Exhibit 10.1 AGREEMENT CONCERNING THE AGREEMENT AND PLAN OF MERGER BY AND AMONG MYCOM GROUP, INC., MYCOM ACQUISITION CORPORATION, a wholly owned subsidiary of Mycom Group, Inc., AND VERITAS SOLUTIONS, INC., THE SECURITY HOLDERS OF VERITAS SOLUTIONS, INC. AND SECURE ASSET REPORTING SERVICES, INC. a wholly subsidiary of Veritas Solutions Inc. AGREEMENT AND PLAN OF MERGER

 

 

 

THIS AGREEMENT AND PLAN OF MERGER (“Agreement”) is made this 28^th day of August, 2007 (the “Closing Date”), by and between Mycom Group, Inc. a Nevada corporation (“Mycom”), Mycom Acquisition Corporation, a Nevada corporation and a wholly owned subsidiary of Mycom (“MergerCo”), Veritas Solutions, Inc., a Washington corporation (“VSI”), the security holders of VSI (the “VSI Security Holders”) who are listed on Exhibit 1.2 attached hereto and Secure Asset Reporting Services Inc., an Alaska corporation and a wholly owned subsidiary of VSI (“SARS”).

WHEREAS, VSI and SARS wishes to merge with and into MergerCo with MergerCo being the surviving corporation (the “Merger”);

WHEREAS, VSI desires to exchange all of the Shares (defined below) held by VSI Security Holders for newly issued unregistered shares of common stock of Mycom;

WHEREAS, Mycom agrees to reserve the Remaining Shares (defined below) for issuance upon the close of the Financing (also defined below);

WHEREAS, it is the intention of the parties that the Merger shall qualify as a transaction in securities exempt from registration or qualification under the Securities Act of 1933, as amended (the “Securities Act”), and under the applicable securities laws of each state or jurisdiction where the VSI Security Holders reside; and

WHEREAS, the board of directors of VSI, SARS, MergerCo each deem it to be in the best interests of VSI, SARS and MergerCo and their respective shareholders to consummate the Merger, as a result of which MergerCo shall acquire all of the assets of VSI and its respective subsidiaries.

NOW, THEREFORE, in consideration of the mutual promises, covenants and representations contained herein, the parties hereto agree as follows:

1.1 The Merger. At the Effective Time (defined below) and subject to and upon the terms and conditions of this Agreement, VSI and SARS shall merge with and into MergerCo in accordance with the provisions of the Washington Business Corporations Act (the “WBCA”), the Nevada Business Associations; Securities; Commodities Act (the “NBA”) and the Alaska Business Corporations Act (“ABCA”), the separate corporate existence of VSI and SARS shall cease and MergerCo shall continue as the surviving entity. The Effective Time of the Merger shall occur upon the filing of the Articles of Merger (defined below) executed in accordance with the applicable provisions of the WBCA, NBA and the ABCA with the Secretaries of State of the States of Washington, Nevada and Alaska, or at such later time as may be agreed to by VSI, SARS and MergerCo and specified in the Articles of Merger subject to the satisfaction or waiver of each of the conditions set forth in Section 4. Provided that this Agreement has not been terminated, the parties will cause the Articles of Merger to be filed on the Closing Date. The “Effective Time” shall mean the date upon which the Merger of VSI and SARS into MergerCo shall be consummated pursuant to the filing of the Articles of Merger with the Secretaries of State of the States of Washington, Nevada and Alaska. “Articles of Merger” shall mean the certificate of merger of VSI and SARS with and into MergerCo with MergerCo as the surviving corporation pursuant to the WBCA, ABCA and NBA.

 

 

(a) Upon the terms and subject to the conditions set forth in this Agreement and in accordance with the WBCA, NBA and ABCA, at the Effective Time all VSI Shares shall be converted into the right to receive the shares of Mycom from MergerCo.

(b) Exchange Agent. The Otto Law Group, PLLC shall act as the exchange agent (the “Exchange Agent”) for the purpose of exchanging the VSI Shares for shares of Mycom common stock.

1.2 Issuance of Securities. Subject to the terms and conditions of this Agreement, MergerCo agrees to issue and exchange Mycom common stock for one hundred percent (100%) of the Shares (defined below) held by the VSI Security Holders on a one-for-one basis. MergerCo shall reserve the Remaining Shares (defined below) for issuance upon completion of the Financing (defined below), also on a one-for-one basis. Mycom, with MergerCo, shall direct its transfer agent, Corporate Stock Transfer, Inc. to exchange its common stock with the VSI Security Holders for the Shares on the Closing Date, pursuant to the schedule set forth in Exhibit 1.2, and to reserve the Remaining Shares (defined below).

 (a) As of August 20, 2007, VSI shall have twenty-four million eight hundred sixteen thousand six hundred twelve (24,816,612) shares outstanding (“VSI Outstanding”).

(b) As of the Closing Date, VSI has (i) one (1) share of 8% cumulative series A convertible preferred stock, the principal amount of Nine Hundred Forty-Nine Thousand Nine Hundred Eight Dollars and Eighty-Three Cents ($949,908.83) (ii) one hundred forty thousand (140,000) shares of 8% cumulative series B convertible preferred stock that shall mandatorily convert into one hundred forty-nine thousand three hundred thirty-three (149,333) shares of VSI common stock at the Closing (collectively, the “Converted Preferred Shares”). The VSI Outstanding and the Converted Preferred Shares equal an aggregate total amount of twenty-four million nine hundred sixty-five thousand nine hundred forty-five (24,965,945) shares and shall collectively be referred to as the “Shares.”

(c) As of the Closing Date, Mycom shall have a total of one million five hundred thousand ninety-five (1,500,095) shares of common stock and zero shares of preferred stock issued and outstanding. Upon issuance of the Shares and the Remaining Shares, Mycom shall have a total of thirty-five million one hundred twenty-six thousand forty (35,126,040) shares of common stock outstanding and one share of series A convertible preferred stock outstanding.

 

1.3 Exemption from Registration. The parties hereto intend that all MergerCo common stock to be issued to the VSI Security Holders, as well as the Remaining Shares, when issued, shall be exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 506 and/or Regulation D of the Securities Act and rules and regulations promulgated thereunder.

 

 

1.4 Effect of Merger. The Merger shall have the effect set forth in Section 23B.11.090 of the WBCA, Title 10, Chapter 5 of the ABCA and Title 7 of the NBA. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the properties, rights, privileges, powers and franchises of VSI, SARS, MergerCo shall vest in MergerCo (the “Surviving Entity”), and all debts, liabilities and duties of VSI, SARS and MergerCo shall become the debts, liabilities and duties of the Surviving Entity.

1.5 Certificate Of Incorporation and Bylaws; Directors And Officers. Prior to the Effective Time of the Merger:

(a) The Certificate of Incorporation of MergerCo shall be the Certificate of Incorporation of the Surviving Entity following the Merger. The Bylaws of MergerCo shall be the Bylaws of Surviving Entity following the Merger.

(b) On the Closing Date, the Surviving Entity shall appoint the following individuals to its Board of Directors: Stephen K. Bannon, Chairman, Clayton Shelver, Jeremy Johnson and David M. Otto. Such members of the Board of Directors shall serve until the earlier of their death, resignation or removal.

(c) On the Closing Date, Earnest Mathis, Jr. shall (i) resign as Chief Executive Officer and Secretary of Mycom and MergerCo and (ii) Mycom and the Surviving Entity shall appoint the following individuals to the following positions: Clayton Shelver, Chief Executive Officer, Jeremy Johnson, Chief Technology Officer, David M. Otto, Secretary and Robert Lear, Chief Operating Officer (the “New Officers”). The New Officers shall serve until the earlier of their death, resignation or removal.

(d) On the Closing Date, Mycom shall appoint David M. Otto to its Board of Directors. Mr. Otto shall serve until the earlier of their death, resignation or removal.

 

1.6 Further Actions.

(a) If, at any time after the Effective Time, the Surviving Entity or Mycom considers or is advised that any deeds, bills of sale, assignments, assurances or any other actions or things are necessary or desirable to vest, perfect or confirm (of record or otherwise) in the Surviving Entity its right, title or interest in, to or under any of the rights, properties, or assets of VSI, or otherwise to carry out the intent and purposes of this Agreement, the officers and directors of the Surviving Entity will be authorized to execute and deliver, in the name and on behalf of each of VSI, all such deeds, bills of sale, assignments and assurances and to take and do, in the name and on behalf of VSI, all such other actions and things as the Board of Directors of the Surviving Entity may determine to be necessary or desirable to vest, perfect or confirm any and all right, title and interest in, to and under such rights, properties or assets in the Surviving Entity or otherwise to carry out the intent and purposes of this Agreement.

 

 

(b) Termination of Merger. In the event VSI Security Holders demand dissenter’s rights that result in VSI repurchasing shares of common stock that are cumulatively in excess of One Hundred Thousand Dollars ($100,000), the Merger will be terminated, unless the parties waive such term.

1.7  Restrictions on Resale. The Shares will not be registered under the Securities Act, or the securities laws of any state, and cannot be transferred, hypothecated, sold or otherwise disposed of until: (i) a registration statement with respect to such securities is declared effective under the Securities Act, or (ii) Mycom receives an opinion of counsel for the stockholder, reasonably satisfactory to counsel for Mycom, that an exemption from the registration requirements of the Securities Act is available.

The certificates representing the Shares, when exchanged, and the Remaining Shares, when issued, pursuant to this Agreement shall contain a legend substantially as follows:

“THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR DOT VN, INC. RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO COUNSEL FOR MYCOM GROUP, INC. THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS AVAILABLE.”

1.8 Exchange of Certificates.

(a) After the Effective Time and pursuant to a customary letter of transmittal or other instructional form provided by the Exchange Agent to the VSI Security Holders, the VSI Security Holders shall be able to surrender all their shares to the Exchange Agent, and the VSI Security Holders shall be entitled upon such surrender to receive in exchange therefor certificates representing the proportionate number of shares of common stock into which the Mycom securities theretofore represented by the stock transfer forms so surrendered shall have been exchanged pursuant to this Agreement. Until so surrendered, each outstanding certificate, which, prior to the Effective Time, represented VSI securities, shall be deemed for all corporate purpose, subject to the further provisions of this Article I, to evidence the ownership of the number of whole shares for which such VSI Shares have been so exchanged. No dividend payable to holders of VSI securities of record as of any date subsequent to the Effective Time shall be paid to the owner of any certificate which, prior to the Effective Time, represented VSI Shares, until such certificate or certificates representing all the relevant VSI Shares, together with a stock transfer form, are surrendered as provided in this Article I or pursuant to letters of transmittal or other instructions with respect to lost certificates provided by the Exchange Agent.

 

 

(b) All Mycom shares for which the Shares shall have been exchanged pursuant to this Article I shall be deemed to have been issued in full satisfaction of all rights pertaining to the Shares.

(c) On the Effective Date, the stock transfer book of VSI shall be deemed to be closed and no transfer of VSI Shares shall thereafter be recorded thereon.

 

VSI and its wholly owned subsidiary, SARS, hereby represent and warrant to Mycom and its wholly owned subsidiary, MergerCo, that:

2.1 Organization. VSI is a corporation duly organized, validly existing and in good standing under the laws of Washington, has all necessary corporate powers to own its properties and to carry on its business as now owned and operated by it, and is duly qualified to do business and is in good standing in each of the states where its business requires qualification. SARS is a corporation duly organized, validly existing and in good standing under the laws of Alaska, has all necessary corporate powers to own its properties and to carry on its business as now owned and operated by it, and is duly qualified to do business and is in good standing in each of the states where its business requires qualification.

2.2 Capital. Upon the close of VSI’s current private placement of its securities with Regal Securities Corp. (the “Financing”), an additional eight million six hundred sixty thousand (8,660,000) shares of VSI common stock are expected to be issuable (the “Remaining Shares”). . Upon the Closing Date, a total of four million eight hundred forty thousand (4,840,000) shares of VSI common stock are issuable in connection with the Financing. Except for the securities listed on Exhibit 2.2 attached hereto, there are no outstanding subscriptions, options, rights, warrants, debentures, instruments, convertible securities or other agreements or commitments obligating VSI to issue any additional VSI securities of any class.

2.3 Subsidiaries. VSI currently owns the following subsidiaries: (i) Secure Asset Reporting Services, Inc., an Alaska corporation; and (ii) ESL Wireless, Inc., a Washington corporation.

2.4 Directors and Executive Officers. The names and titles of the directors and executive officers of VSI are as follows:

Name		Position
Clayton Shelver		Director and Chief Executive Officer
Steven K. Bannon		Chairman
David M. Otto		Director and Secretary
Jeremy Johnson		Director and Chief Technology Officer
Cecil Whitlock		Chief Financial Officer
Robert Lear		Chief Operating Officer

 

 

The names and titles of the director and executive officers of SARS are as follows:

Name		Position
Clayton Shelver		Director and Chief Executive Officer
Jeremy Johnson		Director and Chief Technology Officer
Rich Loretta		Director
Robert Lear		Chief Operating Officer
Larry Shelver		Director

 

2.5 Financial Statements. On or before the Closing Date, VSI shall provide Mycom with unaudited financial statements of VSI for the six months ended June 30, 2007 and audited financials for the year ended September 30, 2006 (the “VSI Financial Statements”). The VSI Financial Statements are attached hereto as Exhibit 2.5. The VSI Financial Statements will be prepared in accordance with generally accepted accounting principles and practices consistently followed by VSI throughout the periods indicated, and fairly present the financial position of VSI as of the date of the balance sheets included in the VSI Financial Statements and the results of operations for the periods indicated.

2.6 Absence of Changes. Since June 30, 2007, there has not been any material change in the financial condition or operations of VSI and SARS, except as contemplated by this Agreement. As used throughout this Agreement, “material” means: Any change or effect (or development that, insofar as can be reasonably foreseen, is likely to result in any change or effect) that causes substantial increase or diminution in the business, properties, assets, condition (financial or otherwise) or results of operations of a party. Taken as a whole, material change shall not include changes in national or international economic conditions or industry conditions generally; changes or possible changes in statutes and regulations applicable to a party; or the loss of employees, customers or suppliers by a party as a direct or indirect consequence of any announcement relating to this transaction.

2.7 Absence of Undisclosed Liabilities. As of June 30, 2007, VSI and SARS did not have any material debt, liability or obligation of any nature, whether accrued, absolute, contingent or otherwise, and whether due or to become due, that is not reflected in the VSI Financial Statements.

2.8 Tax Returns. VSI and SARS have filed all federal, state and local tax returns required by law and have paid all taxes, assessments and penalties due and payable. The provisions for taxes, if any, reflected in Exhibit 2.8 are adequate for the periods indicated. There are no present disputes as to taxes of any nature payable by VSI or SARS.

 

 

2.9 Investigation of Financial Condition. Without in any manner reducing or otherwise mitigating the representations contained herein, Mycom, MergerCo, its legal counsel and accountants shall have the opportunity to meet with VSI’s accountants and attorneys to discuss the financial condition of VSI and SARS during reasonable business hours and in a manner that does not interfere with the normal operation of VSI’s and SARS’ business. VSI and SARS shall make available to Mycom and MergerCo all books and records of VSI and SARS.

2.10 Intellectual Property Rights. VSI and/or SARS owns or has the right to use all trademarks, service marks, trade names, copyrights and patents material to its business.

 

2.11 Compliance with Laws. To the best of VSI’s and SARS’ knowledge, VSI and SARS has complied with, and is not in violation of, applicable federal, state or local statutes, laws and regulations, including federal and state securities laws, except where such non-compliance would not have a material adverse impact upon its business or properties.

2.12 Litigation. VSI and SARS is not a defendant in any suit, action, arbitration or legal, administrative or other proceeding, or governmental investigation which is pending or, to the best knowledge of VSI and SARS, threatened against or affecting VSI or SARS or its business, assets or financial condition. VSI and SARS is not in default with respect to any order, writ, injunction or decree of any federal, state, local or foreign court, department, agency or instrumentality applicable to it. VSI and SARS are not engaged in any material litigation to recover monies due to it.

2.13 Authority. The Boards of Directors of VSI and SARS have authorized the execution of this Agreement and the consummation of the transactions contemplated herein, and VSI and SARS have full power and authority to execute, deliver and perform this Agreement, and this Agreement is a legal, valid and binding obligation of VSI and SARS and is enforceable in accordance with its terms and conditions. A majority of VSI Security Holders has agreed to and has approved the terms of this Agreement and the exchange of securities contemplated hereby.

2.14 Ability to Carry Out Obligations. The execution and delivery of this Agreement by VSI and SARS and the performance by VSI and SARS of its obligations hereunder in the time and manner contemplated will not cause, constitute or conflict with or result in (a) any breach or violation of any of the provisions of or constitute a default under any license, indenture, mortgage, instrument, article of incorporation, bylaw, or other agreement or instrument to which VSI and SARS is a party, or by which it may be bound, nor will any consents or authorizations of any party other than those hereto be required, (b) an event that would permit any party to any agreement or instrument to terminate it or to accelerate the maturity of any indebtedness or other obligation of VSI and SARS, or (c) an event that would result in the creation or imposition of any lien, charge or encumbrance on any asset of VSI or SARS.

 

 

2.15 Full Disclosure. None of the representations and warranties made by VSI and SARS herein or in any exhibit, certificate or memorandum furnished or to be furnished by VSI, or on its behalf, contains or will contain any untrue statement of material fact or omit any material fact the omission of which would be misleading.

2.16 Assets. VSI and SARS’ assets are fully included in Exhibit 2.16 and are not subject to any claims or encumbrances except as indicated in Exhibit 2.16.

2.17 Material Contracts. VSI and SARS’ material contracts are attached hereto as Exhibit 2.17.

2.18 Indemnification. VSI and SARS agree to indemnify, defend and hold Mycom and MergerCo harmless against and in respect of any and all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries and deficiencies, including interest, penalties and reasonable attorney fees asserted by third parties against Mycom or MergerCo which arise out of, or result from (i) any breach by VSI or SARS in performing any of its covenants or agreements under this Agreement or in any schedule, certificate, exhibit or other instrument furnished or to be furnished by VSI and SARS under this Agreement, (ii) a failure of any representation or warranty in this Article II or (iii) any untrue statement made by VSI or SARS in this Agreement.

2.19 Criminal or Civil Acts. For the period of five (5) years prior to the execution of this Agreement, no current executive officer, director or principal stockholder of VSI and SARS have been convicted of a felony crime, filed for personal bankruptcy, been the subject of a Commission or NASD judgment or decree, or is currently the subject to any investigation in connection with a felony crime or Commission or NASD proceeding.

2.20  Restricted Securities. VSI, SARS and the VSI Security Holders acknowledge that all of the Mycom shares issued by Mycom are restricted securities and none of such securities may be sold or publicly traded except in accordance with the provisions of the Securities Act.

 

Mycom and its wholly owned subsidiary, MergerCo, represents and warrants to VSI and its wholly owned subsidiary, SARS, that:

3.1 Organization. Mycom is a corporation duly organized, validly existing and in good standing under the laws of Nevada, has all necessary corporate powers to carry on its business, and is duly qualified to do business and is in good standing in each of the states where its business requires qualification. MergerCo is a corporation duly organized, validly existing and in good standing under the laws of Nevada, has all necessary corporate powers to carry on its business, and is duly qualified to do business and is in good standing in each of the states where its business requires qualification.

 

 

3.2 Capital. The authorized capital stock of Mycom consists of ninety million (90,000,000) shares of $0.01 par value common stock, of which one million five hundred thousand ninety-five (1,500,095) shares are currently outstanding and will be outstanding on the Closing Date, and zero (0) shares of $0.01 par value preferred stock, none of which are outstanding. All of the outstanding common stock is duly and validly issued, fully paid and non-assessable. There are no outstanding subscriptions, options, rights, warrants, debentures, instruments, convertible securities or other agreements or commitments obligating Mycom to issue any additional shares of its capital stock of any class.

3.3 Subsidiaries. Mycom currently owns the following subsidiary: Mycom Acquisition Corporation, a Nevada corporation.

3.4 Directors and Officers. The name and title of the director and executive officer of Mycom and MergerCo are as follows:

Name		Position
Earnest Mathis, Jr.		Director and Chief Executive Officer

 

3.5 Financial Statements. Exhibit 3.5 attached hereto consists of the audited financial statements of Mycom for the year ended December 31, 2006 (the “Mycom Financial Statements”) and for the quarter ended June 30, 2007. The Mycom Financial Statements have been prepared in accordance with generally accepted accounting principles and practices consistently followed by Mycom throughout the period indicated, and fairly present the financial position of Mycom as of the date of the balance sheet included in the Mycom Financial Statements and the results of operations for the period indicated.

3.6 Absence of Changes. Since June 30, 2007, there has not been any material change in the financial condition or operations of Mycom and MergerCo, except as contemplated by this Agreement. As used throughout this Agreement, “material” means: Any change or effect (or development that, insofar as can be reasonably foreseen, is likely to result in any change or effect) that causes substantial increase or diminution in the business, properties, assets, condition (financial or otherwise) or results of operations of a party. Taken as a whole, material change shall not include changes in national or international economic conditions or industry conditions generally; changes or possible changes in statutes and regulations applicable to a party; or the loss of employees, customers or suppliers by a party as a direct or indirect consequence of any announcement relating to this transaction.

3.7 Absence of Undisclosed Liabilities. As of June 30, 2007, Mycom and MergerCo did not have any material debt, liability or obligation of any nature, whether accrued, absolute, contingent or otherwise, and whether due or to become due, that is not reflected in the Mycom Financial Statements.

3.8 Tax Returns. Mycom and MergerCo have filed all federal, state and local tax returns required by law and have paid all taxes, assessments and penalties due and payable. The provisions for taxes, if any, reflected in Exhibit 3.8 are adequate for the periods indicated. There are no present disputes as to taxes of any nature payable by Mycom and MergerCo.

 

 

3.9 Investigation of Financial Condition. Without in any manner reducing or otherwise mitigating the representations contained herein, VSI, SARS, its legal counsel and accountants shall have the opportunity to meet with Mycom’s and MergerCo’s accountants and attorneys to discuss the financial condition of Mycom and MergerCo during reasonable business hours and in a manner that does not interfere with the normal operation of Mycom’s and MergerCo’s business. Mycom and MergerCo shall make available to VSI and SARS all books and records of Mycom and MergerCo.

3.10 Intellectual Property Rights. Mycom and MergerCo have no trademarks, service marks, trade names, copyrights or patents material to its business.

 

3.11 Compliance with Laws. To the best of Mycom’s and MergerCo’s knowledge, Mycom and MergerCo have complied with, and is not in violation of, applicable federal, state or local statutes, laws and regulations, including federal and state securities laws, except where such non-compliance would not have a material adverse impact upon its business or properties.

3.12 Litigation. Mycom is not a defendant in any suit, action, arbitration or legal, administrative or other proceeding, or governmental investigation which is pending or, to the best knowledge of Mycom and MergerCo, threatened against or affecting Mycom and MergerCo or its business, assets or financial condition. Mycom and MergerCo are not in default with respect to any order, writ, injunction or decree of any federal, state, local or foreign court, department, agency or instrumentality applicable to it. Mycom and MergerCo are not engaged in any material litigation to recover monies due to it.

3.13 Authority. The Boards of Directors of Mycom and MergerCo have authorized the execution of this Agreement and the consummation of the transactions contemplated herein, and Mycom and MergerCo have full power and authority to execute, deliver and perform this Agreement, and this Agreement is a legal, valid and binding obligation of Mycom and MergerCo and is enforceable in accordance with its terms and conditions.

3.14 Ability to Carry Out Obligations. The execution and delivery of this Agreement by Mycom and MergerCo and the performance by Mycom and MergerCo of its obligations hereunder in the time and manner contemplated will not cause, constitute or conflict with or result in (a) any breach or violation of any of the provisions of or constitute a default under any license, indenture, mortgage, instrument, article of incorporation, bylaw, or other agreement or instrument to which Mycom or MergerCo is a party, or by which it may be bound, nor will any consents or authorizations of any party other than those hereto be required, (b) an event that would permit any party to any agreement or instrument to terminate it or to accelerate the maturity of any indebtedness or other obligation of Mycom and MergerCo, or (c) an event that would result in the creation or imposition of any lien, charge or encumbrance on any asset of Mycom and MergerCo.

3.15 Full Disclosure. None of the representations and warranties made by Mycom and MergerCo herein or in any exhibit, certificate or memorandum furnished or to be furnished by Mycom, or on its behalf, contains or will contain any untrue statement of material fact or omit any material fact the omission of which would be misleading.

 

 

3.16 Assets. Mycom and MergerCo’s assets are fully included in Exhibit 3.16 and are not subject to any claims or encumbrances except as indicated in Exhibit 3.16.

3.17 Material Contracts. Mycom and MergerCo do not have any material contracts.

3.18 Indemnification. Mycom and MergerCo agree to indemnify, defend and hold VSI and SARS harmless against and in respect of any and all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries and deficiencies, including interest, penalties and reasonable attorney fees asserted by third parties against VSI and SARS which arise out of, or result from (i) any breach by Mycom and MergerCo in performing any of its covenants or agreements under this Agreement or in any schedule, certificate, exhibit or other instrument furnished or to be furnished by Mycom and MergerCo under this Agreement, (ii) a failure of any representation or warranty in this Article III or (iii) any untrue statement made by Mycom and MergerCo in this Agreement.

3.19 Criminal or Civil Acts. For the period of five (5) years prior to the execution of this Agreement, no current executive officer, director or principal stockholder of Mycom and MergerCo have been convicted of a felony crime, filed for personal bankruptcy, been the subject of a Commission or NASD judgment or decree, or is currently the subject to any investigation in connection with a felony crime or Commission or NASD proceeding.

 

4.1 Investigative Rights. Prior to the Closing Date, each party shall provide to the other party, and such other party’s counsel, accountants, auditors and other authorized representatives, full access during normal business hours and upon reasonable advance written notice to all of each party’s properties, books, contracts, commitments and records for the purpose of examining the same. Each party shall furnish the other party with all information concerning each party’s affairs as the other party may reasonably request. If during the investigative period one party learns that a representation of the other party was not accurate, no such claim may be asserted by the party so learning that a representation of the other party was not accurate.

4.2 Conduct of Business. Prior to the Closing Date, each party shall conduct its business in the normal course and shall not sell, pledge or assign any assets without the prior written approval of the other party, except in the normal course of business. No party shall amend its Articles of Incorporation or Bylaws (except as may be described in this Agreement), declare dividends, redeem or sell stock or other securities. No party shall enter into negotiations with any third party or complete any transaction with a third party involving the sale of any of its assets or the exchange of any of its common stock.

 

 

4.3 Confidential Information. Each party will treat all non-public, confidential and trade secret information received from the other party as confidential, and such party shall not disclose or use such information in a manner contrary to the purposes of this Agreement. Moreover, all such information shall be returned to the other party in the event this Agreement is terminated.

4.4 Notice of Non-Compliance. Each party shall give prompt notice to the other party of any representation or warranty made by it in this Agreement becoming untrue or inaccurate in any respect or the failure by it to comply with or satisfy in any material respect any covenant, condition or agreement to be complied with or satisfied by it under this Agreement.

 

ARTICLE V 

5.1 Conditions. Mycom and MergerCo’s obligations hereunder shall be subject to the satisfaction at or before the Closing Date of all the conditions set forth in this Article V. Mycom and MergerCo may waive any or all of these conditions in whole or in part without prior notice; provided, however, that no such waiver of a condition shall constitute a waiver by Mycom and MergerCo of any other condition of or any of Mycom’s and MergerCo’s other rights or remedies, at law or in equity, if VSI and SARS shall be in default of any of its representations, warranties or covenants under this Agreement.

5.2 Accuracy of Representations. Except as otherwise permitted by this Agreement, all representations and warranties by VSI and SARS in this Agreement or in any written statement that shall be delivered to Mycom and MergerCo by VSI and SARS under this Agreement shall be true and accurate on and as of the Closing Date as though made at that time.

5.3 Performance. VSI and SARS shall have performed, satisfied and complied with all covenants, agreements and conditions required by this Agreement to be performed or complied with by it on or before the Closing Date.

5.4 Absence of Litigation. No action, suit or proceeding, including injunctive actions, before any court or any governmental body or authority, pertaining to the transaction contemplated by this Agreement or to its consummation, shall have been instituted or threatened against VSI or SARS on or before the Closing Date.

5.5 Officer’s Certificate. VSI and SARS shall have delivered to Mycom and MergerCo a certificate dated the Closing Date signed by the Chief Executive Officer of VSI and SARS certifying that each of the conditions specified in this Article has been fulfilled and that all of the representations set forth in Article II are true and correct as of the Closing Date.

5.6 Corporate Action. VSI and SARS shall have obtained the approval of the VSI Security Holders for the transaction contemplated by this Agreement.

 

5.7 Acceptance of Financial Statements. Mycom and MergerCo shall have reviewed and in its sole discretion accepted, prior to the Closing Date, the VSI Financial Statements as set forth in Exhibit 2.5.

6.1 Conditions. VSI’s and SARS’ obligations hereunder shall be subject to the satisfaction at or before the Closing Date of all the conditions set forth in this Article VI. VSI and SARS may waive any or all of these conditions in whole or in part without prior notice; provided, however, that no such waiver of a condition shall constitute a waiver by VSI and SARS of any other condition of or any of VSI’s and SARS’ rights or remedies, at law or in equity, if Mycom and MergerCo shall be in default of any of its representations, warranties or covenants under this Agreement.

6.2 Accuracy of Representations. Except as otherwise permitted by this Agreement, all representations and warranties by Mycom and MergerCo in this Agreement or in any written statement that shall be delivered to VSI and SARS by Mycom and MergerCo under this Agreement shall be true and accurate on and as of the Closing Date as though made at that time.

6.3 Performance. Mycom and MergerCo shall have performed, satisfied and complied with all covenants, agreements and conditions required by this Agreement to be performed or complied with by it on or before the Closing Date.

6.4 Absence of Litigation. No action, suit or proceeding before any court or any governmental body or authority, pertaining to the transaction contemplated by this Agreement or to its consummation, shall have been instituted or threatened against Mycom on or before the Closing Date.

6.5 Officer’s Certificate. Mycom and MergerCo shall have delivered to VSI and SARS a certificate dated the Closing Date signed by the Chief Executive Officer of Mycom and MergerCo certifying that each of the conditions specified in this Article has been fulfilled and that all of the representations set forth in Article III are true and correct as of the Closing Date.

6.6 Payment of Liabilities. On or before the Closing Date, Mycom and MergerCo shall have paid any outstanding obligations and liabilities of Mycom and MergerCo through the Closing Date, including obligations created subsequent to the execution of this Agreement.

6.7 Directors of Mycom. On the Closing Date, the Board of Directors of Mycom shall appoint David M. Otto to Mycom’s and MergerCo’s Board of Directors.

6.8 Directors of MergerCo. On the Closing Date, the Board of Directors of MergerCo shall elect the Board of Directors of VSI, as set forth in Section 2.4 above, and MergerCo’s existing Board of Directors shall resign.

 

6.9 Officers of Mycom and MergerCo. On the Closing Date, the Board of Directors of Mycom and MergerCo shall elect the officers of VSI, as set forth in Section 2.4 above, and Mycom’s existing executive officers shall resign.

 

 

7.1 Closing. The closing of this Agreement shall be held at the offices of The Otto Law Group, PLLC or at any mutually agreeable place on or prior to August 31, 2007, unless extended by mutual agreement. At the closing:

(a)  VSI and SARS shall deliver to MergerCo and Mycom (i) copies all exhibits required by VSI and/or SARS to provide in accordance with this Agreement, (ii) the officer’s certificates described in Section 5.5, (iii) signed minutes of its board of directors and the VSI Security Holders approving this Agreement, and (iv) signed minutes of SARS’ board of directors and shareholder approving this Agreement..

(b)  MergerCo and Mycom shall deliver to VSI and SARS (i) copies of all exhibits required by MergerCo and/or its parent, Mycom, to provide in accordance with this Agreement, (ii) the officer’s certificates described in Section 6.5, (iii) signed minutes of its board of directors and shareholders, if necessary, approving this Agreement, and (iv) signed minutes of Mycom’s board of directors approving this agreement and authorizing the issuance of shares to MergerCo for VSI.

8.1 Registration and Listing. Following the Closing Date, Mycom and/or MergerCo shall:

(a)  Continue Mycom’s common stock quotation on the Electronic Over-the-Counter Bulletin Board system;

 

(b)  Comply with the Form 8-K requirements of the Securities Exchange Act of 1934 (the “Exchange Act”), including the timely preparation and filing of audited financial statements as required by Form 8-K;

 

(c)  Promptly retain a qualified investor and public relations firm; and

 

(d)  Clear any Exchange Act Rule 144 sales of Mycom common stock offered by any Mycom common stockholder including affiliates or former affiliates of Mycom within forty-eight (48) hours of the filing of the Notice of Sale pursuant to Rule 144.

 

8.2  Corporate Action. Mycom shall take steps necessary to amend its Articles of Incorporation and change its name to “SARS, Corp.” and cause the amount of authorized shares to increase to the total aggregate amount to five hundred fifty million (550,000,000). MergerCo shall take steps necessary to amend its Articles of Incorporation and change its name to “Secure Asset Reporting Services, Inc.” and cause the amount of authorized shares, if necessary, to increase the total aggregate amount to five hundred fifty million (550,000,000).

 

 

8.3  Mycom shall file a registration statement with the SEC within sixty (60) days of the close of the VSI Financing, registering (i) all shares of restricted Mycom common stock that were outstanding prior to the Closing Date; (ii) all the shares of common stock issued by VSI in connection with the Financing; and (iii) all the shares of common stock underlying warrants issued by VSI in connection with the Financing. Mycom shall use its best efforts to cause the registration statement to be declared effective by the SEC as soon as practicable thereafter, but in any event not later than one hundred fifty (150) days after the Closing. The amount of common stock included in a registration statement filed remains subject, however, to the right of VSI and any underwriters to reduce the number of shares proposed to be registered pro-rata in view of market conditions or legal considerations, pursuant to Rule 415 of the Exchange Act, which may limit the total number of shares included on a registration statement to thirty percent (30%) of the then issued and outstanding common stock of Mycom.

 

8.4  The stock transfer agent shall be Pacific Stock Transfer, Inc. (“Pacific Stock”). Mycom shall take all steps necessary to engage Pacific Stock to become the transfer agent for Mycom and the Surviving Entity.

 

9.1 Captions and Headings. The Article and Section headings throughout this Agreement are for convenience and reference only and shall not define, limit or add to the meaning of any provision of this Agreement.

9.2 No Oral Change. This Agreement and any provision hereof may not be waived, changed, modified or discharged orally, but only by an agreement in writing signed by the party against whom enforcement of any such waiver, change, modification or discharge is sought.

9.3 Non-Waiver. The failure of any party to insist in any one or more cases upon the performance of any of the provisions, covenants or conditions of this Agreement or to exercise any option herein contained shall not be construed as a waiver or relinquishment for the future of any such provisions, covenants or conditions. No waiver by any party of one breach by another party shall be construed as a waiver with respect to any other subsequent breach.

9.4 Time of Essence. Time is of the essence of this Agreement and of each and every provision hereof.

9.5 Entire Agreement. This Agreement contains the entire Agreement and understanding between the parties hereto and supersedes all prior agreements and understandings.

9.6 Choice of Law. This Agreement and its application shall be governed by the laws of the state of Nevada.

 

 

9.7 Counterparts. This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

9.8 Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given on the date of service if served personally on the party to whom notice is to be given, or on the third day after mailing if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid, and properly addressed as follows:

Mycom/MergerCo:

Mycom Group, Inc. 2560 W. Main Street, Suite 200 Littleton, CO 80120 Attn: Earnest Mathis, Jr., Chief Executive Officer

 

9.9 Binding Effect. This Agreement shall inure to and be binding upon the heirs, executors, personal representatives, successors and assigns of each of the parties to this Agreement.

9.10 Mutual Cooperation. The parties hereto shall cooperate with each other to achieve the purpose of this Agreement and shall execute such other and further documents and take such other and further actions as may be necessary or convenient to effect the transaction described herein.

9.11 Finders. There are no finders in connection with this transaction.

9.12 Announcements. The parties will consult and cooperate with each other as to the timing and content of any public announcements regarding this Agreement.

9.13 Expenses. Each party will bear their own expenses, including legal fees incurred in connection with this Agreement. The VSI Security Holders shall not be responsible for any costs incurred in connection with the transaction contemplated by this Agreement.

9.14 Survival of Representations and Warranties. The representations, warranties, covenants and agreements of the parties set forth in this Agreement or in any instrument, certificate, opinion or other writing providing for in it, shall survive the Closing Date.

 

 

9.15 Exhibits. As of the execution hereof, the parties have provided each other with the exhibits described herein. Any material changes to the exhibits shall be immediately disclosed to the other party.

 

9.16 Termination, Amendment and Waiver.

(a)  Termination. This Agreement may be terminated at any time prior to the Closing Date, whether before or after approval of matters presented in connection with the share exchange by the stockholders of VSI:

(1) By mutual written consent of VSI and SARS and Mycom and MergerCo;

(2) By either VSI and SARS or Mycom and MergerCo;

 

(i)

If any court of competent jurisdiction or any governmental, administrative or regulatory authority, agency or body shall have issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the transactions contemplated by this Agreement; or

(ii)

If the transaction shall not have been consummated on or before August 31, 2007, unless the failure to consummate the transaction is the result of a material breach of this Agreement by the party seeking to terminate this Agreement.

(3) By VSI and SARS, if Mycom or MergerCo breaches any of its representations or warranties hereof or fails to perform in any material respect any of its covenants, agreements or obligations under this Agreement; and

(4) By Mycom and MergerCo, if VSI or SARS breaches any of its representations or warranties hereof or fails to perform in any material respect any of its covenants, agreements or obligations under this Agreement.

(b)  Effect of Termination. In the event of termination of this Agreement by either Mycom and MergerCo or VSI and SARS, as provided herein, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of VSI and SARS or Mycom and MergerCo, and such termination shall not relieve any party hereto for any intentional breach prior to such termination by a party hereto of any of its representations or warranties or any of its covenants or agreements set forth in this Agreement.

 

 

(c)  Extension; Waiver. At any time prior to the Closing Date, the parties may, to the extent legally allowed, (a) extend the time for the performance of any of the obligation of the other acts of the other parties, (b) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto or waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.

 

(d)  Procedure for Termination, Amendment, Extension or Waiver. A termination of this Agreement, an amendment of this Agreement or an extension or waiver shall, in order to be effective, require in the case of VSI and SARS or Mycom and MergerCo, action by its respective Board of Directors or the duly authorized designee of such Board of Directors.

[Remainder of Page Intentionally Blank; Signature Page Follows]

 

 

In witness whereof, the parties have executed this Agreement concerning the exchange of securities on the date indicated above.

MYCOM GROUP, INC.       

By:                                                                           

Earnest Mathis, Jr.    

Chief Executive Officer     

MYCOM ACQUISITION CORPORATION

By:                                                                           
Earnest Mathis, Jr.

Chief Executive Officer

VERITAS SOLUTIONS, INC.  

By:                                                                           

Clayton Shelver

Chief Executive Officer

SECURE ASSET REPORTING SERVICES, INC.

By:                                                                           

Clayton Shelver

Chief Executive Officer