AGREEMENT AND PLAN
OF
REORGANIZATION
DATED November 30, 2000,
AMONG
iEXALT, INC.,
GCN COMBINATION CORP.
AND
GLOBAL CHRISTIAN NETWORK, INC.
AND
ITS PRINCIPAL SHAREHOLDERS
TABLE OF CONTENTS
ARTICLE I 6
DEFINITIONS AND INTERPRETATION.........................................6
Definitions..............................................................6
Interpretation...........................................................9
Knowledge................................................................9
ARTICLE II 9
THE MERGER.............................................................9
the Merger...............................................................9
Merger Consideration.....................................................9
Closing and Effective Time of the Merger................................10
ARTICLE III 10
REPRESENTATIONS AND WARRANTIES OF iEXALT PARTIES......................10
Organization of iExalt Parties..........................................10
Authority Relative to This Agreement....................................10
No Violations...........................................................10
Consents and Approval...................................................10
iExalt Capitalization...................................................11
iExalt Subsidiaries.....................................................11
iExalt Financial Statements.............................................11
Absence of Certain Changes..............................................11
Litigation..............................................................12
iExalt Information Statement............................................12
Brokers.................................................................12
Liabilities to be Paid On Closing.......................................12
ARTICLE IV 12
REPRESENTATIONS AND WARRANTIES OF GCN PARTIES.........................12
Organization of GCN.....................................................12
Authority Relative to This Agreement....................................12
No Violations...........................................................12
Consents and Approval...................................................13
GCN Capitalization......................................................13
No Subsidiaries.........................................................13
GCN Financial Statements................................................13
Absence of Certain Changes..............................................13
No Undisclosed Liabilities..............................................14
GCN Properties..........................................................14
Taxes and Tax Returns...................................................14
Litigation..............................................................15
Environmental Matters...................................................15
Employee Benefit Plans..................................................16
Material Contracts......................................................17
2
Governmental Licenses and Permits: Compliance With Law~.................17
Intellectual Property...................................................17
Labor Matters...........................................................18
Transactions With Affiliates:...........................................18
GCN Information Statement...............................................18
Brokers.................................................................18
ARTICLE V 18
REPRESENTATIONS AND AGREEMENTS OF THE GCN PRINCIPAL SHAREHOLDERS......18
Ownership and Status of GCN Shares......................................18
Power of the GCN Principal Shareholder..................................18
Approval of Merger......................................................18
No Conflicts............................................................19
No Litigation...........................................................19
Preemptive and Other Rights; Waiver.....................................19
Control of Related Business.............................................19
Investment Representations..............................................19
ARTICLE VI 20
iEXALT COVENANTS PENDING CLOSING......................................20
Notice of Certain Events................................................20
Access and Information..................................................20
Confidentiality.........................................................20
Consummation of Merger..................................................21
ARTICLE VII 21
COVENANTS OF GCN PENDING CLOSING......................................21
Conduct of Business.....................................................21
Forbearance by GCN......................................................21
Access and Information..................................................22
Confidentiality.........................................................22
GCN Shareholders' Meeting...............................................22
Wineroth Claims.........................................................22
Disposition of Subsidiaries.............................................23
Consummation of Merger..................................................23
ARTICLE VIII 23
MUTUAL CONDITIONS.....................................................23
No Adverse Proceedings..................................................23
GCN Shareholder Approval................................................23
ARTICLE IX 23
CONDITIONS TO OBLIGATIONS OF iEXALT PARTIES...........................23
Representations True At Closing.........................................23
No Adverse Changes......................................................23
Opinion of GCN Counsel..................................................23
Consents................................................................23
3
Resignation of Officers and Directors...................................23
Employment Agreements...................................................23
Releases................................................................24
GCN Shareholder Investment Agreements...................................24
No Dissenters...........................................................24
Non-foreign Status Tax Certificate......................................24
Wineroth Matters........................................................24
Disposition of Subsidiaries.............................................24
Other Documents.........................................................24
ARTICLE X 24
CONDITIONS TO GCN PARTIES OBLIGATIONS.................................24
iExalt Representations True At Closing..................................24
No Adverse iEXALT Changes...............................................24
Opinion of iExalt's Counsel.............................................24
Employment Agreements...................................................25
Other Documents.........................................................25
ARTICLE XI 25
ADDITIONAL AGREEMENTS.................................................25
Agreement as to Payment of GCN Back Salaries............................25
Consents and Approvals..................................................25
Publicity...............................................................25
Expenses................................................................25
Conveyance Taxes........................................................25
Rule 144 Reports........................................................25
Disputes................................................................26
ARTICLE XII 26
NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES.................26
Nature of Statements....................................................26
Survival of Representations End Warranties..............................26
ARTICLE XIII 26
INDEMNIFICATION.......................................................26
Indemnification Regarding Article IV Representations. Warranties
and GCN Covenant.......................................................26
Indemnification Regarding Article V Representations and Warranties
and GCN Shareholder Covenants..........................................27
Indemnification by The iExalt Parties...................................27
Limitation On Indemnification Claims....................................27
Requests for Indemnification............................................27
ARTICLE XIV 28
AMENDMENT AND TERMINATION.............................................28
Amendment...............................................................28
Waiver..................................................................28
Termination.............................................................28
Consequences of Termination.............................................28
4
ARTICLE XV 29
GENERAL PROVISIONS....................................................29
Tax Representations.....................................................29
Non-business Days.......................................................29
iExalt Shareholder Consent..............................................29
GCN Waiver of Share Purchase Rights.....................................29
Notices.................................................................29
Entire Agreement........................................................30
Assignment; Binding Effect..............................................30
Counterparts............................................................30
Governing Law: Jurisdiction.............................................30
Severability of Provisions..............................................30
Specific Performance....................................................30
Joint Drafting..........................................................30
Captions................................................................30
No Third-party Beneficiaries............................................30
Arbitration.............................................................30
5
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (this "AGREEMENT") dated as of
November 30, 2000, among iExalt, Inc., a Nevada corporation ("iEXALT"), and GCN
Combination Corp., a Nevada corporation and a wholly owned subsidiary of iExalt
("MERGER SUB"), both of which are together referred to in this Agreement as the
"iEXALT PARTIES, " and Global Christian Network, Inc., a Nevada corporation
("GCN"), and the undersigned shareholders of GCN (the "PRINCIPAL GCN
SHAREHOLDERS") who collectively own, at the date of this Agreement, at least a
majority of GCN's issued and outstanding common stock and who, collectively with
GCN, are referred to in this Agreement as the "GCN PARTIES";
WITNESSETH
WHEREAS, the parties to this Agreement (the "PARTIES") wish to effect a business
combination in which Merger Sub will merge into GCN in a merger (the "MERGER")
TO be consummated under the General Corporation Law of Nevada, as amended (the
"NGCL"), Chapter 92A of the Nevada Revised Statutes, as amended ("N.R.S.") and a
Plan of Merger in the form attached as Annex A to this Agreement (the "PLAN OF
MERGER"); and
WHEREAS, the parties hereto intend the Merger to qualify as a
reorganization within the meaning of Section 368(a)(2)(E) of the Internal
Revenue Code of 1986, as amended.
NOW, THEREFORE, the Parties agree that:
ARTICLE I
DEFINITIONS AND INTERPRETATION
DEFINITIONS.
In this Agreement:
"AFFILIATE" means a Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with
another Person with the terms "control" and "controlled" meaning for purposes of
this definition, the power to direct the management and policies of a Person,
directly or indirectly, whether through the ownership of voting securities or
partnership or other ownership interests, or by contract or otherwise.
"BUSINESS DAY" means a day other than Saturday, Sunday or any day on which banks
located in Houston, Texas are authorized or obligated to close.
"CHARTER DOCUMENTS" mean (i) in the case of any Person which is a corporation,
its articles or certificate of incorporation and bylaws, and each certificate or
other document setting forth the designation, amount and relative rights,
limitations and preferences of any class or series of the corporation's capital
stock, (ii) in the case of any Person which is a partnership, its partnership
agreement and, if it is a limited partnership, its certificate of limited
partnership, and (iii) in the case of any Person which is a limited liability
company, ITS articles or certificate of organization and ITS regulations or
limited liability company agreement.
"CLOSING" has the meaning specified in Section 2.4.
"CLOSING DATE" means (i) the fifth Business Day immediately following the
earliest date upon or by which all conditions to the respective obligations of
the Parties set forth in Articles VIII, IX and X shall have been satisfied or
waived, or (ii) such other date as iExalt and GCN may agree.
"CODE" means the United States Internal Revenue Code of 1986, as amended.
"DAMAGES" mean all obligations, claims, liabilities, damages, penalties,
deficiencies, losses, investigations, proceedings, judgments, fines, and
reasonable costs and expenses (including reasonable costs and expenses incurred
in connection with the performance of obligations, interest, bonding and court
costs and attorneys', accountants', engineers', consultants' and investigators'
fees and disbursements) and disbursements incurred in connection with any
investigation or defense of any of the foregoing.
"EFFECTIVE TIME" means the time and date when the Merger become effective under
the Plan of Merger.
"ENVIRONMENTAL CLAIM" means any claim by a Person alleging or imposing actual or
potential liability (including potential liability for any investigatory cost,
containment cost, control cost, prevention cost, remediation cost, cleanup cost,
governmental response cost, natural resources damage, property damage, personal
injury, or penalty) arising out of, based on, resulting from or relating to (i)
the presence, storage, transport, disposal, use, discharge, release or
threatened release of any Hazardous Substance at any location, whether or not
owned by the Person against which the claim is made, or (ii) circumstances
forming the basis for any liability under, or any violation or alleged violation
of, any Environmental Law.
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"ENVIRONMENTAL LAWS" mean all applicable U.S. federal, foreign, state, local end
other Laws, including common Laws and administrative or judicial interpretations
of those Laws by any Governmental Entity, relating to pollution or the
protection of human health and safety from the effects of pollution or the
environment (which includes its ambient air, surface water, ground water, land
surface and subsurface strata), including Laws relating to emissions,
discharges, releases or threatened releases of Hazardous Substances, or
otherwise relating to the manufacture, processing, distribution, use, existence,
treatment, storage, disposal, transport, recycling, reporting or handling of
Hazardous Substances, but not including zoning and land use Laws.
"ENVIRONMENTAL PERMITS" mean all permits, licenses, registrations,
certifications, exemptions, approvals and other authorizations of or by any
Governmental Entity required under any Environmental Law for GCN to conduct its
operations as presently conducted.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
"ERISA AFFILIATE" means, with respect to any Person, any trade or business,
whether or not incorporated, which together with that Person would be deemed a
single employer within the meaning of Section 4001 of ERISA or Section 414 of
the Code.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated under that Act.
"GAAP" means United States generally accepted accounting principles consistently
applied throughout the specified period and, if applicable, the immediately
preceding comparable period.
"GCN COMMON STOCK" means the Common Stock, $0.01 par value per share, of GCN.
"GCN COMMON STOCK PURCHASE AGREEMENTS" means any and all of the Common Stock
Purchase Agreements entered into by GCN with any GCN Shareholder with respect to
their investment in GCN capital stock.
"GCN DISCLOSURE SCHEDULE" means the Disclosure Schedule signed for
identification purposes only by the President of GCN, which GCN has delivered
to, and which has been reviewed and accepted by, the iExalt Parties on or before
the date of this Agreement, and which contains information relevant to the
representations and warranties made by the GCN Parties in Articles IV and V.
"GCN FINANCIAL STATEMENTS" has the meaning specified in Section 4.7.
"GCN >35,000 SHAREHOLDER" means any GCN Shareholder who owns of record,
immediately prior to the Effective Time, 35,000 shares or more of GCN's then
outstanding GCN Common Stock.
"GCN INFORMATION STATEMENT" means the GCN Information Statement dated as of
__________, 2000, and prepared and provided by GCN to each of the GCN
Shareholders determined as of the GCN Record Date.
"GCN MINORITY SHAREHOLDERS" means any GCN Shareholder immediately prior to the
Effective Time who is not a GCN <35,000 Shares Shareholder
"GCN PRINCIPAL SHAREHOLDERS" means David E. Fritsche, Jr. and Robert A.
Fritsche individually and collectively.
"GCN RECORD DATE" means November 30, 2000, the date fixed by the GCN Board of
Directors, in accordance with the NGCL and Chapter 92A of the N.R.S., for
purposes of determining the GCN Shareholders eligible to receive notice of and
vote at, the GCN Shareholders' Meeting.
"GCN SHAREHOLDERS" means, as of the relevant date, each holder of GCN's issued
and outstanding capital stock.
"GCN SHAREHOLDERS' MEETING" means the special meeting of the GCN Shareholders
referred to in Section 7.5, as it may be continued following any temporary
adjournment or adjournments thereof.
"GOVERNMENTAL ENTITY" means any U.S. federal, state, local or foreign court,
executive office, legislature, governmental agency or ministry, commission, or
administrative, regulatory or self-regulatory authority or instrumentality.
"HAZARDOUS SUBSTANCES" mean chemicals, pollutants, contaminants, wastes
(including ambient wastes, hazardous wastes and liquid industrial wastes), or
other substances (including toxic, deleterious or hazardous substances), as
defined, listed or regulated pursuant to Environmental Laws, including asbestos
or asbestos-containing materials, polychlorinated biphenyls, pesticides and
oils, and petroleum and petroleum products (as those exemplary terms are defined
in or regulated under the United States National Oil and Hazardous Substances
Pollution Contingency Plan, 40 C.F.R. ss.ss. 300.1 ET. SEQ. and other
Environmental Laws).
"iEXALT COMMON STOCK" means the Common Stock, $.001 par value per share, of
iExalt.
"iEXALT INFORMATION STATEMENT" means the iExalt Information Statement dated as
of October 4, 2000, together with the related supplement dated as of November 1,
2000, and prepared and provided by iExalt to GCN and each of the GCN
Shareholders determined as of the GCN Record Date.
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"iEXALT SEC FILINGS" means all forms, reports and documents filed by iExalt
with the SEC since June 1, 1999.
"iEXALT STOCK OPTIONS" means the presently outstanding warrants and employee
and director stock options granted under iExalt's stock option plans or
otherwise as of June 15, 2000, for the purchase of an aggregate 4,741,000 shares
of iExalt Common Stock of which 1,630,000 shares are exercisable on achieving
certain performance levels of designated businesses.
"INVESTMENT AGREEMENTS" mean the Investment Agreements required to be delivered
to the iExalt Parties by the GCN >35,000 Shareholders(other than the GCN
Principal Shareholders), as provided in Section 9.8.
"LATEST GCN BALANCE SHEET" has the meaning specified in Section 4.7.
"LATEST iEXALT BALANCE SHEET" has the meaning specified in Section 3.7.
"LAW" means a law, statute, ordinance, rule, code or regulation enacted or
promulgated, or order, directive, instruction or other legally binding guideline
or policy issued or rendered by, any Governmental Entity.
"LIEN" means a lien, mortgage, deed of trust, deed to secure debt, pledge,
hypothecation, assignment, deposit arrangement, easement, preference, priority,
assessment, security interest, lease, sublease, charge, claim, adverse claim,
levy, interest of other Persons, or other encumbrance of any kind.
"MATERIAL ADVERSE EFFECT" means when used with reference to a Party, a material
adverse effect on the financial condition, business or results of operations of
that Party and its Subsidiaries taken as a whole, without giving effect to the
consummation of the Merger.
"MERGER" has the meaning specified in the preamble of this Agreement.
"MERGER CONSIDERATION" means collectively (i) the cash payment to be made by
Exalt to the GCN Minority Shareholders as contemplated in Section 2.2(b) and the
Plan of Merger, (ii) the Merger Shares.
"MERGER SHARES" mean the 1,532,302 shares of iExalt Common Stock to be issued by
iExalt to the GCN >35,000 Shareholders in connection the Merger as contemplated
in Section 2.2(a) and the Plan of Merger.
"NGCL" has the meaning specified in the preamble of this Agreement.
"NON-FOREIGN STATUS TAX CERTIFICATES" mean the Non-Foreign Status Tax
Certificate required to be delivered to the iExalt parties by the GCN
Shareholders, as provided in Section 9. 10.
"N.R.S." has the meaning specified in the preamble of this Agreement.
"PARTIES" has the meaning specified in the preamble of this Agreement.
"PERMITTED LIENS" mean (i) those Liens with respect to assets of GCN set forth
in Section 4.11 of the GCN Disclosure Schedule, respectively, (ii) those Liens
reflected in the GCN Financial Statements, and (iii) Liens for wafer and sewer
charges and current taxes not yet due and payable.
"PERSON" means an individual, corporation, partnership, association, joint stock
company, limited liability company, Governmental Entity, business trust,
unincorporated organization, or other legal entity.
"PLAN OF MERGER" has the meaning specified in the preamble of this Agreement.
"PREFERRED STOCK CLAIM" has the meaning specified in Section 7.6.
"RELEASES" mean the Releases required to be delivered to GCN and the iExalt
Parties by the GCN Shareholders, as provided in Section 9.8.
"SEC" means the Securities and Exchange Commission or any successor agency.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.
"SUBSIDIARY" of a Party means an Affiliate of that Party more than 50% of the
aggregate voting power (or any other voting, membership, partnership or joint
venture equity interest in the case of a Person that is not a corporation) of
which is beneficially owned by that Party directly or indirectly through one or
more other Persons.
"TAX" means any tax of any kind, however denominated, including any interest,
penalties or other additions to tax that may become payable in respect thereof
or in respect of a failure to comply with any requirement relating to any Tax
Return, imposed by any U.S. federal, foreign, state or local Governmental
Entity, including all income, gross income, gross receipts, profits, goods and
services, social security, old age security, sales and use, ad valorem, excise,
franchise, business license, occupation, real property gains, payroll and
employee withholding, unemployment insurance, real and personal property, stamp,
environmental, transfer, workers' compensation, severance, alternative minimum,
windfall, and capital taxes, and other obligations of the same or a similar
nature to any of the foregoing.
"TAXING AUTHORITY" means any Governmental Entity responsible for the imposition
assessment, enforcement or
8
collection of any tax.
"TAX RETURNS" means all Tax returns, declarations, reports, estimates,
information returns and statements required to be filed with any Taxing
Authority, or provide to any partner, shareholder, joint venturer or member
under U.S. federal, foreign, state, or local Laws (including reports with
respect to backup withholding and payment to persons other than Taxing
Authorities), and annual tax returns on behalf of employee benefit plans
sponsored by iExalt or GCN or any of their respective Subsidiaries or ERISA
Affiliates, if any.
"WAGES" has the meaning given such term by Section 3401(a) of the Code.
"WARN ACT" means the Worker Adjustment and Retraining Notification Act of 1988.
"WINEROTH DEBT" MEANS THE OBLIGATION OF GCN UNDER THAT CERTAIN
PROMISSORY NOTE OF GCN IN FAVOR OF BARRY WINEROTH DARED 1/3/00 AND
11/17/99, IN THE ORIGINAL PRINCIPAL AMOUNT OF $200,000, THE BALANCE OF
WHICH (INCLUDING ACCRUED AND UNPAID INTEREST THEREON) IS $223 935.03
AS OF OCTOBER 31, 2000
"WINEROTH TRUST" HAS THE MEANING SPECIFIED IN SECTION 7.6.
INTERPRETATION.
CAPITALIZED TERMS DEFINED IN THIS AGREEMENT ARE EQUALLY APPLICABLE TO
BOTH THEIR SINGULAR AND PLURAL FORMS. REFERENCES IN THIS AGREEMENT TO
A DESIGNATED "ARTICLE" OR "SECTION" REFER TO AN ARTICLE OR SECTION OF
THIS AGREEMENT, UNLESS OTHERWISE SPECIFICALLY INDICATED. ALL PRONOUNS
IN THIS AGREEMENT SHALL BE CONSTRUED AS INCLUDING BOTH GENDERS AND
NEUTER. IN THIS AGREEMENT, "INCLUDING" IS USED ONLY TO INDICATE
EXAMPLES, WITHOUT LIMITATION TO THE INDICATED EXAMPLES, AND WITHOUT
LIMITING ANY GENERALITY WHICH PROCEEDS IT.
KNOWLEDGE.
WHEN A REPRESENTATION AND WARRANTY IN ARTICLE II IS MADE TO THE
"KNOWLEDGE" OF iEXALT OR THE iEXALT PARTIES, IT MEANS RECEIPT OF
NOTICE BY OR ACTUAL KNOWLEDGE OF THE CHAIRMAN OF THE BOARD, THE
PRESIDENT AND THE CHIEF EXECUTIVE OFFICER, THE CHIEF FINANCIAL OFFICER
OR VICE PRESIDENT OF EITHER iEXALT OR MERGER SUB, OR THE PRESIDENT OF
ANY OTHER SUBSIDIARY OF iEXALT. WHEN A REPRESENTATION AND WARRANTY IN
ARTICLE IV AND V IS MADE TO THE "KNOWLEDGE" OF GCN OR THE GCN
SHAREHOLDERS, IT MEANS RECEIPT OF NOTICE BY OR ACTUAL KNOWLEDGE OF THE
CHAIRMAN OF THE BOARD, PRESIDENT, CHIEF FINANCIAL OFFICER OR ANY VICE
PRESIDENT OF GCN, OR ANY GCN PRINCIPAL SHAREHOLDER.
ARTICLE II
THE MERGER
THE MERGER.
Simultaneously with the execution and delivery of this Agreement, the Plan of
Merger is being executed and delivered by its parties. Subject to satisfaction
of the conditions set forth in this Agreement and in the Plan of Merger, at the
Effective Time, Merger Sub shall be merged with and into GCN in accordance with
the NGCL, Chapter 92A of the N.R.S. and Plan Merger.
MERGER CONSIDERATION.
As more fully provided in, and subject to the terms and provisions of, the Plan
of Merger, all of the shares of GCN Common Stock issued and outstanding
immediately before the Effective Time will, as a result of the Merger, be
converted as follows:
GCN >35,000 SHAREHOLDERS.
All shares of GCN common Stock held by the GCN >35,000 Shareholders shall be
converted into an aggregate of
9
1,550,000 shares of iExalt Common Stock less shares attributable to those
cashed out under paragraph (b) below.
GCN MINORITY SHAREHOLDERS.
Each share of GCN common Stock held by a GCN Minority Shareholders shall be
converted into the right to receive $1.05 per share [tied to the number of
shares of iExalt Common Stock they otherwise would of received in the Merger
based on the closing sales price of a share of iExalt Common Stock on a date
certain, possibly day before signing or an aggregate amount of $28,032.98 for
all such shares of GCN Common Stock held by all GCN Minority Shareholders as
set forth in GCN Disclosure 2.2.
CLOSING AND EFFECTIVE TIME OF THE MERGER.
The closing of the Merger (the "CLOSING ") shall take place at the offices of
iExalt.com, Inc., Houston: Texas, on the Closing Date. As soon as practicable
after the Closing, GCN and Merger Sub will cause Articles of Merger
incorporating the Plan of Merger to be executed and filed with the Secretary of
State of Nevada as required by the NGCL and Chapter 92A of the N.RS.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF iEXALT PARTIES
The iExalt Parties jointly and severally represent and warrant to the GCN
Parties that:
ORGANIZATION OF iEXALT PARTIES.
Each iExalt Party is a corporation duly organized, validly existing and in good
standing under the Laws of its state of incorporation. Each iExalt Party has
full corporate power and authority to conduct its business as it is currently
being conducted and, unless it will not survive the Merger, as to be conducted
following consummation of the Merger. Each iExalt Party is duly qualified to do
business, and in good standing, in each jurisdiction where the nature of its
properties or business requires such qualification. The iExalt Parties have
delivered to GCN true, correct and complete copies of the Charter Documents of
each Exalt Party.
AUTHORITY RELATIVE TO THIS AGREEMENT.
Each iExalt Party has the requisite corporate power and authority to enter into
and perform its obligations under this Agreement. The execution and delivery of
this Agreement, the consummation of the Merger, the issuance and delivery of the
Merger Shares upon consummation of the Merger have been duly authorized by the
respective Boards of Directors of the iExalt Parties, and no other corporate
proceedings on the part of either iExalt Party are necessary to authorize this
Agreement, the issuance and delivery of the Merger Shares or the consummation of
the Merger. This Agreement has been duly executed and delivered by each iExalt
Party. Assuming the valid authorization, execution and delivery of this
Agreement by each GCN Party, this Agreement is a valid and binding obligation of
each iExalt Party, enforceable against each iExalt Party in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, motorium or other Laws relating to or affecting creditors'
rights generally or by equitable principles.
NO VIOLATIONS.
The execution, delivery and performance of this Agreement by the respective
iExalt Parties, the issuance and delivery by iExalt of the Merger Shares in
connection with the Merger, and the consummation of the Merger will not:
CONSTITUTE A BREACH OR VIOLATION OF OR DEFAULT UNDER THE CHARTER DOCUMENTS OF
EITHER iEXALT PARTY OR ANY OF THE iEXALT SUBSIDIARIES OR, ANY LAW APPLICABLE TO
EITHER iEXALT PARTY; OR
VIOLATE OR CONFLICT WITH OR RESULT IN A BREACH OF, OR CONSTITUTE A DEFAULT (OR
AN EVENT WHICH, WITH NOTICE OR LAPSE OF TIME OR BOTH, WOULD CONSTITUTE A
DEFAULT) UNDER OR RESULT IN THE TERMINATION OF, OR ACCELERATE THE PERFORMANCE
BY, OR RESULT IN A RIGHT OF TERMINATION UNDER, OR RESULT IN THE CREATION OF ANY
LIEN UPON THE ASSETS OR PROPERTIES OF iEXALT OR ANY OF ITS SUBSIDIARIES UNDER,
ANY CONTRACT, INDENTURE, LOAN DOCUMENT, LICENSE, PERMIT, ORDER, DECREE OR
INSTRUMENT TO WHICH iEXALT OR ANY OF ITS SUBSIDIARIES IS A PARTY OR BY WHICH ANY
OF THEM OR THEIR ASSETS OR PROPERTIES ARE BOUND.
CONSENTS AND APPROVAL.
No consent, order, approval, waiver or authorization of, or registration,
application, declaration or filing with, any Person is required with respect to
either iExalt Party or any Subsidiary of iExalt in connection with the execution
and
10
delivery of this Agreement, the issuance of the Merger Shares or the
consummation of the Merger.
iEXALT CAPITALIZATION.
The authorized capital stock of iExalt consists of (i) 100 million shares of
iExalt Common Stock and (ii) 20 million shares of Preferred Stock, $.001 par
value, of iExalt ("iEXALT PREFERRED STOCK"). At May 31, 2000, 27,390,409 shares
of iExalt Common Stock, and no shares of iExalt Preferred Stock, were issued and
outstanding, 5,740,999 shares of iExalt Common Stock were reserved for issuance
upon exercise of the iExalt Stock Options, and upon satisfying the requirements
relating to 999,999 contingent shares granted in connection with iExalt's
acquisition of First Choice Marketing. At May 31, 2000, no shares of iExalt
Common Stock were held by iExalt as treasury shares. All of the issued and
outstanding shares of iExalt Common Stock are duly and validly issued, fully
paid and nonassessable, and were issued free of preemptive rights, in compliance
with any rights of first refusal. Except for the iExalt Stock Options or as
disclosed on Section 3.5 of the iExalt Disclosure Schedule, no subscription,
warrant, option, convertible security, stock appreciation or other right
(contingent or other) to purchase or acquire any shares of any class of capital
stock of iExalt or any of its Subsidiaries is authorized or outstanding, and
there is not outstanding any commitment of iExalt or any of its Subsidiaries to
issue any shares, warrants, options or other such rights or to distribute to
holders of any class of its capital stock any evidences of indebtedness or
assets. Neither iExalt nor any of its Subsidiaries has any contingent or other
obligation to purchase, redeem or otherwise acquire any shares of its capital
stock or any interest therein or to pay any dividend or make any other
distribution in respect thereof. iExalt is not a party, and has no knowledge
that any iExalt Shareholders are parties, to any voting agreement, voting trust
or similar agreement or arrangement relating to iExalt's capital stock.
Upon their issuance, the Merger will be duly authorized, validly issued, fully
paid and nonassessable shares of iExalt Common Stock.
iEXALT SUBSIDIARIES.
Section 3.6 of the iExalt Disclosure Schedule sets forth each iExalt Subsidiary
and its jurisdiction of incorporation. Each Subsidiary of iExalt is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and has full authority and corporate power
to conduct its business as presently being conducted. Each Subsidiary of iExalt
is duly qualified to do business, and in good standing, in each jurisdiction
where the nature of its properties or business requires such qualification. All
of the outstanding shares of capital stock of each Subsidiary of iExalt are
validly issued, fully paid and nonassessable and are owned of record and
beneficially by iExalt or a wholly owned direct or indirect Subsidiary of
iExalt, free and clear of all Liens. There are no outstanding subscriptions,
options, warrants, calls, rights, convertible securities, obligations to make
capital contributions or advances, voting trust arrangements, shareholders'
agreements or other agreements, commitments or understandings relating to the
issued and outstanding capital stock of any Subsidiary of iExalt. iExalt does
not, directly or indirectly, have any equity investment in any corporation,
limited liability company, partnership, joint venture or other business entity.
iEXALT FINANCIAL STATEMENTS.
The consolidated balance sheets and consolidated statements of operations,
stockholders' equity and cash flows of iExalt and its Subsidiaries included in
the iExalt SEC Filings fairly present in all material respects the consolidated
financial position of iExalt and its Subsidiaries at their respective dates and
the consolidated results of operations of iExalt and its Subsidiaries for the
respective periods then ended, in accordance with GAAP, subject, in the case of
unaudited interim financial statements, to (i) year-end adjustments (which
consist of normal recurring accruals) and (ii) the absence of explanatory
footnote disclosures required by GAAP. iExalt's unaudited consolidated balance
sheet at May 31, 2000 included in the iExalt SEC Filings is herein called the
"LATEST iEXALT BALANCE SHEET."
ABSENCE OF CERTAIN CHANGES.
Except as set forth in Section 3.8 of the Exalt Disclosure Schedule, since May
3l, 2000, iExalt and its Subsidiaries have conducted their businesses only in
the ordinary course, consistent with past practice, there has not occurred a
Material Adverse Effect, or any event that could reasonably be expected to
result in a Material Adverse Effect, on iExalt and the Subsidiaries considered
as a whole.
11
LITIGATION.
Except as disclosed in Section 3.9 of the iExalt Disclosure Schedule, there is
no suit, action, investigation or proceeding pending or, to the knowledge of the
iExalt Parties, threatened against iExalt or any of its Subsidiaries at Law or
in equity before or by any Governmental Entity or before any arbitrator or
mediator of any kind, and there is no judgment, decree, injunction, rule or
order of any Governmental Entity, arbitrator or mediator to which iExalt or any
iExalt Subsidiary is subject. Neither iExalt Party has knowledge of any grounds
on which any suit, action, investigation or proceeding of the nature referred to
in this Section 3.9 might be commenced with any reasonable likelihood of
success.
iEXALT INFORMATION STATEMENT.
The information regarding iExalt (including, for purposes of this Section 3.10,
information regarding iExalt's officers, directors and shareholders) included in
the Information Statement and delivered to GCN and each of the GCN Shareholders
will not, on the date the Exalt Information Statement (or any amendment thereof
or supplement thereto) is first delivered to the GCN Shareholders, at the time
of the execution and delivery of this Agreement and at the Effective Time,
contain any statement regarding iExalt that, at such time and in light of the
circumstances under which it will be made, is false or misleading in any
material respect, or will omit to state any material fact regarding iExalt
necessary in order to make the statements made therein regarding iExalt not
false or misleading in any material respect. If at any time prior the Effective
time any event relating to iExalt should be discovered by iExalt which should be
set forth in an amendment or a supplement to the iExalt Information Statement,
iExalt will promptly inform GCN and the GCN Shareholders.
BROKERS.
No broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with this Agreement or the Merger based
upon arrangements made by or on behalf of either iExalt Party.
LIABILITIES TO BE PAID ON CLOSING
Liabilities to be paid at closing are listed on Schedule 3.12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF GCN PARTIES
Each of the GCN Parties, jointly and severally, represent and warrant to the
iExalt Parties
ORGANIZATION OF GCN.
GCN is a corporation duly organized, validly existing and in good standing under
the Laws of the State of Nevada. GCN has full authority and limited liability
company power to conduct its business as it is currently being conducted and as
to be conducted following consummation of the Merger. GCN is duly qualified to
do business, and in good standing, in each jurisdiction where the nature of its
properties or business requires such qualification. GCN has delivered to the
iExalt Parties true, correct and complete copies of the Charter Documents of
GCN.
AUTHORITY RELATIVE TO THIS AGREEMENT.
GCN has the requisite corporate power and authority to enter into and perform
its obligations under this Agreement. The execution and delivery of this
Agreement and the consummation of the Merger have been duly authorized by the
board of directors of GCN, and, except for the approval by the GCN Shareholders
of this Agreement, the Plan of Merger and the Merger as contemplated in Section
7.5, no other corporate proceedings on the part of GCN or the GCN Shareholders
are necessary to authorize this Agreement or the consummation of the Merger.
This Agreement has been duly executed and delivered by GCN. Assuming the valid
authorization, execution and delivery of this Agreement by each iExalt Party,
this Agreement is a valid and binding obligations of GCN, enforceable against
GCN in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other Laws relating to or
affecting creditors' rights generally or by equitable principles.
NO VIOLATIONS.
The execution, delivery end performance of this Agreement by GCN and the
consummation of the Merger will not:
CONSTITUTE A BREECH OR VIOLATION OF OR DEFAULT UNDER THE CHARTER DOCUMENTS OF
GCN, OR ANY LAW APPLICABLE TO GCN, OR EXCEPT AS ACCURATELY REFLECTED IN SECTION
4.3 OF THE GCN DISCLOSURE SCHEDULE, VIOLATE OR CONFLICT WITH OR RESULT IN A
BREACH OF, OR CONSTITUTE A DEFAULT (OR AN EVENT WHICH, WITH NOTICE OR LAPSE OF
TIME OR BOTH, WOULD CONSTITUTE A DEFAULT) UNDER OR RESULT IN THE TERMINATION OF,
OR ACCELERATE THE
12
PERFORMANCE BY, OR RESULT IN A RIGHT OF TERMINATION UNDER, OR RESULT IN THE
CREATION OF ANY LIEN UPON THE ASSETS OR PROPERTIES OF GCN UNDER, ANY CONTRACT,
INDENTURE, LOAN DOCUMENT, LICENSE, PERMIT, ORDER, DECREE OR INSTRUMENT TO WHICH
GCN IS A PARTY OR BY WHICH ITS ASSETS OR PROPERTIES ARE BOUND.
CONSENTS AND APPROVAL.
Except approval by the GCN Shareholders of this Agreement, the Plan of Merger
and Merger as contemplated in Section 7.5, no consent, order, approval, waiver,
authorization of, or registration, application, declaration or filing wish, any
Person is required with respect to GCN in connection with the execution and
delivery of this Agreement or the consummation of the Merger.
GCN CAPITALIZATION.
The authorized capital stock of GCN consists of 20,000,000 shares of common
stock, $0.01 par value per share, of which at the date of this Agreement,
12,849,382 shares are issued and outstanding and no shares are held by GCN as
treasury shares. All of the issued and outstanding shares of GCN Common Stock
are duly and validly issued, fully paid and nonassessable, and were issued not
in violation of any preemptive rights and in compliance with any rights of first
refusal, and in compliance with all Laws. Except as set forth on Section 4.5 of
the GCN Disclosure Schedule, no subscription, warrant, option, convertible
security, stock appreciation or other right (contingent or other) to purchase or
acquire any class of capital stock of GCN is authorized or outstanding and there
is not outstanding any commitment of GCN to issue any shares, warrants, options
or other such rights or, except as specifically contemplated in this Agreement,
to distribute to holders of any class of its capital stock any evidences of
indebtedness or assets. Except under the GCN Common Stock Purchase Agreements,
GCN has no contingent or other obligation to purchase, redeem or otherwise
acquire any shares of its capital stock or any interest therein or to make any
other distribution in respect thereof Section 4.5 of the GCN Disclosure Schedule
also lists all GCN Shareholders, the number of shares of GCN Common Stock owned
by each, and state or other jurisdiction of residence of each GCN Shareholder.
Except as set forth on Section 4.5 of the GCN Disclosure Schedule, GCN is not a
party to any voting agreement, voting trust or similar agreement or arrangement
relating to its capital stock.
NO SUBSIDIARIES.
Except as set forth on Schedule 4.6 of the GCN Disclosure Schedule, GCN does
not, directly or indirectly, have any equity investment in any corporation,
limited liability company, partnership or joint venture or other business
entity.
GCN FINANCIAL STATEMENTS.
Attached to Schedule 4.7 of the GCN Disclosure Schedule, are the unaudited
balance sheet and statements of operations, stockholders' equity and cash flows
of GCN at December 31, 1999 and June 30, 2000 and for the year and six months
then ended (the "GCN FINANCIAL STATEMENTS"). The balance sheets and statements
of operations, stockholders' equity and cash flows of GCN included in the GCN
Financial Statements, respectively, fairly present in all material respects the
financial position of GCN at their respective dates and the results of
operations of GCN for the respective periods then ended, except for back
salaries owed to GCN officers and employees disclosed in Section 4.9 of the GCN
Disclosure Schedule. GCN's unaudited consolidated balance sheet at June 30, 2000
included in the GCN Financial Statements is herein called the "LATEST GCN
BALANCE SHEET."
ABSENCE OF CERTAIN CHANGES.
Except as set forth in Section 4.8 of the GCN Disclosure Schedule, since June
30, 2000, GCN has conducted its businesses only in the ordinary course,
consistent with past practice, there has not occurred a Material Adverse Effect
or any event that could reasonably tee expected to result in a Material Adverse
Effect on GCN, and GCN has not:
13
AMENDED ITS CHARTER DOCUMENTS;
ISSUED, SOLD OR DELIVERED, OR AGREED TO ISSUE, SELL OR DELIVER, ANY CAPITAL
STOCK OR OTHER SECURITIES, OR GRANTED OR AGREED TO GRANT ANY OPTIONS, WARRANTS
OR OTHER RIGHTS CALLING FOR THE ISSUE, SALE OR DELIVERY OF ITS SECURITIES;
BORROWED OR AGREED TO BORROW ANY FUNDS, OR INCURRED OR BECOME SUBJECT TO ANY
ABSOLUTE OR CONTINGENT OBLIGATION OR LIABILITY, EXCEPT TRADE ACCOUNTS PAYABLE
AND ACCRUED OPERATING EXPENSES INCURRED IN THE ORDINARY COURSE OF BUSINESS
CONSISTENT WITH PAST PRACTICES SINCE JUNE 30, 2000;
PAID ANY OBLIGATION OR LIABILITY OTHER THAN CURRENT LIABILITIES REFLECTED IN
THE LATEST GCN BALANCE SHEET AND CURRENT LIABILITIES INCURRED SINCE JUNE 30,
2000, IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICES;
DECLARED OR MADE, OR AGREED TO DECLARE OR MAKE, ANY DISTRIBUTIONS OF ANY ASSETS
OF ANY KIND IN RESPECT OF ITS CAPITAL STOCK, OR PURCHASED, REDEEMED OR OTHERWISE
ACQUIRED, OR AGREED TO PURCHASE OR REDEEM OR OTHERWISE ACQUIRE, DIRECTLY OR
INDIRECTLY, ANY OF ITS OUTSTANDING CAPITAL STOCK;
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF, OR AGREED TO SELL, TRANSFER OR
OTHERWISE DISPOSE OF, ANY OF ITS ASSETS, PROPERTIES OR RIGHTS, OTHER THAN IN THE
ORDINARY COURSE OF BUSINESS, OR CANCELED OR OTHERWISE TERMINATED, OR AGREED TO
CANCEL OR OTHERWISE TERMINATE, ANY DEBTS OR CLAIMS;
ENTERED INTO OR AGREED TO ENTER INTO ANY AGREEMENT OR ARRANGEMENT GRANTING ANY
PREFERENTIAL RIGHT TO PURCHASE ANY OF ITS ASSETS, PROPERTIES OR RIGHTS, OR
REQUIRING ANY CONSENT OF ANY PARTY TO THE TRANSFER OR ASSIGNMENT OF ANY SUCH
ASSET, PROPERTY OR RIGHT;
SUFFERED ANY MATERIAL CASUALTY DAMAGES, DESTRUCTION OR PHYSICAL LOSSES, OR
WAIVED OR SURRENDERED ANY RIGHTS OF VALUE WHICH ARE MATERIAL;
MADE OR PERMITTED ANY AMENDMENT OR TERMINATION OF ANY MATERIAL CONTRACT,
AGREEMENT OR LICENSE TO WHICH IT IS A PARTY OR BY WHICH IT OR ANY OF ITS ASSETS
OR PROPERTIES ARE SUBJECT;
MADE, DIRECTLY OR INDIRECTLY, ANY ACCRUAL OR ARRANGEMENT FOR OR PAYMENT OF
BONUSES OR SPECIAL COMPENSATION OF ANY KIND OR ANY SEVERANCE OR TERMINATION PAY
TO ANY PRESENT OR FORMER OFFICER, DIRECTOR, SHAREHOLDER OR EMPLOYEE OF GCN;
GRANTED ANY GENERAL PAY INCREASES TO ITS DIRECTORS, OFFICERS, EMPLOYEES OR
AGENTS, OR ADOPTED ANY NEW OR MADE ANY INCREASE IN ANY EXISTING PROFIT SHARING,
BONUS, DEFERRED COMPENSATION, SAVINGS, INSURANCE, PENSION, RETIREMENT OR OTHER
EMPLOYEE BENEFIT PLAN FOR OR WITH ANY OF SUCH PERSONS;
INCURRED OR BECOME SUBJECT TO ANY MATERIEL CLAIM OR LIABILITY FOR ANY DAMAGES
OR ALLEGED DAMAGES FOR ACTUAL OR ALLEGED NEGLIGENCE OR OTHER TORT OR BREACH OF
CONTRACT; OR SCHEDULE:
MADE OR AGREED TO MAKE ANY CAPITAL EXPENDITURES IN EXCESS OF $10,000 IN THE
AGGREGATE.
NO UNDISCLOSED LIABILITIES.
Except as disclosed in the Latest GCN Balance Sheet or in Section 4.9 of the GCN
Disclosure Schedule, GCN has no liabilities or obligations, known or unknown,
fixed or contingent, other then those arising since June 30, 2000 in the
ordinary course of business and consistent with past practice and which in the
aggregate are not material.
GCN PROPERTIES.
GCN has good and marketable title to the properties and assets reflected in the
Latest GCN Balance Sheet (other than properties and assets disposed of in the
ordinary course of business consistent with past practices since June 30, 2000,
which, in the aggregate, are not material), free of all Liens except Permitted
Liens.
TAXES AND TAX RETURNS.
Except as described in Section 4.1 1 of the GCN Disclosure
14
ALL TAX RETURNS REQUIRED TO BE FILED WITH ANY TAXING AUTHORITY BY OR ON BEHALF
OF GCN HAS BEEN DULY FILED ON A TIMELY BASIS IN ACCORDANCE WITH ALL APPLICABLE
LAWS;
AT THE TIME OF THEIR FILINGS ALL SUCH TAX RETURNS WERE COMPLETE AND CORRECT;
ALL TAXES REQUIRED TO BE PAID BY GCN ON OR BEFORE THE DATE OF THIS AGREEMENT
HAVE BEEN PAID, AND THE RESERVES FOR TAXES OF GCN REFLECTED IN THE LATEST GCN
BALANCE SHEET ARE ADEQUATE TO COVER ALL TAXES THAT HAVE NOT BEEN PAID, BUT WHICH
UNDER GAAP WERE ACCRUABLE, THROUGH THE DATE OF THE LATEST GCN BALANCE SHEET;
THERE ARE NO LIENS FOR TAXES UPON ANY ASSETS OF GCN, EXCEPT LIENS FOR TAXES NOT
YET DUE FOR CURRENT TAX PERIODS ENDING AFTER THE DATE OF THIS AGREEMENT;
THERE ARE NO OUTSTANDING DEFICIENCIES, ASSESSMENTS OR WRITTEN PROPOSALS FOR THE
ASSESSMENT OF TAXES PROPOSED, ASSERTED OR ASSESSED AGAINST GCN, AND, TO THE
KNOWLEDGE OF THE GCN PARTIES, NO GROUNDS EXIST FOR ANY SUCH ASSESSMENT OF TAXES;
GCN IS NOT AN OBLIGOR ON, AND NONE OF ITS ASSETS HAVE BEEN FINANCED DIRECTLY OR
INDIRECTLY BY, ANY TAX EXEMPT BONDS;
GCN IS NOT NOW, NOR HAS IT BEEN DURING THE APPLICABLE PERIOD SPECIFIED IN
SECTION 897(C)(1)(A)(II) OF THE CODE, AREA1 PROPERTY HOLDING CORPORATION WITHIN
THE MEANING OF SECTION 897(C)(2) OF THE CODE;
GCN HAS NOT FILED A CONSENT UNDER SECTION 341(F) OF THE CODE OR AGREED TO HAVE
SECTION 341(F)(2) OF THE CODE APPLY TO THE DISPOSITION OF ITS ASSETS;
NO EXTENSION OF THE STATUTE OF LIMITATIONS ON THE ASSESSMENT OF ANY TAXES HAS
BEEN GRANTED TO OR APPLIED FOR BY GCN WITH RESPECT TO GCN;
GCN (X) IS NOT A PARTY TO ANY TAX SHARING OR ALLOCATION AGREEMENT, (Y) HAS NOT
BEEN A MEMBER OF A CONSOLIDATED, COMBINED OR UNITARY GROUP FOR PURPOSES OF
FILING TAX RETURNS, AND (Z) HAS NO LIABILITY FOR THE TAXES OF ANY OTHER PERSON
AS A TRANSFEREE OR SUCCESSOR, BY CONTRACT OR OTHERWISE; AND GCN HAS NOT BEEN
NOTIFIED THAT ANY OF THE TAX RETURNS OF GCN ARE THE SUBJECT OF AN AUDIT OR
EXAMINATION BY A GOVERNMENTAL ENTITY.
iEXALT AGREES THAT IT WILL SHALL NOT CAUSE OR PERMIT ANY AMENDED TAX RETURN TO
BE FILED ON BEHALF OF GCN RELATING TO ANY PRIOR PERIOD TO THE CLOSING DATE,
OTHER THAN THOSE REQUIRED BY LAW TO BE FILED, IF THE EFFECT WOULD BE TO INCREASE
THE TAX LIABILITY OF ANY GCN SHAREHOLDER FOR ANY SUCH PERIOD.
LITIGATION.
Except as disclosed in Section 4.12 of the GCN Disclosure Schedule, there is no
suit, action, investigation or proceeding pending or, to the knowledge of the
GCN Patties threatened, against GCN at Law or in equity before or by any
Governmental Entity or before any arbitrator or mediator of any kind, and there
is no judgment, decree, injunction, rule or order of any Governmental Entity,
arbitrator or mediator to which GCN is subject. No GCN Party has knowledge of
any grounds on which any suit, action, investigation or proceeding of the nature
referred to in this Section 4.12 might be commenced with any reasonable
likelihood of success.
ENVIRONMENTAL MATTERS.
Except as described in Section 4.13 of the GCN Disclosure Schedule:
GCN HOLDS, AND IS IN COMPLIANCE WITH AND HAS BEEN IN COMPLIANCE WITH, ALL
ENVIRONMENTAL PERMITS, AND IS OTHERWISE IN COMPLIANCE AND HAS BEEN IN COMPLIANCE
WITH, ALL APPLICABLE ENVIRONMENTAL LAWS, AND THERE IS NO CONDITION THAT IS
REASONABLY LIKELY TO PREVENT OR INTERFERE WITH COMPLIANCE BY GCN WITH ANY
ENVIRONMENTAL LAW;
NO MODIFICATION, REVOCATION, REISSUANCE, ALTERATION, TRANSFER OR AMENDMENT OF
ANY ENVIRONMENTAL
15
PERMIT, OR ANY REVIEW BY, OR APPROVAL OF, ANY GOVERNMENTAL ENTITY OR OTHER THIRD
PARTY OF ANY ENVIRONMENTAL PERMIT IS REQUIRED IN CONNECTION WITH THE EXECUTION
OR DELIVERY OF THIS AGREEMENT, THE CONSUMMATION OF THE MERGER OR THE OPERATION
OF THE BUSINESS OF GCN ON THE CLOSING DATE;
GCN HAS NOT RECEIVED ANY ENVIRONMENTAL CLAIM, NOR, TO THE KNOWLEDGE OF THE GCN
PARTIES, HAS ANY ENVIRONMENTAL CLAIM BEEN THREATENED AGAINST GCN;
GCN HAS NOT ENTERED INTO OR AGREED TO, AND IS NOT SUBJECT TO, ANY JUDGMENT,
DECREE, ORDER OR OTHER DIRECTIVE ISSUED BY, OR CONSENT ARRANGEMENT WITH, ANY
GOVERNMENTAL ENTITY UNDER ANY ENVIRONMENTAL LAW, INCLUDING ANY SUCH JUDGMENT,
DECREE, ORDER OR OTHER DIRECTIVE RELATING TO COMPLIANCE WITH ANY ENVIRONMENTAL
LAW OR TO THE INVESTIGATION, CLEANUP, REMEDIATION OR REMOVAL OF HAZARDOUS
SUBSTANCES;
THERE ARE NO CIRCUMSTANCES THAT COULD REASONAB1Y BE EXPECTED TO (X) GIVE RISE TO
LIABILITY UNDER ANY AGREEMENTS WITH ANY PERSON UNDER WHICH GCN WOULD BE REQUIRED
TO DEFEND, INDEMNIFY, HOLD HARMLESS, OR OTHERWISE BE RESPONSIBLE FOR ANY
VIOLATION BY OR OTHER LIABILITY OR EXPENSE OF SUCH PERSON, OR ALLEGED VIOLATION
BY OR OTHER LIABILITY OR EXPENSE OF SUCH PERSON, ARISING UNDER ANY ENVIRONMENTAL
LAW, OR (Y) PREVENT GCN FROM COMPLYING WITH ITS CONTRACTUAL OBLIGATIONS RELATING
TO ANY SUCH MATTER;
THERE ARE NO OTHER CIRCUMSTANCES OR CONDITIONS THAT ARE REASONABLY LIKELY TO
GIVE RISE TO LIABILITY OR OBLIGATION OF GCN UNDER ANY ENVIRONMENTAL LAW; AND
NO ENVIRONMENTAL REPORT, SURVEY, REVIEW OR AUDIT RELATING TO GCN, ITS
PREDECESSORS, OR ITS PAST OR PRESENT ASSETS OR OPERATIONS HAS BEEN PREPARED BY
OR AT THE DIRECTION OR FOR BENEFIT OF, OR HAS BEEN DELIVERED TO, GCN.
EMPLOYEE BENEFIT PLANS.
Section 4.14 of the GCN Disclosure Schedule accurately sets forth each
retirement, pension, bonus, stock purchase, profit sharing, stock option,
deferred compensation, severance or termination pay, insurance, medical,
hospital, dental, vision care, drug, sick leave, disability, salary
continuation, unemployment benefits, vacation, incentive or other compensation
plan or arrangement or other employee benefit which is maintained, or otherwise
contributed to or required to be contributed to, by GCN or any ERISA Affiliate
of GCN for the benefit of employees or former employees of GCN (the "GCN
EMPLOYEE PLANS,'). GCN has complied, and currently is in compliance, both as to
form and operation with the terms of each GCN Employee Plan and all applicable
provisions of ERISA and each other Law or regulation imposed or administered by
any Governmental Entity with respect to each of the GCN Employee Plans. Except
as set forth in Section 4.14 of the GCN Disclosure Schedule, GCN has not at any
time maintained, adopted, established, contributed to or been required to
contribute to, otherwise participated in or been required to participate in, or
had any liability with respect to, any "employee benefit plan" within the
meaning of Section 3(3) of ERISA. All contributions to, and payments from, each
GCN Employee Plan which may have been required to be made in accordance with the
terms of any such GCN Employee Plan and, where applicable, the Laws which govern
such GCN Employee Plan, have been made in a timely manner. All reports, Tax
Returns and similar documents with respect to any GCN Employee Plan required to
be filed with any Governmental Entity or distributed to any GCN Employee Plan
participant have been duly filed on a timely basis or distributed. There are no
pending investigations by any Governmental Entity involving or relating to a GCN
Employee Plan, no threatened (to the knowledge of the GCN Parties) or pending
claims (except for claims for benefits payable in the normal operation of the
GCN Employee Plans), Suits or proceedings against any GCN Employee Plan or
asserting any rights or claims to benefits under any GCN Employee Plan which
could give rise to a liability of GCN, nor, to the knowledge of the GCN Parties,
are there any facts that could give rise to any liability of GCN in the event of
any such investigation, claim, suit or proceeding. No notice has been received
by GCN of any complaints or other proceedings of any kind involving GCN or any
of the employees of GCN before any Governmental Entity relating to any GCN
Employee Plan. The assets of each GCN Employee Plan are at least equal to the
liabilities of such GCN Employee Plan.
16
MATERIAL CONTRACTS.
Section 4.15 of the GCN Disclosure Schedule lists all of the following written
or oral executory contracts, agreements and commitments (collectively, the "GCN
CONTRACTS"):
ALL EMPLOYMENT, CONSULTING OR PERSONAL SERVICE AGREEMENTS OR CONTRACTS WITH ANY
PRESENT OR FORMER OFFICER, DIRECTOR, SHAREHOLDER OR EMPLOYEE OF GCN WHO HAS AN
ANNUAL SALARY OF $50,000 OR MORE;
ALL LOAN OR CREDIT AGREEMENTS, AND ALL BONDS, DEBENTURES, PROMISSORY NOSES OR
OTHER INSTRUMENTS OF INDEBTEDNESS, RELATING TO THE BORROWING OF MONEY BY GCN;
ALL GUARANTY, SURETYSHIP OR SIMILAR ARRANGEMENTS UNDER WHICH GCN HAS GUARANTEED
OR IS OTHERWISE CONTINGENTLY OR SECONDARILY LIABLE FOR ANY INDEBTEDNESS,
LIABILITY OR OBLIGATION OF ANY PERSON;
ALL LEASES OR SUBLEASES OF REAL PROPERTY USED IN THE CONDUCT OF BUSINESS OF GCN;
ALL CONTRACTS OR AGREEMENTS COMMITTING GCN TO MAKE A CAPITAL EXPENDITURE IN
EXCESS OF $10,000;
ALL CONTRACTS, AGREEMENTS, AGREEMENTS IN PRINCIPLE, LETTERS OF INTENT AND
MEMORANDA OF UNDERSTANDING WHICH CALL FOR OR CONTEMPLATE THE FUTURE DISPOSITION
(INCLUDING RESTRICTIONS ON TRANSFER AND RIGHTS OF FIRST OFFER OR REFUSAL) OR
ACQUISITION OF (OR RIGHT TO ACQUIRE) ANY INTEREST IN ANY BUSINESS ENTERPRISE,
AND ALL CONTRACTS, AGREEMENTS AND COMMITMENTS RELATING TO THE FUTURE DISPOSITION
OF A MATERIAL PORTION OF THE ASSETS AND PROPERTIES OF GCN;
ALL CONTRACTS, AGREEMENTS WITH OR COMMITMENTS TO ANY PERSON CONTAINING ANY
PROVISION OR COVENANT RELATING TO THE INDEMNIFICATION OR HOLDING HARMLESS BY GCN
WHICH COULD RESULT IN A LIABILITY TO GCN IN EXCESS OF $10,000 OR MORE;
ALL CONTRACTS, AGREEMENTS AND UNDERTAKINGS WITH ANY GOVERNMENTAL ENTITY OR OTHER
PERSON WHICH CONTAIN ANY PROVISION OR COVENANT LIMITING (X) THE ABILITY OF GCN
TO ENGAGE ON ANY LINE OF BUSINESS, TO COMPETE WITH ANY PERSON, TO DO BUSINESS
WITH ANY PERSON OR IN ANY LOCATION OR TO EMPLOY ANY PERSON OR (Y) THE ABILITY OF
ANY PERSON TO COMPETE WITH OR OBTAIN PRODUCTS OR SERVICES FROM GCN;
AND
ALL OUTSTANDING PROXIES, POWERS OF ATTORNEY OR SIMILAR DELEGATIONS OF AUTHORITY
GRANTED BY GCN TO ANY OTHER PERSON.
ALL OTHER CONTRACTS, AGREEMENTS WITH OR COMMITMENTS TO ANY PERSON INVOLVING
CONSIDERATION WITH A VALUE OF $10,000 OR MORE.
GCN has delivered to the iExalt Parties a true and correct copy of each GCN
Contract. Each GCN Contract is in full force and effect and constitutes a legal,
valid and binding obligation of GCN, and, to the knowledge of the GCN Parties,
of each other Person that is a party to it. GCN is not, and to the knowledge of
the GCN Parties, no other party to any GCN Contract is, in violation or breach
of or in default under such GCN Contract, or with or without notice or lapse of
time or both, would be in violation or breach of or in default under any such
GCN Contract. No GCN Contract provides that any party thereto other than GCN may
terminate such GCN Contract by reason of the execution of this Agreement or the
consummation of the Merger.
GOVERNMENTAL LICENSES AND PERMITS: COMPLIANCE WITH LAW~ GCN
has not received notice of any revocation or modification of any license,
certification, tariff, permit, registration, exemption, approval or other
authorization by any Governmental Entity. The conduct of the business of GCN
complies with all applicable Law.
INTELLECTUAL PROPERTY.
GCN owns, or have a valid license to use, all patents, trademarks, service
marks, trade names, copyrights, trade secrets, technology, know-how and other
intellectual property (the "Intellectual Property) necessary to or used in the
conduct of the business of GCN as now conducted and as proposed to be conducted.
Section 4.17 of the GCN Disclosure Schedule contains a complete and accurate
list of all patents, patent applications, trademarks and service marks and
related applications, trade names and copyrights owned by or licensed to GCN.
Section 4.17 of the GCN Disclosure Schedule
17
also contains a description of all agreements or licenses relating to the
acquisition by or license to GCN of such Intellectual Property or under which
GCN has sold or granted a right to use any Intellectual Property. All
intellectual Property owned by GCN is owned by it or them free and clear of all
Liens, except Permitted Liens. The conduct or GCN's business does not conflict
with or infringe upon any intellectual Property rights of any other person and
no claims of conflict or infringement are pending or, to the knowledge of GCN
threatened, against GCN. GCN has made all necessary filings and recordations and
has paid all required fees and Taxes to maintain ownership of the Intellectual
Property.
LABOR MATTERS.
There is no labor strike, dispute, slowdown, work stoppage, unresolved labor
union grievance or labor arbitration proceedings pending or, to the knowledge of
the GCN Parties threatened, against GCN, and no current union organizing
activities among employees of GCN.
TRANSACTIONS WITH AFFILIATES:
Except as set forth in Section 4.19 of the GCN Disclosure Schedule, no Affiliate
of GCN: IS A PARTY TO OR HAS ANY INTEREST IN ANY CONTRACT OR AGREEMENT WITH GCN;
HAS ANY OUTSTANDING LOAN TO OR RECEIVABLE FROM GCN; OR HAS ANY OWNERSHIP
INTEREST (OTHER THAN A STOCK OWNERSHIP INTEREST REPRESENTING LESS THAN 1% OF THE
OUTSTANDING STOCK OF ANY CORPORATION WHICH IS PUBLICLY TRADED), DIRECTLY,
INDIRECTLY, OR BENEFICIALLY, IN ANY CUSTOMER OF OR SUPPLIER TO GCN.
GCN INFORMATION STATEMENT.
The information regarding GCN included in the GCN Information Statement and
delivered to iExalt and each of the GCN Shareholders will not, on the date the
GCN Information Statement (or any amendment thereof or supplement thereto) is
first delivered to the GCN Shareholders, at the time of the execution and
delivery of this Agreement and at the Effective Time, contain any statement
regarding GCN that, at such time and in light of the circumstances under which
it will be made, is false or misleading in any material respect, or will omit to
state any material fact regarding GCN necessary in order to make the statements
made therein regarding GCN not false or misleading in any material respect. If
at any time prior the Effective time any event relating to GCN should be
discovered by GCN which should be set forth in an amendment or a supplement to
the GCN Information Statement, GCN will promptly inform iExalt and the GCN
Shareholders.
BROKERS.
No broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with this Agreement or the Merger based
upon arrangements made by or on behalf of any GCN Party.
ARTICLE V
REPRESENTATIONS AND AGREEMENTS OF THE GCN PRINCIPAL SHAREHOLDERS
Each GCN Principal Shareholder, severally as to himself only, represents and
warrants to, and agrees with, iExalt Parties that:
OWNERSHIP AND STATUS OF GCN SHARES.
The GCN Principal Shareholder is the record and beneficial owner of the number
of shares of GCN Common Stock set opposite the GCN Principal Shareholder's name
in Section 4.5 of the GCN Disclosure Schedule, free and clear of all Liens.
POWER OF THE GCN PRINCIPAL SHAREHOLDER.
The GCN Principal Shareholder has the full power, legal capacity and authority
to execute this Agreement and to perform the GCN Principal Shareholder's
obligations under this Agreement. This Agreement constitutes the legal, valid
and binding obligation of the GCN Principal Shareholder, enforceable against the
GCN Shareholder in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other Laws
relating to or affecting creditors' rights generally or by equitable principles.
APPROVAL OF MERGER.
The GCN Principal Shareholder, acting in each capacity in which he is entitled,
by reason of GCN's Charter Documents,
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the NGCL, Chapter 92A of the N.R. S. or any other applicable Laws, to vote to
approve or disapprove this Agreement, the Plan of Merger and the Merger, hereby
covenants and agrees to vote to approve this Agreement, the Plan of Merger and
Merger at the GCN Shareholders' Meeting contemplated in Section 7.5.
NO CONFLICTS.
The execution, delivery and performance of this Agreement by the GCN Principal
Shareholder will not:
VIOLATE ANY LAWS:
BREACH OR CONSTITUTE A DEFAULT UNDER ANY AGREEMENT OR INSTRUMENT TO WHICH THE
GCN PRINCIPAL SHAREHOLDER IS A PARTY OR BY WHICH THE GCN PRINCIPAL SHAREHOLDER
OR ANY OF THE GCN PRINCIPAL SHAREHOLDER'S SHARES OF GCN COMMON STOCK ARE BOUND;
OR RESULT IN THE CREATION OR IMPOSITION OF, OR AFFORD ANY PERSON THE RIGHT TO
OBTAIN, ANY LIEN UPON THE SHARES OF GCN COMMON STOCK OWNED BY THE GCN PRINCIPAL
SHAREHOLDER.
NO LITIGATION.
No Litigation is pending or, to the knowledge of the GCN Principal Shareholder,
threatened against the GCN Principal Shareholder which:
QUESTIONS OR INVOLVES THE VALIDITY OR ENFORCEABILITY OF ANY OF THE GCN PRINCIPAL
SHAREHOLDER'S OBLIGATIONS UNDER THIS AGREEMENT; OR SEEKS TO PREVENT OR DELAY THE
CONSUMMATION BY THE GCN PRINCIPAL SHAREHOLDER OF THE MERGER, OR SEEKS DAMAGES IN
CONNECTION WITH ANY CONSUMMATION BY THE GCN PRINCIPAL SHAREHOLDER OF THE MERGER.
PREEMPTIVE AND OTHER RIGHTS; WAIVER.
Except for the right of the GCN Shareholder to receive Merger Consideration as a
result of the Merger, the GCN Principal Shareholder either:
DOES NOT HAVE ANY STATUTORY OR CONTRACTUAL PREEMPTIVE OR OTHER RIGHT OF ANY KIND
(INCLUDING ANY RIGHT OF FIRST OFFER OR REFUSAL) TO ACQUIRE ANY EQUITY INTEREST
IN GCN; OR HEREBY IRREVOCABLY WAIVES EACH SUCH RIGHT OF THAT TYPE THAT THE GCN
PRINCIPAL SHAREHOLDER HAS OR MAY HAVE.
CONTROL OF RELATED BUSINESS.
Except as set forth in Section 4.19 of the GCN Disclosure Schedule, the GCN
Principal Shareholder is not, and none of his immediate family member are, in
any case alone or with one or more other Persons, the controlling Affiliate of
any Entity, business or trade (other than GCN, if the GCN Principal Shareholder
is an Affiliate of GCN) that: IS ENGAGED IN ANY LINE OF BUSINESS WHICH IS THE
SAME AS OR SIMILAR TO ANY LINE OF BUSINESS IN WHICH GCN IS ENGAGED; IS A
SIGNIFICANT CUSTOMER OF OR SUPPLIER TO GCN; OR IS, OR HAS WITHIN THE THREE-YEAR
PERIOD ENDING ON THE DATE OF THIS AGREEMENT, ENGAGED IN ANY TRANSACTION OR BEEN
A PARTY TO ANY AGREEMENT WITH GCN (OTHER THAN TRANSACTION INHERENT IN HIS
RELATIONSHIP AS A SHAREHOLDER, DIRECTOR OR EMPLOYEE OF GCN).
INVESTMENT REPRESENTATIONS.
GCN PRINCIPAL SHAREHOLDERS INVESTMENT SUITABILITY AND RELATED MATTERS. THE GCN
PRINCIPAL SHAREHOLDER HAS HAD THE OPPORTUNITY TO ASK QUESTIONS OF, AND RECEIVE
ANSWERS FROM, iEXALT OFFICERS AND DIRECTORS CONCERNING THE GCN PRINCIPAL
SHAREHOLDER'S ACQUISITION OF iEXALT COMMON STOCK, AND TO OBTAIN SUCH OTHER
INFORMATION CONCERNING iEXALT AND THE iEXALT COMMON STOCK (INCLUDING THE iEXALT
INFORMATION STATEMENT) TO THE EXTENT THEY POSSESS THE SAME OR COULD ACQUIRE IT
WITHOUT UNREASONABLE EFFORT OR EXPENSE, AS THE GCN PRINCIPAL SHAREHOLDER DEEMED
NECESSARY IN MAKING AN INFORMED INVESTMENT DECISION, (II) THE GCN PRINCIPAL
SHAREHOLDER IS AWARE OF THE RISKS ASSOCIATED WITH OWNERSHIP OF iEXALT COMMON
STOCK (III) THE GCN PRINCIPAL SHAREHOLDER IS CAPABLE OF BEARING
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THE FINANCIAL RISKS ASSOCIATED WITH SUCH OWNERSHIP AND (IV) THE GCN PRINCIPAL
SHAREHOLDER HAS SUCH KNOWLEDGE AND EXPERIENCE IN BUSINESS AND FINANCIAL MATTERS
THAT THE GCN PRINCIPAL SHAREHOLDER IS CAPABLE OF EVALUATING THE MERITS AND RISKS
OF THE INVESTMENT IN EXALT COMMON STOCK.
MERGER SHARES NOT REGISTERED. THE ISSUANCE OF THE MERGER SHARES HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT, OR REGISTERED OR QUALIFIED UNDER ANY
APPLICABLE STATE SECURITIES LAWS.
RELIANCE ON REPRESENTATIONS. THE MERGER SHARES WILL BE ISSUED, TO THE GCN
PRINCIPAL SHAREHOLDER IN RELIANCE UPON EXEMPTIONS FROM SUCH REGISTRATION OR
QUALIFICATION REQUIREMENTS, AND THE AVAILABILITY OF SUCH EXEMPTIONS DEPENDS IN
PART UPON THE GCN PRINCIPAL SHAREHOLDER'S BONA FIDE INVESTMENT INTENT WITH
RESPECT TO SUCH SHARES.
INVESTMENT INTENT. THE GCN PRINCIPAL SHAREHOLDER'S ACQUISITION OF THE MERGER
SHARES PURSUANT TO THIS AGREEMENT IS SOLELY FOR ITS OWN ACCOUNT FOR INVESTMENT,
AND THE GCN PRINCIPAL SHAREHOLDER IS NOT ACQUIRING SUCH SHARES PURSUANT TO THIS
AGREEMENT FOR THE ACCOUNT OF ANY OTHER PERSON OR WITH A VIEW TOWARD RESALE,
ASSIGNMENT, FRACTIONALIZATION, OR DISTRIBUTION THEREOF.
PERMITTED RESALE. THE GCN PRINCIPAL SHAREHOLDER SHALL NOT OFFER FOR SALE, SELL,
TRANSFER, PLEDGE, HYPOTHECATE OR OTHERWISE DISPOSE OF ANY OF THE MERGER SHARES
IT ACQUIRES PURSUANT TO THIS AGREEMENT, EXCEPT IN ACCORDANCE WITH THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS OR UPON DELIVERY TO iEXALT OF AN OPINION OF LEGAL COUNSEL REASONABLY
SATISFACTORY TO iEXALT THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
RESTRICTIVE LEGEND. IN ADDITION TO ANY OTHER LEGENDS REQUIRED BY LAW OR THE
OTHER AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH, THE CERTIFICATES
EVIDENCING THE MERGER SHARES ISSUED PURSUANT TO THIS AGREEMENT WILL BEAR A
CONSPICUOUS RESTRICTIVE LEGEND SUBSTANTIALLY AS FOLLOWS:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITES ACT
OF 1933,AS AMENDED ("ACT"), OR UNDER ANY APPLICABLE STATE SECURITIES LAWS, AND
THEY CANNOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
HYPOTHECATED EXCEPT IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE ACT
AND SUCH OTHER STATE LAWS OR UPON DELIVERY TO THIS CORPORATION OF AN OPINION OF
LEGAL COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION THAT AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.
ARTICLE VI
iEXALT COVENANTS PENDING CLOSING
The iExalt Parties agree that pending the Closing:
NOTICE OF CERTAIN EVENTS.
iExalt shall notify GCN of any matter or event which comes to the knowledge of
the iExalt Parties which makes or could make any representation and warranty
made concerning iExalt or any of its Subsidiaries in Article III untrue.
ACCESS AND INFORMATION.
iExalt shall give GCN and its representatives full access during normal business
hours to all the properties, books, contracts, commitments and records of iExalt
and its Subsidiaries so that GCN may have full opportunity to make such
investigation of iExalt and its Subsidiaries as they shall reasonably request in
advance.
CONFIDENTIALITY.
Except for information required or appropriate for inclusion in any application,
filing, statement or notice to be filed by iExalt with any Governmental Entity,
all information and data furnished by the GCN Parties to the iExalt Parties
under this Agreement shall be received, held and treated confidentially by the
iExalt Parties, and none of such information shall be used in any manner for the
benefit of iExalt or any of its Subsidiaries or for the benefit of any business
controlled by it or them. As soon as practicable after any termination of this
Agreement, the iExalt Parties shall return to GCN, and shall
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cause their representatives to return to GCN, all documents (and all copies
thereof) obtained from GCN under this Agreement.
CONSUMMATION OF MERGER.
The iExalt Parties shall use their best efforts to perform and fulfill all
conditions and obligations on their part to be performed and fulfilled under
this Agreement, to the end that the Merger shall be consummated.
ARTICLE VII
COVENANTS OF GCN PENDING CLOSING
The GCN patties agree that pending the Closing:
CONDUCT OF BUSINESS.
GCN shall conduct its operations according to its ordinary and usual course of
business, and shall use its best efforts to preserve intact its business
organization, keep available the services of its officers and employees and
maintain normal business relationships with customers, clients and others having
business relationships with it. GCN shall confer on a regular and frequent basis
with one or more designated representatives of iExalt to report on operational
matters of materiality and to report the general status of ongoing operations of
GCN. GCN shall notify iExalt of:
ANY UNEXPECTED MATERIAL EMERGENCY OR OTHER MATERIAL CHANGE IN THE NORMAL COURSE
OF BUSINESS OR IN THE OPERATION OF THE PROPERTIES OF GCN; ANY SIGNIFICANT
DEVELOPMENT IN ANY REGULATORY PROCEEDINGS, GOVERNMENTAL COMPLAINTS,
INVESTIGATIONS OR HEARINGS (OR COMMUNICATION INDICATING THAT ANY MAY BE
CONTEMPLATED) INVOLVING GCN; AND ANY MATTER OR EVENT WHICH COMES TO THE
KNOWLEDGE OF GCN PARTIES AND WHICH MAKES OR COULD MAKE ANY REPRESENTATION AND
WARRANTY MADE CONCERNING GCN IN ARTICLES IV OR V UNTRUE OR INACCURATE.
GCN SHALL KEEP iEXALT FULLY INFORMED OF SUCH EVENTS AND PERMIT REPRESENTATIVES
OF iEXALT ACCESS TO ALL MATERIALS PREPARED IN CONNECTION WITH SUCH EVENTS.
FORBEARANCE BY GCN.
GCN shall not:
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AMEND OR PROPOSE TO AMEND ITS CHARTER DOCUMENTS;
ISSUE ANY SHARES OF GCN COMMON STOCK OR SECURITIES CONVERTIBLE INTO OR
EXCHANGEABLE FOR SHARES OF GCN COMMON STOCK, OR ENTER INTO ANY AGREEMENT OR
COMMITMENT FOR THE ISSUANCE OR PURCHASE OF ANY SUCH SHARES OR SECURITIES, WITH
THE EXCEPTION OF THE CONVERSION OF THE PREFERRED SHARES INTO COMMON; SPLIT,
COMBINE OR RECLASSIFY ANY OUTSTANDING SHARES OF GCN COMMON STOCK;
DECLARE, PAY OR SET ASIDE FOR PAYMENT ANY DIVIDEND OR OTHER DISTRIBUTION IN
RESPECT OF ANY OUTSTANDING SHARES OF GCN COMMON STOCK; INCUR ANY INDEBTEDNESS
FOR BORROWED MONEY; INCREASE THE COMPENSATION LEVELS OF ITS OFFICERS OR
MANAGEMENT LEVEL EMPLOYEES OR GRANT ANY GENERAL SALARY INCREASES; ENTER INTO ANY
MATERIAL LEASE AGREEMENTS OR OTHER LONG-TERM COMMITMENTS;
ACQUIRE OR NEGOTIATE FOR THE ACQUISITION OF ANY BUSINESS EITHER DIRECTLY OR
INDIRECTLY; SELL OR AGREE TO SELL ALL OR SUBSTANTIALLY ALL, OR ANY MATERIAL
PORTION, OF ITS ASSETS, OR MERGE OR CONSOLIDATE WITH ANY OTHER ENTITY; OR TAKE
ANY OF THE OTHER ACTIONS OR PERMIT TO OCCUR ANY OF THE OTHER EVENTS SPECIFIED IN
SECTION 4.8 WHICH ARE WITHIN THE CONTROL OF GCN.
ACCESS AND INFORMATION.
GCN shall give iExalt and its representatives access during normal business
hours to all the properties, books, contracts, commitments and records of GCN so
that iExalt may have full opportunity to make such investigation of GCN as they
shall reasonably request in advance. GCN will furnish iExalt all information
concerning GCN required for inclusion in any application, filing, statement or
notice made by iExalt to, or filed or joined in by iExalt with, any Government
Entity in connection with this Agreement or the Merger. None of the information
furnished to iExalt under this Section 7.3, including any information concerning
GCN furnished by it for inclusion in the iExalt Information Statement (if any)
or otherwise contained in the GCN Information Statement shall, at the date
furnished or the date distributed to the GCN Shareholders, as applicable,
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
CONFIDENTIALITY.
All information and data furnished to GCN by a iExalt Party under this
Agreement, whether furnished orally or in writing, shall be received, held and
treated confidentially by GCN, and none of such information shall be used in any
manner for the benefit of GCN or for the benefit of any business controlled by
it. As soon as practicable after any termination of this Agreement, GCN shall
return to the iExalt Parties, and shall cause its representatives to return to
the iExalt Parties, respectively, all documents (and all copies thereof)
obtained from them under this Agreement.
GCN SHAREHOLDERS' MEETING.
GCN shall call a special meeting of the GCN Shareholders determined as of the
GCN Record Date (the "GCN SHAREHOLDERS' MEETING") to tee held to vote to approve
this Agreement, the Plan of Merger end the Merger. GCN shall use its best
efforts to hold the GCN Shareholders' Meeting not later than 15 days following
the mailing date of the required notice of the GCN Shareholders' Meeting and
related materials, which mailing date shall be not later than five days after
execution of this Agreement and the Plan of Merger by the Parties. GCN shall
recommend the approval of the matters to be acted upon at the GCN Shareholders'
Meeting as provided above, and agrees to use its best efforts to obtain a
favorable vote thereon.
WINEROTH CLAIMS.
As soon as practicable after execution of this Agreement and the Plan of Merger
but on or before the Closing date, GCN shall use ITS commercially reasonable
efforts to settle in writing any claims by Barry D. Wineroth or The Barry D.
Wineroth Family Trust U/T/A dated August 2, 1984 (the "WINEROTH TRUST") relating
to his or its purported investment in GCN preferred stock (the "PREFERRED STOCK
CLAIM",) by issuing to Barry D. Wineroth and/or the Wineroth Trust solely
additional shares of GCN Common Stock immediately prior to the Effective Time in
full satisfaction of such Preferred
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Stock Claim.
DISPOSITION OF SUBSIDIARIES.
As soon as practicable after execution of this Agreement but on or before the
Closing Date, GCN shall distribute to the GCN Shareholders, or otherwise dispose
of, its equity interests in CoolDeal.com, Inc. and CoolDeal.com Promotions,
Inc., each of which is a Nevada corporation and wholly owned subsidiary of GCN.
CONSUMMATION OF MERGER.
GCN shall use its best efforts to perform and fulfill all conditions and
obligations on their part to be performed and fulfilled under this Agreement, to
the end that the Merger shall be consummated.
ARTICLE VIII
MUTUAL CONDITIONS
The respective obligations of all Parties to consummate the Merger is subject to
the fulfillment of the following condition on or before the Closing Date:
NO ADVERSE PROCEEDINGS.
No order entered or Law promulgated or entered by any Governmental Entity shall
be in effect which would prevent consummation of the Merger, and no proceeding
brought by a Governmental Entity or any other Person shall have been commenced
and be pending which seeks to restrain, enjoin, prevent or materially delay or
restructure the Merger.
GCN SHAREHOLDER APPROVAL.
At the GCN Shareholders' Meeting, this Agreement, the Plan of Merger and Merger
shall have been approved by the requisite vote of the GCN Shareholders.
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF iEXALT PARTIES
The respective obligations of the iExalt Parties to consummate the Merger are
subject to the fulfillment of each of the following conditions on or before the
Closing Date:
REPRESENTATIONS TRUE AT CLOSING.
The iExalt Parties shall not have discovered any material error, misstatement or
omission in the representations and warranties made by the GCN Parties in either
of Articles IV or V; the representations and warranties made by the GCN Parties
in Articles IV and V shall be deemed to have been made again as of the time of
the Closing, and shall then be true in all material respects; each GCN Party
shall have performed and complied with all agreements and conditions required to
be performed or complied with by it at or prior to the Closing; and the iExalt
Parties shall have received certificates, each dated the Closing Date, of the
President or a Vice President of GCN, to the effect set forth in this Section
9.1.
NO ADVERSE CHANGES.
Since the date of this Agreement, no event shall have occurred which has had or
could be reasonably expected to have a Material Adverse Effect on GCN.
OPINION OF GCN COUNSEL.
The iExalt Parties shall have received an opinion, dated the Closing Date, of
Hale Lane Peck Dennison Howard and Anderson, a Professional Corporation and
special counsel to GCN, substantially in the form attached as Exhibit A to this
Agreement.
CONSENTS.
The iExalt Parties shall have received duly executed copies of all consents,
authorizations, orders or approvals of any Governmental Entity or Person
necessary for or required by any GCN Party for execution of this Agreement or
consummation of the Merger.
RESIGNATION OF OFFICERS AND DIRECTORS.
iExalt and GCN shall have received resignations of all officers and directors of
GCN not designated as such in the Plan of Merger.
EMPLOYMENT AGREEMENTS.
Each of David E. Fritsche, Jr. and Robert A. Fritsche shall have executed and
delivered to iExalt an employment substantially in the form attached hereto as
Exhibits C-1 and C-2, respectively.
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RELEASES.
The iExalt Parties and GCN shall have received a Release, in the form attached
as Exhibit D to this Agreement, from each GCN Shareholder as of the Closing
Date.
GCN SHAREHOLDER INVESTMENT AGREEMENTS.
The iExalt Parties shall have received an Investment Agreement, in the form
attached as Exhibit E to this Agreement, from each GCN Half-Percent Shareholder
as of the Closing Date (other than the GCN Principal Shareholders).
NO DISSENTERS.
No GCN Shareholder shall have properly and timely exercised their dissenters'
rights with respect to this Agreement, the Plan of Merger or the Merger in
accordance with Chapter 92A of the N.R S.
NON-FOREIGN STATUS TAX CERTIFICATE.
iExalt shall have received a Non-Foreign Status Tax Certificate, in the form
attached as Exhibit F to this Agreement, from each GCN Shareholder as of the
Closing Date.
WINEROTH MATTERS.
The iExalt Parties and GCN shall have received (i) a written settlement
agreement executed by GCN and each of Barry D. Wineroth and the Wineroth Trust
as contemplated in Section 7.6 in full satisfaction of the Preferred Stock Claim
and (ii) a written amendment, modification, extension, restructure, refinancing
or settlement agreement with respect to the Wineroth Debt executed by GCN and
Barry D. Wineroth, each of which shall be on terms satisfactory to the iExalt
Parties.
DISPOSITION OF SUBSIDIARIES.
GCN shall have distributed to the GCN Shareholders, or otherwise disposed of,
its equity interest in CoolDeal.com, Inc. and CoolDeal.com Promotions, inc. as
contemplated by Section 7.7, and GCN shall have provided to the iExalt Parties
written evidence of such distribution or disposition reasonably satisfactory to
the iExalt Parties.
OTHER DOCUMENTS.
The iExalt Parties shall have received the certificates, instruments and
documents listed below:
THE CERTIFICATES REPRESENTING ALL OF THE ISSUED AND OUTSTANDING SHARES OF GCN
COMMON STOCK AS OF THE CLOSING DATE, DULY ENDORSED TO iEXALT.
ALL STOCK TRANSFER REGISTERS, MINUTE BOOKS AND OTHER CORPORATE RECORDS
PERTAINING TO GCN; AND SUCH OTHER CERTIFICATES, INSTRUMENTS AND DOCUMENTS AS MAY
BE REASONABLY REQUESTED BY THE iEXALT PARTIES CONSISTENT WITH THE PROVISIONS
HEREOF.
ARTICLE X
CONDITIONS TO GCN PARTIES OBLIGATIONS
The respective obligations of the GCN parties to consummate the Merger are
subject to the fulfillment of each of the following conditions on or before the
Closing Date:
iEXALT REPRESENTATIONS TRUE AT CLOSING.
GCN shall not have discovered any material error, misstatement or omission in
the representations and warranties made by the iExalt Parties in Article m, the
representations and warranties made by the iExalt Parties in Article m shall be
deemed to have been made again as of the time of the Closing, and shall then be
true in all material respects; each iExalt Party shall have performed and
complied with all agreements and conditions required to be performed or complied
with by it at or prior to the Closing; and GCN shall have received certificates,
each dated the Closing Date, of the President or Vice President of each of the
iExalt Parties, to the effects set forth in this Section 10.1.
NO ADVERSE iEXALT CHANGES.
Since the date of this Agreement, no evens shell have occurred which could
reasonably be expected to have a Material Adverse Effect on iExalt.
OPINION OF EXALT'S COUNSEL.
GCN and the GCN Shareholders shall have received an opinion, dated the Closing
Date, of Porter & Hedges, L.L.P., counsel to the iExalt Parties, substantially
in the form attached as Exhibit B to this Agreement.
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EMPLOYMENT AGREEMENTS.
GCN shall have entered into the Employment Agreements with David E. Fritsche,
Jr. and Robert A. Fritsche substantially in the form attached as Exhibits C-1
and C-2, respectively.
OTHER DOCUMENTS.
The GCN Shareholders shall have received the certificates, instruments and
documents listed below: STOCK CERTIFICATES OF iEXALT COMMON STOCK REPRESENTING
THE MERGER SHARES; AND SUCH OTHER CERTIFICATES, INSTRUMENTS AND DOCUMENTS AS MAY
BE REASONABLY REQUESTED BY THE GCN PARTIES CONSISTENT WITH THE PROVISIONS
HEREOF.
ARTICLE XL
ADDITIONAL AGREEMENTS
AGREEMENT AS TO PAYMENT OF GCN BACK SALARIES.
iExalt hereby agrees to pay, or cause GCN to pay, the accrued and unpaid back
salaries set forth on Section 4.9 of the GCN Disclosure Schedules.
CONSENTS AND APPROVALS.
All Parties shall use their best efforts to obtain before the Closing, all other
consents and approvals from any Governmental Entity or Person that are necessary
or required by any Party for the execution of this Agreement or the consummation
of the Merger.
PUBLICITY.
No Party other than iExalt or GCN shall issue any press release or public
announcement pertaining to the Merger. iExalt and GCN shall consult with each
other concerning any such press release or public announcement and shall use
their best efforts to agree on its text before its public dissemination and
before making any filings with any Governmental Entity or national securities
exchange with respect to any such press release or public announcement. In cases
where iExalt and GCN are unable to agree on a press release or public
announcement, the Party proposing it will not issue or make it unless the
proposing Party is required to do so by Law or by any listing agreement with, or
rules of, any national securities exchange, in which case the Party so obligated
shall use its reasonable efforts to provide a copy of the press release or
public announcement to the other Party before its filing or public
dissemination.
EXPENSES.
Each iExalt Party shall pay its own costs and expenses incurred in connection
with the Merger, and GCN shall pay its costs and expenses and the costs and
expenses of the GCN Shareholders :(but not any fees or expenses of any separate
counsel for any GCN Shareholder) in connection with the Merger, in each case
whether or not the Merger is consummated.
CONVEYANCE TAXES.
The Parties shall cooperate in the preparation of all Tax Returns,
questionnaires, applications or other documents regarding any real property
transfer tax, any stock transfer or stamp tax, or any other similar transfer or
conveyance taxes which become payable in connection with the Merger. This
Section 1 1.4 does not apply or extend to any federal, state, or local income
Tax.
RULE 144 REPORTS.
For as long as any GCN Shareholders remains subject to SEC Rule 144 with respect
to the GCN Shareholder's sale of the Merger Shares, iExalt will make available
to such GCN Shareholder the benefit of rules and regulations of the SEC which
may permit such GCN Shareholder to sell the Merger Shares without registration
by:
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MAKING AND KEEPING "CURRENT PUBLIC INFORMATION" "AVAILABLE" (AS BOTH THOSE
TERMS ARE DEFINED IN RULE 144) AT ALL TIMES; TIMELY FILING WITH SEC IN
ACCORDANCE WITH ALL APPLICABLE RULES AND REGULATIONS, ALL REPORTS AND OTHER
DOCUMENTS (X) REQUIRED OF iEXALT FOR RULE 144, AS SUCH RULE MAY BE AMENDED FROM
TIME TO TIME (OR ANY RULE, REGULATION, OR STATUTE REPLACING RULE 144) TO BE
AVAILABLE AND (Y) REQUIRED TO BE FILED UNDER SECTION 15(D) OF THE EXCHANGE ACT
EVEN IF iEXALT'S DUTY TO FILE THOSE REPORTS OR DOCUMENTS IS SUSPENDED OR
OTHERWISE TERMINATED UNDER THE TERMS OF SECTION 15(D); AND FURNISHING A WRITTEN
STATEMENT BY iEXALT THAT IT HAS COMPLIED WITH THE REPORTING REQUIREMENTS OF THE
EXCHANGE ACT AND RULE 144, TOGETHER WITH A COPY OF THE MOST RECENT ANNUAL OR
QUARTERLY REPORT OF iEXALT AND SUCH REPORTS AND DOCUMENTS FILED BY iEXALT WITH
THE SEC AS MAY REASONABLY BE REQUESTED BY ANY SUCH GCN SHAREHOLDER.
DISPUTES
Any dispute arising from this agreement shall be governed in accordance with the
Rules of Procedure for Christian Conciliation of the Institute for Christian
Conciliation (Peacemaker Ministries) for any and all disputes concerning or
arising from or under this agreement. Both parties realize that arbitration will
be the exclusive remedy for potential disputes and may not later litigate these
or any other related matters in civil court.
ARTICLE XII
NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES
NATURE OF STATEMENTS.
All, but only those, statements contained in this Agreement or any Disclosure
Schedule or certificate delivered by or on behalf of a Party under this
Agreement shall be deemed representations and warranties made by that Party in
connection with the transactions contemplated by this Agreement.
SURVIVAL OF REPRESENTATIONS END WARRANTIES.
Regardless of any investigation mace at any time by or on behalf of any Party or
of any information any Party may have as a result of any such investigation, the
representations and warranties made by the iExalt Parties in Article IV, and the
representations and warranties made by the GCN Parties in Article IV, shall
survive for a period of two years after the Closing, except that the
representations and warranties contained in Section 4.11 shall survive until the
expiration applicable statute of limitations (collectively the "SURVIVAL
PERIOD"). Any indemnification claim related to representations and warranties
contained in Articles IV and IV end which is made during such two-year period
(or prior to the expiration of the applicable statute of limitations, as the
case may be) shall remain in effect for such indemnification notwithstanding
such claim may not be resolved before expiration of the applicable survival
period. Regardless of any investigation made at any time by or on behalf of any
Party or of any information any Party may have as a result of any such
investigation, all representations and warranties made by the respective GCN
Shareholders in Article V shall survive the Closing indefinitely and shall
continue in effect thereafter.
ARTICLE XIII
INDEMNIFICATION
The respective indemnification obligations of the Parties are:
INDEMNIFICATION REGARDING ARTICLE 1V REPRESENTATIONS. WARRANTIES AND
GCN COVENANT
Each GCN Shareholder, jointly and severally, agrees to pay and to indemnify and
hold harmless and defend each iExalt Party and its Affiliates, and their
respective successors and assigns from and against any and all Damages caused by
or arising out of or in respect of:
ANY BREACH OR DEFAULT IN THE PERFORMANCE BY GCN OF ANY COVENANT OR AGREEMENT OF
GCN CONTAINED IN THIS AGREEMENT; AND
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ANY BREACH OF WARRANTY OR INACCURATE OR ERRONEOUS REPRESENTATION CONTAINED IN
ARTICLE 1V OF THIS AGREEMENT.
INDEMNIFICATION REGARDING ARTICLE V REPRESENTATIONS AND WARRANTIES AND GCN
SHAREHOLDER
COVENANTS.
Each GCN Shareholder severally agrees to pay and to indemnify and hold harmless
each iExalt Party, GCN, and their respective Affiliates (but, in the case of
GCN, only its Affiliates after the Closing), successors and assigns from and
against any and all Damages caused by, arising out of or in respect of:
ANY BREACH OR DEFAULT IN THE PERFORMANCE BY THE GCN SHAREHOLDER OF ANY COVENANT
OR AGREEMENT MADE BY THE GCN SHAREHOLDER IN THIS AGREEMENT; OR
ANY BREACH OF WARRANTY OR INACCURATE OR ERRONEOUS REPRESENTATION MADE BY THE
GCN SHAREHOLDER IN ARTICLE V OF THIS AGREEMENT.
INDEMNIFICATION BY THE iEXALT PARTIES.
The iExalt Parties, jointly and severally, agree to pay and to indemnify and
hold harmless and defend each GCN Party and its Affiliates (but not GCN after
the Closing), and their respective successors and assigns from and against any
and all Damages caused by or arising out of or in respect of:
ANY BREACH OR DEFAULT IN THE PERFORMANCE BY ANY iEXALT PARTY OF ANY COVENANT OR
AGREEMENT OF SUCH iEXALT PARTY CONTAINED IN THIS AGREEMENT; AND ANY BREACH OF
WARRANTY OR INACCURATE OR ERRONEOUS REPRESENTATION CONTAINED IN ARTICLE III OF
THIS AGREEMENT.
LIMITATION ON INDEMNIFICATION CLAIMS.
Notwithstanding anything contained herein to the contrary, in no event will the
indemnification obligation under this Article XIV of any Party exceed the
TRANSACTION VALUE, and no Party shall be liable under this Article XIV for the
breach of any representation or warranty in Articles m and IV except to the
extent the aggregate amount of such liability (for all such claims) exceeds
$25,000, in which event the indemnifying party shall be liable for amounts in
excess of $25,000.
REQUESTS FOR INDEMNIFICATION.
If any Party (an "INDEMNIFIED PARTY") becomes aware of a fact, circumstance,
claim, situation, demand or other matter for which it or any other Indemnified
Party has been indemnified under this Article XIII (any such item being herein
called an "INDEMNITY MATTER 'L, the Indemnified Party shall give prompt written
notice of the Indemnity Matter to the indemnifying Party, requesting
indemnification there for, specifying the nature of and specific basis for the
Indemnity Matter and the amount or estimated amount thereof to the extent then
feasible; provided, however, a failure to give such notice will not waive any
rights of the Indemnified Party except to the extent the rights of the
Indemnifying Party are actually materially prejudiced by such failure. The
Indemnifying Party shall have the right to assume the defense or investigation
of such Indemnity Matter and to retain counsel and other experts to represent
the Indemnified Party and shall pay the fees and disbursements of such counsel
and other experts. If within 30 days after receipt of the request (or five days
if litigation is pending) the Indemnifying Party fails to give notice to the
Indemnified Party that the Indemnifying Party assumes the defense or
investigation of the Indemnity Matter, an Indemnified Party may retain counsel
and other experts (whose fees and disbursements shall be at the expense of the
Indemnifying Party) to file any motion, answer or other pleading and take such
other action which the Indemnified Party reasonably deems necessary to protect
its interests or those of the Indemnifying Party until the date on which the
Indemnified Party receives such notice from the Indemnifying Party. If an
Indemnifying Party retains counsel and other experts, any Indemnified Party
shall have the right to retain its own counsel and other experts, but the fees
and expenses of such counsel and other experts shall be at the expense of the
Indemnified Party unless (i) the Indemnifying Party and the indemnified Party
mutual~ agree to the retention of such counsel and other experts or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnifying Party and the Indemnified Party and representation of both
parties by the same counsel would, in the opinion of counsel retained by the
Indemnifying Party, be inappropriate due to actual or potential differing
interests between them.
If requested by the Indemnifying Party, the Indemnified Party agrees to
cooperate with the Indemnifying Party and its
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counsel in contesting any Indemnity Matter which the Indemnifying Party defends,
or, if appropriate and related to the Indemnity Matter in question, in making
any counterclaim against the person asserting the Indemnity Matter, or any
cross-complaint against any person. No Indemnity Matter may be settled by the
Indemnified Party without the consent of the Indemnifying Pany, which consent
will not be unreasonably withheld. Unless the Indemnifying Party agrees in
writing that the Damages to the Indemnified Party resulting from such settlement
are fully covered by the indemnities provided herein and that such Damages are
fully compensable in money, no Indemnity Matter may be settled without the
consent of the Indemnified Party, which consent will not be unreasonably
withheld. Except with respect to settlements entered without the
Indemnified Patty's consent pursuant to the immediately preceding sentence, to
the extent it is determined that the Indemnified Party has no right under this
Article XIII to be indemnified by the Indemnifying Party, the Indemnified Party
shall promptly pay to the Indemnifying Party any amounts previously paid or
advanced by the indemnifying Party with respect to such matters pursuant to this
Article XIII.
After the delivery of a notice of an Indemnity Matter hereunder, at the
reasonable request of the indemnifying Party the Indemnified Party shall grant
the Indemnifying Party and its representatives full and complete access to the
books, records and properties of the Indemnified Party to the extent reasonably
related to the matters to which the notice relates. The Indemnifying Party will
not disclose to any third person (except its representatives) any information
obtained pursuant to the preceding sentence which is designated as confidential
by the Indemnified Party and which is not otherwise generally available to the
public or not already within the knowledge of the Indemnifying Party, except as
may be required by applicable law. The Indemnifying Party shall request its
representatives not to disclose any such information (unless already within its
knowledge or as may be required by applicable law). All such access shall be
subject to the normal safety regulations of the Indemnified Party, and shall be
granted under conditions which will not unreasonably interfere with the business
and operations of the Indemnified Party.
ARTICLE XIV
AMENDMENT AND TERMINATION
AMENDMENT.
This Agreement may be amended by iExalt and GCN, by or pursuant to action taken
by the Boards of Directors of iExalt and GCN, but no amendment shall be made
which decreases the number of Merger Shares issuable to the GCN Shareholders in
connection with the Merger, without the further approval of the GCN's
Shareholders. This Agreement may be amended only by a written instrument
executed by iExalt and GCN.
WAIVER.
At any time on or before the Closing Date, each of the Parties may (i) extend
the time for the performance of any of the obligations or other act of any of
the other Parties, (ii):waive any inaccuracies in the representations and
warranties made in this Agreement or in a Disclosure Schedule of a Party, (iii)
waive compliance with any of the agreements or conditions of this Agreement
which may be legally waived, and (iv) grant consents under this Agreement. Any
such extension, waiver or grant shall be valid only if evidenced by a written
instrument executed by the Party giving it. Any such extension, waiver or "rant
on behalf of(i)the iExalt Parties need only be executed by iExalt, and (ii) the
GCN Parties need only be executed by GCN.
TERMINATION.
This Agreement may be terminated at any time before the Closing by: the mutual
consent of the Boards of Directors of iExalt and GCN; and by the Board of
Directors of iExalt or GCN if the Merger has not been consummated on or before
October l6, 2000 (or any later date which may be agreed to by the mutual written
consent of the Boards of Directors of iExalt and GCN); PROVIDED, HOWEVER, that
such right to terminate this Agreement shall not be available to any Party that
has breached in any material respect its obligations under this Agreement in any
manner that has proximately contributed to the failure of the Merger to occur on
or before such date.
CONSEQUENCES OF TERMINATION.
If this Agreement is terminated as provided in Section l4.3, it shall become
void and there shall be no liability or obligation on the part of any Party or
their respective officers or directors except that the provisions of Sections
6.3 7.4, ll.3, shall survive such a termination. Nothing in this Section l4.4
shall, however, relieve any Party from any liability for any breach of this
Agreement.
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ARTICLE XV
GENERAL PROVISIONS
TAX REPRESENTATIONS.
The Merger is intended to qualify as a reorganization within the meaning of
Section 368(aX2)(E) of the Code, but neither iExalt nor Merger Sub make any
representations or warranties that the Merger will so qualify as a
reorganization.
NON-BUSINESS DAYS.
If the date on which any action (including the delivery of notices) to be taken
under this Agreement falls on a day which is not a Business Day, the action will
be deemed timely taken if on the next following Business Day.
iEXALT SHAREHOLDER CONSENT.
Pursuant to the NGCL and Chapter 92A of the N.RS., by execution of this
Agreement, iExalt, as the sole shareholder of Merger Sub, hereby approves by
written consent this Agreement, the Merger and the Plan of Merger.
GCN WAIVER OF SHARE PURCHASE RIGHTS.
By execution of this Agreement, GCN hereby waives any and all rights it may have
to acquire or otherwise purchase any outstanding shares of GCN capital stock as
a result of the Merger or otherwise including, without limitation, any right of
first refusal or other preferential rights it may have with respect to shares of
GCN capital stock under the GCN Common Stock Purchase Agreements.
NOTICES.
All notices or other communications which are required or may be given under
this Agreement shall be in writing and shall be deemed to have been duly given
when delivered in person or transmitted by telecopier (with receipt confirmed)
to a Party at the address or telecopy number, as applicable, set forth below (as
any such address or telecopier number may be changed from time to time by notice
similarly given):
IF TO EITHER iEXALT PARTY, TO:
iExalt, Inc.
430l Windfern
Houston, Texas 7704l
Attention: Donald W. Sapaugh
Chairman and Chief Executive Officer
Telecopy No.(28l) 600-4000
if to any GCN Party, to:
Global Christian Network, Inc.
P.O Box ll495
Reno, Nevada 895l0
Attention: David E. Fritsche, Jr.
Telecopy No.: (775)829-6682
with copy to:
Hale Lane Peek Dennison Howard and Anderson
2300 West Sahara Avenue, Eighth Floor, Box 8
Las Vegas, Nevada 89l02
Attention: Jerome R. Smith
Telecopy No.: (702) 635-6940
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ENTIRE AGREEMENT.
This Agreement, its Exhibits, the Disclosure Schedules, and all documents
delivered under this Agreement, constitute the entire agreement, and supersede
all of the prior agreements and undertakings, both written and oral, among the
Parties, or any of them, with respect to the subject matter of this Agreement.
ASSIGNMENT; BINDING EFFECT.
This Agreement may not be assigned by any of its Parties. Subject to the
preceding sentence, this Agreement shall be binding upon the Parties and their
respective successors and assigns.
COUNTERPARTS.
This Agreement may be executed in counterparts that together shall constitute a
single agreement. Delivery by telephonic facsimile transmission of a signed
counterpart of this Agreement shall be effective as delivery of a manually
signed counterpart.
GOVERNING LAW: JURISDICTION.
This Agreement and the rights and obligations of the parties created hereby
shall be governed by the internal Laws of the State of Texas without regard to
its conflict of law rules. The Parties irrevocably consent to the non-exclusive
jurisdiction of the courts of the State of Texas in connection with any dispute
between or among them arising under this Agreement.
SEVERABILITY OF PROVISIONS.
If a provision of this Agreement or its application to any Person or
circumstance, is held invalid or unenforceable in any jurisdiction, to the
extent permitted by law, such provision or the application of such provision to
Persons or circumstances other than those as to which it is held invalid or
unenforceable and in other jurisdictions, and the remaining provisions of this
Agreement, shall not be affected.
SPECIFIC PERFORMANCE.
Each Party agrees that one or more other Parties would be irreparably damaged if
any provision of this Agreement were not performed in accordance with its
specific terms or was otherwise breached. Therefore, the Parties agree chat each
Party shall be enticed to an injunction or injunctions to prevent breaches of
this Agreement or any of its provisions and to specifically enforce this
Agreement and its terms and provisions in any action instituted in any court of
the United States or any state thereof haying subject matter jurisdiction, in
addition to any other remedy to which a Party may be entitled, at law or in
equity.
JOINT DRAFTING.
This Agreement and its Exhibits have been jointly drafted by the Parties and
their counsel. Neither this Agreement nor any of its Exhibits shall be construed
against any Party based on its authorship.
CAPTIONS.
The article and section headings in this Agreement are for convenience only, and
shall not affect the meaning or interpretation of this Agreement.
NO THIRD-PARTY BENEFICIARIES.
There are no third-party beneficiaries of this Agreement, except that the
respective Affiliates of the Parties are entitled to the benefits of the
respective indemnification obligations of the Parties under Article XIII.
ARBITRATION.
Any dispute arising from this agreement shall be governed in accordance with the
Rules of Procedure for Christian Conciliation of the Institute for Christian
Conciliation (Peacemaker Ministries) for any and all disputes concerning or
arising from or under this agreement. Both parties realize that arbitration will
be the exclusive remedy for potential disputes and may not later litigate these
or any other related matters in civil court.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parties have duly executed this Agreement, all as of the
date first written above.
iEXALT PARTIES:
iEXALT, INC.
/s/ DONALD SAPAUGH
Donald W. Sapaugh
Chairman and Chief Executive Officer:
GCN COMBINATION CORP.
/s/ DONALD SAPAUGH
Donald W. Sapaugh
President
GCN:
GLOBAL CHRISTIAN NETWORK, INC.
By: /s/ DAVID FRITSCHE
David Fritsche
President
GCN PRINCIPAL SHAREHOLDERS:
/s/ DAVID FRITSCHE
David E. Fritsche, Jr.
/s/ ROBERT A. FRITSCHE
Robert Fritsche
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