AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "AGREEMENT") has been made as
of December 10, 2006, by and among Diversifax, Inc., a Delaware corporation
("DSFX"), DFAX Acquisition Vehicle, Inc., a Delaware corporation and a
wholly-owned Subsidiary of DSFX ("SUB"), Upper Class Group Limited, a British
Virgin Islands corporation ("UCG"), and the shareholders of UCG, each of whom is
identified on Schedule A to this Agreement (the "UCG SHAREHOLDERS").
WHEREAS, the respective Boards of Directors of DSFX, Sub and UCG have
approved the merger, pursuant and subject to the terms and conditions of this
Agreement, of Sub with and into UCG (the "MERGER"), whereby all of the issued
and outstanding shares of the Common Stock of UCG (the "UCG COMMON STOCK") will
be converted into the right to receive a specified number of shares of the
Common Stock of DSFX (the "DSFX COMMON STOCK"); and the parties each desire to
make certain representations, warranties and agreements in connection with the
Merger and also to prescribe various conditions to the Merger;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and covenants herein contained, the parties agree to
effect the Merger on the terms and conditions herein provided and further agree
ARTICLE 1. DEFINITIONS
In addition to the other definitions contained in this Agreement, the
following terms will, when used in this Agreement, have the following respective
"AFFILIATE" means a Person that, directly or indirectly, controls, is
controlled by, or is under common control with, the referenced party.
"CLAIM" means any contest, claim, demand, assessment, action, suit,
cause of action, complaint, litigation, proceeding, hearing, arbitration,
investigation or notice of any of the foregoing involving any Person.
"CLOSING" means the consummation of the Merger.
"CODE" means the Internal Revenue Code of 1986, as amended, together
with all rules and regulations promulgated thereunder.
"CONSTITUENT CORPORATIONS" means UCG and Sub, as the constituent
corporations of the Merger.
"GAAP" means United States generally accepted accounting practices.
"GCL" means the Delaware General Corporation Law.
"PERSON" means and includes any individual, partnership, corporation,
trust, company, unincorporated organization, joint venture or other entity, and
any Governmental Entity.
- 1 -
"RECORD HOLDER" means a holder of record of UCG Common Stock as shown
on the regularly maintained stock transfer records of UCG.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, joint venture, trust or other entity of which such Person, directly
or indirectly through an Affiliate, owns an amount of voting securities, or
possesses other ownership interests, having the power, direct or indirect, to
elect a majority of the Board of Directors or other governing body thereof.
"SURVIVING CORPORATION" means UCG, as the surviving corporation of the
"U.S." means the United States of America.
In this Agreement, unless the express context otherwise requires:
(a) the words "HEREIN," "HEREOF" and "HEREUNDER and words of similar
import refer to this Agreement as a whole and not to any particular provision of
(b) references to "ARTICLE" or "SECTION" are to the respective Articles
and Sections of this Agreement, and references to "EXHIBIT" or "SCHEDULE" are to
the respective Exhibits and Schedules annexed hereto;
(c) references to a "PARTY" means a party to this Agreement and include
references to such party's successors and permitted assigns;
(d) references to a "THIRD PARTY" means a Person that is neither a
Party to this Agreement nor an Affiliate thereof;
(e) the terms "DOLLARS" and "$" means U.S. dollars;
(f) terms defined in the singular have a comparable meaning when used
in the plural, and vice versa;
(g) the masculine pronoun includes the feminine and the neuter, and
vice versa, as appropriate in the context; and
(h) wherever the word "INCLUDE," "INCLUDES" or "INCLUDING is used in
this Agreement, it will be deemed to be followed by the words "without