AGREEMENT AND PLAN OF MERGER BY AND AMONG ZONE MINING LIMITED ZM ACQUISITION CORP. DRIVEITAWAY, INC. AND STONEWELL PARTNERS LLP Dated September 21, 2006 TABLE OF CONTENTS

(iii)    Conversion of Company Shares. All of the Company Shares issued and outstanding at the Effective Time shall be converted into the right to receive an aggregate of Thirteen Million Eighty Six Thousand Three Hundred Ninety Eight (13,086,398) newly issued shares of Parent Common Stock (the “Parent Shares”). All such Company Shares, when so converted, shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and each holder of a certificate representing any such Company Share shall cease to have any rights with respect thereto, except the right to receive the Parent Shares, without interest or dividends. Schedule 1.3(a)(iii) attached hereto sets forth the allocation of the Merger consideration payable to the Company Shareholders hereunder.

 

 

(b)  The authorized capital stock of Merger Sub consists solely of 1,000 shares of common stock, $0.001 par value per share, of which 100 shares are issued and outstanding and owned of record and beneficially by Parent. All shares of capital stock of Merger Sub outstanding as of the date of this Agreement have been duly authorized and validly issued, are fully paid and non-assessable, and are free of preemptive rights. There are no outstanding options, warrants, agreements, conversion rights, preemptive rights, or other rights to subscribe for, purchase or otherwise acquire any common stock or preferred stock of Merger Sub. There are no voting trusts or other agreements or understandings to which Merger Sub is a party with respect to the voting of common stock of Merger Sub, and there is no indebtedness of Merger Sub having general voting rights issued and outstanding. There are no outstanding obligations of any Person to repurchase, redeem or otherwise acquire outstanding shares of common stock of Merger Sub. Merger Sub has no common stock reserved for issuance.

 

(b)  Without limiting the generality of Section 5.1(a), during the period commencing with the date of this Agreement and continuing until the Closing Date, neither the Company nor any of its Subsidiaries shall, without the consent of the Parent:

 

(a)  The representations and warranties of Parent and Merger Sub set out in this Agreement shall be true and correct in all material respects at and as of the time of the Closing as though such representations and warranties were made at and as of such time, except that the representations and warranties set forth in Section 4.4 shall be updated as provided in Section 5.13(b);(c)  Notwithstanding anything contained herein to the contrary, Parent shall be expressly permitted to take any and all actions reasonably necessary to consummate the following activities:

 

(c)  Parent shall have delivered to the Company an officer’s certificate of each of Parent and Merger Sub to the effect that the conditions set forth in Section 6.1(a) and (b) have been satisfied;

 

(d)  Parent shall have delivered to the Company Shareholders any certificates evidencing the Parent Shares in accordance with Section 2.2(b)(i);

(e)  Parent shall have filed all reports and other documents required to be filed by Parent under the U.S. federal securities laws through the Closing Date;

 

(f)  Parent shall have maintained its status as a Company whose common stock is quoted on the Over-the-Counter Bulletin Board and no reason shall exist as to why such status shall not continue immediately following the Closing;

 

(g)  Parent shall have consummated the Trident Financing and loaned a portion of the net proceeds of that financing to the Company upon mutually acceptable terms and conditions;

 

(h)  At least $1,000,000 shall have been deposit into an escrow account for the benefit of Parent in connection with the Private Placement;

 

(i)  Parent shall have adopted the 2006 Stock Plan; and

(b)   The Company and the Principal Shareholder shall have performed and complied in all material respects with all covenants, conditions, obligations and agreements required by this Agreement to be performed or complied with by the Company or the Principal Shareholder on or prior to the Closing Date;

 

(c)  The Company shall have delivered to Parent and Merger Sub a certificate of the Secretary of the Company and the Principal Shareholder to the effect that the conditions set forth in Section 6.2(a) and (b) hereof have been satisfied;

(d)  The Company shall have delivered to Parent and Merger Sub any certificates evidencing the Company Shares and any agreement relating to the Company Shares in accordance with 2.2(a)(i) & (ii);

(g)  Parent and Merger Sub shall have completed a due diligence review of the business, operations, financial condition and prospects of the Company and shall have been satisfied with the results of their due diligence review in their sole and absolute discretion;

 

(h)  The Company Shareholders shall have approved the Merger in accordance with the DGCL;

 

(i)  No Company Shareholder shall have asserted any dissenters’ rights under the DGCL;

(j)  The Company shall have caused those warrants identified on Schedule 6.2(j) to be terminated;

 

(k)  The Company shall have caused that certain Share Repurchase Agreement to be terminated;

(l)  The Company shall have obtained the consent from each holder of a Company Option or Warrant to the amendment of such Company Option or Warrant pursuant to Section 1.6 of this Agreement (unless such consent is not required under the terms of the applicable agreement, instrument or plan); and

 

(m)  The Company shall have delivered to Parent Investment Letters from each of the Company Shareholders identified in Schedule 3.5(a).

 

(a)  All director, shareholder, lender, lessor and other parties’ consents and approvals, as well as all filings with, and all necessary consents or approvals of, all federal, state Governmental Authorities, as are required under this Agreement, applicable law or any applicable contract or agreement (other than as contemplated by this Agreement) to complete the Merger shall have been secured; and

 

(b)  No statute, rule, regulation, executive order, decree, preliminary or permanent injunction, or restraining order shall have been enacted, entered, promulgated or enforced by any Governmental Authority that prohibits or restricts the consummation of the Merger.

 

(a)  Upon obtaining knowledge of any Claim by a third party that has given rise to, or is expected to give rise to, a claim for indemnification hereunder, Parent shall give written notice (“Notice of Claim”) of such claim or demand to the Principal Shareholder, specifying in reasonable detail such information as the Indemnified Party may have with respect to such indemnification claim (including copies of any summons, complaint or other pleading that may have been served on it and any written claim, demand, invoice, billing or other document evidencing or asserting the same). Subject to the limitations set forth in Section 7.2(b) hereof, no failure or delay by Parent in the performance of the foregoing shall reduce or otherwise affect the obligation of the Principal Shareholder to indemnify and hold the Indemnified Party harmless, except to the extent that such failure or delay shall have actually adversely affected the Principal Shareholder’s ability to defend against, settle or satisfy any Claims for which the Indemnified Party is entitled to indemnification hereunder; provided, however, that in no event shall such failure or delay extend the period in which a claim for indemnification can be made by an Indemnified Party hereunder.

(b)  If the claim or demand set forth in the Notice of Claim given by Parent pursuant to Section 7.2(a) hereof is a claim or demand asserted by a third party, the Principal Shareholder shall have fifteen (15) days after the date on which the Notice of Claim is delivered to notify Parent in writing of its election to defend such third party claim or demand on behalf of the Indemnified Party. If the Principal Shareholder elects to defend such third party claim or demand, Parent shall make available to the Principal Shareholder and its agents and representatives all records and other materials that are reasonably required in the defense of such third party claim or demand and shall otherwise cooperate with, and assist the Principal Shareholder in the defense of, such third party claim or demand, and so long as the Principal Shareholder is defending such third party claim in good faith, the Indemnified Party shall not pay, settle or compromise such third party claim or demand. If the Principal Shareholder elects to defend such third party claim or demand, the Indemnified Party shall have the right to participate in the defense of such third party claim or demand at the Principal Shareholder’s expense. In the event, however, that such Indemnified Party reasonably determines that representation by counsel to the Principal Shareholder of both the Principal Shareholder and such Indemnified Party could reasonably be expected to present counsel with a conflict of interest, then the Indemnified Party may employ separate counsel to represent or defend it in any such action or proceeding and the Principal Shareholder will pay the fees and expenses of such counsel. If the Principal Shareholder does not elect to defend such third party claim or demand or does not defend such third party claim or demand in good faith, the Indemnified Party shall have the right, in addition to any other right or remedy it may have hereunder, at the Principal Shareholder’s expense, to defend such third party claim or demand; provided, however, that (i) such Indemnified Party shall not have any obligation to participate in the defense of or defend any such third party claim or demand; (ii) such Indemnified Party’s defense of or its participation in the defense of any such third party claim or demand shall not in any way diminish or lessen the obligations of the Principal Shareholder under the agreements of indemnification set forth in this Article VII; and (iii) such Indemnified Party may not settle any claim without the consent of the Principal Shareholder, which consent shall not be unreasonably withheld or delayed.

 

(c)  The Company and the Principal Shareholder, and Parent, Merger Sub and the other Indemnified Parties, if any, shall cooperate fully in all aspects of any investigation, defense, pre-trial activities, trial, compromise, settlement or discharge of any claim in respect of which indemnity is sought pursuant to this Article VII, including, but not limited to, by providing the other party with reasonable access to employees and officers (including as witnesses) and other information.

(a)  No claim for indemnification under this Article VII shall be asserted by an Indemnified Party, and no liability for such indemnify shall be enforced against the Principal Shareholder, to the extent the Indemnified Party has theretofore received indemnification or otherwise been compensated for such Claim. In the event that an Indemnified Party shall later collect any such amounts recovered under insurance policies with respect to any Claim for which it has previously received payments under this Article VII from the Principal Shareholder, such Indemnified Party shall promptly repay to the Principal Shareholder such amount recovered; provided, however, that in no event shall the amount repaid to the Principal Shareholder exceed the amount paid by the Principal Shareholder under this Article VII.

 

(b)  The aggregate liability of the Principal Shareholder under this Article VII shall be limited to ten percent (10%) of the Parent Shares issued to the Principal Shareholder hereunder. The Principal Shareholder's liability with respect to any Claim under this Article VII shall be limited to the obligation to surrender to the Parent for cancellation such number of Parent Shares as is equal to the amount obtained by dividing (i) the dollar amount of such Claim by (ii) the price per share for Parent Common Stock paid by the investors in the Private Placement (which price per share shall be, in the case of securities convertible into or exchangeable for, shares of Parent Common Stock, the effective price per share determined by mutual agreement of Parent and the Company).

 

(a)  by mutual consent of Parent, Merger Sub, the Company and the Principal Shareholder;

(b)  by any of Parent, Merger Sub, the Company or the Principal Shareholder if the Closing shall not have occurred on or before the Outside Date;

(c)  by Parent, Merger Sub, the Company or the Principal Shareholder if any Governmental Authority shall have issued an injunction, order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting any material portion of the Merger and such injunction, order, decree, ruling or other action shall have become final and nonappealable;

 

(d)  by Parent, Merger Sub, the Company or the Principal Shareholder upon written notice to the other party if any of the conditions to the Closing set forth in Section 6.3 shall have become incapable of fulfillment by the Outside Date and shall not have been waived in writing by Parent, Merger Sub, the Company, or the Principal Shareholder, respectively;

(e)  by Parent or Merger Sub upon written notice to the Company if any of the conditions to the Closing set forth in Section 6.2 shall have become incapable of fulfillment by the Outside Date and shall not have been waived in writing by Parent; or

 

(f)  by the Company or the Principal Shareholder upon written notice to Parent if any of the conditions to the Closing set forth in Section 6.1 shall have become incapable of fulfillment by the Outside Date and shall not have been waived in writing by the Company or the Principal Shareholder.

 

(a)  each party hereto shall redeliver, and shall cause its agents (including, without limitation, attorneys and accountants) to redeliver, all documents, work papers and other material of each party hereto relating to the Merger, whether obtained before or after the date hereof; and

(b)  each party agrees that all Confidential Information received by Parent and Merger Sub, on the one hand, or the Company and the Principal Shareholder, on the other hand, with respect to the other party, this Agreement or the Merger shall be kept confidential notwithstanding the termination of this Agreement.

(a)  “Affiliate” shall have the meanings ascribed to such term in Rule 12b-2 of the Exchange Act;

 

(b)  “Business Day” shall mean any day other than a Saturday, Sunday or a day on which federally chartered financial institutions are not open for business in New York City;

(c)  “Confidential Information” shall mean the existence and contents of this Agreement and the schedules and exhibits hereto, and all proprietary technical, economic, environmental, operational, financial and/or business information or material of one party that, prior to or following the Closing Date, has been disclosed by the Company or any Subsidiary, on the one hand, or Parent or Merger Sub, on the other hand, in written, oral (including by recording), electronic, or visual form to, or otherwise has come into the possession of, the other;

 

(d)  “Employee Benefit Plan” shall mean: (i) each bonus, stock option, stock purchase, incentive compensation, deferred compensation and other equity compensation plan, program, agreement or arrangement; (ii) each severance or termination pay, medical, surgical, hospitalization, life insurance and other “welfare” plan, fund or program within the meaning of Section 3(1) of ERISA (whether or not subject to ERISA); (iii) each profit-sharing, stock bonus or other “pension” plan, fund or program (within the meaning of Section 3(2) of ERISA); (iv) each “employee benefit plan” within the meaning of Section 3(3) of ERISA (whether or not subject to ERISA); (v) each employment, retention, termination, severance, change of control or compensation agreement; and (vi) each other employee benefit plan, fund, program, agreement or arrangement that is, in each case, sponsored, maintained or contributed to or required to be contributed to by the Company, any Subsidiary or any third party, or to which the Company, any Subsidiary or any third party is party, whether written or otherwise, for the benefit of any director, employee or former employee of the Company or any Subsidiary;

(g)  “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

 

(h)  “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder;

(i)  “GAAP” shall mean United States generally accepted accounting principles as in effect on the date or for the period with respect to which such principles are applied;

(j)  “Governmental Authority” shall mean any nation or government, any state, municipality or other political subdivision thereof and any entity, body, agency, commission or court, whether domestic, foreign or multinational, exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any executive official thereof;

 

(k)  “Intellectual Property” shall mean all of the following: (i) inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto and all patents, patent applications and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions and reexaminations thereof, (ii) trademarks, service marks, trade dress, domain names, maskworks, logos, trade names and corporate names, including all goodwill associated therewith and all applications, registrations and renewals in connection therewith, (iii) copyrightable works, copyrights and all applications, registrations and renewals in connection therewith, (iv) trade secrets and confidential business information (including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information and business and marketing plans and proposals), (v) computer software, together with all translations, adaptations, derivations and combinations thereof (including data and related documentation), (vi) all other proprietary rights, and (vii) all copies and tangible embodiments thereof (in whatever form or medium);

 

(q)  “Parent Material Contract” shall mean any oral, written or implied contracts, agreements, leases, powers of attorney, guaranties, surety arrangements, employment agreements, consulting agreements or other commitments, the liabilities or commitments associated therewith exceed, in the case of Parent and its subsidiaries collectively, $10,000 individually or $25,000 in the aggregate;

 

(r)  “Permitted Encumbrance” shall mean a Lien or Encumbrance (i) for Taxes not yet due or delinquent or being contested in good faith by appropriate proceedings for which adequate reserves have been established in the Company’s financial statements, (ii) arising in the ordinary course of business by statute with respect to a liability that is not yet due or delinquent, (iii) created by operation of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course of business with respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings, (iv) securing purchase money debt or capital lease obligations which extend only to the interests in property, equipment, or other assets acquired with such purchase money debt or capital lease obligations or other indebtedness; or (v) which does not materially detract from the value or use of the asset to which it relates.

 

(s)  “Person” shall mean any individual, corporation, partnership, association, trust or other entity or organization, including a governmental or political subdivision or any agency or institution thereof;

(v)  “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder;

 

(w)  "Share Repurchase Agreement" shall mean the Share Repurchase Agreement dated September 23, 2005 by and among R Capital II, Ltd, Daniel Ratner, James Ratner, Stacy Ratner, JF Mita Trust, Aatish Salvi, and the Company.

(x)  “Taxes” shall mean all taxes (whether U.S. federal, state, local or non-U.S.) based upon or measured by income and any other tax whatsoever, including, without limitation, gross receipts, profits, sales, levies, imposts, deductions, charges, rates, duties, use, occupation, value added, ad valorem, transfer, franchise, withholding, payroll and social security, employment, excise, stamp duty or property taxes, together with any interest, penalties, charges or fees imposed with respect thereto.