EXHIBIT 2.1
AGREEMENT AND PLAN OF SHARE EXCHANGE
DATED AS OF JUNE 15, 2OO1
BETWEEN
MORANZO, INC.
AND
2DOTRADE
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TABLE OF CONTENTS
ARTICLE 1 The Share Exchange
Section 1.1 The Share Exchange
Section 1.2. Effective Time
Section 1.3. Closing of the Share Exchange
Section 1.4. Effects of the Share Exchange
Section E.5. Board of Directors and Officers
Section 1.6. Conversion of Shares
Section 1.7. Exchange of Certificates
Section 1.3. Stock Options
Section 1.9. Taking of Necessary Action; Further Action
Section 1.10. Change of Domicile
ARTICLE 2 Representations and Warranties of MRZO
Section 2.1. Organization and Qualification
Section 2.2. Capitalization of MRZO
Section 2.3. Authority Relative to this Agreement; Recommendations
Section 2.4. SEC Reports; Financial Statements
Section 2.5. Information Supplied
Section 2.6. Consents and Approvals; No Violations
Section 2.7. No Default
Section 2.8. No Undisclosed Liabilities; Absence of Changes
Section 2.9. Litigation
Section 2.10. Compliance with Applicable Law
Section 2.11. Employee Benefit Plans; Labor Matters
Section 2.12. Environmental Laws and Regulations
Section 2.13. Tax Matters
Section 2.14. Title to Property
Section 2.15. Intellectual Property
Section 2.16. Insurance
Section 2.17. Vote Required
Section 2.18. Tax Treatment
Section 2.19. Affiliates
Section 2.20. Certain Business Practices
Section 2.21. Insider Interests
Section 2.22. Opinion of Financial Adviser
Section 2.23. Brokers
Section 2.24. Disclosure
Section 2.25. No Existing Discussion
Section 2.26. Material Contracts
ARTICLE 3. Representations and Warranties of 2-DO
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Section 3.1. Organization and Qualification
Section 3.2. Capitalization of 2-DO
Section 3.3. Authority Relative to this Agreement; Recommendation
Section 3.4. SEC Reports; Financial Statements
Section 3.5. Information Supplied
Section 3.6. Consents and Approvals; No Violations
Section 3.7. No Default
Section 3.8 No Undisclosed Liabilities; Absence of Changes
Section 3.9. Litigation
Section 3.10. Compliance with Applicable Law
Section 3.11. Employee Benefit Plans; Labor Matters
Section 3.12. Environmental Laws and Regulations
Section 3.13. Tax Matters
Section 3.14. Title to Property
Section 3.15. Intellectual Property
Section 3.16. Insurance
Section 3.17. Vote Required
Section 3.18. Tax Treatment
Section 3.19. Affiliates
Section 3.20. Certain. Business Practices
Section 3.21. Insider Interests
Section 3.22. Opinion of Financial Adviser
Section 3.23. Brokers
Section 3.24. Disclosure
Section 3.25. No Existing Discussions
Section 3.26. Material Contracts
ARTICLE 4. Covenants
Section 4.1. Conduct of Business of MRZO
Section 4.2. Conduct of Business of 2-DO
Section 4.3. Preparation of the Proxy Statement
Section 4.4. Other Potential Acquirers
Section 4.5. Meetings of Stockholders
Section 4.6. NASD OTC:BB Listing
Section 4.7. Access to Information
Section 4.8. Additional Agreements; Reasonable Efforts
Section 4.9. Employee Benefits; Stock Option and Employee Purchase Plans
Section 4.10. Public Announcements
Section 4.11. Indemnification
Section 4.12. Notification of Certain Matters
ARTICLE 5. Conditions to Consummation of tile Share Exchange
Section 5.1. Conditions to Each Party's Obligations to Effect the
Share Exchange
Section 5.2. Conditions to the Obligations of MRZO
Section 5.3. Conditions to the Obligations of 2-DO
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ARTICLE 6. Termination; Amendment; Waiver
Section 6.1. Termination
Section 6.2. Effect of Termination
Section 6.3. Fees and Expenses
Section 6.4. Amendment
Section 6.5. Extension; Waiver
ARTICLE 7. Miscellaneous
Section 7.1. Nonsurvival of Representations and Warranties
Section 7.2. Entire Agreement; Assignment
Section 7.3. Validity
Section 7.4. Notices
Section 7.5. Governing Law
Section 7.6. Descriptive Headings
Section 7.7. Parties in Interest
Section 7.8. Certain Definitions
Section 7.9. Personal Liability
Section 7.10. Specific Performance
Section 7.11. Construction
Section 7.12. Counterparts
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AGREEMENT AND PLAN OF SHARE EXCHANGE
This Agreement and Plan of Share Exchange (this "Agreement"), dated
as of June 15, 2001 is between MORANZO, INC., a Delaware corporation ("MRZO"),
and 2DoTrade, a Nevada corporation ("2-DO").
Whereas, the Boards of Directors of MRZO and 2-DO each have, in light of
and subject to the terms and conditions set forth herein, (i) determined
that the Share Exchange (as defined below) is fair to their respective
stockholders and in the best interests of such stockholders and (ii)
approved the Share Exchange in accordance with this Agreement;
Whereas, for Federal income tax purposes, it is intended that the
Share Exchange qualify as a reorganization under the provisions of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code");
and
Whereas, MRZO and 2-DO desire to make certain representations,
warranties, covenants and agreements in connection with the Share Exchange and
also to prescribe various conditions to the Share Exchange.
Now, therefore, in consideration of the premises and the representations,
warranties, covenants and agreements herein contained, and intending to be
legally bound hereby, MRZO and 2-DO hereby agree as follows;
ARTICLE I
The Share Exchange
Section 1.1 The Share Exchange. MORANZO, INC., a Delaware
Corporation, at the Effective Time and upon the terms and subject to the
conditions of this Agreement and in accordance with and into General
Corporation Law of the State of Delaware (the "DGCL"), shall exchange
the shares as set forth below for one hundred percent (100%) of the
issued and outstanding shares of 2-DO (as defined below) (the "Share
Exchange"). Following the Share Exchange, 2-DO shall continue as a
wholly owned subsidiary of MORANZO, INC., and MORANZO, INC. shall be
the "acquiring" corporation ( the "Acquiring Corporation"), and shall
continue to be governed by the laws of the jurisdiction of its
incorporation or organization. The Share Exchange is intended to
qualify as a tax-free reorganization under Section 368 of the Code as it
relates to the non-cash Exchange of stock referenced herein.
Section 1. - Effective Time. Subject to the terms and conditions
set forth in this Agreement, a Certificate of Share Exchange (the "Share
Exchange Certificate") shall he duly executed and acknowledged by 2-DO
and MRZO, and thereafter the Share Exchange Certificate reflecting the
Share Exchange shall be delivered to the Secretary of State of the State
of Nevada and the Secretary of State of Delaware for filing pursuant to
the NGCL and DGCL on the Closing Date (as defined in Section 1.3). The
Share Exchange shall become effective at such time at such time as a
properly executed and certified copy of the Share Exchange Certificate
is duty filed by the Secretary of State of the State of Nevada
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in accordance with the NGCL and the Secretary of State of Delaware, or such
later time as the parties may agree upon and set forth in the Share
Exchange Certificate (the time at which the Share Exchange becomes
effective shall be referred, to herein as the "Effective Time")
Section 1.3 Closing of the Share Exchange. The closing of the
Share Exchange (the "Closing") will take place at a time and on a date
to be specified by the parties, which shall be no later than the
second business day after satisfaction of the latest to occur of the
conditions set forth in Article 5 (the "Closing Date"), at the offices
of the Law Office of X. Xxx Xxxxxxxx, PA, 000 Xxxxxx Xxxx, Xxxxxxx,
Xxxxx 00000, unless another time, date or place is agreed to in writing
by the parties hereto.
Section 1.4. Effects of the Share Exchange. The Share Exchange
shall have the effects set forth in the NGCL and the DGCL. Without
limiting the generality of the foregoing, and subject thereto, at the
Effective Time, all the properties, rights, privileges, powers of 2-DO
shall vest in the Acquiring Corporation, and 2-DO shall remain a wholly
owned subsidiary of MRZO.
Section 1.5. Board of Directors and Officers MRZO. At or prior to
the Effective Time, each of 2-DO and MRZO agrees to take such action
as is necessary (i) to cause the number of directors comprising the full
Board of Directors of MRZO resign, effective 10 days after the Company files
with the SEC a Form 14(f) (1) and (ii) to cause those individuals named by the
acquired corporation (the "2-DO Designees") to be elected as directors of MRZO.
In addition, majority stockholders of MRZO prior to the Effective Time shall
take all action necessary to cause, to the greatest extent practicable, the
2-DO Designees to serve on MRZO's Board of Directors until the 2001 Annual
Meeting. If a 2-DO Designee, respectively, shall decline or be unable to serve
as a director prior to the Effective Time, 2-DO shall nominate another person
to serve in such person's stead, which such person shall be subject to
approval of the other party. From and after the Effective Time, and until
successors are duly elected or appointed and qualified in accordance with
applicable law. Xxxxxxx Xxxxxx shall be Chief Executive Officer and President,
with all other officers being appointed or elected, according to the Company's
By-Laws.
Section 1.6. Conversion of Shares.
(a) At the Effective Time, each share of common stock, par value
$.001 per share of 2-DO (individually a "2-DO Share" and collectively,
the "2-DO Shares") issued and outstanding immediately prior to the
Effective Time shall, by virtue of the Share Exchange and without any action
on the part of 2-DO, or MRZO or the holder thereof; be convened into and shall
become fully paid and nonassessable MRZO common shares determined by dividing
(i) Sixteen Million (16,000,000), by (ii) the total number of shares of 2-DO,
Sixteen Million (16,000,000) outstanding immediately prior to the Effective
Time (such quotient, the 'Exchange Ratio"). The holder of one or more shares of
2-DO common stock shall be entitled to receive in Exchange therefore a number
of shares of MRZO Common Stock equal to the product of (x) (the number of
shares of 2-DO common stock (16,000,000)), times (y) (the Exchange Ratio.
MRZO Shares and 2-DO Shares are sometimes referred to collectively herein as
"Shares." By way of example, 16,000,00/16,000,000 = 1.00 (the Exchange Ratio).
The number of shares of 2-DO common stock held by a stockholder (100,000) times
the Exchange Ratio of 1.00 equals 100,000 shares of MRZO Shares to be issued.
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(b) At the Effective Time, each 2-DO Share held in the treasury of
2-D0, by 2-DO immediately prior to the Effective Time shall, by virtue of the
Share Exchange and without any action on the part of 2-DO or MRZO be canceled,
retired and cease to exist and no payment shall be made with respect thereto.
Section 1.7. Exchange of Certificates.
(a) Prior to the Effective Time, MRZO shall enter into an agreement
with, and shall deposit with, The Law Office of X. Xxx Xxxxxxxx, or such other
agent or agents as may be satisfactory to MRZO and 2-DO (the "Exchange Agent"),
for the benefit of the holders of 2-DO Shares, for Exchange through the
Exchange Agent in accordance with this Article I; (i) certificates
representing the appropriate number of MRZO Shares to be issued to holders of
2-DO Shares issuable pursuant to Section 1.6 in Exchange for outstanding 2-DO
Shares.
(b) As soon as reasonably practicable after the Effective Time, the
Exchange Agent shall mail to each holder of record of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding 2-DO Shares (the "Certificates") whose shares were converted into
the right to receive MRZO Shares pursuant to Section 1.6: (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such
other provisions as 2-DO and MRZO may reasonably specify) and (ii) instructions
for use in effecting the surrender of the Certificates in Exchange for
certificates representing MRZO Shares. Upon surrender of a Certificate to the
Exchange Agent, together with such letter of transmittal, duly executed, and
any other required documents, the holder of such Certificate shall be entitled
to receive in Exchange thereforee a certificate representing that number of
whole MRZO Shares which such holder has the right to receive pursuant to the
provisions of this Article I, and the Certificate so surrendered shall
forthwith be canceled. In no event will fractional shares be issued, but if a
certificate holder is entitled to a fractional interest, said interest will be
rounded up to the nearest whole number. In no event will MRZO be obligated to
issue shares in excess of the amount provided for in this agreement, or
16,000,000 shares. Until surrendered as contemplated by this Section 1.7, each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender the certificate representing MRZO
Shares as contemplated by this Agreement.
(c) No dividends or other distributions declared or made after the
Effective Time with respect to MRZO Shares with a record date after the
Effective Time shall be paid to the holder of any unsurrendered Certificate
with respect to the MRZO Shares represented thereby until the holder of record
of such Certificate shall surrender such Certificate.
(d) In the event that any Certificate for 2-DO Shares or MRZO Shares shall
have been lost, stolen or destroyed, the Exchange Agent shall issue in
Exchange thereforee, upon the making of an affidavit of that fact by the
holder thereof such MRZO Shares if any, as may be required pursuant to
this Agreement; provided, however, that MRZO or the Exchange Agent, may,
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in its respective discretion, require the delivery of a suitable bond,
opinion or indemnity.
(e) All MRZO Shares issued upon the surrender for Exchange of 2-DO
Shares in accordance with the terms hereof shall be deemed to have been issued
in full satisfaction of all rights pertaining to such 2-DO Shares. There
shall be no further registration of transfers on the stock transfer
books of either of 2-DO or MRZO of the 2-DO Shares or MRZO Shares which
were outstanding immediately prior to the Effective Time. It after the
Effective Time, Certificates are presented to MRZO for any reason, they
shall be canceled and Exchanged as provided in this Article I.
(f) No fractional MRZO Shares shall be issued in the Share Exchange, but
in lieu thereof each holder of 2-DO Shares otherwise entitled to a fractional
MRZO Share shall, upon surrender of its, his or her Certificate or
Certificates, be entitled to receive an additional share to round up to the
nearest round number of shares.
Section 1.8. Stock Options. At the Effective Time, each outstanding
option to purchase 2-DO Shares, if any (a "2-DO Stock Option" or collectively,
"2-DO Stock Options") issued pursuant to any 2-DO Stock Option Plan or 2-DO
Long Term Incentive Plan whether vested or unvested, shall be cancelled.
Section 1.9 Taking of Necessary Action: Further Action. If, at any
time after the Effective Time, 2-DO or MRZO reasonably determines that any
deeds, assignments, or instruments or confirmations or transfer are necessary
or desirable to carry out the purposes of this Agreement and to vest MRZO with
full right, title and possession to all assets, property, rights, privileges,
powers and franchises of 2-DO) the officers and directors of MRZO and 2-DO
are fully authorized in the name of their respective corporations or otherwise
to take, and will take, all such lawful and necessary or desirable action.
Section 1.10. Change of Domicile. Concurrent with the Closing of
the Share Exchange, MRZO shall take all corporate action necessary to change
its corporate domicile from Delaware to Nevada..
ARTICLE 2
Representations and Warranties of MRZO
Except as set forth on the Disclosure Schedule delivered by MRZO to
2-DO (the "MRZO Disclosure Schedule"), MRZO hereby represents and warrants to
2-DO as follows:
Section 2.1 - Organization and ion and Qualification.
(a) MRZO is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization and
has all requisite power and authority to own, lease and operate its properties
and to carry on its businesses as now being conducted, except where the
failure to be so organized, existing and in good standing or to have such
power and authority would not have a Material Adverse Effect (as defined below)
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on MRZO When used in connection with MRZO, the term "Material Adverse Effect"
means any change or effect (i) that is or is reasonably likely to be
materially adverse to the business, results of operations, condition
(financial or otherwise) or prospects of MRZO, other than any change or effect
arising out of general economic conditions unrelated to any business in which
MRZO is engaged, or (ii) that may impair the ability of MRZO' to perform its
obligations hereunder or to consummate the transactions contemplated hereby.
(b) MRZO has heretofore delivered to 2-DO accurate and complete
copies of the Certificate of Incorporation and Bylaws (or similar governing
documents), as currently in effect, of MRZO. Except as set forth on
Schedule 2.1 of the MRZO Disclosure Schedule, MRZO is duly qualified or
licensed and in good standing to do business in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except in
such jurisdictions where the failure to be so duly qualified or licensed and
in good standing would not have a Material Adverse Effect on MRZO.
Section 2.2. Capitalization of MRZO.
(a) The authorized capital stock of MRZO consists of: (i) Fifty
Million (50,000,000) MRZO Common Shares, of which, as of June 15, 2001,
13,800,000 MRZO Shares were issued and outstanding, (ii) One Million
(l,000,000) MRZO Preferred Shares, of which, as of June 15, 2001 there were no
preferred outstanding, and no MRZO Shares were held in treasury. All of the
outstanding MRZO Shares have been duly authorized and validly issued and
are fully paid, non-assessable and free of preemptive rights. Except as
set forth herein, as of the date hereof, there are no outstanding (i)
shares of capital stock or other voting securities of MRZO, (ii)
securities of MRZO convertible into or Exchangeable for shares of
capital stock or voting securities of MRZO, except for the preferred
shares of MRZO, (iii) options or other rights to acquire from MRZO and,
except as described in the MRZO SEC Reports (as defined below), no
obligations of MRZO to issue, any capital stock, voting securities or
securities convertible into or Exchangeable for capital stock or voting
securities of MRZO, and (iv) equity equivalents, interests in the
ownership or earnings of MRZO or other similar rights (collectively,
"MRZO Securities"). As of the date hereof; except as set forth on
Schedule 2.2(a) of the MRZO Disclosure Schedule there are no outstanding
obligations of MRZO or its subsidiaries to repurchase, redeem or
otherwise acquire any MRZO Securities or stockholder agreements, voting
trusts or other agreements or understandings to which MRZO is a party or
by which it its bound relating to the voting or registration of any
shares of capital stock of MRZO. For purposes of this Agreement, "Lien"
means, with respect to any asset (including, without limitation, any
security) any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset.
(b) The MRZO Shares constitute the only class of equity securities
of MRZO registered or required to be registered under the Exchange Act.
(c) MRZO does not own directly or indirectly more than fifty
percent (50%) of the outstanding voting securities or interests
(including membership interests) of any entity, other than as specifically
disclosed in the disclosure documents.
Section 2.3. Authority Relative to this Agreement; Recommendation.
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(a) MRZO has all necessary corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement, and the consummation
of the transactions contemplated hereby, have been duly and validly
authorized by the Board of Directors of MRZO (the "MRZO Board") and no
other corporate proceedings on the part of MRZO are necessary to authorize
this Agreement or to consummate the transactions contemplated hereby, except,
as referred to in Section 2.17, the approval and adoption of this Agreement
by the holders of at least a majority of the then outstanding MRZO Shares.
This Agreement has been duly and validly executed and delivered by MRZO
and constitutes a valid, legal and binding agreement of MRZO, enforceable
against MRZO in accordance with its terms.
(b) The MRZO Board has resolved to recommend that the stockholders
of MRZO approve and adopt this Agreement.
Section 2.4. SEC Reports, Financial Statements.
(a) MRZO has filed all required forms, reports and documents with
the Securities and Exchange Commission (the "SEC") since the filing of its
initial registration statement on Form 1OSB on February 14, 2000, each of
which has complied in all material respects with all applicable requirements
of the Securities Act of 1933, as amended (the "Securities Act"), and the
Exchange Act (and the rules and regulations promulgated there-under,
respectively), each as in effect on the dates such forms, reports and
documents were filed. MRZO has heretofore delivered or promptly will deliver
prior to the Effective Date to 2-DO, in the form filed with the SEC (including
any amendments thereto but excluding any exhibits), (i) its Annual Report on
Form 10-KSB for the fiscal year ended Xxxxx 00, 0000, (xx) all definitive
proxy statements relating to MRZO's meetings of stockholders (whether annual
or special) held since February 14, 2000, if any, and (iii) all other reports
or registration statements filed by MRZO with the SEC since February 14, 2000
(all of the foregoing, collectively, the "MRZO SEC Reports"). None of such
MRZO SEC Reports, including, without limitation, any financial statements or
schedules included or incorporated by reference therein, contained, when
filed, any untrue statement of a material fact or omitted to state a material
fact required to be stated or incorporated by reference therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The audited financial statements of MRZO
included in the MRZO SEC Reports fairly present, in conformity with generally
accepted accounting principles applied on a consistent basis (except as may be
indicated in the notes thereto), the financial position of MRZO as of the
dates thereof and its results of operations and changes in financial position
for the periods then ended. All material agreements, contracts and other
documents required to be filed as exhibits to any of the MRZO SEC Reports have
been so filed.
(b) MRZO has heretofore made available or promptly will make
available to 2-DO a complete and correct copy of any amendments or
modifications which are required to he filed with the SEC but have not yet
been filed with the SEC, to agreements, documents or other instruments which
previously had been filed by MRZO with the SEC pursuant to the Exchange Act.
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Section 2.5. Information Supplied. None of the information supplied
or to be supplied by MRZO for inclusion or incorporation by reference in
connection with the Share Exchange (the "Proxy Statement") will at the date
mailed to stockholders of MRZO and at the times of the meeting or meetings of
stockholders of MRZO to be held in connection with the Share Exchange,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they are made, not misleading. The Proxy Statement, insofar as it relates to
the meeting of MRZO's stockholders to vote on the Share Exchange, will comply
as to form in all material respects with the provisions of the Exchange Act
and the rules and regulations there-under.
Section. 2.6. Consents and Approvals; No Violations. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements to the Securities Act, the Exchange
Act, state securities or blue sky laws, the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1916, as amended (the "HSR Act"), the rules of the
National Association of Securities Dealers, Inc. ("NASD"), thefiling and
recordation of the Share Exchange Certificate as required by the NGCL and the
DGCL and as set forth on Schedule 2.6 of the MRZO Disclosure Schedule no filing
with or notice to, and no permit, authorization, consent or approval of,
any court or tribunal or administrative, governmental or regulatory
body, agency or authority (a "Governmental Entity") is necessary for the
execution and delivery by MRZO of this Agreement or the consummation by
MRZO of the transactions contemplated hereby, except where the failure
to obtain such permits, authorizations, consents or approvals or to make
such filings or give such notice would not have a Material Adverse
Effect on MRZO.
Except as set forth in Section 2.6 of the MRZO Disclosure Schedule,
neither the execution, delivery and performance of this Agreement by MRZO nor
the consummation by MRZO of the transactions contemplated hereby will
(i) conflict with or result in any breach of any provision of the respective
Certificate of Incorporation or Bylaws (or similar governing documents) of
MRZO, (ii) result in a violation or breach of, or constitute (with or without
due notice or lapse of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration or Lien) under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument or obligation to
which MRZO is a party or by which any of its properties or assets may be
bound, or (iii) violate any order, writ, injunction, decree, law, statute,
rule or regulation applicable to MRZO or any or its properties or assets,
except in the case of (ii) or (iii) for violations, breaches or defaults which
would not have a Material Adverse Effect on MRZO.
Section 2.7. No Default. Except as set forth in Section 2.7 of the
MRZO Disclosure Schedule, MRZO is not in breach, default or violation
(and no event has occurred which with notice or the lapse of time or both
would constitute a breach default or violation) of any term, condition or
provision of (i) its Certificate of Incorporation or Bylaws (or similar
governing documents), (ii) any note, bond, mortgage, indenture, lease, license,
contract, agreement or other instrument or obligation to which MRZO is
now a party or by which any of its respective properties or assets may be
bound or (iii) any order, writ injunction, decree, law, statute, rule or
regulation applicable to MRZO or any of its respective properties or assets,
except in, the case of (ii) or (iii) for violations, breaches or defaults
that would not have a Material Adverse Effect on MRZO. Except as set forth in
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Section 2.7 of the MRZO Disclosure Schedule, each note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or
obligation to which MRZO is now a party or by which its respective properties
or assets may be bound that is material to MRZO and that has not expired is
in full force and effect and is not subject to any material default
there-under of which MRZO is aware by any party obligated to MRZO there-under.
Section 2.8. No Undisclosed Liabilities; Absence of Changes. Except
as set forth in Section 2.8 of the MRZO Disclosure Schedule and except as and
to the extent publicly disclosed by MRZO in the MRZO SEC Reports, as of
February 22, 2001, MRZO does not have any liabilities or obligations of any
nature, whether or not accrued, contingent or otherwise, that would be
required by generally accepted accounting principles to be reflected on a
balance sheet of MRZO (including the notes thereto) or which would have a
Material Adverse Effect on MRZO. Except as publicly disclosed by MRZO, since
February 22, 2001, MRZO has not incurred any liabilities of any nature,
whether or not accrued, contingent or otherwise, which could reasonably be
expected to have, and there have been no events, changes or effects with
respect to MRZO having or which reasonably could be expected to have, a
Material Adverse Effect on MRZO. Except as and to the extent publicly disclosed
by MRZO in the MRZO SEC Reports and except as set forth in Section 2.8
of the MRZO Disclosure Schedule, since February 22, 2001, there has not
been (i) any material change by MRZO in its accounting methods,
principles or practices (other than as required after the date hereof by
concurrent changes in generally accepted accounting principles), (ii)
any revaluation by MRZO of any of its assets having a Material Adverse
Effect on MRZO, including, without limitation, any write-down of the
value of any assets other than in the ordinary course of business or
(iii) any other action or event that would have required the consent of
any other party hereto pursuant to Section 4.1 of this Agreement had
such action or event occurred after the date of this Agreement.
Section 2.9. Litigation. Except as publicly disclosed by MRZO in
the MRZO SEC Reports, there is no suit, claim, action, proceeding or
investigation, pending or, to the knowledge of MRZO, threatened against MRZO
or any of its subsidiaries or any or their respective properties or assets
before any Governmental Entity which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect on MRZO
or could reasonably be expected to prevent or delay the consummation of the
transactions contemplated by this Agreement. Except as publicly disclosed by
MRZO in the MRZO SEC Reports, MRZO is not subject to any outstanding order,
writ, injunction or decree which, insofar as can be reasonably foreseen in
the future, could reasonably be expected to have a Material Adverse Effect on
MRZO or could reasonably be expected to prevent or delay the consummation of
the transactions contemplated hereby.
Section 2. TO. Compliance with Applicable Law. Except as publicly
disclosed by MRZO in the MRZO SEC Reports, MRZO holds all permits, licenses,
variances, exemptions, orders and approvals of all Governmental Entities
necessary for the lawful conduct of their respective businesses
(the "MRZO Permits"), except for failures to hold such permits, licenses,
variances, exemptions, orders and approvals which would not have a Material
Adverse Effect on MRZO. Except as publicly disclosed by MRZO in the MRZO SEC
Reports, MRZO is in compliance with the terms or the MRZO Permits, except
where the failure so to comply would not have a Material Adverse Effect on
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MRZO. Except as publicly disclosed by MRZO in the MRZO SEC Reports, the
business of MRZO is not being conducted in violation of any law, ordinance or
regulation of any Governmental Entity except that no representation or
warranty is made in this Section 2.10 with respect to Environmental Laws
(as defined in Section 2.1.2 below) and except for violations or possible
violations which do not, and, insofar as reasonably can be foreseen, in the
future will not, have a Material Adverse Effect on MRZO. Except as publicly
disclosed by MRZO in the MRZO SEC Reports, no investigation or review by any
Governmental Entity with respect to MRZO is pending or, to the knowledge of
MRZO, threatened, nor, to the knowledge of MRZO, has any Governmental Entity
indicated an intention to conduct the same, other than, in each case, those
which MRZO reasonably believes will not have a Material Adverse Effect on
MRZO.
Section 2.11. Employee Benefit Plans: Labor Matters.
(a) Except as set forth in Section 2.11(a) of the MRZO Disclosure
Schedule with respect to each employee benefit plan, program, policy,
arrangement and contract (including, without limitation, any
"employee benefit plan," as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), maintained or
contributed to at any time by MRZO or any entity required to be aggregated
with MRZO pursuant to Section 414 of the Code (each, a "MRZO Employee Plan"),
no event has occurred and to the knowledge of MRZO, no condition or set of
circumstances exists in connection with which MRZO could reasonably be
expected to be subject to any liability which would have a Material Adverse
Effect on MRZO.
(b) (i) No MRZO Employee Plan is or has been subject to Title IV of
ERISA or Section 412 of the Code; and (ii) each MRZO Employee Plan intended
to qualify under Section 401(a) of the Code and each trust intended to quality
under Section 501(a) of the Code is the subject of a favorable Internal
Revenue Service determination letter, and nothing has occurred which
could reasonably be expected to adversely affect such determination.
(c) Section 2.11(c) of the MRZO Disclosure Schedule sets forth a
true and complete list, as of the date of this Agreement, of each person who
holds any MRZO Stock Options, together with the number of MRZO Shares which
are subject to such option, the date of grant of such option, the extent to
which such option is vested (or will become vested as a result or the
Share Exchange), the option price of such option (to the extent determined as
of the date hereof), whether such option is a nonqualified stock option or is
intended to qualify as an incentive stock option within the meaning of
Section 422(b) of the Code, and the expiration date of such option.
Section. 2.11(c) of the MRZO Disclosure Schedule also sets forth the total
number of such incentive stock options and such nonqualified options. MRZO has
furnished 2-DO with complete copies of the plans pursuant to which the MRZO
Stock Options were issued. Other than the automatic vesting of MRZO Stock
Options that may occur without any action on the part of MRZO or its officers
or directors, MRZO has not taken any action that would result in any MRZO
Stock Options that are unvested becoming vested in connection with or as a
result of the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby.
(d) MRZO has made available to 2-DO (I) a description of the terms
of employment and compensation arrangements of all officers of MRZO and a
13
copy of each such agreement currently in effect; (ii) copies of all agreements
with consultants who are individuals obligating MRZO to make annual cash
payments in an amount exceeding $60,000; (iii) a schedule listing all officers
of MRZO who have executed a non-competition agreement with MRZO and a
copy of each such agreement currently in effect; (iv) copies (or descriptions)
of all severance agreements, programs and policies of MRZO with or relating to
its employees, except programs and policies required to be maintained by law;
and (v) copies of all plans, programs, agreements and other arrangements of
MRZO with or relating to its employees which contain change in control
provisions all of which are set forth in Section 2.11(d) of the MRZO Disclosure
Schedule.
(e) There shall be no payment, accrual of additional benefits,
acceleration of payments, or vesting in any benefit under any MRZO employee
Plan or any agreement or arrangement disclosed under this Section 2.1.1 solely
by reason of entering into or in connection with the transactions contemplated
by this Agreement.
(f) There are no controversies pending or, to the knowledge of
MRZO, threatened, between MRZO and any of their employees, which controversies
have or could reasonably be expected to have a Material Adverse Effect on
MRZO. Neither MRZO nor any of its subsidiaries is a party to any collective
bargaining agreement or other labor union contract applicable to persons
employed by MRZO or any of its subsidiaries (and neither MRZO nor any of its
subsidiaries has any outstanding material liability with respect to any
terminated collective bargaining agreement or labor union contract), nor does
MRZO know of any activities or proceedings of any labor union to organize any
of its or employees. MRZO has no knowledge of any strike, slowdown, work
stoppage, lockout or threat thereof, by or with respect to any of its
employees.
Section 2.12. Environmental Laws and Regulations.
(a) Except as publicly disclosed by MRZO in the MRZO SEC Reports,
(i) MRZO is in material compliance with all applicable federal, state, local
and foreign laws and regulations relating to pollution or protection of human
health or the environment (including, without limitation, ambient air, surface
water, ground water, land surface or subsurface strata) (collectively,
"Environmental Laws"). except for non-compliance that would not have a Material
Adverse Effect on MRZO, which compliance includes but is not limited to,
the possession by MRZO or all material permits and other governmental
authorizations required under applicable Environmental Laws, and compliance
with the terms and conditions thereof; (ii) MRZO has not received written
notice of, or, to the knowledge of MRZO, is the subject of, any action, cause
of action, claim, investigation, demand or notice by any person or entity
alleging liability under or non-compliance with any Environmental Law (an
"Environmental Claim") that could reasonably be expected to have a Material
Adverse Effect on MRZO; and (iii) to the knowledge of MRZO, there are no
circumstances that are reasonably likely to prevent or interfere with such
material compliance in the future.
(b) Except as publicly disclosed by MRZO, there are no Environmental
Claims which could reasonably be expected to have a Material Adverse
Effect on MRZO that are pending or, to the knowledge of MRZO, threatened
against MRZO or, to the knowledge of MRZO, against any person or entity
whose liability for any Environmental Claim MRZO has or may have retained
or assumed either contractually or by operation of law.
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Section 2.13. Tax Matters.
(a) Except as set forth in Section 2.13 of the MRZO Disclosure
Schedule: (i) MRZO has filed or has had filed on its behalf in a timely
manner (within any applicable extension periods) with the appropriate
Governmental Entity all income and other material Tax Returns (as defined
herein) with respect to Taxes (as defined herein) of MRZO and all Tax
Returns were in all material respects true, complete and correct; (ii) all
material Taxes with respect to MRZO have been paid in full or have been
provided for in accordance with GAAP on MRZO's most recent balance sheet which
is part of the MRZO SEC Documents. (iii) there are no outstanding
agreements or waivers extending the statutory period of limitations
applicable to any federal, state, local or foreign income or other material
Tax Returns required to be filed by or with respect to MRZO; (iv) to the
knowledge of MRZO none of the Tax Returns of or with respect to MRZO is
currently being audited or examined by any Governmental Entity; and (v) no
deficiency for any income or other material Taxes has been assessed with
respect to MRZO which has not been abated or paid in full.
(b) For purposes of this Agreement, (i) "Taxes" shall mean all
taxes, charges, fees, levies or other assessments, including, without
limitation, income, gross receipts, sales, use, ad valorem, goods and
services, capital, transfer, franchise, profits, license, withholding, payroll,
employment, employer health, excise, estimated, severance, stamp,
occupation, property or other taxes, customs duties, fees, assessments
or charges of any kind whatsoever together with any interest and any
penalties, additions to tax or additional amounts imposed by any taxing
authority and. (ii.) "Tax Return" shall mean any report, return,
documents declaration or other information or filing required to be
supplied to any taxing authority or jurisdiction with respect to Taxes.
Section 2.14. Title to Property. MRZO has good and defensible title
to all of its properties and assets, free and clear of all liens, charges and
encumbrances except liens for taxes not yet due and payable and such liens or
other imperfections of title, if any, as do not materially detract
from the value of or interfere with the present use of the property
affected thereby or which, individually or in the aggregate, would not have a
Material Adverse Effect on MRZO; and, to MRZO's knowledge, all leases pursuant
to which MRZO leases from others real or personal property are in good
standing, valid and effective in accordance with their respective terms, and
there is not, to the knowledge of MRZO, under any of such leases, any
existing material default or event of default (or event which with notice of
lapse of time, or both, would constitute a default and in respect of which
MRZO has not taken adequate steps to prevent such a default from occurring)
except where the lack of such good standing, validity and effectiveness, or the
existence of such default or event, would not have a Material Adverse
Effect on MRZO.
Section 2.15. Intellectual Property.
(a) MRZO owns, or possesses adequate licenses or other valid rights
to use, all existing United States and foreign patents, trademarks, trade
names, service marks, copyrights, trade secrets and applications thereforee
15
that are material to its business as currently conducted (the "MRZO
Intellectual Property Rights").
(b) The validity of the MRZO Intellectual Property Rights and the
title thereto of MRZO is not being questioned in any litigation to which MRZO
is a party.
(c) Except as set forth in Section 2.15(c) of the MRZO Disclosure
Schedule, the conduct of the business of MRZO as now conducted does not, to
MRZO's knowledge, infringe any valid patents, trademarks, trade names, service
marks or copyrights of others. The consummation of the transactions completed
hereby will not result in the loss or impairment of any MRZO Intellectual
Property Rights.
(d) MRZO has taken steps it believes appropriate to protect and
maintain its trade secrets as such, except in cases where MRZO has elected to
rely on patent or copyright protection in lieu of trade secret protection.
Section 2.16. Insurance. MRZO currently does not maintain general
liability and other business insurance.
Section. 2.17. Vote Required. The affirmative vote of the holders
of at least a majority of the outstanding MRZO Shares is the only vote of the
holders of any class or series of MRZO's capital stock necessary to approve
and adopt this Agreement and the Share Exchange.
Section 2.18. Tax Treatment. Neither MRZO nor, to the knowledge of
MRZO, any of its affiliates has taken or agreed to take action that would
prevent the Share Exchange from constituting a reorganization qualifying under
the provisions of Section 368(a) of the Code.
Section 2.19. Affiliates. Except for Principal MRZO Stockholder
("PJS") and the directors and executive officers of MRZO, each of whom is
listed in Section 2.19 of the MRZO Disclosure Schedule, there are no persons
who, to the knowledge of MRZO, may be deemed to be affiliates of MRZO under
Rule 1-02(b) of Regulation S-X of the SEC (the MRZO Affiliates").
Section 2.20. Certain Business Practices. None of MRZO or any
directors, officers, agents or employees of MRZO has (i) used any funds
for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity, (ii) made any unlawful payment
to foreign or domestic government officials or employees or to foreign
or domestic political parties or campaigns or violated any provision of
the Foreign Corrupt Practices Act of 1977, as amended (the "FCPA"), or
(iii) made any other unlawful payment.
Section 2.21. Insider Interests. Except as set forth in Section
2.21 of the MRZO Disclosure Schedule, neither PJS nor any officer or director
of MRZO has any interest in any material property, real or personal, tangible
or intangible, including without limitation, any computer software or MRZO
Intellectual Property Rights, used in or pertaining to the business of MRZO,
expect for the ordinary rights of a stockholder or employee stock option
holder.
16
Section 2.22. Opinion of Financial Adviser. No advisers, as of the
date hereof, have delivered to the MRZO Board a written opinion to the effect
that, as of such date, the Exchange ratio contemplated by the Share Exchange
is fair to the holders of MRZO Shares.
Section. 2.24. Disclosure. No representation or warranty of MRZO in
this Agreement or any certificate, schedule, document or other instrument
furnished or to be furnished to 2-DO pursuant hereto or in connection herewith
contains, as of the date of such representation, warranty or instrument, or
will contain any untrue statement of a material fact or, at the date thereof,
omits or will omit to state a material fact necessary to make any statement
herein or therein, in light of the circumstances under which such statement is
or will be made, not misleading.
Section 2.25. No Existing Discussions. As of the date hereof, MRZO
is not engaged, directly or indirectly, in any discussions or negotiations
with any other party with respect to any Third Party Acquisition (as defined
in Section 4.4).
Section 2.26. Material Contracts.
(a) MRZO has delivered or otherwise made available to 2-DO true,
correct and complete copies of all contracts and agreements (and all
amendments, modifications and supplements thereto and all side letters to
which MRZO is a party affecting the obligations of any party there-under) to
which MRZO is a party or by which any of its properties or assets are bound
that are, material to the business, properties or assets of MRZO taken as a
whole, including, without limitation, to the extent any of the following are,
individually or in the aggregate, material to the business, properties or
assets of MRZO taken as a whole, all: (i) employment, product design or
development, personal services, consulting, non-competition, severance, golden
parachute or indemnification contracts (including, without limitation, any
contract to which MRZO is a party involving employees of MRZO); (ii)
licensing, publishing, merchandising or distribution agreements; (iii)
contracts granting rights of first refusal or first negotiation; (iv)
partnership or joint venture agreements; (v) agreements for the acquisition,
sale or lease of material properties or assets or stack or otherwise entered
into since December 31, 2000; (vi) contracts or agreements with any
Governmental Entity. and (vii) all commitments and agreements to enter
into any of the foregoing (collectively, together with any such
contracts entered into in accordance with Section 4.1 hereof, the "MRZO
Contracts"). MRZO is not a party to or bound by any severance, golden
parachute or other agreement with any employee or consultant pursuant to which
such person would be entitled to receive any additional compensation or an
accelerated payment of compensation as a result of the consummation of the
transactions contemplated hereby.
(b) Each of the MRZO Contracts is valid and enforceable in
accordance with its terms, and there is no default under any MRZO Contract so
listed either by MRZO or, to the knowledge of MRZO, by any other party
thereto, and no event has occurred that with the lapse of time or the giving
of notice or both would constitute a default there-under by MRZO or, to the
knowledge of MRZO, any other party, in any such case in which such default or
event could reasonably be expected to have a Material Adverse Effect on MRZO.
17
(c) No party to any such MRZO Contract has given notice to MRZO of
or made a claim against MRZO with respect to any breach or default there-
under, in any such case in which such breach or default could reasonably be
expected to have a Material Adverse Effect on MRZO
ARTICLE 3
Representations and Warranties of 2-DO
Except as set forth on the Disclosure Schedule delivered by 2-DO to
MRZO (the "2-DO Disclosure Schedule"), 2-DO hereby represents and warrants to
MRZO as follows;
Section 3.1. Organization and Qualification.
(a) Each of 2-DO and its subsidiaries is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization and has all requisite power and authority to
own, lease and operate its properties and to carry on its businesses as now
being conducted, except where the failure to be so organized, existing and in
good standing or to have such power and authority would not have a Material
Adverse Affect (as defined below) on 2-DO. When used in connection with 2-DO,
the term "Material Adverse Effect" means any change or effect (i) that is or
is reasonably likely to be materially adverse to the business, results of
operations, condition (financial or otherwise) or prospects of 2-DO and its
subsidiaries, taken as a whole, other than any change or effect arising out of
general economic conditions unrelated to any businesses in, which 2-DO and its
subsidiaries are engaged, or (ii) that may impair the ability of 2-DO to
consummate the transactions contemplated hereby.
(b) 2-DO has heretofore delivered to MRZO accurate and complete
copies of the Certificate of Incorporation and Bylaws (or similar governing
documents), as currently in effect, of 2-DO. Each of 2-DO and its subsidiaries
is duly qualified or licensed and in good standing to do business in each
jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification or
licensing necessary except in such jurisdictions where the failure to be so
duly qualified or licensed and in good standing would not have a Material
Adverse Effect on 2-DO.
Section 3.2. Capitalization of 2-DO.
(a) Tile authorized capital stock of 2-DO consists of Sixteen
Million (16,000,000) 2-DO common Shares, $.001 par value, 16,000,000 common
Shares are currently issued and outstanding. All of the outstanding 2-DO
Shares have been duly authorized and validly issued, and are fully paid,
nonassessable and free of preemptive rights.
(b) Except as set forth in Section 3.2(b) of the 2-DO Disclosure
Schedule, 2-DO is the record and beneficial owner of all of the issued and
outstanding shares of capital stock of its subsidiaries.
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(c) Except as set tub in Section 3.2(c) of the 2-DO Disclosure
Schedule, between March 1, 2001 and the date hereof, no shares of 2-DO's
capital stock have been issued and no 2-DO Stock options have been granted.
Except as set forth in Section 3.2(a) above, as of the date hereof, there are
no outstanding (i) shares of capital stock or other voting securities of 2-
DO, (ii) securities of 2-DO or its subsidiaries convertible into or
Exchangeable for shares of capital stock or voting securities of 2-DO, (iii)
options or other rights to acquire from 2-DO or its subsidiaries, or
obligations of 2-DO or its subsidiaries to issue, any capital stock, voting
securities or securities convertible into or Exchangeable for capital stock or
voting securities of 2-DO, or (iv) equity equivalents, interests in the
ownership or earnings of 2-DO or its subsidiaries or other similar rights
(collectively, "2-DO Securities"). As of the date hereof there are no
outstanding obligations of 2-DO or any of its subsidiaries to repurchase,
redeem or otherwise acquire any 2-DO Securities. There are no stockholder
agreements, voting trusts or other agreements or understandings to which 2-DO
is a party or by which it is bound relating to the voting or registration of
any shares of capital stock of 2-DO.
(d) Except as set forth in Section 3.2(d) of the 2-DO Disclosure
Schedule, there are no securities of 2-DO convertible into or Exchangeable
for, no options or other rights to acquire from 2-DO, and no other contract,
understanding, arrangement or obligation (whether or not contingent) providing
for the issuance or sale, directly or indirectly, of any capital stock or other
ownership interests in or any other securities of, any subsidiary of 2-DO.
(e) The 2-DO Shares constitute the only class of equity securities
of 2-DO or its subsidiaries.
(f) Except as set forth in Section 3.2(f) of the 2-DO Disclosure
Schedule, 2-DO does not own directly or indirectly more than fifty percent
(50%) of the outstanding voting securities or interests (including membership
interests) of any entity.
Section 3.3. Authority Relative to this Agreement Recommendation.
(a) 2-DO has all necessary corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
the Board of Directors of 2-DO (the "2-DO Board"), and no other corporate
proceedings on the part of 2-DO are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby, except, as referred to in
Section 3.17, the approval and adoption of this Agreement by the holders of at
least a majority of the then outstanding 2-DO Shares. This Agreement has been
duly and validly executed and delivered by 2-DO and constitutes a valid, legal
and binding agreement of 2-DO,enforceable against 2-DO in accordance with its
terms.
(b) The 2-DO Board has resolved to recommend that the stockholders
of 2-DO approve and adopt this Agreement.
Section 3.4. SEC Retorts Financial Statements. 2-DO is not required
to file forms, reports and documents with the SEC.
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Section 3.5. Information Supplied. None of the information supplied
or to be supplied by 2-DO for inclusion or incorporation by reference to (i)
the MRZO Proxy Statement, 8-K or other SEC Report will, at the time the SEC
Report is filed with the SEC and at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading and (ii) the Proxy Statement will, at the
date mailed to stockholders of MRZO, if any, and at the times of the meeting or
meetings of stockholders of MRZO to be held in connection with the Share
Exchange, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they are made, not misleading. The Proxy Statement, insofar
as it relates to the meeting of 2-DO's stockholders to vote on the Share
Exchange, will comply as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations there-
under, and the 8-K will comply as to form in all material respects with
the provisions of the Securities Act and the rules and regulations
there-under.
Section. 3.6. Consents and Approvals; No Violations. Except as set
forth in Section 3.6 of the 2-DO Disclosure Schedule, and for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Securities Act, the Exchange Act, state
securities or blue sky laws, the HSR Act, the rules of the NASD and the filing
and recordation of the Share Exchange Certificate as required by the NCGL,
no filing with or notice to, and no permit, authorization, consent or
approval of any Governmental Entity is necessary for the execution and
delivery by 2-DO of this Agreement or the consummation by 2-DO of the
transactions contemplated hereby, except where the failure to obtain
such permits, authorizations consents or approvals or to make such
filings or give such notice would not have a Material Adverse Effect on
2-DO.
Neither the execution, delivery and performance of this Agreement
by 2-DO nor the consummation by 2-DO of the transactions contemplated hereby
will (i) conflict with or result in any breach of any provision of the
respective Certificate of Incorporation or Bylaws (or similar governing
documents) of 2-DO or ally of 2-DO's subsidiaries, (ii) result in a violation
or breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration or Lien) under, any of the terms conditions
or provisions of any note, bond, mortgage, indenture, lease, license,
contract agreement or other instrument or obligation to which 2-DO or
any of 2-DO 's subsidiaries is a party or by which any of them or any
of their respective properties or assets may be bound or (iii) violate
any order, writ, injunction, decree, law, statute, rule or regulation
applicable to 2-DO or any of 2-DO's subsidiaries or any of their
respective properties or assets except in the case of (ii) or (iii) for
violations, breaches or defaults which would not have a Material Adverse
Effect on 2-DO.
Section 3.7. No Default. None of 2-DO or any of its subsidiaries is
in breach, default or violation (and no event has occurred which with notice
or the lapse of time or both would constitute a breach, default or violation)
of any term, condition or provision of (i) its Certificate of Incorporation or
Bylaws (or similar governing documents), (ii) any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or
obligation to which 2-DO or any of its subsidiaries is now a party or by
which any of them or any of their respective properties or assets may be bound
20
or (iii) any order, writ, injunction, decree, law, statute, rule or regulation
applicable to 2-DO, its subsidiaries or any of their respective properties or
assets, except in the case or (ii) or (iii) for violations, breaches or
defaults that would not have a Material Adverse Effect on 2-DO. Bach note,
bond, mortgage, indenture? lease, license, contract, agreement or other
instrument or obligation to which 2-DO or any of its subsidiaries is now a
party or by which any of them or any of their respective properties or assets
may be bound that is material to 2-DO and its subsidiaries taken as a whole
and that has not expired is in full force and effect and is not subject to any
material default there-under of which 2-DO is aware by any party obligated to
2-DO or any subsidiary there-under.
Section 3.8. No Undisclosed Liabilities; Absence of Changes. Except
as and to the extent disclosed by 2-DO in the 2-DO, none of 2-DO or its
subsidiaries had any liabilities or obligations of any nature, whether or not
accrued, contingent or otherwise, that would be required by generally accepted
accounting principles to be reflected on a consolidated balance sheet or
2-DO and its consolidated subsidiaries (including the notes thereto) or
which would have a Material Adverse Effect on 2-DO. Except as disclosed
by 2-DO, none of 2-DO or its subsidiaries has incurred any liabilities
of any nature, whether or not accrued, contingent or otherwise, which
could reasonably be expected to have, and there have been no events,
changes or effects with respect to 2-DO or its subsidiaries having or
which could reasonably be expected to have, a Material Adverse Effect on
2-DO. Except as and to the extent disclosed by 2-DO there has not been
(i) any material change by 2-DO in its accounting methods, principles or
practices (other than as required after the date hereof by concurrent
changes in generally accepted accounting principles, (ii) any
revaluation by 2-DO of any of its assets having a Material Adverse
Effect on 2-DO, including, without limitation, any write-down of the
value of any assets other than in the ordinary course of business or
(iii) any other action or event that would have required the consent of
any other party hereto pursuant to Section 4.2 of this Agreement had
such action or event occurred after the date of this Agreement.
Section 3.9. Litigation. Except as set forth in Schedule 3.9 of the
2-DO Disclosure Schedule there is no suit, claim, action, proceeding or
investigation pending or, to the knowledge of 2-DO, threatened against 2-DO
or any of its subsidiaries or any of their respective properties or assets
before any Governmental Entity which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on 2-DO or
could reasonably be expected to prevent or delay the consummation of the
transactions contemplated by this Agreement. Except as disclosed by 2-
DO, none of 2-DO or its subsidiaries is subject to any outstanding
order, writ, injunction or decree which, insofar as can be reasonably
foreseen in the future, could reasonably be expected 'to have a Material
Adverse Effect on 2-DO or could reasonably be expected to prevent or
delay the consummation of the transactions contemplated hereby.
Section 3.10. Compliance with Applicable Law. Except as disclosed
by 2-DO, 2-DO and its subsidiaries hold all permits, licenses, variances,
exemptions, orders and approvals of all Permits"), except for failures to hold
such permits, licenses, variances, exemptions, orders and Governmental
entities necessary for the lawful conduct of their respective businesses
(the "2-DO approvals which would not have a Material Adverse Effect on 2-DO.
Except as disclosed by 2-DO, 2-DO and its subsidiaries are in compliance with
the terms of the 2-DO Permits, except where the failure so to comply would not
have a Material Adverse Effect on 2-DO. Except as disclosed by 2-DO, tile
21
businesses of 2-DO and its subsidiaries are not being conducted in violation
of any law, ordinance or regulation of any Governmental Entity except that no
representation or warranty is made in this Section 3.10 with respect to
Environmental Laws and except for violations or possible violations which do
not, and, insofar as reasonably can be foreseen, in the future will not, have
a Material Adverse Effect on 2-DO. Except as disclosed by 2-DO no
investigation or review by any Governmental Entity with respect to 2-DO or its
subsidiaries is pending or, to the knowledge of 2-DO, threatened, nor,
to the knowledge of 2-DO, has any Governmental Entity indicated an
intention to conduct the same, other than, in each case, those which 2-
DO reasonably believes will not have a Material Adverse Effect on 2-DO.
Section 3.11. Employee Benefit Plans, Labor Matters.
(a) With respect to each employee benefit plan, program policy,
arrangement and contract (including, without limitation, any "employee benefit
plan," as defined in Section 3(3) of ERISA), maintained or contributed to at
any time by 2-DO, any of its subsidiaries or any entity required to be
aggregated with 2-DO or any of its subsidiaries pursuant to Section 414 of
the Code (each, a "2-DO Employee Plan"). No event has occurred and, to
the knowledge of 2-DO, no condition or set of circumstances exists in
connection with which 2-DO or any of its subsidiaries could reasonably be
expected to be subject to any liability which would have a Material Adverse
Effect on 2-DO.
(b) (i) No 2-DO Employee Plan is or has been subject to Title IV or
ERISA or Section 412 of the Code; and (ii) each 2-DO Employee Plan intended to
qualify under Section 401(a) of the Code and each trust intended to qualify
under Section 501(a) of the Code is the subject of favorable internal
Revenue Service determination letter, and nothing has occurred which
could reasonably be expected to adversely affect such determination.
(c) Section 3.11(c) of the 2-DO Disclosure Schedule sets forth a
true and complete list, as of the date of this Agreement, of each person who
holds any 2-DO Stock Options, together with the number of 2-DO Shares which
are subject to such option, the date of grant of such option, the extent to
which such option is vested (or will become vested as a result of the Share
Exchange), the option price of such option (to the extent determined as of the
date hereof), whether such option is a nonqualified stock option or is
intended to qualify as an incentive stock option within the meaning of
Section 422(b) of the Code, and the expiration date of such option.
Section 3. ii (c) of the 2-DO Disclosure Schedule also sets forth the total
number of such incentive stock options and such nonqualified options. 2-DO has
furnished MRZO with complete copies of the plans pursuant to which the 2-DO
Stock Options were issued. Other than the automatic vesting of 2-DO Stock
Options that may occur without any action on the part of 2-DO or its officers
or directors, 2-DO has not taken any action that would result in any 2-DO
Stock Options that are unvested becoming vested in connection with or as a
result of the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby.
(d) 2-DO has made available to MRZO (i) a description of the terms
of employment and compensation arrangements of all officers of 2-DO and a
copy of each such agreement currently in effect; (ii) copies of all agreements
with consultants who are individuals obligating 2-DO to make annual cash
22
payments in an amount exceeding $60,000; (iii) a schedule listing all officers
of 2-DO who have executed a non-competition agreement with 2-DO and a
copy of each such agreement currently in effect; (iv) copies (or descriptions)
of all severance agreements, programs and policies of 2-DO with or relating to
its employees, except programs and policies required to be maintained by law;
and (v) copies of all plans, programs, agreements and other arrangements of
the 2-DO with or relating to its employees which contain change in control
provisions.
(e) Except as disclosed in Section 3.1.1(e) of the 2-DO Disclosure
Schedule there shall be no payment, accrual of additional benefits,
acceleration of payments, or vesting in any benefit under any 2-DO Employee
Plan or any agreement or arrangement disclosed under this Section 3.11 solely
by reason of entering into or in connection with the transactions contemplated
by this Agreement.
(f) There are no controversies pending or, to the knowledge of 2-DO
threatened, between 2-DO or any of its subsidiaries and any of their
respective employees, which controversies have or could reasonably be expected
to have a Material Adverse Effect on 2-DO. Neither 2-DO nor any of its
subsidiaries is a party to any collective bargaining agreement or other labor
union contract applicable to persons employed by 2-DO or any of its
subsidiaries (and neither 2-DO nor any of its subsidiaries has any outstanding
material liability with respect to any terminated collective bargaining
agreement or labor union contract), nor does 2-DO know of any activities or
proceedings of any labor union to organize any of its or any of its
subsidiaries' employees. 2-DO has no knowledge of any strike, slowdown,
work stoppage, lockout or threat thereof by or with respect to any of
its or any of its subsidiaries' employees.
Section 3.12. Environmental Laws and Regulations.
(a) Except as disclosed by 2-DO, (i) each of 2-DO and its
subsidiaries is in material compliance with all Environmental Laws, except for
non-compliance that would not have a Material Adverse Effect on 2-DO, which
compliance includes, but is not limited to, the possession by 2-DO and its
subsidiaries of all material permits and other government, authorizations
required under applicable Environmental Laws, and compliance with, the terms
and conditions thereof; (ii) none of 2-DO or its subsidiaries has
received written notice of; or, to the knowledge of 2-DO, is the subject
of, any Environmental Claim that could reasonably be expected to have a
Material Adverse Effect on 2-DO; and (iii) to the knowledge of 2-DO, there
are no circumstances that are reasonably likely to prevent or interfere
with such material compliance in the future.
(U) Except as disclosed by 2-DO, there are no Environmental Claims
which could reasonably be expected to have a Material Adverse Effect on 2-DO
that are pending or, to the knowledge of 2-DO, threatened against 2-DO or any
of its subsidiaries or, to the knowledge of 2-DO, against any person or entity
whose liability for any Environmental Claim 2-DO or its subsidiaries has or
may have retained or assumed either contractually or by operation of law.
Section 3.13. Tax Matters. Except as set forth in Section 3.13 of
the 2-DO Disclosure Schedule: (i) 2-DO and each of its subsidiaries has filed
or has had filed on its behalf in a timely manner (within any applicable
23
extension periods) with the appropriate Governmental Entity all income and
other material Tax Returns with respect to Taxes of 2-DO and each of its
subsidiaries and all Tax Returns were in all material respects true,
complete and correct; (ii) all material Taxes with respect to 2-DO and each of
its subsidiaries have been paid in full or have been provided for in
accordance with GAAP on 2-DO's most recent balance sheet which is part
of the 2-DO SEC Documents; (iii) there are no outstanding agreements or
waivers extending the statutory period or limitations applicable to any
federal, state, local or foreign income or other material Tax Returns required
to be filed by or with respect to 2-DO or its subsidiaries; (iv) to
the knowledge of 2-DO none of the Tax Returns of or with respect to 2-DO
or any of its subsidiaries is currently being audited or examined by any
Governmental Entity; and (v) no deficiency for any income or other material
Taxes has been assessed with respect to 2-DO or any of its subsidiaries which
has not been abated or paid in, full.
Section. 3.14. Title to Property. 2-DO and each of its subsidiaries
have good and defensible title to all of their properties and assets, free and
clear of all liens, charges and encumbrances except liens for taxes not yet
due and payable and such liens or other imperfections of title, if any, as do
not materially detract from the value of or interfere with the
present use of the property affected thereby or which, individually or
in the aggregate, would not have a Material Adverse Effect on 2-DO; and,
to 2-DO's knowledge, all leases pursuant to which 2-DO or any of its
subsidiaries lease from others real or personal property are in good
standing, valid and effective in accordance with their respective terms,
and there is not, to the knowledge of 2-DO, under any or such leases,
any existing material default or event of default (or event which with
notice or lapse of time, or both, would constitute a material default
and in respect of which 2-DO or such subsidiary has not taken adequate
steps to prevent such a default from occurring) except where the lack of
such good standing, validity and effectiveness, or the existence of such
default or event of default would not have a Material Adverse Effect on
2-DO.
Section 3.15. Intellectual Property.
(a) Each of 2-DO and its subsidiaries owns, or possesses adequate
licenses or other valid rights to use, all existing United States and foreign
patents, trademarks, trade names, services marks, copyrights, trade secrets,
and applications therefore that are material to its business as currently
conducted (the "2-DO Intellectual Property Rights").
(b) Except as set forth in Section 315(b) of the 2-DO Disclosure
Schedule the validity of the 2-DO intellectual Property Rights and the title
thereto of 2-DO or any subsidiary, as the case may be, is not being questioned
in any litigation to which 2-DO or any subsidiary is a party.
(c) The conduct of the business of 2-DO and its subsidiaries as now
conducted does not, to 2-DO's knowledge, infringe any valid patents,
trademarks, trade names, service marks or copyrights of others. The
consummation of the transactions contemplated hereby will not result
in the loss or impairment of any 2-DO intellectual Property Rights.
(d) Each of 2-DO and its subsidiaries has taken steps it believes
appropriate to protect and maintain its trade secrets as such, except in
cases where 2-DO has elected to rely on patent or copyright protection in lieu
24
of trade secret protection.
Section 3.16. Insurance. 2-DO and its subsidiaries maintain general
liability and other business insurance that 2-DO believes to be reasonably
prudent for its business.
Section 3.17. Vote Required. The affirmative vote of the holders of
at least a majority of the outstanding 2-DO Shares is the only vote of the
holders of any class or series of 2-DO's capital stock necessary to approve
and adopt this Agreement and the Share Exchange.
Section 3.18. Tax Treatment. Neither 2-DO nor, to the knowledge of
2-DO, any of its affiliates has taken or agreed to take any action that would
prevent the Share Exchange from constituting a reorganization qualifying under
the provisions of Section 368(a) of the Code.
Section 3.19. Affiliates. Except for the directors and executive
officers of 2-DO, each of whom is listed in Section 3.19 of the 2-DO
Disclosure Schedule, there are no persons who, to the knowledge of 2-DO, may
be deemed to be affiliates of 2-DO under Rule 1-02(b) of Regulation S-X of the
SEC (the "2-DO Affiliates").
Section 3.20. Certain Business Practices. None of 2-DO, any of its
subsidiaries or any directors, officers, agents or employees of 2-DO or any of
its subsidiaries has (i) used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity, (ii)
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns or
violated any provision of the FCPA, or (iii) made any other unlawful payment.
Section 3.21. Insider Interests. Except as set forth in Section
3.21 of the 2-DO Disclosure Schedule, no officer or director of 2-DO has any
interest in any material; property, real or personal, tangible or intangible,
including without limitation, any computer software or 2-DO Intellectual
Property Rights, used in or pertaining to the business of 2-DO or any
subsidiary, except for the ordinary rights of a stockholder or employee stock
option holder.
Section 3.22. Opinion of Financial Adviser. No advisers, as of the
date hereof, have delivered to the 2-DO Board a written opinion to the effect
that, as of such date, the Exchange ratio contemplated by the Share Exchange
is fair to the holders of 2-DO Shares.
Section 3.24. Disclosure. No representation or warranty of 2-DO in
this Agreement or any certificate, schedule, document or other instrument
furnished or to be furnished to MRZO pursuant hereto or in connection herewith
contains, as of the date of such representation, warranty or instrument, or
will contain any untrue statement of a material fact or, at the date thereof,
omits or will omit to state a material fact necessary to make any statement
herein or therein, in light of the circumstances under which such statement
is or will be made, not misleading.
25
Section 3.25. No Existing Discussions. As of the date hereof 2-DO
is not engaged, directly or indirectly, in any discussions or negotiations
with any other party with respect to any Third Party Acquisition (as defined
in Section 5.4).
Section 3.26. Material Contracts.
(a) 2-DO has delivered or otherwise made available to MRZO true,
correct and complete copies of all contracts and agreements (and all
amendments, modifications and supplements thereto and all side letters
to which 2-DO is a party affecting the obligations of any party there-
under) to which 2-DO or any of its subsidiaries is a party or by which
any of their properties or assets are bound that are, material to the
business, properties or assets of 2-DO and its subsidiaries taken as a
whole, including, without limitation, to the extent any of the following
are, individually or in the aggregate, material to the business,
properties or assets of 2-DO and its subsidiaries taken as a whole, all:
(i) employment, product design or development, personal services,
consulting, non-competition, severance, golden parachute or
indemnification contracts (including, without limitation, any contract
to which 2-DO is a party involving employees of 2-DO); (ii) licensing,
publishing, merchandising or distribution agreements; (iii) contracts
granting rights of first refusal or first negotiation; (iv) partnership
or joint venture agreements; (v) agreements for the acquisition, sale or
lease of material properties or assets or stock or otherwise (vi)
contracts or agreements with any Governmental Entity; and (vii) all
commitments and agreements to enter into any of the foregoing
(collectively, together with any such contracts entered into in
accordance with Section 5.2 hereof; the "2-DO Contracts"). Neither 2-DO
nor any of its subsidiaries is a party to or bound by any severance,
golden parachute or other agreement with any employee or consultant
pursuant to which such person would be entitled to receive any
additional compensation or an accelerated payment of compensation as a
result of the consummation of the transactions contemplated hereby.
(b) Each of the 2-DO Contracts is valid and enforceable in
accordance with its terms, and there is no default under any 2-DO Contract so
listed either by 2-DO of, to the knowledge of 2-DO, by any other party
thereto, and no event has occurred that with the lapse of time or the
giving of notice or both would constitute a default there-under by 2-DO
or, to the knowledge of 2-DO, any other party, in any such case in which
such default or event could reasonably be expected to have a Material Adverse
Effect on 2-DO.
(c) No party to any such 2-DO Contract has given notice to 2-DO of
or made a claim against 2-DO with respect to any breach or default
there-under, in any such case in which such breach or default could reasonably
be expected to have a Material Adverse Effect on 2-DO.
ARTICLE 4
Covenants
Section 4.1 - Conduct of Business of MRZO. Except as contemplated
by this Agreement or as described in Section 4. of the MRZO Disclosure
Schedule, during the period from the date hereof to the Effective Time, MRZO
will conduct its operations in the ordinary course of business consistent with
past practice and, to the extent consistent therewith, with no less
diligence and effort than would be applied in the absence of this
Agreement, seek to preserve intact its current business organization, keep
26
available the service of its current officers and employees and preserve its
relationships with customers, suppliers and others having business
dealings with it to the end that goodwill and ongoing businesses shall
be unimpaired at the Effective Time Without limiting the generality of the
foregoing, except as otherwise expressly provided in this Agreement or as
described in Section 4.1 of the MRZO Disclosure Schedule, prior to the
Effective Time, MRZO will not, without the prior written consent of 2-DO:
(a) amend its Certificate of Incorporation or Bylaws (or other
similar governing instrument);
(b) amend the terms of any stock of any class or any other
securities (except bank loans) or equity equivalents;
(c) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock,
make any other actual, constructive or deemed distribution in respect of its
capital stock or otherwise make any payments to stockholders in their capacity
as such, or redeem or otherwise acquire any of its securities;
(d) adopt a plan of complete or partial liquidation, dissolution,
share Exchange, consolidation, restructuring, recapitalization or other
reorganization of MRZO (other than the Share Exchange);
(e) (i) incur or assume any long-term or short-term debt or issue
any debt securities except for borrowings or issuances of letters of credit
under existing lines of credit in the ordinary course of business; (ii)
assume, guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person
(iii) make any loans, advances or capital contributions to, or investments in,
any other person; (iv) pledge or otherwise encumber shares of capital stock of
MRZO; or (v) mortgage or pledge any of its material assets, tangible or
intangible, or create or suffer to exist any material Lien thereupon (other
than tax Liens for taxes not yet due);
(f) except as may be required by law, enter into, adopt or amend or
terminate any bonus, profit sharing, compensation, severance, termination,
stock option, stock appreciation right, restricted stock, performance unit,
stock equivalent, stock purchase agreement, pension, retirement, deferred
compensation, employment, severance or other employee benefit agreement,
trust, plan, fund or other arrangement for the benefit or welfare of any
director, officer or employee in any manner, or increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay
any benefit not required by any plan and arrangement as in effect as of the
date hereof (including, without limitation, the granting of stock appreciation
rights or performance units); provided, however, that this paragraph (f)
shall not prevent MRZO from (i) entering into employment agreements or
severance agreements with employees in the ordinary course of business and
consistent with past practice or (ii) increasing annual compensation and/or
providing for or amending bonus arrangements for employees for fiscal
2001 in the ordinary course of year-end compensation reviews consistent
with past practice and paying bonuses to employees for fiscal 2001 in amounts
previously disclosed to 2-DO (to the extent that such compensation increases
27
and new or amended bonus arrangements do not reset in a material increase in
benefits or compensation expense to MRZO);
(g) acquire, sell, lease or dispose of any assets in any single
transaction or series of related transactions (other than in the ordinary
course of business);
(h) except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
principles or practices used by it;
(i) revalue in, any material respect any of its assets including,
without limitation, writing down the value of inventory or writing-off notes
or accounts receivable other than in the ordinary course of business;
(j) (i) acquire (by share Exchange, consolidation, or acquisition
of stock or assets) any corporation, partnership or other business
organization or division thereof or any equity interest therein; (ii) enter
into any contract or agreement other than in tile ordinary course of business
consistent with past practice which would be material to MRZO; (iii)
authorize any new capital expenditure or expenditures which, individually is
in excess of $1,000 or, in the aggregate, are in excess of $5,000; provided,
however that none of the foregoing shall limit any capital expenditure
required pursuant to existing contracts;
(k) make any tax election or settle or compromise any income tax
liability material to MRZO;
(l) settle or compromise any pending or threatened suit, action or
claim which (i) relates to the transactions contemplated hereby or (ii) the
settlement or compromise of which could have a Material Adverse Effect on MRZO;
(m) commence any material research and development project or
terminate any material research and development project that is currently
ongoing, in either case, except pursuant to the terms of existing contracts or
in the ordinary course of business; or
(n) take, or agree in writing or otherwise to take, any of the
actions described in Sections 4.1(a) through 4.1(m) or any action which would
make any of the representations or warranties of, contained in this Agreement
untrue or incorrect.
Section 4.2. Conduct of Business of 2-DO. Except as contemplated by
this Agreement or as described in Section 4.2 of the 2-DO Disclosure Schedule
during the period from the date hereof to the Effective Time, 2-DO will
conduct its operations in the ordinary course of business consistent with
past practice and, to the extent consistent therewith,with no less diligence
and effort than would be applied in the absence of this Agreement, seek to
preserve intact its current business organization, keep available the service
of its current officers and employees and preserve its relationships with
customers, suppliers and others having business dealings with it to the end
that goodwill and ongoing businesses shall be unimpaired at the Effective
Time. Without limiting the generality of the foregoing, except as otherwise
expressly provide in this Agreement or as described in Section 4.2 of the
28
2-DO Disclosure Schedule, prior to the Effective Time, 2-DO will not, without
the prior written consent of:
(a) amend its Certificate of Incorporation or Bylaws (or other
similar governing instrument);
(b) authorize for issuance, issue, sell, deliver or agree or commit
to issue, sell or deliver (whether through the issuance or granting of
options, warrants, commitments, subscriptions, rights to purchase or
otherwise) any stock of any class or any other securities (except bank loans)
or equity equivalents (including, without limitation, any stock options or
stock appreciation rights;
(c) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock,
make any other actual, constructive or deemed distribution in respect of its
capital stock or otherwise make any payments to stockholders in their capacity
as such, or redeem or otherwise acquire any of its securities;
Cd) adopt a plan of complete or partial liquidation, dissolution,
share Exchange consolidation, restructuring, re-capitalization or other
reorganization of 2-DO (other than the Share Exchange);
(e) (i) incur or assume any long-term or short-term debt or issue
any debt securities except for borrowings or issuances of letters of credit
under existing lines of credit in the ordinary course of business (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person;
(iii) make any loans, advances or capital contributions to or investments in,
any other person; (iv) pledge or otherwise encumber shares of capital stock of
2-DO or its subsidiaries; or (v) mortgage or pledge any of its material assets,
tangible or intangible, or create or suffer to exist any material Lien
thereupon (other than tax Liens for taxes not yet due);
(f) except as may be required by law, enter into, adopt or amend or
terminate any bonus, profit sharing, compensation, severance, termination,
stock option, stock appreciation right, restricted stock, performance unit
stock equivalent, stock purchase agreement, pension, retirement, deferred
compensation, employment, severance or other employee benefit agreement,
trust, plan, fund or other arrangement for the benefit or welfare of any
director, officer or employee in any manner, or increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay
any benefit not required by any plan and arrangement as in effect as of the
date hereof (including, without limitation, the granting of stock appreciation
rights or performance units); provided, however, that this paragraph (f)
shall not prevent 2-DO or its subsidiaries from (i) entering into
employment agreements or severance agreements with employees in the ordinary
course of business and consistent with past practice or (ii) increasing
annual compensation and/or providing for or amending bonus arrangements
for employees for fiscal 2001 in the ordinary course of yearend compensation
reviews consistent with past practice and paying bonuses to employees for
fiscal 2001 in amounts previously disclosed to (to the extent that such
compensation increases and new or amended bonus arrangements do not result
in a material increase in, benefits or compensation expense to 2-DO);
29
(g) acquire, sell, lease or dispose of any assets in any single
transaction or series of related transactions other than in the ordinary
course of business;
(h) except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
principles or practices used by it;
(i) revalue in any material respect any of its assets, including,
without limitation, writing down the value of inventory of writing-off notes
or accounts receivable other than in the ordinary course of business;
(j) (i) acquire (by share Exchange, consolidation, or acquisition
of stock or assets) any corporation, partnership, or other business
organization or division thereof or any equity interest therein; (ii) enter
into any contract or agreement other than in, the ordinary course of business
consistent with past practice which would be material to 2-DO; (iii)
authorize any new capital expenditure or expenditures which, individually, is
in excess of $1,000 or, in the aggregate, are in excess of $5,000: provided,
however that none of the foregoing shall limit any capital expenditure
required pursuant to existing contracts;
(k) make any tax election or settle or compromise any income tax
liability material to 2-DO and its subsidiaries taken as a whole;
(l) settle or compromise any pending or threatened suit, action or
claim which (i) relates to the transactions contemplated hereby or (ii) the
settlement or compromise of which could have a Material Adverse Effect on,
2-DO;
(m) commence any material research and development project or
terminate any material research and development project that is currently
ongoing, in either case, except pursuant to the terms of existing contracts
or except in the ordinary course of business; or
(n) take, or agree in writing or otherwise to take, any of the
actions described in Sections 4.2(a) through 4.2(m) or any action which would
make any of the representations or warranties of the 2-DO contained in this
Agreement untrue or incorrect.
Section 4.3 Preparation of Proxy Statement. MRZO shall promptly
prepare and file with the SEC the Proxy Statement to be sent to its
stockholders.
Section 4.4 Other Potential Acquirers.
(a) 2-DO, its affiliates and. their respective officers, directors,
employees, representatives and agents shall immediately cease any existing
discussions or negotiations, if any, with any parties conducted heretofore
with respect to any Third Party Acquisition
Section 4.5. Meetings of Stockholders. Each of 2-DO and MRZO shall
take all action necessary, in accordance with the respective General
Corporation Law of its respective state, and its respective certificate of
30
incorporation and bylaws, to duly call, give notice of, convene and hold a
meeting of its stockholders as promptly as practicable, to consider and vote
upon the adoption and approval of this Agreement and the transactions
contemplated hereby. The stockholder votes required for the adoption and
approval of the transactions contemplated by this Agreement shall be the vote
required by the NGCL and its charter and bylaws, in the case of MRZO and the
General Corporation Law of its respective state, and its charter and bylaws,
in the case of 2-DO. MRZO and 2-DO will, through their respective Boards of
Directors, recommend to their respective stockholders approval of such matters.
Section 4.6. OTC:BB Listing. The parties shall use all reasonable
efforts to cause the MRZO Shares, subject to Rule 144, to be traded on the
Over-the-Counter Bulletin Board (OTC:BB).
Section. 4.7. Access to Information
(a) Between the date hereof and the Effective Time, MRZO will give
2-DO and its authorized representatives, and 2-DO will give MRZO and its
authorized representatives, reasonable access to all employees, plants,
offices, warehouses and other facilities and to all books and records of
itself and its subsidiaries, will permit the other party to make such
inspections as such party may reasonably require and will cause its
officers and those of its subsidiaries to furnish the other party with such
financial and operating data and other information with respect to the
business and properties of itself and its subsidiaries as the other party may
from time to time reasonably request.
(b) Between the date hereof and the Effective Time, MRZO shall
furnish to 2-DO, and 2-DO will furnish to MRZO, within 25 business days after
the end of each quarter, quarterly statements prepared by such party in
conformity with its past practices) as of the last day of the period then
ended.
(c) Each of the parties hereto will hold and will cause its
consultants and advisers to hold in confidence all documents and information
furnished to it in connection with the transactions contemplated by this
Agreement.
Section 4.8. Additional Agreements. Reasonable Efforts. Subject to
the terms and conditions herein provided, each of the parties hereto agrees
to use all reasonable efforts to take, or cause to be taken, all action, and
to do, or cause to be done, all things reasonably necessary,
proper or advisable under applicable laws and regulations to consummate
and make effective the transactions contemplated by this Agreement, including,
without limitation, (i) cooperating in the preparation and filing of the Proxy
Statement and the 8-K, any filings that may be required under the HSR
Act, and any amendments to any thereof; (ii) obtaining consents of al
third parties and Governmental Entities necessary, proper or advisable
for the consummation of the transactions contemplated by this Agreement;
(iii) contesting any legal proceeding relating to the Share Exchange and
(iv) the execution of any additional instruments necessary to consummate
the transactions contemplated hereby. Subject to the terms and
conditions of this Agreement, 2-DO and TKREN agree to use all reasonable
efforts to cause the Effective Time to occur as soon as practicable
31
after the stockholder votes with respect to the Share Exchange. In case
at any time after the Effective Time any further action is necessary to
carry out the purposes of this Agreement, the proper officers and
directors of each party hereto shall take all such necessary action.
Section 4.9. Employee Benefits Stock Option and Employee Purchase
Plans. It is the parties' present intent to provide after the Effective Time
to employees of 2-DO employee benefit plans (other than stock option or other
plans involving the potential issuance of securities of MRZO) which, in the
aggregate, are not less favorable than those currently provided by 2-DO.
Notwithstanding the foregoing, nothing contained herein shall be construed as
requiring the parties to continue any specific employee benefit plans.
Section 4.10. Public Announcements. 2-DO, and MRZO will consult
with one another before issuing any press release or otherwise making any
public statements with respect to the transactions contemplated by this
Agreement, including, without limitation, the Share Exchange, and
shall not issue any such press release or make any such public statement
prior to such consultation, except as may be required by applicable law or by
obligations pursuant to any listing agreement with the NASD Over-the-Counter
Bulletin Board (OTC:BB) as determined by 2-DO or MRZO.
Section 4.11. Indemnification.
(a) To the extent, if any, not provided by an existing right under
one of the parties, directors and officers liability insurance policies, from
and after the Effective Time, MRZO shall, to the fullest extent permitted by
applicable law, indemnify, defend and hold harmless each person who is now, or
has been at any time prior to the date hereof, or who becomes prior to the
Effective Time, a director, officer or employee of the parties hereto or any
subsidiary thereof (each an "Indemnified Party" and, collectively, the
"Indemnified Parties") against all losses, expenses (including reasonable
attorneys' fees and expenses), claims, damages or liabilities or,
subject to the proviso of the next succeeding sentence, amounts paid in
settlement arising out of actions or omissions occurring at or prior to the
Effective Time and whether asserted or claimed prior to, at or after the
Effective Time) that are in whole or in part (i) based on, or arising out of
the fact that such person is or was a director, officer or employee of such
party or a subsidiary of such party or (ii) based on, arising out of or
pertaining to the transactions contemplated by this Agreement. In the event of
any such loss expense, claim, damage or liability (whether or not arising
before the Effective Time), (i) MRZO shall pay the reasonable fees and
expenses of counsel selected by the indemnified Parties, which counsel shall
be reasonably satisfactory to MRZO, promptly after statements therefore are
received and otherwise advance to such Indemnified Party upon request
reimbursement of documented expenses reasonably incurred, in either case
to the extent not prohibited by the NGCL or its certificate of
incorporation or bylaws, (ii) MRZO will cooperate in the defense of any
such matter and (iii) any determination required to be made with respect
to whether an Indemnified Party's conduct complies with the standards
set forth under the NGCL and MRZO's certificate of incorporation or
bylaws shall be made by independent counsel mutually acceptable to MRZO
and the Indemnified Party; provided, however, that MRZO shall not be
liable for any settlement effected without its written consent (which
consent shall not be unreasonably withheld). The Indemnified Parties as
a group may retain only one law firm with respect to each related matter
except to the extent there is, in the opinion of counsel to an
32
Indemnified Party, under applicable standards of professional conduct,
or conflict on any significant issue between positions of any two or
more Indemnified Parties.
(b) In the event MRZO or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or Acquiring corporation or entity or such consolidation or share
Exchange or (ii) transfers all or substantially all of its properties and
assets to any person, then and in either such case, proper provision shall be
made so that the successors and assigns of MRZO shall assume the obligations
set forth in this Section 4.11.
(c) To the fullest extent permitted by law, from and after the
Effective Time, all rights to indemnification now existing in favor of the
employees, agents, directors or officers of MRZO and 2-DO and their
subsidiaries with respect to their activities as such prior to the Effective
Time, as provided in MRZO's and 2-DO's certificate of incorporation or
bylaws, in effect on the date thereof or otherwise in effect on the date
hereof, shall survive the Share Exchange and shall continue in full
force and effect for a period of not less than six years from the
Effective Time.
(d) The provisions of this Section 4.11 are intended to be for the
benefit of and shall be enforceable by, each indemnified Party, his or her
heirs and his or her representatives.
Section 4.12. Notification of Certain Matters. The parties hereto
shall give prompt notice to the other parties, of (i) the occurrence or
nonoccurrence of any event the occurrence or nonoccurrence of which would be
likely to cause any representation or warranty contained in, this Agreement
to be untrue or inaccurate in any material respect at or prior to the
Effective Time, (ii) any material failure of such party to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied
by it hereunder, (iii) any notice of, or other communication relating to, a
default or event which, with notice or lapse of time or both, would become a
default, received by such party or any of its subsidiaries subsequent to the
date of this Agreement and prior to the Effective Time, under any contract or
agreement material to the financial condition, properties, businesses or
results of operations of such party and its subsidiaries taken other
communication from any third party alleging that the consent of such
third party is or may as a whole to which such party or any of its
subsidiaries is a party or is subject, (iv) any notice or be required in
connection with the transactions contemplated by this Agreement, or (v)
any material adverse change in their respective financial condition,
properties, businesses, results of operations or prospects taken as a
whole, other than changes resulting from general economic conditions;
provided, however, that the delivery of any notice pursuant to this
Section 4.12 shall not cure such breach or non-compliance or limit or
otherwise affect the remedies available hereunder to the party receiving
such notice.
ARTICLE 5
Conditions to Consummation of the Share Exchange
Section 5 1 Conditions to Each Party's Obligations to Effect the
Share Exchange. The respective obligations of each party hereto to effect the
Share Exchange are subject to the satisfaction at or prior to the Effective
Time of the following conditions:
33
(a) this Agreement shall have been approved and adopted by the
requisite vote of the stockholders of MRZO and 2-DO;
(b) this Agreement shall have been approved and adopted by the
Board of Directors of MRZO and 2-DO;
(c) no statute, rule, regulation, executive order, decree, ruling
or injunction shall have been enacted, entered, promulgated or enforced by
any United States court or United States governmental authority which
prohibits, restrains, enjoins or restricts the consummation of the Share
Exchange;
(d) any waiting period applicable to the Share Exchange under the
HSR Act shall have terminated or expired, and any other governmental or
regulatory notices or approvals required with respect to the transactions
contemplated hereby shall have been either filed or received; and
Section 5.2 Conditions to the Obligations of MRZO. The obligation
of MRZO to effect the Share Exchange is subject to the satisfaction at or
prior to the Effective Time of the following conditions:
(a) the representations of 2-DO contained in this Agreement or in
any other document delivered pursuant hereto shall be true and correct
(except to the extent that the breach thereof would not have a Material
Adverse Effect on 2-DO) at and as of the Effective Time with the same effect
as if made at and as of the Effective Time (except to the extent such
representations specifically related to an earlier date, in which case such
representations shall be true and correct as of such earlier date), and at
the Closing 2-DO shall have delivered to MRZO a certificate to that effect;
(b) each of the covenants and obligations of 2-DO to be performed
at or before the Effective Time pursuant to the terms of this Agreement shall
have been duly performed in all material respects at or before the Effective
Time and at the Closing 2-DO shall have delivered to MRZO a certificate to
that effect;
(c) 2-DO shall have obtained the consent or approval of each person
whose consent or approval shall be required in order to permit the Share
Exchange as relates to any obligation, right or interest of 2-DO under any
loan or credit agreement, note, mortgage, indenture, lease or other
agreement or instrument, except those for which failure to obtain such
consents and approvals would not, in the reasonable opinion of MRZO,
individually or in the aggregate, have a Material Adverse Effect on 2-DO;
(d) there shall have been no events, changes or effects with
respect to 2-DO or its subsidiaries having or which could reasonably be
expected to have a Material Adverse Effect on 2-DO; and
(e) The Board of Directors of 2-DO shall recommend to its shareholders
that it adopt the following resolution:
34
For a period of twenty four (24) months after the effective
date of the Share Exchange between 2-DO and MRZO, any shareholder
receiving MRZO shares shall not cause the shares owned by former 2-DO
shareholders to vote for any action which would cause a "reverse-split"
of the company's shares, or which would result in the dilution of shares
or voting percentages of all of the outstanding shares of MRZO issued on
the effective date of the Share Exchange.
(f) The Shareholders of 2-DO shall adopt the following resolution:
For a period of twenty four (24) months after the effective
date of the Share Exchange between 2-DO and MRZO, any shareholder
receiving MRZO shares shall not cause the shares owned by former 2-DO
shareholders to vote for any action which would cause a "reverse-split"
of the company's shares, or which would result in the dilution of shares
or voting percentages of all of the outstanding shares of MRZO issued on
the effective date of the Share Exchange.
Section 5.3 Conditions to the Obligations of 2-DO. The respective
obligations of 2-DO to effect the Share Exchange are subject to the
satisfaction at or prior to the Effective Time of the following conditions:
(a) the representations of MRZO contained in this Agreement or in
any other document delivered pursuant hereto shall be true and correct
(except to the extent that the breach thereof would not have a Material
Adverse Effect on MRZO) at and as of the Effective Time with the same effect
as if made at and as of the Effective Time (except to the extent such
representations specifically related to an earlier date, in which case such
representations shall be true and correct as of such earlier date), and at the
Closing MRZO shall have delivered to 2-DO a certificate to that effect;
(b) each of the covenants and obligations of MRZO to be performed
at or before the Effective Time pursuant to the terms of this Agreement shall
have been duly performed in all material respects at or before the Effective
Time and at the Closing MRZO shall have delivered to 2-DO a certificate to
that effect; and
(c) there shall have been no events, changes or effects with respect to
MRZO having or which could reasonably be expected to have a Material Adverse
Effect on MRZO.
ARTICLE 6
Termination; Amendment; Waiver
Section 6.1. Termination. This Agreement may be terminated and the
Share Exchange may be abandoned at any time prior to the Effective Time,
whether before or after approval and adoption of this Agreement by MRZO's or
2-DO's stockholders:
(a) by mutual written consent of MRZO and 2-DO;
35
(b) by 2-DO or MRZO if (i) any court of competent jurisdiction in
the United States or other United States Governmental Entity shall have
issued a final order, decree or ruling or taken any other final action
restraining, enjoining or otherwise prohibiting the Share Exchange and such
order, decree, ruling or other action is or shall have become nonappealable
or (ii) the Share Exchange has not been consummated by April 1, 2001; provided,
however, that no party may terminate this Agreement pursuant to this
clause (ii) if such party's failure to fulfill any of its obligations
under this Agreement shall have been the reason that the Effective Time
shall not have occurred on or before said date,
(c) by MRZO if (i) there shall have been a breach of any representation
or warranty on the part of 2-DO set forth in this Agreement, or if any
representation or warranty of 2-DO shall have become untrue, in either case
such that the conditions set forth in Section 5.2(a) would be incapable of
being satisfied by June 15, 2001 (or as otherwise extended), (ii) there shall
have been a breach by 2-DO of any of their respective covenants or agreements
hereunder having a Material Adverse Effect on 2-DO or materially adversely
affecting (or materially delaying) the consummation of the Share Exchange,
and 2-DO, as the case may be, has not cured such breach within 20 business
days after notice by MRZO thereof, provided that MRZO has not breached any
of its obligations hereunder, (iii) MRZO shall have convened a meeting of its
stockholders to vote upon the Share Exchange and shall have failed to obtain
the requisite vote of its stockholders; or (iv) MRZO shall have convened a
meeting of its Board of Directors to vote upon the Share Exchange and shall
have failed to obtain the requisite vote;
(d) by 2-DO if (i) there shall have been a breach of any
representation or warranty on the part of MRZO set forth in this Agreement,
or if any representation or warranty of MRZO shall have become untrue, in
either case such that the conditions set forth in Section 5.3(a) would be
incapable of being satisfied by June 15, 2001 (or as otherwise extended),
(ii) there shall have been a breach by MRZO of its covenants or agreements
hereunder having a Material Adverse Effect on MRZO or materially adversely
affecting (or materially, delaying) the consummation of the Share Exchange,
and MRZO, as the case may be, has not cured such breach within twenty business
days after notice by 2-DO thereof, provided that 2-DO has not breached any of
its obligations hereunder, (iii) the MRZO Board shall have recommended to
MRZO's stockholders a Superior Proposal, (iv) the MRZO Board shall have
withdrawn, modified or changed its approval or recommendation of this
Agreement or the Share Exchange or shall have failed to call, give notice of,
convene or hold a stockholders' meeting to vote upon the Share Exchange,
or shall have adopted any resolution to effect any of the foregoing, (v) 2-DO
shall have convened a meeting of its stockholders to vote upon the Share
Exchange and shall have failed to obtain the requisite vote of its
stockholders or (vi) MRZO shall have convened a meeting of its stockholders to
vote upon the Share Exchange and shall have failed to obtain the requisite
vote of its stockholders.
Section 6.2. Effect of Termination. In the event of the
termination and abandonment of this Agreement pursuant to Section 6.1, this
Agreement shall forthwith became void and have no effect, without any
liability on the part of any party hereto or its affiliates, directors, owners
or stockholders, other than the provisions of this Section 6.2 and
Sections 4.7(c) and 6.3 hereof Nothing contained in this Section 6.2 shall
relieve any party from liability for any breach of this Agreement.
36
Section 6.3. Fees and Expenses. Except as specifically provided
in this Section 6.3, each party shall bear its own expenses in connection with
this Agreement and the transactions contemplated hereby.
Section 6.4. Amendment. This Agreement may he amended by action
taken by MRZO and 2-DO at any time before or after approval of the Share
Exchange by the stockholders of MRZO and 2-DO (if required by applicable law)
but, after any such approval, no amendment shall be made which requires the
approval of such stockholders under applicable law without such approval.
This Agreement may not be amended except by an instrument in writing
signed on behalf of the parties hereto.
Section 6.5. Extension: Waiver. At any time prior to the Effective
Time, each party hereto may (i) extend the time for the performance of any of
the obligations or other acts of any other party, (ii) waive any inaccuracies
in the representations and warranties of any other party contained herein or
in any document, certificate or writing delivered pursuant hereto or (iii)
waive compliance by any other party with any of the agreements or conditions
contained herein. Any agreement on the part of any party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any party hereto to
assert any of its rights hereunder shall not constitute a waiver of such
rights.
ARTICLE 7
Miscellaneous
Section 7.1. Nonsurvival of Representations and Warranties. The
representations and warranties made herein shall not survive beyond the
Effective Time or a termination of this Agreement. This Section 7.1 shall
not limit any covenant or agreement of the parties hereto which by its terms
requires performance after the Effective Time.
Section 7.2. Entire Agreement; Assignment. This Agreement (a)
constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all other prior agreements and
understandings both written and oral, between the parties with respect to the
subject matter hereof and (b) shall not be assigned by operation of law or
otherwise.
Section 7.3. Validity. If any provision of this Agreement, or
the application thereof to any person or circumstance, is held invalid
or unenforceable, the remainder of this Agreement and the application of
such provision to other persons or circumstances, shall not be affected
thereby, and to such end, the provisions of this Agreement are agreed to
be severable.
Section 7.4. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given
(and shall be deemed to have been duly given upon receipt) by delivery in
person, by facsimile or by registered or certified mail (postage
prepaid, return receipt requested), to each other party as follows:
37
If to 2-DO:
2DOTrade
Xxxxxxxxxx Xxxxx, President
00 Xxxxx Xxxxx
Xxxxx Xxxxxx
Xxxxxx Xxxx Xxxxxx XX
XX0 68D
if to MRZO:
MORANZO, INC.
Xxxxxx Xxxxxxxx, President
00000 Xxxxx Xxxx
Xxxxx, Xxxxxxxxxx 00000
And:
X. Xxx Xxxxxxxx, Esq.
0000 Xxxxxx Xxxx Xxxx. Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxx 00000
(000) 000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth
above.
Section 7.5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada, without regard
to the principles of conflicts of law thereof.
Section 7.6. Descriptive Headings. The descriptive headings herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
Section 7.7. Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto and its successors
and permitted assigns, and except as provided in Sections 4.9 and 4.11,
nothing in this Agreement, express or implied, is intended to or shall
confer upon any other person any rights, benefits or remedies of any
nature whatsoever under or by reason of this Agreement.
Section 7.3. Certain Definitions. For the purposes of this Agreement,
the term.:
(a) "affiliate" means (except as otherwise provided in Sections
2.1.9, 3.19 and 4.13) a person that directly or indirectly, through one or
more intermediaries, controls, is controlled by, or is under common control
with, the first mentioned person;
38
(b) "business day" means any day other than a day on which Nasdaq
is closed;
(c) "capital stock" means common stock, preferred stock,
partnership interests, limited liability company interests or other ownership
interests entitling the holder thereof to vote with respect to matters
involving the issuer thereof.;
(d) "knowledge" or "known means, with respect to any matter in
question, if an executive officer of MRZO or 2-DO or its subsidiaries, as the
case may be, has actual knowledge of such matter;
(e) "person" means an individual, corporation, partnership, limited
liability company, association, trust, unincorporated organization or other
legal entity; and
(f) "subsidiary" or "subsidiaries" of MRZO, 2-DO or any other
person, means any corporation, partnership, limited liability company,
association, trust, unincorporated association or other legal entity of which
MRZO, 2-DO or any such other person, as the case may be (either alone or
through or together with any other subsidiary), owns, directly
or indirectly, 50% or more of the capital stock, the holders of which
are generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other legal
entity.
Section 7.9. Personal Liability. This Agreement shall not create or
be deemed to create or permit any personal liability or obligation on the part
of any direct or indirect stockholder of MRZO, 2-DO or any officer, director,
employee, agent, representative or investor of any party hereto.
Section 7.10. Specific Performance. The parties hereby acknowledge
and agree that the failure of any party to perform its agreements and
covenants hereunder, including its failure to take all actions as are
necessary on its part to the consummation of the Merge, will cause
irreparable injury to the other parties for which damages, even if
available, will not be an adequate remedy. Accordingly, each party hereby
consents to the issuance of injunctive relief by any court of competent
jurisdiction to compel performance of such party's obligations and to the
granting by any court of the remedy of specific performance of its obligations
hereunder; provided, however, that, if a party hereto is entitled to receive
any payment or reimbursement of expenses pursuant to Sections 6.3(a), (b) or
(c), it shall not be entitled to specific performance to compel the
consummation of the Share Exchange.
Section 7.11. Construction. MRZO and 2-DO have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity
or question of intent or interpretation arises, the Agreement shall be
construed as if drafted jointly by the parties and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
Section 7.12. Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an original, but a
which shall constitute one and the same agreement.
39
In Witness Whereof each of the parties has caused this Agreement to
be duly executed. on its behalf as of the day and year first above written.
MORANZO, INC.
By: ______________________
Title: President
2DoTrade
By:/s/ Xxxxxxxxxx Xxxxx
----------------------
Name: Xxxxxxxxxx Xxxxx
Title: President
40
MRZO DISCLOSURE SCHEDULE
Schedule 2.1 Organization See Amended Articles/Bylaws/Minutes
Schedule 2.6 Consents & Approvals None Required
Schedule 2.7 No Default Not Applicable
Schedule 2.8 No Undisclosed Liability None Exist
Schedule 2.9 Litigation None Exist
Schedule 2.10 Compliance with Not Applicable - full disclosed
Applicable Law in 1OKSB
Schedule 2.11 Employee Benefit Plans Section 2.11(a) Not Applicable
- None Exist
Section 2.11(b) No Benefit Plan Exist
Section 2.11( c) No Options Exist
Section 2.E 1(d) No Agreements Exist
Schedule 2.12 Environmental Laws and Regs Not Applicable
Schedule 2.13 Tax Matters None Exist
Schedule 2.14 Title to Property None Exist
Schedule 2.15 Intellectual Property None Exist
Schedule 2.16 Insurance None Exist
Schedule 2.17 Vote Required See Shareholder Meeting Certificate
Schedule 2.13 Tax Treatment Not Applicable
Schedule 2.19 Affiliates Xxxxxx Xxxxxxxx
Xxx Xxxxxx
Schedule 2.20 Certain Business Practices None Exist
Schedule 2.21 Insider Interest None Exist
Schedule 2.22 Opinion of Financial Adviser Waived-None Exist
Schedule 2.23 Broker None Exist
41
Schedule 4.1 Conduct of Business See Amended & Restated Articles
2-DO DISCLOSURE SCHEDULE
Schedule 3.2(b) Subsidiary Stock None Exist
Schedule 3.2(c) Capital Stock Rights None Exist other than as in Articles
Schedule 3.2(d) Securities conversions None Exist
Schedule 3.2 (f) Subsidiaries None Exist
Schedule 3.6 Consents & Approvals None Required
Schedule 3.7 No Default Not Applicable
Schedule 3.8 No Undisclosed Liability None Exist
Schedule 3.9 Litigation None Exist
Schedule 3.10 Compliance with Applicable Law Not Applicable
Schedule 3.11 Employee Benefit Plans Section 3.11(c) No Options Exist
Section 3.11(c) No Agreements Exist
Schedule 3.12 Environmental Laws and Regs Not Applicable
Schedule 3.13 Tax Matters None Exist
Schedule 3.14 Title to Property None Exist
Schedule 3.15(b) Intellectual Property None Exist
Schedule 3.16 Insurance None Exist
Schedule 3.17 Vote Required See Shareholder Meeting Certificate
Schedule 3.18 Tax Treatment Not Applicable
Schedule 3.19 Affiliates ___________________
Schedule 3.20 Certain Business Practices None Exist
Schedule 3.21 Insider Interest None Exist
Schedule 3.22 Opinion of Financial Adviser Waived - None Exist
42
Schedule 2.23 Broker None Exist
Schedule 4.2 Conduct of Business See Amended & Restated Articles
43
