SHARE EXCHANGE AGREEMENT among Sterling Gold Corp., a Nevada Corporation and iDcentrix, Inc., a Delaware Corporation and the Shareholders of iDcentrix, Inc. and the Shareholders Representative made as of January 16, 2008
among
a
Nevada
Corporation
and
iDcentrix,
Inc.,
a
Delaware Corporation
and
the
Shareholders of iDcentrix, Inc. and the Shareholders
Representative
made
as
of
January
16, 2008
TABLE
OF CONTENTS
I.
DEFINITIONS
|
1
|
|
II.
EXCHANGE
|
6
|
|
2.1
|
Share
Exchange
|
6
|
2.2
|
Share
Exchange Consideration.
|
6
|
2.3
|
Option
Exchange.
|
7
|
III.
CLOSING
|
7
|
|
3.1
|
The
Closing
|
7
|
3.2
|
Effective
Time.
|
7
|
3.3
|
Closing
Procedures.
|
7
|
3.4
|
Post-Closing
Matters.
|
10
|
3.5
|
Further
Assurances
|
11
|
IV.
SHAREHOLDERS
REPRESENTATIVE
|
11
|
|
4.1
|
Appointment.
|
11
|
4.2
|
Replacement.
|
11
|
4.3
|
Powers
of Appointment.
|
11
|
4.4
|
Liability.
|
12
|
4.5
|
Acceptance.
|
12
|
4.6
|
Indemnification
of Shareholders Representative.
|
12
|
V.
REPRESENTATIONS AND WARRANTIES OF
SHAREHOLDERS
|
12
|
|
5.1
|
Title
to Shares
|
12
|
5.2
|
Incorporation;
Power and Authority
|
12
|
5.3
|
Valid
and Binding Agreement
|
12
|
5.4
|
No
Breach; Consents
|
13
|
5.5
|
Brokerage
|
13
|
5.6
|
Investment
|
13
|
VI.
REPRESENTATIONS AND WARRANTIES OF
IDCENTRIX
|
17
|
|
6.1
|
Incorporation;
Power and Authority.
|
17
|
6.2
|
Valid
and Binding Agreement
|
17
|
6.3
|
No
Breach; Consents.
|
17
|
6.4
|
Capitalization
|
17
|
6.5
|
Subsidiaries
|
18
|
6.6
|
Financial
Statements
|
18
|
6.7
|
Absence
of Undisclosed Liabilities
|
18
|
6.8
|
Books
and Records
|
18
|
6.9
|
Absence
of Certain Developments
|
18
|
6.10
|
Property
|
20
|
6.11
|
Accounts
Receivable
|
20
|
6.12
|
Tax
Matters
|
21
|
6.13
|
Intellectual
Property Rights
|
21
|
6.14
|
Material
Contracts
|
22
|
6.15
|
Litigation
|
23
|
6.16
|
Insurance
|
23
|
6.17
|
Compliance
with Laws; Governmental Authorizations
|
23
|
6.18
|
Environmental
Matters
|
24
|
6.19
|
Employees
|
25
|
6.20
|
Employee
Benefits
|
25
|
6.21
|
Affiliate
Transactions
|
25
|
6.22
|
Brokerage
|
26
|
6.23
|
Solvency
|
26
|
6.24
|
Confidentiality.
|
26
|
6.25
|
Disclosure
|
26
|
ii
VII.
REPRESENTATIONS AND WARRANTIES OF
STERLING
|
26
|
|
7.1
|
Incorporation;
Power and Authority
|
26
|
7.2
|
SEC
Reporting.
|
27
|
7.3
|
Capitalization.
|
27
|
7.4
|
Subsidiaries
|
27
|
7.5
|
Valid
and Binding Agreement
|
27
|
7.6
|
No
Breach; Consents
|
28
|
7.7
|
Brokerage
|
28
|
7.8
|
Investment
Intent
|
28
|
7.9
|
Authorized
Capital and Exchange Shares
|
28
|
7.10
|
Financial
Statements
|
28
|
7.11
|
Certain
Tax Matters
|
28
|
7.12
|
Undisclosed
Liabilities
|
29
|
7.13
|
Interim
Changes
|
29
|
7.14
|
Title
to Property.
|
31
|
7.15
|
Books
and Records
|
31
|
7.16
|
Litigation
|
31
|
7.17
|
Insurance
|
31
|
7.18
|
Compliance
with Laws; Governmental Authorizations
|
31
|
7.19
|
Environmental
Matters
|
31
|
7.20
|
Employees
|
32
|
7.21
|
Employee
Benefits
|
32
|
7.22
|
Affiliate
Transactions
|
33
|
7.23
|
Solvency
|
33
|
7.24
|
Material
Contracts
|
33
|
7.25
|
Confidentiality.
|
34
|
7.26
|
Access
to Information Regarding iDcentrix.
|
35
|
7.27
|
Disclosure
|
35
|
VIII.
COVENANTS OF SHAREHOLDERS, IDCENTRIX AND
STERLING
|
35
|
|
8.1
|
iDcentrix
Conduct of the Business
|
35
|
8.2
|
Sterling
Conduct of Business
|
35
|
8.3
|
Notice
of Developments
|
36
|
8.4
|
Audited
Financial Statements
|
36
|
8.5
|
Sterling
Listing
|
36
|
8.6
|
Other
Covenants.
|
36
|
IX.
ORGANIZATIONAL DOCUMENTS OF STERLING AFTER SHARE
EXCHANGE
|
36
|
|
9.1
|
Sterling
Articles of Incorporation.
|
36
|
9.2
|
Sterling
Bylaws.
|
37
|
X.
OFFICERS AND DIRECTORS OF STERLING AFTER SHARE
EXCHANGE
|
37
|
|
10.1
|
Directors.
|
37
|
10.2
|
Officers
|
37
|
XI.
CONDITIONS TO CLOSING
|
37
|
|
11.1
|
Conditions
to Sterling’s Obligations
|
37
|
11.2
|
Conditions
to Shareholders’ Obligations
|
38
|
XII.
INDEMNIFICATION
|
38
|
|
12.1
|
Indemnification
by Shareholders
|
38
|
12.2
|
Indemnification
by iDcentrix
|
39
|
12.3
|
Indemnification
by Sterling
|
39
|
XIII.
GENERAL
|
40
|
|
13.1
|
Press
Releases and Announcements
|
40
|
13.2
|
Expenses
|
40
|
13.3
|
Amendment
and Waiver
|
41
|
13.4
|
Notices
|
41
|
iii
13.5
|
Assignment
|
42
|
13.6
|
No
Third-Party Beneficiaries
|
42
|
13.7
|
Severability
|
42
|
13.8
|
Complete
Agreement
|
42
|
13.9
|
Schedules
|
42
|
13.10
|
Signatures;
Counterparts
|
43
|
13.11
|
Governing
Law
|
43
|
13.12
|
Specific
Performance
|
43
|
13.13
|
Jurisdiction
|
43
|
13.14
|
Waiver
of Jury Trial
|
43
|
13.15
|
Construction
|
44
|
13.16
|
Time
of Essence
|
44
|
SIGNATURES
|
45
|
iv
This
SHARE
EXCHANGE AGREEMENT
(this
“Agreement”)
among
Sterling Gold Corp., a Nevada corporation (“Sterling”),
iDcentrix, Inc., a Delaware corporation (“iDcentrix”),
and
all the holders of common shares of iDcentrix, named on Schedule
2.2
hereto
(the “Shareholders”),
and
Xxxxxxxx Xxxxxx as the appointed representative of the Shareholders (the
“Shareholders
Representative”)
is
effective as of January 16, 2008.
Recitals
WHEREAS,
the
Shareholders own all of the outstanding capital stock of iDcentrix;
WHEREAS,
iDcentrix has executed technology sub-license agreements with Fortress Paper
Ltd. (“Fortress
Paper”)
giving
iDcentrix exclusive rights in Canada, the United States, and Mexico and
non-exclusive rights in the rest of the world, excluding Switzerland and Africa,
to Landqart AG’s (“Landqart”)
LQard®
I and II security card technology (“LQard
Technology”),
which
Fortress Paper has granted pursuant to its license agreement with Landqart,
its
wholly-owned subsidiary (iDcentrix’s use of rights to the LQard Technology is
referred to hereinafter as the “Business”);
WHEREAS,
the
Shareholders desire to transfer, and Sterling desires to acquire, all of the
outstanding capital stock and other equity interests of iDcentrix, by issuing
shares of common stock of Sterling (“Sterling
Shares”)
as
consideration, on the terms and subject to the conditions set forth in this
Agreement (the “Share
Exchange”);
WHEREAS,
iDcentrix intends to secure financing for the Business in the amount of up
to
US$4,050,000 through the completion of a private placement of up to 5,400,000
shares of common stock of iDcentrix (“Private
Placement Shares”)
at
US$0.75 per Private Placement Share on a best efforts basis (the “Private
Placement”),
which
Private Placement is to close just prior to the Share Exchange;
WHEREAS,
the
President of Sterling owns 4,900,000 restricted Sterling Shares (the
“President
Shares”),
and
Sterling has agreed that prior to the Share Exchange, Sterling will cancel,
or
will cause to be cancelled, all 4,900,000 of the President Shares;
and
WHEREAS,
the
Shareholders, iDcentrix and Sterling desire that following the Share Exchange,
iDcentrix will be a wholly-owned subsidiary of Sterling and Sterling will
continue as a public company with iDcentrix’s directors and management on the
Closing Date becoming the directors and management of Sterling moving forward;
and
WHEREAS,
following the Share Exchange, pursuant to a shareholder consent resolution,
Sterling will amend its articles of incorporation to change its name to
iDcentrix, Inc. (the “Name
Change”);
and
WHEREAS,
iDcentrix and Sterling have provided the Shareholders with an information
statement (the “Information
Statement”)
describing the Share Exchange and the Business and seeking the Shareholders’
approval of the Share Exchange, to which this Agreement is attached as
Annex
A.
NOW,
THEREFORE,
in
consideration of the mutual representations, warranties and agreements contained
in this Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as
follows:
I.
DEFINITIONS
Certain
terms not defined in this Article I are defined in Article II.
“Admitted
Claim”
has
the
meanings set forth in Sections 12.1(b), 12.2(b), and 12.3(b).
“Affiliate”
has
the
meaning set forth in Rule 12b-2 under the Exchange Act.
1
“Agreement”
has
the
meaning set forth in the first paragraph of this Agreement.
“Ancillary
Agreements”
means
any other agreements that the Parties may mutually agree are necessary or
desirable in connection with the Closing.
“Articles
of Incorporation”
has
the
meaning set forth in Section 9.1.
“Business”
has
the
meaning set forth in the recitals to this Agreement.
“Bylaws”
has
the
meaning set forth in Section 9.2.
“Canadian
Securities Commissions”
has
the
meaning set forth in Section 5.6(a).
“Canadian
Securities Laws”
means
any of the securities laws or regulations of any of the provinces of Canada
or
as promulgated by the Canadian Securities Commissions.
“Capital
Lease”
means
a
lease on which iDcentrix or Sterling, as the case may be, is a lessee that
is a
capital lease as determined in accordance with U.S. GAAP.
“Closing”
has
the
meaning set forth in Section 3.1.
“Closing
Date”
has
the
meaning set forth in Section 3.1.
“Code”
means
the Internal Revenue Code of 1986, as amended.
“Consent”
means
any authorization, consent, approval, filing, waiver, exemption or other action
by or notice to any Person.
“Contract”
means
a
contract, agreement, lease, commitment or binding understanding, whether oral
or
written, that is in effect as of the date of this Agreement or any time after
the date of this Agreement.
“Disclosure
Schedule”
means
all the schedules delivered by the Shareholder Representative and iDcentrix
to
Sterling or by Sterling to iDcentrix and the Shareholder Representative, as
the
case may be, pursuant to this Agreement.
“Effective
Time”
has
the
meaning set forth in Section 3.2.
“Encumbrance”
means
any charge, claim, community property interest, easement, covenant, condition,
equitable interest, lien, option, pledge, security interest, right of first
refusal or restriction of any kind, including any restriction on use, voting,
transfer, receipt of income or exercise of any other attribute of
ownership.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder.
“Exchange
Consideration”
has
the
meaning set forth in Section 2.2(a).
“Exchange
Rate”
has
the
meaning set forth in Section 2.2(b).
“Exchange
Shares”
has
the
meaning set forth in Section 2.2(a).
“Fortress
Paper”
has
the
meaning set forth in the recitals to this Agreement.
“Governmental
Authorization”
means
any approval, consent, license, permit, waiver, registration or other
authorization issued, granted, given, made available or otherwise required
by
any Governmental Entity or pursuant to Law.
2
“Governmental
Entity”
means
any federal, state, local, foreign, international or multinational entity or
authority exercising executive, legislative, judicial, regulatory,
administrative or taxing functions of or pertaining to government.
“Governmental
Order”
means
any judgment, injunction, writ, order, ruling, award or decree by any
Governmental Entity or arbitrator.
“iDcentrix”
has
the
meaning set forth in the first paragraph of this Agreement.
“iDcentrix
Intellectual Property Rights”
means
Intellectual Property Rights owned or licensed by iDcentrix as described on
Schedule 6.13(a).
“iDcentrix
Material Adverse Effect”
means
any change, effect, event or condition, individually or in the aggregate, that
has had, or, with the passage of time, could reasonably be expected to have,
a
material adverse effect on the business, assets, properties, condition
(financial or otherwise), results of operations, prospects or customer, supplier
or employee relationships of iDcentrix, taken as a whole.
“iDcentrix
Material Contracts”
has
the
meaning set forth in Section 6.14(a).
“iDcentrix
Option”
has
the
meaning set forth in Section 2.3.
“iDcentrix
Shares”
has
the
meaning set forth in Section 2.1.
“Indemnitee”
has
the
meanings set forth in Sections 12.1(a), 12.2(a) and 12.3(a).
“Indemnitee
Claim”
has
the
meanings set forth in Section 12.1(a), 12.2(a) and 12.3(a).
“Indemnitee
Losses”
has
the
meanings set forth in Sections 12.1(a), 12.2(a), and 12.3(a).
“Information
Statement”
has
the
meaning set forth in the recitals to this Agreement.
“Insider”
means
(i) a shareholder, officer, director or employee of iDcentrix or Sterling,
as
the case may be, (ii) any member of the immediate family of any shareholder,
officer, director or employee of iDcentrix or Sterling, as the case may be,
or
(iii) any entity in which any of the Persons described in clause (i) or (ii)
owns any beneficial interest (other than less than one percent of the
outstanding shares of capital stock of any corporation whose stock is listed
on
a national securities exchange or publicly traded on the NASDAQ Global Select
Market®, NASDAQ Global Market®, or NASDAQ Capital Market®).
“Intellectual
Property Rights”
means
(i) rights in patents, patent applications and patentable subject matter,
whether or not the subject of an application, (ii) rights in trademarks, service
marks, trade names, trade dress and other designators of origin, registered
or
unregistered, (iii) rights in copyrightable subject matter or protectable
designs, registered or unregistered, (iv) trade secrets, (v) rights in internet
domain names, uniform resource locators and e-mail addresses, (vi) rights in
semiconductor topographies (mask works), registered or unregistered, (vii)
know-how and (viii) all other intellectual and industrial property rights of
every kind and nature and however designated, whether arising by operation
of
Law, Contract, license or otherwise.
“International
Jurisdiction”
has
the
meaning set forth in Section 5.6(q).
“Knowledge”
means
the knowledge of such Person or any knowledge that would have been acquired
by
any such Person upon appropriate reasonable inquiry and
investigation.
“Landqart”
has
the
meaning set forth in the recitals to this Agreement.
“Latest
Balance Sheet”
has
the
meaning set forth in Section 6.6.
3
“Latest
Balance Sheet Date”
has
the
meaning set forth in Section 6.6.
“Latest
Financial Statements”
has
the
meaning set forth in Section 6.6.
“Law”
means
any constitution, law, ordinance, principle of common law, regulation, statute
or treaty of any Governmental Entity.
“Liability”
means
any liability or obligation whether accrued, absolute, contingent, unliquidated
or otherwise, whether due or to become due, whether known or unknown, and
regardless of when asserted.
“Litigation”
means
any claim, action, arbitration, mediation, audit, hearing, investigation,
proceeding, litigation or suit (whether civil, criminal, administrative,
investigative or informal) commenced, brought, conducted or heard by or before,
or otherwise involving, any Governmental Entity or arbitrator or
mediator.
“Loss”
means
any Litigation, Governmental Order, complaint, claim, demand, damage,
deficiency, penalty, fine, cost, amount paid in settlement, liability,
obligation, Tax, Encumbrance, loss, expense or fee, including court costs and
attorneys’ fees and expenses.
“LQard
Technology”
has
the
meaning set forth in the recitals to this Agreement.
“Material
Adverse Effect”
means
any change, effect, event or condition, individually or in the aggregate, that
has had, or, with the passage of time, could reasonably be expected to have,
a
material adverse effect on the business, assets, properties, condition
(financial or otherwise), results of operations, prospects or customer, supplier
or employee relationships of iDcentrix or Sterling, as the case may be, taken
as
a whole.
“Name
Change”
has
the
meaning set forth in the recitals to this Agreement.
“Name
Change Resolution”
has
the
meaning set forth in Section 9.1.
“NI
45-102”
has
the
meaning set forth in Section 5.6(o)(ix).
“NI
45-106”
has
the
meaning set forth in Section 5.6(o)(vi).
“Offshore
Transaction”
has
the
meaning given thereto under Regulation S of the Securities Act.
“Ordinary
Course of Business”
means
the ordinary course of business of iDcentrix or Sterling, as the case may be,
consistent with past custom and practice.
“Organizational
Documents”
means
(i) the articles or certificate of incorporation and the bylaws of a
corporation, (ii) the partnership agreement and any statement of partnership
of
a general partnership, (iii) the limited partnership agreement and the
certificate of limited partnership of a limited partnership, (iv) the limited
liability company agreement and articles or certificate of formation of a
limited liability company, (v) any charter or similar document adopted or filed
in connection with the creation, formation or organization of a Person and
(vi)
any amendment to any of the foregoing.
“OSC”
has
the
meaning set forth in Section 5.6(o)(vii)(A).
“OSC
Information”
has
the
meaning set forth in Section 5.6(o)(vii)(A).
“Owned
Real Property”
has
the
meaning set forth in Section 6.10(b).
“Permitted
Encumbrances”
means
(i) Encumbrances for Taxes and other governmental charges and assessments
(except assessments for public improvements levied, pending or deferred against
Real Property) that are not yet due and payable or which are being contested
in
good faith by appropriate proceedings (provided required payments have been
made
in connection with any such contest), (ii) Encumbrances of carriers,
warehousemen, mechanics’ and materialmen and other like Encumbrances arising in
the Ordinary Course of Business (provided lien statements have not been filed
as
of the Closing Date), (iii) easements, rights of way and restrictions, zoning
ordinances and other similar Encumbrances affecting the Real Property and which
do not unreasonably restrict the use thereof or proposed use thereof in the
Ordinary Course of Business, (iv) statutory Encumbrances in favor of lessors
arising in connection with any leased property leased to iDcentrix or Sterling,
as the case may be, (v) Encumbrances reflected in the Latest Financial
Statements or arising under iDcentrix Material Contracts or Sterling Material
Contracts, as the case may be, and (vi) Encumbrances that will be removed prior
to or in connection with the Closing.
4
“Person”
means
any individual, corporation (including any non-profit corporation), general
or
limited partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union, Governmental Entity or other
entity.
“Plan”
means
every plan, fund, contract, program and arrangement (whether written or not)
for
the benefit of present or former employees, including those intended to provide
(i) medical, surgical, health care, hospitalization, dental, vision,
workers’ compensation, life insurance, death, disability, legal services,
severance, sickness or accident benefits, (ii) pension, profit sharing,
stock bonus, retirement, supplemental retirement or deferred compensation
benefits or (iii) salary continuation, unemployment, supplemental
unemployment, severance, termination pay, change-in-control, vacation or holiday
benefits.
“Power
of Attorney for Approval of Name Change and Consent to Share
Exchange”
means
the power of attorney attached to the Information Statement as Annex
B,
as more
fully described in Section 9.1.
“President
Shares”
has
the
meaning set forth in the recitals to this Agreement.
“Private
Placement”
has
the
meaning set forth in the recitals to this Agreement.
“Private
Placement Shares”
has
the
meaning set forth in the recitals to this Agreement.
“Qualifying
Provinces”
has
the
meaning set forth in Section 5.6(o)(vi).
“Real
Property”
means
real property owned, leased, controlled or occupied by iDcentrix or Sterling,
as
the case may be.
“Registered
Intellectual Property Rights”
means
Intellectual Property Rights that are the subject of a pending application
or an
issued patent, trademark, copyright, design right or other similar registration
formalizing exclusive rights.
“Remedies
Exception,”
when
used with respect to any Person, means except to the extent enforceability
may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or
other laws affecting the enforcement of creditors’ rights generally and by
general equitable principles.
“Return”
means
any return, declaration, report, estimate, information return and statement
pertaining to any Taxes.
“Required
Consent”
means
any consent necessary to legally undertake the transactions of this Agreement,
including but not limited to, any consents of spouses of the
Shareholders.
“Required
Financial Statements”
has
the
meaning set forth in Section 8.3.
“SEC”
has
the
meaning set forth in Section 5.6(a).
“Securities
Act”
means
the Securities Act of 1933, as amended.
“Share
Exchange”
has
the
meaning set forth in the recitals to this Agreement.
“Shareholders”
has
the
meaning set forth in the first paragraph of this Agreement.
5
“Shareholders
Representative”
has
the
meaning set forth in the first paragraph of this Agreement.
“Software”
means
computer programs or data in computerized form, whether in object code, source
code or other form.
“Sterling”
has
the
meaning set forth in the first paragraph of this Agreement.
“Sterling
Material Adverse Effect”
means
any change, effect, event or condition, individually or in the aggregate, that
has had, or, with the passage of time, could reasonably be expected to have,
a
material adverse effect on the business, assets, properties, condition
(financial or otherwise), results of operations, prospects or customer, supplier
or employee relationships of Sterling, taken as a whole.
“Sterling
Material Contracts”
has
the
meaning set forth in Section 7.24(a).
“Sterling
SEC Reports”
has
the
meaning set forth in Section 7.2.
“Sterling
Shares”
has
the
meaning set forth in the recitals to this Agreement.
“Subsidiary”
means
any Person in which any ownership interest is owned, directly or indirectly,
by
another Person.
“Taxes”
means
all taxes, charges, fees, levies or other assessments, including all net income,
gross income, gross receipts, sales, use, ad valorem, transfer, franchise,
profits, license, withholding, payroll, employment, social security,
unemployment, excise, estimated, severance, stamp, occupation, property or
other
taxes, customs duties, fees, assessments or charges of any kind whatsoever,
including all interest and penalties thereon, and additions to tax or additional
amounts imposed by any Governmental Entity.
“Third-Party
Intellectual Property Rights”
means
Intellectual Property Rights in which a Person other than iDcentrix or a
Subsidiary has any ownership interest.
“U.S.
GAAP”
means
generally accepted accounting principles in the United States of America, as
in
effect from time to time.
“U.S.
Person”
has
the
meaning set forth in Regulation S of the Securities Act.
II.
EXCHANGE
2.1 Share
Exchange.
At
the
Closing and on the terms and subject to the conditions set forth in this
Agreement, the Shareholders agree to transfer to Sterling, and Sterling agrees
to acquire, all of the issued and outstanding shares of common stock of
iDcentrix (“iDcentrix
Shares”)
from
the Shareholders. Each Shareholder waives any co-sale rights, rights of first
refusal or similar rights that such Shareholder may have relating to Sterling’s
transfer of the iDcentrix Shares, whether conferred by iDcentrix’s
Organizational Documents, by Contract or otherwise.
2.2 Share
Exchange Consideration.
(a) The
aggregate consideration (the “Exchange
Consideration”)
issued
in exchange for the iDcentrix Shares shall be up to 21,320,000 Sterling Shares
(the “Exchange
Shares”),
depending on the number of issued and outstanding iDcentrix Shares as of the
Closing Date.
(b) Shareholders
shall exchange all iDcentrix Shares for Exchange Shares, representing an
exchange rate of one (1) iDcentrix Share for one (1) Exchange Share
(“Exchange
Rate”).
No
fractional shares shall be issued. Each Shareholder shall exchange his, her
or
its iDcentrix Shares for the number of Exchange Shares listed under the heading
“Total Exchange Shares” opposite such Shareholder’s name on Schedule
2.2.
All
parties agree that Schedule
2.2
shall be
delivered by iDcentrix to Sterling no later than 1 business day prior to the
Closing.
6
2.3
Option
Exchange.
Pursuant
to and by virtue of the Share Exchange, effective as of the Closing, iDcentrix
shall assign to, and Sterling shall assume, the 2007 Equity Participation Plan
of iDcentrix (the “iDcentrix
Option Plan”)
and
agreements entered into thereunder. At the Closing, any option to purchase
iDcentrix Shares issued and outstanding immediately prior to the Closing Date
(“iDcentrix
Option”)
will
be converted into and become rights with respect to Sterling Shares, and
Sterling will assume each such iDcentrix Option in accordance with the terms
(as
in effect as of the date of this Agreement) of the iDcentrix Option Plan under
which it was issued and the terms of the stock option agreement by which it
is
evidenced. From and after the Closing Date, (i) each iDcentrix Option assumed
by
Sterling may be exercised solely for Sterling Shares, (ii) the number of
Sterling Shares subject to each such iDcentrix Option will be equal to the
number of iDcentrix Shares subject to such iDcentrix Option immediately prior
to
the Closing Date, (iii) the per share exercise price under each such iDcentrix
Option will be equal to the per share exercise price immediately prior to the
Closing Date, and (iv) any restriction on the exercise of any such iDcentrix
Option will continue in full force and effect and the term, exercisability,
vesting schedule and other provisions of such iDcentrix Option will otherwise
remain unchanged; the option exercise price, the number of Sterling Shares
purchasable pursuant to such option and the terms and conditions of exercise
of
such option will be determined in order to comply with Section 424(a) of the
Code.
At
the
Closing, any restricted share issued under the iDcentrix Option Plan prior
to
the Closing Date and that remains unvested as of the Closing Date (“iDcentrix
Restricted Share”)
will
be converted into and become rights with respect to Sterling Shares, and
Sterling will assume each such iDcentrix Restricted Share in accordance with
the
terms (as in effect as of the date of this Agreement) of the iDcentrix Option
Plan under which it was issued and the terms of the agreement by which it is
evidenced. From and after the Closing Date, (i) the number of Sterling Shares
issued or issuable to the holder of the iDcentrix Restricted Share pursuant
to
an agreement under the iDcentrix Option Plan will be equal to the number of
iDcentrix Shares previously issued or issuable to such holder under such plan
prior to the Closing Date, (ii) any restriction relating to the iDcentrix
Restricted Share will continue in full force and effect and the number, vesting
schedule and other provisions of such iDcentrix Restricted Share will otherwise
remain unchanged.
Prior
to
the Closing Date, iDcentrix will take all action that may be necessary (under
the plans pursuant to which iDcentrix Options and iDcentrix Restricted Shares
are outstanding and otherwise) to effectuate the provisions of this Section
2.3
and to ensure that, from and after the Closing Date, holders of iDcentrix
Options and/or iDcentrix Restricted Shares have no rights with respect thereto
inconsistent with those specifically provided in this Section 2.3.
III.
CLOSING
3.1
The
Closing.
The
closing of the transactions contemplated by this Agreement (the “Closing”)
will
take place at the offices of Xxxxxx & Xxxxxxx LLP at 000 Xxxxxxxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, at 12 p.m. (MST) as soon as reasonably
possible following satisfaction of the conditions set forth in Article XI (the
“Closing
Date”),
but
no later than January 28, 2008, or at such other place and on such other date
as
may be mutually agreed by Sterling and the Shareholders Representative, in
which
case the Closing Date means the date so agreed.
3.2 Effective
Time.
The
Closing will be effective as of the close of business (5 p.m. MST) on the
Closing Date (“Effective
Time”).
3.3 Closing
Procedures.
(a) Subject
to the conditions set forth in this Agreement, on the Closing Date:
(i) the
Shareholders and iDcentrix, as applicable, will deliver to Sterling:
7
(A)
|
certificates
representing all of the iDcentrix Shares, free and clear of all
Encumbrances, duly endorsed or accompanied by duly executed stock
powers;
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(B)
|
a
certificate of an appropriate officer of iDcentrix dated the Closing
Date
in a form satisfactory to Sterling, certifying that (a) no Litigation
is
pending or threatened (i) challenging or seeking to prevent or delay
consummation of any of the transactions contemplated by this Agreement,
(ii) asserting the illegality of or seeking to render unenforceable
any
material provision of this Agreement or any of the Ancillary Agreements,
(iii) seeking to prohibit direct or indirect ownership, combination
or
operation by Sterling of any portion of the Business, or to compel
Sterling or iDcentrix to dispose of, or to hold separately, or to
make any
change in any portion of the business of Sterling or of the Business,
as a
result of the transactions contemplated by this Agreement, (iv) seeking
to
require direct or indirect transfer or sale by Sterling of, or to
impose
material limitations on the ability of Sterling to exercise full
rights of
ownership of, any of the iDcentrix Shares or (v) imposing or seeking
to
impose material damages or sanctions directly arising out of the
transactions contemplated by this Agreement on Sterling or iDcentrix
or
any of their respective officers or directors; (b) iDcentrix’s
representations and warranties are true, accurate and correct as
of the
Closing Date, (c) iDcentrix has complied with and performed the agreements
contained in this Agreement to be complied with, or performed by,
it on or
prior to the Closing Date, and (d) all conditions to Closing of iDcentrix
have been satisfied;
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(C)
|
a
certificate of the Shareholders Representative dated the Closing
Date in a
form satisfactory to Sterling, certifying that: (a) the Shareholders’
representations and warranties are true, accurate and correct as
of the
Closing Date, (b) the Shareholders have complied with and performed
the
agreements contained in this Agreement, to be complied with, or performed
by them on or prior to the Closing Date, and (c) all conditions to
Closing
of the Shareholders have been
satisfied;
|
(D)
|
a
Disclosure Schedule, prepared as though this Agreement has been dated
as
of the Closing Date, a good faith draft of which will have been submitted
to Sterling no later than one (1) business day prior to the Closing
Date;
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(E)
|
the
text of the resolutions adopted by the board of directors (or similar
body) of any Shareholder that is not a natural Person and iDcentrix
authorizing the execution, delivery and performance of this Agreement,
certified by an appropriate officer of such Shareholder or iDcentrix,
as
applicable;
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(F)
|
each
Ancillary Agreement, if any, fully executed and completed to which
any of
the Shareholder Representative, any Shareholder and/or iDcentrix
is a
party, duly executed by each as
applicable;
|
(G)
|
all
Required Consents duly executed by all appropriate
parties;
|
(H)
|
any
other instruments of transfer reasonably requested by Sterling, duly
executed by the Shareholders and/or
iDcentrix;
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(I)
|
iDcentrix’s
Latest Balance Sheet and the Latest Financial
Statements;
|
(J)
|
certificates
dated as of a date not earlier than the fifth business day prior
to the
Closing as to the good standing of iDcentrix executed by the appropriate
officials of the State of Delaware and each jurisdiction in which
iDcentrix is licensed or qualified to do business as a foreign corporation
as specified in Schedule
6.1;
|
8
(K)
|
Powers
of Attorney for Approval of Name Change and Consent to Share Exchange
in
substantially the form attached to the Information Statement as
Annex
B
for each Shareholder;
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(L)
|
such
documents evidencing the closing of the Private Placement as may
be
reasonably requested by Sterling or its counsel;
and
|
(M)
|
such
other certificates, documents and instruments that Sterling reasonably
requests for the purpose of (1) evidencing the accuracy of Shareholders’
representations and warranties, (2) evidencing the performance and
compliance by Shareholders with the agreements contained in this
Agreement, or (3) otherwise facilitating the consummation of the
transactions contemplated by this
Agreement.
|
All
actions to be taken by the Shareholders or iDcentrix in connection with
consummation of the transactions contemplated by this Agreement and all
certificates, instruments and other documents required to effect the
transactions contemplated by this Agreement will be in form and substance
satisfactory to Sterling and Sterling’s counsel.
(ii) Sterling
will deliver to the Shareholders Representative:
(A)
|
evidence
that, upon surrender of the iDcentrix Shares, Sterling
has immediately entered into its stock register and will
be deemed to have delivered certificates representing such number
of
Exchange Shares as set forth opposite such Shareholder’s name under the
heading “Total Exchange Shares” on Schedule
2.2
in
the exact name of the Shareholder of such iDcentrix Shares as such
name
appears on the surrendered certificates free and clear of all
Encumbrances. No fraction of an Exchange Share will be issued at
Closing,
but in lieu thereof, fractional Exchange Shares will be rounded down
to
the nearest whole Exchange Share;
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(B)
|
a
certificate of an appropriate officer of Sterling dated the Closing
Date
in a form satisfactory to iDcentrix certifying that (a) no Litigation
is
pending or threatened (i) challenging or seeking to prevent or delay
consummation of any of the transactions contemplated by this Agreement,
(ii) asserting the illegality of or seeking to render unenforceable
any
material provision of this Agreement or any of the Ancillary Agreements,
(iii) seeking to prohibit direct or indirect ownership, combination
or
operation by Sterling of any portion of the Business, or to compel
Sterling or iDcentrix to dispose of, or to hold separately, or to
make any
change in any portion of the business of Sterling or of the Business,
as a
result of the transactions contemplated by this Agreement, (iv) seeking
to
require direct or indirect transfer or sale by Sterling of, or to
impose
material limitations on the ability of Sterling to exercise full
rights of
ownership of, any of the iDcentrix Shares or (v) imposing or seeking
to
impose material damages or sanctions directly arising out of the
transactions contemplated by this Agreement on Sterling or iDcentrix
or
any of their respective officers or directors; (b) Sterling’s
representations and warranties are true, accurate and correct as
of the
Closing Date, (c) Sterling has complied with and performed the agreements
contained in this Agreement to be complied with, or performed by,
it on or
prior to the Closing Date; and (d) all conditions to Closing of Sterling
have been satisfied;
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9
(C)
|
the
text of the resolutions adopted by the board of directors of Sterling
authorizing the execution, delivery and performance of this Agreement
including the issuance of the Exchange Shares, certified by an appropriate
officer of Sterling;
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(D)
|
evidence
that all 4,900,000 of the President Shares have been tendered for
cancellation and that there will be no President Shares issued and
outstanding immediately prior to
Closing;
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(E)
|
evidence
that the Bylaws, as defined in Article IX have been properly adopted
by
Sterling;
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(F)
|
evidence
that the resignations and appointments of directors and officers
of
Sterling as described in Article X will be effected upon Closing
and as of
the Effective Time;
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(G)
|
each
Ancillary Agreement, if any, duly executed and completed to which
Sterling
is a party;
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(H)
|
all
Required Consents duly executed by all appropriate parties;
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(I)
|
certificates
dated as of a date not earlier than the fifth business day prior
to the
Closing as to the good standing of Sterling executed by the appropriate
officials of the State of Nevada and each jurisdiction in which Sterling
is licensed or qualified to do business as a foreign corporation
as
specified in Schedule
7.1.
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(J)
|
the
minute books, stock or equity records, corporate seal and other materials
related to the corporate administration of Sterling;
and
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(K)
|
such
other certificates, documents and instruments that iDcentrix or the
Shareholder Representative reasonably request for the purpose of
(1)
evidencing the accuracy of Sterling’s representations and warranties, (2)
evidencing the performance and compliance by Sterling with the agreements
contained in this Agreement, or (3) otherwise facilitating the
consummation of the transactions contemplated by this
Agreement.
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All
actions to be taken by Sterling in connection with consummation of the
transactions contemplated by this Agreement and all certificates, instruments
and other documents required to effect the transactions contemplated by this
Agreement will be in form and substance satisfactory to iDcentrix, the
Shareholder Representative and their respective counsels.
(b) All
items
delivered by the parties at the Closing will be deemed to have been delivered
simultaneously, and no items will be deemed delivered or waived until all have
been delivered.
(c) Notwithstanding
any investigation made by or on behalf of any of the parties to this Agreement
or the results of any such investigation and notwithstanding the fact of, or
the
participation of such party in, the Closing, the representations, warranties
and
agreements in this Agreement will survive the Closing for a period of 12
months.
3.4 Post-Closing
Matters.
(a) Immediately
following the delivery of all outstanding iDcentrix Share Certificates to
Sterling and the deemed delivery of all Sterling Share certificates to the
Shareholder Representative pursuant to Section 3.3, the Shareholder
Representative will execute the Name Change Resolution, as described in Section
9.1, effecting a name change of Sterling Gold to iDcentrix, Inc. Sterling Gold
will immediately file on an expedited basis with the Secretary of State of
Nevada a Certificate of Amendment to Articles of Incorporation changing the
name
of Sterling Gold to iDcentrix, Inc.
10
(b) Upon
confirmation that the Secretary of State has accepted the Certificate of
Amendment to Articles of Incorporation, the Shareholder Representative will
surrender the Exchange Share certificates that were deemed to be issued as
part
of the Share Exchange in exchange for new iDcentrix Pubco share certificates
(“iDcentrix
Pubco Certificates”).
Sterling will instruct its transfer agent to issue such number of iDcentrix
Pubco Certificates to which each Shareholder is entitled in the exact name
of
the Shareholder as entered into the stock register of Sterling Gold pursuant
to
Section 3.3.
(c) The
Shareholder Representative will deliver each Shareholder’s iDcentrix Pubco
Certificates to each Shareholder within five (5) business days of receipt
thereof.
(d) Additionally,
as of the Effective Time on the Closing Date, the resignation of Xxxxx X. Xxxxx
as Sterling Gold’s director and president, principal executive officer,
principal accounting officer, principal financial officer, secretary and
treasurer will be effective and the appointment of Xxxxxxxx Xxxxxx, Xxxx
Xxxxxxx, Xxxxx Xxxxxx and Xxxxxxx Xxxxxx as directors of Sterling Gold and
the
appointment of Xxxxxxxx Xxxxxx to the office of Chief Executive Officer and
President and Xxxx Xxxxxxx as Chief Financial Officer will be
effective.
3.5 Further
Assurances.
On
and
after the Closing Date, the Shareholders, iDcentrix and Sterling will take
all
appropriate action and execute any documents, instruments or conveyances of
any
kind that may be reasonably requested by the other parties to carry out any
of
the provisions of this Agreement.
IV.
SHAREHOLDERS
REPRESENTATIVE
4.1 Appointment.
Shareholders
appoint Xxxxxxxx Xxxxxx (or any Person appointed as a successor Shareholders
Representative pursuant to Section 4.2)
as
their representative and agent under this Agreement.
4.2 Replacement.
Until
all
obligations under this Agreement have been discharged (including all
indemnification obligations under Article XII), the Shareholders (as a single
group voting based on the total number of Exchange Shares issuable under this
Agreement) who, immediately prior to the Closing, are entitled to receive more
than 66% of the Exchange Consideration, may, from time to time upon written
notice to the Shareholders Representative and Sterling, remove the Shareholders
Representative or appoint a new Shareholders Representative upon the death,
incapacity, resignation or removal of the Shareholders Representative. If,
after
the death, incapacity, resignation or removal of the Shareholders
Representative, a successor Shareholders Representative has not been appointed
by the Shareholders within 15 business days after a request by Sterling or
iDcentrix, the board of directors of iDcentrix will have the right to appoint
a
Shareholders Representative to fill any vacancy so created by written notice
of
such appointment to Shareholders.
4.3 Powers
of Appointment.
The
Shareholders authorize the Shareholders Representative to take any action and
to
make and deliver any certificate, notice, consent or instrument required or
permitted to be made or delivered under this Agreement or under the documents
referred to in this Agreement, to waive any requirements of this Agreement
or to
enter into one or more amendments or supplements to this Agreement that the
Shareholders Representative determines in the Shareholders Representative’s sole
and absolute discretion, acting reasonably, to be necessary, appropriate or
advisable; provided
however
that the
Shareholder Representative shall (i) not take any action or waive any
requirements of this Agreement that would result in a material change in the
Exchange Rate or otherwise materially alter the nature of the Exchange Shares,
and (ii) notify the Shareholders of any material amendment to or waiver of
the
requirements of this Agreement. The authority of Shareholders Representative
includes the right to hire or retain, at the sole expense of Shareholders,
such
counsel, investment bankers, accountants, representatives and other professional
advisors as the Shareholders Representative determines in the Shareholders
Representative’s sole and absolute discretion, acting reasonably, to be
necessary, appropriate or advisable in order to perform this Agreement. Any
party will have the right to rely upon any action taken by the Shareholders
Representative, and to act in accordance with such action without independent
investigation.
11
4.4 Liability.
Sterling
will have no liability to any Shareholder or otherwise arising out of the acts
or omissions of the Shareholders Representative or any disputes among the
Shareholders or with the Shareholders Representative. Sterling may rely entirely
on its dealings with, and notices to and from, the Shareholders Representative
to satisfy any obligations it might have under this Agreement or any other
agreement referred to in this Agreement or otherwise to the
Shareholders.
4.5 Acceptance.
Upon
executing this Agreement, the Shareholders Representative accepts the
appointment made by this Article IV and agrees to abide by the provisions of
this Article IV.
4.6
Indemnification
of Shareholders Representative.
The
Shareholders hereby agree to indemnify and save harmless the Shareholders
Representative from any liability, loss, cost, damage or expense, including
attorneys fees (reasonably incurred or suffered as a result of the performance
of her duties under this Agreement) incurred by the Shareholders Representative
based on or arising out of any act, whether of commission or omission, of the
Shareholders Representative pursuant to the authority herein granted, other
than
acts, whether of commission or omission, of the Shareholders Representative
that
constitute gross negligence or willful misconduct in the exercise by the
Shareholders Representative of the authority herein granted.
V.REPRESENTATIONS
AND WARRANTIES OF SHAREHOLDERS
Each
Shareholder, severally (solely as to itself, himself or herself), represents
and
warrants to Sterling that, except as described in the Disclosure Schedule,
as of
the date of this Agreement and as of the Closing Date (as though made then
and
as though the Closing Date were substituted for the date of this
Agreement):
5.1 Title
to Shares.
Such
Shareholder owns, of record and beneficially, the number of iDcentrix Shares
listed under the heading “Total iDcentrix Shares” opposite such Shareholder’s
name on Schedule
2.2,
free
and clear of any Encumbrance, which Schedule
2.2
will be
delivered by iDcentrix no later than one (1) business day before Closing. At
Closing, Sterling will obtain good and valid title to such iDcentrix Shares,
of
record and beneficially, free and clear of any Encumbrance other than an
Encumbrance created by Sterling or this Agreement.
5.2 Incorporation;
Power and Authority.
If
such
Shareholder is not a natural Person, it is duly organized, validly existing
and
in good standing under the laws of the jurisdiction of its organization. Such
Shareholder has all necessary power and authority to execute, deliver and
perform this Agreement and any Ancillary Agreements to which it will become
a
party.
5.3 Valid
and Binding Agreement.
If
such
Shareholder is not a natural Person, the execution, delivery and performance
of
this Agreement and any Ancillary Agreements to which it will become a party
by
such Shareholder has been duly and validly authorized by all necessary corporate
or equivalent action. This Agreement has been duly executed and delivered by
such Shareholder and constitutes the valid and binding obligation of such
Shareholder, enforceable against it in accordance with its terms, subject to
the
Remedies Exception. Each Ancillary Agreement to which such Shareholder will
become a party, when executed and delivered by or on behalf of such Shareholder
will constitute the valid and binding obligation of such Shareholder enforceable
against such Shareholder in accordance with its terms, subject to the Remedies
Exception.
12
5.4 No
Breach; Consents.
The
execution, delivery and performance of this Agreement and any Ancillary
Agreements to which Shareholder will become a party by such Shareholder will
not
(a) if it is not a natural person, contravene any provision of the
Organizational Documents, if any, of such Shareholder; (b) violate or conflict
with any Law, Governmental Order or Governmental Authorization; (c) conflict
with, result in any breach of any of the provisions of, constitute a default
(or
any event that would, with the passage of time or the giving of notice or both,
constitute a default) under, result in a violation of, increase the burdens
under, result in the termination, amendment, suspension, modification,
abandonment or acceleration of payment (or any right to terminate) or require
a
Consent under any Contract or Governmental Authorization that is either binding
upon or enforceable against such Shareholder or any Governmental Authorization
that is held by iDcentrix; (d) result in the creation of any Encumbrance upon
the iDcentrix Shares held by such Shareholder; or (e) require any Governmental
Authorization.
5.5 Brokerage.
No
Person
will be entitled to receive any brokerage commission, finder’s fee, fee for
financial advisory services or similar compensation in connection with the
transactions contemplated by this Agreement based on any Contract made by or
on
behalf of such Shareholder for which Sterling or iDcentrix is or could become
liable or obligated.
5.6 Investment.
(a) Shareholder
understands that the Exchange Shares have not been approved or disapproved
by
the United States Securities and Exchange Commission (“SEC”),
any
state securities agency or any securities commission or similar regulatory
authority in any of the provinces or territories of Canada (“Canadian
Securities Commissions”);
(b) Shareholder
certifies that it is resident in the jurisdiction set out on the signature
page
of this Agreement under the heading "Shareholder Information", as the case
may
be, which address is the residence or place of business of the Shareholder
and
that such address was not obtained or used solely for the purpose of investing
in the Exchange Shares;
(c) Shareholder
is acquiring the Exchange Shares for investment purposes only for its own
account and not with a view to, or for, resale in connection with any
distribution of the Exchange Shares within the meaning of the Securities Act;
and the Exchange Shares are not being acquired with a view to or for the resale,
distribution, subdivision or fractionalization thereof; and the Shareholder
has
no contract, undertaking, understanding, agreement, or arrangement, formal
or
informal, with any person to sell, transfer, or pledge to any person the
Exchange Shares which it hereby acquires, or any part thereof; and it
understands the legal consequences of the foregoing representations and
warranties to mean that it must bear the economic risk of the investment for
an
indefinite period of time because the Exchange Shares have not been registered
under the Securities Act, and, therefore, may be resold only if registered
under
the Securities Act, or if an exemption from such registration requirements
is
available;
(d) Shareholder
is at arm's length with, and is not an insider or affiliate of, (each, within
the meaning of the Securities Act and the Canadian Securities Laws) Sterling,
except as disclosed in writing by the Shareholder to Sterling;
(e) Shareholder
understands the speculative nature and risks of investments associated with
Sterling, and confirms that the Exchange Shares would be suitable and consistent
with its investment program and that its financial position enables Shareholder
to bear the risks of this investment, and that there may not be any public
market for the Exchange Shares;
13
(f) Shareholder
acknowledges that the Exchange Shares are “restricted securities,” as such term
is defined under Rule 144 of the Securities Act, and may not be offered, sold,
transferred, pledged, or hypothecated to any person in the absence of
registration under the Securities Act and applicable state securities laws
or an
opinion of counsel satisfactory to Sterling that such registration is not
required. Without limiting the generality or application of any other covenants,
representations, warranties or acknowledgements of the Shareholder respecting
resale of the Exchange Shares, if the Shareholder decides to offer, sell or
otherwise transfer any of the Exchange Shares, it will not offer, sell or
otherwise transfer any of such Exchange Shares directly or indirectly,
unless:
(i)
|
the
sale is to Sterling;
|
(ii)
|
the
sale is made outside the United States in an Offshore Transaction
meeting
the requirements of Rule 904 of Regulation S (or such successor rule
or
regulation then in effect), if available, and in compliance with
applicable state securities laws;
|
(iii)
|
the
sale is made pursuant to the exemption from the registration requirements
under the Securities Act provided by Rule 144 thereunder and in accordance
with any applicable state securities laws or in a transaction that
does
not require registration under the Securities Act or any applicable
state laws, and in each case, it has prior to such sale furnished to
Sterling an opinion of counsel of reputable standing and in a form
reasonably satisfactory to Sterling to that effect;
or
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(iv)
|
the
Exchange Shares are registered under the Securities Act and any applicable
state laws;
|
Shareholder
understands that Sterling may instruct its registrar and transfer agent not
to
record any transfer of the Exchange Shares without first being notified by
Sterling that it is satisfied that such transfer is exempt from or not subject
to the registration requirements of the Securities Act and applicable state
securities laws;
(g) Shareholder
understands that Sterling is under no obligation in the United States, to
register the Exchange Shares or seek an exemption under the Securities Act
or
any applicable state laws, or to cause or permit the Exchange Shares to be
transferred in the absence of any such registration or exemption, and
understands that Shareholder must hold the Exchange Shares indefinitely unless
the Exchange Shares are subsequently registered under the Securities Act or
applicable state securities laws, as applicable, or an exemption from such
registration requirements is available;
(h) Shareholder
understands that the Company is under no obligation whatsoever in Canada to
qualify the distribution of the Exchange Shares under a prospectus under
Canadian Securities Laws, and understands that Shareholder must hold the
Exchange Shares indefinitely unless available statutory exemptions from
registration and prospectus requirements or a discretionary exemption granted
by
applicable Canadian Securities Commissions is available;
(i) Shareholder
acknowledges that it has not relied upon Sterling, iDcentrix, the Shareholder
Representative or their respective counsels for legal, financial or tax
advice;
(j) all
costs
and expenses incurred by the Shareholder (including any fees and disbursements
of any special counsel or other advisors retained by the Shareholder) relating
to the acquisition of the Exchange Shares shall be borne by the
Shareholder;
(k) Shareholder
acknowledges that no person has made to the Shareholder any written or oral
representations:
(i) |
that
any person will resell or repurchase any of the Exchange Shares;
or
|
14
(ii) |
as
to the future price or value of any of the Exchange
Shares;
|
(l) Shareholder
has not purchased the Exchange Shares as a result of any form of general
solicitation or general advertising, including advertisements, articles, notices
or other communications published in any newspaper, magazine or similar media
or
broadcast over radio, or television, or any seminar or meeting whose attendees
have been invited by general solicitation or general advertising;
(m) Shareholder
confirms that the issuance and sale of the Exchange Shares by Sterling is being
made pursuant to an exemption from the registration requirements under the
Securities Act provided by Rule 506 of Regulation D and/or section 4(2) of
the
Securities Act, or the exclusion from such registration requirements available
under Regulations S of the Securities Act, and confirms that it is an
“accredited investor” (as
that term is defined under Rule 501(a) as promulgated under Regulation D of
the Securities Act);
(n) Unless
the Shareholder has completed, signed and delivered a U.S.
Accredited Investor Certificate (Annex
D to
the
Information Statement), then the Shareholder represents and acknowledges
that:
(i)
|
it
is acquiring the Exchange Shares in an Offshore Transaction (as that
term
is defined in Regulation S of the Securities
Act);
|
(ii)
|
it
is not a U.S. Person and is not acquiring the Exchange Shares for
the
account or benefit of any U.S. Persons or persons within the United
States;
|
(iii)
|
it
will not engage in hedging transactions with regard to the Exchnage
Shares
unless conducted in compliance with the Securities
Act;
|
(iv)
|
it
will not resell any of the Exchange Shares unless in accordance with
the
provisions of Regulation S and in accordance with applicable state
securities laws in the United States, pursuant to an effective
registration statement under the Securities Act with respect to such
Exchange Shares or pursuant to an available exemption from registration
under the Securities Act; provided that the Shareholder provides
an
opinion of counsel or other evidence of exemption, in form reasonably
satisfactory to U.S. counsel to Sterling;
|
(v)
|
Sterling
will refuse to register any transfer of any of the Exchange Shares
not
made in accordance with the provisions of Regulation S, pursuant
to an
effective registration statement under the Securities Act with respect
to
such Securities or pursuant to an available exemption from registration;
|
(o) Shareholder
acknowledges that the certificates representing the Exchange Shares delivered
pursuant to this Agreement shall bear a legend in the following
form:
“THE
SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE SHARES MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B)
IF
THE SHARES HAVE BEEN REGISTERED IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS
UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS
(C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER
THE SECURITIES ACT IN ACCORDANCE WITH RULE 144 THEREUNDER, IF APPLICABLE, AND
IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT
DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE
LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OF SHARES, AND THE HOLDER
HAS,
PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED
STANDING, OR OTHER EVIDENCE OF EXEMPTION, REASONABLY SATISFACTORY TO THE
COMPANY. HEDGING TRANSACTIONS INVOLVING THE SHARES REPRESENTED HEREBY MAY NOT
BE
CONDUCTED UNLESS IN COMPLIANCE WITH U.S. SECURITIES LAWS.”
15
(p) Shareholder
will execute and deliver within the applicable time periods all documentation
as
may be required by applicable federal or state securities laws and Canadian
Securities Laws to permit the acquisition of the Exchange Shares on the terms
set forth herein and, if required by applicable federal or state securities
laws, Canadian Securities Laws or stock exchange rules, it will execute, deliver
and file or assist Sterling in obtaining and filing such reports, undertakings,
and other documents relating to the purchase of the Shares by it as may be
required by any applicable federal or state securities laws, Canadian Securities
Laws, securities commissions, stock exchange or other regulatory authority;
(q) if
the
Shareholder is resident outside of Canada and the United States, the
Shareholder:
(i)
|
is
knowledgeable of, or has been independently advised as to the applicable
securities Laws of the securities regulatory authorities having
application in the jurisdiction in which the Shareholder is resident
(the
“International
Jurisdiction”)
which would apply to the acquisition of the Exchange Shares, if
any;
|
(ii) |
is
exchanging the Shareholder’s iDcentrix Shares pursuant to exemptions from
the prospectus and registration requirements under the applicable
securities Laws in the International Jurisdiction or, if such is
not
applicable, the Shareholder is permitted to acquire the Exchange
Shares
under the applicable securities Laws of the International Jurisdiction
without the need to rely on any
exemption;
|
(iii) |
confirms
that the applicable securities Laws in the International Jurisdiction
do
not require iDcentrix or Sterling to make any filings or seek any
Governmental Authorization of any nature whatsoever from any Governmental
Entity of any kind whatsoever in the International Jurisdiction in
connection with the exchange and issue or subsequent resale of the
Exchange Shares; and
|
(iv)
|
confirms
that the exchange of the iDcentrix Shares for the Exchange
Shares
by
the Shareholder does not trigger:
|
(A)
|
an
obligation to prepare and file a registration statement, prospectus
or
similar document, or any other report with respect to such purchase
in the
International Jurisdiction; or
|
(B)
|
continuous
disclosure reporting obligations of iDcentrix or Sterling in the
International Jurisdiction; and
|
(r) All
information which the Shareholder has provided concerning the Shareholder is
correct and complete as of the date hereof, and if there should be any change
in
such information prior to the Closing Date, the Shareholder will immediately
provide such information to the Company.
16
VI.
REPRESENTATIONS
AND WARRANTIES OF IDCENTRIX
iDcentrix
represents and warrants to Sterling that, except as described in the Disclosure
Schedule, as of the date of this Agreement (except as otherwise provided) and
as
of the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement):
6.1 Incorporation;
Power
and
Authority.
(a) iDcentrix
is a corporation duly organized, validly existing and in good standing under
the
laws of the jurisdiction of its organization, and has all necessary power and
authority necessary to own, lease and operate its assets and to carry on its
business as conducted and proposed to be conducted. iDcentrix is duly qualified
to do business as a foreign corporation in each jurisdiction in which the nature
of its Business or its ownership of property requires it to be so qualified,
except where such failure to be so qualified would not have a Material Adverse
Effect. Schedule 6.1
lists,
for iDcentrix, the jurisdiction of its organization, its form as a legal entity
and each jurisdiction in which it is so qualified. iDcentrix has all necessary
power and authority to execute, deliver and perform this Agreement and any
Ancillary Agreements to which it will become a party. iDcentrix is in full
compliance with all provisions of its Organizational Documents.
(b) As
of the
Closing Date, iDcentrix owns, possesses or has the right to use, and operates
the Business, and owns all right, title and interest in all property, real,
personal or mixed, tangible and intangible, of every kind and description,
that
relate to, have been developed for use in connection with, arise from the
conduct of, are used or held for use in connection with or are necessary for
the
conduct of the Business as conducted or proposed to be conducted as of the
Closing Date, except where the failure to comply with the provisions of this
Section 6.1(b) would not individually or in the aggregate have a Material
Adverse Effect.
6.2 Valid
and Binding Agreement.
The
execution, delivery and performance of this Agreement and any Ancillary
Agreements to which it will become a party by iDcentrix have been duly and
validly authorized by all necessary corporate action. This Agreement has been
duly executed and delivered by iDcentrix and constitutes the valid and binding
obligation of iDcentrix, enforceable in accordance with its terms, subject
to
the Remedies Exception.
6.3 No
Breach;
Consents.
The
execution, delivery and performance of this Agreement and any Ancillary
Agreements to which iDcentrix will become a party will not (a)
contravene any provision of the Organizational Documents of iDcentrix; (b)
violate or conflict with any Law, Governmental Order or Governmental
Authorization; (c) conflict with, result in any breach of any of the provisions
of, constitute a default (or any event that would, with the passage of time
or
the giving of notice or both, constitute a default) under, result in a violation
of, increase the burdens under, result in the termination, amendment,
suspension, modification, abandonment or acceleration of payment (or any right
to terminate) or require a Consent under any Contract that is either binding
upon or enforceable against iDcentrix or any Governmental Authorization that
is
held by iDcentrix; (d) result in the creation of any Encumbrance upon iDcentrix
or any of the assets of iDcentrix; or (e) require any Governmental
Authorization.
6.4 Capitalization.
iDcentrix
has 15,920,000 iDcentrix Shares issued and outstanding as of the date of this
Agreement and anticipates having 21,320,000 iDcentrix Shares issued and
outstanding as of the Closing Date, depending on the number of iDcentrix Shares
issued as part of the Private Placement, none of which are held in treasury.
Schedule
6.4(a),
which
all parties agree will be delivered not later than one (1) business day prior
to
the Closing, lists the names and addresses of each record holder of the issued
and outstanding iDcentrix Shares, the number of iDcentrix Shares held by each
such holder and the share certificate numbers, repurchase or redemption rights
for such shares in favor of iDcentrix, the vesting schedule and forfeiture
provisions for any of such shares that are “restricted stock,” and the extent to
which vesting will or may be accelerated by the transactions contemplated by
this Agreement and any limitations on the ability of the holder of such capital
stock to vote or dispose of such shares. All issued and outstanding iDcentrix
Shares are duly authorized, validly issued, fully paid and nonassessable, free
of preemptive rights or any other third party rights and in certificated form,
and have been offered, sold and issued by iDcentrix in compliance with
applicable securities and corporate Laws, Contracts applicable to iDcentrix
and
iDcentrix’s Organizational Documents and in compliance with any preemptive
rights, rights of first refusal or similar rights. The rights and privileges
of
the iDcentrix Shares are set forth in iDcentrix’s Organizational Documents or
otherwise provided by Law. Except as disclosed on Schedule
6.4(b),
there
is no option, warrant, call, subscription, convertible security, right
(including preemptive right) or Contracts of any character to which iDcentrix
is
a party or by which it is bound obligating iDcentrix to issue, exchange,
transfer, sell, repurchase, redeem or otherwise acquire any iDcentrix Shares
or
other equity in iDcentrix or obligating iDcentrix to grant, extend, accelerate
the vesting of or enter into any such option, warrant, call, subscription,
convertible security, right or Contract. There are no outstanding or authorized
stock appreciation, phantom stock or similar rights with respect to iDcentrix.
Except as contemplated by this Agreement, there are no registration rights
agreements, no voting trust, proxy or other Contract and no restrictions on
transfer with respect to any iDcentrix Shares.
17
6.5 Subsidiaries.
iDcentrix
does not have any Subsidiaries.
6.6 Financial
Statements.
The
audited consolidated balance sheet as of October 31, 2007 (“Latest
Balance Sheet Date”)
of
iDcentrix (the “Latest
Balance Sheet”)
and
the audited consolidated statements of income, changes in shareholders’ equity
and cash flows of iDcentrix for the period then ended (such statements and
the
Latest Balance Sheet, the “Latest
Financial Statements”)
are
based upon the books and records of iDcentrix, have been prepared in accordance
with U.S. GAAP consistently applied during the periods indicated, and present
fairly in all material respects the financial position, results of operations
and cash flows of iDcentrix at the dates and for the periods indicated, except
that the Latest Financial Statements may not contain all notes and are subject
to year-end adjustments, the effect of which are not material.
6.7 Absence
of Undisclosed Liabilities.
Except
as
reflected or expressly reserved against in the Latest Balance Sheet, to its
Knowledge iDcentrix does not have any material Liability, contingent or
otherwise, except (a) a Liability that has arisen after the date of the Latest
Balance Sheet in the Ordinary Course of Business or (b) obligations under any
Contract, Litigation, Plan, lease, license or commitment listed or otherwise
disclosed on a Schedule to this Agreement or under any Contract, Litigation,
Plan, lease, license or commitment not required to be listed on such a
Schedule.
6.8
Books
and Records.
The
books
of account of iDcentrix are complete and correct. Each transaction is properly
and accurately recorded on the books and records of iDcentrix and each document
upon which entries in iDcentrix’s books and records are based is complete and
accurate in all material respects. The minute books and stock or equity records
of iDcentrix, all of which have been made available to Sterling, are complete
and correct. The minute books of iDcentrix contain accurate records of all
meetings held and actions taken by the holders of stock or equity interests,
the
board of directors and committees of the board of directors or other governing
body of iDcentrix, and no meeting of any such holders, board of directors or
other governing body or committees has been held for which minutes are not
contained in such minute books. At the Closing, all such books and records
will
be in the possession of iDcentrix.
6.9 Absence
of Certain Developments.
Except
as
disclosed on Schedule
6.9,
since
the Latest Balance Sheet Date, there has not been any Material Adverse Effect
and:
(a) iDcentrix
has not sold, leased, licensed, transferred or assigned any of its assets,
tangible or intangible, other than for a fair consideration in the Ordinary
Course of Business;
18
(b) iDcentrix
has not entered into any Contract (or series of related Contracts) outside
the
Ordinary Course of Business;
(c) no
party
(including iDcentrix) has accelerated, suspended, terminated, modified or
canceled any Contract to which iDcentrix is a party or by which iDcentrix is
bound that would have been an iDcentrix Material Contract at the time of any
such action;
(d) no
Encumbrance has been imposed on any assets of iDcentrix, except Permitted
Encumbrances;
(e) iDcentrix
has not made any capital expenditure (or series of related capital expenditures)
outside the Ordinary Course of Business;
(f) iDcentrix
has not made any capital investment in, any loan to, or any acquisition of
the
securities or assets of, any other Person (or series of related capital
investments, loans and acquisitions) either involving more than $25,000 or
outside the Ordinary Course of Business or acquired (by merger, exchange,
consolidation, acquisition of stock or assets or otherwise) any
Person;
(g) iDcentrix
has not issued any note, bond or other debt security or created, incurred,
assumed or guaranteed any indebtedness for borrowed money (including advances
on
existing credit facilities) or Capital Lease either involving more than $25,000
individually or $100,000 in the aggregate;
(h) iDcentrix
has not delayed, postponed or accelerated the payment of accounts payable or
other Liability or the receipt of any accounts receivable, in each case outside
the Ordinary Course of Business;
(i) iDcentrix
has not canceled, compromised, waived or released any right or claim (or series
of related rights or claims) outside the Ordinary Course of
Business;
(j) except
incidental to the sale of products or services, iDcentrix has not granted any
license or sublicense of any rights under or with respect to any Intellectual
Property Rights;
(k) there
has
been no change made or authorized in the Organizational Documents of
iDcentrix;
(l) iDcentrix
has not issued, sold or otherwise disposed of any of its capital stock or equity
interests, or granted any options, warrants or other rights to purchase or
obtain (including upon conversion, exchange or exercise) any of its capital
stock;
(m) iDcentrix
has not declared, set aside or paid any dividend or made any distribution with
respect to its capital stock or equity interests (whether in cash or in kind)
or
redeemed, purchased or otherwise acquired any of its capital stock or split,
combined or reclassified any outstanding shares of its capital
stock;
(n) iDcentrix
has not experienced any damage, destruction or loss (whether or not covered
by
insurance) to its property;
(o) iDcentrix
has not entered into any employment or collective bargaining agreement, written
or oral, or modified the terms of any such existing agreement;
(p) iDcentrix
has not granted any increase in the base compensation or made any other change
in employment terms of any of its directors, officers or employees outside
the
Ordinary Course of Business;
(q) iDcentrix
has not adopted, amended, modified or terminated any Plan (or taken any such
action with respect to any Plan);
(r) iDcentrix
has not discharged or satisfied any Encumbrance or paid any liability, in each
case with a value in excess of $25,000 individually or $100,000 in the
aggregate, other than current liabilities paid in the Ordinary Course of
Business;
19
(s) iDcentrix
has not disclosed to any Person other than Sterling and authorized
representatives of Sterling any proprietary confidential information, other
than
pursuant to a confidentiality agreement prohibiting the use or further
disclosure of such information, which agreement is listed on Schedule
6.9
and is
in full force and effect; and
(t) iDcentrix
has not made any change in accounting principles or practices from those
utilized in the preparation of the Latest Financial Statements.
6.10 Property.
(a) As
of the
Closing Date, the real properties owned by iDcentrix listed on Schedule
6.10
constitute all of the real property owned, leased (whether or not occupied
and
including any leases assigned or leased premises sublet for which iDcentrix
remains liable), used or occupied by iDcentrix.
(b) As
of the
Closing Date, iDcentrix owns good and marketable title to each parcel of real
property identified on Schedule
6.10
as being
owned by iDcentrix (the “Owned
Real Property”),
free
and clear of all Encumbrances, except for Encumbrances listed on Schedule
6.10.
(c) The
zoning for each parcel of Owned Real Property permits the existing improvements
and the continuation of the business being conducted thereon as a conforming
use. iDcentrix is not in violation of any applicable zoning ordinance or other
Law relating to the Owned Real Property, and iDcentrix has not received any
notice of any such violation or the existence of any condemnation or other
proceeding with respect to any of the Owned Real Property.
(d) As
of the
Closing Date, iDcentrix has good and marketable title to, or a valid leasehold
interest in, the buildings, machinery, equipment and other tangible assets
and
properties used by it, located on its premises or shown in the Latest Balance
Sheet or acquired after the date thereof, free and clear of all Encumbrances,
except for Encumbrances listed on Schedule
6.10
and
properties and assets disposed of in the Ordinary Course of Business since
the
date of the Latest Balance Sheet.
(e) As
of the
Closing Date, the buildings, improvements, building systems, machinery,
equipment and other tangible assets and properties used in the conduct of the
Business are in good condition and repair, ordinary wear and tear excepted,
and
are usable in the Ordinary Course of Business. As of the Closing Date, iDcentrix
owns, or leases under valid leases, all buildings, machinery, equipment and
other tangible assets and properties necessary for the conduct of the Business
as conducted and as proposed to be conducted.
(f) The
fixed
asset listing attached as Schedule
6.10(f)
includes
all buildings, machinery, equipment and other tangible assets and properties
of
iDcentrix as of the Closing
Date that are material to the Business in the manner operated by
iDcentrix.
(g) As
of the
Closing Date, iDcentrix owns, leases, possesses or has the right to use all
of
the assets, tangible and intangible, necessary to operate the Business in the
manner operated by iDcentrix.
6.11 Accounts
Receivable.
All
notes
and accounts receivable of iDcentrix are reflected properly on its books of
account, are valid, have arisen from bona fide transactions in the Ordinary
Course of Business, are subject to no setoff or counterclaim, and are current
and collectible. Such notes and accounts receivable will be collected in
accordance with their terms (none of which is beyond 60 days) at their recorded
amounts, subject only to the reserve for bad debts on the face of the Latest
Balance Sheet as adjusted in iDcentrix’s books of account for the passage of
time through the Closing Date in the Ordinary Course of Business.
20
6.12 Tax
Matters.
(a) iDcentrix
has (i) timely filed (or has had timely filed on its behalf) each Return
required to be filed or sent by it in respect of any Taxes or required to be
filed or sent by it by any Governmental Entity, each of which was correctly
completed and accurately reflected any liability for Taxes of iDcentrix covered
by such Return, (ii) timely and properly paid (or had paid on its behalf) all
Taxes due and payable for all Tax periods or portions thereof whether or not
shown on such Returns, (iii) established in iDcentrix’s books of account, in
accordance with applicable generally accepted accounting principles and
consistent with past practices, adequate reserves for the payment of any Taxes
not then due and payable and (iv) complied with all applicable Laws relating
to
the withholding of Taxes and the payment thereof.
(b) iDcentrix
has made (or caused to be made on its behalf) all estimated tax payments
required to have been made to avoid any underpayment penalties.
(c) There
are
no Encumbrances for Taxes upon any assets of iDcentrix or, except Encumbrances
for Taxes not yet due.
(d) iDcentrix
has not requested any extension of time within which to file any Return, which
Return has not since been filed.
(e) No
deficiency for any Taxes has been proposed, asserted or assessed against
iDcentrix that has not been resolved and paid in full. No waiver, extension
or
comparable consent given by iDcentrix regarding the application of the statute
of limitations with respect to any Taxes or any Return is outstanding, nor
is
any request for any such waiver or consent pending. There has been no Tax audit
or other administrative proceeding or court proceeding with regard to any Taxes
or any Return for any Tax year subsequent to the year ended December 31, 2005,
nor is any such Tax audit or other proceeding pending, nor has there been any
notice to iDcentrix by any Governmental Entity regarding any such Tax, audit
or
other proceeding, or, to the Knowledge of iDcentrix, is any such Tax audit
or
other proceeding threatened with regard to any Taxes or Returns. There are
no
outstanding subpoenas or requests for information with respect to any of the
Returns of iDcentrix. iDcentrix has not entered into a closing agreement
pursuant to Section 7121 of the Code or any similar provision under any other
Law.
(f) Schedule
6.12
lists
all federal, state, local and foreign income Returns filed with respect to
iDcentrix for taxable periods ended on or after December 31, 2005, indicates
those Returns that have been audited and indicates those Returns that currently
are the subject of audit.
(g) iDcentrix
does not have any liability for Taxes in a jurisdiction where it does not file
a
Return, nor has iDcentrix received notice from a taxing authority in such a
jurisdiction that it is or may be subject to taxation by that
jurisdiction.
6.13 Intellectual
Property Rights.
(a) Schedule
6.13(a)
lists
and describes all Intellectual Property Rights used in the Business as conducted
or proposed to be conducted. The Intellectual Property Rights on Schedule
6.13(a) constitute all iDcentrix Intellectual Property Rights necessary for
the
Business as conducted or proposed to be conducted.
(b) iDcentrix
owns all right, title and interest in the iDcentrix Intellectual Property Rights
free and clear of all Encumbrances (including royalty or other payments), except
for those licenses of the iDcentrix Intellectual Property Rights to or from
Persons, payments for use of the Intellectual Property Rights and other
Encumbrances listed on Schedule
6.13(b).
To the
Knowledge of iDcentrix, no iDcentrix Intellectual Property Right has been
infringed by any Person. To the Knowledge of iDcentrix, no employee or former
employee or independent contractor of iDcentrix has any claim with respect
to
any iDcentrix Intellectual Property Right.
(c) All
iDcentrix Intellectual Property Rights owned by iDcentrix and, to the Knowledge
of iDcentrix, all iDcentrix Intellectual Property Rights licensed by iDcentrix
from third parties, are valid and enforceable, and, to the Knowledge of
iDcentrix, no Person has asserted that any iDcentrix Intellectual Property
Right
is invalid or not enforceable. All iDcentrix Intellectual Property Rights that
are Registered Intellectual Property Rights owned by iDcentrix and, to the
Knowledge of iDcentrix, licensed by iDcentrix from third parties, are in full
force and effect, and all actions required to keep such rights pending or in
effect or to provide full available protection, including payment of filing,
examination, annuity, and maintenance fees and filing of renewals, statements
of
use or working, affidavits of incontestability and other similar actions, have
been taken, and, to the Knowledge of iDcentrix, no such Registered Intellectual
Property Right is the subject of any interference, opposition, cancellation,
nullity, re-examination or other proceeding placing in question the validity
or
scope of such rights. All products covered by iDcentrix Intellectual Property
Rights that are Registered Intellectual Property Rights and all usages of
iDcentrix Intellectual Property Rights that are Registered Intellectual Property
Rights have been marked with the appropriate patent, trademark or other marking
required or desirable to maximize available damage awards.
21
(d) To
the
Knowledge of iDcentrix, iDcentrix has not infringed, misappropriated or
otherwise violated any Third-Party Intellectual Property Right, and iDcentrix
has not received any notice of any infringement, misappropriation or violation
by iDcentrix of any Third-Party Intellectual Property Right. No infringement,
misappropriation or violation of any Third-Party Intellectual Property Right
has
occurred with respect to products or services sold by iDcentrix or with respect
to the products or services currently under development or with respect to
the
conduct of the Business as conducted or proposed to be conducted.
(e) All
Software that is used by iDcentrix or on any equipment of iDcentrix is owned
by
iDcentrix or is subject to a current license agreement that covers all use
of
the Software in the Business as conducted or as proposed to be conducted.
iDcentrix has the right to use the Software used in the Business as it is being
used, without any conflict with the rights of others. iDcentrix is not in breach
of any license to, or license of, any Software. IDcentrix does not use, rely
on
or contract with any Person to provide service bureau, outsourcing or other
computer processing services to iDcentrix, in lieu of or in addition to their
respective use of the Software. Following the Closing, iDcentrix will have
sufficient rights to all necessary Software, to operate the Business as it
is
conducted or as proposed to be conducted.
6.14
Material
Contracts.
(a) Schedule
6.14
lists
the following Contracts to which iDcentrix is a party or subject or by which
it
is bound (with the Contracts required to be listed on Schedule
6.13,
the
“iDcentrix
Material Contracts”):
(i)
|
each
employment, agency, collective bargaining or consulting Contract;
|
(ii)
|
each
Contract (A) with any Insider or (B) between or among any Insiders
relating in any way to iDcentrix;
|
(iii)
|
each
lease of real or personal property with aggregate annual payments
in
excess of $100,000;
|
(iv)
|
each
Contract for the sale of any capital
assets;
|
(v)
|
each
Contract for capital expenditures in excess of
$100,000;
|
(vi)
|
each
Contract relating to the borrowing of money or to mortgaging, pledging
or
otherwise placing an Encumbrance on any of the assets of
iDcentrix;
|
(vii)
|
each
written warranty, guaranty or other similar undertaking with respect
to
contractual performance extended by iDcentrix other than in the Ordinary
Course of Business;
|
(viii)
|
each
Contract relating to any surety bond or letter of credit required
to be
maintained by iDcentrix;
|
(ix)
|
each
Contract that contains or provides for an express undertaking by
iDcentrix
to be responsible for consequential damages in excess of
$100,000;
|
(x)
|
each
Contract providing for the development of any products, Software
or
Intellectual Property Rights or the delivery of any services by,
for or
with any third party in excess of
$100,000;
|
22
(xi)
|
each
Contract containing exclusivity, noncompetition or nonsolicitation
provisions or that would otherwise prohibit iDcentrix from freely
engaging
in business anywhere in the world or prohibiting the solicitation
of the
employees or contractors of any other
entity;
|
(xii)
|
each
Contract pertaining to confidentiality or
non-disclosure;
|
(xiii)
|
each
Contract terminable by any other party upon a change of control of
iDcentrix or upon the failure of iDcentrix to satisfy financial or
performance criteria specified in such Contract, which if terminated
would
have a Material Adverse Effect on the
Business;
|
(xiv)
|
each
stock purchase, stock option and stock incentive plan (other than
a
Plan);
|
(xv)
|
each
power of attorney that is currently in effect;
and
|
(xvi)
|
each
other Contract of iDcentrix not entered into in the Ordinary Course
of
Business or that is material to the business, financial condition,
results
of operations or prospects of iDcentrix taken as a
whole.
|
(b) Each
iDcentrix Material Contract is valid and binding, currently in force and
enforceable in accordance with its terms, subject to the Remedies Exception.
iDcentrix has performed all obligations required to be performed by it in
connection with each iDcentrix Material Contract, except where such
non-performance would not have a Material Adverse Effect. iDcentrix has not
received any notice of any claim of default by it under or termination of any
iDcentrix Material Contract. iDcentrix does not have any present expectation
or
intention of not fully performing any obligation pursuant to any iDcentrix
Material Contract, and there is no breach, anticipated breach or default by
iDcentrix or, to the Knowledge of iDcentrix, any other party to any iDcentrix
Material Contract.
6.15 Litigation.
To
the
Knowledge of iDcentrix, no Litigation is pending or, to the Knowledge of
iDcentrix, threatened against iDcentrix and there is no reasonable basis for
any
Litigation against iDcentrix. iDcentrix is not subject to any outstanding
Governmental Order.
6.16
Insurance.
iDcentrix
has at all times maintained insurance relating to its business and covering
property, fire, casualty, liability, workers’ compensation and all other forms
of insurance customarily obtained by businesses in the same industry. Such
insurance (i) is in full force and effect, (ii) is sufficient for compliance
with all requirements of applicable Law and of any Contract to which iDcentrix
is subject, (iii) is valid and enforceable, (iv) insures against risks of the
kind customarily insured against and in amounts customarily carried by
businesses similarly situated and (v) provides adequate insurance coverage
for
the activities of each of iDcentrix. Schedule
6.16
lists
each policy of insurance in effect.
6.17
Compliance
with Laws; Governmental Authorizations.
(a) iDcentrix
has complied in all material respects with all applicable Laws and Governmental
Orders. iDcentrix is not relying on any exemption from or deferral of any Law,
Governmental Order or Governmental Authorization that, to the Knowledge of
iDcentrix, would not be available to Sterling after the Closing.
(b) iDcentrix
has in full force and effect all Governmental Authorizations necessary to
conduct the Business and own and operate its properties. iDcentrix
has complied in all material respects with all Governmental Authorizations
applicable to it.
(c) iDcentrix
has not offered, authorized, promised, made or agreed to make any gifts,
payments or transfers of property of any kind (other than incidental gifts
of
nominal value) in connection with any actual or proposed transaction, except
as
required or permitted by the Laws of each applicable jurisdiction and in each
such case has complied with the U.S. Foreign Corrupt Practices Act.
23
6.18
Environmental
Matters.
(a) As
used
in this Section 6.18,
the
following terms have the following meanings:
(i)
|
“Environmental
Costs”
means
any and all costs and expenditures, including any fees and expenses
of
attorneys and of environmental consultants or engineers incurred
in
connection with investigating, defending, remediating or otherwise
responding to any Release of Hazardous Materials, any violation or
alleged
violation of Environmental Law, any fees, fines, penalties or charges
associated with any Governmental Authorization, or any actions necessary
to comply with any Environmental
Law.
|
(ii)
|
“Environmental
Law”
means any Law, Governmental Authorization or Governmental Order relating
to pollution, contamination, Hazardous Materials or protection of
the
environment.
|
(iii)
|
“Hazardous
Materials”
means any dangerous, toxic or hazardous pollutant, contaminant, chemical,
waste, material or substance as defined in or governed by any Law
relating
to such substance or otherwise relating to the environment or human
health
or safety, including any waste, material, substance, pollutant or
contaminant that might cause any injury to human health or safety
or to
the environment or might subject the owner or operator of the Property
to
any Environmental Costs or liability under any Environmental
Law.
|
(iv)
|
“Property”
means real property owned, leased, controlled or occupied by
iDcentrix.
|
(v)
|
“Regulatory
Action”
means any Litigation with respect to iDcentrix brought or instigated
by
any Governmental Entity in connection with any Environmental Costs,
Release of Hazardous Materials or any Environmental
Law.
|
(vi)
|
“Release”
means the spilling, leaking, disposing, discharging, emitting, depositing,
ejecting, leaching, escaping or any other release or threatened release,
however defined, whether intentional or unintentional, of any Hazardous
Material.
|
(vii)
|
“Third-Party
Environmental Claim”
means any Litigation (other than a Regulatory Action) based on negligence,
trespass, strict liability, nuisance, toxic tort or any other cause
of
action or theory relating to any Environmental Costs, Release of
Hazardous
Materials or any violation of Environmental
Law.
|
(b) No
Third-Party Environmental Claim or Regulatory Action is pending or, to the
Knowledge of iDcentrix, threatened against iDcentrix.
(c) iDcentrix
has obtained all permits, licenses and other authorizations which are required
under applicable Environmental Laws for the conduct of the Business as presently
conducted.
(d) iDcentrix
is in material compliance with the terms and conditions of all of its permits,
licenses and other authorizations required under any Environmental
Law;
(e) iDcentrix
is in material compliance with all applicable Environmental Laws;
(f) No
material expenditure will be required in order for Sterling or iDcentrix to
comply with any Environmental Law in effect at the time of Closing in connection
with the operation or continued operation of the Property in a manner consistent
with the present operation thereof.
24
(g) No
Encumbrance has been attached or filed against iDcentrix in favor of any Person
for (i) any liability under or violation of any applicable Environmental Law,
(ii) any Release of Hazardous Materials or (iii) any imposition of Environmental
Costs.
6.19
Employees.
(a) Schedule
6.19(a)
states
the number of employees of iDcentrix as of the date of this Agreement with
full-time, part-time and temporary status and the total number of employees
in
the aggregate.
(b) Except
as
disclosed on Schedule
6.19(b),
to the
Knowledge of iDcentrix, no executive employee of iDcentrix and no group of
employees of iDcentrix has any plans to terminate his, her or their employment.
iDcentrix has complied at all times with all applicable Laws relating to
employment and employment practices and those relating to the calculation and
payment of wages (including overtime pay, maximum hours of work and child labor
restrictions), equal employment opportunity (including Laws prohibiting
discrimination and/or harassment or requiring accommodation on the basis of
race, color, national origin, religion, gender, disability, age, sexual
orientation or otherwise), affirmative action and other hiring practices,
occupational safety and health, workers’ compensation, unemployment
compensation, the payment of social security and other Taxes, and unfair labor
practices under the National Labor Relations Act or applicable state law.
iDcentrix does not have any labor relations problem pending or, to the Knowledge
of iDcentrix, threatened, and its labor relations are satisfactory. There are
no
workers’ compensation claims pending against iDcentrix, or, to the Knowledge of
iDcentrix, any facts that could reasonably be expected to give rise to such
a
claim. No employee of iDcentrix is subject to any secrecy or non-competition
agreement or any other agreement or restriction of any kind that would impede
in
any way the ability of such employee to carry out fully all activities of such
employee in furtherance of the Business.
(c) No
employee of iDcentrix is covered by any collective bargaining agreement, and
no
collective bargaining agreement is being negotiated.
(d) iDcentrix
has paid in full to all employees all wages, salaries, bonuses and commissions
due and payable to such employees and has fully reserved in its books of account
all amounts for wages, salaries, bonuses and commissions due but not yet payable
to such employees.
6.20
Employee
Benefits.
(a) Schedule
6.20
contains
a complete list, as of the Closing Date, of all material Plans sponsored or
maintained by iDcentrix or with respect to which iDcentrix has any obligation
to
make contributions.
(b) (i)
All
contributions, premium payments and other payments required to be made in
connection with the Plans have been made, (ii) a proper accrual has been made
on
the books of account of iDcentrix for all contributions, premium payments and
other payments due in the current fiscal year, and (iii) iDcentrix is not liable
for any accumulated funding deficiency not set forth in Schedule 6.21 and
the projected benefit obligations do not exceed the assets of any
Plan.
(c) The
consummation of the transactions contemplated by this Agreement will not (i)
cause any Plan to increase benefits payable to any participant or beneficiary,
or (ii) accelerate or modify the time of payment or vesting, or increase the
amount of any benefit, award or compensation due any such employee.
(d) No
Litigation is pending with regard to any Plan other than routine claims for
benefits.
6.21
Affiliate
Transactions.
Except
as
described on Schedule
6.22,
no
Insider has any Contract with iDcentrix (other than employment not represented
by a written Contract and terminable at will), any loan to or from iDcentrix
or
any interest in any assets (whether real, personal or mixed, tangible or
intangible) used in or pertaining to the business of iDcentrix (other than
ownership of capital stock of iDcentrix). No Insider has any direct or indirect
interest in any competitor, supplier or customer of iDcentrix or in any Person
from whom or to whom iDcentrix or any Subsidiary leases any property, or in
any
other Person with whom iDcentrix or any Subsidiary otherwise transacts business
of any nature.
25
6.22
Brokerage.
No
Person
will be entitled to receive any brokerage commission, finder’s fee, fee for
financial advisory services or similar compensation in connection with the
transactions contemplated by this Agreement based on any Contract made by or
on
behalf of iDcentrix for which Sterling or iDcentrix is or could become liable
or
obligated.
6.23
Solvency.
(a) IDcentrix
is not insolvent and will not be rendered insolvent by any of the transactions
contemplated by this Agreement. As used in this Section 6.23,
“insolvent” means that the sum of the debts and other probable Liabilities of
iDcentrix exceeds the present fair saleable value of its assets.
(b) Immediately
after giving effect to the consummation of the transactions contemplated by
this
Agreement, (i) iDcentrix will be able to pay its Liabilities as they become
due
in the usual course of its business; (ii) iDcentrix will not have unreasonably
small capital with which to conduct its present or proposed Business; (iii)
iDcentrix will have assets (calculated at fair market value) that exceed its
Liabilities; (iv) taking into account all pending and threatened litigation,
final judgments against iDcentrix in actions for money damages are not
reasonably anticipated to be rendered at a time when, or in amounts such that,
iDcentrix will be unable to satisfy any such judgments promptly in accordance
with their terms (taking into account the maximum probable amount of such
judgments in any such actions and the earliest reasonable time at which such
judgments might be rendered) as well as all other obligations of iDcentrix;
and
(v) the cash available to iDcentrix, after taking into account all other
anticipated uses of the cash, will be sufficient to pay all such debts and
judgments promptly in accordance with their terms.
6.24
Confidentiality.
Until
the
Closing (and thereafter if there is no Closing), iDcentrix and its
representatives will keep confidential any information which they obtain from
Sterling concerning the properties, assets and business of Sterling. If the
transactions contemplated by this Agreement are not consummated by January
28,
2008, or such other date as the parties may agree, iDcentrix will return to
Sterling all written matter with respect to Sterling obtained by iDcentrix
in
connection with the negotiation or consummation of this Agreement.
6.25
Disclosure.
The
representations and warranties of iDcentrix in this Agreement, the Disclosure
Schedule and the Latest Financial Statements do not contain any untrue statement
or omit any material fact necessary to make the statements contained herein
or
therein, in light of the circumstances in which they were made, not
misleading.
VII.
REPRESENTATIONS
AND WARRANTIES OF STERLING
Sterling
represents and warrants to Shareholders and iDcentrix that, except as described
in the Disclosure Schedule, as of the date of this Agreement (except as
otherwise provided) and as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this
Agreement):
7.1
Incorporation;
Power
and
Authority.
Sterling
is a corporation duly organized, validly existing and in good standing under
the
laws of the jurisdiction of its organization, and has all necessary power and
authority necessary to own, lease and operate its assets and to carry on its
business as conducted. Sterling is duly qualified to do business as a foreign
corporation in each jurisdiction in which the nature of its business or its
ownership of property requires it to be so qualified, except where such failure
to be so qualified would not have a Material Adverse Effect. Schedule 7.1 lists,
for Sterling, the jurisdiction of its organization, its form as a legal entity
and each jurisdiction in which it is so qualified. Sterling has all necessary
power and authority to execute, deliver and perform this Agreement and any
Ancillary Agreements to which it will become a party. Sterling is in full
compliance with all provisions of its Organizational Documents.
26
7.2
SEC
Reporting.
Sterling
is a “reporting issuer” under the Exchange Act, that is required to file reports
with the Securities and Exchange Commission under Section 13 of the Exchange
Act
(the “Sterling
SEC Reports”);
Sterling
has filed all Sterling SEC Reports required to be filed by it during the 12
months immediately preceding the date of this Agreement with the SEC; Sterling
SEC Reports (i) were prepared in all material respects in accordance with all
applicable requirements of the Securities Act or the Exchange Act, as
applicable, (ii) except as disclosed on Schedule
7.2,
were
timely filed within the requirements of the Securities Act or the Exchange
Act,
as applicable (iii) included all necessary certifications of the principal
executive officer, principal accounting officer and principal financial officer
as required to be filed pursuant to Sections 302 and 906 of the Xxxxxxxx-Xxxxx
Act of 2002; and (iv) did not, at the time they were filed, contain any untrue
statement of a material fact or omit to state any material fact required to
be
stated therein or necessary in order to make the statements therein, in light
of
the circumstances under which they were made, not misleading; the representation
in clause (iv) of the preceding sentence does not apply to any misstatement
or
omission in any Sterling SEC Report that was superseded by subsequent Sterling
SEC Reports;
the
Sterling Shares are quoted on the OTC Bulletin Board of the Financial Industry
Regulatory Authority Inc. under the symbol “SGCO”.
7.3
Capitalization.
Sterling
has 13,480,000 Sterling Shares issued and outstanding, after cancellation of
the
President Shares, none of which are held in treasury. Schedule
7.3(a),
which
both parties agree will be delivered one (1) business day prior to the Closing,
lists the names and addresses of each record holder of the issued and
outstanding Sterling Shares, the number of Sterling Shares held by each such
holder, repurchase or redemption rights for such shares in favor of Sterling,
the vesting schedule and forfeiture provisions for any of such shares that
are
“restricted stock,” and the extent to which vesting will or may be accelerated
by the transactions contemplated by this Agreement and any limitations on the
ability of the holder of such capital stock to vote or dispose of such shares.
All issued and outstanding Sterling Shares are duly authorized, validly issued,
fully paid and nonassessable, free of preemptive rights or any other third
party
rights and in certificated form, and have been offered, sold and issued by
Sterling in compliance with applicable securities and corporate Laws, Contracts
applicable to Sterling and Sterling’s Organizational Documents and in compliance
with any preemptive rights, rights of first refusal or similar rights. The
rights and privileges of the Sterling Shares are set forth in Sterling’s
Organizational Documents or otherwise provided by Law. Except as disclosed
on
Schedule
7.3(b),
there
is no option, warrant, call, subscription, convertible security, right
(including preemptive right) or Contracts of any character to which Sterling
is
a party or by which it is bound obligating Sterling to issue, exchange,
transfer, sell, repurchase, redeem or otherwise acquire any Sterling Shares
or
other equity in Sterling or obligating Sterling to grant, extend, accelerate
the
vesting of or enter into any such option, warrant, call, subscription,
convertible security, right or Contract. There are no outstanding or authorized
stock appreciation, phantom stock or similar rights with respect to Sterling.
Except as contemplated by this Agreement, there are no registration rights
agreements, no voting trust, proxy or other Contract and no restrictions on
transfer with respect to any Sterling Shares.
7.4
Subsidiaries.
Sterling
does not have any Subsidiaries.
7.5
Valid
and Binding Agreement.
The
execution, delivery and performance of this Agreement and any Ancillary
Agreements to which Sterling will become a party by Sterling have been duly
and
validly authorized by all necessary corporate action. This Agreement has been
duly executed and delivered by Sterling and constitutes the valid and binding
obligation of Sterling, enforceable against it in accordance with its terms,
subject to the Remedies Exception. Each Ancillary Agreement to which Sterling
will become a party, when executed and delivered by Sterling, will constitute
the valid and binding obligation of Sterling, enforceable against Sterling
in
accordance with its terms, subject to the Remedies Exception.
27
7.6
No
Breach;
Consents.
The
execution, delivery and performance of this Agreement and any Ancillary
Agreements to which it will become a party by Sterling will not (a) contravene
any provision of the Organizational Documents of Sterling; (b) violate or
conflict with any Law, Governmental Order or Governmental Authority; (c)
conflict with, result in any breach of any of the provisions of, constitute
a
default (or any event that would, with the passage of time or the giving of
notice or both, constitute a default) under, result in a violation of, increase
the burdens under, result in the termination, amendment, suspension,
modification, abandonment or acceleration of payment (or any right to terminate)
or require a Consent, including any Consent under any Contract or Governmental
Authorization that is either binding upon or enforceable against Sterling;(d)
require any Governmental Authorization; or (e) result in the creation of any
Encumbrance upon Sterling or any of the assets of Sterling.
7.7
Brokerage.
No
Person
will be entitled to receive any brokerage commission, finder’s fee, fee for
financial advisory services or similar compensation in connection with the
transactions contemplated by this Agreement based on any Contract made by or
on
behalf of Sterling for which iDcentrix or any Shareholder is or could become
liable or obligated.
7.8
Investment
Intent.
Sterling
is acquiring the iDcentrix Shares for investment purposes only for its own
account and not with a view to, or for, resale in connection with any
distribution of the iDcentrix Shares within the meaning of the Securities Act;
and the iDcentrix Shares are not being acquired with a view to or for the
resale, distribution, subdivision or fractionalization thereof; and Sterling
has
no contract, undertaking, understanding, agreement, or arrangement, formal
or
informal, with any person to sell, transfer, or pledge to any person the
iDcentrix Shares which it hereby acquires, or any part thereof; and it
understands the legal consequences of the foregoing representations and
warranties to mean that it must bear the economic risk of the investment for
an
indefinite period of time because the iDcentrix Shares have not been registered
under the Securities Act, and, therefore, may be resold only if registered
under
the Securities Act, or if an exemption from such registration requirements
is
available.
7.9
Authorized
Capital and Exchange Shares.
Sterling
has sufficient authorized capital, pursuant to its current Organizational
Documents, to issue all the Exchanges Shares required to be issued by it
pursuant to this Agreement, to assume and meet its obligations under all of
the
iDcentrix Options, and to meet all outstanding conversion rights into Sterling
Shares. The Exchange Shares will, when issued and delivered in accordance with
this Agreement, be duly authorized, validly issued, fully paid and
nonassessable, free and clear of all Encumbrances and other third party rights
and shall not be subject to pre-emptive or similar rights.
7.10
Financial
Statements.
The
audited financial statements and unaudited interim financial statements of
Sterling included or incorporated by reference in the Sterling SEC Reports
have
been prepared in accordance with U.S. GAAP consistently applied during the
periods indicated (except as may otherwise be indicated in the notes) and
present fairly in all material respects the financial position, results of
operations and cash flows of Sterling at the respective dates and for the
respective periods indicated (except interim financial statements may not
contain all notes and are subject to year-end adjustments).
7.11
Certain
Tax Matters.
(a)
Sterling
has (i) timely filed (or has had timely filed on its behalf) each Return
required to be filed or sent by it in respect of any Taxes or required to be
filed or sent by it by any Governmental Entity, each of which was correctly
completed and accurately reflected any liability for Taxes of Sterling covered
by such Return, (ii) timely and properly paid (or had paid on its behalf) all
Taxes due and payable for all Tax periods or portions thereof whether or not
shown on such Returns, (iii) established in Sterling’s books of account, in
accordance with applicable generally accepted accounting principles and
consistent with past practices, adequate reserves for the payment of any Taxes
not then due and payable and (iv) complied with all applicable Laws relating
to
the withholding of Taxes and the payment thereof.
28
(b) Sterling
has made (or caused to be made on its behalf) all estimated tax payments
required to have been made to avoid any underpayment penalties.
(c) There
are
no Encumbrances for Taxes upon any assets of Sterling or, except Encumbrances
for Taxes not yet due.
(d) Sterling
has not requested any extension of time within which to file any Return, which
Return has not since been filed.
(e) No
deficiency for any Taxes has been proposed, asserted or assessed against
Sterling that has not been resolved and paid in full. No waiver, extension
or
comparable consent given by Sterling regarding the application of the statute
of
limitations with respect to any Taxes or any Return is outstanding, nor is
any
request for any such waiver or consent pending. There has been no Tax audit
or
other administrative proceeding or court proceeding with regard to any Taxes
or
any Return for any Tax year subsequent to the year ended December 31, 2005,
nor
is any such Tax audit or other proceeding pending, nor has there been any notice
to Sterling by any Governmental Entity regarding any such Tax, audit or other
proceeding, or, to the Knowledge of Sterling, is any such Tax audit or other
proceeding threatened with regard to any Taxes or Returns. There are no
outstanding subpoenas or requests for information with respect to any of the
Returns of Sterling. Sterling has not entered into a closing agreement pursuant
to Section 7121 of the Code or any similar provision under any other
Law.
7.12
Undisclosed
Liabilities.
Except
as
reflected or expressly reserved against in its balance sheets as reported in
the
Sterling SEC Reports, to its Knowledge, Sterling does not have any material
Liability, contingent or otherwise, except (a) a Liability that has arisen
after
the date of the latest balance sheet as reported in the Sterling SEC Reports
in
the Ordinary Course of Business or (b) obligations under any Contract,
Litigation, Plan, lease, license or commitment listed or otherwise disclosed
on
a Schedule to this Agreement or under any Contract, Litigation, Plan, lease,
license or commitment not required to be listed or otherwise disclosed on such
a
Schedule.
7.13 Interim
Changes.
Except
as
disclosed on Schedule
7.13,
since
the most recent Sterling SEC Report required to be filed pursuant to Section
13
of the Exchange Act, there has not been any Material Adverse Effect
and:
(a) Sterling
has not sold, leased, licensed, transferred or assigned any of its assets,
tangible or intangible, other than for a fair consideration in the Ordinary
Course of Business;
(b) Sterling
has not entered into any Contract (or series of related Contracts) outside
the
Ordinary Course of Business;
(c) no
party
(including Sterling) has accelerated, suspended, terminated, modified or
canceled any Contract to which Sterling is a party or by which Sterling is
bound
that would have been a Sterling Material Contract at the time of any such
action;
(d) no
Encumbrance has been imposed on any assets of Sterling, except Permitted
Encumbrances;
(e) Sterling
has not made any capital expenditure (or series of related capital expenditures)
outside the Ordinary Course of Business;
(f) except
for the transactions contemplated by this Agreement, Sterling has not made
any
capital investment in, any loan to, or any acquisition of the securities or
assets of, any other Person (or series of related capital investments, loans
and
acquisitions) either involving more than $25,000 or outside the Ordinary Course
of Business or acquired (by merger, exchange, consolidation, acquisition of
stock or assets or otherwise) any Person;
29
(g) Sterling
has not issued any note, bond or other debt security or created, incurred,
assumed or guaranteed any indebtedness for borrowed money (including advances
on
existing credit facilities) or Capital Lease either involving more than $25,000
individually or $100,000 in the aggregate;
(h) Sterling
has not delayed, postponed or accelerated the payment of accounts payable or
other Liability or the receipt of any accounts receivable, in each case outside
the Ordinary Course of Business;
(i) Sterling
has not canceled, compromised, waived or released any right or claim (or series
of related rights or claims) outside the Ordinary Course of
Business;
(j) except
incidental to the sale of products or services, Sterling has not granted any
license or sublicense of any rights under or with respect to any Intellectual
Property Rights;
(k) there
has
been no change made or authorized in the Organizational Documents of
Sterling;
(l) except
for the transactions contemplated by this Agreement, Sterling has not issued,
sold or otherwise disposed of any of its capital stock or equity interests,
or
granted any options, warrants or other rights to purchase or obtain (including
upon conversion, exchange or exercise) any of its capital stock;
(m) Sterling
has not declared, set aside or paid any dividend or made any distribution with
respect to its capital stock or equity interests (whether in cash or in kind)
or
redeemed, purchased or otherwise acquired any of its capital stock or split,
combined or reclassified any outstanding shares of its capital
stock;
(n) Sterling
has not experienced any damage, destruction or loss (whether or not covered
by
insurance) to its property;
(o) Sterling
has not entered into any employment or collective bargaining agreement, written
or oral, or modified the terms of any such existing agreement;
(p) Sterling
has not granted any increase in the base compensation or made any other change
in employment terms of any of its directors, officers or employees outside
the
Ordinary Course of Business;
(q) Sterling
has not adopted, amended, modified or terminated any Plan (or taken any such
action with respect to any Plan);
(r) Sterling
has not discharged or satisfied any Encumbrance or paid any liability, in each
case with a value in excess of $25,000 individually or $100,000 in the
aggregate, other than current liabilities paid in the Ordinary Course of
Business;
(s) Sterling
has not disclosed to any Person other than iDcentrix and authorized
representatives of iDcentrix any proprietary confidential information, other
than pursuant to a confidentiality agreement prohibiting the use or further
disclosure of such information, which agreement is listed on Schedule
7.13
and is
in full force and effect; and
(t) Sterling
has not made any change in accounting principles or practices from those
utilized in the preparation of the most recent unaudited and audited financial
statements contained its most recent Sterling SEC Reports.
30
7.14
Title
to Property.
Sterling
has good and marketable title to all properties and assets, real and personal,
reflected in its balance sheets as reported in the Sterling SEC Reports, and
the
properties and assets of Sterling are subject to no mortgage, pledge, or
Encumbrance, except for Permitted Encumbrances.
7.15
Books
and Records.
The
books
of account of Sterling are complete and correct. Each transaction is properly
and accurately recorded on the books and records of Sterling and each document
upon which entries in Sterling’s books and records are based is complete and
accurate in all respects. The minute books and stock or equity records of
Sterling, all of which have been made available to iDcentrix, are complete
and
correct. The minute books of Sterling contain accurate records of all meetings
held and actions taken by the holders of stock or equity interests, the board
of
directors and committees of the board of directors or other governing body
of
Sterling, and no meeting of any such holders, board of directors or other
governing body or committees has been held for which minutes are not contained
in such minute books. At the Closing, all such books and records will be in
the
possession of Sterling.
7.16
Litigation.
No
Litigation is pending or, to the Knowledge of Sterling, threatened against
Sterling and, to the Knowledge of Sterling, there is no reasonable basis for
any
Litigation against Sterling. Sterling is not subject to any outstanding
Governmental Order.
7.17
Insurance.
Sterling
has at all times maintained insurance relating to its business and covering
property, fire, casualty, liability, workers’ compensation and all other forms
of insurance customarily obtained by businesses in the same industry. Such
insurance (i) is in full force and effect, (ii) is sufficient for compliance
with all requirements of applicable Law and of any Contract to which Sterling
is
subject, (iii) is valid and enforceable, (iv) insures against risks of the
kind
customarily insured against and in amounts customarily carried by businesses
similarly situated and (v) provides adequate insurance coverage for the
activities of Sterling. Schedule
7.17
lists
each policy of insurance in effect.
7.18
Compliance
with Laws; Governmental Authorizations.
(a) Sterling
has complied in all material respects with all applicable Laws and Governmental
Orders. Sterling is not relying on any exemption from or deferral of any Law,
Governmental Order or Governmental Authorization that, to the Knowledge of
Sterling, would not be available to Sterling after the Closing.
(b) Sterling
has in full force and effect all Governmental Authorizations necessary to
conduct its business and own and operate its properties. Sterling has complied
in all material respects with all Governmental Authorizations applicable to
it.
(c) Sterling
has not offered, authorized, promised, made or agreed to make any gifts,
payments or transfers of property of any kind (other than incidental gifts
of
nominal value) in connection with any actual or proposed transaction, except
as
required or permitted by the Laws of each applicable jurisdiction and in each
such case has complied with the U.S. Foreign Corrupt Practices Act.
7.19
Environmental
Matters.
(a) As
used
in this Section 7.19, terms shall have the meaning provided in Section 6.18,
except for the following:
(i)
|
“Property”
means real property owned, leased, controlled or occupied by Sterling.
|
31
(ii)
|
“Regulatory
Action”
means any Litigation with respect to Sterling brought or instigated
by any
Governmental Entity in connection with any Environmental Costs, Release
of
Hazardous Materials or any Environmental
Law.
|
(b) No
Third-Party Environmental Claim or Regulatory Action is pending or, to the
Knowledge of Sterling, threatened against Sterling.
(c) Sterling
has obtained all permits, licenses and other authorizations which are required
under applicable Environmental Laws for the conduct of the Business as presently
conducted.
(d) Sterling
is in material compliance with the terms and conditions of all of its permits,
licenses and other authorizations required under any Environmental
Law;
(e) Sterling
is in material compliance with all applicable Environmental Laws;
(f) No
material expenditure will be required in order for Sterling or iDcentrix to
comply with any Environmental Law in effect at the time of Closing in connection
with the operation or continued operation of the Property in a manner consistent
with the present operation thereof.
(g) No
Encumbrance has been attached or filed against Sterling in favor of any Person
for (i) any liability under or violation of any applicable Environmental Law,
(ii) any Release of Hazardous Materials or (iii) any imposition of Environmental
Costs.
7.20
Employees.
(a) Schedule
7.20
states
the number of employees of Sterling as of the date of this Agreement with
full-time, part-time and temporary status and total number of employees in
the
aggregate.
(b) Sterling
has complied at all times with all applicable Laws relating to employment and
employment practices and those relating to the calculation and payment of wages
(including overtime pay, maximum hours of work and child labor restrictions),
equal employment opportunity (including Laws prohibiting discrimination and/or
harassment or requiring accommodation on the basis of race, color, national
origin, religion, gender, disability, age, sexual orientation or otherwise),
affirmative action and other hiring practices, occupational safety and health,
workers’ compensation, unemployment compensation, the payment of social security
and other Taxes, and unfair labor practices under the National Labor Relations
Act or applicable state law. Sterling does not have any labor relations problem
pending or, to the Knowledge of Sterling, threatened, and its labor relations
are satisfactory. There are no workers’ compensation claims pending against
Sterling, or, to the Knowledge of Sterling, any facts that would give rise
to
such a claim. No employee of Sterling is subject to any secrecy or
non-competition agreement or any other agreement or restriction of any kind
that
would impede in any way the ability of such employee to carry out fully all
activities of such employee in furtherance of the Business.
(c) No
employee of Sterling is covered by any collective bargaining agreement, and
no
collective bargaining agreement is being negotiated.
(d) Sterling
has paid in full to all employees all wages, salaries, bonuses and commissions
due and payable to such employees and has fully reserved in its books of account
all amounts for wages, salaries, bonuses and commissions due but not yet payable
to such employees.
7.21
Employee
Benefits.
(a) Schedule
7.21
contains
a complete list, as of the Closing Date, of all material Plans sponsored or
maintained by Sterling or with respect to which Sterling has any obligation
to
make contributions.
32
(b) (i)
All
contributions, premium payments and other payments required to be made in
connection with the Plans have been made, (ii) a proper accrual has been made
on
the books of account of Sterling for all contributions, premium payments and
other payments due in the current fiscal year, and (iii) Sterling is not liable
for any accumulated funding deficiency not set forth in Schedule 7.21 and
the projected benefit obligations do not exceed the assets of any
Plan.
(c) The
consummation of the transactions contemplated by this Agreement will not (i)
cause any Plan to increase benefits payable to any participant or beneficiary,
or (ii) accelerate or modify the time of payment or vesting, or increase the
amount of any benefit, award or compensation due any such employee.
(d) No
Litigation is pending with regard to any Plan other than routine uncontested
claims for benefits.
7.22
Affiliate
Transactions.
Except
as
described on Schedule
7.22,
no
Insider has any Contract with Sterling (other than employment not represented
by
a written Contract and terminable at will), any loan to or from Sterling or
any
interest in any assets (whether real, personal or mixed, tangible or intangible)
used in or pertaining to the business of Sterling (other than ownership of
capital stock of Sterling). No Insider has any direct or indirect interest
in
any competitor, supplier or customer of Sterling or in any Person from whom or
to whom Sterling or any Subsidiary leases any property, or in any other Person
with whom Sterling or any Subsidiary otherwise transacts business of any nature.
7.23
Solvency.
(a) Sterling
is not insolvent and will not be rendered insolvent by any of the transactions
contemplated by this Agreement. As used in this Section 7.23, “insolvent” means
that the sum of the debts and other probable Liabilities of Sterling exceeds
the
present fair saleable value of its assets.
(b) Immediately
after giving effect to the consummation of the transactions contemplated by
this
Agreement, (i) Sterling will be able to pay its Liabilities as they become
due
in the usual course of its business; (ii) Sterling will not have unreasonably
small capital with which to conduct its present or proposed Business; (iii)
Sterling will have assets (calculated at fair market value) that exceed its
Liabilities; (iv) taking into account all pending and threatened litigation,
final judgments against Sterling in actions for money damages are not reasonably
anticipated to be rendered at a time when, or in amounts such that, Sterling
will be unable to satisfy any such judgments promptly in accordance with their
terms (taking into account the maximum probable amount of such judgments in
any
such actions and the earliest reasonable time at which such judgments might
be
rendered) as well as all other obligations of Sterling; and (v) the cash
available to Sterling, after taking into account all other anticipated uses
of
the cash, will be sufficient to pay all such debts and judgments promptly in
accordance with their terms.
7.24
Material
Contracts.
(a) Schedule
7.24
lists
the following Contracts to which Sterling is a party or subject or by which
it
is bound (the “Sterling
Material Contracts”):
(i)
|
each
employment, agency, collective bargaining or consulting Contract;
|
(ii)
|
each
Contract (A) with any Insider or (B) between or among any Insiders
relating in any way to Sterling;
|
(iii)
|
each
lease of real or personal property with aggregate annual payments
in
excess of $100,000;
|
(iv)
|
each
Contract for the sale of any capital
assets;
|
(v)
|
each
Contract for capital expenditures in excess of
$100,000;
|
33
(vi)
|
each
Contract relating to the borrowing of money or to mortgaging, pledging
or
otherwise placing an Encumbrance on any of the assets of
Sterling;
|
(vii)
|
each
written warranty, guaranty or other similar undertaking with respect
to
contractual performance extended by Sterling other than in the Ordinary
Course of Business;
|
(viii)
|
each
Contract relating to any surety bond or letter of credit required
to be
maintained by Sterling;
|
(ix)
|
each
Contract that contains or provides for an express undertaking by
Sterling
to be responsible for consequential damages in excess of
$100,000;
|
(x)
|
each
Contract providing for the development of any products, Software
or
Intellectual Property Rights or the delivery of any services by,
for or
with any third party in excess of
$100,000;
|
(xi)
|
each
Contract containing exclusivity, noncompetition or nonsolicitation
provisions or that would otherwise prohibit Sterling from freely
engaging
in business anywhere in the world or prohibiting the solicitation
of the
employees or contractors of any other
entity;
|
(xii)
|
each
Contract pertaining to confidentiality or
non-disclosure;
|
(xiii)
|
each
Contract terminable by any other party upon a change of control of
Sterling or upon the failure of Sterling to satisfy financial or
performance criteria specified in such Contract, which if terminated
would
have a Material Adverse Effect on the
Business;
|
(xiv)
|
each
stock purchase, stock option and stock incentive plan (other than
a
Plan);
|
(xv)
|
each
power of attorney that is currently in effect;
and
|
(xvi)
|
each
other Contract of Sterling not entered into in the Ordinary Course
of
Business or that is material to the business, financial condition,
results
of operations or prospects of Sterling taken as a
whole.
|
(b) Each
Sterling Material Contract is valid and binding, currently in force and
enforceable in accordance with its terms, subject to the Remedies Exception.
Sterling has performed all obligations required to be performed by it in
connection with each Sterling Material Contract, except where such
non-performance would not have a Material Adverse Effect. Sterling has not
received any notice of any claim of default by it under or termination of any
Sterling Material Contract. Sterling does not have any present expectation
or
intention of not fully performing any obligation pursuant to any Sterling
Material Contract, and there is no breach, anticipated breach or default by
Sterling or, to the Knowledge of Sterling, any other party to any Sterling
Material Contract.
7.25
Confidentiality.
Until
the
Closing (and thereafter if there is no Closing), Sterling and its
representatives will keep confidential any information which they obtain from
iDcentrix concerning the properties, assets and business of iDcentrix. If the
transactions contemplated by this Agreement are not consummated by January
28,
2008, or such other date as the parties may agree, Sterling will return to
iDcentrix all written matter with respect to iDcentrix obtained by Sterling
in
connection with the negotiation or consummation of this Agreement.
34
7.26
Access
to Information Regarding iDcentrix.
Sterling
acknowledges that they have been delivered copies of what has been represented
to be documentation containing all material information respecting iDcentrix
and
its present and contemplated business operations, potential acquisitions,
management and other factors; that they have had a reasonable opportunity to
review such documentation and discuss it, to the extent desired, with their
legal counsel, directors and executive officers; that they have had, to the
extent desired, the opportunity to ask questions of and receive responses from
the directors and executive officers of iDcentrix, and with the legal and
accounting firms of iDcentrix, with respect to such documentation; and that
to
the extent requested, all questions raised have been answered to their complete
satisfaction. Sterling acknowledges that iDcentrix is a high risk early
development stage company that is subject to all the attendant risks and
uncertainties of similarly situated businesses.
7.27
Disclosure.
The
representations and warranties of Sterling in this Agreement, the Disclosure
Schedule and the Latest Financial Statements do not contain any untrue statement
or omit any material fact necessary to make the statements contained herein
or
therein, in light of the circumstances in which they were made, not
misleading.
VIII.
COVENANTS
OF SHAREHOLDERS, IDCENTRIX AND STERLING
8.1
iDcentrix
Conduct of the Business.
The
Shareholders and iDcentrix will cause iDcentrix to observe the following
provisions up to and including the Closing Date:
(a) iDcentrix
will conduct the Business only in, and iDcentrix will not take any action except
in, the Ordinary Course of Business and in accordance with applicable
Law;
(b) iDcentrix
will not amend or modify any iDcentrix Material Contract or enter into any
Contract that would have been an iDcentrix Material Contract if such Contract
had been in effect on the date of this Agreement, except as set forth in the
Disclosure Schedule;
(c) iDcentrix
will (i) use its best efforts to preserve its business organization and
goodwill, keep available the services of its officers, employees and consultants
and maintain satisfactory relationships with vendors, customers and others
having business relationships with it, (ii), subject to applicable Laws, confer
on a regular basis with representatives of Sterling to report operational
matters and the general status of ongoing operations as requested by Sterling
and (iii) not take any action that would render, or that reasonably may be
expected to render, any representation or warranty made by iDcentrix in this
Agreement untrue at the Closing as though then made and as though the Closing
Date had been substituted for the date of this Agreement in such representation
or warranty;
(d) iDcentrix
will not cancel or terminate its current insurance policies or allow any of
the
coverage thereunder to lapse, unless simultaneously with such termination,
cancellation or lapse replacement policies providing coverage equal to or
greater than the coverage under the canceled, terminated or lapsed policies
for
substantially similar premiums are in full force and effect.
8.2
Sterling
Conduct of Business
Sterling
will observe the following provisions up to and including the Closing
Date:
(a) Sterling
will conduct its business only in, and Sterling will not take any action except
in, the Ordinary Course of Business and in accordance with applicable
Law;
(b) Sterling
will not amend or modify any Sterling Material Contract or enter into any
Contract that would have been a Sterling Material Contract if such Contract
had
been in effect on the date of this Agreement, except as set forth in the
Disclosure Schedule;
(c) Sterling
will (i) use its best efforts to preserve its business organization and
goodwill, keep available the services of its officers, employees and consultants
and maintain satisfactory relationships with vendors, customers and others
having business relationships with it, (ii), subject to applicable Laws, confer
on a regular basis with representatives of iDcentrix to report operational
matters and the general status of ongoing operations as requested by iDcentrix
and (iii) not take any action that would render, or that reasonably may be
expected to render, any representation or warranty made by Sterling in this
Agreement untrue at the Closing as though then made and as though the Closing
Date had been substituted for the date of this Agreement in such representation
or warranty;
35
(d) Sterling
will not cancel or terminate its current insurance policies or allow any of
the
coverage thereunder to lapse, unless simultaneously with such termination,
cancellation or lapse replacement policies providing coverage equal to or
greater than the coverage under the canceled, terminated or lapsed policies
for
substantially similar premiums are in full force and effect.
8.3
Notice
of Developments.
(a) The
Shareholders and iDcentrix will promptly notify Sterling of any emergency or
other change in the Ordinary Course of Business of iDcentrix or the commencement
or threat of Litigation. The Shareholders will promptly notify Sterling in
writing if any Shareholder should discover that any representation or warranty
made by such Shareholder in this Agreement was when made, has subsequently
become or will be on the Closing Date untrue in any respect. iDcentrix will
promptly notify Sterling in writing if it should discover that any
representation or warranty made by iDcentrix in this Agreement was when made,
has subsequently become or will be on the Closing Date untrue in any respect.
(b) Sterling
will promptly notify the Shareholders and iDcentrix of any emergency or other
change in the Ordinary Course of Business of Sterling or the commencement or
threat of Litigation. Sterling will promptly notify the Shareholders and
iDcentrix in writing if it should discover that any representation or warranty
made by Sterling in this Agreement was when made, has subsequently become or
will be on the Closing Date untrue in any respect.
8.4
Audited
Financial Statements.
iDcentrix
agrees with Sterling that no later than 60 days after the Closing Date,
iDcentrix shall deliver a balance sheet of iDcentrix and statements of income,
changes in shareholders’ equity and cash flows of iDcentrix as of the date and
period as may be required to comply with Sterling’s SEC reporting obligations of
the acquisition of iDcentrix (collectively, the “Required
Financial Statements”),
prepared in accordance with U.S. GAAP consistently applied during the periods
indicated and present fairly the financial position, results of operations
and
cash flows of iDcentrix at the respective dates and for the respective periods
indicated, and audited by an independent public accountant properly registered
and qualified by the United States Public Company Accounting Oversight
Board.
8.5
Sterling
Listing.
Sterling
will use its best efforts to cause the Sterling Shares to remain eligible for
quotation on the Over-the-Counter Bulletin Board.
8.6
Other
Covenants.
The
Shareholders, iDcentrix and Sterling hereby agree to use their best efforts
to
undertake, or cause to be undertaken, all actions necessary to fulfill the
agreements made by such party herein and to fulfill all conditions precedent
to
the Closing of this Agreement before the Closing Date.
IX.
ORGANIZATIONAL
DOCUMENTS OF STERLING AFTER SHARE EXCHANGE
9.1
Sterling
Articles of Incorporation.
Upon
Closing of the Share Exchange, the Articles of Incorporation of Sterling will
be
amended by a consent resolution of the shareholders of Sterling to effect the
Name Change of Sterling to “iDcentrix, Inc.” (the “Name
Change Resolution”);
prior
to the Closing Date, the Shareholders hereby agree to execute and deliver to
the
Shareholder Representative at the address for iDcentrix, provided below, the
“Power of Attorney for Approval of Name Change and Consent to Share Exchange”
attached as Annex
B
to the
Information Statement, which grants, in part, the Shareholder Representative
the
limited authority to vote the Shareholder’s Exchange Shares in favor of the Name
Change through a written consent of the Sterling Shareholders in lieu of a
meeting of the Sterling Shareholders or otherwise as the case may be. As amended
the Articles of Incorporation of Sterling will be the Articles of Incorporation
moving forward (“Articles
of Incorporation”).
36
9.2
Sterling
Bylaws.
Prior
to
Closing, Sterling hereby agrees to amend and restate, or to cause to be amended
and restated, its bylaws such that its bylaws are substantially identical to
those bylaws attached to the Information Statement as Annex
E.
Such
amended and restated bylaws will be the bylaws of Sterling moving forward
(“Bylaws”).
X.
OFFICERS
AND DIRECTORS OF STERLING AFTER SHARE EXCHANGE
10.1
Directors.
Upon
Closing and as of the Effective Time, Sterling shall cause its director, Xxxxx
X. Xxxxx, to resign as director of Sterling and shall cause Xxxxxxxx Xxxxxx,
Xxxx Xxxxxxx, Xxxxx Xxxxxx and Xxxxxxx Xxxxxx to be elected as the directors
of
Sterling until their successors have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the Articles of Incorporation or Bylaws.
10.2
Officers.
Upon
Closing and as of the Effective Time, the board of directors of Sterling shall
cause Xxxxx X. Xxxxx to resign as president, principal executive officer,
principal accounting officer, principal financial officer, secretary and
treasurer and shall appoint Xxxxxxxx Xxxxxx to the office of Chief Executive
Officer and President and Xxxx Xxxxxxx as Chief Financial Officer until their
successors have been duly elected or appointed and qualify or until their
earlier death, resignation or removal in accordance with the Articles of
Incorporation or Bylaws.
XI.
CONDITIONS
TO CLOSING
11.1
Conditions
to Sterling’s Obligations.
The
obligation of Sterling to take the actions required to be taken by it at the
Closing is subject to the satisfaction or waiver, in whole or in part, in
Sterling’s sole discretion (but no such waiver will waive any rights or remedy
otherwise available to Sterling), of each of the following conditions at or
prior to the Closing:
(a) Except
as
would not have a Material Adverse Effect, the representations and warranties
set
forth in Articles V and VI, are true and correct at and as of the Closing Date
as though then made and as though the Closing Date had been substituted for
the
date of this Agreement in such representations and warranties, except that
any
representation or warranty expressly made as of a specified date will only
need
to have been true on and as of such date (without taking into account any
supplemental disclosures after the date of this Agreement by Shareholders or
iDcentrix or the discovery of information by Sterling);
(b) The
Shareholders and iDcentrix will have performed and complied with each of their
respective agreements contained in this Agreement in all material respects
that
are required to be completed prior to Closing;
(c) Each
Required Consent will have been obtained and be in full force and effect and
such actions as Sterling’s counsel may reasonably require will have been taken
in connection therewith;
(d) No
iDcentrix Material Adverse Effect
will
have occurred;
(e) iDcentrix
will have delivered each of the agreements, certificates, instruments and other
documents that it is obligated to deliver pursuant to Section 3.3(a)(i),
and
such agreements so delivered will be in full force and effect; and
37
(f) iDcentrix
will have closed the Private Placement.
11.2
Conditions
to Shareholders’ Obligations.
The
obligation of Shareholders to take the actions required to be taken by them
at
the Closing is subject to the satisfaction or waiver, in whole or in part,
in
the sole discretion of the Shareholders’ Representative (but no such waiver will
waive any right or remedy otherwise available under this Agreement), of each
of
the following conditions at or prior to the Closing:
(a) The
representations and warranties set forth in Article VII will be true and correct
in all material respects;
(b) Sterling
will have performed and complied with each of its agreements contained in this
Agreement in all material respects that are required to be completed prior
to
Closing;
(c) Each
Required Consent will have been obtained and be in full force and effect and
such actions as the Shareholders Representative or iDcentrix’s counsel may
reasonably require will have been taken in connection therewith;
(d) No
Law or
Governmental Order will have been enacted, entered, enforced, promulgated,
issued or deemed applicable to the transactions contemplated by this Agreement
by any Governmental Entity that prohibits the Closing;
(e) No
Sterling Material Adverse Effect will have occurred;
(f) Sterling
will have delivered each of the certificates, instruments and other documents
that it is obligated to deliver pursuant to Section 3.3(a)(ii);
(g) iDcentrix
will have closed the Private Placement.
XII.
INDEMNIFICATION
12.1
Indemnification
by Shareholders.
(a) Each
individual Shareholder will indemnify each of Sterling and iDcentrix (for
purposes of this Section 12.1 only, “Indemnitees”)
and
hold them harmless against any Loss, whether or not actually incurred prior
to
the applicable date referred to in Section 12.1(b),
arising
from, relating to or constituting any breach or inaccuracy in any of the
representations and warranties of such individual Shareholder contained in
Article V of this Agreement or in the Disclosure Schedule or any closing
certificate delivered by or on behalf of such Shareholder pursuant to this
Agreement or any breach of any of the agreements of such Shareholder contained
in this Agreement (collectively, “Indemnitee
Losses”).
(b) If
any
Indemnitee has a claim for indemnification under this Section 12.1,
such
Indemnitee will deliver to the Shareholders Representative one or more written
notices of Losses (each an “Indemnitee
Claim”),
prior
to the period expiring on the first anniversary of the Closing Date. The
Shareholders Representative will then forward as soon as practicable, but in
no
event later than within five (5) business days, such Indemnitee claim to the
respective Shareholder to which it relates. Shareholders will have no liability
under this Section 12.1
unless
the written notices required by the preceding sentence are given by the date
specified. Any Indemnitee Claim will state in reasonable detail the basis for
such Indemnitee Losses to the extent then known by Indemnitee and the nature
of
Indemnitee Loss for which indemnification is sought, and it may state the amount
of Indemnitee Loss claimed. If such Indemnitee Claim (or an amended Indemnitee
Claim) states the amount of Indemnitee Loss claimed and such Shareholder
notifies Indemnitee that such Shareholder does not dispute the claim described
in such notice or fails to notify Indemnitee within 20 business days after
delivery of such notice by Shareholders Representative whether such Shareholder
disputes the claim described in such notice, Indemnitee Loss in the amount
specified in Indemnitee’s notice will be admitted by such Shareholder (an
“Admitted
Claim”),
and
such Shareholder will pay the amount of such Indemnitee Loss to Indemnitee.
If
Shareholder has timely disputed the liability of Shareholder with respect to
an
Indemnitee Claim (or an amended Indemnitee Claim) stating the amount of an
Indemnitee Loss claimed, such Shareholder and Indemnitee will proceed in good
faith to negotiate a resolution of such dispute. If a claim for indemnification
has not been resolved within 30 days after delivery by the Shareholders
Representative of the Indemnitee Claim, Indemnitee may seek judicial recourse.
If an Indemnitee Claim does not state the amount of Indemnitee Loss claimed,
such omission will not preclude Indemnitee from recovering from such Shareholder
the amount of Indemnitee Loss described in such Indemnitee Claim if any such
amount is subsequently provided in an amended Indemnitee Claim. In order to
assert its right to indemnification under this Article XII, Indemnitee will
not
be required to provide any notice except as provided in this Section
12.1(b).
38
(c) Shareholder
will pay the amount of any Indemnitee Loss to Indemnitee within 10 days
following the determination of Shareholder’s liability for and the amount of an
Indemnitee Loss (whether such determination is made pursuant to the procedures
set forth in this Section 12.1,
by
agreement between Indemnitee and such Shareholder, by arbitration award or
by
final adjudication).
12.2
Indemnification
by iDcentrix.
(a) iDcentrix
will indemnify each of Sterling and the Shareholders (for purposes of this
Section 12.2 only, “Indemnitees”)
and
hold them harmless against any Loss, whether or not actually incurred prior
to
the applicable date referred to in Section 12.2(b), arising from, relating
to or
constituting any breach or inaccuracy in any of the representations and
warranties of such individual Shareholder contained in Article VI of this
Agreement or in the Disclosure Schedule or any closing certificate delivered
by
or on behalf of iDcentrix pursuant to this Agreement or any breach of any of
the
agreements of iDcentrix contained in this Agreement (collectively, “Indemnitee
Losses”).
(b) If
any
Indemnitee has a claim for indemnification under this Section 12.2, such
Indemnitee will deliver to iDcentrix one or more written notices of Losses
(each
an “Indemnitee
Claim”),
prior
to the period expiring on the first anniversary of the Closing Date. iDcentrix
will have no liability under this Section 12.2 unless the written notices
required by the preceding sentence are given by the date specified. Any
Indemnitee Claim will state in reasonable detail the basis for such Indemnitee
Losses to the extent then known by Indemnitee and the nature of Indemnitee
Loss
for which indemnification is sought, and it may state the amount of Indemnitee
Loss claimed. If such Indemnitee Claim (or an amended Indemnitee Claim) states
the amount of Indemnitee Loss claimed and iDcentrix notifies Indemnitee that
iDcentrix does not dispute the claim described in such notice or fails to notify
Indemnitee within 20 business days after delivery of such notice to iDcentrix
whether iDcentrix disputes the claim described in such notice, Indemnitee Loss
in the amount specified in Indemnitee’s notice will be admitted by iDcentrix (an
“Admitted
Claim”),
and
iDcentrix will pay the amount of such Indemnitee Loss to Indemnitee. If
iDcentrix has timely disputed the liability of iDcentrix with respect to an
Indemnitee Claim (or an amended Indemnitee Claim) stating the amount of an
Indemnitee Loss claimed, iDcentrix and Indemnitee will proceed in good faith
to
negotiate a resolution of such dispute. If a claim for indemnification has
not
been resolved within 30 days after delivery to iDcentrix of the Indemnitee
Claim, Indemnitee may seek judicial recourse. If an Indemnitee Claim does not
state the amount of Indemnitee Loss claimed, such omission will not preclude
Indemnitee from recovering from iDcentrix the amount of Indemnitee Loss
described in such Indemnitee Claim if any such amount is subsequently provided
in an amended Indemnitee Claim. In order to assert its right to indemnification
under this Article XII, Indemnitee will not be required to provide any notice
except as provided in this Section 12.2(b).
(c) iDcentrix
will pay the amount of any Indemnitee Loss to Indemnitee within 10 days
following the determination of iDcentrix’s liability for and the amount of an
Indemnitee Loss (whether such determination is made pursuant to the procedures
set forth in this Section 12.2, by agreement between Indemnitee and iDcentrix,
by arbitration award or by final adjudication).
12.3
Indemnification
by Sterling.
(a) Sterling
will indemnify each of iDcentrix and each of the Shareholders (for purposes
of
this Section 12.3 only, “Indemnitees”)
and
hold them harmless against any Loss, whether or not actually incurred prior
to
the applicable date referred to in Section 12.3(b), arising from, relating
to or
constituting any breach or inaccuracy in any of the representations and
warranties of Sterling contained in Article VII of this Agreement or in the
Disclosure Schedule or any closing certificate delivered by or on behalf of
Sterling pursuant to this Agreement or any breach of any of the agreements
of
Sterling contained in this Agreement (collectively, “Indemnitee
Losses”).
39
(b) If
any
Indemnitee has a claim for indemnification under this Section 12.3, such
Indemnitee will deliver to Sterling one or more written notices of Losses (each
an “Indemnitee
Claim”),
prior
to the period expiring on the first anniversary of the Closing Date. Sterling
will have no liability under this Section 12.3 unless the written notices
required by the preceding sentence are given by the date specified. Any
Indemnitee Claim will state in reasonable detail the basis for such Indemnitee
Losses to the extent then known by Indemnitee and the nature of Indemnitee
Loss
for which indemnification is sought, and it may state the amount of Indemnitee
Loss claimed. If such Indemnitee Claim (or an amended Indemnitee Claim) states
the amount of Indemnitee Loss claimed and Sterling notifies Indemnitee that
Sterling does not dispute the claim described in such notice or fails to notify
Indemnitee within 20 business days after delivery of such notice to Sterling
whether Sterling disputes the claim described in such notice, Indemnitee Loss
in
the amount specified in Indemnitee’s notice will be admitted by Sterling (an
“Admitted
Claim”),
and
Sterling will pay the amount of such Indemnitee Loss to Indemnitee. If Sterling
has timely disputed the liability of Sterling with respect to an Indemnitee
Claim (or an amended Indemnitee Claim) stating the amount of an Indemnitee
Loss
claimed, Sterling and Indemnitee will proceed in good faith to negotiate a
resolution of such dispute. If a claim for indemnification has not been resolved
within 30 days after delivery to Sterling of the Indemnitee Claim, Indemnitee
may seek judicial recourse. If an Indemnitee Claim does not state the amount
of
Indemnitee Loss claimed, such omission will not preclude Indemnitee from
recovering from Sterling the amount of Indemnitee Loss described in such
Indemnitee Claim if any such amount is subsequently provided in an amended
Indemnitee Claim. In order to assert its right to indemnification under this
Article XII, Indemnitee will not be required to provide any notice except as
provided in this Section 12.3(b).
(c) Sterling
will pay the amount of any Indemnitee Loss to Indemnitee within 10 days
following the determination of Sterling’s liability for and the amount of an
Indemnitee Loss (whether such determination is made pursuant to the procedures
set forth in this Section 12.3, by agreement between Indemnitee and Sterling,
by
arbitration award or by final adjudication).
XIII.
GENERAL
13.1
Press
Releases and Announcements.
Any
public announcement, including any announcement to employees, customers,
suppliers or others having dealings with iDcentrix, or similar publicity with
respect to this Agreement or the transactions contemplated by this Agreement,
will be issued, if at all, at such time and in such manner as both Sterling
and
iDcentrix determine and approve, unless otherwise required by law, provided
however, that when practicable, before one party makes any announcement required
by Law, a copy of the announcement and notice of the provision of law requiring
its disclosure will be provided to the other party. Unless consented to by
Sterling, iDcentrix and the Shareholders Representative or required by Law,
Sterling, iDcentrix and the Shareholders will keep this Agreement and the
transactions contemplated by this Agreement confidential.
13.2
Expenses.
Except
as
otherwise expressly provided for in this Agreement, Shareholders, Sterling,
and
iDcentrix. respectively, will each pay all expenses incurred by each of them
in
connection with the transactions contemplated by this Agreement, including
legal, accounting, investment banking and consulting fees and expenses incurred
in negotiating, executing and delivering this Agreement and the other
agreements, exhibits, documents and instruments contemplated by this Agreement
(whether the transactions contemplated by this Agreement are consummated or
not). The Shareholders agree that iDcentrix has not borne and will not bear
any
of Shareholders’ expenses in connection with the transactions contemplated by
this Agreement.
40
13.3
Amendment
and Waiver.
This
Agreement may not be amended, a provision of this Agreement or any default,
misrepresentation or breach of warranty or agreement under this Agreement may
not be waived, and a consent may not be rendered, except in a writing executed
by the party against which such action is sought to be enforced. Neither the
failure nor any delay by any Person in exercising any right, power or privilege
under this Agreement will operate as a waiver of such right, power or privilege,
and no single or partial exercise of any such right, power or privilege will
preclude any other or further exercise of such right, power or privilege or
the
exercise of any other right, power or privilege. In addition, no course of
dealing between or among any Persons having any interest in this Agreement
will
be deemed effective to modify or amend any part of this Agreement or any rights
or obligations of any Person under or by reason of this Agreement. The rights
and remedies of the parties to this Agreement are cumulative and not
alternative.
13.4
Notices.
All
notices, demands and other communications to be given or delivered under or
by
reason of the provisions of this Agreement will be in writing and will be deemed
to have been given (i) when delivered if personally delivered by hand (with
written confirmation of receipt), (ii) when received if sent by a nationally
recognized overnight courier service (receipt requested), (iii) five (5)
business days after being mailed, if sent by first class mail, return receipt
requested, or (iv) when receipt is acknowledged by an affirmative act of the
party receiving notice, if sent by facsimile, telecopy or other electronic
transmission device (provided that such an acknowledgement does not include
an
acknowledgment generated automatically by a facsimile or telecopy machine or
other electronic transmission device). Notices, demands and communications
to
each of Sterling, iDcentrix, the Shareholders and Shareholders Representative
will, unless another address is specified in writing, be sent to the respective
addresses indicated below:
If
to Sterling:
x/x
Xxxxx X. Xxxxx
000
Xxxxx
Xxxxxxxxx,
Xxxxx 00000
Facsimile
No. (000) 000-0000
Email:
xxxxxxx@xxxxxxxx.xxx
|
With
a copy to:
Xxxxxx
X. Xxxxxx, Esq.
000
Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxxxxx 00000
Facsimile
No. (000) 000-0000
Email:
xxxxxxxx@xxxxx.xxx
|
If
to Shareholders or Shareholders Representative:
Xxxxxxxx
Xxxxxx
0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000 Xx
Xxxxxxx, Xxxxxxxxxx 00000
Facsimile
No. (000) 000-0000
Email:
xxxxxxxx.xxxxxx@xxxxxxxxx.xxx
|
If
to iDcentrix:
iDcentrix,
Inc.
Attn:
Xxxxxxxx Xxxxxx
0000
Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xx
Xxxxxxx, Xxxxxxxxxx 00000
Facsimile
No. (000) 000-0000
Email:
xxxxxxxx.xxxxxx@xxxxxxxxx.xxx
|
41
With
a copy to:
Xxxxxx
& Whitney LLP
Republic
Plaza Building
Suite
4700, 000 Xxxxxxxxxxx Xx.
Xxxxxx,
XX 00000-0000
Fax:
000-000-0000
Email:
xxxxxxxx.xxxxx@xxxxxx.xxx
Attention:
Xxxxx X. Xxxxxxxx, Esq
|
13.5
Assignment.
Neither
this Agreement nor any of the rights, interests or obligations under this
Agreement may be assigned by any party to this Agreement without the prior
written consent of the other parties to this Agreement. Subject to the
foregoing, this Agreement and all of the provisions of this Agreement will
be
binding upon and inure to the benefit of the parties to this Agreement and
their
respective successors and permitted assigns.
13.6
No
Third-Party Beneficiaries.
Nothing
expressed or referred to in this Agreement confers any rights or remedies upon
any Person that is not a party or permitted assign of a party to this
Agreement.
13.7
Severability.
Whenever
possible, each provision of this Agreement will be interpreted in such manner
as
to be effective and valid under applicable Law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable Law, such
provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
13.8
Complete
Agreement.
This
Agreement and, when executed and delivered, the Ancillary Agreements contain
the
complete agreement between the parties and supersede any prior understandings,
agreements or representations by or between the parties, written or oral. Each
of the parties to this Agreement acknowledge that the other parties hereto
have
not made any representations, warranties, agreements, undertakings or promises
except for those expressly set forth in this Agreement or in agreements referred
to herein that survive the execution and delivery of this
Agreement.
13.9
Schedules.
The
Disclosure Schedule contains a series of schedules corresponding to the sections
contained in Articles V, VI and VII. Nothing in the Disclosure Schedule is
deemed adequate to disclose an exception to a representation or warranty made
in
this Agreement unless the Disclosure Schedule identifies in the corresponding
schedule the exception with particularity and describes the relevant facts
in
detail. Without limiting the generality of the foregoing, the mere listing
(or
inclusion of a copy) of a document or other item is not deemed adequate to
disclose an exception to a representation or warranty unless the representation
or warranty relates solely to the existence of the document or other item
itself. The schedules in the Disclosure Schedule relate only to the
representations and warranties in the section and subsection of this Agreement
to which they correspond and not to any other representation or warranty in
this
Agreement.
42
13.10
Signatures;
Counterparts.
This
Agreement may be executed in one or more counterparts, any one of which need
not
contain the signatures of more than one party, but all such counterparts taken
together will constitute one and the same instrument. A facsimile signature
will
be considered an original signature.
13.11
Governing
Law.
The
domestic law, without regard to conflicts of laws principles, of the State
of
Delaware will govern all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the obligations imposed
by this Agreement.
13.12
Specific
Performance.
Each
of
the parties acknowledges and agrees that the subject matter of this Agreement,
including the business, assets and properties of iDcentrix, is unique, that
the
other parties would be damaged irreparably in the event any of the provisions
of
this Agreement are not performed in accordance with their specific terms or
otherwise are breached, and that the remedies at law would not be adequate
to
compensate such other parties not in default or in breach. Accordingly, each
of
the parties agrees that the other parties will be entitled to an injunction
or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and the terms and provisions of this
Agreement in addition to any other remedy to which they may be entitled, at
law
or in equity (without any requirement that Sterling provide any bond or other
security). The parties waive any defense that a remedy at law is adequate and
any requirement to post bond or provide similar security in connection with
actions instituted for injunctive relief or specific performance of this
Agreement.
13.13
Jurisdiction.
Each
of
the parties submits to the exclusive jurisdiction of any state or federal court
sitting in Delaware, in any action or proceeding arising out of or relating
to
this Agreement and agrees that all claims in respect of the action or proceeding
may be heard and determined in any such court. Each party also agrees not to
bring any action or proceeding arising out of or relating to this Agreement
in
any other court. Each of the parties waives any defense of inconvenient forum
to
the maintenance of any action or proceeding so brought and waives any bond,
surety or other security that might be required of any other party with respect
to any such action or proceeding. The parties agree that either or both of
them
may file a copy of this paragraph with any court as written evidence of the
knowing, voluntary and bargained agreement between the parties irrevocably
to
waive any objections to venue or to convenience of forum.
13.14
Waiver
of Jury Trial.
EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE
IT IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL
BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER,
(III) IT MAKES SUCH WAIVER VOLUNTARILY AND (IV) IT HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS
IN THIS SECTION 13.14.
43
13.15
Construction.
The
parties and their respective counsel have participated jointly in the
negotiation and drafting of this Agreement. In addition, each of the parties
acknowledges that it is sophisticated and has been advised by experienced
counsel and, to the extent it deemed necessary, other advisors in connection
with the negotiation and drafting of this Agreement. In the event an ambiguity
or question of intent or interpretation arises, this Agreement will be construed
as if drafted jointly by the parties and no presumption or burden of proof
will
arise favoring or disfavoring any party by virtue of the authorship of any
of
the provisions of this Agreement. The parties intend that each representation,
warranty and agreement contained in this Agreement will have independent
significance. If any party has breached any representation, warranty or
agreement in any respect, the fact that there exists another representation,
warranty or agreement relating to the same subject matter (regardless of the
relative levels of specificity) that the party has not breached will not detract
from or mitigate the fact that the party is in breach of the first
representation, warranty or agreement. Any reference to any Law will be deemed
to refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise. The headings preceding the text of articles and sections
included in this Agreement and the headings to the schedules and exhibits are
for convenience only and are not be deemed part of this Agreement or given
effect in interpreting this Agreement. References to sections, articles,
schedules or exhibits are to the sections, articles, schedules and exhibits
contained in, referred to or attached to this Agreement, unless otherwise
specified. The word “including” means “including without limitation.” A
statement that an action has not occurred in the past means that it is also
not
presently occurring. When any party may take any permissive action, including
the granting of a consent, the waiver of any provision of this Agreement or
otherwise, whether to take such action is in its sole and absolute discretion.
The use of the masculine, feminine or neuter gender or the singular or plural
form of words will not limit any provisions of this Agreement. A statement
that
an item is listed, disclosed or described means that it is correctly listed,
disclosed or described, and a statement that a copy of an item has been
delivered means a true and correct copy of the item has been
delivered.
13.16
Time
of Essence.
With
regard to all dates and time periods set forth or referred to in this Agreement,
time is of the essence.
[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]
44
IN
WITNESS WHEREOF,
Sterling, iDcentrix, the Shareholders and the Shareholders Representative have
executed this Share Exchange Agreement as of the date first above
written.
STERLING: | SHAREHOLDERS: | |||
Sterling Gold Corp. | By: | |||
Name: Xxxxxxxx Xxxxxx | ||||
By: | Title: Attorney-in-Fact for the Shareholders | |||
Name: Xxxxx X. Xxxxx | ||||
Title: President | ||||
IDCENTRIX: | SHAREHOLDERS REPRESENTATIVE: | |||
iDcentrix, Inc. | ||||
By: | Name: Xxxxxxxx Xxxxxx | |||
Name: Xxxxxxxx Xxxxxx | ||||
Title: Chief Executive Officer |
45