MERGER AGREEMENT
Exhibit 2.1
This
Merger Agreement (“Agreement”)
is
entered into as of August 10, 2007, by and among CT Holdings Enterprises,
Inc., a Delaware corporation (“CTHE”),
XC
Acquisition Corporation, a Delaware corporation and a newly-created wholly-owned
subsidiary of CTHE (“Merger
Sub”),
and
Xcorporeal, Inc., a Delaware corporation (“Company”)
(each
a “Party”
and
collectively the “Parties”).
RECITALS
A. This
Agreement contemplates a reverse triangular merger, of Merger Sub with and
into
Company in a transaction intended to qualify as a tax free reorganization
under
Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code.
B. At
the Closing, all holders (“Company
Stockholders”)
of
shares of common stock, par value $0.0001 (“Company
Shares”)
of the
Company will receive shares of common stock, $0.01 par value (“CTHE
Shares”)
of
CTHE in exchange for all of their Company Shares, and the Company will become
a
wholly-owned Subsidiary of CTHE.
NOW,
THEREFORE,
in
consideration of the premises and the representations, warranties and covenants
contained herein, the Parties agree as follows.
1.
Basic
Transaction.
A. Merger.
On and
subject to the terms and conditions of this Agreement, Merger Sub will merge
with and into Company (the “Merger”).
Pursuant to the Merger, the Company Shares will be converted into CTHE Shares
at
the rate set forth herein. Company will be the corporation surviving the
Merger
(after the Closing, the “Surviving
Corporation”),
and
the separate corporate existence of Merger Sub will cease.
B. Documents.
As soon
as practicable following the execution of this Agreement, each Party will
promptly prepare, execute and deliver to the others the various certificates,
instruments, and documents referred to herein.
C. Closing.
The
closing of the Merger will take place as soon as practicable on the business
day
following the satisfaction or waiver of all conditions to the obligations
of the
Parties to consummate the transaction, other than conditions with respect
to
actions the respective Parties will take at the Closing itself, or such other
time as the Parties may mutually determine (the “Closing”).
D. Merger
Certificate.
At the
Closing of the Merger, CTHE will file with the Secretary of State of the
State
of Delaware a Certificate of Merger between Company and Merger Sub, in the
form
attached hereto as Exhibit A
(the
“Merger
Certificate”).
E. Effect
of Merger.
(1) General.
The
Merger will become effective upon filing of the Merger Certificate with the
Secretary of State of the State of Delaware (the “Effective
Time”).
The
Merger will have the effect set forth in the DGCL. The Surviving Corporation
may, at any time after the Closing, take any action, including executing
or
delivering any document, in the name and on behalf of either Company or Merger
Sub in order to carry out and effectuate the transactions contemplated by
this
Agreement.
(2) Certificate
of Incorporation.
The
certificate of incorporation of CTHE will be amended and restated at and
as of
the Effective Time to the form attached hereto as Exhibit
B,
in
substantial conformance with the certificate of incorporation of Company
immediately prior to the Closing, and the name of CTHE will be changed to
“Xcorporeal, Inc.”
(3) Bylaws.
The
bylaws of CTHE will be amended and restated at and as of the Closing to read
as
did the bylaws of Company immediately prior to the Closing.
(4) Directors
and Officers.
At the
Closing, the officers and directors of CTHE and Merger Sub immediately prior
to
the Effective Time shall resign and the officers and directors of the Company
immediately prior to the Closing will be appointed as officers and directors
of
CTHE and Surviving Corporation, in each case until their respective successors
are duly elected or appointed and qualified.
(5) Conversion
of Company Shares and Reverse Split of CTHE Shares.
(a) Conversion.
At and
as of the Effective Time, (a) each issued and outstanding Company Share
(other than any Dissenting Shares) will, by virtue of the Merger and without
any
further action on behalf of CTHE, Merger Sub, Company, or any Company
Stockholder, automatically be converted into and become one validly issued,
fully paid and non-assessable CTHE Share, (b) each Dissenting Share will be
converted into the right to receive payment from Surviving Corporation with
respect thereto in accordance with the provisions of the DGCL, and (c) all
unissued and treasury Company Shares will be cancelled.
(b) Reverse
Split.
At and
as of the Effective Time, (a) each 8.27 issued and outstanding CTHE Shares,
par value $0.01, will, by virtue of the Merger and without any further action
on
behalf of CTHE or any CTHE Stockholder, automatically be converted into and
become one validly issued, fully paid and non-assessable CTHE Share, par
value
$0.0001 (the ratio of pre-Merger CTHE Shares to one post-Merger CTHE Share
is
referred to herein as the “Conversion
Ratio”),
rounding up to the nearest whole share, such that there remain a total of
approximately 350,000 post-Merger CTHE Shares resulting from such split.
(c) Share
Certificates.
(i) Following
the Closing, upon surrender of an original stock certificate representing
Company Shares or pre-Merger CTHE Shares, CTHE will cause to be issued a
stock
certificate for CTHE Shares to which such Person is entitled, bearing any
necessary or appropriate restrictive legend. CTHE will not pay any dividend
or
make any distribution on Company Shares or CTHE Shares with a record date
at or
after the Closing until the record holder surrenders for exchange his, her,
or
its certificates that represented Company Shares or pre-Merger CTHE Shares.
(ii) If
any certificate evidencing Shares shall has been lost, stolen or destroyed,
upon
the making of an affidavit in form acceptable to CTHE’s Transfer Agent of that
fact by the Person claiming the certificate to be lost, stolen or destroyed
and
an indemnity bond in such amount as the Transfer Agent may direct, as collateral
security against any claim that may be made with respect to the certificate,
CTHE will cause to be issued in exchange for the lost, stolen or destroyed
certificate the applicable number of CTHE Shares.
(d) Conversion
of Warrants.
All
warrants to purchase Company Shares issued and outstanding at the Closing
will,
by virtue of the Merger and without any action on the part of
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CTHE,
Company or the holders of the warrants, be converted into and will become
warrants to purchase an equal number of CTHE Shares on the same terms.
(e) Conversion
of Options.
All
options to purchase Company Shares outstanding at the Closing will, by virtue
of
the Merger and without any action on the part of CTHE, Company or the holders
of
the options, be assumed by CTHE, and will become options to purchase an equal
number of CTHE Shares on the same terms.
(f) Option
Plan.
At or
prior to the Closing, CTHE will adopt a stock option plan in the form attached
hereto as Exhibit C,
which
will be substantially identical to the Company’s 2006 Incentive Compensation
Plan with at least 3,900,000 CTHE Shares reserved for issuance thereunder.
(g) Cancellations;
Transfers.
As of
the Closing of the Merger, the Company Shares and warrants and options to
purchase same (collectively, “Company
Securities”)
will
be deemed canceled and will cease to exist, and each holder of a Company
Security will cease to have any rights with respect thereto, other than those
expressly set forth in this Section 1.E(5).
After
the Closing, transfers of Company Shares outstanding prior to the Closing
will
not be made on the stock transfer books of Surviving Corporation.
Notwithstanding anything to the contrary herein, none of the Surviving
Corporation or any Party shall be liable to any Person for any amount properly
paid to a public official pursuant to any applicable abandoned property,
escheat
or similar law.
2.
Conditions
to Obligations to Close.
A. Conditions
to CTHE’s Obligation.
The
obligation of each of CTHE and Merger Sub to consummate the transactions
to be
performed by it in connection with the Closing is subject to satisfaction
of the
following conditions:
(1) The
representations and warranties of Company set forth in Section 4
will be
true and correct in all material respects as if made at and as of the Closing,
except to the extent that such representations and warranties are qualified
by
the term “material,” or contain terms such as “Adverse Effect” or “Adverse
Change,” in which case such representations and warranties as so written,
including the term “material” or “Material,” will be true and correct in all
respects at and as of the Closing;
(2) Company
will have performed and complied with all of its covenants hereunder in all
material respects through the Closing, except to the extent that such covenants
are qualified by the term “material,” or contain terms such as “Adverse Effect”
or “Adverse Change,” in which case Company will have performed and complied with
all of such covenants as so written, including the term “material” or
“Material,” in all respects through the Closing;
(3) There
will not be any judgment, order, decree or injunction in effect that would
(a)
prevent consummation of any of the transactions contemplated by this Agreement,
(b) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation, (c) adversely affect the right of CTHE
to own
the capital stock of Surviving Corporation and to control Surviving Corporation
and its Subsidiaries, or (d) adversely affect the right of any of Surviving
Corporation and its Subsidiaries to own its assets and to operate its business;
(4) Company
and its Subsidiaries will not have engaged in any practice, taken any action,
or
entered into any transaction outside the Ordinary Course of Business which
results in a Material Adverse Effect;
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(5) The
Merger will have been duly approved by the requisite number of Company
Stockholders;
(6) Company
will have delivered to CTHE a certificate to the effect that each of the
conditions specified in Sections 2.A(1)-(5)
is
satisfied in all respects; and
(7) Company
will have delivered to CTHE an executed counterpart of the Merger Certificate.
CTHE
and Merger Sub may waive any condition specified in this Section 2.A
if it or
they execute a writing so stating at or prior to the Closing.
B. Conditions
to Company’s Obligation.
The
obligation of Company to consummate the transactions to be performed by it
in
connection with the Closing is subject to satisfaction of the following
conditions:
(1) The
representations and warranties of CTHE and Merger Sub set forth in Section 5
will be
true and correct in all material respects at and as of the Closing, except
to
the extent that such representations and warranties are qualified by the
term
“material,” or contain terms such as “Adverse Effect” or “Adverse Change,” in
which case such representations and warranties as so written, including the
term
“material” or “Material,” will be true and correct in all respects at and as of
the Closing;
(2) Each
of CTHE and Merger Sub will have performed and complied with all of its
covenants hereunder in all material respects through the Closing, except
to the
extent that such covenants are qualified by the term “material,” or contain
terms such as “Adverse Effect” or “Adverse Change,” in which case CTHE and, in
the case of the Closing of the Merger, Merger Sub will have performed and
complied with all of such covenants as so written, including the term “material”
or “Material,” in all respects through the Closing;
(3) There
will not be any judgment, order, decree or injunction in effect that would
(a)
prevent consummation of any of the transactions contemplated by this Agreement,
or (b) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation;
(4) CTHE
and its Subsidiaries will not have engaged in any practice, taken any action,
or
entered into any transaction outside the Ordinary Course of Business which
results in a Material Adverse Effect;
(5) The
Merger will have been duly approved by the requisite number of CTHE
Stockholders;
(6) CTHE
will have delivered to Company a certificate to the effect that each of the
conditions specified in Sections 2.B(1)-(5)
is
satisfied in all respects;
(7) CTHE
will have delivered to Company an executed counterpart of the Merger
Certificate;
(8) CTHE
will have delivered to Company in mutually agreed form an Indemnity from
its
President and Acknowledgements from a majority-in-interest of the stockholders
listed on Exhibit D.
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(9) CTHE
will have delivered to Company the resignations, effective as of the Closing,
of
each director and officer of CTHE and its Subsidiaries.
Company
may waive any condition specified in this Section 2.B
if it
executes a writing so stating at or prior to the Closing.
3.
Covenants.
(i) Pre-closing
Covenants.
The
Parties agree as follows with respect to the period from and after the execution
of this Agreement until the Closing or termination of this Agreement:
A. General.
Each of
the Parties will use its best efforts to prepare, execute and deliver all
documents, take all actions and do all things necessary, proper, or advisable
in
order to consummate and make effective the transactions contemplated by this
Agreement as soon as practicable, including the satisfaction, but not waiver,
of
all of the Closing conditions set forth in Section 2.
B. Notices.
Company
will give any notices (and will cause each of its Subsidiaries to give any
notices) to third parties, and will use its best efforts to obtain (and will
cause each of its Subsidiaries to use its best efforts to obtain) any necessary
third-party consents.
C. SEC
and State Filings.
Each of
the Parties will, and will cause each of its Subsidiaries to, give any notices
to, make any filings with, and use its best efforts to obtain any
authorizations, consents, and approvals of Governmental Authorities in
connection with the matters referred to herein.
D. Further
Cooperation.
The
filing Party in each instance will use its best efforts to respond to the
comments of the SEC or any state Governmental Authorities on any filings
and
will make any further filings, including amendments and supplements, in
connection therewith that may be necessary, proper, or advisable. CTHE will
provide Company, and Company will provide CTHE, with whatever information
and
assistance in connection with the foregoing filings the filing Party may
request.
E. Reasonable
Access.
Company
and CTHE will (and will cause each of their Subsidiaries to) permit
representatives of CTHE and Company (including legal counsel and accountants)
to
have reasonable access, during normal business hours and on reasonable notice,
to all information (including tax information) concerning its business,
properties and personnel. The receiving Party will treat and hold as such
any
Confidential Information it receives from the other in the course of the
reviews
contemplated by this Section 3.E,
will
not use any of the Confidential Information except in connection with this
Agreement, and, if this Agreement is terminated for any reason whatsoever,
agrees to return to the disclosing Party all tangible embodiments (and all
copies) thereof that are in its possession.
F. Notice
of Developments.
Each
Party will give prompt written notice to the others of any material adverse
development causing a breach of any of its own representations and warranties
in
this Agreement. No disclosure by any Party pursuant to this Section 3.F,
however, will be deemed to amend or supplement the Company Disclosure Schedule
or the CTHE Disclosure Schedule or to prevent or cure any misrepresentation,
breach of warranty, or breach of covenant.
(ii) Post-closing
Covenant.
Company
and CTHE covenant and agree that following the Closing the holders of CTHE
common stock listed on Exhibit D
who
execute an Acknowledgement prior to Closing will have piggyback registration
rights substantially similar to those set forth in Section 2 of the
Registration Rights Agreement filed as Exhibit 10.2 to Company’s
November 27, 2006 current report on Form 8-K, with respect to the shares of
CTHE common stock set forth on Exhibit D,
covering
the resale for an offering to be made on a continuous basis pursuant to
Rule 415 under the Securities Act,
5
(a) for
as many such shares as can be added to the shares set forth in the Company’s
prior Form S-3 to equal up to 29% of the total outstanding CTHE Shares on
the
filing date of such registration statement, and (b) as soon as practicable
after the effective date of such registration statement for any such shares
that
remain unregistered.
4.
Company’s
Representations and Warranties.
The
Company represents and warrants to CTHE that the statements contained in
this
Section
4
are
correct and complete as of the date of this Agreement and will be correct
and
complete as of the Closing, as though made then and as though the Closing
were
substituted for the date of this Agreement throughout this Section 4,
except
as set forth in the Company SEC Reports or the disclosure schedule provided
by
the Company to CTHE (the “Company
Disclosure Schedule”)
corresponding to the Section of this Agreement, to which any of the following
representations and warranties specifically relate, or as disclosed in another
section of the Company Disclosure Schedule, if it is reasonably apparent
on the
face of the disclosure that it is applicable to another Section of this
Agreement, or in the Company SEC Reports:
A. Organization,
Qualification, and Corporate Power.
Each of
Company and its Subsidiaries is a corporation duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its incorporation.
Each of Company and its Subsidiaries is duly authorized to conduct business
and
is in good standing under the laws of each jurisdiction where such qualification
is required. Company and its Subsidiaries have full corporate power and
authority to carry on the business in which it is engaged and to own and
use the
properties owned and used by it.
B. Capitalization.
The
entire authorized capital stock of Company consists solely of 40,000,000
shares
of common stock, of which 14,200,050 shares are issued and outstanding, and
10,000,000 shares of preferred stock, none of which are issued or outstanding.
All of the issued and outstanding Company Shares have been duly authorized
and
are validly issued, fully paid, non-assessable and free of preemptive rights,
and were issued in compliance with all applicable state and federal securities
laws. There are no: (1) other outstanding or authorized shares, options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights, or other contracts or commitments of any kind that could require
Company
to issue, sell, or otherwise cause to become outstanding any of its capital
stock.; (2) equity securities, debt securities or instruments convertible
into or exchangeable for shares of such stock; or (3) outstanding or
authorized stock appreciation, phantom stock, profit participation, or similar
rights with respect to Company.
C. Authorization
of Transaction.
Company
has all requisite power and authority, including full corporate power and
authority, to execute and deliver this Agreement and to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by Company and the consummation by Company
of the
transactions contemplated hereby have been duly and validly authorized by
all
necessary corporate action by Company and, except as set forth herein, no
other
corporate proceedings on the part of Company and no shareholder vote or consent
are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Company. This Agreement and all other agreements and obligations
entered into and undertaken in connection with the transactions contemplated
hereby to which Company is a party constitutes the valid and legally binding
obligations of Company, enforceable against Company in accordance with their
respective terms.
D. Non-Contravention.
Neither
the execution and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (i) violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any
6
government,
governmental agency, or court to which Company or any of its Subsidiaries
is
subject or any provision of the charter or bylaws of Company or any of its
Subsidiaries, or (ii) conflict with, result in a breach of, constitute a
default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to
which
Company or any of its Subsidiaries is a party or by which it is bound or
to
which any of its assets is subject (or result in the imposition of any Lien
upon
any of its assets). Other than in connection with the provisions of the DGCL,
the Exchange Act, the Securities Act, and state securities laws, neither
Company
nor any of its Subsidiaries needs to give any notice to, make any filing
with,
or obtain any authorization, consent, or approval of any government or
governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement.
E. Filings
with SEC.
Company
has timely made all filings with the SEC that it has been required to make
under
the Securities Act and the Exchange Act (collectively the “Company
Public Reports”)
since
September 1, 2006, and, to the Knowledge of the current officers and
directors of Company, since Company Public Reports were first required to
be
filed. Each of the Company Public Reports has complied with the Securities
Act
and the Exchange Act in all material respects. None of the Company Public
Reports, as of their respective dates, contained any untrue statement of
a
material fact or omitted to state a material fact necessary in order to make
the
statements made therein, in light of the circumstances under which they were
made, not misleading.
F. Financial
Statements.
Company
has filed an annual report on Form 10-KSB for the fiscal year ended
December 31, 2006 (“Year
End”)
and
quarterly reports on Form 10-QSB for the fiscal quarters ended March 31 and
June 30, 0000 (“Xxxxxxx
Xxx”).
The
financial statements included in or incorporated by reference into these
Company
Public Reports (including the related notes and schedules) have been prepared
in
accordance with GAAP throughout the periods covered thereby, present fairly
the
financial condition of Company and its Subsidiaries as of the indicated dates
and the results of operations of Company and its Subsidiaries for the indicated
periods and are correct and complete in all respects, and are consistent
with
the books and records of Company and its Subsidiaries; provided,
however,
that
the interim statements are subject to normal year-end adjustments.
G. Events
Subsequent to Year End.
Since
Year End and Quarter End, there has not been any Adverse Change.
H. Litigation.
There
is no action, suit, legal or administrative proceeding or investigation pending,
or to Company’s Knowledge threatened, against or involving Company (either as a
plaintiff or defendant) before any court or governmental agency, authority,
body
or arbitrator. Neither Company nor to its Knowledge any officer, director
or
employee of Company, has been permanently or temporarily enjoined by any
order,
judgment or decree of any court or any governmental agency, authority or
body
from engaging in or continuing any conduct or practice in connection with
the
business, assets, or properties of Company. There in existence on the date
hereof any order, judgment or decree of any court, tribunal or agency enjoining
or requiring Company to take any action of any kind with respect to its
business, assets or properties.
I. Undisclosed
Liabilities.
Neither
Company nor any of its Subsidiaries has any liability of any kind, whether
known
or unknown, whether asserted or unasserted, whether absolute or contingent,
whether accrued or unaccrued, whether liquidated or unliquidated, and whether
due or to become due, including any liability for Taxes, except for
(i) liabilities set forth on the face of the balance sheet dated as of Year
End and Quarter End (rather than in any notes thereto), and
(ii) liabilities that have arisen after Year End and Quarter End in the
Ordinary Course of Business (none of which results from, arises out of,
7
relates
to, is in the nature of, or was caused by any breach of contract, breach
of
warranty, tort, infringement, or violation of law).
J. Compliance
with Laws.
To its
Knowledge, (a) Company has all requisite licenses, permits and
certificates, including environmental, health and safety permits, from federal,
state and local authorities necessary to conduct its business and own and
operate its assets including, without limitation all necessary approvals,
licenses, except where the failure to have such permits would not reasonably
be
expected to have an Adverse Effect; (b) Company is not in violation of any
law, regulation or ordinance (including, without limitation, laws, regulations
or ordinances relating to building, zoning, environmental, disposal of hazardous
waste, land use or similar matters) relating to its properties, the enforcement
of which would have an Adverse Effect; and (c) the business of Company as
conducted since September 1, 2006, and to the Knowledge of the current
officers and directors of Company since inception, has not violated, and
as of
the Closing does not violate, in any material respect, any federal, state,
local
or foreign laws, regulations or orders, the enforcement of which would have
an
Adverse Effect. Company has not had notice or communication from any federal,
state or local governmental or regulatory authority or otherwise of any such
violation or noncompliance.
K. Brokers’
Fees.
Neither
Company nor any of its Subsidiaries has any liability or obligation to pay
any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
L. Tax
Treatment.
Company
operates at least one significant historic business line, or owns at least
a
significant portion of its historic business assets, in each case within
the
meaning of Treas. Reg. §1.368-1(d). Neither Company nor, to the Knowledge of
Company, any of its Affiliates has taken or agreed to take action that would
prevent the Merger from constituting a tax-free reorganization under
Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code.
5.
CTHE’s
Representations and Warranties.
Each
of CTHE and Merger Sub represents and warrants to Company that the statements
contained in this Section 5
are
correct and complete as of the date of this Agreement and will be correct
and
complete as of the Closing (as though made then and as though the Closing
were
substituted for the date of this Agreement throughout this Section 5,
except
as set forth in the except as set forth in the CTHE SEC Reports or the
disclosure schedule provided by CTHE to the Company (the “CTHE
Disclosure Schedule”)
corresponding to the Section of this Agreement, to which any of the following
representations and warranties specifically relate, or as disclosed in another
section of the CTHE Disclosure Schedule, if it is reasonably apparent on
the
face of the disclosure that it is applicable to another Section of this
Agreement, or in the CTHE SEC Reports:
A. Organization,
Qualification, and Corporate Power.
Each of
CTHE and its Subsidiaries is a corporation duly organized, validly existing,
and
in good standing under the laws of the jurisdiction of its incorporation.
Each
of CTHE and its Subsidiaries is duly authorized to conduct business and is
in
good standing under the laws of each jurisdiction where such qualification
is
required. CTHE and its Subsidiaries have full corporate power and authority
to
carry on the business in which it is engaged and to own and use the properties
owned and used by it.
B. Capitalization.
The
entire authorized capital stock of CTHE consists solely of 60,000,000 shares
of
common stock, of which 2,894,675 shares are issued and outstanding, and
1,000,000 shares of preferred stock, none of which are issued or outstanding.
All of the issued and outstanding CTHE Shares have been duly authorized and
are
validly issued, fully paid, non-assessable and free of preemptive rights,
and
were issued in compliance with all applicable state and federal securities
laws.
There are no: (1) other
8
outstanding
or authorized shares, options, warrants, purchase rights, subscription rights,
conversion rights, exchange rights, or other contracts or commitments of
any
kind that could require CTHE to issue, sell, or otherwise cause to become
outstanding any of its capital stock.; (2) equity securities, debt
securities or instruments convertible into or exchangeable for shares of
such
stock; or (3) outstanding or authorized stock appreciation, phantom stock,
profit participation, or similar rights with respect to CTHE.
C. Authorization
of Transaction.
CTHE
has all requisite power and authority, including full corporate power and
authority, to execute and deliver this Agreement and to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by CTHE and the consummation by CTHE of the
transactions contemplated hereby have been duly and validly authorized by
all
necessary corporate action by CTHE and, except as set forth herein, no other
corporate proceedings on the part of CTHE and no shareholder vote or consent
are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by CTHE. This Agreement and all other agreements and obligations
entered into and undertaken in connection with the transactions contemplated
hereby to which CTHE is a party constitutes the valid and legally binding
obligations of CTHE, enforceable against CTHE in accordance with their
respective terms.
D. Non-Contravention.
Neither
the execution and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (i) violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court to
which
CTHE or any of its Subsidiaries is subject or any provision of the charter
or
bylaws of CTHE or any of its Subsidiaries, or (ii) conflict with, result in
a breach of, constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify, or cancel, or require
any notice under any agreement, contract, lease, license, instrument, or
other
arrangement to which CTHE or any of its Subsidiaries is a party or by which
it
is bound or to which any of its assets is subject (or result in the imposition
of any Lien upon any of its assets). Other than in connection with the
provisions of the DGCL, the Exchange Act, the Securities Act, and state
securities laws, neither CTHE nor any of its Subsidiaries needs to give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for the Parties
to
consummate the transactions contemplated by this Agreement.
E. Filings
with SEC.
CTHE
has timely made all filings with the SEC that it has been required to make
under
the Securities Act and the Exchange Act (collectively the “CTHE
Public Reports”)
since
January 1, 2006, and, to the Knowledge of the current officers and
directors of CTHE, since CTHE Public Reports were first required to be filed.
Each of the CTHE Public Reports has complied with the Securities Act and
the
Exchange Act in all material respects. None of the CTHE Public Reports, as
of
their respective dates, contained any untrue statement of a material fact
or
omitted to state a material fact necessary in order to make the statements
made
therein, in light of the circumstances under which they were made, not
misleading.
F. Financial
Statements.
CTHE
has filed an annual report on Form 10-KSB for the fiscal year ended
December 31, 2006 (“Year
End”)
and
quarterly reports on Form 10-QSB for the fiscal quarter ended March 31,
2007 (“Quarter
End”).
The
financial statements included in or incorporated by reference into these
CTHE
Public Reports (including the related notes and schedules) have been prepared
in
accordance with GAAP throughout the periods covered thereby, present fairly
the
financial condition of CTHE and its Subsidiaries as of the indicated dates
and
the results of operations of CTHE and its Subsidiaries for the indicated
periods
and are correct and complete in all respects, and are consistent with the
books
and records of CTHE and its Subsidiaries; provided,
however,
that
the interim statements are subject to normal year-end adjustments.
9
G. Events
Subsequent to Year End.
Since
Year End and Quarter End, there has not been any Adverse Change.
H. Litigation.
There
is no action, suit, legal or administrative proceeding or investigation pending,
or to CTHE’s Knowledge threatened, against or involving CTHE (either as a
plaintiff or defendant) before any court or governmental agency, authority,
body
or arbitrator. Neither CTHE nor to its Knowledge any officer, director or
employee of CTHE, has been permanently or temporarily enjoined by any order,
judgment or decree of any court or any governmental agency, authority or
body
from engaging in or continuing any conduct or practice in connection with
the
business, assets, or properties of CTHE. There in existence on the date hereof
any order, judgment or decree of any court, tribunal or agency enjoining
or
requiring CTHE to take any action of any kind with respect to its business,
assets or properties.
I. Undisclosed
Liabilities.
Neither
CTHE nor any of its Subsidiaries has any liability of any kind, whether known
or
unknown, whether asserted or unasserted, whether absolute or contingent,
whether
accrued or unaccrued, whether liquidated or unliquidated, and whether due
or to
become due, including any liability for Taxes, except for (i) liabilities
set forth on the face of the balance sheet dated as of Year End and Quarter
End
(rather than in any notes thereto), and (ii) liabilities that have arisen
after
Year End and Quarter End in the Ordinary Course of Business (none of which
results from, arises out of, relates to, is in the nature of, or was caused
by
any breach of contract, breach of warranty, tort, infringement, or violation
of
law).
J. Compliance
with Laws.
To its
Knowledge, (a) CTHE has all requisite licenses, permits and certificates,
including environmental, health and safety permits, from federal, state and
local authorities necessary to conduct its business and own and operate its
assets including, without limitation all necessary approvals, licenses, except
where the failure to have such permits would not reasonably be expected to
have
an Adverse Effect; (b) CTHE is not in violation of any law, regulation or
ordinance (including, without limitation, laws, regulations or ordinances
relating to building, zoning, environmental, disposal of hazardous waste,
land
use or similar matters) relating to its properties, the enforcement of which
would have an Adverse Effect; and (c) the business of CTHE as conducted since
September 1, 2006, and to the Knowledge of the current officers and
directors of CTHE since inception, has not violated, and as of the Closing
does
not violate, in any material respect, any federal, state, local or foreign
laws,
regulations or orders, the enforcement of which would have an Adverse Effect.
CTHE has not had notice or communication from any federal, state or local
governmental or regulatory authority or otherwise of any such violation or
noncompliance.
K. Brokers’
Fees.
Neither
CTHE nor any of its Subsidiaries has any liability or obligation to pay any
fees
or commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement.
L. Tax
Treatment.
Neither
CTHE or Merger Sub nor, to the Knowledge of CTHE, any of their Affiliates
has
taken or agreed to take action that would prevent the Merger from constituting
a
tax-free reorganization under Sections 368(a)(1)(A) and 368(a)(2)(E) of the
Code.
M. No
Liabilities.
As of
the Closing, neither CTHE nor any of its Subsidiaries will have any liability
of
any kind, whether known or unknown, asserted or unasserted, absolute or
contingent, accrued or unaccrued, liquidated or unliquidated, due or to become
due, by virtue of contract, statute, regulation, law, equity, or otherwise.
N. OTCBB
Trading.
CTHE
Shares are actively and currently quoted on the OTC Bulletin Board, CTHE
meets
all issuer and equity security requirements to permit an NASD member to quote
the
10
CTHE
Shares on the OTC Bulletin Board, and, to CTHE’s Knowledge, is entitled to
continue to be so quoted following the Merger.
O. Form S-3
Eligibility.
CTHE
meets all Registrant Requirements (as such term is defined in Form S-3
promulgated by the SEC) in order to use the registration statement on Form
S-3
for the registration of securities under the Act, including without limitation
all requirements set forth in Section I.A of the General Instructions to
Form S-3 promulgated by the SEC.
P. Stockholder
Claims.
There
are no existing claims against CTHE by any current or former stockholder
of
CTHE, and to CTHE’s Knowledge, no facts or circumstances reasonably likely to
result in any such claims.
Q. Operations
of Merger Sub.
Merger
Sub is a direct, wholly owned subsidiary of CTHE, was formed solely for the
purpose of engaging in the transactions contemplated by this Agreement, has
engaged in no other business activities and has conducted its operations
only as
contemplated by this Agreement.
R. Banking
Facilities.
Its
disclosure schedule sets forth a true, correct, and complete list of:
(1) Each
bank, savings and loan or similar financial institution in which CTHE has
an
account or safety deposit box and the numbers of the accounts or safety deposit
boxes maintained by CTHE thereat; and
(2) The
names of all signatories authorized to draw on each such account or to have
access to any such safety deposit box facility.
X. Xxxxxx
of Attorney and Suretyships.
CTHE
does not have (i) any general powers of attorney outstanding, whether as
grantor or grantee thereof, or (ii) except as reflected in its financial
statements, any obligation or liability, whether actual, accrued, accruing,
contingent or otherwise, as guarantor, surety, co-signer, endorser, co-maker,
indemnitor, or otherwise in respect of the obligation of any person,
corporation, partnership, joint venture, association, organization or other
entity, except as endorser or maker of checks or letters of credit,
respectively, endorsed or made in the ordinary course of business.
T. Tax
Matters.
(1) Within
the times and in the manner prescribed by law, CTHE has filed all federal,
state
and local Tax Returns, and all Tax Returns for other governing bodies having
jurisdiction to levy Taxes upon it, that it was required to file (including
Tax
Returns for any Affiliated Group of which CTHE was a member). All such Tax
Returns were true, correct and complete in all respects.
(2) All
Taxes owed by CTHE or any Affiliated Group of which CTHE was a member (including
interest, penalties, assessments and deficiencies which have become due,
including without limitation income, franchise, real estate, and sales and
withholding Taxes), whether or not shown on any Tax Return, have been paid.
(3) CTHE
has withheld and paid all Taxes required to have been withheld and paid in
connection with any amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party.
11
(4) CTHE
has not waived or extended any applicable statute of limitations relating
to the
assessment of federal, state or local Taxes;
(5) No
examinations of the federal, state or local Tax Returns of CTHE are currently
in
progress nor threatened and no deficiencies have been asserted or to its
Knowledge assessed against CTHE as a result of any audit by the Internal
Revenue
Service or any state or local Tax authority and no such deficiency has been
proposed or threatened.
(6) There
are no pending or threatened audits, assessments or other actions relating
to
any liability in respect of Taxes of CTHE by any Tax authority nor are there
any
matters under discussion with any Tax authority with respect to Taxes of
CTHE.
(7) CTHE
is not a party to or bound by any Tax allocation or sharing agreement.
(8) CTHE
(A) has not been a member of an Affiliated Group filing a consolidated
federal income Tax Return (other than a group of the common parent of which
was
CTHE) or (B) does not have any liability for the Taxes of any Person (other
than CTHE or any members of an Affiliated Group of which CTHE was a member)
under Treasury Regulations Section 1.1502-6 (or any similar provision of
state, local, or foreign law), as a transferee or successor, by contract,
or
otherwise.
(9) CTHE
has not distributed stock of another Person, or has had its stock distributed
by
another Person, in a transaction that was purported or intended to be governed
in whole or in part by Code Section 355 or §361.
(10) CTHE
has not filed a consent pursuant to Section 341(f) of the Code relating to
collapsible corporations nor has CTHE agreed to have Section 341(f)(2) of
the Code apply to any disposition of a subsection (f) asset as such term is
defined in Section 341(f)(4) of the Code.
(11) CTHE
has filed all required state and federal income tax returns for all periods
through December 31, 2006, and will file all such returns for all periods
prior to Closing. CTHE does not and will not owe any taxes or penalties for
any
such periods.
U. Books
and Records.
The
general ledger and books of account of CTHE, all minute books of CTHE, all
federal, state and local income, franchise, property and other Tax Returns
filed
by CTHE, all reports and filings with the SEC by CTHE, all of which have
been
made available to CTHE, are in all material respects complete and correct
and
have been maintained in accordance with good business practice and in accordance
with all applicable procedures required by laws and regulations.
V. Contracts
and Commitments.
There
are no contracts, agreements or understandings, whether written or oral,
to
which CTHE is a party or by which CTHE or any of its property may be bound
in
any manner as of the Closing Date.
W. Investment
Company.
CTHE is
not and never has been an “investment company” as such term is defined in
Section 3 of the Investment Company Act of 1940, as amended.
6.
Termination
of Merger Transaction.
A. Termination.
Any of
the Parties may terminate this Agreement only as follows:
(1) CTHE
may terminate this Agreement by giving written notice to Company at any time
prior to the Closing in the event:
12
(a) of
an Uncured Breach by Company;
(b) CTHE
is not reasonably satisfied with the results of its due diligence regarding
Company;
(c) the
Closing shall not have been consummated on or before close of business on
Friday, August 31, 2007; or
(d) the
board of directors or special committee of CTHE determines in good faith
that
the failure to terminate this Agreement would constitute a breach of the
fiduciary duties of the CTHE board of directors or special committee to the
CTHE
stockholders under applicable law.
(2) Company
may terminate this Agreement by giving written notice to CTHE and Merger
Sub at
any time prior to the Closing in the event:
(a) of
an Uncured Breach by CTHE or Merger Sub;
(b) Company
is not reasonably satisfied with the results of its due diligence regarding
CTHE;
(c) the
Company Shares become quoted on the OTC Bulletin Board;
(d) the
Closing shall not have been consummated on or before close of business on
Friday, August 31, 2007; or
(e) the
board of directors or special committee of Company determines in good faith
that
the failure to terminate this Agreement would constitute a breach of the
fiduciary duties of the Company board of directors or special committee to
the
Company stockholders under applicable law.
(3) Company
may terminate this Agreement and rescind the Merger by giving written notice
to
CTHE and Merger Sub within 10 days after the Closing in the event that the
CTHE Shares do not continue to be quoted on the OTC Bulletin Board immediately
following the Merger.
(4) Either
Party may terminate this Agreement if a Governmental Authority of competent
jurisdiction shall have issued an order or taken any other action, in each
case
which has become final and non-appealable, and which permanently restrains,
enjoins or otherwise prohibits the Closing.
B. Effect
of Termination.
If this
Agreement is terminated pursuant to Section
6.A,
the
Parties shall no further obligation of any kind; provided,
however,
that if
the Agreement is terminated by Company pursuant to Section 6.A(2)(c),
Company
shall pay to CTHE an amount equal to its reasonable out-of-pocket costs and
expenses related this Agreement and the transactions contemplated hereby.
7.
Definitions.
“Adverse
Effect”
or
“Adverse
Change”
means
any effect or change that would be, or could reasonably be expected to be,
materially adverse to the business, assets, financial condition, operating
results, operations, or business prospects of Company or CTHE, as appropriate,
or to the ability of Company or CTHE, as appropriate, to consummate timely
the
transactions contemplated by this Agreement, regardless of whether or not
such
adverse effect or change can be or has been cured at any time or whether
CTHE or
Company, as appropriate, has knowledge of such effect or change on the date
13
hereof,
including any adverse change, event, development, or effect arising from
or
relating to: (a) general business or economic conditions, including such
conditions related to the business of Company or CTHE, as appropriate,
(b) national or international political or social conditions, including the
engagement by the United States in hostilities, whether or not pursuant to
the
declaration of a national emergency or war, or the occurrence of any military
or
terrorist attack upon the United States, or any of its territories, possessions,
or diplomatic or consular offices or upon any military installation, equipment
or personnel of the United States, (c) financial, banking, or securities
markets, including any general suspension of trading in, or limitation on
prices
for, securities on any national exchange or trading market, (d) changes in
GAAP, (e) changes in laws, rules, regulations, orders, or other binding
directives issued by any governmental entity, and (f) the taking of any
action contemplated by this Agreement and the other agreements contemplated
hereby.
“Affiliate”
has
the
meaning set forth in Rule 12b-2 of the regulations promulgated under the
Exchange Act.
“Affiliated
Group”
means
any affiliated group within the meaning of Code §1504(a) or any similar group
defined under a similar provision of state, local or foreign law.
“Code”
means
the Internal Revenue Code of 1986, as amended, or any succeeding law.
“Company
SEC Reports”
means
each report, schedule, registration statement, definitive proxy statement
and
other document required to be filed by the Company and its predecessors and
officers and directors under the Exchange Act or the Securities Act as such
documents have been amended since the time of their filing.
“Confidential
Information”
means
material non-public information concerning the business and affairs of Company
and its Subsidiaries, that is confidential or proprietary in nature, relating
to
(a) Company’s proprietary technology, including any patent applications,
trade secrets, methods, data, processes, formulas, instrumentation, techniques,
know-how, procedures, enhancements or improvements, or (b) Company’s
products or services, systems, finances, methods of operation, strategy,
business plans, prospective or existing contracts or other business
arrangements, that Company uses reasonable efforts to identify as Confidential
Information when provided. Confidential Information does not include information
that is or becomes: (i) part of the public domain through no act or
omission of the receiving Party, (ii) developed independently by the
receiving Party, or (iii) lawfully provided to the receiving Party by a
third party not subject to an obligation of confidentiality or otherwise
prohibited from transmitting the information.
“CTHE
SEC Reports”
means
each report, schedule, registration statement, definitive proxy statement
and
other document required to be filed by CTHE and its predecessors and officers
and directors under the Exchange Act or the Securities Act as such documents
have been amended since the time of their filing.
“DGCL”
means
the General Corporation Law of the State of Delaware, as amended.
“Dissenting
Share”
means
any Company Share held of record by any stockholder who has exercised applicable
appraisal rights under the DGCL.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the regulations promulgated
thereunder.
14
“GAAP”
means
United States generally accepted accounting principles as in effect from
time to
time, consistently applied.
“Governmental
Authority”
means
any national, state, municipal, local or foreign government, any
instrumentality, subdivision, court, administrative agency or commission
or
other authority thereof, or any quasi-governmental or private body exercising
any regulatory, taxing, importing or other governmental or quasi-governmental
authority.
“Knowledge”
means
actual knowledge after reasonable investigation.
“NASD”
means
NASD, Inc. or any successor organization which regulates and administers
trading
in OTC Bulletin Board securities.
“Ordinary
Course of Business”
means
the ordinary course of business consistent with past custom and practice,
including with respect to nature, quantity and frequency.
“OTC
Bulletin Board”
means
the over-the-counter bulletin board trading of securities administered by
the
NASD.
“Person”
means
an individual, a partnership, a corporation, a limited liability company,
an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, any other business entity, or a governmental entity (or any
department, agency, or political subdivision thereof).
“SEC”
means
the Securities and Exchange Commission.
“Securities
Act”
means
the Securities Act of 1933, as amended, and the regulations promulgated
thereunder.
“Stockholder
Approval”
means
the effective affirmative vote of the holders of a majority of the Company
Shares or CTHE Shares, as the case may be, in favor of this Agreement and
the
Merger.
“Subsidiary”
means,
with respect to any Person, any corporation, limited liability company,
partnership, association, or other business entity of which (a) if a
corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election
of
directors, managers, or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof or (b) if a limited liability
company, partnership, association, or other business entity (other than a
corporation), a majority of the partnership or other similar ownership interests
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more Subsidiaries of that Person or a combination thereof
and
for this purpose, a Person or Persons owns a majority ownership interest
in such
a business entity (other than a corporation) if such Person or Persons will
be
allocated a majority of such business entity’s gains or losses or will be or
control any managing director or general partner of such business entity
(other
than a corporation). The term “Subsidiary”
will
include all Subsidiaries of such Subsidiary.
“Tax”
or “Taxes”
means
any federal, state, local, or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Code §59A), customs duties, capital stock,
franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property,
sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever,
15
including
any interest, penalty, or addition thereto, whether disputed or not and
including any obligations to indemnify or otherwise assume or succeed to
the Tax
liability of any other Person.
“Tax
Return”
means
any return, declaration, report, claim for refund, or information return
or
statement relating to Taxes, including any schedule or attachment thereto,
and
including any amendment thereof.
“Uncured
Breach”
means
an unexcused breach of any material representation, warranty or covenant
contained in this Agreement, in any material respect, following written notice
reasonably specifying the breach and the demanded manner of cure, if and
when
the breach has continued without cure for a period of five (5) days after
the notice of breach.
8.
General.
A. Press
Releases and Public Announcements.
No
Party will issue any press release or make any public announcement relating
to
the subject matter of this Agreement without the prior written approval of
the
other Parties; provided,
however,
that
any Party may make any public disclosure it believes in good faith based
upon
advise of counsel is required by applicable law or any listing or trading
agreement concerning its publicly traded securities (in which case the
disclosing Party will use its best efforts to advise the other Party prior
to
making the disclosure).
B. No
Third-Party Beneficiaries.
This
Agreement will not confer any rights or remedies upon any Person other than
the
Parties and their respective successors and permitted assigns.
C. Succession
and Assignment.
This
Agreement will be binding upon and inure to the benefit of the Parties named
herein and their respective successors and permitted assigns. No Party may
assign either this Agreement or any of its rights, interests, or obligations
hereunder without the prior written approval of the other Parties.
D. Headings.
The
section headings contained in this Agreement are inserted for convenience
only
and will not affect in any way the meaning or interpretation of this Agreement.
E. Notices.
All
notices, requests, demands, claims, and other communications hereunder will
be
in writing. Any notice, request, demand, claim, or other communication hereunder
will be deemed duly given (i) when delivered personally to the recipient,
(ii) one (1) business day after being sent to the recipient by
reputable overnight courier service, (iii) one (1) business day after
being sent to the recipient by facsimile transmission or electronic mail,
or
(iv) four (4) business days after being mailed to the recipient by
certified or registered mail, return receipt requested and postage prepaid,
and
addressed to the intended recipient as set forth below:
If
to
CTHE or Merger Sub:
CT
Holdings Enterprises, Inc.
0000
XxXxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
Attn:
Xxxxxx X. Xxxxxxx
Fax:
(000) 000-0000
Email:
xxxxxxxx@xx-xxxxxxxx.xxx
16
With
a
copy to:
Wood
& Xxxxxxx, LLP
00000
Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxx,
XX 00000
Attn:
Xxxxx X. Xxxx, Esq.
Fax:
(000) 000-0000
Email:
xxxxx@xxxxxxxxxxx.xxx
If
to
Company:
00000
Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxx
Xxxxxxx, XX 00000
Attention:
Xxxxxx X. Xxxxxx
Fax:
(000) 000-0000
With
a
copy to:
Xxxxxx
Xxxxx & Xxxxx, LLP
1620
26th
Street,
Xxxxx Xxxxx, Xxxxx Xxxxx
Xxxxx
Xxxxxx, XX 00000
Attn:
Xxxx X. Xxxxxxxx, Esq.
Fax:
(000) 000-0000
Email:
xxxxxxxxx@xxxxxx.xxx
Any
Party may change the address to which notices, requests, demands, claims,
and
other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
F. Governing
Law.
This
Agreement will be governed by and construed in accordance with the domestic
laws
of the State of Delaware without giving effect to any choice or conflict
of law
provision or rule (whether of the State of Delaware or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than
the
State of Delaware.
G. Arbitration.
Any
dispute, controversy or claim arising out of or relating to this Agreement,
shall be resolved by final and binding arbitration before a retired judge
at
JAMS or its successor in Santa Monica, California. The prevailing party shall
be
awarded its arbitrator, expert and attorney fees, costs and expenses. Any
interim or final award of the arbitrator may be entered in any court of
competent jurisdiction.
H. Severability.
Any
term or provision of this Agreement that is invalid or unenforceable in any
situation in any jurisdiction will not affect the validity or enforceability
of
the remaining terms and provisions hereof or the validity or enforceability
of
the offending term or provision in any other situation or in any other
jurisdiction.
I. Attorneys
and Expenses.
All
Parties have been represented by their own separate counsel in connection
with
this Agreement and the transactions contemplated hereby: Wood & Xxxxxxx, LLP
and its attorneys have solely represented the interests of CTHE and Merger
Sub,
and Xxxxxx Xxxxx & Xxxxx LLP and its attorneys have solely represented the
interests of Company. Each of the Parties will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this negotiation
17
and
preparation of this Agreement and the transactions contemplated hereby; provided
that Company shall pay for up to $25,000 of the reasonable, necessary and
customary out-of-pocket costs and expenses (including, if the Closing is
consummated, legal fees and expenses of negotiation and preparation) of CTHE
incurred in connection with this Agreement and the transactions contemplated
hereby.
J. Construction.
The
Parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement will be construed as if drafted jointly by the Parties
and no presumption or burden of proof will arise favoring or disfavoring
any
Party by virtue of the authorship of any of the provisions of this Agreement.
Any reference to any federal, state, local, or foreign statute or law will
be
deemed also to refer to all rules and regulations promulgated thereunder,
unless
the context otherwise requires. The word “including” will mean including without
limitation. Time is of the essence of each provision of this Agreement.
K. Incorporation
of Exhibits.
The
Exhibits identified in this Agreement are incorporated herein by reference
and
made a part hereof.
L. Amendments
and Waivers.
The
Parties may mutually amend any provision of this Agreement at any time prior
to
the Closing with the prior authorization of their respective boards of
directors; provided,
however,
that
any amendment effected subsequent to stockholder approval will be subject
to the
restrictions contained in the DGCL. No amendment of any provision of this
Agreement will be valid unless the same will be in writing and signed by
all of
the Parties. No waiver by any Party of any provision of this Agreement or
any
default, misrepresentation, or breach of warranty or covenant hereunder,
whether
intentional or not, will be valid unless the same will be in writing and
signed
by the Party making such waiver nor will such waiver be deemed to extend
to any
prior or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any rights arising by virtue of any
prior or subsequent such default, misrepresentation, or breach of warranty
or
covenant.
M. Survival.
All of
the representations, warranties, and covenants of the Parties contained in
this
Agreement shall survive the Closing, and continue in full force and effect
for a
period of three years thereafter, or the expiration of the applicable statute
of
limitation.
N. Counterparts.
This
Agreement may be executed in one or more counterparts, including by means
of
facsimile, each of which will be deemed an original, and all of which together
will constitute one and the same instrument.
18
O. Entire
Agreement.
This
Agreement, including the attached Exhibits and documents referred to herein,
constitutes the entire agreement among the Parties, and supersedes all prior
or
contemporaneous understandings or agreements, whether written or oral. Neither
party has relied upon any promise, representation or undertaking not expressly
set forth herein. To the extent that there is any conflict between any provision
in this Agreement and any provision in any other agreement to which the Parties
are also parties, the provision of this Agreement shall govern.
IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date
first above written.
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CTHE:
CT
HOLDINGS ENTERPRISES, INC.
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By:
|
|
|
||
|
|
Xxxxxx
X. Xxxxxxx
|
|
||
|
|
|
President
and Chief Executive Office
|
|
|
|
|
||||
|
MERGER
SUB:
XC
ACQUISITION CORPORATION
|
|
|||
|
By:
|
|
|
||
|
|
Xxxxxx
X. Xxxxxxx
|
|
||
|
|
President
and Chief Executive Officer
|
|
||
|
|
COMPANY:
|
|
||
|
|
By:
|
|
|
|
|
|
|
Xxxxxx
X. Xxxxxx
|
|
|
|
|
|
Executive
Chairman of the Board
|
|
|
19
Exhibit A
Certificate
of Merger
20
Exhibit B
Amended
and Restated Certificate of Incorporation of CTHE
21
Exhibit C
2007
Incentive Compensation Plan of CTHE
22
Exhibit D
Piggyback
Registration Rights
|
Name
|
Number
of Shares (Post-reverse split)
|
|||
|
Xxxxxxx
Xxxxxxxx
|
1,250
|
|||
|
Xxxxx
X. Xxxxxxxx
|
5,001
|
|||
|
Xxxxxxxx
Xxxxxxx
|
50,879
|
|||
|
Xxxx
Xxxxxx
|
5,001
|
|||
|
Xxxx
Xxxxxx
|
626
|
|||
|
Xxxx
Xxxxxxxxx
|
2,501
|
|||
|
Xxxxxx
X. Xxxxxxx
|
169,625
|
|||
|
Xxxxx
Xxxx
|
6,251
|
23
