ACQUISITION AGREEMENT
BY AND BETWEEN
CORSPAN, INC.,
A Delaware corporation
And
EU LABORATORIES LIMITED
A UK corporation
As of February 24, 2003
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT ("Agreement"), is made and entered
into this 24th day of February, 2003, by and between Corspan, Inc.,
a Delaware corporation ("CPI") and EU LABORATORIES LIMITED a UK
corporation ("EUL"), each herein sometimes being referred to
individually as a "party" and collectively as the "parties," is
made with reference to the following facts:
R E C I T A L S
A. CPI is a publicly held corporation who's wholly owned
subsidiary is engaged in the development, production and
distribution of print and related services..
X. XXX is a privately held pharmaceutical company that is
developing products that aim to improve quality of life (the
"Business").
C. The Parties propose that CPI will transfer all of their
assets out to Printsolve Inc (a subsidiary), via a share transfer
sanctioned by the shareholders and board of directors. Shareholders
in CPI, will receive 1 share of Printsolve Inc, for every 1 share
they hold in CPI and will then file Printsolve Inc to become a
reporting company with the Securities and Exchange Commission. Upon
completion of this share transfer CPI shall sign this agreement and
carry out its responsibilities pertaining to this agreement,
acquiring EUL, and change its name to Oncthera Inc.
D. The parties propose, as of the Effective Time (as
hereinafter defined), that CPI shall acquire ownership of 100% of
the outstanding common shares of EUL (the "Acquisition"), as a
result of which (a) EUL will become a wholly-owned subsidiary of
CPI and (b) the current holders of the outstanding common shares of
EUL (the "EUL Shareholders") will receive as consideration for the
Acquisition shares of CPI common stock as hereinafter set forth.
E. The Acquisition is to be effectuated as a non-taxable
reorganization under Section 368(a)(1)(B) of the Internal Revenue
Code of 1986, as amended (the "Code").
F. "CPI/EUL" refers to the corporate entity as of the
Effective Time.
NOW, THEREFORE, in consideration of the promises and the
mutual representations, warranties, covenants and agreements herein
contained, the parties hereby agree as follows:
ARTICLE ONE
1.01 The Acquisition. On the terms and subject to the
conditions set forth in this Agreement, CPI shall acquire 100% of
the outstanding common shares of EUL (the "EUL Shares") in exchange
for a total of 15,000,000 newly issued post reverse split shares of
CPI common stock (the "CPI Shares") to be issued to the EUL
Shareholders in amounts calculated in accordance with Article Two.
1.02 The Reverse Split. CPI shall carry out a 10 for 1
reverse split immediately prior to closing which will leave CPI
with 1,581,492 shares issued and outstanding prior to the issuance
of 15,000,000 new shares to the EUL shareholders.
ARTICLE TWO
2.01 Calculation of Exchange Ratio. The number of CPI Shares
to be issued to each of the EUL Shareholders for their respective
EUL Shares shall be calculated in accordance with the formula in
Section 2.02, using an exchange ratio of (75,000) (the "Exchange
Ratio"). Immediately preceding the issue of CPI shares CPI will
have carried out a ten for one split leaving 1,581,492 shares in
issue.
2.02 Calculation of CPI Shares to Be Issued. The number of
CPI Shares to be issued to each of the EUL Shareholders for their
respective shares shall be calculated by (i) multiplying (a) the
total number of EUL Shares held by each EUL Shareholder by (b) the
Exchange Ratio and (ii) rounding the product to the nearest whole
number (subject to other reasonable adjustments needed to maintain
the total number of CPI Shares to be issued at 15,000,000. No
fractional shares of CPI common stock shall be issued in connection
with the Acquisition.
ARTICLE THREE
3.01 The Closing. The consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place as
soon as practicable after or upon the satisfaction or waiver in
writing of all of the conditions precedent to the obligations of
the parties hereto, on such date as may be designated by mutual
consent of the parties (the "Closing Date"). The parties will
conduct the Closing at the offices of Corspan Inc, Xxxxx 0000, Xxx
Xxxxxxxxxxx Xxxxx, Xxx Xxxx, XX, 00000, or such other place as the
parties may mutually agree. At the Closing, the parties will
determine that each condition to the obligations of the parties
hereunder has been satisfied or waived or will, at such Closing, be
satisfied or waived.
3.02 The Effective Time. The Acquisition shall become
effective when all of the items required by this Agreement to be
delivered at the Closing have been delivered (the "Effective
Time").
3.03 Directors of CPI at the Effective Time. EUL shall have
the right to nominate up to three new persons to serve as directors
of CPI at and after the Effective Time of the Acquisition. EUL
shall identify any such nominees in Schedule 3.03. As provided in
Section 7.05 hereof, the CPI board of directors shall adopt
resolutions appointing such persons (the "New CPI Directors") as
directors (the "New Director Resolutions"), which by their terms
shall become operative only at the Effective Time of the
Acquisition.
3.04 Officers of CPI at the Effective Time. EUL shall
identify in Schedule 3.04 those persons it desires to nominate for
appointment as the new officers of CPI at and after the Effective
Time of the Acquisition. As provided in Section 7.05 hereof,
the CPI board of directors shall adopt resolutions appointing such
persons as the new officers of CPI (the "New CPI Officers") (the
"New Officer Resolutions"), which by their terms shall become
operative only at the Effective Time of the Acquisition.
3.05 Change of Name. Upon closing the company will change
its name to Oncthera Inc.
ARTICLE FOUR
EUL represents and warrants to CPI with respect to EUL as
follows:
4.01Organization and Good Standing. EUL is a corporation
duly organized, validly existing and in good standing under the
laws of the United Kingdom and has all requisite corporate power
and authority to own or lease its assets as now owned or leased by
it and to otherwise conduct its business. All corporate
proceedings required by law or by the provisions of this Agreement
to be taken by EUL on or before the Closing Date in connection with
the execution and delivery of this Agreement and the consummation
of the transactions contemplated by this Agreement have been or
will be duly and validly taken.
4.02 Due Authorization. EUL has all requisite power,
authority and legal capacity and is competent to execute and
deliver this Agreement and EUL has all requisite power,
authority and legal capacity and is competent to execute and
deliver each of the other transaction documents to which it is or
is specified to be a party, perform its obligations hereunder and
thereunder and consummate the transactions contemplated hereby and
thereby. This Agreement constitutes, together with all other
transaction documents to which EUL is a party, when executed and
delivered by EUL, will constitute legal, valid and binding
obligations of EUL, enforceable against EUL in accordance with
their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance and moratorium
laws and other laws of general application affecting the
enforcement of creditors' rights generally. The execution and
delivery by EUL of this Agreement and each of the other transaction
documents to which it is, or is specified to be, a party, and the
consummation of the stock exchange and other transactions
contemplated hereby and thereby have been duly authorized by all
necessary action (corporate and other) of EUL.
4.03 Agreement Not in Breach of Other Instruments. Except
as noted on Schedule 4.03, the execution and delivery of this
Agreement by EUL and the consummation of the transactions
contemplated hereby will not result in a breach of any of the terms
and provisions of, or constitute a default under, or conflict with,
any material agreement, indenture or other instrument to which EUL
is a party or by which they or their assets are bound.
4.04 Absence of Certain Changes. Since the date of the most
recent financial statements given to CPI, there has not been any
material adverse change in the working capital, financial
condition, assets, liabilities, reserves, contractual allowances,
business operations or prospects of EUL, and neither EUL nor any
subsidiary of EUL has:
(a) Engaged in any material transaction outside the
ordinary course of business;
(b) Made any capital expenditures other than in the
ordinary course of business;
(c) Paid, loaned or advanced (other than the payment of
salaries or reimbursement of expenses in the ordinary course of
business) any amounts to, or sold, transferred or leased any
properties or assets to or entered into any other transactions with
any of its officers or directors, any of its affiliates, or any
officer or director of its affiliates;
(d) Made any material change in any method of accounting
or accounting practice;
(e) Incurred any material indebtedness or leasehold
expense in excess of $5,000;
(f) Entered into any material guaranties or otherwise
incurred or suffered to exist any material contingent liabilities;
(g) Paid or declared any dividend or other distribution
in respect of its capital stock, or set aside any sums for the
payment of any such dividend or other distribution;
(h) Issued or sold any common shares or other equity
security, granted any stock option or warrant, or otherwise issued
any security convertible into capital stock;
(i) Canceled any indebtedness due it except upon full
payment thereof;
(j) Increased the compensation payable or to become
payable by EUL to any of its respective directors, officers,
employees or agents, or any bonus payments or arrangement
made to or with any thereof;
(k) Agreed, whether in writing or otherwise, to do any
of the foregoing;
(l) Suffered any labor trouble or any controversies with
any of its employees;
(m) Suffered any damage, destruction or loss, whether or
not covered by insurance, materially adversely affecting the
business or properties of EUL; or
(n) Received notice that any person or entity with which
EUL has a significant business relationship intends to cancel or
terminate such business relationship.
4.05 Contracts and Commitments. All references to EUL in this
Section 4.05 shall be deemed to refer to both EUL and its
subsidiaries. Attached as Schedule 4.05 is a list of all
agreements which materially affect EUL, to which EUL is a party or
by which EUL or any of its property is bound which exist as of the
date of execution of this Agreement (including, without limitation,
joint venture or partnership agreements, personal property leases,
conditional sales contracts, notes or other evidence of
indebtedness, or other contracts, agreements, or commitments)
(collectively, the "Contracts"). EUL now has, and at the Closing
will have, valid and enforceable interests in and to the Contracts.
EUL is not in default with respect to any material term or
condition of any such Contract, nor has any event occurred which
through the passage of time or the giving of notice, or both, would
constitute a default thereunder. EUL has received no notice that
any party to a Contract intends to cancel or terminate such
Contract or to exercise or not to exercise any option thereunder.
4.06 Licenses and Permits. Schedule 4.06 lists all licenses
("Licenses") and permits ("Permits") held by EUL and its
subsidiaries in connection with the operation of their business as
currently conducted or to the occupancy and use of the premises
upon which their business is conducted. No breach of any such
License or Permit currently exists, nor has any event occurred
which through the passage of time or the giving of notice, or both,
would constitute a breach thereunder.
4.07 Proprietary Rights. Schedule 4.07 lists all patents,
patent applications, trademarks, trade names, service marks,
copyrights, patent rights, trademark registrations, trademark
applications, business names, brand names, copyright registrations,
designs, design registrations, rights to computer software or any
rights to any of the foregoing ("Intellectual Property") of which
EUL is the owner, licensee or licensor (other than
commercially-available computer software and similar property), and
indicates whether EUL is the owner, the licensee or the licensor of
such Intellectual Property and, if it is the licensee or licensor,
the identity of the other party to the agreement, the scope of the
rights licensed, and the term of the agreement. Neither the stock
exchange or the other transactions to be consummated at closing
will conflict with, alter or impair such rights. To EUL's
knowledge, it conducts its business without conflict or
infringement of any Intellectual Property claimed or held by
others. To EUL's knowledge, no third party conflicts with or
infringes upon any Intellectual Property owned or licensed by EUL.
4.08 Litigation. All references to EUL in this Section 4.08
shall be deemed to refer to both EUL and its subsidiaries. Except
as listed in Schedule 4.08:
(a) there is no action, suit or proceeding to which EUL
or any of EUL's officers or directors, is a party (either as a
plaintiff or defendant) pending before any court or governmental
agency, authority or body, or any arbitrator or arbitral body,
which, if decided or concluded adversely, would have a materially
adverse impact upon the operation by EUL of the Business or on
EUL's ability to consummate the transactions contemplated herein,
and EUL has no knowledge that any such action, suit or proceeding
has been threatened against EUL;
(b) None of EUL, its officers or its directors has not
been permanently or temporarily enjoined by any order, judgment or
decree of any court or tribunal or any other agency from engaging
in or continuing any conduct or practice in connection with the
Business; and
(c) There is not in existence on the date hereof any
order, judgment or decree of any court or other tribunal or other
agency or any arbitrator or arbitral body, enjoining or requiring
EUL or any of its officers or directors to take any action of any
kind with respect to the business, pro perties or assets of the
Business.
4.09 Compliance with Law.
(a)EUL and its subsidiaries currently have no outstanding notice or
notification from any court or governmental agency, authority or
body that, with respect to the operations of the Business, it is
in violation in any material respect of or not in substantial
compliance with any federal, provincial or local laws, statutes,
ordinances, rules, regulations, decrees, orders, permits or other
similar items (including, but not limited to, those related to
employee safety, employment discrimination and environmental
protection or conservation) or that upon the passage of time it
will be in violation in any material respect of any of the
foregoing;
(b) The conduct of the Business within the five-year
period prior to the date hereof has not been in violation of any
federal, provincial or local laws, statutes, ordinances, rules,
regulations, decrees, orders, permits or other similar items
(including, but not limited to, those related to employee safety,
employment discrimination and environmental protection or
conversation) in force on the date hereof, the enforcement of which
would materially and adversely affect the condition (financial or
otherwise), business or properties of EUL or its subsidiaries;
(c) Neither EUL, its subsidiaries, nor any shareholder,
officer, employee or agent of EUL or its subsidiaries has, directly
or indirectly, within the five year period prior to the date
hereof given or agreed to give any gift or similar benefit to any
customer, supplier, competitor or governmental employee or official
or has engaged in any other practice, which in any such case
would subject EUL to any damage or penalty in any civil, criminal
or governmental litigation or proceeding or which would be grounds
for termination or modification of any material contract, license
or other instrument to which EUL or any subsidiary of EUL is a
party; and
(d) All outstanding securities issued by EUL (including
all common stock and securities convertible into or exercisable for
common stock) were issued in compliance with all applicable
securities laws. All of the outstanding common shares of EUL are,
and any common shares of EUL issuable upon conversion or exercise
of any other security, when issued pursuant to such conversion or
exercise will be, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights created by
statute, the charter documents of EUL or any agreement to which EUL
is a party or is bound.
4.10 Capitalization. The authorized capital stock of EUL
consists of 200 ordinary shares, of which 200 shares are
outstanding on the date hereof. Such issued and outstanding shares
have been duly and validly authorized and are fully paid and
non-assessable. There are no other shares of capital stock of EUL
outstanding, authorized or reserved for issuance; there are no
outstanding options, warrants, or rights to purchase or acquire, or
securities convertible into or exchangeable for, any shares of
capital stock of EUL, and there are no contracts, commitments,
agreements, understandings, arrangements or restrictions which
require EUL to issue, sell or deliver any shares of capital stock
of EUL. Attached as Schedule 4.14 is a list of the shareholders of
EUL as of the date hereof, indicating the number of EUL common
shares owned by them beneficially and of record.
4.11 Labor and Employment Matters. All references to EUL in
this Section 4.11 shall be deemed to refer to both EUL and its
subsidiaries. EUL has no collective bargaining agreement, service
or employment contract or other labor or employment agreement or
scheme to which EUL is a party or by which EUL is bound; no profit
sharing, deferred compensation, bonus, stock option, stock
purchase, pension, retainer, consulting, retirement, welfare or
incentive plan, contract, arrangement or scheme to which EUL is a
party or by which EUL is bound; and no plan, contract, arrangement
or scheme under which fringe benefits (including, but not limited
to, vacation plans or programs, sick leave plans or programs and
related benefits) are afforded to employees of EUL.
4.12 Taxes. All references to EUL in this Section 4.12 shall
be deemed to refer to both EUL and its subsidiaries.
(a) As used in this Agreement, (i) "Code" shall mean the Internal
Revenue Code of 1986, as amended, and the Treasury Regulations
promulgated thereunder; (ii) "Taxes" shall mean all Federal, state
and local, domestic and foreign, income, franchise, property,
sales, excise, employment, payroll, withholding and other taxes of
any nature, including any interest, penalties or additions with
respect thereto and any obligations under any agreements or
arrangements with any other Person with respect to such amounts;
(iii) "Taxing Authority" shall mean any Governmental Entity
(including any subdivision, agency or commission thereof)
exercising regulatory authority in respect of Taxes or liability
for Taxes of any other Person as required by Applicable Law; (iv)
"Tax Return" shall mean all returns, reports, forms, including
information returns, with respect to Taxes; (v) "Person" shall mean
an individual, partnership, corporation, business trust, joint
stock company, estate, trust, unincorporated association, joint
venture, Governmental Authority or other entity, of whatever
nature; and (vi) "Governmental Authority shall mean any
governmental, regulatory or administrative body, agency,
commission, board, arbitrator or authority, any court or judicial
authority, any public, private or industry regulatory authority,
whether international, foreign, national, federal, state or local,
and any entity or official exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining
to any laws or regulations.
(b) EUL has filed, when due, all Tax Returns except as
discussed in Schedule 4.12(b). All such Tax Returns are true and
complete in all respects. All Taxes due from EUL with respect to
the taxable periods covered by such Tax Returns and all other Taxes
have been or will be timely paid. EUL has not requested any
extension of time to file any Tax Return that has not yet been
filed.
(c) No Tax Return of EUL is currently under audit,
examination, or dispute by any Taxing Authority, and no written or
unwritten notice of such an audit, examination or dispute has been
received by EUL. No issues relating to Taxes have been raised in
the last five years by any Taxing Authority that can reasonably be
expected to recur in a later taxable period. No deficiency for any
material amount of Taxes has been asserted or assessed or
threatened by any Taxing Authority against EUL. No Liens for Taxes
exist with respect to any assets or properties of EUL.
4.13 Environmental Compliance. All references to EUL in this
Section 4.13 shall be deemed to refer to both EUL and its
subsidiaries. There have been no uses, disposals, burials or
releases of Hazardous Materials (as defined) on any premises used
in the Business, either before or after EUL's occupancy of such
premises, except in substantial compliance with applicable laws.
For purposes of this Section 4.13, the term "Hazardous Materials"
shall mean any substances defined as or included in the definition
of "hazardous substances," "hazardous wastes," "hazardous
materials," "toxic substances" and similar terms under any
applicable federal, provincial or local laws or regulations. The
operations of EUL at EUL's premises have been in material
compliance with all applicable federal, provincial or local
environmental laws or regulations. EUL shall indemnify and
hold harmless CPI and its successors and assigns from and against
any and all claims, demands, damages, actions, penalties,
liabilities, causes of action and government proceedings of any
kind or nature whatsoever, arising out of or in any manner directly
or indirectly connected with the presence prior to Closing of
Hazardous Materials at such premises or the violation prior to
Closing of any applicable federal, provincial or local
environmental laws or regulations at such premises, including,
but not limited to, any claims of indemnification or contribution
under any federal, provincial or local laws or regulations.
4.14 Subsidiaries and Affiliates. Except for the subsidiaries
of EUL named in Section 4.01, EUL does not have, directly or
indirectly, an equity investment in any corporation, partnership,
joint venture or other business entity which investment represents
or upon conversion would represent more than ten percent (10%) of
the voting power or interest in the profits of such entity.
4.15 No Assets Owned by Affiliates. There are no properties,
tangible or intangible, owned by the shareholders of EUL, or owned
by any affiliate or relative of such shareholders, which have been
used in the normal day-to-day operations of the Business any time
since January 1, 2000.
4.16 Indebtedness to and from Officers, Directors and
Shareholders. Except as set forth in the financial statements
dated 00XX Xxxxxxxx, 0000, XXX is not indebted to any officer,
director, or shareholder of EUL in any amount whatsoever other than
for salaries or services rendered since the start of EUL's current
pay period and for reimbursable business expenses, nor is
any such officer, director or shareholder indebted to EUL except
for advances made in the ordinary course of business to meet
anticipated reimbursable business expenses to be incurred by such
obligor.
4.17 Related Party Transactions. All references to EUL in
this Section 4.17 shall be deemed to refer to both EUL and its
subsidiaries. Except as identified on Schedule 4.17, no
officer or director, in such person's capacity as such, or, to
EUL's knowledge, any shareholder of EUL, nor any affiliate or
relative of any such person, now has or within the last three (3)
years has had, either directly or indirectly, a material interest
in any contract, agreement or commitment to which EUL is or was a
party, or under which EUL is or was obligated or bound, or to which
any of EUL's properties may be or may have been subject, other than
any contract, agreement or commitment between EUL and such persons
in their capacities as employees, officers or directors of EUL.
4.18 No Legal Bar. EUL is not prohibited by any order, writ,
injunction or decree of any body of competent jurisdiction from
consummating the transactions contemplated by this Agreement, and
no such action or proceeding is pending against EUL which questions
the validity of this Agreement or any of the transactions
contemplated hereby.
4.19 Finder's Fees and Brokerage Fees. EUL has not had any
dealings with any person which would entitle such person to any
finder's fee or brokerage fees in connection with this
Agreement or any transaction contemplated hereby (provided that the
parties acknowledge that in the event that the Private Placement is
consummated EUL will have entered into arrangements for the payment
of investment banking fees or finder's fees in connection with the
Private Placement).
4.20 Required Consents. No consent, waiver or other
authorization of any third party (including, without limitation,
any third party to a Real Property Lease, Equipment Lease,
Contract, License, Permit or other instrument to which EUL or any
subsidiary of EUL is a party or by which EUL or any subsidiary of
EUL is bound) is required to the consummation of the transactions
contemplated by this Agreement.
4.21 Other Information. EUL has disclosed or will, prior to
the Closing, disclose to CPI all information requested by CPI and
known to EUL (after reasonable investigation and inquiry) to be
material to the condition (financial or otherwise), business or
properties of EUL and its subsidiaries. The information concerning
EUL and its subsidiaries set forth in this Agreement, in the
schedules hereto furnished by EUL, and in any other document,
statement or certificate furnished or to be furnished to CPI
pursuant hereto, does not and will not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated herein or therein or necessary to make the statements and
facts contained herein or therein, in light of the circumstances
in which they are made, not false or misleading. All information
contained or referred to in the schedules hereto furnished by EUL
is accurate in all material respects and EUL (after having made
reasonable inquiry) is not aware of any other fact or matter which
renders any such information materially misleading. Copies of all
documents heretofore or hereafter delivered or made available to
CPI were or will be complete and accurate copies of such documents
on the date such copies are delivered.
4.22 EUL Unaudited Financial Statements. EUL has delivered to
CPI its unaudited consolidated financial statements for the year
ended 31st December, 2002 and such financial statements are true
and correct and fully represent the financial condition of EUL at
such dates and comply with United States generally accepted
accounting principles consistently applied throughout the periods
covered.
4.23 Regulatory Investigations. To EUL's knowledge, there are
no investigations or inquiries pending against EUL or its directors
or officers by any stock exchange, securities regulatory authority,
taxing authority or any other governmental department or agency.
4.24 Corporate Records. All of the minute books and corporate
and financial records of EUL are, or prior to the Closing will be,
in all material respects, complete, up to date and accurate.
4.25 Private Offering. None of EUL or its subsidiaries or the
officers, directors, agents or representatives thereof or their
Affiliates has issued, sold or offered any security of EUL
to any Person under circumstances that would cause the sale of the
stock, as contemplated by this Agreement, to be subject to the
registration requirements of the Securities Act of 1933 (the
"Securities Act"). None of EUL parties described above will offer
the stock or any part thereof or any similar securities for
issuance or sale to, or solicit any offer to acquire any of the
same from, anyone so as to make the issuance and sale of the Shares
subject to the registration requirements of Section 5 of the
Securities Act. The exchange, sale and delivery of the stock
hereunder are exempt from the registration and prospectus delivery
requirements of the Securities Act.
4.26 Foreign Corrupt Practices Act. None of EUL or its
subsidiaries, or any officer, director or employee of EUL or its
subsidiaries, or any agent or other Person associated with
or acting on behalf of EUL has with respect to EUL (i) used any
corporate funds for any unlawful cEULribution, gift, entertainment
or other unlawful expense relating to political activity; (ii) made
any unlawful payment to any foreign or domestic government official
or employee from corporate funds; (iii) violated or is in violation
of any provision of the Foreign Corrupt Practices Act of 1977;
or (iv) made any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment.
4.27 Corporate Name. EUL has not received any written or
unwritten notice of conflict during the past five (5) years with
respect to the rights of others regarding the corporate names of
EUL, and has the exclusive right to use its name as the name of a
corporation in the jurisdictions in which EUL has operations. No
Person is presently authorized by EUL to use the name of EUL.
4.28 Representations. All representations and warranties of
EUL are true, accurate and complete in all material respects as of
the date hereof and will be true, accurate and complete as of the
Closing as if made at such time, except with respect to the effect
of transactions in the ordinary course of business and transactions
contemplated or permitted by this Agreement. Any exception to a
representation or warranty of EUL which is disclosed in any of the
schedules hereto furnished by EUL shall be deemed to apply only to
the representation or warranty referenced by such schedule, and
shall not, unless scheduled separately, be considered an exception
to any other representation or warranty of EUL in this Agreement.
ARTICLE FIVE
CPI represents and warrants to EUL as follows:
5.01 Organization, Standing and Power. CPI is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate
power and authority to own or lease its assets as now owned or
leased by it and to otherwise conduct its business. All corporate
proceedings required by law or by the provisions of this Agreement
to be taken by CPI on or before the Closing Date in connection with
the execution and delivery of this Agreement and the consummation
of the transactions contemplated by this Agreement have been
or will be duly and validly taken.
5.02 Due Authorization. This Agreement and each other
agreement contemplated hereby to be executed in connection herewith
by CPI or have been (or upon execution will have been) duly
executed and delivered by CPI and constitute (or upon execution
will constitute) legal, valid and binding obligations of CPI
enforceable in accordance with their respective terms, except as
limited by bankruptcy, insolvency, reorganization or other laws
affecting generally the enforcement of creditors' rights.
5.03 Agreement Not in Breach of Other Instruments. The
execution and delivery of this Agreement by CPI and the
consummation of the transactions contemplated hereby will not
result in a breach of any of the terms and provisions of, or
constitute a default under, or conflict with, any material
agreement, indenture or other instrument to which CPI is a party or
by which it or its properties are bound.
5.04 Status of Common Stock. Upon consummation of the
transactions contemplated by this Agreement, the CPI Shares to be
issued to the EUL Shareholders, when issued and delivered, will be
duly authorized, validly issued, fully paid and non-assessable and
free of any and all liens, claims or encumbrances.
5.05 No Bankruptcy. Neither CPI nor its assets are the
subject of any proceeding involving either a voluntary or an
involuntary bankruptcy, insolvency or receivership.
5.06 Absence of Certain Changes. Since January 31st, 2003,
there has not been any material adverse change in the financial
condition, assets or liabilities of CPI, and CPI has not:
(a) Engaged in any material transaction outside the
ordinary course of business;
(b) Made any capital expenditures other than in the
ordinary course of business;
(c) Paid, loaned or advanced (other than the payment of
salaries or reimbursement of expenses in the ordinary course of
business) any amounts to, or sold, transferred or leased any
properties or assets to or entered into any other transactions with
any of its officers or directors, any of its affiliates, or any
officer or director of its affiliates;
(d) Made any material change in any method of accounting
or accounting practice;
(e) Incurred any material indebtedness or leasehold
expense in excess of $5,000;
(f) Entered into any material guaranties or otherwise
incurred or suffered to exist any material contingent liabilities;
(g) Paid or declared any dividend or other distribution
in respect of its capital stock, or set aside any sums for the
payment of any such dividend or other distribution;
(h) Issued or sold any shares of common stock or any
other equity security, granted any stock option or warrant, or
otherwise issued any security convertible into capital stock.
(i) Agreed, whether in writing or otherwise, to do any
of the foregoing;
(j) Suffered any labor trouble or any controversies with
any of its employees; or
(k) Suffered any damage, destruction or loss, whether or
not covered by insurance, materially adversely affecting the
business or properties of CPI.
5.07 Contracts and Commitments. All agreements which
materially affect CPI, to which CPI is a party or by which CPI or
any of its property is bound which exist as of the date of
execution of this Agreement have been filed as exhibits to
documents filed by CPI with the Commission under the Securities
Exchange Act of 1934 (collectively, the "Contracts"). CPI is not
in default with respect to any material term or condition of any
such Contract, nor has any event occurred which through the passage
of time or the giving of notice, or both, would constitute a
default thereunder.
5.08 Litigation.
(a) There is no action, suit or proceeding to which CPI
or any of CPI's officers or directors is a party (either as a
plaintiff or defendant) pending before any court or governmental
agency, authority or body, or any arbitrator or arbitral body,
which, if decided or concluded adversely, would have a materially
adverse impact upon the operation by CPI of its business or on
CPI's ability to consummate the transactions contemplated herein,
and CPI has no knowledge that any such action, suit or proceeding
has been threatened against CPI;
(b) None of CPI, its officers or its directors has been
permanently or temporarily enjoined by any order, judgment or
decree of any court or tribunal or any other agency from engaging
in or continuing any conduct or practice in connection with its
business; and
(c) There is not in existence on the date hereof any
order, judgment or decree of any court or other tribunal or other
agency or any arbitrator or arbitral body, enjoining or requiring
CPI or any of its officers or directors to take any action of any
kind with respect to its business, properties or assets.
5.09 Compliance with Law.
(a) CPI currently has no outstanding notice or notification
from any court or governmental agency, authority or body that, with
respect to the operations of CPI's business, it is in violation in
any material respect of or not in substantial compliance with any
federal, state or local laws, statutes, ordinances, rules,
regulations, decrees, orders, permits or other similar items
(including, but not limited to, those related to employee safety,
employment discrimination and environmental protection or
conservation) or that upon the passage of time it will be in
violation in any material respect of any of the foregoing;
(b) The conduct of CPI's business within the five-year period
prior to the date hereof has not been in violation of any federal,
state or local laws, statutes, ordinances, rules, regulations,
decrees, orders, permits or other similar items (including, but not
limited to, those related to employee safety, employment
discrimination and environmental protection or conversation) in
force on the date hereof, the enforcement of which would materially
and adversely affect the condition (financial or otherwise),
business or properties of CPI;
(c) Neither CPI nor any shareholder, officer, employee or
agent of CPI has, directly or indirectly, within the five year
period prior to the date hereof given or agreed to give any gift or
similar benefit to any customer, supplier, competitor or
governmental employee or official or has engaged in any other
practice, which in any such case would subject CPI to any damage or
penalty in any civil, criminal or governmental litigation or
proceeding or which would be grounds for termination or
modification of any material contract, license or other instrument
to which CPI is a party; and
(d) All outstanding securities issued by CPI (including all
common stock and securities convertible into or exercisable for
common stock) were issued in compliance with all applicable
securities laws. All of the outstanding shares of CPI common stock
are, and any shares of CPI common stock issuable upon conversion or
exercise of any other security, when issued pursuant to
such conversion or exercise will be, duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive
rights created by statute, the charter documents of CPI or any
agreement to which CPI is a party or is bound.
5.10 Capitalization. The authorized capital stock of CPI consists
of 25,000,000 shares of common stock, of which 15,814,920 shares
are outstanding on the date hereof. Such issued and outstanding
shares have been duly and validly authorized and are fully paid and
nonassessable. There are no other shares of capital stock of CPI
outstanding, authorized or reserved for issuance, there are
no outstanding options, warrants, or rights to purchase or acquire,
or securities convertible into or exchangeable for, any shares of
capital stock of CPI, and there are no contracts, commitments,
agreements, understandings, arrangements or restrictions which
require CPI to issue, sell or deliver any shares of capital stock
of CPI. Attached as Schedule 5.10 is a list of the stockholders of
CPI indicating the number of CPI common shares owned of record by
them as of a recent date.
5.11 Taxes. All tax returns required to be filed with respect
to CPI have been duly filed and all taxes and other governmental
charges as reflected on such tax returns as being due and
owing in respect of the properties, income, sales and payrolls of
CPI have been duly paid. There are no pending questions with
governmental agencies relating to, or claims or assessments for,
taxes payable by CPI, and CPI has not given, and has not been
requested to give, any waivers extending the statutory period of
limitation applicable to any income tax return for any period; and
proper and accurate amounts have been withheld by CPI from its
employees for all periods in full and complete compliance with the
tax withholding provisions of all applicable laws.
5.12 Environmental Compliance. There have been no uses,
disposals, burials or releases of Hazardous Materials (as defined)
on any premises used in CPI's business, either before or after
CPI's occupancy of such premises, except in substantial compliance
with applicable laws. For purposes of this Section 5.12, the term
"Hazardous Materials" shall mean any substances defined as or
included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "toxic substances" and similar
terms under any applicable federal, state or local laws or
regulations. The operations of CPI at CPI's premises have been in
material compliance with all applicable federal, state or local
environmental laws or regulations. CPI shall indemnify and hold
harmless EUL and its successors and assigns from and against any
and all claims, demands, damages, actions, penalties, liabilities,
causes of action and government proceedings of any kind or
nature whatsoever, arising out of or in any manner directly or
indirectly connected with the presence prior to Closing of
Hazardous Materials at such premises or the violation prior to
Closing of any applicable federal, state or local environmental
laws or regulations at such premises, including, but not limited
to, any claims of indemnification or contribution under any
federal, state or local laws or regulations.
5.13 Subsidiaries and Affiliates. Except for its wholly owned
subsidiary Advanced Knowledge, CPI has no direct or indirect equity
investment in any corporation, partnership, joint venture or other
business entity.
5.14 Indebtedness to and from Officers, Directors and
Stockholders. Except as set forth in the financial statements
dated November 30, 2002 CPI is not indebted to any officer,
director, or stockholder of CPI in any amount whatsoever.
5.15 No Legal Bar. CPI is not prohibited by any order, writ,
injunction or decree of any body of competent jurisdiction from
consummating the transactions contemplated by this Agreement, and
no such action or proceeding is pending against CPI which questions
the validity of this Agreement or any of the transactions
contemplated hereby.
5.16 Finder's Fees and Brokerage Fees. CPI has not had any
dealings with any person which would entitle such person to any
finder's fee or brokerage fees in connection with this
Agreement or any transaction contemplated hereby.
5.17 Other Information. CPI has disclosed or will, prior to
the Closing, disclose to EUL all information requested by EUL and
known to CPI (after reasonable investigation and inquiry) to be
material to the condition (financial or otherwise), business or
properties of CPI. The information concerning CPI set forth in
this Agreement, in the CPI Annual Report (including the
audited financial statements contained therein (the "CPI Financial
Statements")), in any schedules hereto furnished by CPI, and in any
other document, statement or certificate furnished or to be
furnished to CPI pursuant hereto, does not and will not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated herein or therein or necessary to make
the statements and facts contained herein or therein, in light of
the circumstances in which they are made, not false or misleading.
All information contained or referred to in the schedules hereto
furnished by CPI is accurate in all material respects and CPI
(after having made reasonable inquiry) is not aware of any other
fact or matter which renders any such information materially
misleading. Copies of all documents heretofore or hereafter
delivered or made available to AMI were or will be complete and
accurate copies of such documents on the date such copies are
delivered.
5.18 CPI Pro-Forma Financial Statements. The CPI Financial
Statements fully represent the financial condition of CPI given
the effect of the spin out of the current subsidiaries prior to
closing. The CPI Financial Statements comply with generally
accepted accounting principles consistently applied throughout the
periods covered.
5.20 Reporting Company. CPI is a reporting company registered
under Section 12(g) of the Securities Exchange Act of 1934 and is
in compliance with all laws, rules and regulations applicable to
reporting companies generally.
5.21 Securities Filings. CPI is current with respect to all
required filings with state and federal securities regulatory
authorities and the contents of all such filings are complete and
accurate in all material respects.
5.22 OTC Bulletin Board. CPI's common stock is posted for
trading on the OTC Bulletin Board under the symbol "CRPN."
5.23 Stop Trade Orders. There are no pending, and there have
never been any, stop trade orders issued against CPI or any of its
directors or officers or those of any affiliates of CPI by any
securities regulatory authority whether in the United States or in
any other jurisdiction.
5.24 Regulatory Investigations. To CPI's knowledge, there are
no investigations or inquiries pending against CPI or its directors
or officers by any stock exchange, securities regulatory authority,
taxing authority or any other governmental department or agency.
5.25 Corporate Records. All of the minute books and corporate
and financial records of CPI are, or prior to the Closing will be,
in all material respects, complete, up to date and accurate.
5.26 Representations. All representations and warranties of
CPI are true, accurate and complete in all material respects as of
the date hereof and will be true, accurate and complete as of the
Closing as if made at such time, except with respect to the effect
of transactions in the ordinary course of business and transactions
contemplated or permitted by this Agreement. Any exception to a
representation or warranty of CPI which is disclosed in any of the
schedules hereto furnished by CPI shall be deemed to apply only to
the representation or warranty referenced by such schedule, and
shall not, unless scheduled separately, be considered an exception
to any other representation or warranty of CPI in this Agreement.
5.27 Government Approvals. Other than (i) the pre-Closing
filing and delivery to stockholders of the Stockholder Notice
described in Section 8.17 and (ii) the post-Closing filing
of securities exemption notice filings required in the State of
California and the Province of EULario, no governmental notices,
filings, approvals or consents are required in order for CPI to
complete the transactions contemplated by this Agreement.
5.28 Required Consents. No consent, waiver or other
authorization of any third party (including, without limitation,
any third party to a real property lease, equipment lease,
contract, license, permit or other instrument to which CPI is a
party or by which CPI is bound) is required to the consummation of
the transactions contemplated by this Agreement.
ARTICLE SIX
All references to EUL in this Article shall be deemed to refer
to both EUL and its subsidiaries, except where the context requires
otherwise. EUL hereby covenants and agrees, between the date
hereof and the Closing (and, with respect to Sections 6.06, 6.09,
6.10, 6.18, 6.19 and 6.20 also after the Closing), as follows:
6.01 Conduct of Business. EUL shall conduct the operations of
its Business only in the ordinary course and in a manner consistent
with a maximization of the value of the Business. EUL shall use
reasonable efforts to preserve the goodwill of its customers and
others with whom it has business relations. Except as otherwise
contemplated by this Agreement or consented to by CPI in writing,
between the date of this Agreement and the Closing, EUL shall not:
(a) Engage in any material transaction outside the
ordinary course of business;
(b) Make any capital expenditures other than in the
ordinary course of business;
(c) Enter into any material guaranties or otherwise
incur or suffer to exist any material contingent liabilities;
(d) Enter into any material new indebtedness, or cancel
any indebtedness due it except upon full payment thereof;
(e) Make any payment of dividends or other unusual
distribution of cash or assets to shareholders or employees,
including repayment of outstanding indebtedness;
(f) Make any material change in any method of accounting
or accounting practice;
(g) Enter into or engage in any transaction with any
officer, director, shareholder or affiliate, except for the payment
of salaries and other activities in the ordinary course of
business;
(h) Fail to pay when due, or fail to maintain a reserve
adequate for the payment when due of, any applicable local,
provincial or federal taxes;
(i) Issue or sell any common shares or other equity
security, grant any stock option or warrant, or otherwise issue any
security convertible into capital stock;
(j) Take any other action which would render any
representation or warranty of EUL herein inaccurate as of the date
such action is taken; or
(k) Agree, whether in writing or otherwise, to do any of
the foregoing.
6.02 Fulfillment of Conditions and Covenants. EUL shall not
voluntarily undertake any course of action inconsistent with the
satisfaction of the requirements or conditions applicable to it
as set forth in this Agreement and shall promptly do all acts and
take all such steps as it deems necessary or appropriate to enable
it to perform as early as possible the obligations herein provided.
6.03 Status of Assets. EUL's title to its assets shall be
maintained and preserved at all times from the date hereof until
completion of the Closing in material accordance with the
representations and warranties of EUL set forth in Article Four
hereof.
6.04 Access to Information. Upon reasonable notice from CPI,
EUL shall deliver to the representatives of CPI, or grant such
representatives access during normal business hours to, the
books, records and financial statements of EUL to make such
reviews, examinations and investigations thereof as CPI deems
necessary.
6.05 Financial Records and Unaudited Financial Statements.
EUL shall accurately maintain its books and records and promptly
advise CPI in writing of any material adverse change in the
condition (financial or otherwise), assets, liabilities, earnings
or Business of EUL.
6.06 Audited Financial Statements. EUL shall complete an
audit of the financial statements of EUL in conformance with the
requirements of Form 8-K (items 2 and 7) and other applicable rules
and regulations of the Commission. Such audit shall be completed in
time for CPI to timely file the audited financial statements of
EUL, together with all required pro forma financial statements,
with the Commission on Form 8-K, i.e., within 75 days after the
Effective Time.
6.08 Transfer of Licenses, Permits and Authorizations.
Between the date hereof and the Closing, EUL shall, if required by
applicable law or regulations, at its cost, obtain new Licenses
and Permits or transfers of existing Licenses and Permits and any
governmental or other consents or authorizations required for the
consummation of the Acquisition and the conduct of EUL's
Business following the Closing; provided, however, that the terms
and conditions of such new or transferred Licenses and Permits
shall not be less favorable than those terms and conditions to
which EUL is currently subject.
6.09 Employees. Between the date hereof and the Closing, EUL
shall use its best efforts to ensure that all of the key employees
of EUL shall remain as employees of EUL (subject to Section
14.05 below).
6.10 Agreement with Respect to Other Regulatory Filings. EUL
agrees that it shall cooperate with CPI in the preparation of any
document or other material which may be required by any
governmental agency as a predicate to or result of the transactions
herein contemplated.
6.11 Solicitation of Inquiries. From the date hereof to the
earlier to occur of (i) the Closing or (ii) the termination of this
Agreement pursuant to Article Ten hereof (which period shall
be referred to herein as the "No-Shop Period"), neither EUL nor its
directors, employees, agents or representatives shall, without the
prior written consent of CPI, solicit from any other person, firm
or corporation any inquiry or proposal relating to a merger,
consolidation, amalgamation, purchase or sale of assets, exchange
of securities or similar transaction involving EUL, other than in
the ordinary course of business, nor shall they deliver to any
other person any information concerning EUL or its business,
financial affairs or prospects for the purpose or with the intent
of permitting such person or entity to evaluate the possibility of
such a transaction involving EUL.
6.12 Purchase and Sale Agreements. EUL shall distribute to
each of the EUL Shareholders a Purchase and Sale Agreement in
substantially the form attached as Exhibit B (the "Purchase and
Sale Agreement") to be signed by them and returned to EUL for
delivery to CPI at the Closing. EUL shall also distribute to each
of the EUL Shareholders for informational purposes (i) a copy of
the CPI Annual Report, and (ii) a copy of this Agreement.
6.13 Public Announcements. Except as required by any
applicable law, rule or regulation, prior to the Closing EUL shall
not issue nor permit to be issued any press release or otherwise
make or permit to be made any public statement with respect to the
transactions contemplated by this Agreement without the prior
written consent of CPI.
6.14 Appointment of Successor Directors. The persons to be
appointed as the New CPI Directors at the Effective Time shall
adopt the Successor Director Resolutions and shall deliver an
original signed copy of such resolutions to Xxx Xxxxxxx in
connection with the Closing.
6.15 Instruction Letter to Transfer Agent.
6.16 Conduct of Business Prior to Private Placement. EUL
covenants and agrees, at all times after the Effective Date until
the Private Placement shall have been consummated, to the
following:
(a) EUL and its subsidiaries will operate their
businesses separate and apart from CPI
(b) EUL and its subsidiaries will not transfer or assign
to CPI, directly or indirectly, by any means whatsoever, any of
EUL's liabilities, debts, expenses, losses, judgments, claims,
damages or other obligations and will not cause CPI to incur any
liabilities, debts, expenses, losses, judgments, claims, damages or
other obligations on behalf or for the benefit of EUL or its
subsidiaries; and
(c) EUL and its subsidiaries will pay in a timely manner
all legal, accounting and other costs and expenses of CPI incurred
in connection with the Private Placement and incurred for
any other purpose, including, but not limited to, costs and
expenses of effecting a change of CPI's corporate name, preparing
and filing reports and statements under the Securities Exchange Act
of 1934, and satisfying all other applicable laws and regulations.
ARTICLE SEVEN
CPI hereby covenants and agrees, between the date hereof and
the date of Closing (and, with respect to Section 7.08, also after
the Closing), as follows:
7.01 Fulfillment of Conditions and Covenants. CPI shall not
voluntarily undertake any course of action inconsistent with the
satisfaction of the requirements and conditions applicable to
it as set forth in this Agreement, and CPI shall promptly do all
acts and take all such measures as may be necessary or appropriate
to enable it to perform as early as possible the obligations herein
provided.
7.02 Access to Information. Upon reasonable notice from EUL,
CPI shall deliver to the representatives of EUL, or grant such
representatives access during normal business hours to, the
books, records and financial statements of CPI to make such
reviews, examinations and investigations thereof as XXX xxxxx
necessary.
7.03 Compliance with Applicable Securities Laws. CPI agrees
to use its best efforts to comply with all applicable securities
laws in connection with the offer and sale of the CPI Shares
to the EUL Shareholders and will pay all expenses incident thereto.
7.04 Resignations of Existing Directors and Officers. The
board of directors of CPI shall obtain written resignations of each
of the existing directors and officers of CPI, to become
effective at the Effective Time, and shall deliver them to EUL at
the Closing.
7.05 Appointment of New Directors and Officers. The board of
directors of CPI shall adopt the New Director Resolutions (as
defined in Section 3.03) and the New Officer Resolutions
(as defined in Section 3.045) and shall deliver certified copies of
such resolutions to EUL at the Closing.
7.06 Conduct of Business. Except for spinning off Corspan
Limited and other current subsidiaries as a separate entity, CPI
shall conduct the operations of its business only in the ordinary
course. Except as otherwise contemplated by this Agreement or
consented to by EUL in writing, between the date of this Agreement
and the Closing, CPI shall not:
(a) Engage in any material transaction outside the
ordinary course of business;
(b) Make any capital expenditures other than in the
ordinary course of business;
(c) Enter into any material guaranties or otherwise
incur or suffer to exist any material contingent liabilities;
(d) Enter into any material new indebtedness, or cancel
any indebtedness due it except upon full payment thereof;
(e) Make any payment of dividends or other unusual
distribution of cash or assets to stockholders or employees,
including repayment of outstanding indebtedness;
(f) Make any material change in any method of accounting
or accounting practice;
(g) Enter into or engage in any transaction with any
officer, director, shareholder or affiliate, except for the payment
of salaries and other activities in the ordinary course of
business;
(h) Fail to pay when due, or fail to maintain a reserve
adequate for the payment when due of, any applicable local, state
or federal taxes;
(i) Issue or sell any shares of common stock or other
equity security, grant any stock option or warrant, or otherwise
issue any security convertible into capital stock;
(j) Take any other action which would render any
representation or warranty of CPI herein inaccurate as of the date
such action is taken; or
(k) Agree, whether in writing or otherwise, to do any of
the foregoing.
7.07 Financial Records. CPI shall accurately maintain its
books and records and promptly advise EUL in writing of any
material adverse change in the condition (financial or otherwise),
assets, liabilities or business of CPI.
7.08 Agreement with Respect to Other Regulatory Filings. CPI
agrees that it shall cooperate with EUL in the preparation of any
document or other material which may be required by
any governmental agency as a predicate to or result of the
transactions herein contemplated.
7.09 Solicitation of Inquiries. Unless otherwise permitted by
this Agreement, during the No-Shop Period (as defined in Section
6.11) neither CPI nor its directors, employees, agents or
representatives shall, without the prior written consent of EUL,
solicit from any other person, firm or corporation any inquiry or
proposal relating to a merger, consolidation, amalgamation,
arrangement, purchase or sale of assets, exchange of securities or
similar transaction involving CPI, other than in the ordinary
course of business, nor shall they deliver to any other person any
information concerning CPI or its business, financial affairs or
prospects for the purpose or with the intent of permitting such
person or entity to evaluate the possibility of such a transaction
involving CPI.
7.10 Public Announcements. Except as required by any
applicable law, rule or regulation, prior to the Closing CPI shall
not issue nor permit to be issued any press release or
otherwise make or permit to be made any public statement with
respect to the transactions contemplated by this Agreement without
the prior written consent of EUL.
7.11 Spin Off of Corspan Limited. Currently, CPI owns,
controls and operates a wholly owned subsidiary known as Corspan
Limited. ("COR") and prior to the Closing, CPI shall spin off
COR to CPI's current shareholders, as constituted prior to the
Closing (i.e. no shares shall be issued to the EUL shareholders),
with COR assuming all of the assets and liabilities associated with
its business. As of the Closing, CPI shall have no liabilities,
contingent or otherwise, except as set forth on Schedule 7.11, and
CPI represents and warrants the same.
ARTICLE EIGHT
The obligations of EUL contemplated herein are subject to the
satisfaction, at or before the Closing, of all of the conditions
set out hereinbelow. If any such condition is not satisfied, EUL
shall have the right, at its sole election, either to waive the
condition in question and proceed with the Closing or, in the
alternative, to terminate this Agreement without liability. In the
event that EUL elects to waive the condition in question and
proceed with the Closing, the condition in question shall be deemed
to have been satisfied and shall have no further force or effect
hereunder in the absence of any misrepresentation of CPI to EUL
with respect to such condition.
8.01 Accuracy of and Certificate as to Representations and
Warranties. The representations and warranties of CPI contained
herein and in all documents to be delivered pursuant hereto shall
be true and correct in all material respects as of the Closing, as
if made at such time, and EUL shall have received from CPI a
certificate, dated as of the Closing and signed by an executive
officer of CPI, certifying that all such representations and
warranties of CPI remain true and correct as of the Closing.
8.02 Compliance with Covenants. CPI shall have performed and
complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed or
satisfied by CPI.
8.03 Action/Proceeding. No court shall have issued an order
effective against a party to restrain or prohibit the transactions
herein contemplated.
8.04 Consents. EUL shall have obtained all Required Consents
from the parties from whom consent is required, as listed on
Schedule 4.25 hereto, and from any other third party (including any
federal, provincial or local governmental agency or
instrumentality) as may be necessary or appropriate in connection
with the execution and delivery of this Agreement, or to the
consummation of the transactions contemplated hereby, and EUL shall
have obtained documentation or other evidence confirming same.
8.05 Compliance with Law. There shall have been obtained any
and all permits, approvals and consents of all governmental bodies
or agencies which counsel for EUL may reasonably deem necessary or
appropriate so that consummation of the transactions contemplated
by this Agreement will be in compliance in all material respects
with applicable laws.
8.06 Opinion of Counsel for CPI. EUL shall have received an
opinion of counsel to CPI, dated as of the Closing, which is
addressed to EUL and the EUL Shareholders and is satisfactory in
form and substance to EUL and its counsel, to the effect that:
(a) CPI is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware;
(b) CPI is qualified to do business in the USA;
(c) CPI has corporate power and authority to enter into
this Agreement, the Purchase and Sale Agreements and the
transactions and documents contemplated thereby and to perform its
obligations thereunder, and CPI has corporate power and authority
to own its properties and assets and to conduct its present
business;
(d) The execution, delivery and performance of the
agreements to be delivered pursuant hereto by CPI have been duly
authorized and approved by CPI and constitute the valid and
binding obligations of CPI duly enforceable in accordance with
their terms except as such enforcement may be limited by
bankruptcy, insolvency and other similar laws affecting the rights
of creditors generally, and will not contravene outstanding
documents, by-laws, contracts or instruments by which CPI or its
assets are bound or to which they are subject;
(e) The CPI Shares to be issued and delivered at the
Closing are duly authorized, validly issued, fully paid and
non-assessable, and free of pre-emptive rights;
(f) To counsel's knowledge, after due inquiry of CPI's
officers and directors but without investigation of public records,
CPI is not a party to any litigation or the subject of any
judgment or actual or threatened claim;
(g) To counsel's knowledge, after due inquiry of CPI's
officers and directors but without investigation of public records,
CPI has not been the subject of any investigation, stop order
or legal action by the Commission or any state securities
authorities having jurisdiction;
(h) To counsel's knowledge, after due inquiry of CPI's
officers and directors but without investigation of public records,
the transactions contemplated by this Agreement will not
contravene any applicable law, rule or regulation to which CPI is
subject; and
In rendering its opinion, counsel for CPI may rely upon
certificates of officers of CPI and certificates of governmental
authorities as to factual matters.
8.07 Delivery of Resolutions. The board of directors of CPI
shall have adopted the New Director Resolutions (as defined in
Section 3.04) and the New Officer Resolutions (as defined in
Section 3.05) and shall have delivered certified copies of such
resolutions to EUL at the Closing.
8.08 Delivery of CPI Shares. At the Closing the certificates
representing the CPI Shares shall have been delivered to the EUL
Shareholders in accordance with Articles 1 and 2 of this
Agreement.
8.10 Purchase and Sale Agreements. EUL shall have received
properly executed Purchase and Sale Agreements from all of the EUL
Shareholders for delivery to CPI at the Closing.
8.11 Other Information. EUL shall have received such other
certificates, opinions and other documents as it or its counsel may
reasonably require in order to consummate the transactions
contemplated hereby, all of which shall be in form and substance
satisfactory to it and its counsel.
8.12 Adverse Change. CPI shall not have suffered any material
change, loss or damage, whether or not covered by insurance, since
the date of execution of this Agreement.
8.13 Corporate Authorization. CPI shall have delivered to EUL
certified copies of all appropriate resolutions of CPI's board of
directors authorizing the transactions contemplated by this
Agreement.
8.14 Certificate of Status. CPI shall have delivered to EUL a
certificate of good standing and a tax clearance certificate from
the Delaware Secretary of State with respect to CPI dated not
more than ten (10) days prior to the Closing.
8.15 Incumbency Certificate. CPI shall have delivered to EUL
a certificate of incumbency with respect to those persons who are
the directors and officers of CPI at the time of the Closing.
8.17 Stockholder Notice. At least ten days prior to the
Closing, CPI shall have filed with the Commission and sent to CPI's
stockholders the notice which is required by Section 14(f) of the
Securities Exchange Act of 1934 and Rule 14f-1 promulgated
thereunder (the "Stockholder Notice") with respect to the
anticipated change in control of CPI's board of directors at the
Effective Time.
ARTICLE NINE
The obligations of CPI contemplated herein are subject to the
satisfaction, at or before the Closing, of all of the conditions
set out herein below. If any such condition is not satisfied, CPI
shall have the right, at its sole election, either to waive the
condition in question and proceed with the Closing or, in the
alternative, to terminate this Agreement without liability. In the
event that CPI elects to waive the condition in question and
proceed with the Closing, the condition in question shall be deemed
to have been satisfied and shall have no further force or effect
hereunder in the absence of any misrepresentation of EUL to CPI
with respect to such condition.
9.01 Accuracy of and Certificate as to Representations and
Warranties. The representations and warranties of EUL contained
herein and in all documents to be delivered pursuant hereto shall
be true and correct in all material respects as of the Closing, as
if made at such time, and CPI shall have received from EUL a
certificate, dated as of the Closing and signed by an authorized
officer of EUL, certifying that all such representations and
warranties of EUL remain true and correct as of the Closing.
9.02 Compliance with Covenants. EUL shall have performed and
complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed or
satisfied by EUL.
9.03 Action/Proceeding. No court shall have issued an order
effective against a party to restrain or prohibit the transactions
herein contemplated.
9.04 Consents. EUL shall have obtained all Required Consents
from the parties from whom consent is required, and from any other
third party (including any federal, provincial or local
governmental agency or instrumentality) as may be necessary or
appropriate in connection with the execution and delivery of this
Agreement, or to the consummation of the transactions contemplated
hereby, and CPI shall have obtained from EUL documentation or other
evidence confirming same.
9.05 Compliance with Law. There shall have been obtained any
and all permits, approvals and consents of all governmental bodies
or agencies which counsel for CPI may reasonably deem necessary or
appropriate so that consummation of the transactions contemplated
by this Agreement will be in compliance in all material respects
with applicable laws.
9.06 Purchase and Sale Agreements. EUL shall have delivered
to CPI a properly executed Purchase and Sale Agreement from a
majority of the EUL Shareholders.
9.07 Opinion of Counsel for EUL. CPI shall have received
an opinion from counsel to EUL, which is dated as of the Closing
and is satisfactory in form and substance to CPI
and its counsel, to the effect that:
(a) EUL is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware;
(b) EUL is qualified to do business in the USA;
(c) EUL has corporate power and authority to enter into
this Agreement and the Promissory Note and to perform its
obligations thereunder, and EUL and its subsidiaries have
corporate power and authority to own their respective properties
and assets and to conduct their businesses as presently conducted;
(d) The execution, delivery and performance of the
agreements to be delivered pursuant hereto by EUL have been duly
authorized and approved by EUL and constitute the valid and binding
obligations of EUL duly enforceable in accordance with their terms
except as such enforcement may be limited by bankruptcy, insolvency
and other similar laws affecting the rights of creditors
generally,;
(e) The EUL Shares to be delivered at the Closing are
duly authorized, validly issued, fully paid and non-assessable, and
free of pre-emptive rights;
(f) The sale to CPI of the EUL Shares at the Closing is
exempt from all applicable takeover statutes, rules and
regulations;
(g) No governmental notices, filings, approvals or
consents are required in order for EUL to complete the transactions
contemplated by this Agreement;
(h) To counsel's knowledge, upon due inquiry of EUL's
officers and directors without investigation of public records, EUL
is not a party to any litigation or the subject of any judgment or
actual or threatened claim except as disclosed in the Agreement or
the schedules thereto;
(i) To counsel's knowledge, upon due inquiry of EUL's
officers and directors and without investigation of public records,
EUL has not been the subject of any investigation, stop order
or legal action by any securities authorities having jurisdiction;
and
(j) To counsel's knowledge, upon due inquiry of EUL's
officers and directors and without investigation of public records,
the transactions contemplated by this Agreement will not
contravene any applicable law, rule or regulation to which EUL is
subject; and;
In rendering its opinion, counsel for EUL may rely upon
certificates of officers of EUL and certificates of governmental
authorities as to factual matters.
9.08 Securities Law Compliance. All applicable securities
laws have been satisfied in connection with the offer and sale of
the CPI Shares.
9.09 Other Information. CPI shall have received such other
certificates, opinions and other documents as it or its counsel may
reasonably require in order to consummate the transactions
contemplated hereby, all of which shall be in form and substance
satisfactory to it and its counsel.
9.10 Adverse Change. EUL shall provide an officer's
certificate to CPI which states that: (i ) no material adverse
change in the results of operations or the financial condition of
EUL which materially impairs EUL's ability to conduct its Business
shall have occurred other than for changes which occur from the
fact that EUL has entered into this Agreement with CPI; (ii) EUL
shall not have suffered any material change, loss or damage,
whether or not covered by insurance, since the date of execution of
this Agreement, which change, loss or damage materially affects or
impairs the ability of EUL to conduct its Business; and, (iii)
without limitation of the foregoing, there shall not have occurred
any destruction of or damage or loss to all or any part of the
assets of EUL from any cause whatsoever, including, but not limited
to, fire, flood, accident, acts of God, earthquake, insurrection,
riot or any other cause commonly referred to as force majeure,
which destruction, damage or loss shall not have been fully
repaired to CPI's satisfaction.
9.11 Corporate Authorization. EUL shall have delivered to CPI
certified copies of all appropriate resolutions of EUL's board of
directors authorizing the transactions contemplated by this
Agreement.
9.12 Certificate of Good Standing. EUL shall have delivered
to CPI a certificate of good standing from the state of Delaware
with
respect to EUL and each of its subsidiaries dated not more
than ten (10) days prior to the Closing, together with confirmation
of good standing on the date of Closing.
9.13 Transfer and Delivery of EUL Shares. [Intentionally
omitted.]
9.14 Incumbency Certificate. EUL shall have delivered to CPI
a certificate of incumbency with respect to those persons who are
the
directors and officers of CPI at the time of the
Closing.
9.15 Stockholder Notice. At least ten days prior to the
Closing, CPI shall have filed with the Commission and sent to CPI's
stockholders the Stockholder Notice described in Section 8.17.
ARTICLE TEN
10.01 Termination. This Agreement may be terminated and
the Acquisition abandoned (notwithstanding any shareholder approval
of the Acquisition) prior to the Effective Time:
(a) by mutual written consent of CPI and EUL at any
time;
(b) by EUL at any time after February 28, 2003, provided
that EUL is not in material breach of any covenant, agreement,
representation or warranty made by it in this Agreement;
(c) by CPI at any time after February 28, 2003, provided
that CPI is not in material breach of any covenant, agreement,
representation or warranty made by it in this Agreement;
(d) by CPI or EUL at any time if an order is entered by
any court or governmental agency having jurisdiction enjoining
CPI or EUL, respectively, from consummating any of the transactions
contemplated by this Agreement and such order shall not have been
vacated, reversed or withdrawn on or before the thirtieth (30th)
day after the date on which such order was first issued;
or
(e) by CPI or EUL if (i) any representation or warranty
of the other hereunder shall not have been materially true and
correct as of the time at which made, or (ii) any conditions
precedent to the obligations of such party as set forth in Article
Eight or Nine are not satisfied in a timely fashion, or (iii)
default
shall be made by the other hereunder in the due and timely
observance
or performance of any of its covenants and agreements herein
contained,
in either event only if such representation or warranty cannot be
made true
and correct or such default cannot be cured on or prior to the
fifteenth (15th)
day after the non-defaulting or breaching party notifies the other
in
writing of such default or breach, specifying the nature thereof.
10.02 Notice of Termination. The power of termination
provided for by Section 10.01 hereof may be exercised only by a
notice given in writing and signed on behalf of CPI by its
President and on behalf of EUL by its President.
10.03 Effect of Termination. In the event of termination
and abandonment pursuant to this Article Ten, this Agreement
shall become void and have no effect, without any liability on the
part
of any of the parties, except as otherwise provided in Articles
Eleven and Twelve hereof. Any announcement of the termination of
this Agreement and the abandonment of the Acquisition shall
be made by means of a press release issued jointly by CPI and EUL
unless otherwise required to be made by CPI pursuant to the federal
or state securities laws.
ARTICLE ELEVEN
11.01 Survival of Representations and Warranties. The
representations and warranties of each party hereto shall survive
the Closing for a period of twelve (12) months, and shall not be
affected by any investigation made by or on behalf of CPI or EUL,
as the case may be. After the applicable expiration with respect
to
any particular representation or warranty, neither CPI nor EUL
shall be under any liability whatsoever with respect to any such
representation or warranty. All covenants and agreements of the
parties contained herein shall survive the Closing Date and shall
continue for the period required to fulfill the applicable covenant
or agreement.
11.02 Indemnification. The parties shall indemnify each
other as follows:
(a) EUL's Indemnity of CPI. EUL shall indemnify, defend
and hold harmless CPI and its stockholders, directors, officers and
agents from and against all losses, judgments, liabilities,
claims, damages, or expenses (including reasonable attorneys' fees)
of every kind, nature and description, whether known or unknown,
absolute or contingent, joint or several ("Loss"), arising
out of or relating to (i) any misrepresentation, breach of any
representation or warranty, or non-fulfillment, non-performance,
failure
to timely or fully perform, or breach of any covenant,
agreement or other obligation to be performed by EUL contained in
this Agreement or any exhibit or schedule hereto, (ii) the conduct
of
EUL's Business prior to the Effective Time, or (iii) the conduct
of EUL's business after the Effective Time and prior to any
rescission of the Acquisition.
(b) CPI's Indemnity of EUL. CPI shall indemnify, defend
and hold harmless EUL, the EUL Shareholders and EUL's directors,
officers and agents from and against any Loss arising out of or
relating to
(i) any misrepresentation, breach of any representation or
warranty, or
non-fulfillment, non-performance, failure to timely or fully
perform, or
breach of any covenant, agreement or other obligation to be
performed by
CPI contained in this Agreement or any exhibit or schedule hereto,
or (ii)
the conduct of CPI's business prior to the Effective Time.
11.03 Indemnification Notice.
(a) Third Party Claim. In the event that EUL, CPI or
any other party entitled to indemnification under Section 11.02
hereof shall choose to assert a claim for Loss or potential Loss
based upon a claim by a third party ("Third Party Claim"), the
party seeking indemnification ("Indemnified Party") shall notify
the
party against which indemnification is sought ("Indemnifying
Party") in writing of such claim, promptly following the occurrence
of the event giving rise thereto, certifying that such a claim has
been
asserted and the basis therefor which shall be set forth in
reasonable detail ("Notification").
(i) The Indemnifying Party shall acknowledge
receipt of the Notification and advise the Indemnified Party in
writing
twenty (20) days after receipt thereof as to whether the
Indemnifying Party agrees to such Third Party Claim and whether the
defense of the Third Party Claim shall be undertaken by counsel of
the
choice of and at the expense of the Indemnifying Party.
If the Indemnifying Party so agrees, the Indemnifying Party shall
be deemed to have accepted any indemnifiable Loss suffered arising
from such Third Party Claim, the defense of which has been
assumed by the Indemnifying Party. If the Indemnifying Party
advises the Indemnified Party that it shall undertake the defense
of the
Third Party Claim, the Indemnified Party shall deliver all the
documents related
to the Third Party Claim to the Indemnifying
Party or to its counsel, after which the responsibility of the
Indemnified
Party for the defense of the Third Party Claim shall cease, except
that the
Indemnified Party shall make available all
documents, books and records in its possession related to the Third
Party Claim, at no expense to the Indemnifying Party, and shall
fully cooperate
with counsel for the Indemnifying Party, including
providing its personnel who are acquainted with the facts or the
documents or books and records related to the Third Party Claim.
(ii) If the Indemnifying Party advises the
Indemnified Party that the defense of the Third Party Claim will
not
be undertaken, either the Indemnified Party shall settle
such Third Party Claim (in which case, the amount of such
settlement and all attorneys' fees attendant to the achievement of
such
settlement shall be deemed included in any computation to
determine Loss), or the Indemnified Party shall notify the
Indemnifying Party of the identity of the counsel for the
Indemnified
Party who has been selected to defend the Third Party Claim. The
Indemnifying
Party shall fully cooperate with the Indemnified Party and its
counsel to the
extent that the Indemnifying Party has knowledge of the facts or
circumstances
relating to the Third Party Claim and the Indemnified Party shall
cause its counsel to be available to the Indemnifying Party or its
counsel to respond to any inquiries of the Indemnifying Party
concerning the progress of such defense. In the event that the
Indemnified Party shall assert a claim for Loss as a result of any
loss
suffered by the Indemnified Party in settling or defending such
Third Party
Claim, the Indemnified Party shall notify the Indemnifying Party in
writing of
such claim. The Indemnifying Party shall pay all costs related to
the
settlement or the defense within thirty (30) days after a demand
for the
Loss or any component part is made.
(b) Non-Third Party Claim. In the event the Indemnified
Party shall choose to assert a claim for Loss or potential Loss
by reason of other than a Third Party Claim, the Indemnified Party
shall
notify the Indemnifying Party in writing of such claim
and the reasons therefor, which reasons shall be set forth in
reasonable detail. The Indemnifying Party shall pay to the
Indemnified
Party the amount of the Loss within thirty (30) days of demand
pursuant to this Section 11.03.
11.04 Dispute.
(a) If the Indemnifying Party disputes any claim for
indemnification or its obligation to indemnify any claim pursuant
to this Article Eleven, the Indemnifying Party shall notify
the Indemnified Party of such dispute within twenty (20) days of
receipt of the Notification. If the matter cannot be reconciled by
mutual agreement, the matter shall be submitted to binding
arbitration as
provided in Section 14.05 hereof.
(b) If the Indemnifying Party fails to fulfill its
obligations under this Article, the Indemnified Party may submit
the matter to binding arbitration as provided in Section 14.05
hereof.
ARTICLE TWELVE
12.01 Litigation Costs. If any legal action, arbitration
or other proceeding is brought for the enforcement of this
Agreement
or because of an alleged dispute, breach, default or
misrepresentation in connection with any of the provisions of this
Agreement, the successful or prevailing party shall be entitled to
recover reasonable attorneys' fees, court costs and other costs
incurred in such action or proceeding, in addition to any other
relief to which it or they may be entitled.
ARTICLE THIRTEEN
13.02 Confidentiality. Except as may be required by law
or as otherwise permitted herein, the parties hereto shall cause
all information obtained by them in connection with the negotiation
and
performance of this Agreement to be treated as confidential and
will not use, and will not knowingly permit others to use, any
such information in any manner detrimental to the other.
Notwithstanding
the foregoing, such information may be disclosed (i) in connection
with
any filings or permit applications with governmental authorities as
may
be necessary in order to complete the transactions contemplated by
this Agreement; (ii) as necessary in order to obtain any Required
Consents of third parties to the transactions contemplated by this
Agreement; or (iii) as otherwise necessary in order for CPI to
close
the transactions contemplated by this Agreement. The provisions of
this Section shall survive any termination of this Agreement.
ARTICLE FOURTEEN
14.01 Notices. All notices, waivers or other
communications required or contemplated hereby shall be
deemed given if delivered personally, or sent by registered or
certified mail or air courier, postage prepaid, return receipt
requested,
or by telex or telecopier addressed to the parties so to be served
as follows:
If to EUL: Xxxxxx Xxxxxxx
If to CPI: Xxx Xxxxxxx
Service of any such notice or demand so made by mail shall be
deemed complete on the date of actual delivery thereof as shown
by the addressee's registry or certification receipt, or upon the
expiration of seven days following the date of mailing. Any party
hereto from time to time by notice in writing served upon the other
as aforesaid may designate a different mailing address to which, or
a different or additional person to whom, all such notices or
demands thereafter shall be addressed.
14.02 Assignment. Neither the Agreement nor any of the
rights hereunder may be assigned by either party without the
prior written consent of the other.
14.03 Expenses. Except as otherwise provided in this
Agreement, each party hereto shall bear all expenses and
costs incurred by it with respect to this Agreement and the
transactions contemplated hereby.
14.04 Governing Law. This Agreement shall be governed and
construed in accordance with the internal law of the State of
Delaware without reference to its rules as to conflicts of law.
14.05 Dispute. Any controversy or claim arising out of or
relating to this Agreement, or breach thereof, including without
limitation claims against any party or its affiliates, employees,
professionals, officers or directors shall be settled by binding
arbitration in the State of New York, in accordance with the
Commercial Rules of the American Arbitration Association. The
arbitrator shall be an active member of the California bar. In the
proceeding, the arbitrator shall apply California substantive
law and the California Evidence Code. The arbitrator shall prepare
an award in writing, which shall include factual findings and any
legal conclusions on which the decision is based. Judgment
upon any award rendered by the arbitrator may be entered
in any court having jurisdiction thereof. In any such proceeding,
the prevailing party shall be entitled, in addition to any
other relief awarded or adjudged, such sum as the arbitrator may
fix as and for reasonable attorneys' fees and costs, and
the same shall be included in the award and any judgment.
14.06 Entire Understanding. All prior agreements,
representations, discussions, negotiations, commitments
and understandings between the parties are incorporated in this
Agreement and the exhibits and schedules attached hereto which
constitute the entire contract between the parties. The terms
of this Agreement are intended by the parties as a final expression
of their agreement with respect to such terms as are included
herein and may not be contradicted by evidence of any
prior or contemporaneous written or oral representations,
agreements
or understandings, whether express or implied. The parties
further
intend that this Agreement constitutes the complete and
exclusive statement of its terms and that no extrinsic evidence
whatsoever may be introduced in any judicial proceeding, if any,
involving this Agreement. No amendment or variation of the terms
of this Agreement shall be valid unless made in writing and
signed by each of the parties.
14.07 Further Assurances. Each party, both prior to and
after the Closing, shall reasonably cooperate with the other,
at the other's request, in furnishing information, documents,
testimony and other assistance in connection with the
transactions contemplated hereby.
14.08 Waiver. Each party may at any time waive compliance
by the other with any covenants or conditions contained in
this Agreement, but only by a written instrument executed by
the party waiving such compliance. If either party waives a
condition of Closing, the other party shall have no liability
hereunder with respect to the matters so waived.
14.09 Headings. All Section and Article headings are
included for convenience only and are not intended to be
full or accurate descriptions of the contents thereof.
14.10 Counterparts. This Agreement may be executed
simultaneously in one or more counterparts, each of which
may be deemed an original but all of which together shall
constitute one and the same instrument. In making proof of this
Agreement, it shall not be necessary to produce or account for more
than one counterpart.
14.11 Severability. If any provision of this Agreement,
as applied to any party or to any circumstance, shall be
adjudged by a court to be void, invalid or unenforceable, the same
shall in no way affect any other provision of this Agreement, the
application of such provision in any other circumstance or the
validity or enforceability of this Agreement.
14.12 Binding on Successors. All of the terms, provisions
and conditions of this Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective heirs, successors, assigns and legal representatives.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in multiple originals as of the day and
year first above written.
"CPI"
CORSPAN, INC.
By: /s/ Xxx Xxxxxxx
Name: Xxx Xxxxxxx
Title: President and Chief Executive Officer
"EUL"
EU LABORATORIES LIMITED
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: President & Chief Executive Officer
