
of any affiliate of any of them, or (insofar as such confidential
information was obtained directly by 24x7 or any such affiliate from
any customer or supplier of any of them) of any such customer or
supplier, (ii) as may otherwise be required by law, (iii) as may be
necessary or appropriate in connection with the enforcement of this
Agreement, or (iv) to the extent the information shall have otherwise
become publicly available. 24x7 shall, and shall cause all other such
persons and entities to, deliver to DGBI all tangible evidence of the
confidential information to which the restrictions of the foregoing
sentence apply immediately after the rightful abandonment or
termination of the Merger pursuant to Article VII or Article VIII or
otherwise.
(i) Public Statements. Before 24x7 releases any information concerning
this Agreement, the Merger, or any of the other transaction
contemplated by this Agreement which is intended for or may result in
public dissemination thereof, 24x7 shall cooperate with DGBI, shall
furnish drafts of all documents or proposed oral statements to DGBI
for comments, and shall not release any such information without the
written consent of DGBI. Nothing contained herein shall prevent 24x7
from releasing any information if required to do so by law.
(j) Indemnification. 24x7 agrees to indemnify and hold harmless DGBI and
its officers, directors, managers, employees, agents and counsel,
against any and all losses, liabilities, claims, damages, and expenses
whatsoever (which shall include, for all purposes of this Section
5.01(j), but not be limited to, counsel fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation) as
and when incurred and whether or not involving a third party arising
out of, based upon, or in connection with (i) an untrue statement or
alleged untrue statement of a material fact contained in this
Agreement or any other document relating to this Agreement and the
Merger contemplated thereby, and (ii) any liability under state or
Federal securities laws resulting from any omission or alleged
omission to state a material fact required to be stated in this
Agreement or any other document required hereunder, provided in each
case that such untrue statement, alleged untrue statement, omission,
or alleged omission relates to information furnished by or on behalf
of, or pertaining to, 24x7 or any 24x7 security holder or (ii) any
breach of any representation, warranty, covenant or agreement of 24x7
contained in this Agreement. The foregoing agreement to indemnify
shall be in addition to any liability 24x7 may otherwise have,
including liabilities arising under this Agreement.
5.02 Covenants of DGBI
DGBI agrees that, unless 24x7 otherwise agrees in writing:
(a) Articles of Incorporation and Bylaws. Until the earlier of the
Effective Time or the rightful abandonment or termination of the
Merger pursuant to Article VII or Article VIII or otherwise ("Release
Time"), no amendment will be made in the articles of incorporation or
bylaws of DGBI.
(b) Shares and Options. Until the Release Time, no shares of capital stock
of DGBI, options or warrants for such shares, rights to subscribe to
or purchase such shares, or securities convertible into or
exchangeable for such shares, shall be issued, granted or sold by
DGBI, otherwise than as may be required upon the exercise of DGBI
stock options.
(c) Dividends and Purchases of Stock. Until the Release Time, no dividend
or liquidating or other distribution or stock split shall be
authorized, declared, paid or effected by DGBI in respect of the
outstanding shares of DGBI Common Stock.
(d) Borrowing of Money. Until the Release Time, DGBI shall not borrow
money, guarantee the borrowing of money, engage in any transaction or
enter into any material agreement, except in the ordinary course of
business.
(e) Access. Until the Release Time, DGBI will afford the officers,
directors, employees, counsel, agents, investment bankers accountants
and other representatives of 24x7 free and full access to the plants,
premises, properties, books and records of DGBI and the DGBI
Subsidiaries, will permit them to make extracts from and copies of
such books and records, and will from time to time furnish 24x7 with
such additional financial and operating data and other information as
to the financial condition, results of operations, business,
properties, assets, liabilities or future prospects of DGBI and the
DGBI Subsidiaries as 24x7 from time to time may request.
(f) Conduct of Business. Until the Release Time, DGBI shall conduct its
affairs so that at the Effective Time no representation or warranty of
DGBI will be inaccurate, no covenant or agreement of DGBI will be
breached, and no condition of this Agreement will remain unfulfilled
by reason of the actions or omissions of DGBI. Except as otherwise
requested by 24x7 in writing, until the Release Time, DGBI will use
its best efforts to preserve the business operations of DGBI intact,
to keep available the services of its present personnel, to preserve
in full force and effect the contracts, agreements, instruments,
leases, licenses, arrangements and understandings of DGBI, and to
preserve the good will of its suppliers, customers and others having
business relations with any of them. Until the Release Time, DGBI will
conduct its business and operations in all respects only in the
ordinary course.
(g) Advice of Changes. Until the Release Time, DGBI will immediately
advise 24x7 in a detailed written notice of any fact or occurrence or
any pending or threatened occurrence of which it obtains knowledge and
which (if existing and known at the date of the execution of this
Agreement) would have been required to be set forth or disclosed in or
pursuant to this Agreement or the DGBI Disclosure Letter [as defined
in Section 6.02 (a)], which (if existing and known at any time prior
to or at the Effective Time) would make the performance by any party
of a covenant contained in this Agreement impossible or make such
performance materially more difficult than in the absence of such fact
or occurrence, or which (if existing and known at the time of the
Effective Time) would cause a condition to any party's obligations
under this Agreement not to be fully satisfied.
(h) Confidentiality. DGBI shall insure that all confidential information
which DGBI or any of its officers, directors, employees, counsel,
agents, investment bankers, or accountants may now possess or may
hereafter create or obtain relating to the financial condition,
results of operation, business, properties, assets, liabilities or
future prospects of 24x7, any 24x7 affiliate, or any customer or
supplier of 24x7 or any such affiliate shall not be published,
disclosed, or made accessible by any of them to any other person or
entity at any time or used by any of them except pending the Effective
Time in the business and for the benefit of DGBI , in each case
without the prior written consent of 24x7; provided, however, that the
restrictions of this sentence shall not apply (i) after the Merger is
rightfully abandoned or terminated pursuant to Article VII or Article
VIII or otherwise, but only to the extent such confidential
information relates to the financial condition, results of operations,
business, properties, assets, liabilities or future prospects of
DGBI or of any of its affiliates, or (insofar as such confidential
information was obtained directly by DGBI, any DGBI Subsidiary, or any
such affiliate from any customer or supplier of any of them) of any
such customer or supplier, (ii) as may otherwise be required by law,
(iii) as may be necessary or appropriate in connection with the
enforcement of this Agreement, or (iv) to the extent the information
shall have otherwise become publicly available. DGBI shall, and shall
cause all other such persons and entities to, deliver to 24x7 all
tangible evidence of the confidential information to which the
restrictions of the foregoing sentence apply immediately after the
rightful abandonment or termination of the Merger pursuant to
Article VII or Article VIII or otherwise.
(i) Public Statements. Before DGBI releases any information concerning
this Agreement, the Merger, or any of the other transaction
contemplated by this Agreement which is intended for or may result in
public dissemination thereof, DGBI shall cooperate with 24x7, shall
furnish drafts of all documents or proposed oral statements to 24x7
for comments, and shall not release any such information without the
written consent of 24x7. Nothing contained herein shall prevent DGBI
from releasing any information if required to do so by law.
(j) Indemnification. DGBI agrees to indemnify and hold harmless 24x7 and
its officers, directors, managers, employees, agents and counsel,
against any and all losses, liabilities, claims, damages, and expenses
whatsoever (which shall include, for all purposes of this Section
5.03(j), but not be limited to, counsel fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation) as
and when incurred and whether or not involving a third party arising
out of, based upon, or in connection with (i) untrue statement or
alleged untrue statement of a material fact contained in this
Agreement or in any other document relating to this Agreement and the
Merger contemplated thereby, and (ii) any liability under state or
Federal securities laws resulting from any omission or alleged
omission to state a material fact required to be stated this Agreement
or any other document required hereunder, provided in each case that
such untrue statement, alleged untrue statement, omission, or alleged
omission relates to information furnished by or on behalf of, or
pertaining to, DGBI, any DGBI Subsidiary, or any DGBI security holder
or (ii) any breach of any representation, warranty, covenant or
agreement of DGBI contained in this Agreement. The foregoing agreement
to indemnify shall be in addition to any liability DGBI may otherwise
have, including liabilities arising under this Agreement.
VI. REPRESENTATIONS AND WARRANTIES
6.01 Certain Representations and Warranties of 24x7
24x7 represents and warrants to DGBI as follows:
(a) Disclosure Letter. Section A of a letter ("24x7 Disclosure Letter")
sets forth as to 24x7 its place of incorporation, principal place of
business, jurisdictions in which it is qualified to do business, and the
business which it presently conducts and which it contemplates conducting;
its authorized capitalization, its shares of capital stock outstanding and
the record and beneficial owner of those shares. 24x7 is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, with all requisite power and authority, and
all necessary consents, authorizations, approvals, orders, licenses,
certificates and permits of and from, and declarations and filings with,
all federal, state, local and other governmental authorities and all courts
and other tribunals, to own, lease, license and use its properties and
assets and to carry on the business in which it is now engaged and the
business in which it contemplates engaging. 24x7 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) Capitalization. The authorized capital stock of 24x7 consists of
25,000,000 shares of 24x7 Common Stock, $0.001 par value, of which
25,000,000 shares are outstanding. Each of such outstanding shares of 24x7
Common Stock is validly authorized, validly issued, fully paid and
nonassessable, has not been issued and is not owned or held in violation of
any preemptive right of stockholders, and is owned of record and
beneficially by the following persons in the case of 24x7 in accordance
with the following table:
NAME OF STOCKHOLDER NUMBER OF SHARES
XXXX X. XXXXXXXX, XX. 17,125,000
GLOBALNET XXXXXXXXX.XXX, INC. 5,000,000
XXXX X. XXXXXXXX, XX. 500,000
XXXXX X. XXXX 410,000
XXXXXXXX X. XXXX 30,000
XXXXXXX X. XXXX 30,000
XXXXXXX X. XXXX, UGTMA 30,000
XXXXXX XXXXX 750,000
XXXX X. XXXXXXXX 250,000
XXXX X. XXXXXX 500,000
XXXXX XXXXXXX 250,000
XXX XXXXXX 125,000
TOTAL 25,000,000
in each case free and clear of all liens, security interests, pledges,
charges, encumbrances, stockholders' agreements and voting trusts. There is
no commitment, plan or arrangement to issue, and no outstanding option,
warrant, or other right calling for the issuance of, any share of capital
stock of 24x7 or any security or other instrument convertible into,
exercisable for, or exchangeable for capital stock of 24x7. There is
outstanding no security or other instrument convertible into or
exchangeable for capital stock of 24x7.
(c) Financial Condition. 24x7 has delivered to DGBI true and correct
copies of its unaudited financial statements (profit and loss
statement and a balance sheet). Such financial statements are true and
correct. Since its inception:
(i) There has at no time been a material adverse change in the
financial condition, results of operations, business, properties,
assets, liabilities, or future prospects of 24x7.
(ii) 24x7 has not authorized, declared, paid or effected any dividend
or liquidating or other distribution in respect of its capital
stock or any direct or indirect redemption, purchase or other
acquisition of any stock of 24x7.
(d) Tax and Other Liabilities. 24x7 has no liability of any nature,
accrued or contingent, including without limitation liabilities for
federal, state, local or foreign taxes ("Taxes") and liabilities to
customers or suppliers, except those reflected in the financial
statements provided by 24x7 to the other parties to this Agreement.
24x7 has filed all federal, state and local tax returns required to be
filed by it, and all such tax returns are true and correct and all
taxes due by 24x7 have been paid.
(e) Litigation and Claims. There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or
investigation pending, threatened or in prospect known to 24x7, with
respect to 24x7 or any of its businesses, properties or assets.
(f) Properties. 24x7 has good and marketable title to all properties and
assets used in its business or owned by it, free and clear of all
liens, security interests, mortgages, pledges, charges and
encumbrances (except as set forth in Section D of the 24x7 Disclosure
Letter).
(g) Retirement Plans. 24x7 has no pension, profit-sharing or other
incentive plans or any outstanding bonuses, incentive compensation,
vacations, severance pay, insurance or other benefits, except as set
forth in Section E of the 24x7 Disclosure Letter.
(h) Employees. Section E of the 24x7 Disclosure Letter contains a true and
correct statement of the names of 24x7's employees and consultants,
present rates of compensation (whether in the form of salary, bonuses,
commissions, or other supplemental compensation now or hereafter
payable), and aggregate compensation for the most recent fiscal year.
24x7 has not changed the rate of compensation for any of its
directors, officers or employees except as set forth in Section E of
the 24x7 Disclosure Letter.
(i) Patents, Trademarks, Et Cetera. 24x7 does not own or have pending, nor
is it licensed under, any patent, patent application, trademark,
trademark registration, trade name, service xxxx, copyright, franchise
or other tangible property or asset other than as set forth in Section
C of the 24x7 Disclosure letter, all of which is in good standing and
uncontested.
(j) Authority to Merge. 24x7 has all requisite power and authority to
execute, deliver and perform this Agreement. All necessary corporate
proceedings of 24x7 have been taken to authorize the execution,
delivery and performance of this Agreement by 24x7, other than
approval of the holders of 24x7 Common Stock. This Agreement has been
duly authorized, executed and de- livered by 24x7, constitutes the
legal, valid and binding obligation of 24x7, and is enforceable as to
it in accordance with its terms. Except as set forth elsewhere herein,
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 24x7 for the execution, delivery or performance of this
Agreement by 24x7. No consent of any party to any contract, agreement,
instrument, lease, arrangement or understanding to which 24x7 is a
party, or to which any of its properties or assets are subject, is
required for the execution, delivery or performance of this Agreement
(except for the consents referred to in Section D of the 24x7
Disclosure Letter). At the Effective Time, the Surviving Corp- oration
will acquire all right, title and interest of 24x7 in and to all of
its properties and assets, free and clear of all liens, mortgages,
security interests, pledges, charges and encumbrances (except those
listed in Section D of the 24x7 Disclosure Letter).
(k) Completeness of Disclosure. No representation or warranty by 24x7 in
this Agreement contains or at the Effective Time will contain an
untrue statement of material fact or omits or at the Effective Time
will omit to state a material fact required to be stated therein or
necessary to make the statements made not misleading.
6.02 Certain Representations and Warranties of DGBI.
DGBI represents and warrants to 24x7 as follows:
(a) Disclosure Letter. Section A of a letter ("DGBI Disclosure Letter")
sets forth as to DGBI its place of incorporation, principal place of
business, jurisdictions in which it is qualified to do business, and the
business which it presently conducts and which it contemplates conducting;
its authorized capitalization, its shares of capital stock outstanding and
the record and beneficial owner of those shares as of a date not more than
thirty (30) days preceding the Effective Time. DGBI is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, with all requisite power and authority, and
all necessary consents, authorizations, approvals, orders, licenses,
certificates and permits of and from, and declarations and filings with,
all federal, state, local and other governmental authorities and all courts
and other tribunals, to own, lease, license and use its properties and
assets and to carry on the business in which it is now engaged and the
business in which it contemplates engaging. DGBI 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) Capitalization. The authorized capital stock of DGBI consists of
31,250,000 shares of DGBI Common Stock, and 5,000,000 shares of Preferred
Stock, $0.001 par value, of which 27,750,000 shares of Common Stock and
zero shares of Preferred Stock are outstanding. Each of such outstanding
shares of DGBI Common Stock is validly authorized, validly issued, fully
paid and nonassessable, has not been issued and is not owned or held in
violation of any preemptive right of stockholders. In order to close the
Merger, DGBI will amend it Certificate of Incorporation to provide for a
sufficient number of shares of DGBI Common Stock (10,000,000 shares) to
issue in exchange for the 25,000,000 shares of 24x7 common stock. There is
no commitment, plan or arrangement to issue, and no outstanding option,
warrant, or other right calling for the issuance of, any share of capital
stock of DGBI or any security or other instrument convertible into,
exercisable for, or exchangeable for capital stock of DGBI. There is
outstanding no security or other instrument convertible into or
exchangeable for capital stock of DGBI.
(c) Financial Condition. DGBI has delivered to 24x7 true and correct
copies of its audited and unaudited financial statements (profit and
loss statement and a balance sheet). Such financial statements are
true and correct. Since the end of DGBI's last fiscal year end:
(d) There has at no time been a material adverse change in the financial
condition, results of operations, business, properties, assets,
liabilities, or future prospects of DGBI.
(ii) DGBI has not authorized, declared, paid or effected any dividend
or liquidating or other distribution in respect of its capital
stock or any direct or indirect redemption, purchase or other
acquisition of any stock of DGBI.
(e) Tax and Other Liabilities. DGBI has no liability of any nature,
accrued or contingent, including without limitation liabilities for
federal, state, local or foreign taxes ("Taxes") and liabilities to
customers or suppliers, except those reflected in the financial
statements provided by DGBI to the other parties to this Agreement.
DGBI has filed all federal, state and local tax returns required to be
filed by it, and all such tax returns are true and correct and all
taxes due by DGBI have been paid.
(f) Litigation and Claims. There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or
investigation pending, threatened or in prospect known to DGBI, with
respect to DGBI or any of its businesses, properties or assets.
(g) Properties. DGBI has good and marketable title to all properties and
assets used in its business or owned by it, free and clear of all
liens, security interests, mortgages, pledges, charges and
encumbrances (except as set forth in Section D of the DGBI Disclosure
Letter).
(h) Retirement Plans. DGBI has no pension, profit-sharing or other
incentive plans or any outstanding bonuses, incentive compensation,
vacations, severance pay, insurance or other benefits, except as set
forth in Section E of the DGBI Disclosure Letter.
(i) Employees. Section E of the DGBI Disclosure Letter contains a true and
correct statement of the names of DGBI's employees and consultants,
present rates of compensation (whether in the form of salary, bonuses,
commissions, or other supplemental compensation now or hereafter
payable), and aggregate compensation for the most recent fiscal year.
DGBI has not changed the rate of compensation for any of its
directors, officers or employees except as set forth in Section E of
the DGBI Disclosure Letter.
(j) Patents, Trademarks, Et Cetera. DGBI does not own or have pending, nor
is it licensed under, any patent, patent application, trademark,
trademark registration, trade name, service xxxx, copyright, franchise
or other tangible property or asset other than as set forth in Section
C of the DGBI Disclosure letter, all of which is in good standing and
uncontested.
(k) Authority to Merge. DGBI has all requisite power and authority to
execute, deliver and perform this Agreement. All necessary corporate
proceedings of DGBI have been taken to authorize the execution,
delivery and performance of this Agreement by DGBI, other than
approval of the holders of DGBI Common Stock. This Agreement has been
duly authorized, executed and de- livered by DGBI, constitutes the
legal, valid and binding obligation of DGBI, and is enforceable as to
it in accordance with its terms. Except as set forth elsewhere herein,
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 DGBI for the execution, delivery or
performance of this Agreement by DGBI. No consent of any party to any
contract, agreement, instrument, lease, arrangement or understanding
to which DGBI is a party, or to which any of its properties or assets
are subject, is required for the execution, delivery or performance of
this Agreement (except for the consents referred to in Section D of
the DGBI Disclosure Letter).
(l) Completeness of Disclosure. No representation or warranty by DGBI in
this Agreement contains or at the Effective Time will contain an
untrue statement of material fact or omits or at the Effective Time
will omit to state a material fact required to be stated therein or
necessary to make the statements made not misleading.
(m) Status of DGBI Common Stock to be Issued. Assuming without
investigation that the shares of 24x7 Common Stock at the Effective
Time will be validly authorized, validly issued, fully paid and
nonassessable, the shares of DGBI Common Stock to be issued in the
Merger will, at the Effective Time, be validly authorized and, when
the Merger has become effective and the shares of DGBI Common Stock
have been duly delivered pursuant to the terms of this Agreement, such
shares of DGBI Common Stock will be validly issued, fully paid and
nonassessable.
(n) Business after the Effective Time. For a period of two years or such
shorter period as DGBI on the advice of counsel believes will not
cause the Merger to fail as a tax free reorganization under the
federal tax laws as then construed, DGBI will continue the historic
business of 24x7 or use a significant portion of their historic assets
in a business.
VII. ABANDONMENT AND TERMINATION
7.01 Right of DGBI to Abandon.
DGBI's Board of Directors shall have the right to abandon or terminate the
Merger if any of the following shall not be true or shall not have
occurred, as the case may be, prior to the Effective Time:
(a) Accuracy of Representations and Compliance with Conditions. All
representations and warranties of 24x7 contained in this Agreement
shall be accurate when made and, in addition, shall be accurate as of
the Effective Time as though such representations and warranties were
then made in exactly the same language by 24x7 and regardless of
knowledge or lack thereof on the part of 24x7 or changes beyond their
control; as of the Effective Time, 24x7 shall have performed and
complied with all covenants and agreements and satisfied all
conditions required to be performed and complied with by them at or
before the Effective Time of this Agreement; and DGBI shall have
received a certificate executed by the chief executive officer and the
chief financial officer of 24x7 dated the Effective Time to that
effect.
(b) Other Closing Documents. 24x7 shall have delivered to DGBI at or prior
to the Effective Time such other documents as DGBI may reasonably
request in order to enable DGBI to determine whether the conditions to
its obligations under this Agreement have been met and otherwise to
carry out the provisions of this Agreement.
(c) Legal Action. There shall not have been instituted or threatened any
legal proceeding relating to, or seeking to prohibit or otherwise
challenge the consummation of, the transactions contemplated by this
Agreement, or to obtain substantial damages with respect thereto.
7.02 Right of 24x7 to Abandon
The Board of Directors of 24x7 shall have the right to abandon or terminate
the Merger if any of the following shall not be true or shall not have
occurred, as the case may be, prior to the Effective Time:
(a) Accuracy of Representations and Compliance with Conditions. All
representations and warranties of DGBI contained in this Agreement
shall be accurate when made and, in addition, shall be accurate as of
the Effective Time as though such representations and warranties were
then made in exactly the same language by DGBI and regardless of
knowledge or lack thereof on the part of DGBI or changes beyond their
control; as of the Effective Time, DGBI shall have performed and
complied with all covenants and agreements and satisfied all
conditions required to be performed and complied with by them at or
before the Effective Time of this Agreement; and 24x7 shall have
received a certificate executed by the chief executive officer and the
chief financial officer of the DGBI dated the Effective Time to that
effect.
(b) Other Closing Documents. DGBI shall have delivered to 24x7 at or prior
to the Effective Time such other documents as 24x7 may reasonably
request in order to enable 24x7 to determine whether the conditions to
its obligations under this Agreement have been met and otherwise to
carry out the provisions of this Agreement.
(c) Legal Action. There shall not have been instituted or threatened any
legal proceeding relating to, or seeking to prohibit or otherwise
challenge the consummation of, the transactions contemplated by this
Agreement, or to obtain substantial damages with respect thereto.
VIII. ADDITIONAL TERMS OF ABANDONMENT
8.01 Mandatory Abandonment
The Merger shall be abandoned or terminated if:
The holders of at least the requisite majority of the shares of any of the
Constituent Corporations, as required by applicable state laws, shall not
have voted in favor of the adoption and approval of this Agreement, the
Merger and the other transactions contemplated hereby.
8.02 Optional Abandonment
In addition to the provisions of Article VII, the Merger may be abandoned
or terminated at or before the Effective Time, notwithstanding the adoption
and approval of this Agreement, the Merger and the other transactions
contemplated hereby by the stockholders of the parties hereto:
(a) by mutual agreement of the Boards of Directors of the Constituent
Corporations; or
(b) at the option of any of the respective Boards of Directors of the
Constituent Corporations, if the Effective Time shall not have
occurred on or before September 30, 2000;
8.03 Effect of Abandonment
If the Merger is rightfully abandoned or terminated as provided in Article
VII or in this Article VIII:
(a) this Agreement shall forthwith become wholly void and of no effect
without liability on the part of either party to this Agreement or on
the part of any officer, director, controlling person, employee,
counsel, agent or shareholder thereof; and
(b) the Constituent Corporations shall each pay and bear its own fees and
expenses incident to the negotiation, preparation and execution of
this Agreement and its respective meetings of stockholders, including
fees and expenses of its counsel, accountants, investment banking firm
and other experts.
IX. MISCELLANEOUS
9.01 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.
9.02 Amendments
This Agreement sets forth the entire understanding of the parties with
respect to the subject matter hereof and supersedes all existing agreements
among them concerning such subject matter. This Agreement may be amended
prior to the Effective Time (notwithstanding stockholder adoption and
approval) by a written instrument executed by the Constituent Corporations
with the approval of their respective Boards of Directors
9.03 Notices
Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested, or by Federal Express or similar overnight delivery or
courier service or delivered in person against receipt to the party to whom
it is to be given at the address of such party set forth in the preamble to
this Agreement. Notices hereunder shall be deemed delivered only upon
actual delivery against a signed receipt.
9.04 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.
Any waiver must be in writing and be authorized by a resolution of the
Board of Directors of the waiving party.
9.05 Binding Effect
The provisions of this Agreement shall be binding upon and inure to the
benefit of the Constituent Corporations and their respective successors and
assigns and shall inure to the benefit of each indemnity.
9.06 Separability
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.
9.07 Headings
The headings in this Agreement are solely for convenience of reference and
shall be given no effect in the construction or interpretation of this
Agreement.
9.08 Counterparts; Governing Law
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
and the same instrument. It shall be governed by and construed in
accordance with the laws of the State of Nevada.
IN WITNESS WHEREOF, this Agreement has been approved by resolutions
duly adopted by the Board of Directors of each of the Constituent
Corporations and has been signed by duly authorized officers of each of the
Constituent Corporations, and each of the Constituent Corporations has
caused its corporate seal to be hereunto affixed and attested by the
signature of its Secretary or Assistant Secretary, all as of the date first
above written.
Digital Bridge, Inc. Attest:
By: /s/ Xxxxx Xxxx By: /s/ Xxx Xxxxxxx
-------------------- ------------------------
Xxxxx Xxxx, President Xxx Xxxxxxx, Secretary
24x7 Xxxxxxxxxxx.xxx, Inc. Attest:
By: /s/ Xxxx X. Xxxxxxxx, Xx. By: /s/ Xxxxxx Xxxxx
---------------------------- ------------------------
Xxxx X. Xxxxxxxx, Xx., President Xxxxxx Xxxxx,
Secretary
