AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made
this 31st day of December, 2000, by and between Holographic Systems, Inc.,
a publicly-held, fully reporting corporation incorporated in Nevada
("Holographic"); Emission Control Devices, Inc., a North Carolina
corporation ("ECD"); and the persons listed in Exhibit A-1 hereof who are
the owners of record of all the issued and outstanding stock of ECD who
execute and deliver the Agreement ("ECD Stockholders"), based on the
following:
Recitals
Holographic wishes to acquire all the issued and outstanding stock of ECD in
exchange for stock of Holographic in a transaction intended to qualify as a
tax-free exchange pursuant to section 368(a)(1)(B) of the Internal Revenue
Code of 1986, as amended. The parties intend for this Agreement to represent
the terms and conditions of such tax-free reorganization, which Agreement the
parties hereby adopt. However, neither party is seeking tax counsel or legal
or accounting opinions on whether the transaction qualifies for tax free
treatment.
Agreement
Based on the stated premises, which are incorporated herein by
reference, and for and in consideration of the mutual covenants and
agreements hereinafter set forth, the mutual benefits to the parties to be
derived herefrom, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, it is hereby agreed as follows:
ARTICLE I
EXCHANGE OF STOCK
1.01 Exchange of Shares. On the terms and subject to the conditions set
forth in this Agreement, on the Closing Date (as defined in Section 1.05
hereof), the ECD Stockholders shall assign, transfer, and deliver to
Holographic, free and clear of all liens, pledges, encumbrances, charges,
restrictions, or claims of any kind, nature, or description, all issued and
outstanding shares of common stock of ECD (the "ECD Shares") held by ECD
Stockholders which shares shall represent all issued and outstanding shares
of ECD common stock, and Holographic agrees to acquire such shares on such
date by issuing and delivering in exchange therefor an aggregate of
10,000,000 restricted shares of Holographic common stock, par value $0.001
per share, (the "Holographic Common Stock"). Such shares of Holographic
Common Stock shall be issued pro rata based on the number of ECD Shares held
and as set forth opposite the ECD Stockholder's respective names in Exhibit
A-1. All shares of Holographic Common Stock to be issued and delivered
pursuant to this Agreement shall be appropriately adjusted to take into
account any stock split, stock dividend, reverse stock split,
recapitalization, or similar change in the Holographic Common Stock which may
occur between the date of the execution of this Agreement and the Closing
Date.
(a) Additional Shares. There shall be issued 500,000 restricted shares of
Holographic Common Stock to Pacific Management Services, Inc., for
services rendered to Holographic and ECD.
(b) Registration of Shares. All shares set forth in Section 1.01(a) shall
have rights of registration, and ECD agrees to register said shares,
pursuant to the Registration Rights Agreement attached hereto. In
addition, any shares issued prior to this reorganization during any
period of time that Holographic may be deemed to have been a blank
check company shall have rights of registration, and ECD agrees to
register said shares, pursuant to the Registration Rights Agreement
attached hereto.
1.02 Delivery of Certificates by ECD Stockholders. The transfer of ECD
shares by the ECD Stockholders shall be effected by the delivery to
Holographic at the Closing (as set forth in Section 1.05 hereof) of
certificates representing the transferred shares endorsed in blank or
accompanied by stock powers executed in blank, with all signatures medallion
guaranteed and with all necessary transfer taxes and other revenue stamps
affixed and acquired at the ECD Stockholders' expense.
1.03 Operation as Wholly-Owned Subsidiary. After giving effect to the
transaction contemplated hereby, Holographic will own all the issued and
outstanding shares of ECD and ECD will be a wholly-owned subsidiary of
Holographic operating under the name ECD, Inc. or such other name selected by
the shareholders and management of ECD.
1.04 Further Assurances. At the Closing and from time to time thereafter,
the ECD Stockholders shall execute such additional instruments and take such
other action as Holographic may reasonably request, without undue cost to
the ECD Stockholders in order to more effectively sell, transfer, and assign
clear title and ownership in the ECD Shares to Holographic .
1.05 Closing and Parties. The Closing contemplated hereby shall be held at
a mutually agreed upon time and place on or before December 31, 2000 or on
another date to be agreed to in writing by the parties (the "Closing Date').
The Agreement may be closed at any time following approval by a majority of
the shareholders of Holographic Common Stock as set forth in Section 4.01
hereof and the ECD Stockholders as set forth in Section 5.02. The Closing may
be accomplished by wire, express mail, overnight courier, conference
telephone call or as otherwise agreed to by the respective parties or their
duly authorized representatives.
1.06 Closing Events.
(a) Holographic Deliveries. Subject to fulfillment or waiver of
the conditions set forth in Article IV, Holographic shall deliver to ECD
at Closing all the following:
(i) A certificate of good standing from the Department of
Commerce of the State of Nevada, issued as of a date within ten
days prior to the Closing Date, certifying that Holographic is in
good standing as a corporation in the State of Nevada;
(ii) Incumbency and specimen signature certificates dated the
Closing Date with respect to the officers of Holographic executing
this Agreement and any other document delivered pursuant hereto on
behalf of Holographic ;
(iii) Copies of the resolutions/consents of Holographic's
board of directors and shareholder minutes or consents authorizing
the execution and performance of this Agreement and the
contemplated transactions, certified by the secretary or an
assistant secretary of Holographic as of the Closing Date;
(iv) The certificate contemplated by Section 4.02, duly
executed by the chief executive officer of Holographic;
(v) The certificate contemplated by Section 4.03, dated the
Closing Date, signed by the chief executive officer of Holographic;
(vii) Certificates for 10,000,000 shares of Holographic
Common Stock in the names of the ECD Stockholders and in the
amounts set forth in Exhibit "A-1"; and
In addition to the above deliveries, Holographic shall take all steps
and actions as ECD and ECD Stockholders may reasonably request or as may
otherwise be reasonably necessary to consummate the transactions
contemplated hereby.
(b) ECD Deliveries. Subject to fulfillment or waiver of the
conditions set forth in Article V, ECD and/or ECD Stockholder's shall
deliver to Holographic at Closing all the following:
(i) A certificate of good standing from the Department of
Commerce of the State of North Carolina, issued as of a date within
ten days prior to the Closing Date certifying that ECD is in good
standing as a corporation in the State of North Carolina;
(ii) Incumbency and specimen signature certificates dated the
Closing Date with respect to the officers of ECD executing this
Agreement and any other document delivered pursuant hereto on
behalf of ECD;
(iii) Copies of resolutions/consents of the board of
directors and of the stockholders of ECD authorizing the execution
and performance of this Agreement and the contemplated
transactions, certified by the secretary or an assistant secretary
of ECD as of the Closing Date;
(iv) The certificate contemplated by Section 5.03, executed by
the chief operating officer of ECD; and
(v) The certificate contemplated by Section 5.04, dated
the Closing Date, signed by the chief operating officer of ECD.
In addition to the above deliveries, ECD shall take all steps and
actions as Holographic may reasonably request or as may otherwise be
reasonably necessary to consummate the transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES OF HOLOGRAPHIC
As an inducement to, and to obtain the reliance of ECD, Holographic
represents and warrants as follows:
2.01 Organization.
(a) Holographic is, and will be on the Closing, a corporation duly
organized, validly existing, and in good standing under the laws of the
State of Nevada and has the corporate power and is and will be duly
authorized, qualified, franchised, and licensed under all applicable
laws, regulations, ordinances, and orders of public authorities to own
all of its properties and assets and to carry on its business in all
material respects as it is now being conducted, and there are no other
jurisdictions in which it is not so qualified in which the character and
location of the assets owned by it or the nature of the material
business transacted by it requires qualification, except where failure
to do so would not have a material adverse effect on its business,
operations, properties, assets or condition. The execution and delivery
of this Agreement does not, and the consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof will
not, violate any provision of Holographic's articles of incorporation or
bylaws, or other agreement to which it is a party or by which it is
bound.
2.02 Approval of Agreement. Holographic has full power, authority, and
legal right and have taken, or will take, all action required by law, its
articles of incorporation, bylaws, and otherwise to execute and deliver this
Agreement and to consummate the transactions herein contemplated. The board
of directors of Holographic has authorized and approved the execution,
delivery, and performance of this Agreement and the transactions contemplated
hereby; subject to the approval of the Holographic shareholders and
compliance with state and federal corporate and securities laws.
2.03 Capitalization. The authorized capitalization of Holographic
consists of 100,000,000 shares of common stock, $0.001 par value, of which
approximately 1,000,000 shares shall be issued and outstanding, prior to
issuance of shares as set forth in Section 1.01 of this Agreement. All
issued and outstanding shares of Holographic are legally issued, fully paid,
and nonassessable and not issued in violation of the preemptive or other
right of any person. There are no dividends or other amounts due or payable
with respect to any of the shares of capital stock of Holographic
2.04 Financial Statements.
(a) Included in Schedule 2.04 or otherwise available from XXXXX
through the SEC's website, xxx.xxx.xxx, are the audited balance sheet of
Holographic as of December 31, 1999, and the related statements of
operations, stockholders' equity (deficit), and cash flows for the
fiscal years ended December 31, 1999, and 1998, including the notes
thereto, and the accompanying report of the company's independent
certified public accountant.
(b) The financial statements of Holographic delivered pursuant to
Section 2.04(a) have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved as explained in the notes to such financial statements. The
Holographic financial statements present fairly, in all material
respects, as of their respective dates, the financial position of
Holographic. Holographic did not have, as of the date of any such
financial statements, except as and to the extent reflected or reserved
against therein, any liabilities or obligations (absolute or contingent)
which should be reflected therein in accordance with generally accepted
accounting principles, and all assets reflected therein presently fairly
the assets of Holographic in accordance with generally accepted
accounting principles.
(c) Holographic has filed or will file as the Closing Date its tax
returns required to be filed for its two most recent fiscal years. All
such returns and reports are accurate and correct in all material
respect. Holographic has no material liabilities with respect to the
payment of any federal, state, county, local, or other taxes (including
any deficiencies, interest, or penalties) accrued for or applicable to
the period ended on the date of the most recent balance sheet of
Holographic, except to the extent reflected on such balance sheet and
all such dates and years and periods prior thereto and for which
Holographic may at said date have been liable in its own right or as
transferee of the assets of, or as successor to, any other corporation
or entity, except for taxes accrued but not yet due and payable, and to
the best knowledge of Holographic, no deficiency assessment or proposed
adjustment of any such tax return is pending, proposed or contemplated.
To the best knowledge of Holographic, none of such income tax returns
has been examined or is currently being examined by the Internal Revenue
Service and no deficiency assessment or proposed adjustment of any such
return is pending, proposed or contemplated. Holographic has not made
any election pursuant to the provisions of any applicable tax laws
(other than elections that relate solely to methods of accounting,
depreciation, or amortization) that would have a material adverse affect
on Holographic, its financial condition, its business as presently
conducted or proposed to be conducted, or any of its respective
properties or material assets. There are no outstanding agreements or
waivers extending the statutory period of limitation applicable to any
tax return of Holographic.
2.05 Outstanding Warrants and Options. At closing, Holographicwill
have no existing warrants or options, calls or commitments of any nature
relating to the authorized and unissued HolographicCommon Stock.
2.06 Information. The information concerning Holographic set forth in
this Agreement is complete and accurate in all material respects and does not
contain any untrue statement of a material fact or omit to state a material
fact required to make the statements made, in light of the circumstances
under which they were made, not misleading. Holographic shall cause the
schedules delivered by it pursuant hereto and the instruments delivered to
ECD hereunder to be updated after the date hereof up to and including the
Closing Date.
2.07 Absence of Certain Changes or Events. Except as set forth in this
Agreement or the schedules hereto, since the date of the most recent
Holographic balance sheet described in Section 2.04 and included in the
information referred to in Section 2.06:
(a) There has not been (i) any material adverse change in the
business, operations, properties, level of inventory, assets, or
condition of Holographic or (ii) any damage, destruction, or loss to
Holographic (whether or not covered by insurance) materially and
adversely affecting the business, operations, properties, assets, or
conditions of Holographic;
(b) Holographic has not (i) amended its articles of incorporation
or bylaws; (ii) declared or made, or agreed to declare or make, any
payment of dividends or distributions of any assets of any kind
whatsoever to stockholders or purchased or redeemed, or agreed to
purchase or redeem, any of its capital stock; (iii) waived any rights of
value which in the aggregate are extraordinary or material considering
the business of Holographic; (iv) made any material change in its method
of management, operation, or accounting; (v) entered into any other
material transactions; (vi) made any accrual or arrangement for or
payment of bonuses or special compensation of any kind or any severance
or termination pay to any present or former officer or employee; (vii)
increased the rate of compensation payable or to become payable by it to
any of its officers or directors or any of its employees whose monthly
compensation exceeds $1,000; or (viii) made any increase in any profit-
sharing, bonus, deferred compensation, insurance, pension, retirement,
or other employee benefit plan, payment, or arrangement made to, for, or
with its officers, directors, or employees;
(c) Holographic has not (i) granted or agreed to grant any
options, warrants, or other rights for its stocks, bonds, or other
corporate securities calling for the issuance thereof, (ii) borrowed or
agreed to borrow any funds or incurred, or become subject to, any
material obligation or liability (absolute or contingent) except
liabilities incurred in the ordinary course of business; (iii) paid any
material obligation or liability (absolute or contingent) other than
current liabilities reflected in or shown on the most recent Holographic
balance sheet and current liabilities incurred since that date in the
ordinary course of business; (iv) sold or transferred, or agreed to sell
or transfer, any of its material assets, properties, or rights (except
assets, properties, or rights not used or useful in its business which,
in the aggregate have a value of less than $5,000 or canceled, or agreed
to cancel, any debts or claims (except debts and claims which in the
aggregate are of a value of less than $5,000); (v) made or permitted any
amendment or termination of any contract, agreement, or license to which
it is a party if such amendment or termination is material, considering
the business of Holographic; or (vi) issued, delivered, or agreed to
issue or deliver any stock, bonds, or other corporate securities
including debentures (whether authorized and unissued or held as
treasury stock); and
(d) To the best knowledge of Holographic, it has not become
subject to any law or regulation which materially and adversely
affects, or in the future would be reasonably expected to adversely
affect, the business, operations, properties, assets, or condition
of Holographic.
2.08 Litigation and Proceedings. There are no material actions, suits,
or administrative or other proceedings pending or, to the knowledge of
Holographic, threatened by or against Holographic or adversely affecting
Holographic or its properties, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind. Holographic does not have any knowledge of any
default on its part with respect to any judgment, order, writ, injunction,
decree, award, rule, or regulation of any court, arbitrator, or governmental
agency or instrumentality.
2.09 Compliance With Laws and Regulations. Holographic has complied
with all applicable statutes and regulations of any federal, state, or other
governmental entity or agency thereof, except to the extent that
noncompliance (i) could not materially and adversely affect the business,
operations, properties, assets, or condition of Holographic or (ii) could not
result in the occurrence of any material liability for Holographic. To the
best knowledge of Holographic, the consummation of this transaction will
comply with all applicable statutes and regulations, subject to the
preparation and filing of any forms required by state and federal securities
laws.
2.10 Material Contract Defaults. Holographic is not in default in any
material respect under the terms of any outstanding contract, agreement,
lease, or other commitment which is material to the business, operations,
properties, assets, or condition of Holographic, and there is no event of
default or other event which, with notice or lapse of time or both, would
constitute a default in any material respect under any such contract,
agreement, lease, or other commitment in respect of which Holographic has not
taken adequate steps to prevent such a default from occurring.
2.11 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any ten-n or provision of, or
constitute an event of default under, any material indenture, mortgage, deed
of trust, or other material contract, agreement, or instrument to which
Holographic is a party or to which any of its properties or operations are
subject.
2.12 Subsidiary. Holographic does not own, beneficially or of record,
any equity securities in any other entity. Holographic does not have a
predecessor as that term is defined under generally accepted accounting
principles or Regulation S-X promulgated by the Securities and Exchange
Commission,
2.13 Holographic Schedules. Holographic has delivered to ECD the
following schedules, which are collectively referred to as the "Holographic
Schedules" and which consist of the following separate schedules dated as of
the date of execution of this Agreement, all certified by a duly authorized
officer of Holographic as complete, true, and accurate:
(a) A schedule including copies of the articles of incorporation
and bylaws of Holographic in effect as of the date of this Agreement;
(b) A schedule containing copies of resolutions adopted by the
board of directors of Holographic approving this Agreement and the
transactions herein contemplated;
(c) A schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or
condition of Holographic since the most recent Holographic balance
sheet, required to be provided pursuant to Section 2.04 hereof,
(d) A schedule setting forth the financial statements required
pursuant to Section 2.04(a) hereof, and
(e) A schedule setting forth any other information, together with
any required copies of documents, required to be disclosed in the
Holographic Schedules by Sections 2.01 through 2.12.
Holographic shall cause the Holographic Schedules and the instruments
delivered to ECD hereunder to be updated after the date hereof up to and
including a specified date not more than three business days prior to the
Closing Date. Such updated Holographic Schedules, certified in the same
manner as the original Holographic Schedules, shall be delivered prior to and
as a condition precedent to the obligation of ECD to close.
ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF ECD
As an inducement to, and to obtain the reliance of Holographic, ECD
represents and warrants as follows:
3.01 Organization. ECD is, and will be on the Closing Date, a
corporation duly organized, validly existing, and in good standing under the
laws of the State of North Carolina and has the corporate power and is and
will be duly authorized, qualified, franchised, and licensed under all
applicable laws, regulations, ordinances, and orders of public authorities to
own all of its properties and assets and to carry on its business in all
material respects as it is now being conducted, and there are no other
jurisdictions in which it is not so qualified in which the character and
location of the assets owned by it or the nature of the material business
transacted by it requires qualification, except where failure to do so would
not have a material adverse effect on its business, operations, properties,
assets or condition of ECD. The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof will not, violate any provision
of ECD's articles of incorporation or bylaws, or other material agreement to
which it is a party or by which it is bound.
3.02 Approval of Agreement. ECD has full power, authority, and legal
right and has taken, or will take, all action required by law, its articles
of incorporation, bylaws, or otherwise to execute and deliver this Agreement
and to consummate the transactions herein contemplated. The board of
directors of ECD have authorized and approved the execution, delivery, and
performance of this Agreement and the transactions contemplated hereby;
subject to the approval of the ECD Stockholders and compliance with state and
federal corporate and securities laws.
3.03 Capitalization. The authorized capitalization of ECD consists of
100,000 shares, consisting of common stock, no par value, of which as of the
date hereof, 100,000 shares are issued and outstanding to four shareholders.
All issued and outstanding shares of ECD are legally issued, fully paid, and
nonassessable and not issued in violation of the preemptive or other right of
any person. There are no dividends or other amounts due or payable with
respect to any of the shares of capital stock of ECD.
3.04 Financial Statements.
(a) Included in Schedule 3.04 are the unaudited balance sheet
(which will be delivered prior to Closing) of ECD as of December 31,
1999 and the related statements of operations, cash flows, and
stockholders' equity for the period from inception to December 31, 1999
including the notes thereto and representations by the chief operating
officer of ECD to the effect that such financial statements contain all
adjustments (all of which are normal recurring adjustments) necessary to
present fairly the results of operations and financial position for the
periods and as of the dates indicated.
(b) The unaudited financial statements delivered pursuant to
Section 3.04(a) have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved. The financial statements of ECD present fairly, as of their
respective dates, the financial position of ECD. ECD did not have, as
of the date of any such balance sheets, except as and to the extent
reflected or reserved against therein, any liabilities or obligations
(absolute or contingent) which should be reflected in any financial
statements or the notes thereto prepared in accordance with generally
accepted accounting principles, and all assets reflected therein present
fairly the assets of ECD, in accordance with generally accepted
accounting principles. The statements of revenue and expenses and cash
flows present fairly the financial position and result of operations of
ECD as of their respective dates and for the respective periods covered
thereby.
3.05 Outstanding Warrants and Options. ECD has no issued warrants or
options, calls, or commitments of any nature relating to the authorized and
unissued ECD Common Stock.
3.06 Information. The information concerning ECD set forth in this
Agreement and in the schedules delivered by ECD pursuant hereto is complete
and accurate in all material respects and does not contain any untrue
statement of a material fact or omit to state a material fact required to
make the statements made, in light of the circumstances under which they were
made, not misleading. ECD shall cause the schedules delivered by ECD
pursuant hereto to Holographic hereunder to be updated after the date hereof
up to and including the Closing Date.
3.07 Absence of Certain Changes or Events. Except as set forth in this
Agreement since the date of the most recent ECD balance sheet described in
Section 3.04 and included in the information referred to in Section 3.06:
(a) There has not been (i) any material adverse change in the
business, operations, properties, level of inventory, assets, or
condition of ECD or (ii) any damage, destruction, or loss to ECD
materially and adversely affecting the business, operations, properties,
assets, or conditions of ECD.
(b) ECD has not (i) amended its articles of incorporation or
bylaws; (ii) declared or made, or agreed to declare or make, any payment
of dividends or distributions of any assets of any kind whatsoever to
stockholders or purchased or redeemed, or agreed to purchase or redeem,
any of its capital stock; (iii) waived any rights of value which in the
aggregate are extraordinary and material considering the business of
ECD; (iv) made any material change in its method of accounting; (v)
entered into any other material transactions other dm those contemplated
by this Agreement; (vi) made any material accrual or material
arrangement for or payment of bonuses or special compensation of any
kind or any severance or termination pay to any present or former
officer or employee; or (vii) made any material increase in any profit-
sharing, bonus, deferred compensation, insurance, pension, retirement,
or other employee benefit plan, payment, or arrangement made to, for, or
with their officers, directors, or employees;
(c) ECD has not (i) granted or agreed to grant any options,
warrants, or other rights for its stocks, bonds, or other corporate
securities calling for the issuance thereof, (ii) borrowed or agreed to
borrow any funds or incurred, or become subject to, any material
obligation or liability (absolute or contingent) except liabilities
incurred in the ordinary course of business; (iii) paid any material
obligation or liability (absolute or contingent) other than current
liabilities reflected in or shown on the most recent ECD balance sheet
and current liabilities incurred since that date in the ordinary course
of business; (iv) sold or transferred, or agreed to sell or transfer,
any of its material assets, properties, or rights, or agreed to cancel,
any material debts or claims; (v) made or permitted any amendment or
termination of any contract, agreement, or license to which it is a
party if such amendment or termination is material, considering the
business of ECD; or (vi) issued, delivered, or agreed to issue or
deliver any stock, bonds, or other corporate securities including
debentures (whether authorized and unissued or held as treasury stock);
and
(d) To the best knowledge of ECD, it has not become subject to any
law or regulation which materially and adversely affects, or in the
future would be reasonably expected to adversely affect, the business,
operations, properties, assets, or condition of ECD.
3.08 Title and Related Matters. Except as provided herein or disclosed
in the most recent ECD balance sheet and the notes thereto, ECD has good and
marketable title to all of its properties, inventory, interests in
properties, technology, whether patented or unpatented, including, but not
limited to the ECD technology, intellectual property, computer software, and
assets, which are reflected in the most recent ECD balance sheet or acquired
after that date (except properties, interests in properties, and assets sold
or otherwise disposed of since such date in the ordinary course of business),
free and clear of all mortgages, liens, pledges, charges, or encumbrances,
except (i) statutory liens or claims not yet delinquent; and (ii) such
imperfections of title and easements as do not, and will not, materially
detract from, or interfere with, the present or proposed use of the
properties subject thereto or affected thereby or otherwise materially impair
present business operations on such properties. To the best knowledge of
ECD, its technology does not infringe on the copyright, patent, trade secret,
know-how, or other proprietary right of any other person or entity and
comprises all such rights necessary to permit the operation of the business
of ECD as now being conducted or as contemplated.
3.09 Litigation and Proceedings. There are no material actions, suits,
or proceedings pending or, to the knowledge of ECD, threatened by or against
ECD or adversely affecting ECD, at law or in equity, before any court or
other governmental agency or instrumentality, domestic or foreign, or before
any arbitrator of any kind. ECD does not have any knowledge of any default
on its part with respect to any judgment, order, writ, injunction, decree,
award, rule, or regulation of any court, arbitrator, or governmental agency
or instrumentality.
3.10 Material Contract Defaults. ECD is not in default in any material
respect under the terms of any outstanding contract, agreement, lease, or
other commitment which is material to the business, operations, properties,
assets, or condition of ECD, and there is no event of default or other event
which, with notice or lapse of time or both, would constitute a default in
any material respect under any such contract, agreement, lease, or other
commitment in respect of which ECD has not taken adequate steps to prevent
such a default from occurring.
3.11 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed
of trust. or other material contract, agreement, or instrument to which ECD
is a party or to which any of its properties or operations are subject.
3.12 Governmental Authorizations. ECD has all licenses, franchises,
permits, and other governmental authorizations that are legally required to
enable it to conduct its business in all material respects as conducted on
the date of this Agreement. Except for compliance with federal and state
securities and corporation laws, as hereinafter provided, no authorization,
approval, consent, or order of, or registration, declaration, or filing with,
Any court or other governmental body is required in connection with the
execution and delivery by ECD of this Agreement and the consummation by ECD
of the transactions contemplated hereby.
3.13 Compliance With Laws and Relations. ECD has complied with all
applicable statutes and regulations of any federal, state, or other
governmental entity or agency thereof, except to the extent that
noncompliance would not materially and adversely affect the business,
operations, properties, assets, or condition of ECD or except to the extent
that noncompliance would not result in the occurrence of any material
liability for ECD. To the best knowledge of ECD, the consummation of this
transaction will comply with all applicable statutes and regulations, subject
to the preparation and filing of any forms required by state and federal
security laws.
3.14 Subsidiary. ECD does not own, beneficially or of record, any
equity securities in any other entity. ECD does not have a predecessor as
that term is defined under generally accepted accounting principles or
Regulation S-X promulgated by the Securities and Exchange Commission.
3.15 ECD Schedules. ECD has delivered to Holographic the following
schedules, which are collectively referred to as the "ECD Schedules" and
which consist of the following separate schedules dated as of the date of
execution of this Agreement, and instruments and Holographic as of such date,
all certified by the chief executive officer of ECD as complete, true, and
accurate:
(a) A schedule including copies of the articles of incorporation
and bylaws of ECD and all amendments thereto in effect as of the date of
this Agreement;
(b) A schedule containing copies of resolutions adopted by the
board of directors of ECD approving this Agreement and the transactions
herein contemplated as referred to in Section 3.02;
(c) A schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or
condition of ECD since the most recent ECD balance sheet, required to be
provided pursuant to Section 3.04 hereof,
(d) A schedule setting forth the financial statements required
pursuant to Section 3.04 (a) hereof, and
(e) A schedule setting forth any other information, together with
any required copies of documents, required to be disclosed in the ECD
Schedules by Sections 3.01 through 3.14.
ECD shall cause the ECD Schedules and the instruments delivered to
Holographic hereunder to be updated after the date hereof up to and including
a specified date not more than three business days prior to the Closing Date.
Such updated ECD Schedules, certified in the same manner as the original ECD
Schedules, shall be delivered prior to and as a condition precedent to the
obligation of Holographic to close.
ARTICLE IV
CONDITIONS PRECEDENT TO OBLIGATIONS OF ECD
The obligations of ECD under this Agreement are subject to the
satisfaction of ECD, at or before the Closing Date, of the following
conditions:
4.01 Shareholder Approval. Holographic shall call and hold a meeting of
its shareholders, or obtain the written consent of a majority of its
shareholders, to approve the transactions contemplated by this Agreement
including the acquisition of ECD through the issuance of Holographic Common
Stock for all of the issued and outstanding ECD Shares; the change of name of
Holographic to "Emission Control Devices, Inc." or such other derivation
thereof as may be agreed to by the board of directors of ECD.
4.02 Accuracy of Representations. The representations and Warranties
made by Holographic in this Agreement were true when made and shall be true
at the Closing Date with the same force and affect as if such representations
and warranties were made at and as of the Closing Date (except for changes
therein permitted by this Agreement), and Holographic shall have performed or
complied with all covenants and conditions required by this Agreement to be
performed or complied with by Holographic prior to or at the Closing. ECD
shall be furnished with certificates, signed by duly authorized officers of
Holographic and dated the Closing Date, to the foregoing effect.
4.03 Officer's Certificates. ECD shall have been furnished with
certificates dated the Closing Date and signed by the duly authorized chief
executive officer of Holographic to the effect that to such officer's best
knowledge no litigation, proceeding, investigation, or inquiry is pending or,
to the best knowledge of Holographic threatened, which might result in an
action to enjoin or prevent the consummation of the transactions contemplated
by this Agreement. Furthermore, based on certificates of good standing,
representations of government agencies, and Holographic's own documents and
information, the certificate shall represent, to the best knowledge of the
officer, that:
(a) This Agreement has been duly approved by Holographic's board
of directors and shareholders and has been duly executed and delivered
in the name and on behalf of Holographic by its duly authorized officers
pursuant to, and in compliance with, authority granted by the board of
directors of Holographic pursuant to a unanimous consent;
(b) There have been no material adverse changes in Holographic up
to and including the date of the certificate;
(c) All conditions required by this Agreement have been met,
satisfied, or performed by Holographic;
(d) All authorizations, consents, approvals, registrations, and/or
filings with any governmental body, agency, or court required in
connection with the execution and delivery of the documents by
Holographic have been obtained and are in full force and effect or, if
not required to have been obtained, will be in full force and effect by
such time as may be required; and
(e) There is no material action, suit, proceeding, inquiry, or
investigation at law or in equity by any public board or body pending or
threatened against Holographic, wherein an unfavorable decision, ruling,
or finding could have an adverse effect on the financial condition of
Holographic, the operation of Holographic, or the acquisition and
reorganization contemplated herein, or any agreement or instrument by
which Holographic is bound or in any way contests the existence of
Holographic.
4.04 No Material Adverse Change. Prior to the Closing Date, there shall
not have occurred any material adverse change in the financial condition,
business, or operations of Holographic, nor shall any event have occurred
which, with the lapse of time or the giving of notice, may cause or create
any material adverse change in the financial condition, business, or
operations of Holographic.
4.05 Good Standings. ECD shall have received a certificate of good
standing from the appropriate authority, dated as of the date within five
days prior to the Closing Date, certifying that Holographic is in good
standing as a corporation in the State of Nevada.
4.06 Other Items. ECD shall have received such other documents,
certificates, or instruments relating to the transactions contemplated hereby
as ECD may reasonably request.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF HOLOGRAPHIC
The obligations of Holographic under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
5.01 Shareholder Approval. Holographic shall call and hold a meeting of
its shareholders, or obtain through a majority written consent of its
shareholders, whereby the shareholders of Holographic authorize and approve
this Agreement and the transactions contemplated hereby. If Holographic is
unable to obtain shareholder approval, Holographic is under no further
obligation to proceed with the transactions contemplated under this
Agreement.
5.02 ECD Shareholders. Holders of all of the issued and outstanding ECD
Shares shall agree to this Agreement and the exchange of shares contemplated
by this Agreement.
5.03 Accuracy of Representations. The representations and warranties
made by ECD and the ECD Stockholders in this Agreement were true when made
and shall be true at the Closing Date with the same force and affect as if
such representations and warranties were made at and as of the Closing Date
(except for changes therein permitted by this Agreement), and ECD shall have
performed or complied with all covenants and conditions required by this
Agreement to be performed or complied with by ECD prior to or at the Closing.
Holographic shall be furnished with a certificate, signed by a duly
authorized officer of ECD and dated the Closing Date, to the foregoing
effect.
5.04 Officer's Certificates. Holographic shall have been furnished with
certificates dated the Closing Date and signed by the duly authorized chief
operating officer of ECD to the effect that no litigation, proceeding,
investigation, or inquiry is pending or, to the best knowledge of ECD,
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement.
Furthermore, based on certificates of good standing, representations of
government agencies, and ECD's own documents, the certificate shall
represent, to the best knowledge of the officer, that:
(a) This agreement has been duly approved by ECD's board of
directors and shareholders and has been duly executed and delivered in
the name and on behalf of ECD by its duly authorized officers pursuant
to, and in compliance with, authority granted by the board of directors
of ECD pursuant to a unanimous consent of its board of directors and a
majority vote of its stockholders;
(b) Except as provided or permitted herein, there have been no
material adverse changes in ECD up to and including the date of the
certificate.
(c) All authorizations, consents, approvals, registrations, and/or
filing with any governmental body, agency, or court required in
connection with the execution and delivery of the documents by
ECD have been obtained and are in full force and effect or, if
not required to have been obtained will be in full force and effect by
such time as may be required; and
(d) There is no material action, suit, proceeding, inquiry, or
investigation at law or in equity by any public board or body pending or
threatened against ECD, wherein an unfavorable decision, ruling, or
finding would have an adverse affect on the financial condition of ECD,
the operation of ECD, or the acquisition and reorganization contemplated
herein, or any material agreement or instrument by which ECD is bound or
would in any way contest the existence of ECD.
5.05 No Material Adverse Change. Prior to the Closing Date, there shall
not have occurred any material adverse change in the financial condition,
business or operations of ECD, nor shall any event have occurred which, with
the lapse of time or the giving of notice, may cause of create any material
adverse change in the financial condition, business, or operations of ECD.
ECD shall have no more than $100,000 in liabilities excluding any loans from
Holographic.
5.06 Good Standing. Holographic shall have received a certificate of
good standing from the appropriate authority, dated as of a date with five
days prior to the Closing Date, certifying that ECD is in good standing as
a corporation in the State of North Carolina.
5.07 Ownership Documentation. Holographic shall have received
documentation verifying that all rights, title and interest in and to the
trade names, technology, software, intellectual property, manufacturing
equipment, inventory and assets related to the ECD products and technology
shall be free and clear of any and all liens, encumbrances, royalties and
claims prior to Closing, other than those documents in the schedules or
financials delivered to Holographic.
5.08 Other Items. Holographic shall have received such further
documents certificates, or instruments relating to the transactions
contemplated hereby as Holographic may reasonably request.
ARTICLE VI
SPECIAL COVENANTS
6.01 Activities of Holographic and ECD
(a) From and after the date of this Agreement until the Closing
Date and except as set forth in the respective schedules to be delivered
by Holographic and ECD pursuant hereto or as permitted or contemplated
by this Agreement, Holographic and ECD will each:
(i) Carry on its business in substantially the same manner
as it has heretofore;
(ii) Maintain in full force and effect insurance comparable
in amount and in scope of coverage to that now maintained by it;
(iii) Perform in all material respects all of its
obligations under material contracts, leases, and instruments
relating to or affecting its assets, properties, and business;
(iv) Use its best efforts to maintain and preserve it
business organization intact, to retain its key employees, and
to maintain Its relationships with its material suppliers and
customers;
(v) Duly and timely file for all taxable periods ending on
or prior to the Closing Date all federal, state, county, and
local tax returns required to be filed by or on behalf of such
entity or for which such entity may be held responsible and shall
pay, or cause to pay, all taxes required to be shown as due and
payable on such returns, as well as all installments of tax due
and payable during the period commencing on the date of this
Agreement and ending on the Closing Date.; and
(vi) Fully comply with and perform in all material respects
all obligations and duties imposed on it by all federal and state
laws and all rules, regulations, and orders imposed by federal or
state governmental authorities.
(b) From and after the date of this Agreement and except as
provided herein until the Closing Date, Holographic and ECD will not:
(i) Make any change in its articles of incorporation or
bylaws;
(ii) Enter into or amend any material contract, agreement, or
other instrument of any of the types described in such party's
schedules, except that a party may enter into or amend any
contract, agreement, or other instrument in the ordinary course of
business; and
(iii) Enter into any agreement for the sale of ECD or
Holographic securities without the prior approval of the other
party.
6.02 Access to Properties and Records. Until the Closing Date, ECD and
Holographic will afford to the other party's officers and authorized
representatives full access to the properties, books, and records of the
other party in order that each party may have full opportunity to make such
reasonable investigation as it shall desire to make of the affairs of ECD or
Holographic and will furnish the other party with such additional financial
and other information as to the business and properties of ECD or Holographic
as each party shall from time to time reasonably request.
6.03 Indemnification by ECD. ECD will indemnify and hold harmless
Holographic and its directors and officers, and each person, if any, who
controls Holographic within the meaning of the Securities Act, from and
against any and all losses, claims, damages, expenses, liabilities, or
actions to which any of them may become subject under applicable law
(including the Securities Act and the Securities Exchange Act) and will
reimburse them for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any claims or actions, whether or
not resulting in liability, insofar as such losses, claims, damages,
expenses, liabilities, or actions arise out of or are based upon any untrue
statement or alleged untrue statement of material fact contained in any
application or statement filed with a governmental body or arising out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein, or necessary in order to make the
statements therein not misleading, but only insofar as any such statement or
omission was made in reliance upon and in conformity with information
furnished in writing by ECD expressly for use therein. The indemnity
agreement contained in this Section 6.03 shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of
Holographic and shall survive the consummation of the transactions
contemplated by this Agreement for a period of six months.
6.04 Indemnification by Holographic. Holographic will indemnify and
hold harmless ECD, the ECD Stockholders, ECD's directors and officers, and
each person, if any, who controls ECD within the meaning of the Securities
Act, from and against any and all losses, claims, damages, expenses,
liabilities, or actions to which any of them may become subject under
applicable law (including the Securities Act and the Securities Exchange Act)
and will reimburse them for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any claims or actions,
whether or not resulting in liability, insofar as such losses, claims,
damages, expenses, liabilities, or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in
any application or statement filed with a governmental body or arise out of
or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary in order to make
the statements therein not misleading, but only insofar as any such statement
or omission was made in reliance upon and in conformity with information
furnished in writing by Holographic expressly for use therein. The indemnity
agreement contained in this Section 6.04 shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of ECD
and shall survive the consummation of the transactions contemplated by this
Agreement for a period of six months.
6.05 The Acquisition of Holographic Common Stock. Holographic and ECD
understand and agree that the consummation of this Agreement including the
issuance of the Holographic Common Stock to ECD in exchange for the ECD
Shares as contemplated hereby, constitutes the offer and sale of securities
under the Securities Act and applicable state statutes. Holographic and ECD
agree that such transactions shall be consummated in reliance on exemptions
from the registration and prospectus delivery requirements of such statutes
that depend, among other items, on the circumstances under which such
securities are acquired.
(a) In order to provide documentation for reliance upon exemptions
from the registration and prospectus delivery requirements for such
transactions, the signing of this Agreement and the delivery of
appropriate separate representations shall constitute the parties
acceptance of, and concurrence in, the following representations and
warranties:
(i) The ECD Stockholders acknowledge that neither the SEC nor
the securities commission of any state or other federal agency has
made any determination as to the merits of acquiring Holographic
Common Stock, and that this transaction involves certain risks.
(ii) The ECD Stockholders have received and read the Agreement
and understand the risks related to the consummation of the
transactions herein contemplated.
(iii) ECD Stockholders have such knowledge and experience
in business and financial matters that they are capable of
evaluating each business.
(iv) The ECD Stockholders have been provided with copies of
all materials and information requested by them or their
representatives, including any information requested to verify any
information furnished (to the extent such information is available
or can be obtained without unreasonable effort or expense), and-
the parties have been provided the opportunity for direct
communication regarding the transactions contemplated hereby.
(v) All information which the ECD Stockholders have provided
to Holographic or their representatives concerning their
suitability and intent to hold shares in Holographic following the
transactions contemplated hereby is complete, accurate, and
correct.
(vi) The ECD Stockholders have not offered or sold any
securities of Holographic or interest in this Agreement and have no
present intention of dividing the Holographic Common Stock or ECD
Shares to be received or the rights under this Agreement with
others or of reselling or otherwise disposing of any portion of
such stock or rights, either currently or after the passage of a
fixed or determinable period of time or on the occurrence or
nonoccurrence of any predetermined event or circumstance.
(vii) The ECD Stockholders understand that the Holographic
Common Stock has not been registered, but is being acquired by
reason of a specific exemption under the Securities Act as well as
under certain state statutes for transactions not involving any
public offering and that any disposition of the subject Holographic
Common Stock may, under certain circumstances, be inconsistent with
this exemption and may make ECD or Holographic an "underwriter",
within the meaning of the Securities Act. It is understood that
the definition of "underwriter" focuses upon the concept of
"distribution" and that any subsequent disposition of the subject
Holographic Common Stock can only be effected in transactions which
are not considered distributions. Generally, the term
"distribution" is considered synonymous with "public offering" or
any other offer or sale involving general solicitation or general
advertising. Under present law, in determining whether a
distribution occurs when securities are sold into the public
market, under certain circumstances one must consider the
availability of public information regarding tire issuer, a holding
period for the securities sufficient to assure that the persons
desiring to sell the securities without registration first bear the
economic risk of their investment, and a limitation on the number
of securities which the stockholder is permitted to sell and on the
manner of sale, thereby reducing the potential impact of the sale
on the trading markets. These criteria are set forth specifically
in rule 144 promulgated under the Securities Act, and, after one
year after the date the Holographic Common Stock or ECD Shares is
fully paid for, as calculated in accordance with rule 144(d), sales
of securities in reliance upon rule 144 can only be made in limited
amounts in accordance with the terms and conditions of that rule.
After two years from the date the securities are fully paid for, as
calculated in accordance with rule 144(d), they can generally be
sold without meeting those conditions, provided the holder is not
(and has not been for the preceding three months) an affiliate of
the issuer.
(viii) The ECD Stockholders acknowledge that the shares of
Holographic Common Stock , must be held and may not be sold,
transferred, or otherwise disposed of for value unless they are
subsequently registered under the Securities Act or an exemption
from such registration is available. Other than as set forth
herein, Holographic is not under any obligation to register the
Holographic Common Stock under the Securities Act. If rule 144 is
available after one year and prior to two years following the date
the shares are fully paid for, only routine sales of such
Holographic Common Stock in limited amounts can be made in reliance
upon rule 144 in accordance with the terms and conditions of that
rule. Holographic is not under any obligation to make rule 144
available except as set forth in this Agreement and in the event
rule 144 is not available, compliance with Regulation A or some
other disclosure exemption may be required before ECD Stockholders
can sell, transfer, or otherwise dispose of such Holographic Common
Stock without registration under the Securities Act. Subject to
compliance with federal and state securities laws, Holographic'
registrar and transfer agent will maintain a stop transfer order
against the registration of transfer of the Holographic Common
Stock held by ECD Stockholders and the certificates representing
the Holographic Common Stock will bear a legend in substantially
the following form so restricting the sale of such securities:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT.
(ix) Subject to compliance with federal and state securities
laws, Holographic may refuse to register further transfers or
resales of the Holographic Common Stock in the absence of
compliance with rule 144 unless the ECD Stockholders furnish
Holographic with an opinion of counsel reasonably acceptable to
Holographic stating that the transfer is proper. Further, unless
such opinion states that the shares of Holographic Common Stock are
free of any restrictions under the Securities Act, Holographic may
refuse to transfer the securities to any transferee who does not
furnish in writing to Holographic the same representations and
agree to the same conditions with respect to such Holographic
Common Stock as set forth herein. Holographic may also refuse to
transfer the Holographic Common Stock if any circumstances are
present reasonably indicating that the transferee's representations
are not accurate.
(b) In connection with the transaction contemplated by this
Agreement, ECD and Holographic shall each file, with the assistance of
the other and their respective legal counsel, such notices.
applications, reports, or other instruments as may be deemed by them to
be necessary or appropriate in an effort to document reliance on such
exemptions, and the appropriate regulatory authority in the states where
the ECD Stockholders reside unless an exemption requiring no filing is
available in such jurisdictions, all to the extent and in the manner as
may be deemed by such parties to be appropriate.
(c) In order to more fully document reliance on the exemptions as
provided herein, ECD, the ECD Stockholders, and Holographic shall
execute and deliver to the other, at or prior to the Closing, such
further letters of representation, acknowledgment, suitability, or the
like as Holographic or ECD and their respective counsel may reasonably
request in connection with reliance on exemptions from registration
under such securities laws.
(d) The ECD Stockholders acknowledge that the basis for relying on
exemptions from registration or qualifications are factual, depending on
the conduct of the various parties, and that no legal opinion or other
assurance will be required or given to the effect that the transactions
contemplated hereby are in fact exempt from registration or
qualification.
6.06 Holographic Liabilities. Immediately prior to the Closing Date,
Holographic shall have no material assets and no liabilities in excess of
$5,000, and all expenses related to this Agreement or otherwise shall have
been paid.
6.07 Securities Filings. Holographic shall be responsible for the
preparation of a Form 8-K filing and consolidated financials in a separate 8-
K filing within 45 days thereafter, with the Securities and Exchange
Commission and ECD will be responsible for any and all filings in any
jurisdiction where its shareholders reside which would require a filing with
a governmental agency as a result of the transactions contemplated in this
Agreement.
6.08 Sales of Securities Under Rule 144, If Applicable.
(a) Holographic will use its best efforts to at all times satisfy
the current public information requirements of rule 144 promulgated
under the Securities Act so that its shareholders can sell restricted
securities that have been held for one year or more or such other
restricted period as required by rule 144 as it is from time to tune
amended.
(b) Upon being informed in writing by any person holding
restricted stock of Holographic as of the date of this Agreement that
such person intends to sell any shares under rule 144 promulgated under
the Securities Act (including any rule adopted in substitution or
replacement thereof), Holographic will certify in writing to such person
that it is in compliance with rule 144 current public information
requirement to enable such person to sell such person's restricted stock
under rule 144, as may be applicable under the circumstances.
(c) If any certificate representing any such restricted stock is
presented to Holographic's transfer agent for registration or transfer
in connection with any sales theretofore made under rule 144, provided
such certificate is duly endorsed for transfer by the appropriate
person(s) or accompanied by a separate stock power duly executed by the
appropriate person(s) in each case with reasonable assurances that such
endorsements are genuine and effective, and is accompanied by an opinion
of counsel satisfactory to Holographic and its counsel that such
transfer has complied with the requirements of rule 144, as the case may
be, Holographic will promptly instruct its transfer agent to register
such transfer and to issue one or more new certificates representing
such shares to the transferee and, if appropriate under the provisions
of rule 144. As the case may be, free of any stop transfer order or
restrictive legend. The provisions of this Section 6.08 shall survive
the Closing and the consummation of the transactions contemplated by
this Agreement for a period of two years.
(d) The shareholders of Holographic as of the date of this
Agreement, as well as those receiving Holographic Common Stock pursuant
to this Agreement, are intended third-party beneficiaries of this
Section 6.08.
6.09 New Board of Directors and Officers. Upon closing of the
transactions contemplated by this Agreement, the current board of directors
and officers of Holographic shall resign and in their place nominees of ECD
shall be appointed, subject to the approval of the suitability and
qualifications of such nominees.
6.10 Holographic Capitalization. For a period of eighteen months from
the Closing Date, Holographic will not engage in any reverse split of its
issued and outstanding Common Stock without the prior written approval of the
holders of a majority in interest of the issued and outstanding Holographic
Common Stock on the date of this Agreement.
ARTICLE VII
MISCELLANEOUS
7.01 Brokers. Except as provided herein, Holographic and ECD agree that
there were no finders or brokers involved in bringing the parties together or
who were instrumental in the negotiation, execution, or consummation of this
Agreement other than those previously disclosed. Further, Holographic and
ECD each agree to indemnify the other against any claim by any third person
for any commission, brokerage, or finder's fee or other payment with respect
to this Agreement or the transactions contemplated hereby based on any
alleged agreement or understanding between such party and such third person,
whether express or implied, from the actions of such party. The covenants
set forth in this section shall survive the Closing Date and the consummation
of the transactions herein contemplated.
7.02 No Representation Regarding Tax Treatment. No representation or
warranty is being made by any party to any other regarding the treatment of
this transaction for federal or state income taxation. Each party has relied
exclusively on its own legal, accounting, and other tax adviser regarding the
treatment of this transaction for federal and state income taxes and on no
representation, warranty, or assurance from any other party or such other
party's legal, accounting, or other adviser.
7.03 Governing Law. This Agreement shall be governed by, enforced and
construed under and in accordance with the laws of the State of Nevada.
7.04 Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if personally delivered, if sent by
facsimile or telecopy transmission or other electronic communication
confirmed by registered or certified mail, postage prepaid, or if sent by
prepaid overnight courier addressed as follows:
If to Holographic., to: If to ECD, to:
Justeene Xxxxxxxxxxx, President Xxxxxxx X. Xxxxxxx, President
Holographic Systems, Inc. Emission Control Devices, Inc.
0000 X. Xxxxxxxx Xx, Xxx 000 00000-X Xxxxxxxxx Xxxxxxx
Xxxx Xxxx Xxxx, XX 00000 Xxxxxxxxx, XX 00000
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices, hereunder, and any such notice or communication
shall be deemed to have been given as of the date so delivered or sent by
facsimile or telecopy transmission or other electronic communication, or one
day after the date so sent by overnight courier.
7.05 Attorney's Fees. In the event that any party institutes any action
or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parties shall reimburse
the nonbreaching party or parties for all costs, including reasonable
attorneys' fees, incurred in connection therewith and in enforcing or
collecting any judgment rendered therein.
7.06 Schedules; Knowledge. Whenever in any section of this Agreement
reference is made to information set forth in the schedules provided by
Holographic or ECD such reference is to information specifically set forth in
such schedules and clearly marked to identify the section of this Agreement
to which the information relates. Whenever any representation is made to the
"knowledge" of any party, it shall be deemed to be a representation that no
officer or director of such party, after reasonable investigation, has any
knowledge of such matters.
7.07 Entire Agreement. This Agreement represents the entire agreement
between the parties relating to the subject matter hereof. All previous
agreements between the parties, whether written or oral, have been merged
into this Agreement. This Agreement alone fully and completely expresses the
agreement of the parties relating to the subject matter hereof. There are no
other courses of dealing, understandings, agreements, representations, or
warranties, written or oral, except as set forth herein.
7.08 Survival, Termination. The representations, warranties, and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of six
months from the Closing Date, unless otherwise provided herein.
7.09 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which
taken together shall be but a single instrument.
7.10 Amendment or Waiver. Every right and remedy provided herein shall
be cumulative with every other right and remedy, whether conferred herein, at
law, or in equity, and such remedies may be enforced concurrently, and no
waiver by any party of the performance of any obligation by the other shall
be construed as a waiver of the same or any other default then, theretofore,
or thereafter occurring or existing. At any time prior to the Closing Date,
this Agreement may be amended by a writing signed by all parties hereto, with
respect to any of the terms contained herein, and any term or condition of
this Agreement may be waived or the time for performance thereof may be
extended by a writing signed by the party or parties for whose benefit the
provision is intended.
IN WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly
authorized, as of the date first above written.
Holographic Systems, Inc. Emission Control Devices, Inc.
a Nevada corporation a North Carolina corporation
By: /s/ Justeene Xxxxxxxxxxx By: /s/ Xxxxxxx X Xxxxxxx
------------------------ -----------------------
Justeene Xxxxxxxxxxx, President Xxxxxxx X. Xxxxxxx, President
EXHBIT A-1
Emission Control Devices, Inc.
List of Shareholders
Number of Number of Holographic
ECD Shares Shares to be Received
Name of Shareholder Owned in Exchange
Star Fish Foundation 28,000 2,800,000
Snowbird Group 2,000 200,000
Unlimited Technologies Int'l, Inc. 10,000 1,000,000
Xxxxxxx X. Xxxxxxx 60,000 6,000,000
