AGREEMENT OF MERGER AND PLAN OF REORGANIZATION among WIRELESS HOLDINGS, INC. WIRELESS ACQUISITION HOLDINGS CORP. and H2DIESEL, INC. October 17, 2006
AGREEMENT
OF MERGER AND
PLAN
OF REORGANIZATION
among
WIRELESS
HOLDINGS, INC.
WIRELESS
ACQUISITION HOLDINGS CORP. and
H2DIESEL,
INC.
October
17, 2006
TABLE
OF CONTENTS
Page
1.
The Merger
|
1
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||
1.1
Merger
|
1
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||
1.2
Effective Time
|
1
|
||
1.3
Certificate of Incorporation, By-laws,
Directors and
Officers.
|
2
|
||
1.4
Assets and Liabilities
|
2
|
||
1.5
Manner and Basis of Converting Shares.
|
2
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||
1.6
Surrender and Exchange of Certificates
|
3
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||
1.7
Warrants and Options.
|
3
|
||
1.8
Parent Common Stock
|
4
|
||
2. Representations
and Warranties of the Company
|
4
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||
2.1 Organization,
Standing, Subsidiaries, Etc.
|
4
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||
2.2
Qualification
|
4
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||
2.3 Capitalization
of the Company
|
5
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||
2.4 Company
Stockholders
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5
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||
2.5 Corporate
Acts and Proceedings
|
5
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||
2.6 Compliance
with Laws and Instruments
|
5
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||
2.7 Binding
Obligations
|
6
|
||
2.8 Broker’s
and Finder’s Fees
|
6
|
||
2.9 Financial
Statements
|
6
|
||
2.10 Absence
of Undisclosed Liabilities
|
6
|
||
2.11 Changes
|
6
|
||
2.12 Employee
Benefit Plans; ERISA
|
7
|
||
2.13 Title
to Property and Encumbrances
|
7
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||
2.14 Litigation
|
7
|
||
2.15 Patents,
Trademarks, Etc
|
7
|
||
2.16 Disclosure
|
7
|
||
3. Representations
and Warranties of Parent and Acquisition
Corp
|
8
|
||
3.1 Organization
and Standing
|
8
|
||
3.2 Corporate
Authority
|
8
|
||
3.3 Broker’s
and Finder’s Fees
|
8
|
||
3.4 Capitalization
of Parent
|
8
|
||
3.5 Acquisition
Corp
|
9
|
||
3.6 Validity
of Shares
|
9
|
||
3.7 SEC
Reporting and Compliance
|
9
|
||
3.8 Financial
Statements
|
10
|
||
3.9 Governmental
Consents
|
10
|
||
3.10 Compliance
with Laws and Instruments
|
11
|
||
3.11 No
General Solicitation
|
11
|
||
3.12 Binding
Obligations
|
11
|
||
3.13 Absence
of Undisclosed Liabilities
|
11
|
i
3.14 Changes
|
11
|
||
3.15 Tax
Returns and Audits
|
12
|
||
3.16 Employee
Benefit Plans; ERISA
|
12
|
||
3.17 Litigation
|
13
|
||
3.18 Interested
Party Transactions
|
13
|
||
3.19 Questionable
Payments
|
14
|
||
3.20 Obligations
to or by Stockholders
|
14
|
||
3.21 Assets
and Contracts
|
14
|
||
3.22 Employees
|
15
|
||
3.23 Disclosure
|
15
|
||
4. Additional
Representations, Warranties and Covenants
of the
Stockholders
|
15
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||
5. Conduct
of Businesses Pending the Merger.
|
16
|
||
5.1 Conduct
of Business by the Company Pending the
Merger
|
16
|
||
5.2 Conduct
of Business by Parent and Acquisition
Corp. Pending the
Merger
|
16
|
||
6. Additional
Agreements.
|
17
|
||
6.1 Access
and Information
|
17
|
||
6.2 Additional
Agreements
|
18
|
||
6.3 Publicity
|
18
|
||
6.4 Appointment
of Directors and Officers
|
19
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||
6.5 Parent
Name Change and Exchange Listing
|
19
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||
6.6 Registration
Rights Agreement
|
19
|
||
6.7 Employment
Agreements
|
19
|
||
7. Conditions
of Parties’ Obligations.
|
19
|
||
7.1 Company
Obligations
|
19
|
||
7.2 Parent
and Acquisition Corp. Obligations
|
21
|
||
7.3 Waiver
of Conditions
|
24
|
||
8. Non-Survival
of Representations and Warranties
|
24
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||
9. Amendment
of Agreement
|
24
|
||
10. Definitions
|
24
|
||
11. Closing
|
28
|
||
12. Termination
Prior to Closing.
|
28
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||
12.1 Termination
of Agreement
|
28
|
||
12.2 Termination
of Obligations
|
29
|
||
13. Miscellaneous.
|
29
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||
13.1 Notices
|
29
|
ii
13.2 Entire
Agreement
|
30
|
|
13.3 Expenses
|
30
|
|
13.4 Time
|
30
|
|
13.5 Severability
|
30
|
|
13.6 Successors
and Assigns
|
30
|
|
13.7 No
Third Parties Benefited
|
30
|
|
13.8 Counterparts
|
30
|
|
13.9 Governing
Law
|
31
|
iii
LIST
OF EXHIBITS AND SCHEDULES
Exhibits
|
|
A
|
Certificate
of Merger
|
B
|
Letter
of Transmittal
|
C
|
Form
of Opinion of Parent’s Counsel
|
D
|
Form
of Release of Parent Officers and Directors
|
Company
Disclosure Schedules
|
|
1.7(a)(1)
|
Treatment
of Company Warrants
|
2.8
|
Broker’s
and Finder’s Fees
|
2.10
|
Undisclosed
Liabilities
|
2.11
|
Changes/Indebtedness
|
2.13
|
Title
to Properties and Encumbrances
|
2.15
|
Patents,
Trademarks, Etc.
|
Parent
Disclosure Schedules
|
|
3.21
|
Schedule
of Parent Bank Accounts
|
iv
THIS
AGREEMENT OF MERGER AND PLAN OF REORGANIZATION (this
“Agreement”)
is
made and entered into as of October 17,
2006,
by and among WIRELESS HOLDINGS, INC., a Florida corporation
(“Parent”),
WIRELESS ACQUISITION HOLDINGS CORP., a Delaware corporation
(“Acquisition
Corp.”),
which
is a wholly-owned subsidiary of Parent, and H2DIESEL,
INC., a Delaware
corporation (the “Company”).
W I T N E S S E T H
:
WHEREAS,
the
Board of Directors of each of Acquisition Corp., Parent
and the Company have
each determined that it is fair to and in the best
interests of their respective
corporations and shareholders for Acquisition Corp.
to be merged with and into
the Company (the “Merger”)
upon
the terms and subject to the conditions set forth herein;
WHEREAS,
the
Board of Directors of Acquisition Corp. and the Board
of Directors of the
Company have approved the Merger in accordance with
the General Corporation Law
of the State of Delaware (the “DGCL”),
and
upon the terms and subject to the conditions set forth
herein and in the
Certificate of Merger (the “Certificate
of Merger”)
attached as Exhibit
A
hereto;
and the Board of Directors of Parent has also approved
this Agreement and the
Certificate of Merger; and
WHEREAS,
the
requisite Stockholders (as such term is defined in
Section
10
hereof)
have approved, by written consent pursuant to Sections
228 and 251 of the DGCL,
this Agreement, the Certificate of Merger and the transactions
contemplated
hereby and thereby, including without limitation, the
Merger, and Parent, as the
sole stockholder of Acquisition Corp., has approved
this Agreement, the
Certificate of Merger and the transactions contemplated
and described hereby and
thereby, including without limitation, the Merger.
NOW,
THEREFORE,
in
consideration of the mutual agreements and covenants
hereinafter set forth, the
parties hereto agree as follows:
1. The
Merger.
1.1 Merger.
Subject
to the terms and conditions of this Agreement and the
Certificate of Merger,
Acquisition Corp. shall be merged with and into the
Company in accordance with
Section 251 of the DGCL. At the Effective Time (as
hereinafter defined), the
separate legal existence of Acquisition Corp. shall
cease, and the Company shall
be the surviving corporation in the Merger (sometimes
hereinafter referred to as
the “Surviving
Corporation”)
and
shall continue its corporate existence under the laws
of the State of Delaware
under the name H2Diesel, Inc.
1.2 Effective
Time.
As
soon
as practicable on the Closing Date, the parties shall
file the Certificate of
Merger in accordance with the relevant provisions of
the DGCL. The
Merger shall become effective
on the
date and at the time the Certificate of Merger is filed
with the Secretary of
State of the State of Delaware in accordance with Section
251 of the DGCL. The
time at which the Merger shall become effective as
aforesaid is referred to
hereinafter as the “Effective
Time.”
1
Notwithstanding
the above, in the event that the Effective Time does
not occur on or before
October
31, 2006,
Parent
shall have the right to terminate this Agreement and
shall be entitled to retain
the amount of $50,000 currently held by Parent, provided
that such failure of
the Merger to become effective by the Effective Time
is not the result of any
failure of the Parent or Acquisition Corp. to perform
its obligations set forth
in this Agreement.
1.3 Certificate
of Incorporation, By-laws, Directors and Officers.
(a) The
Certificate of Incorporation of the Company, as in
effect immediately prior to
the Effective Time shall be the Certificate of Incorporation
of the Surviving
Corporation from and after the Effective Time until
further amended in
accordance with applicable law.
(b) The
By-laws of the Company, as in effect immediately prior
to the Effective Time
shall be the By-laws of the Surviving Corporation from
and after the Effective
Time until amended in accordance with applicable law,
the Certificate of
Incorporation of the Surviving Corporation and such
By-laws.
(c) The
directors and officers of the Company immediately prior
to the Effective Time
shall be the directors and officers of the Surviving
Corporation, and each shall
hold his respective office or offices from and after
the Effective Time until
his successor shall have been elected and shall have
qualified in accordance
with applicable law, or as otherwise provided in the
Certificate of
Incorporation or By-laws of the Surviving Corporation.
1.4 Assets
and Liabilities.
At the
Effective Time, the Surviving Corporation shall possess
all the rights,
privileges, powers and franchises of a public as well
as of a private nature,
and be subject to all the restrictions, disabilities
and duties of each of
Acquisition Corp. and the Company (collectively, the
“Constituent
Corporations”);
and
all the rights, privileges, powers and franchises of
each of the Constituent
Corporations, and all property, real, personal and
mixed, and all debts due to
any of the Constituent Corporations on whatever account,
as well for stock
subscriptions as all other things in action or belonging
to each of the
Constituent Corporations, shall be vested in the Surviving
Corporation; and all
property, rights, privileges, powers and franchises,
and all and every other
interest shall be thereafter as effectively the property
of the Surviving
Corporation as they were of the several and respective
Constituent Corporations,
and the title to any real estate vested by deed or
otherwise in either of the
such Constituent Corporations shall not revert or be
in any way impaired by the
Merger; but all rights of creditors and all liens upon
any property of any of
the Constituent Corporations shall be preserved unimpaired,
and all debts,
liabilities and duties of the Constituent Corporations
shall thenceforth attach
to the Surviving Corporation, and may be enforced against
it to the same extent
as if said debts, liabilities and duties had been incurred
or contracted by
it.
1.5 Manner
and Basis of Converting Shares.
(a) At
the
Effective Time:
(i) each
share of common stock, par value $.01 per share, of
Acquisition Corp. that shall
be outstanding immediately prior to the Effective Time
shall, by virtue of the
Merger and without any action on the part of the holder
thereof, be converted
into the right to receive one share of common stock,
par value $.0001 per share,
of the Surviving Corporation, so that at the Effective
Time, Parent shall be the
holder of all of the issued and outstanding shares
of the Surviving
Corporation;
2
(ii) each
share of common stock, par value $.0001 per share,
of the Company (the
“Company
Common Stock”)
that
shall be outstanding immediately prior to the Effective
Time (other than shares
of Company Common Stock as to which appraisal rights
are perfected pursuant to
the applicable provisions of the DGCL and not withdrawn
or otherwise forfeited),
shall, by virtue of the Merger and without any action
on the part of the holders
thereof, be converted into the right to receive one
share of common stock, par
value $.001 per share, of Parent (the “Parent
Common Stock”);
and
(iii) each
share of Company Common Stock held in the treasury
of the Company immediately
prior to the Effective Time shall be cancelled in the
Merger and cease to
exist.
(b) After
the
Effective Time, there shall be no further registration
of transfers on the stock
transfer books of the Surviving Corporation of the
shares of Company Common
Stock that were outstanding immediately prior to the
Effective
Time.
1.6 Surrender
and Exchange of Certificates.
Promptly after the Effective Time and upon (i) surrender
of a certificate or
certificates representing shares of Company Common
Stock that were outstanding
immediately prior to the Effective Time or an affidavit
and indemnification in
form reasonably acceptable to counsel for the Parent
stating that such
Stockholder has lost its certificate or certificates
or that such have been
destroyed and (ii) delivery of a Letter of Transmittal (as described in
Section
4
hereof),
Parent shall issue to each record holder of the Company
Common Stock
surrendering such certificate or certificates and Letter
of Transmittal, a
certificate or certificates registered in the name
of such Stockholder
representing the number of shares of Parent Common
Stock that such Stockholder
shall be entitled to receive as set forth in Section
1.5(a)(ii)
hereof.
Until the certificate, certificates or affidavit is
or are surrendered together
with the Letter of Transmittal as contemplated by this
Section
1.6
and
Section
4
hereof,
each certificate or affidavit that immediately prior
to the Effective Time
represented any outstanding shares of Company Common
Stock shall be deemed at
and after the Effective Time to represent only the
right to receive upon
surrender as aforesaid the Parent Common Stock as set
forth in Section
1.5
hereof
for the holder thereof or to perfect any rights of
appraisal which such holder
may have pursuant to the applicable provisions of the
DGCL.
1.7 Warrants
and Options.
(a) (1)
At
the Effective Time, all outstanding warrants and stock
options issued by the
Company to purchase shares of Company Common Stock
(collectively, the
“Company
Warrants”)
that
have not been surrendered by the holder thereof in
exchange for Company Common
Stock, will, at the Effective Time, be deemed be a
warrant or option, as the
case may be (collectively, the “Parent
Warrants”)
to
acquire the same number of shares of Parent Common
Stock as the holder of such
Company Warrants would have been entitled to receive
pursuant to the Merger had
such holder exercised such Company Warrants in full
immediately prior to the
Effective Time at a price per share of Parent Common
Stock equal to the exercise
price per share for the shares of Company Common Stock
otherwise purchasable
pursuant to such Company Warrant. Schedule
1.7(a)(1)
3
attached
hereto sets forth the name of each holder of Company
Warrants, the aggregate
number of shares of Company Common Stock that each
such person may purchase
pursuant to the exercise of his, her or its Company
Warrants and the aggregate
number of shares of Parent Common Stock that each
such person may purchase upon
exercise of Parent Warrants acquired pursuant to
this Section
1.7(a)(1).
By its
signature hereunder, Parent expressly assumes the
obligation to issue Parent
Common Stock to the holders of Parent Warrants upon
exercise thereof, in
accordance with the provisions of this Section
1.7(a)(1).
The Company shall be permitted to amend Schedule
1.7(a)(7) to reflect (i) any
warrants or options issued by the Company in connection
with any new members of
management of the Company retained following the
date hereof and prior to
the Effective Time, and (ii) the final number of
warrants issued in connection
with the Final Offering.
(2) Without
limiting the generality of the foregoing, the Company
and the Parent shall take
all corporate actions as may be necessary and desirable
in order to effectuate
the transactions contemplated by this Section
1.7(a).
(b) Parent
shall take all action necessary and appropriate, on
or prior to the Effective
Time, to authorize and reserve a number of shares of
Parent Common Stock
sufficient for issuance upon the exercise of Parent
Warrants following the
Effective Time as contemplated by this Section
1.7.
(c) Other
than the Company Warrants, all options, warrants and
rights to purchase Company
Common Stock outstanding as of the Effective Date will
be exercised or
terminated at or prior to the Effective Time, and neither
Parent nor Acquisition
Corp. shall assume or have any obligation with respect
to such options, warrants
or rights.
1.8 Parent
Common Stock.
Parent
agrees that it will cause the Parent Common Stock into
which the Company Common
Stock is converted at the Effective Time pursuant to
Section
1.5(a)(ii)
to be
available for such purpose. Parent further covenants
that immediately prior to
the Effective Time there will be no more than 1,101,250
shares of Parent Common
Stock issued and outstanding, and that no other common
or preferred stock or
equity securities or any options, warrants, rights
or other agreements or
instruments convertible, exchangeable or exercisable
into common or preferred
stock or other equity securities of Parent or any subsidiary
of Parent shall be
issued or outstanding.
2. Representations
and Warranties of the Company.
The
Company hereby represents and warrants to Parent and
Acquisition Corp. as
follows:
2.1 Organization,
Standing, Subsidiaries, Etc.
(a) The
Company is a corporation duly organized and existing
in good standing under the
laws of the State of Delaware, and has all requisite
power and authority
(corporate and other) to carry on its business, to
own or lease its properties
and assets, to enter into this Agreement and the Certificate
of Merger and to
carry out the terms hereof and thereof. Copies of the
Certificate of
Incorporation and By-laws of the Company that have
been delivered to Parent and
Acquisition Corp. prior to the execution of this Agreement
are true and complete
and have not since been amended or repealed.
(b) The
Company has no subsidiaries or direct or indirect interest
(by way of stock
ownership or otherwise) in any firm, corporation, limited
liability company,
partnership, association or business.
4
2.2 Qualification.
The
Company is duly qualified to conduct business as a
foreign corporation in each
jurisdiction wherein the nature of its activities or
its properties owned or
leased makes such qualification necessary, except where
the failure to be so
qualified would not have a material adverse effect
on the condition (financial
or otherwise), properties, assets, liabilities, business
operations, results of
operations or prospects of the Company (the “Condition
of the Company”).
2.3 Capitalization
of the Company.
The
authorized capital stock of the Company consists of
25,000,000 shares of Company
Common Stock, and the Company has no authority to issue
any other capital stock.
As of the date hereof, there are 13,000,000 shares
of Company Common Stock
issued and outstanding, and such shares are duly authorized,
validly issued,
fully paid and nonassessable. Except as disclosed in
Schedule
1.7(a)(1),
the
Company has no outstanding warrants, stock options,
rights or commitments to
issue Company Common Stock or other Equity Securities
of the Company, and there
are no outstanding securities convertible or exercisable
into or exchangeable
for Company Common Stock or other Equity Securities
of the Company. The Company
is currently conducting a private offering pursuant
to which it is offering to
issue and sell a minimum of 2,000,000 shares and a
maximum of 6,000,000 shares
of Company Common Stock (the “Private
Offering”),
which
shares would be duly authorized, validly issued, fully
paid and nonassessable at
the Effective Time.
2.4 Company
Stockholders.
To the
knowledge of the Company, there is no voting trust,
agreement or arrangement
among any of the beneficial holders of Company Common
Stock affecting the
exercise of the voting rights of Company Common Stock.
2.5 Corporate
Acts and Proceedings.
The
execution, delivery and performance of this Agreement
and the Certificate of
Merger (together, the “Merger
Documents”)
have
been duly authorized by the Board of Directors of the
Company and have been
approved by the requisite vote of the Stockholders,
and all of the corporate
acts and other proceedings required for the due and
valid authorization,
execution, delivery and performance of the Merger Documents
and the consummation
of the Merger have been validly and appropriately taken,
except for the filing
of the Certificate of Merger referred to in Section
1.2.
2.6 Compliance
with Laws and Instruments.
To the
knowledge of the Company, the business, products and
operations of the Company
have been and are being conducted in compliance in
all material respects with
all applicable laws, rules and regulations, except
for such violations thereof
for which the penalties, in the aggregate, would not
have a material adverse
effect on the Condition of the Company. The execution,
delivery and performance
by the Company of the Merger Documents and the consummation
by the Company of
the transactions contemplated by this Agreement: (a)
will not require any
authorization, consent or approval of, or filing or
registration with, any court
or governmental agency or instrumentality, except such
as shall have been
obtained prior to the Closing, (b) will not cause the
Company to violate or
contravene in any material respect (i) any provision
of law, (ii) any rule or
regulation of any agency or government, (iii) any order,
judgment or decree of
any court, or (iv) any provision of the Certificate
of Incorporation or By-laws
of the Company, (c) will not violate or be in conflict
with, result in a breach
of or constitute (with or without notice or lapse of
time, or both) a default
under, any indenture, loan or credit agreement, deed
of trust, mortgage,
security agreement or other contract, agreement or
instrument to which the
Company is a party or by which the Company or any of
its properties is bound or
affected,
5
except
as
would not have a material adverse effect on the Condition
of the Company, and
(d) will not result in the creation or imposition
of any material Lien upon any
property or asset of the Company.
2.7 Binding
Obligations.
The
Merger Documents constitute the legal, valid and binding
obligations of the
Company and are enforceable against the Company in
accordance with their
respective terms, except as such enforcement is limited
by bankruptcy,
insolvency and other laws affecting the enforcement
of creditors’ rights
generally and by general principles of equity.
2.8 Broker’s
and Finder’s Fees.
No
Person has, or as a result of the transactions contemplated
herein will have,
any right or valid claim against the Company, Parent,
Acquisition Corp. or any
Stockholder for any commission, fee or other compensation
as a finder or broker,
or in any similar capacity, except as set forth Schedule
2.8.
and
from which the Company will hold Parent harmless if
the Effective Time does not
occur other than as a result of the breach of this
Agreement by
Parent.
2.9 Financial
Statements.
At or
prior to the Effective Time, the Company shall deliver
to Parent the Company’s
audited balance sheet (the “Company
Balance Sheet”),
as of
June 30, 2006 (the “Company
Balance Sheet Date”),
statement of operations, statement of changes in shareholders’ equity and
statement of cash flows as of and for the period from
inception to June 30,
2006. Such financial statements (i) will be in accordance with the books
and records of the Company, (ii) present fairly in all material respects
the financial condition of the Company at the dates
therein specified and the
results of its operations and changes in financial
position for the periods
therein specified and (iii) will be prepared in accordance
with generally
accepted accounting principles (“GAAP”)
applied on a basis consistent with prior accounting
periods.
2.10 Absence
of Undisclosed Liabilities.
The
Company has no material obligation or liability (whether
accrued, absolute,
contingent, liquidated or otherwise, whether due or
to become due), arising out
of any transaction entered into at or prior to the
Closing, except (a) as
disclosed in the private placement memorandum and the
related offering documents
prepared in connection with the Private Offering, Schedule
2.10
and/or
Schedule
2.11
hereto,
(b) to the extent to be set forth on or reserved against
in the Company Balance
Sheet, (c) current liabilities incurred and obligations under
agreements
entered into in the usual and ordinary course of business,
none of which
(individually or in the aggregate) has had or will
have a material adverse
effect on the Condition of the Company and (d) by the
specific terms of any
written agreement, document or arrangement identified
in the
Schedules.
2.11 Changes.
Since
the Company Balance Sheet Date, except as disclosed
in Schedule
2.11
hereto
or in the notes to the financial statements provided
pursuant to Section 2.9
above, the Company has not (a)
incurred any material debts, obligations or liabilities,
absolute, accrued,
contingent or otherwise, whether due or to become due,
except for fees, expenses
and liabilities incurred in connection with the Private
Offering, the Merger and
related transactions, as described in the disclosure
annex to the subscription
agreements pursuant to which the Private Offering is
being effected (the
“Disclosure
Annex”),
and
current liabilities incurred in the usual and ordinary
course of business,
(b)
discharged or satisfied any Liens other than those
securing, or paid any
obligation or liability other than, current liabilities
shown on the Company
Balance Sheet and current liabilities incurred since
the Company Balance Sheet
Date, in each case in the usual and ordinary course
of business, (c)
mortgaged, pledged or subjected to
6
Lien
any
of its assets, tangible or intangible, other than
in the usual and ordinary
course of business, (d)
sold,
transferred or leased any of its assets, except in
the usual and ordinary course
of business, (e)
cancelled or compromised any debt or claim, or waived
or released any right, of
material value, (f)
suffered any physical damage, destruction or loss
(whether or not covered by
insurance) materially and adversely affecting the
Condition of the Company, or
(g)
entered into any transaction other than in the usual
and ordinary course of
business or as set forth in the Disclosure Annex.
2.12 Employee
Benefit Plans; ERISA.
At the
date hereof, the Company does not maintain any “employee benefit plans” as
defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974,
as amended (“ERISA”).
2.13 Title
to
Property and Encumbrances.
Except
as disclosed in Schedule
2.13
hereto,
the Company has good, valid and indefeasible marketable
title to all properties
and assets used in the conduct of its business (except
for property held under
valid and subsisting leases which are in full force
and effect and which are not
in default) free of all Liens and other encumbrances,
except Permitted Liens and
such ordinary and customary imperfections of title,
restrictions and
encumbrances as do not, individually or in the aggregate,
materially detract
from the value of the property or assets or materially
impair the use made
thereof by the Company in its business.
2.14 Litigation.
There
is no legal action, suit, arbitration or other legal,
administrative or other
governmental proceeding pending or, to the best knowledge
of the Company,
threatened against or affecting the Company or its
properties, assets or
business, and after reasonable investigation, the Company
is not aware of any
incident, transaction, occurrence or circumstance that
might reasonably be
expected to result in or form the basis for any such
action, suit, arbitration
or other proceeding. The Company is not in default
with respect to any order,
writ, judgment, injunction, decree, determination or
award of any court or any
governmental agency or instrumentality or arbitration
authority.
2.15 Patents,
Trademarks, Etc.
Schedule
2.15
sets
forth a list of all United States and foreign patents,
trademarks, trade names,
copyrights, and applications therefor used by the Company
exclusively in and
material to the conduct of its business (the “Patent
and Trademark Rights”).
Except as disclosed in Schedule
2.15,
(a)
the
Company owns or possesses adequate licenses or other
valid rights to use all
Patent and Trademark Rights and trade secrets used
in the Company’s business;
and (b)
to
the Company’s knowledge, the conduct of its business as now being
conducted does
not conflict with any valid patents, trademarks, trade
names or copyrights of
others in any way which has a material adverse effect
on the business or
financial condition of the Company or its business.
2.16 Disclosure.
No
representation or warranty by the Company herein and
no information disclosed in
the schedules or exhibits hereto by the Company contains
any untrue statement of
a material fact or omits to state a material fact necessary
to make the
statements contained herein or therein not misleading.
7
3. Representations
and Warranties of Parent and Acquisition Corp.
Parent
and Acquisition Corp. jointly and severally represent
and warrant to the
Company, as follows:
3.1 Organization
and Standing.
Parent
is a corporation duly organized and existing in good
standing under the laws of
the State of Florida. Acquisition Corp. is a corporation
duly organized and
existing in good standing under the laws of the State
of Delaware. Parent and
Acquisition Corp. have heretofore delivered to the
Company complete and correct
copies of their respective Articles or Certificates
of Incorporation and By-laws
as now in effect. Parent and Acquisition Corp. have
full corporate power and
authority to carry on their respective businesses as
they are now being
conducted and as now proposed to be conducted and to
own or lease their
respective properties and assets. Other than Action
Wireless, Inc., a Florida
corporation and a direct wholly-owned subsidiary of
Parent (“Action
Wireless”),
neither Parent nor Acquisition Corp. has any subsidiaries
(except Parent as the
sole stockholder of Acquisition Corp.) or direct or
indirect interest (by way of
stock ownership or otherwise) in any firm, corporation,
limited liability
company, partnership, association or business. Parent
owns all of the issued and
outstanding capital stock of Acquisition Corp. free
and clear of all Liens, and
Acquisition Corp. has no outstanding options, warrants
or rights to purchase
capital stock or other equity securities of Acquisition
Corp., other than the
capital stock owned by Parent. Unless the context otherwise
requires, all
references in this Section
3
to the
“Parent” shall be treated as being a reference to the Parent
and Acquisition
Corp. taken together as one enterprise.
3.2 Corporate
Authority.
Each of
Parent and/or Acquisition Corp. (as the case may be)
has full corporate power
and authority to enter into the Merger Documents and
the other agreements to be
made pursuant to the Merger Documents, and to carry
out the transactions
contemplated hereby and thereby. All corporate acts
and proceedings required for
the authorization, execution, delivery and performance
of the Merger Documents
and such other agreements and documents by Parent and/or
Acquisition Corp. (as
the case may be) have been duly and validly taken or
will have been so taken
prior to the Closing. Each of the Merger Documents
constitutes a legal, valid
and binding obligation of Parent and/or Acquisition
Corp. (as the case may be),
each enforceable against them in accordance with their
respective terms, except
as such enforcement may be limited by bankruptcy, insolvency,
reorganization or
other laws affecting creditors’ rights generally and by general principles of
equity.
3.3 Broker’s
and Finder’s Fees.
Except
for the firms engaged by the Company described in Section
2.8,
no
person, firm, corporation or other entity is entitled
by reason of any act or
omission of Parent or Acquisition Corp. to any broker’s or finder’s fees,
commission or other similar compensation with respect
to the execution and
delivery of this Agreement or the Certificate of Merger,
or with respect to the
consummation of the transactions contemplated hereby
or thereby. Parent and
Acquisition Corp. jointly and severally indemnify and
hold Company harmless from
and against any and all loss, claim or liability arising
out of any such claim
from any other Person who claims he, she or it introduced
Parent or Acquisition
Corp. to, or assisted them with, the transactions contemplated
by or described
herein.
3.4 Capitalization
of Parent.
The
authorized capital stock of Parent consists of (a)
100,000,000 shares of Parent
Common Stock, of which 30,176,250 shares are issued
and outstanding (of which
29,400,000 are owned by Xxxxxx Xxxx) and of which not
more than 1,101,250 shares
will be, prior to the Effective Time, issued and outstanding
after taking into
consideration the cancellation of Parent Common Stock
as indicated in
Section
8
7.2(f)(7)(iii)
hereof,
and (b) 10,000,000 shares of preferred stock, par value $.001
per share, of
which no shares are issued or outstanding. Parent
has no outstanding options,
rights or commitments to issue shares of Parent Common
Stock or any other Equity
Security of Parent or Acquisition Corp., and there
are no outstanding securities
convertible or exercisable into or exchangeable for
shares of Parent Common
Stock or any other Equity Security of Parent or Acquisition
Corp. There is no
voting trust, agreement or arrangement among any
of the beneficial holders of
Parent Common Stock affecting the nomination or election
of directors or the
exercise of the voting rights of Parent Common Stock.
All outstanding shares of
the capital stock of Parent are validly issued and
outstanding, fully paid and
nonassessable, and none of such shares have been
issued in violation of the
preemptive rights of any person.
3.5 Acquisition
Corp.
Acquisition Corp. is a wholly-owned subsidiary of Parent
that was formed
specifically for the purpose of the Merger and that
has not conducted any
business or acquired any property, and will not conduct
any business or acquire
any property prior to the Closing Date, except in preparation
for and otherwise
in connection with the transactions contemplated by
this Agreement, the
Certificate of Merger and the other agreements to be
made pursuant to or in
connection with this Agreement and the Certificate
of Merger.
3.6 Validity
of Shares.
The
shares of Parent Common Stock to be issued at the Closing
pursuant to
Section
1.5(a)(ii)
hereof,
when issued and delivered in accordance with the terms
hereof and of the
Certificate of Merger, shall be duly and validly issued,
fully paid and
nonassessable. Based in part on the representations
and warranties of the
Stockholders as contemplated by Section
4
hereof
and assuming the accuracy thereof, the issuance of
the Parent Common Stock upon
the Merger pursuant to Section
1.5(a)(ii)
will be
exempt from the registration and prospectus delivery
requirements of the
Securities Act and from the qualification or registration
requirements of any
applicable state blue sky or securities laws.
3.7 SEC
Reporting and Compliance.
(a)
Parent filed a registration statement on Form SB-2
under the Securities Act
which became effective on July 16, 2004 and a Form
8A under the Securities
Exchange Act of 1934, as amended (the “Exchange
Act”),
which
became effective on April 7, 2006. Since the date of
effectiveness of such Form
SB-2, Parent has timely filed with the Commission all
reports required to be
filed pursuant to Section 15(d) of the Exchange Act
and since the date of
effectiveness of such Form 8A, Parent has timely filed
with the Commission all
reports and materials required to be filed by companies
registered pursuant to
Section 12(g) of the Exchange Act.
(b) Parent
has delivered to the Company true and complete copies
of all annual reports on
Form 10-KSB, quarterly reports on Form 10-QSB, current
reports on Form 8-K and
other statements reports and filings (collectively,
the “Parent
SEC Documents”)
filed
by Parent with the Commission. The Parent SEC Documents
complied, as to form,
with the requirements of the Exchange Act, the rules
and regulations of the
Commission thereunder and the requirements of such
forms in all material
respects. None of the Parent SEC Documents, as of their
respective dates,
contained any untrue statement of a material fact or
omitted to state a material
fact necessary in order to make the statements contained
therein not
misleading.
(c) Parent
has not filed, and nothing has occurred with respect
to which Parent would be
required to file, any report on Form 8-K since the
date that Parent filed its
most recent periodic report on Form 10-KSB or 10-QSB,
as the case may be. Prior
to and until the Closing,
9
Parent
will provide to the Company copies of any and all
amendments or supplements to
the Parent SEC Documents filed with the Commission
since such date and any and
all subsequent statements, reports and filings filed
by the Parent with the
Commission or delivered to the stockholders of Parent
and all communications
with the Commission or its staff.
(d) Parent
is
not an investment company within the meaning of the
Investment Company
Act.
(e) The
shares of Parent Common Stock are quoted on the Over-the-Counter
Bulletin Board
(the “OTC
Bulletin Board”)
under
the symbol “WLHO.OB,” and Parent is in compliance in all material respects
with
all rules and regulations of the OTC Bulletin Board
applicable to it and the
Parent Stock. The OTC Bulletin Board has cleared the
Form 211 filed by Parent
pursuant to Rule 15c2-11(a)(5) of the Exchange Act.
Such Form 211 did not
contain any untrue statement of a material fact or
omit to state a material fact
necessary in order to make the statements contained
therein not
misleading.
(f) Between
the date hereof and the Closing Date, Parent shall
continue to satisfy the
filing requirements of the Exchange Act and all other
requirements of applicable
securities laws and the OTC Bulletin Board.
(g) To
the
best knowledge of Parent, Parent has otherwise complied
with the Securities Act,
Exchange Act and all other applicable federal and state
securities
laws.
3.8 Financial
Statements.
The
consolidated balance sheets, and statements of operations,
statements of changes
in shareholders’ equity and statements of cash flows contained in the
Parent SEC
Documents (the “Parent
Financial Statements”)
(i)
have been prepared in accordance with GAAP applied
on a basis consistent with
prior periods (and, in the case of unaudited financial
information, on a basis
consistent with year-end audits) and the applicable
rules and regulations of the
Commission, (ii) are in accordance with the books and
records of Parent, and
(iii) present fairly in all material respects the financial
condition of Parent
at the dates therein specified and the results of its
operations and changes in
financial position for the periods therein specified.
The financial statements
included in the Annual Report on Form 10-KSB for the
fiscal year ended December
31, 2005, are audited by, and include the related report
of Xxxxxx, Xxxxxxxx
& Associates, Parent’s Independent Registered Public Accounting Firm. The
financial information included in the Quarterly Report
on Form 10-QSB for the
quarter ended June 30, 2006, is unaudited, but reflects
all adjustments
(including normally recurring accounts) that Parent
considers necessary for a
fair presentation of such information and have been
prepared in accordance with
GAAP, consistently applied and the applicable rules
and regulations of the
Commission.
3.9 Governmental
Consents.
All
consents, approvals, orders, or authorizations of,
or registrations,
qualifications, designations, declarations, or filings
with any federal or state
governmental authority on the part of Parent or Acquisition
Corp. required in
connection with the consummation of the Merger shall
have been obtained prior
to, and be effective as of, the Closing.
3.10 Compliance
with Laws and Instruments.
The
execution, delivery and performance by Parent and/or
Acquisition Corp. of this
Agreement, the Certificate of Merger and the other
agreements to be made by
Parent or Acquisition Corp. pursuant to or in connection
with this
10
Agreement
or the Certificate of Merger and the consummation
by Parent and/or Acquisition
Corp. of the transactions contemplated by the Merger
Documents will not cause
Parent and/or Acquisition Corp. to violate or contravene
(i) any provision of
law, (ii) any rule or regulation of any agency or
government, (iii) any order,
judgment or decree of any court, or (iv) any provision of their respective
Articles or Certificate of Incorporation or By-laws
as amended and in effect on
and as of the Closing Date and will not violate or
be in conflict with, result
in a breach of or constitute (with or without notice
or lapse of time, or both)
a default under any indenture, loan or credit agreement,
deed of trust,
mortgage, security agreement or other agreement or
contract to which Parent or
Acquisition Corp. is a party or by which Parent and/or
Acquisition Corp. or any
of their respective properties is bound.
3.11 No
General Solicitation.
In
issuing Parent Common Stock in the Merger hereunder,
neither Parent nor anyone
acting on its behalf has offered to sell the Parent
Common Stock by any form of
general solicitation or advertising.
3.12 Binding
Obligations.
The
Merger Documents constitute the legal, valid and binding
obligations of the
Parent and Acquisition Corp., and are enforceable against
the Parent and
Acquisition Corp., in accordance with their respective
terms, except as such
enforcement is limited by bankruptcy, insolvency and
other laws affecting the
enforcement of creditors’ rights generally and by general principles of equity.
3.13 Absence
of Undisclosed Liabilities.
Neither
Parent nor Acquisition Corp. has any obligation or
liability (whether accrued,
absolute, contingent, liquidated or otherwise, whether
due or to become due),
arising out of any transaction entered into at or prior
to the Closing, except
(a)
as
disclosed in the Parent SEC Documents filed prior to
the date hereof,
(b)
to
the extent set forth on or reserved against in the
audited balance sheet of
Parent (the “Parent
Balance Sheet”)
as of
December 31, 2005 (the “Parent
Balance Sheet Date”)
or the
notes to the Parent Financial Statements, (c)
current liabilities incurred and obligations under
agreements entered into in
the usual and ordinary course of business since the
Parent Balance Sheet Date,
none of which (individually or in the aggregate) materially
and adversely
affects the condition (financial or otherwise), properties,
assets, liabilities,
business operations, results of operations or prospects
of the Parent or
Acquisition Corp., taken as a whole (the “Condition
of the Parent”),
and
(d)
by
the specific terms of any written agreement, document
or arrangement attached as
an exhibit to the Parent SEC Documents filed prior
to the date hereof.
Immediately prior to the Effective Time, neither Parent
nor Acquisition Corp.
shall have any liabilities other than those arising
under this Agreement.
3.14 Changes.
Since
the Parent Balance Sheet Date, except as disclosed
in the Parent SEC Documents
filed prior to the date hereof, Parent has not (a)
incurred any debts, obligations or liabilities, absolute,
accrued or, to the
Parent’s knowledge, contingent, whether due or to become due,
except for current
liabilities incurred in the usual and ordinary course
of business, (b)
discharged or satisfied any Liens other than those
securing, or paid any
obligation or liability other than, current liabilities
shown on the Parent
Balance Sheet and current liabilities incurred since
the Parent Balance Sheet
Date, in each case in the usual and ordinary course
of business, (c)
mortgaged, pledged or subjected to Lien any of its
assets, tangible or
intangible, other than in the usual and ordinary course
of business,
(d)
sold,
transferred or leased any of its assets, except in
the usual and ordinary course
of business, (e)
cancelled or compromised any debt or claim, or waived
or released any right of
material value, (f)
suffered any physical damage,
11
destruction
or loss (whether or not covered by insurance) which
could reasonably be expected
to have a material adverse effect on the Condition
of the Parent, (g)
entered into any transaction other than in the usual
and ordinary course of
business, (h)
encountered any labor union difficulties, (i)
made
or granted any wage or salary increase or made any
increase in the amounts
payable under any profit sharing, bonus, deferred
compensation, severance pay,
insurance, pension, retirement or other employee
benefit plan, agreement or
arrangement, other than in the ordinary course of
business consistent with past
practice, or entered into any employment agreement,
(j)
issued or sold any shares of capital stock, bonds,
notes, debentures or other
securities or granted any options (including employee
stock options), warrants
or other rights with respect thereto, (k)
declared or paid any dividends on or made any other
distributions with respect
to, or purchased or redeemed, any of its outstanding
capital stock, (l)
suffered or experienced any change in, or condition
affecting, the financial
condition of the Parent other than changes, events
or conditions in the usual
and ordinary course of its business, none of which
(either by itself or in
conjunction with all such other changes, events and
conditions) could reasonably
be expected to have a material adverse effect on
the Condition of the Parent,
(m)
made
any change in the accounting principles, methods
or practices followed by it or
depreciation or amortization policies or rates theretofore
adopted, (n)
made
or permitted any amendment or termination of any
material contract, agreement or
license to which it is a party, (o)
suffered any material loss not reflected in the Parent
Balance Sheet or its
statement of income for the year ended on the Parent
Balance Sheet Date,
(p)
paid,
or made any accrual or arrangement for payment of,
bonuses or special
compensation of any kind or any severance or termination
pay to any present or
former officer, director, employee, stockholder or
consultant, (q)
made
or agreed to make any charitable contributions or
incurred any non-business
expenses in excess of $5,000 in the aggregate, or
(r)
entered into any agreement, or otherwise obligated
itself, to do any of the
foregoing.
3.15 Tax
Returns and Audits.
All
required federal, state and local Tax Returns of the
Parent have been accurately
prepared in all material respects and duly and timely
filed, and all federal,
state and local Taxes required to be paid with respect
to the periods covered by
such returns have been paid to the extent that the
same are material and have
become due, except where the failure so to file or
pay could not reasonably be
expected to have a material adverse effect upon the
Condition of the Parent. The
Parent is not and has not been delinquent in the payment
of any Tax. The Parent
has not had a Tax deficiency assessed against it. None
of the Parent’s federal
income tax returns nor any state or local income or
franchise tax returns has
been audited by governmental authorities. The reserves
for Taxes reflected on
the Parent Balance Sheet are sufficient for the payment
of all unpaid Taxes
payable by the Parent with respect to the period ended
on the Parent Balance
Sheet Date. There are no federal, state, local or foreign
audits, actions,
suits, proceedings, investigations, claims or administrative
proceedings
relating to Taxes or any Tax Returns of the Parent
now pending, and the Parent
has not received any notice of any proposed audits,
investigations, claims or
administrative proceedings relating to Taxes or any
Tax Returns.
3.16 Employee
Benefit Plans; ERISA.
(a)
Except as disclosed in the Parent SEC Documents filed
prior to the date hereof,
there are no “employee benefit plans” (within the meaning of Section 3(3) of
ERISA) nor any other employee benefit or fringe benefit
arrangements, practices,
contracts, policies or programs other than programs
merely involving the regular
payment of wages, commissions, or bonuses established,
maintained or contributed
to by the Parent. Any plans listed in such Parent SEC
Documents are hereinafter
referred to as the “Parent
Employee Benefit Plans.”
12
(b) Any
current and prior material documents, including all
amendments thereto, with
respect to each Parent Employee Benefit Plan have been
given to the Company or
its advisors.
(c) All
Parent Employee Benefit Plans are in material compliance
with the applicable
requirements of ERISA, the Code and any other applicable
state, federal or
foreign law.
(d) There
are
no pending, or to the knowledge of the Parent, threatened,
claims or lawsuits
which have been asserted or instituted against any
Parent Employee Benefit Plan,
the assets of any of the trusts or funds under the
Parent Employee Benefit
Plans, the plan sponsor or the plan administrator of
any of the Parent Employee
Benefit Plans or against any fiduciary of a Parent
Employee Benefit Plan with
respect to the operation of such plan.
(e) There
is
no pending, or to the knowledge of the Parent, threatened,
investigation or
pending or possible enforcement action by the Pension
Benefit Guaranty
Corporation, the Department of Labor, the Internal
Revenue Service or any other
government agency with respect to any Parent Employee
Benefit Plan.
(f) No
actual
or, to the knowledge of Parent, contingent liability
exists with respect to the
funding of any Parent Employee Benefit Plan or for
any other expense or
obligation of any Parent Employee Benefit Plan, except
as disclosed on the
financial statements of the Parent or the Parent SEC
Documents filed prior to
the date hereof, and to the knowledge of the Parent,
no contingent liability
exists under ERISA with respect to any “multi-employer plan,” as defined in
Section 3(37) or Section 4001(a)(3) of ERISA.
3.17 Litigation.
There
is no legal action, suit, arbitration or other legal,
administrative or other
governmental proceeding pending or, to the knowledge
of the Parent, threatened
against or affecting the Parent or Acquisition Corp.
or their properties, assets
or business. To the knowledge of the Parent, neither
Parent nor Acquisition
Corp. is in default with respect to any order, writ,
judgment, injunction,
decree, determination or award of any court or any
governmental agency or
instrumentality or arbitration authority.
3.18 Interested
Party Transactions.
Except
as disclosed in the Parent SEC Documents filed prior
to the date hereof, no
officer, director or stockholder of the Parent or any
Affiliate or “associate”
(as such term is defined in Rule 405 under the Securities
Act) of any such
Person or the Parent has or has had, either directly
or indirectly, (a)
an
interest in any Person that (i)
furnishes or sells services or products that are furnished
or sold or are
proposed to be furnished or sold by the Parent or (ii)
purchases from or sells or furnishes to the Parent
any goods or services, or
(b)
a
beneficial interest in any contract or agreement to
which the Parent is a party
or by which it may be bound or affected.
3.19 Questionable
Payments.
Neither
the Parent, Acquisition Corp. nor to the knowledge
of the Parent, any director,
officer, agent, employee or other Person associated
with or acting on behalf of
the Parent or Acquisition Corp., has used any corporate
funds for unlawful
13
contributions,
gifts, entertainment or other unlawful expenses relating
to political activity;
made any direct or indirect unlawful payments to
government officials or
employees from corporate funds; established or maintained
any unlawful or
unrecorded fund of corporate monies or other assets;
made any false or
fictitious entries on the books of record of any
such corporations; or made any
bribe, rebate, payoff, influence payment, kickback
or other unlawful
payment.
3.20 Obligations
to or by Stockholders.
Except
as disclosed in the Parent SEC Documents filed prior
to the date hereof, the
Parent has no liability or obligation or commitment
to any stockholder of Parent
or any Affiliate or “associate” (as such term is defined in Rule 405 under the
Securities Act) of any stockholder of Parent, nor does
any stockholder of Parent
or any such Affiliate or associate have any liability,
obligation or commitment
to the Parent.
3.21 Assets
and Contracts.
Except
as expressly set forth in a schedule to this Agreement,
the Parent Balance Sheet
or the notes thereto, the Parent is not a party to
any written or oral agreement
not made in the ordinary course of business that is
material to the Parent.
Parent does not own any real property. Parent is not
a party to or otherwise
bound by any written or oral (a)
agreement with any labor union, (b)
agreement for the purchase of fixed assets or for the
purchase of materials,
supplies or equipment in excess of normal operating
requirements, (c)
agreement for the employment of any officer, individual
employee or other Person
on a full-time basis or any agreement with any Person
for consulting services,
(d)
bonus, pension, profit sharing, retirement, stock purchase,
stock option,
deferred compensation, medical, hospitalization or
life insurance or similar
plan, contract or understanding with respect to any
or all of the employees of
Parent or any other Person, (e)
indenture, loan or credit agreement, note agreement,
deed of trust, mortgage,
security agreement, promissory note or other agreement
or instrument relating to
or evidencing Indebtedness for Borrowed Money or subjecting
any asset or
property of Parent to any Lien or evidencing any Indebtedness,
(f)
guaranty of any Indebtedness, (g)
lease
or agreement under which Parent is lessee of or holds
or operates any property,
real or personal, owned by any other Person, (h)
lease
or agreement under which Parent is lessor or permits
any Person to hold or
operate any property, real or personal, owned or controlled
by Parent,
(i)
agreement granting any preemptive right, right of first
refusal or similar right
to any Person, (j)
agreement or arrangement with any Affiliate or any
“associate” (as such term is
defined in Rule 405 under the Securities Act) of Parent
or any present or former
officer, director or stockholder of Parent, (k)
agreement obligating Parent to pay any royalty or similar
charge for the use or
exploitation of any tangible or intangible property,
(l)
covenant not to compete or other restriction on its
ability to conduct a
business or engage in any other activity, (m)
distributor, dealer, manufacturer’s representative, sales agency, franchise or
advertising contract or commitment, (n)
agreement to register securities under the Securities
Act, (o)
collective bargaining agreement, or (p)
agreement or other commitment or arrangement with any
Person continuing for a
period of more than two months from the Closing Date
that involves an
expenditure or receipt by Parent in excess of $1,000.
The Parent maintains no
insurance policies and insurance coverage of any kind
with respect to Parent,
its business, premises, properties, assets, employees
and agents. Schedule
3.21
contains
a true and complete list and description of each bank
account, savings account,
other deposit relationship and safety deposit box of
Parent, including the name
of the bank or other depository, the account number
and the names of the
individuals having signature or other withdrawal authority
with respect thereto.
Except as disclosed on Schedule
3.21,
no
consent of any bank or other depository is required
to maintain any bank
account, other
14
deposit
relationship or safety deposit box of Parent in effect
following the
consummation of the Merger and the transactions contemplated
hereby. Parent has
furnished to the Company true and complete copies
of all agreements and other
documents disclosed or referred to in Schedule
3.21
or the
Parent Balance Sheet or the notes thereto, as well
as any additional agreements
or documents, requested by the Company.
3.22 Employees.
Other
than pursuant to ordinary arrangements of employment
compensation, all of which
are terminable at will with no liability for severance,
Parent is not under any
obligation or liability to any officer, director, employee
or Affiliate of
Parent.
3.23 Disclosure.
There
is no fact relating to Parent that Parent has not disclosed
to the Company in
writing that materially and adversely affects nor,
insofar as Parent can now
foresee, will materially and adversely affect, the
condition (financial or
otherwise), properties, assets, liabilities, business
operations, results of
operations or prospects of Parent. No representation
or warranty by Parent
herein and no information disclosed in the schedules
or exhibits hereto by
Parent contains any untrue statement of a material
fact or omits to state a
material fact necessary to make the statements contained
herein or therein not
misleading.
4. Additional
Representations, Warranties and Covenants of the Stockholders.
Promptly after the Effective Time, Parent shall cause
to be mailed to each
holder of record of Company Common Stock that was converted
pursuant to
Section
1.5
hereof
into the right to receive Parent Common Stock a letter
of transmittal
(“Letter
of Transmittal”),
in
substantially the form attached hereto as Exhibit
B,
which
shall contain additional representations, warranties
and covenants of such
Stockholder, including, without limitation, that (i)
such
Stockholder has full right, power and authority to
deliver such Company Common
Stock and Letter of Transmittal, (ii)
the
delivery of such Company Common Stock will not violate
or be in conflict with,
result in a breach of or constitute a default under,
any indenture, loan or
credit agreement, deed of trust, mortgage, security
agreement or other agreement
or instrument to which such Stockholder is bound or
affected, (iii)
such Stockholder has good, valid and marketable title
to all shares of Company
Common Stock indicated in such Letter of Transmittal
and that such Stockholder
is not affected by any voting trust, agreement or arrangement
affecting the
voting rights of such Company Common Stock, (iv)
such
Stockholder is an “accredited investor,” as such term is defined in Regulation D
under the Securities Act and that such Stockholder
is acquiring Parent Common
Stock for investment purposes, and not with a view
to selling or otherwise
distributing such Parent Common Stock in violation
of the Securities Act or the
securities laws of any state, and (v)
such
Stockholder has had an opportunity to ask and receive
answers to any questions
such Stockholder may have had concerning the terms
and conditions of the Merger
and the Parent Common Stock and has obtained any additional
information that
such Stockholder has requested. Delivery shall be effected,
and risk of loss and
title to the Parent Common Stock shall pass, only upon
delivery to the Parent
(or an agent of the Parent) of (x) certificates evidencing
ownership thereof as
contemplated by Section
1.6
hereof
(or affidavit of lost certificate), and (y) the Letter of Transmittal
containing the representations, warranties and covenants
contemplated by this
Section
4.
5. Conduct
of Businesses Pending the Merger.
5.1 Conduct
of Business by the Company Pending the Merger.
Prior
to the Effective Time, unless Parent or Acquisition
Corp. shall otherwise agree
in writing or as otherwise contemplated by the Private
Offering, the Disclosure
Annex or this Agreement:
15
(a) the
business of the Company shall be conducted only in
the ordinary
course;
(b) the
Company shall not (i) directly or indirectly redeem,
purchase or otherwise
acquire or agree to redeem, purchase or otherwise acquire
any shares of its
capital stock; (ii) amend its Certificate of Incorporation
or By-laws; or (iii)
split, combine or reclassify the outstanding Company
Common Stock or declare,
set aside or pay any dividend payable in cash, stock
or property or make any
distribution with respect to any such stock;
(c) the
Company shall not (i)
issue
or agree to issue any additional shares of, or options,
warrants or rights of
any kind to acquire any shares of, Company Common Stock
except to issue shares
of Company Common Stock upon the exercise of stock
options or warrants
outstanding on the date hereof or granted in the ordinary
course of business
thereafter; (ii)
acquire or dispose of any fixed assets or acquire or
dispose of any other
substantial assets other than in the ordinary course
of business; (iii)
incur additional Indebtedness or any other liabilities
or enter into any other
transaction other than in the ordinary course of business;
(iv)
enter into any contract, agreement, commitment or arrangement
with respect to
any of the foregoing; or (v)
except as contemplated by this Agreement, enter into
any contract, agreement,
commitment or arrangement to dissolve, merge, consolidate
or enter into any
other material business combination;
(d) the
Company shall use its best efforts to preserve intact
the business organization
of the Company, to keep available the service of its
present officers and key
employees, and to preserve the good will of those having
business relationships
with it; and
(e) the
Company will not, nor will it authorize any director
or authorize or permit any
officer or employee or any attorney, accountant or
other representative retained
by it to, make, solicit, encourage any inquiries with
respect to, or engage in
any negotiations concerning, any Acquisition Proposal
(as defined below). The
Company will promptly advise Parent orally and in writing
of any such inquiries
or proposals (or requests for information) and the
substance thereof. As used in
this paragraph, “Acquisition
Proposal”
shall
mean any proposal for a merger or other business combination
involving the
Company or for the acquisition of a substantial equity
interest in it or any
material assets of it other than as contemplated by
this Agreement. The Company
will immediately cease and cause to be terminated any
existing activities,
discussions or negotiations with any person conducted
heretofore with respect to
any of the foregoing;
5.2 Conduct
of Business by Parent and Acquisition Corp. Pending
the Merger.
Prior
to the Effective Time, unless the Company shall otherwise
agree in writing or as
otherwise contemplated by this Agreement:
(a) the
business of Parent and Acquisition Corp. shall be conducted
only in the ordinary
course; provided,
however,
that
Parent shall take the steps necessary to have discontinued
or dispose of its
existing business without liability to Parent or Acquisition
Corp. as of the
Closing Date;
(b) neither
Parent nor Acquisition Corp. shall (A) directly or
indirectly redeem, purchase
or otherwise acquire or agree to redeem, purchase or
otherwise acquire any
shares of its capital stock; (B) amend its Articles
or Certificate of
Incorporation or By-laws; or (C) split,
16
combine
or reclassify its capital stock or declare, set aside
or pay any dividend
payable in cash, stock or property or make any distribution
with respect to such
stock; and
(c) neither
Parent nor Acquisition Corp. shall (A) issue or agree
to issue any additional
shares of, or options, warrants or rights of any kind
to acquire shares of, its
capital stock; (B) acquire or dispose of any assets
other than in the ordinary
course of business (except for dispositions in connection
with Section
5.2(a)
hereof);
(C) incur additional Indebtedness or any other liabilities
or enter into any
other transaction except in the ordinary course of
business; (D) enter into any
contract, agreement, commitment or arrangement with
respect to any of the
foregoing, or (E) except as contemplated by this Agreement,
enter into any
contract, agreement, commitment or arrangement to dissolve,
merge; consolidate
or enter into any other material business contract
or enter into any
negotiations in connection therewith.
(d) neither
Parent nor Acquisition Corp. will, nor will they authorize
any director or
authorize or permit any officer or employee or any
attorney, accountant or other
representative retained by them to, make, solicit,
encourage any inquiries with
respect to, or engage in any negotiations concerning,
any Acquisition Proposal
(as defined below for purposes of this paragraph).
Parent will promptly advise
the Company orally and in writing of any such inquiries
or proposals (or
requests for information) and the substance thereof.
As used in this paragraph,
“Acquisition
Proposal”
shall
mean any proposal for a merger or other business combination
involving the
Parent or Acquisition Corp. or for the acquisition
of a substantial equity
interest in either of them or any material assets of
either of them other than
as contemplated by this Agreement. Parent will immediately
cease and cause to be
terminated any existing activities, discussions or
negotiations with any person
conducted heretofore with respect to any of the foregoing;
and
(e) neither
the Parent nor Acquisition Corp. will enter into any
new employment agreements
with any of their officers or employees or grant any
increases in the
compensation or benefits of their officers or employees.
6. Additional
Agreements.
6.1 Access
and Information.
The
Company, Parent and Acquisition Corp. shall each afford
to the other and to the
other’s accountants, counsel and other representatives full
access during normal
business hours throughout the period prior to the Effective
Time of all of its
properties, books, contracts, commitments and records
(including but not limited
to tax returns) and during such period, each shall
furnish promptly to the other
all information concerning its business, properties
and personnel as such other
party may reasonably request; provided,
that no
investigation pursuant to this Section
6.1
shall
affect any representations or warranties made herein.
Each party shall hold, and
shall cause its employees and agents to hold, in confidence
all such information
(other than such information which (i) is already in
such party’s possession or
(ii) becomes generally available to the public other
than as a result of a
disclosure by such party or its directors, officers,
managers, employees, agents
or advisors, or (iii) becomes available to such party
on a non-confidential
basis from a source other than a party hereto or its
advisors, provided that
such source is not known by such party to be bound
by a confidentiality
agreement with or other obligation of secrecy to a
party hereto or another party
until such time as such information is otherwise publicly
available;
provided,
however,
that
(A) any such information may be disclosed to such
17
party’s
directors, officers, employees and representatives
of such party’s advisors who
need to know such information for the purpose of
evaluating the transactions
contemplated hereby (it being understood that such
directors, officers,
employees and representatives shall be informed by
such party of the
confidential nature of such information), (B) any
disclosure of such information
may be made as to which the party hereto furnishing
such information has
consented in writing, and (C) any such information
may be disclosed pursuant to
a judicial, administrative or governmental order
or request; provided,
however,
that
the requested party will promptly so notify the other
party so that the other
party may seek a protective order or appropriate
remedy and/or waive compliance
with this Agreement and if such protective order
or other remedy is not obtained
or the other party waives compliance with this provision,
the requested party
will furnish only that portion of such information
which is legally required and
will exercise its best efforts to obtain a protective
order or other reliable
assurance that confidential treatment will be accorded
the information
furnished). If this Agreement is terminated, each
party will deliver to the
other all documents and other materials (including
copies) obtained by such
party or on its behalf from the other party as a
result of this Agreement or in
connection herewith, whether so obtained before or
after the execution
hereof.
6.2 Additional
Agreements.
Subject
to the terms and conditions herein provided, each of
the parties hereto agrees
to use its commercially reasonable efforts to take,
or cause to be taken, all
action and to do, or cause to be done, all things necessary,
proper or advisable
under applicable laws and regulations to consummate
and make effective the
transactions contemplated by this Agreement, including
using its commercially
reasonable efforts to satisfy the conditions precedent
to the obligations of any
of the parties hereto to obtain all necessary waivers,
and to lift any
injunction or other legal bar to the Merger (and, in
such case, to proceed with
the Merger as expeditiously as possible). In order
to obtain any necessary
governmental or regulatory action or non-action, waiver,
consent, extension or
approval, each of Parent, Acquisition Corp. and the
Company agrees to take all
reasonable actions and to enter into all reasonable
agreements as may be
necessary to obtain timely governmental or regulatory
approvals and to take such
further action in connection therewith as may be necessary.
In case at any time
after the Effective Time any further action is necessary
or desirable to carry
out the purposes of this Agreement, the proper officers
and/or directors of
Parent, Acquisition Corp. and the Company shall take
all such necessary action.
Without limiting the foregoing, Parent and the Company
shall cooperate in the
preparation of a current report on Form 8-K under the
Exchange Act which
satisfies the requirements applicable to shell companies
set forth in Item
2.01(f) and related exhibit and financial statement
requirements of such form
(the “Jumbo
8-K”)
6.3 Publicity.
No
party shall issue any press release or public announcement
pertaining to the
Merger that has not been agreed upon in advance by
Parent and the Company,
except as Parent reasonably determines to be necessary
in order to comply with
the rules of the Commission or of the principal trading
exchange or market for
Parent Common Stock; provided,
that in
such case Parent will use its best efforts to allow
the Company to review and
reasonably approve any press release or public announcement
prior to its
release.
6.4 Appointment
of Directors
and
Officers.
Parent
shall accept the resignation of the current officers
and directors of Parent as
provided by Section 7.2(f)(7)
hereof.
Immediately following the Effective Time, (a) Parent
shall increase the size of
the Board of Directors to such number of directors
as the Board of Directors of
Parent shall determine and shall cause Xxx X. Xxxxx
to be elected to the Board
of Directors of the Parent and cause the current officers
of the Company to be
elected as similarly-titled officers of Parent, and
(b) Parent shall further
increase the size of its Board of Directors to such
number of directors as the
Board of Directors of Parent shall determine and shall
cause any other directors
of the Company at the Effective Time to become members
of the Board of Directors
of Parent; provided, however, that the actions described
in clause (b) above
shall take effect only upon compliance by Parent with
the provisions of Section
14(f) of the Exchange Act and rules promulgated thereunder,
as set forth in
Section 7.2(f)(7) hereof. If Parent has not filed the
information required
pursuant to Rule 14f-1 with the Commission prior to
the Effective Time it shall
file such information necessary to permit the election
of such directors hereto
promptly following the Effective Time. Parent shall
also cooperate with Company
in the preparation and filing with the Commission and
the mailing to the holders
of record of Parent Common Stock of an information
statement pursuant to Section
14(f) of the Exchange Act so as to permit the effectiveness
of such resignations
and appointments at the Effective Time. At the first
annual meeting of Parent
stockholders and thereafter, the election of members
of Parent’s Board of
Directors shall be accomplished in accordance with
the By-laws of
Parent.
18
6.5 Parent
Name Change and Exchange Listing.
At the
Effective Time, Parent shall take all required legal
actions, including the
filing of an Information Statement on Schedule 14C
under the Exchange Act, to
change its corporate name to H2Diesel Holdings, Inc.
and to amend Parent’s
articles of incorporation to provide for supermajority
voting with respect to
mergers, consolidations, dispositions of assets, liquidation
and dissolution.
Promptly following the Effective Time, Parent shall
take all required actions
to, upon satisfaction of the original listing requirements,
list the Parent
Common Stock for trading on the Nasdaq Stock Market
or other national securities
exchange.
6.6 Registration
Rights Agreement.
As of
the Effective Time, Parent shall assume the Registration
Rights Agreement with
the Stockholders executed by the Company in connection
with the Private
Offering.
6.7 Employment
Agreements.
As of
the Effective Time, Parent shall assume each of the
employment agreements of the
Company entered into at or prior to such time.
7. Conditions
of Parties’ Obligations.
7.1 Company
Obligations.
The
obligations of Parent and Acquisition Corp. under this
Agreement and the
Certificate of Merger are subject to the fulfillment
at or prior to the Closing
of the following conditions, any of which may be waived
in whole or in part by
Parent.
(a) No
Errors, etc.
The
representations and warranties of the Company under
this Agreement shall be
deemed to have been made again on the Closing Date
and shall then be true and
correct in all material respects.
(b) Compliance
with Agreement.
The
Company shall have performed and complied in all material
respects with all
agreements and conditions required by this Agreement
to be performed or complied
with by it on or before the Closing Date.
(c) No
Default or Adverse Change.
There
shall not exist on the Closing Date any Default or
Event of Default or any event
or condition that, with the giving of notice or lapse
of time, or both, would
constitute a Default or Event of Default, and since
the Company Balance Sheet
Date, there shall have been no material adverse change
in the Condition of the
Company.
19
(d) Certificate
of Officer.
The
Company shall have delivered to Parent and Acquisition
Corp. a certificate dated
the Closing Date, executed on its behalf by Xxx X.
Xxxxx, the Chairman and
President of the Company, certifying the satisfaction
of the conditions
specified in paragraphs (a), (b) and (c) of this Section
7.1.
(e) No
Restraining Action.
No
action or proceeding before any court, governmental
body or agency shall have
been threatened, asserted or instituted to restrain
or prohibit, or to obtain
substantial damages in respect of, this Agreement or
the Certificate of Merger
or the carrying out of the transactions contemplated
by the Merger
Documents.
(f) Supporting
Documents.
Parent
and Acquisition Corp. shall have received the following:
(1) Copies
of
resolutions of the Board of Directors and the Stockholders
of the Company,
certified by the Secretary of the Company, authorizing
and approving the
execution, delivery and performance of the Merger Documents
and all other
documents and instruments to be delivered pursuant
hereto and
thereto.
(2) A
certificate of incumbency executed by the Secretary
of the Company certifying
the names, titles and signatures of the officers authorized
to execute any
documents referred to in this Agreement and further
certifying that the
Certificate of Incorporation and By-laws of the Company
delivered to Parent and
Acquisition Corp. at the time of the execution of this
Agreement have been
validly adopted and have not been amended or modified.
(3) A
certificate, dated the Closing Date, executed by the
Company’s Secretary,
certifying that, except for the filing of the Certificate
of Merger: (i) all
consents, authorizations, orders and approvals of,
and filings and registrations
with, any court, governmental body or instrumentality
that are required for the
execution and delivery of this Agreement and the Certificate
of Merger and the
consummation of the Merger shall have been duly made
or obtained, and all
material consents by third parties that are required
for the Merger have been
obtained; and (ii) no action or proceeding before any
court, governmental body
or agency has been threatened, asserted or instituted
to restrain or prohibit,
or to obtain substantial damages in respect of, this
Agreement or the
Certificate of Merger or the carrying out of the transactions
contemplated by
the Merger Documents.
(4) Evidence
as of a recent date of the good standing and corporate
existence of the Company
issued by the Secretary of State of the State of Delaware
and evidence that the
Company is qualified to transact business as a foreign
corporation and is in
good standing in each state of the United States and
in each other jurisdiction
where the character of the property owned or leased
by it or the nature of its
activities makes such qualification necessary.
(5) Such
additional supporting documentation and other information
with respect to the
transactions contemplated hereby as Parent and Acquisition
Corp. may reasonably
request.
20
(g) Proceedings
and Documents.
All
corporate and other proceedings and actions taken in
connection with the
transactions contemplated hereby and all certificates,
opinions, agreements,
instruments and documents mentioned herein or incident
to any such transactions
shall be reasonably satisfactory in form and substance
to Parent and Acquisition
Corp. The Company shall furnish to Parent and Acquisition
Corp. such supporting
documentation and evidence of the satisfaction of any
or all of the conditions
precedent specified in this Section
7.1
as
Parent or its counsel may reasonably request.
7.2 Parent
and Acquisition Corp. Obligations.
The
obligations of the Company under this Agreement and
the Certificate of Merger
are subject to the fulfillment at or prior to the Closing
of the following
conditions, any of which may be waived in whole or
in part by the
Company:
(a) No
Errors, etc. The
representations and warranties of Parent and Acquisition
Corp. under this
Agreement shall be deemed to have been made again on
the Closing Date and shall
then be true and correct in all material respects.
(b) Compliance
with Agreement.
Parent
and Acquisition Corp. shall have performed and complied
in all material respects
with all agreements and conditions required by this
Agreement and the
Certificate of Merger to be performed or complied with
by them on or before the
Closing Date.
(c) No
Default or Adverse Change.
There
shall not exist on the Closing Date any Default or
Event of Default or any event
or condition, that with the giving of notice or lapse
of time, or both, would
constitute a Default of Event of Default, and since
the Parent Balance Sheet
Date, there shall have been no material adverse change
in the Condition of the
Parent.
(d) Certificate
of Officer.
Parent
and Acquisition Corp. shall have delivered to the Company
a certificate dated
the Closing Date, executed on their behalf by their
respective Presidents,
certifying the satisfaction of the conditions specified
in paragraphs (a), (b),
and (c) of this Section
7.2.
(e) Opinion
of Parent’s Counsel.
The
Company shall have received from counsel for Parent,
a favorable opinion dated
the Closing Date to the effect set forth in Exhibit
D
hereto.
(f) Supporting
Documents.
The
Company shall have received the following:
(1) Copies
of
resolutions of Parent’s and Acquisition Corp.’s respective Boards of Directors
and the sole stockholder of Acquisition Corp., certified
by their respective
Secretaries, authorizing and approving, to the extent
applicable, the execution,
delivery and performance of this Agreement, the Certificate
of Merger and all
other documents and instruments to be delivered by
them pursuant hereto and
thereto.
(2) A
certificate of incumbency executed by the respective
Secretaries of Parent and
Acquisition Corp. certifying the names, titles and
signatures of the officers
authorized to execute the documents referred to in
paragraph (1) above and
further certifying that the Articles or Certificates
of Incorporation and
By-laws of Parent and Acquisition Corp. appended thereto
have not been amended
or modified.
21
(3) A
certificate, dated the Closing Date, executed by the
Secretary of each of the
Parent and Acquisition Corp., certifying that, except
for the filing of the
Certificate of Merger: (i) all consents, authorizations,
orders and approvals
of, and filings and registrations with, any court,
governmental body or
instrumentality that are required for the execution
and delivery of this
Agreement and the Certificate of Merger and the consummation
of the Merger shall
have been duly made or obtained, and all material consents
by third parties
required for the Merger have been obtained; and (ii)
no action or proceeding
before any court, governmental body or agency has been
threatened, asserted or
instituted to restrain or prohibit, or to obtain substantial
damages in respect
of, this Agreement or the Certificate of Merger or
the carrying out of the
transactions contemplated by any of the Merger Documents.
(4) A
certificate of Olde Monmouth Stock and Transfer, Co.,
Parent’s transfer agent
and registrar, certifying as of the most recent practicable
date prior to the
Closing Date, and before taking into consideration
the cancellation of Parent
Common Stock as indicated in Section
7.2(f)(7)(iii)
hereof,
a true and complete list of the names and addresses
of the record owners of all
of the outstanding shares of Parent Common Stock, together
with the number of
shares of Parent Common Stock held by each record owner.
(5) A
letter
from Xxxxxx & Xxxxxx, LLP, Parent’s counsel, setting forth that the number
of shares of Parent Common Stock that would be issued
and outstanding as of the
Closing Date after taking into consideration the cancellation
of Parent Common
Stock as indicated in Section
7.2(f)(7)(iii)
hereof,
but prior to the closing of the Merger, is no more
than 1,101,250 shares of
Parent Common Stock.
(6) An
agreement in writing from Xxxxxx, Xxxxxxxx & Associates, in form and
substance reasonably satisfactory to the Company, to
deliver copies of the audit
opinions and audit reports with respect to any and
all financial statements of
Parent that had been audited by such firm and confirming
that they know of no
reason that such firm would not be able to deliver
their consent to the
inclusion of such audit reports in the registration
statement contemplated by
the Private Offering.
(7) (i)
The
executed resignation of Xxxxxx Xxxx as the sole director
and officer of Parent,
with the officer resignation to take effect at the
Effective Time, and with the
resignation of Xxxxxx Xxxx as director to take effect
at the later of (x) the
Effective Time, and (y) upon compliance with Section
14(f) of the Exchange Act
and rules promulgated thereunder, (ii)
an
executed release from Xxxxxx Xxxx except as to the
right to be indemnified as a
director with respect to the time period, if any, between
the Effective Time and
compliance with Section 14(f) of the Exchange Act and
rules promulgated
thereunder, in the form attached hereto as Exhibit
E,
and
(iii)
stock certificates and stock powers executed in blank by
Xxxxxx Xxxx
evidencing the transfer to Parent for cancellation
of an aggregate of 29,075,000
shares of Parent Common Stock owned by him, in consideration
for $300,000 (of
which $50,000 has been paid prior to the date hereof),
the agreement described
in clause (8) below and the delivery to Parent of evidence
satisfactory to the
Company of the satisfaction in full and cancellation
of any indebtedness owed by
Parent to Xxxxxx Xxxx.
22
(8) An
acquisition agreement in writing from Parent, in form
and substance reasonably
satisfactory to the Company, to sell all of the issued
and outstanding shares of
its subsidiary, Action Wireless, to Xxxxxx Xxxx promptly
after the Effective
Time, which agreement shall contain the assumption
by Action Wireless of any and
all liabilities of Parent in respect of all periods
prior to the Effective Time
(other than liabilities arising under this Agreement)
and an indemnification of
Parent by Action Wireless and Xxxxxx Xxxx therefrom.
(9) The
Private Offering shall have been consummated with not
less than $2,000,000 in
gross proceeds received by the Company.
(10) The
Jumbo
8-K shall have been prepared in a form satisfactory
to the Company and in
condition suitable for filing with the Commission.
(11) Evidence
as of a recent date of the good standing and corporate
existence of Parent made
available to the Company by the Secretary of State
of Florida and evidence that
Parent is qualified to transact business as a foreign
corporation and is in good
standing in each state of the United States and in
each other jurisdiction where
the character of the property owned or leased by it
or the nature of its
activities makes such qualification necessary.
(12) Evidence
that Parent has filed all tax returns required to filed
with the Internal
Revenue Service or in the State of Florida and that
Parent has no liabilities or
penalties for failure to timely file tax returns.
(13) Evidence
as of a recent date of the good standing and corporate
existence of Acquisition
Corp. issued by the Secretary of State of Delaware.
(14) Such
additional supporting documentation and other information
with respect to the
transactions contemplated hereby as the Company may
reasonably
request.
(g) Proceedings
and Documents.
All
corporate and other proceedings and actions taken in
connection with the
transactions contemplated hereby and all certificates,
opinions, agreements,
instruments and documents mentioned herein or incident
to any such transactions
shall be satisfactory in form and substance to the
Company. Parent and
Acquisition Corp. shall furnish to the Company such
supporting documentation and
evidence of satisfaction of any or all of the conditions
specified in this
Section
7.2
as the
Company may reasonably request.
7.3 Waiver
of
Conditions.
The
Company and Parent may waive compliance with any of
the conditions precedent
specified in this Section
7
provided
that the waiving party is the party entitled to the
benefit of such condition to
be waived.
8. Non-Survival
of Representations and Warranties.
The
representations and warranties of the parties made
in Sections
2
and
3
of this
Agreement (including the Schedules to the Agreement
which are hereby
incorporated by reference) shall survive for six months
beyond the Effective
Time. This Section
8
shall
not limit any claim for fraud or any covenant or agreement
of the parties which
by its terms contemplates performance after the Effective
Time.
23
9. Amendment
of Agreement.
This
Agreement and the Certificate of Merger may be amended
or modified at any time
in all respects by an instrument in writing executed
(i)
in
the case of this Agreement by the parties hereto and
(ii)
in
the case of the Certificate of Merger by the parties
thereto.
10. Definitions.
Unless
the context otherwise requires, the terms defined in
this Section
10
shall
have the meanings herein specified for all purposes
of this Agreement,
applicable to both the singular and plural forms of
any of the terms herein
defined.
“Acquisition
Corp.”
shall
have the meaning set for in the preamble to this Agreement.
“Acquisition
Proposal”
shall
have the meaning assigned to such term in each of Section
5.1(e)
and
Section
5.2(d)
hereof,
as applicable.
“Action
Wireless”
shall
have the meaning set forth in Section
3.1
hereof.
“Affiliate”
shall
mean any Person that directly or indirectly controls,
is controlled by, or is
under common control with, the indicated Person.
“Agreement”
shall
have the meaning set forth in the preamble to this
Agreement.
“Certificate
of Merger”
shall
have the meaning assigned to it in the second recital
hereof.
“Closing”
and
“Closing
Date”
shall
have the meanings assigned to such terms in Section
11
hereof.
“Code”
shall
mean the Internal Revenue Code of 1986, as amended.
“Commission”
shall
mean the U.S. Securities and Exchange Commission.
“Company”
shall
have the meaning set forth in the preamble to this
Agreement.
“Company
Balance Sheet”
and
“Company
Balance Sheet Date”
shall
have the meanings assigned to them in Section
2.9
hereof.
“Company
Common Stock”
shall
have the meaning assigned to it in Section
1.5(a)(ii)
hereof.
“Company
Warrants”
shall
have the meaning assigned to it in Section
1.7(a)
hereof.
“Condition
of the Company”
shall
have the meaning assigned to it in Section
2.2
hereof.
“Condition
of the Parent”
shall
have the meaning assigned to it in Section
3.13
hereof.
24
“Constituent
Corporations”
shall
have the meaning assigned to it in Section
1.4
hereof.
“Default”
shall
mean a default or failure in the due observance or
performance of any covenant,
condition or agreement on the part of an issuer to
be observed or performed
under the terms of this Agreement or the Certificate
of Merger, if such default
or failure in performance shall remain unremedied for
five (5)
days.
“Disclosure
Annex”
shall
have the meaning set forth in Section
2.11
hereof.
“DGCL”
shall
have the meaning assigned to it in the second recital
hereof.
“Effective
Time”
shall
have the meaning assigned to it in Section
1.2
hereof.
“Equity
Security”
shall
mean any stock or similar security of an issuer or
any security (whether stock
or Indebtedness for Borrowed Money) convertible, with
or without consideration,
into any stock or similar equity security, or any security
(whether stock or
Indebtedness for Borrowed Money) carrying any warrant
or right to subscribe to
or purchase any stock or similar security, or any such
warrant or
right.
“ERISA”
shall
have the meaning assigned to it in Section
2.12
hereof.
“Exchange
Act”
shall
mean the Securities Exchange Act of 1934, as amended.
“Event
of Default”
shall
mean (a) the failure of an issuer to pay any Indebtedness
for Borrowed Money, or
any interest or premium thereon, within five (5) days
after the same shall
become due, whether such Indebtedness shall become
due by scheduled maturity, by
required prepayment, by acceleration, by demand or
otherwise, (b) an event of
default under any agreement or instrument evidencing
or securing or relating to
any such Indebtedness, or (c) the failure of an issuer
to perform or observe any
material term, covenant, agreement or condition on
its part to be performed or
observed under any agreement or instrument evidencing
or securing or relating to
any such Indebtedness when such term, covenant or agreement
is required to be
performed or observed.
“GAAP”
shall
have the meaning assigned to it in Section
2.9
hereof.
“Indebtedness”
shall
mean as to any Person any obligation of such Person
which under GAAP is required
to be shown on the balance sheet of such Person as
a liability. Any obligation
secured by a Lien on, or payable out of the proceeds
of production from,
property of any Person shall be deemed to be Indebtedness
even though such
obligation is not assumed by such Person.
“Indebtedness
for Borrowed Money”
shall
mean as to any Person (a) all Indebtedness in respect
of money borrowed
including, without limitation, Indebtedness which represents
the unpaid amount
of the purchase price of any property and is incurred
in lieu of borrowing money
or using available funds to pay such amounts and not
constituting an account
payable or expense accrual incurred or assumed in the
ordinary course of
business of such Person, (b) all Indebtedness evidenced
by a promissory note,
bond or similar written obligation to pay money, or
(c) all such Indebtedness
guaranteed by such Person or for which such Person
is otherwise contingently
liable.
25
“Investment
Company Act”
shall
mean the Investment Company Act of 1940, as amended.
“Jumbo
8-K”
shall
have the meaning set forth in Section
6.2
hereof.
“knowledge”
and
“know”
means,
when referring to any person or entity, the actual
knowledge of such person or
entity of a particular matter or fact, and what that
person or entity would have
reasonably known after due inquiry. An entity will
be deemed to have “knowledge”
of a particular fact or other matter if any individual
who is serving, or who
has served, as an executive officer of such entity
has actual “knowledge” of
such fact or other matter, or had actual “knowledge” during the time of such
service of such fact or other matter, or would have
had “knowledge” of such
particular fact or matter after due inquiry.
“Letter
of Transmittal”
shall
have the meaning assigned to it in Section
4
hereof.
“Lien”
shall
mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any
kind, including, without limitation, any conditional
sale or other title
retention agreement, any lease in the nature thereof
and the filing of or
agreement to give any financing statement under the
Uniform Commercial Code of
any jurisdiction and including any lien or charge arising
by statute or other
law.
“Merger”
shall
have the meaning assigned to it in the first recital
hereof.
“Merger
Documents”
shall
have the meaning assigned to it in Section
2.5
hereof.
“OTC
Bulletin Board”
shall
have the meaning set forth in Section
3.7(e)
hereof.
“Parent”
shall
have the meaning set forth in the preamble to this
Agreement.
“Parent
Balance Sheet”
and
“Parent
Balance Sheet Date”
shall
have the meanings assigned to them in Section
3.13
hereof.
“Parent
Common Stock”
shall
have the meaning assigned to it in Section
1.5(a)(ii)
hereof.
“Parent
Employee Benefit Plans”
shall
have the meaning assigned to it in Section
3.16
hereof.
“Parent
Financial Statements”
shall
have the meaning assigned to it in Section
3.8
hereof.
“Parent
SEC Documents”
shall
have the meaning assigned to it in Section
3.7(b)
hereof.
“Parent
Warrants”
shall
have the meaning assigned to it in Section
1.7(a)
hereof.
26
“Patent
and Trademark Rights”
shall
have the meaning assigned to it in Section
2.15
hereof.
“Permitted
Liens”
shall
mean (a) Liens for taxes and assessments or governmental
charges or levies not
at the time due or in respect of which the validity
thereof shall currently be
contested in good faith by appropriate proceedings;
(b) Liens in respect of
pledges or deposits under workmen’s compensation laws or similar legislation,
carriers’, warehousemen’s, mechanics’, laborers’ and materialmens’ and similar
Liens, if the obligations secured by such Liens are
not then delinquent or are
being contested in good faith by appropriate proceedings;
and (c) Liens
incidental to the conduct of the business of the Company
that were not incurred
in connection with the borrowing of money or the obtaining
of advances or
credits and which do not in the aggregate materially
detract from the value of
its property or materially impair the use made thereof
by the Company in its
business.
“Person”
shall
include all natural persons, corporations, business
trusts, associations,
limited liability companies, partnerships, joint ventures
and other entities and
governments and agencies and political subdivisions.
“Private
Offering”
shall
have the meaning assigned to it in Section
2.3
of this
Agreement.
“Registration
Rights Agreement”
shall
mean the Registration Rights Agreement to be entered
into in connection with the
Private Offering.
“Securities
Act”
shall
mean the Securities Act of 1933, as amended.
“Stockholders”
shall
mean all of the stockholders of the Company.
“Surviving
Corporation”
shall
have the meaning assigned to it in Section
1.1
hereof.
“Tax”
or
“Taxes”
shall
mean (a) any and all taxes, assessments, customs, duties,
levies, fees, tariffs,
imposts, deficiencies and other governmental charges
of any kind whatsoever
(including, but not limited to, taxes on or with respect
to net or gross income,
franchise, profits, gross receipts, capital, sales,
use, ad valorem, value
added, transfer, real property transfer, transfer gains,
transfer taxes,
inventory, capital stock, license, payroll, employment,
social security,
unemployment, severance, occupation, real or personal
property, estimated taxes,
rent, excise, occupancy, recordation, bulk transfer,
intangibles, alternative
minimum, doing business, withholding and stamp), together
with any interest
thereon, penalties, fines, damages costs, fees, additions
to tax or additional
amounts with respect thereto, imposed by the United
States (federal, state or
local) or other applicable jurisdiction; (b) any liability
for the payment of
any amounts described in clause (a) as a result of
being a member of an
affiliated, consolidated, combined, unitary or similar
group or as a result of
transferor or successor liability, including, without
limitation, by reason of
Regulation section 1.1502-6; and (c) any liability
for the payments of any
amounts as a result of being a party to any tax sharing
agreement or as a result
of any express or implied obligation to indemnify any
other Person with respect
to the payment of any amounts of the type described
in clause (a) or
(b).
27
“Tax
Return”
shall
include all returns and reports (including elections,
declarations, disclosures,
schedules, estimates and information returns (including
Form 1099 and
partnership returns filed on Form 1065) required to
be supplied to a Tax
authority relating to Taxes.
11. Closing.
The
closing of the Merger (the “Closing”)
shall
occur at
10:00
a.m. (Miami time) on a date to be specified by the
parties (the “Closing Date”),
which shall be no later than the second business day
after satisfaction or
waiver of the conditions set forth in Article 7 (other
than those conditions
that by their terms are to be satisfied at the Closing,
but subject to the
satisfaction or waiver of those conditions).
The
Closing shall occur
at the
offices of Xxxxxxxxx Xxxxxxx, P.A. referred to in Section
13.1
hereof.
At the Closing, Parent shall present for delivery to
each Stockholder the
certificate representing the Parent Common Stock to
be issued pursuant to
Section
1.5(a)(ii)
hereof
to them pursuant to Sections
1.6
and
4
hereof.
Such presentment for delivery shall be against delivery
to Parent and
Acquisition Corp. of the certificates, opinions, agreements
and other
instruments referred to in Section
7.1
hereof,
and the certificates representing all of the Company Common Stock issued and
outstanding immediately prior to the Effective Time.
Parent will deliver to the
Company at such Closing the officers’ certificate and opinion referred to in
Section
7.2
hereof.
All of the other documents, certificates and agreements
referenced in
Section
7
will
also be executed as described therein. At the Effective
Time, all actions to be
taken at the Closing shall be deemed to be taken simultaneously.
12. Termination
Prior to Closing.
12.1 Termination
of Agreement.
This
Agreement may be terminated at any time prior to the
Closing:
(a) By
the
mutual written consent of the Company, Acquisition
Corp. and
Parent;
(b) By
the
Company, if Parent or Acquisition Corp. (i) fails to
perform in any material
respect any of its agreements contained herein required
to be performed by it on
or prior to the Closing Date, (ii) materially breaches
any of its
representations, warranties or covenants contained
herein, which failure or
breach is not cured within thirty (30) days after the
Company has notified
Parent and Acquisition Corp. of its intent to terminate
this Agreement pursuant
to this paragraph (b);
(c) By
Parent
and Acquisition Corp., if the Company (i) fails to
perform in any material
respect any of its agreements contained herein required
to be performed by it on
or prior to the Closing Date, (ii) materially breach
any of its representations,
warranties or covenants contained herein, which failure
or breach is not cured
within thirty (30) days after Parent or Acquisition
Corp. has notified the
Company of its intent to terminate this Agreement pursuant
to this paragraph
(c);
(d) By
either
the Company, on the one hand, or Parent and Acquisition
Corp., on the other
hand, if there shall be any order, writ, injunction
or decree of any court or
governmental or regulatory agency binding on Parent,
Acquisition Corp. or the
Company, which prohibits or materially restrains any
of them from consummating
the transactions contemplated hereby; provided,
that
the parties hereto shall have used their best efforts
to have any such order,
writ, injunction or decree lifted and the same shall
not have been lifted within
ninety (90) days after entry, by any such court or
governmental or regulatory
agency; or
28
(e) By
either
the Company, on the one hand, or Parent and Acquisition
Corp., on the other
hand, if the Closing has not occurred on or prior to
October
31,
2006 for
any reason other than delay or nonperformance of the
party seeking such
termination.
12.2 Termination
of Obligations.
Termination of this Agreement pursuant to this Section
12
shall
terminate all obligations of the parties hereunder,
except for the obligations
under Sections
6.1,
13.3
and
13.9;
provided,
however,
that
termination pursuant to paragraphs (b) or (c) of Section
12.1
shall
not relieve the defaulting or breaching party or parties
from any liability to
the other parties hereto.
13. Miscellaneous.
13.1 Notices.
Any
notice, request or other communication hereunder shall
be given in writing and
shall be served either personally by overnight delivery
or delivered by mail,
certified return receipt and addressed to the following
addresses:
If
to Parent
or
Acquisition Corp.:
|
Wireless
Holdings, Inc.
300
Xxxxx Xxxxx Xxxx.
Xxxxxxx
Xxxxx, XX 00000
Xttention:
Xxxxxx Xxxx, President
|
With
a copy to:
|
Xxxxxx
& Xxxxxx, LLP
190
Xxxxx 0 Xxxxx, Xxxxx 000
Xxxxxxxxx,
XX 00000
Xax:
(000) 000-0000
Attention:
Xxxxx X. Xxxxxx, Esq.
|
If
to the Company:
|
H2Diesel,
Inc.
20000
Xxxxx Xxxx 0, Xxxxx 00
Xxxx
Xxxxx, XX 00000
Xttention:
Xxx X. Xxxxx, President
|
With
a copy to:
|
Xxxxxxxxx
Traurig, P.A.
1200
Xxxxxxxx Xxxxxx
Xxxxx,
XX 00000
Xax:
(000) 000-0000
Attention:
Xxx X. Xxxxxx, Esq.
|
Notices
shall be deemed received at the earlier of actual receipt
or three (3) business
days following mailing if mailed by first class U.S.
Mail or one (1) business
day after deposit with a nationally recognized overnight
courier if deposited
prior to 5:00 p.m.. Counsel for a party (or any authorized
representative) shall
have authority to accept delivery of any notice on
behalf of such
party.
13.2 Entire
Agreement.
This
Agreement, including the schedules and exhibits attached
hereto and other
documents referred to herein, contains the entire understanding
of the parties
hereto with respect to the subject matter hereof. This
Agreement supersedes all
prior agreements and undertakings between the parties
with respect to such
subject matter.
29
13.3 Expenses.
In
addition to the provisions of Section 12.2 of this
Agreement, each party shall
bear and pay all of the legal, accounting and other
expenses incurred by it in
connection with the transactions contemplated by this
Agreement. Expenses of
Parent in respect of all periods prior to the Effective
Time shall be satisfied
by Parent immediately prior to the Effective Time and
parent shall not be liable
for such expenses after the Effective Time.
13.4 Time.
Time is
of the essence in the performance of the parties’ respective obligations herein
contained.
13.5 Severability.
Any
provision of this Agreement that is prohibited or unenforceable
in any
jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of
such prohibition or unenforceability without invalidating
the remaining
provisions hereof, and any such prohibition or unenforceability
in any
jurisdiction shall not invalidate or render unenforceable
such provision in any
other jurisdiction.
13.6 Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit
of the parties hereto
and their respective successors, assigns and heirs;
provided, however, that none
of the parties shall directly or indirectly transfer
or assign any of its rights
or obligations hereunder in whole or in part without
the written consent of the
others, which consent may be withheld in such other
party’s sole discretion, and
any such transfer or assignment without said consent
shall be void.
13.7 No
Third
Parties Benefited.
This
Agreement is made and entered into for the sole protection
and benefit of the
parties hereto, their successors, assigns and heirs,
and no other Person shall
have any right or action under this Agreement.
13.8 Counterparts.
This
Agreement may be executed in one or more counterparts,
with the same effect as
if all parties had signed the same document. Each such
counterpart shall be an
original, but all such counterparts together shall
constitute a single
agreement.
13.9 Governing
Law.
This
Agreement shall be governed by and construed and enforced
in accordance with the
laws of the State of Florida, without regard to its
principles of conflict of
laws that would cause the law of a different jurisdiction
to apply. This
Agreement and the transactions contemplated hereby
shall be subject to the
exclusive jurisdiction of the courts of the State of
Florida sitting in Palm
Beach County, Florida. The parties to this Agreement
agree that any breach of
any term or condition of this Agreement or the transactions
contemplated hereby
shall be deemed to be a breach occurring in the State
of Florida by virtue of a
failure to perform an act required to be performed
in the State of Florida. The
parties to this Agreement irrevocably and expressly
agree to submit to the
jurisdiction of the courts of the State of Florida
for the purpose of resolving
any disputes among the parties relating to this Agreement
or the transactions
contemplated hereby. The parties irrevocably waive,
to the fullest extent
permitted by law, any objection which they may now
or hereafter have to the
laying of venue of any suit, action or proceeding arising
out of or relating to
this Agreement and the transactions contemplated hereby,
or any judgment entered
by any court in respect hereof brought in Palm Beach
County, Florida, and
further irrevocably waive any claim that any suit,
action or proceeding brought
in Palm Beach County, Florida has been brought in an
inconvenient forum.
30
With
respect to any action before the above courts, the
parties hereto agree to
service of process by certified or registered United
States mail, postage
prepaid, addressed to the party in question.
[SIGNATURE
PAGE FOLLOWS]
31
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement to be binding
and effective as of
the day and year first above written.
PARENT:
WIRELESS
HOLDINGS, INC.
By: /s/
Xxxxxx Xxxx
Name:
Xxxxxx Xxxx
Title:
President
|
|
ACQUISITION
CORP.:
WIRELESS
ACQUISITION HOLDINGS CORP.
By: /s/
Xxxxxx Xxxx
Name:
Xxxxxx Xxxx
Title:
President
|
|
COMPANY:
H2DIESEL,
INC.
By: /s/
Xxx X. Xxxxx
Name:
Xxx X. Xxxxx
Title:
President
|