Contract
Exhibit
2.1
THIS
AGREEMENT AND PLAN OF SHARE EXCHANGE (hereinafter referred to as the
“Agreement”), is entered into as of this 6th day of December, 2007, by and
among, ECONOSHARE, INC., a publicly-owned Nevada corporation (“ECSR”),
CELLCEUTIX PHARMA, INC., a Delaware corporation (“CPI”), and the
shareholders of CPI on the signature page hereof (the “CPI Shareholders”).
(ECSR, CPI, and the CPI Shareholders are sometimes hereinafter collectively
referred to as the “Parties” and individually as a “Party.”)
W
I T N E S S E T H
WHEREAS,
ECSR is a publicly-owned
Nevada corporation with 9,791,000 shares of common stock, par value $0.0001
per
share, issued and outstanding (the “ECSR Common Stock”) and is quoted on the
Over the Counter Bulletin Board under the symbol “ECSR”.
WHEREAS,
the CPI Shareholders listed on
Schedule I hereto own all of the issued and outstanding shares of the
common stock of CPI (the “CPI Common Stock”).
WHEREAS,
the Parties desire that ECSR
acquire all of the CPI Common Stock from the CPI Shareholders solely in exchange
for an aggregate of 82,000,000 newly issued shares of common stock (the
“Exchange Shares”) pursuant to the terms and conditions set forth in this
Agreement.
WHEREAS,
immediately upon consummation
of the Closing (as hereinafter defined), the Exchange Shares will be issued
to
the CPI Shareholders on a pro rata basis, in proportion to the ratio that the
number of shares of CPI Common Stock held by such CPI Shareholder bears to
the
number of shares of CPI Common Stock held by all the CPI Shareholders as of
the
date of the Closing.
WHEREAS, following
the Closing,
CPI will become a wholly-owned subsidiary of ECSR and the Exchange Shares will
represent approximately eighty-nine one-third percent (89.33%) of the total
outstanding shares of Common Stock of ECSR.
WHEREAS,
the Parties intend that the
transaction contemplated herein (the “Transaction”) qualify as a reorganization
and tax-free exchange under Section 368(a) of the Internal Revenue Code of
1986,
as amended.
NOW
THEREFORE, on the stated premises
and for and in consideration of the foregoing recitals which are hereby
incorporated by reference, the mutual covenants and agreements hereinafter
set
forth and the mutual benefits to the Parties to be derived herefrom and for
other good and valuable consideration, the sufficiency and receipt of which
are
hereby acknowledged, the Parties hereto agree as follows:
ARTICLE
I
PLAN
OF EXCHANGE
1.1 The
Exchange. At the Closing (as hereinafter defined), each share of CPI
Common Stock issued and outstanding immediately prior to the Closing Date shall
be exchanged for Eighty-Two (82) shares of ECSR Common Stock. The
aggregate number of shares of ECSR Stock exchanged for the CPI Shares pursuant
to this Agreement shall be 82,000,000. From and after the Closing
Date, the CPI Shareholders shall no longer own any shares of CPI Common Stock,
and the stock certificates formerly representing shares of CPI Common Stock
shall represent the pro rata portion of the Exchange Shares issuable in exchange
therefor pursuant to this Agreement. Any fractional shares that would
result from such exchange will be rounded up to the next highest whole
number.
1.2 No
Dilution. ECSR shall neither effect, nor fix any record date with
respect to, any stock split, stock dividend, reverse stock split,
recapitalization, or similar change in the ECSR Stock between the date of this
Agreement and the Effective Time.
1.3 Closing.
The closing (“Closing”) of the transactions contemplated by this Agreement shall
occur immediately following the execution of this Agreement providing the
closing conditions set forth in Articles V and VI have been satisfied or waived
(the “Closing Date”).
1.4 Closing
Events. At the Closing, each of the respective parties hereto shall
execute, acknowledge, and deliver (or shall cause to be executed, acknowledged,
and delivered) any and all stock certificates, officers’ certificates, opinions,
financial statements, schedules, agreements, resolutions, rulings, or other
instruments required by this Agreement to be so delivered at or prior to the
Closing, and the documents and certificates provided in Sections 5.2, 5.4,
6.2,
6.4 and 6.5, together with such other items as may be reasonably requested
by
the parties hereto and their respective legal counsel in order to effectuate
or
evidence the transactions contemplated hereby. If agreed to by the
parties, the Closing may take place through the exchange of documents (other
than the exchange of stock certificates) by efax, fax, email and/or express
courier. At the Closing, the Exchange Shares shall be issued in the
names and denominations provided by CPI.
1.5 Standstill.
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(a)
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Until
the earlier of the Closing or January 31, 2008 (the “No Shop Period”),
neither CPI nor the CPI Shareholders will (i) solicit or encourage
any
offer or enter into any agreement or other understanding, whether
written
or oral, for the sale, transfer or other disposition of any capital
stock
or assets of CPI to or with any other entity or person, except as
contemplated by the Transaction, other than sales of goods and services
by
CPI in the ordinary course of its business; (ii) entertain or pursue
any
unsolicited communication, offer or proposal for any such sale, transfer
or other disposition; or (iii) furnish to any person or entity (other
than
ECSR, and its authorized agents and representatives) any nonpublic
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 a possible acquisition of any capital stock or assets of
CPI. If either CPI or any of the CPI Shareholders shall receive
any unsolicited communication or offer, CPI or the CPI Shareholders,
as
applicable, shall immediately notify ECSR of the receipt of such
communication or offer.
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(b)
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During
the No-Shop Period, ECSR will not (i) solicit or encourage any offer
or
enter into any agreement or other understanding, whether written
or oral,
for the sale, transfer or other disposition of any capital stock
or assets
of ECSR to or with any other entity or person, except as contemplated
herein, other than sales of goods and services by ECSR in the ordinary
course of its business; (ii) entertain or pursue any unsolicited
communication, offer or proposal for any such sale, transfer or other
disposition; or (iii) furnish to any person or entity (other than
CPI, and
its authorized agents and representatives) any nonpublic information
concerning ECSR or its business, financial affairs or prospects for
the
purpose or with the intent of permitting such person or entity to
evaluate
a possible acquisition of any capital stock or assets of
ECSR. If either ECSR or any of ECSR’s stockholders shall
receive any unsolicited communication or offer, ECSR or such ECSR
stockholder, as applicable, shall immediately notify CPI of the receipt
of
such communication or offer.
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ARTICLE
II
REPRESENTATIONS,
COVENANTS, AND WARRANTIES OF CPI
As
an inducement to, and to obtain the reliance of ECSR, CPI represents and
warrants as follows:
2.1 Organization. CPI
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Delaware. CPI has the power and is duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects
as
it is now being conducted, including qualification to do business as a foreign
corporation in jurisdictions in which the character and location of the assets
owned by it or the nature of the business transacted by it requires
qualification. The execution and delivery of this Agreement does not,
and the consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof will not, violate any provision of CPI’s
organizational documents. CPI has taken all action required by laws,
its certificate of incorporation, certificate of business
registration, or otherwise to authorize the execution and delivery of this
Agreement. CPI has full power, authority, and legal right and has taken or
will
take all action required by law, its Certificate of Incorporation,
and otherwise to consummate the transactions herein contemplated.
2.2 Capitalization. All
issued and outstanding shares of CPI are legally issued, fully paid, and
non-assessable and were not issued in violation of the pre-emptive or other
rights of any person. CPI has no outstanding options, warrants, or
other convertible securities.
2.3 Financial
Statements.
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(a)
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CPI
has filed all local income tax returns required to be filed by it
from its
inception to the date hereof. All such returns are complete and
accurate in all material respects.
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(b)
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CPI
has no liabilities with respect to the payment of federal, county,
local,
or other taxes (including any deficiencies, interest, or penalties),
except for taxes accrued but not yet due and payable, for which CPI
may be
liable in its own right or as a transferee of the assets of, or as
a
successor to, any other corporation or
entity.
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(c)
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No
deficiency for any taxes has been proposed, asserted or assessed
against
CPI. There has been no tax audit, nor has there been any notice
to CPI by any taxing authority regarding any such tax audit, or,
to the
knowledge of CPI, is any such tax audit threatened with regard to
any
taxes or CPI tax returns. CPI does not expect the assessment of
any additional taxes of CPI for any period prior to the date hereof
and
has no knowledge of any unresolved questions concerning the liability
for
taxes of CPI.
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(d)
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The
books and records, financial and otherwise, of CPI are in all material
respects complete and correct and have been maintained in accordance
with
good business and accounting
practices.
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2.4 Information. The
information concerning CPI set forth in this Agreement and the CPI Schedules
(as
that term is defined herein) are and will be complete and accurate in all
material respects and does not contain any untrue statement of a material fact
or omit to state a material fact required to make the statements made, in light
of the circumstances under which they were made, not misleading as of the date
hereof and as of the Closing Date.
2.5 Common
Stock Equivalents. There are no existing options, warrants,
calls, commitments of any character or other common stock equivalents relating
to the authorized and unissued CPI Common Stock.
2.6 Absence
of Certain Changes or Events. Except as set forth in this
Agreement or the CPI Schedules (as that term is defined herein):
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(a)
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except
in the normal course of business, there has not been (i) any material
adverse change in the business, operations, properties, assets, or
condition of CPI; or (ii) any damage, destruction, or loss to CPI
(whether
or not covered by insurance) materially and adversely affecting the
business, operations, properties, assets, or condition of
CPI;
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(b)
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CPI
has not (i) borrowed or agreed to borrow any funds or incurred, or
become
subject to, any material obligation or liability (absolute or contingent)
not otherwise in the ordinary course of business, and except for
capital
raised by issuance of debt or equity in a private placement or other
capital raising transaction deemed advisable by CPI; (ii) paid any
material obligation or liability not otherwise in the ordinary course
of
business (absolute or contingent) other than current liabilities
reflected
in or shown on the most recent CPI consolidated balance sheet, and
current
liabilities incurred since that date in the ordinary course of business;
(iii) sold or transferred, or agreed to sell or transfer, any of
its
assets, properties, or rights not otherwise in the ordinary course
of
business; (iv) made or permitted any amendment or termination of
any
contract, agreement, or license to which they are a party not otherwise
in
the ordinary course of business if such amendment or termination
is
material, considering the business of CPI; or (v) issued, delivered,
or
agreed to issue or deliver any stock, bonds or other corporate securities
including debentures (whether authorized and unissued or held as
treasury
stock).
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2.7 Litigation
and Proceedings. There are no actions, suits, proceedings, or
investigations pending or, to the knowledge of CPI, threatened by or against
CPI, or affecting CPI, or its properties, at law or in equity, before any court
or other governmental agency or instrumentality, domestic or foreign, or before
any arbitrator of any kind.
2.8 No
Conflict With Other Instruments. The execution of this Agreement
and the consummation of the transactions contemplated by this Agreement will
not
result in the breach of any term or provision of, or constitute an event of
default under, any material indenture, mortgage, deed of trust, or other
material contract, agreement, or instrument to which CPI is a party or to which
any of its properties or operations are subject.
2.9 Contracts. CPI
has provided, or will provide ECSR, copies of all material contracts,
agreements, franchises, license agreements, or other commitments to which CPI
is
a party or by which it or any of its assets, products, technology, or properties
are bound.
2.10 Compliance
With Laws and Regulations. CPI has complied with all applicable
statutes and regulations of any national, county, or other governmental entity
or agency thereof, except to the extent that noncompliance would not materially
and adversely affect the business, operations, properties, assets, or condition
of CPI.
2.11 Approval
of Agreement. The board of directors of CPI (the “CPI Board”) and
the CPI Shareholders have authorized the execution and delivery of this
Agreement by CPI and have approved the transactions contemplated
hereby.
2.12 CPI
Schedules. CPI will deliver, as soon as practicable, the
following schedules, which are collectively referred to as the “CPI Schedules”
and which consist of separate schedules dated as of the date of execution of
this Agreement and instruments and data as of such date, all certified by the
chief executive officer of CPI as complete, true and correct:
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(a)
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a
schedule containing complete and correct copies of the organizational
documents, as amended, of CPI in effect as of the date of this Agreement;
and
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(b)
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a
schedule as requested by ECSR, containing true and correct copies
of all
material contracts, agreements, or other instruments to which CPI
is a
party or by which it or its properties are bound, specifically including
all contracts, agreements, or arrangements referred to in Section
2.9.
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2.13 Title
and Related Matters. CPI has good and marketable title to all of
its properties, interest in properties, and assets, real and personal, which
are
reflected in the CPI balance sheet or acquired after that date (except
properties, interest in properties, and assets sold or otherwise disposed of
since such date in the ordinary course of business), free and clear of all
liens, pledges, charges, or encumbrances except:
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(a)
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statutory
liens or claims not yet delinquent;
and
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(b)
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as
described in the CPI Schedules.
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2.14 Governmental
Authorizations. CPI has all licenses, franchises, permits, and
other government authorizations, that are legally required to enable it to
conduct its business operations in all material respects as conducted on the
date hereof. Except for compliance with federal and state securities or
corporation laws, as hereinafter provided, no authorization, approval, consent,
or order of, or registration, declaration, or filing with, any court or other
governmental body is required in connection with the execution and delivery
by
CPI of this Agreement and the consummation by CPI of the transactions
contemplated hereby.
2.15 Continuity
of Business Enterprises. CPI has no commitment or present
intention to liquidate CPI or sell or otherwise dispose of a material portion
of
its business or assets following the consummation of the transactions
contemplated hereby.
2.16 Ownership
of CPI Shares. The CPI Shareholders are the legal and beneficial
owners of 100% of the CPI Common Stock as set forth on Schedule I, free and
clear of any claims, charges, equities, liens, security interests, and
encumbrances whatsoever, and the CPI Shareholders have full right, power, and
authority to transfer, assign, convey, and deliver their respective CPI Common
Stock; and delivery of such common stock at the Closing will convey to ECSR
good
and marketable title to such shares free and clear of any claims, charges,
equities, liens, security interests, and encumbrances except for any such
claims, charges, equities, liens, security interests, and encumbrances arising
out of such shares being held by ECSR.
2.17 Brokers. CPI
has not entered into any contract with any person, firm or other entity that
would obligate CPI or ECSR to pay any commission, brokerage or finders’ fee in
connection with the transactions contemplated herein.
2.18 Nominees. The
nominees of CPI to serve as ECSR's directors and officers following the Closing
(the "Nominees"), whose names and signatures appear on Schedule II hereto,
represent that no event listed in Sub-paragraphs (1) through (4) of Subparagraph
(d) of Item 401 of Regulation S-B has occurred with respect to any of the
Nominees during the past five years which is material to an evaluation of the
ability or integrity of such Nominee.
2.19 Subsidiaries
and Predecessor Corporations. CPI does not have any subsidiaries
and does not own, beneficially or of record, any shares or other equity
interests of any other corporation or entity.
ARTICLE
III
REPRESENTATIONS,
COVENANTS, AND WARRANTIES OF ECSR
As
an inducement to, and to obtain the reliance of CPI, ECSR represents and
warrants as follows:
3.1 Organization. ECSR
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Nevada, and has the corporate power and is duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects
as
it is now being conducted, and there is no jurisdiction in which it is not
qualified in which the character and location of the assets owned by it or
the
nature of the business transacted by it requires qualification. Included in
the
ECSR Schedules (as hereinafter defined) are complete and correct copies of
the
Articles of Incorporation and bylaws of ECSR, and all amendments thereto, as
in
effect on the date hereof. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby will not,
violate any provision of ECSR’s Articles of Incorporation or bylaws. ECSR has
taken all action required by law, its Certificate of Incorporation, its bylaws,
or otherwise to authorize the execution and delivery of this Agreement, and
ECSR
has full power, authority, and legal right and has taken all action required
by
law, its Certificate of Incorporation, By-Laws, or otherwise to consummate
the
transactions herein contemplated.
3.2 Capitalization. ECSR’s
authorized capitalization consists of 100,000,000 shares of Common Stock, of
which no more than 9,791,000 shares will be issued and outstanding at Closing,
and 10,000,000 shares of preferred stock, par value $0.001 per share authorized
(the “Preferred Stock”), of which no shares are outstanding. All
presently issued and outstanding shares are legally issued, fully paid, and
non-assessable and not issued in violation of the pre-emptive or other rights
of
any person. The Exchange Shares will be legally issued, fully paid
and non-assessable and shall not be issued in violation of the pre-emptive
or
other rights of any other person.
3.3 Financial
Statements. Except as set forth within its filing of reports with
the Securities and Exchange Commission (the "SEC Reports"):
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(a)
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ECSR
has no liabilities with respect to the payment of any federal, state,
county, local, or other taxes (including any deficiencies, interest,
or
penalties), except for taxes accrued but not yet due and payable,
for
which ECSR may be liable in its own right, or as a transferee of
the
assets of, or as a successor to, any other corporation or
entity.
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(b)
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ECSR
has filed all federal, state, or local income tax returns required
to be
filed by it from inception.
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(c)
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The
books and records, financial and otherwise, of ECSR are in all material
respects complete and correct and have been maintained in accordance
with
good business and accounting
practices.
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(d)
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No
deficiency for any taxes has been proposed, asserted or assessed
against
ECSR. There has been no tax audit, nor has there been any
notice to ECSR by any taxing authority regarding any such tax audit,
or,
to the knowledge of ECSR, is any such tax audit threatened with regard
to
any taxes or ECSR tax returns. ECSR does not expect the
assessment of any additional taxes of ECSR for any period prior to
the
date hereof and has no knowledge of any unresolved questions concerning
the liability for taxes of ECSR.
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(e)
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ECSR
has good and marketable title to its assets and, except as set forth
in
the ECSR Schedules, has no material contingent liabilities, direct
or
indirect, matured or unmatured.
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3.4 Information. The
information concerning ECSR set forth in this Agreement and the ECSR Schedules
are and will be complete and accurate in all material respects and does not
contain any untrue statement of a material fact or omit to state a material
fact
required to make the statements made, in light of the circumstances under which
they were made, not misleading as of the date hereof and as of the Closing
Date.
3.5 Common
Stock Equivalents. Except as set forth herein, there are no
existing options, warrants, calls, commitments of any character or other common
stock equivalents relating to authorized and unissued stock of
ECSR.
3.6 Absence
of Certain Changes or Events. Except as described herein or in
the ECSR Schedules or the SEC Reports:
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(a)
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There
has not been (i) any material adverse change, financial or otherwise,
in
the business, operations, properties, assets, or condition of ECSR
(whether or not covered by insurance) materially and adversely affecting
the business, operations, properties, assets, or condition of
ECSR;
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(b)
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ECSR
has not (i) amended its Articles of Incorporation or by-laws; (ii)
declared or made, or agreed to declare or make any payment of dividends
or
distributions of any assets of any kind whatsoever to stockholders
or
purchased or redeemed, or agreed to purchase or redeem, any of its
capital
stock; (iii) waived any rights of value which in the aggregate are
extraordinary or material considering the business of ECSR; (iv)
made any
material change in its method of management, operation, or accounting;
(v)
entered into any other material transactions; (vi) made any accrual
or
arrangement for or payment of bonuses or special compensation of
any kind
or any severance or termination pay to any present or former officer
or
employee; (vii) increased the rate of compensation payable or to
become
payable by it to any of its officers or directors or any of its employees;
or (viii) made any increase in any profit sharing, bonus, deferred
compensation, insurance, pension, retirement, or other employee benefit
plan, payment, or arrangement, made to, for, or with its officers,
directors, or employees;
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(c)
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ECSR
has not (i) granted or agreed to grant any options, warrants, or
other
rights for its stocks, bonds, or other corporate securities calling
for
the issuance thereof; (ii) borrowed or agreed to borrow any funds
or
incurred, or become subject to, any material obligation or liability
(absolute or contingent) except liabilities incurred in the ordinary
course of business; (iii) paid or agreed to pay any material obligation
or
liability (absolute or contingent) other than current liabilities
reflected in or shown on the most recent ECSR balance sheet and current
liabilities incurred since that date in the ordinary course of business
and professional and other fees and expenses incurred in connection
with
the preparation of this Agreement and the consummation of the transactions
contemplated hereby; (iv) sold or transferred, or agreed to sell
or
transfer, any of its assets, property, or rights (except assets,
property,
or rights not used or useful in its business which, in the aggregate
have
a value of less than $1,000), or canceled, or agreed to cancel, any
debts
or claims (except debts or claims which in the aggregate are of a
value of
less than $1,000); (v) made or permitted any amendment or termination
of
any contract, agreement, or license to which it is a party if such
amendment or termination is material, considering the business of
ECSR; or
(vi) issued, delivered, or agreed to issue or deliver any stock,
bonds, or
other corporate securities including debentures (whether authorized
and
unissued or held as treasury stock), except in connection with this
Agreement;
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(d)
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ECSR
has no assets, liabilities or accounts payable of any kind or nature,
actual or contingent, in excess of $4,500 in the aggregate as of
the
Closing Date; and
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(e)
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To
the best knowledge of ECSR, it has not become subject to any law
or
regulation which materially and adversely affects, or in the future
may
adversely affect, the business, operations, properties, assets, or
condition of ECSR.
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3.7 Title
and Related Matters. ECSR has good and marketable title to all of
its properties, interest in properties, and assets, real and personal, which
are
reflected in the ECSR balance sheet or acquired after that date (except
properties, interest in properties, and assets sold or otherwise disposed of
since such date in the ordinary course of business), free and clear of all
liens, pledges, charges, or encumbrances except:
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(a)
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statutory
liens or claims not yet delinquent;
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(b)
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such
imperfections of title and easements as do not and will not materially
detract from or interfere with the present or proposed use of the
properties subject thereto or affected thereby or otherwise materially
impair present business operations on such properties;
and
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(c)
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as
described in the ECSR Schedules or the SEC
Reports.
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3.8 Litigation
and Proceedings. There are no actions, suits, or proceedings
pending or, to the knowledge of ECSR, threatened by or against or affecting
ECSR, at law or in equity, before any court or other governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any
kind.
3.9 Contracts. ECSR
is not a party to any material contract, agreement, or other commitment, except
as specifically disclosed in its schedules to this Agreement.
3.10 No
Conflict With Other Instruments. The execution of this Agreement
and the consummation of the transactions contemplated by this Agreement will
not
result in the breach of any term or provision of, or constitute a default under,
any indenture, mortgage, deed of trust, or other material agreement or
instrument to which ECSR is a party or to which it or any of its assets or
operations are subject.
3.11 Governmental
Authorizations. ECSR is not required to have any licenses,
franchises, permits, and other government authorizations, that are legally
required to enable it to conduct its business operations in all material
respects as conducted on the date hereof. Except for compliance with federal
and
state securities or corporation laws, as hereinafter provided, no authorization,
approval, consent, or order of, or registration, declaration, or filing with,
any court or other governmental body is required in connection with the
execution and delivery by ECSR of this Agreement and the consummation by ECSR
of
the transactions contemplated hereby.
3.12 Compliance
With Laws and Regulations. To the best of its knowledge, ECSR has
complied with all applicable statutes and regulations of any federal, state,
or
other applicable governmental entity or agency thereof, except to the extent
that noncompliance would not materially and adversely affect the business,
operations, properties, assets, or conditions of ECSR or except to the extent
that noncompliance would not result in the incurrence of any material liability.
3.13 Insurance. ECSR
owns no insurable properties and carries no casualty or liability
insurance.
3.14 Approval
of Agreement. The board of directors of ECSR (the “ECSR Board”)
has authorized the execution and delivery of this Agreement by ECSR and has
approved this Agreement and the transactions contemplated hereby.
3.15 Material
Transactions of Affiliations. Except as disclosed herein and in
the ECSR Schedules, there exists no material contract, agreement, or arrangement
between ECSR and any person who was at the time of such contract, agreement,
or
arrangement an officer, director, or person owning of record or known by ECSR
to
own beneficially, 10% or more of the issued and outstanding common stock of
ECSR
and which is to be performed in whole or in part after the date hereof or was
entered into not more than three years prior to the date hereof. Neither any
officer, director, nor 10% stockholder of ECSR has, or has had during the last
preceding full fiscal year, any known interest in any material transaction
with
ECSR which was material to the business of ECSR. ECSR has no commitment, whether
written or oral, to lend any funds to, borrow any money from, or enter into
any
other material transaction with any such affiliated person.
3.16 Employment
Matters. ECSR has no employees other than its executive
officers.
3.17 ECSR
Schedules. Prior to the Closing, ECSR shall have delivered to CPI
the following schedules, which are collectively referred to as the “ECSR
Schedules,” which are dated the date of this Agreement, all certified by an
officer to be complete, true, and accurate:
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(a)
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a
schedule containing complete and accurate copies of the Certificate
of Incorporation and by-laws, as amended, of ECSR as in effect
as of the date of this Agreement;
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|
(b)
|
a
schedule containing a copy of the federal income tax returns of ECSR
identified in Section 3.3(b); and
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|
(c)
|
a
schedule setting forth any other information, together with any required
copies of documents, required to be disclosed in the ECSR
Schedules.
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3.18 Brokers. ECSR
has not entered into any contract with any person, firm or other entity that
would obligate CPI or ECSR to pay any commission, brokerage or finders’ fee in
connection with the transactions contemplated herein.
3.19 Subsidiaries. ECSR
does not have any subsidiaries and does not own, beneficially or of record,
any
shares or other equity interests of any other corporation or other
entity.
ARTICLE
IV
SPECIAL
COVENANTS
4.1 Post-Closing
Covenants. Within twenty (20) days following the Closing,
ECSR shall file an Information Statement in accordance with the provisions
of
Rule 14C of the Rules promulgated under the Securities Exchange Act of 1934,
as
amended, to amend ECSR's Articles of Incorporation to provide for the following:
to change the name of the Corporation to "Cellceutix Corporation", or such
similar name as is available; to increase the number of ECSR's authorized
capital stock to 300,000,0000 shares of Common Stock and 10,000,000 shares
of
preferred stock, par value, $0.001 per share.
4.2 Shareholders’
Actions of ECSR. Prior to the Closing, ECSR shall cause the
following actions to be taken by the written consent of the holders of a
majority of the outstanding shares of common stock of ECSR:
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(a)
|
the
approval of this Agreement and the transactions contemplated hereby
and
thereby; and
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|
(b)
|
such
other actions as the directors may determine are necessary or
appropriate.
|
4.3 Actions
of CPI Shareholders. Prior to the Closing, CPI shall cause the
following actions to be taken by the written consent of the holders of a
majority of the outstanding shares of common stock of CPI:
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(a)
|
the
approval of this Agreement and the transactions contemplated hereby
and
thereby; and
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|
(b)
|
such
other actions as the directors may determine are necessary or
appropriate.
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4.4 Access
to Properties and Records. ECSR and CPI will each afford to the
officers and authorized representatives of the other reasonable access to the
properties, books, and records of ECSR or CPI in order that each may have full
opportunity to make such reasonable investigation as it shall desire to make
of
the affairs of the other, and each will furnish the other with such additional
financial and operating data and other information as to the business and
properties of ECSR or CPI as the other shall from time to time reasonably
request.
4.5 Delivery
of Books and Records. At the Closing, ECSR shall deliver to CPI,
the originals of the corporate minute books, books of account, contracts,
records, and all other books or documents of ECSR now in the possession or
control of ECSR or its representatives and agents.
4.6 Actions
Prior to Closing by both Parties.
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(a)
|
From
and after the date of this Agreement until the Closing Date and except
as
set forth in the ECSR or CPI Schedules or as permitted or contemplated
by
this Agreement, ECSR and CPI will each: (i) carry on its business
in
substantially the same manner as it has heretofore; (ii) maintain
and keep
its properties in states of good repair and condition as at present,
except for depreciation due to ordinary wear and tear and damage
due to
casualty; (iii) maintain in full force and effect insurance comparable
in
amount and in scope of coverage to that now maintained by it; (iv)
perform
in all material respects all of its obligation under material contracts,
leases, and instruments relating to or affecting its assets, properties,
and business; (v) use its best efforts to maintain and preserve its
business organization intact, to retain its key employees, and to
maintain
its relationship with its material suppliers and customers; and (vi)
fully
comply with and perform in all material respects all obligations
and
duties imposed on it by all federal and state laws and all rules,
regulations, and orders imposed by federal or state governmental
authorities.
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(b)
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From
and after the date of this Agreement until the Closing Date, neither
ECSR
nor CPI will: (i) make any change in their organizational documents,
charter documents or bylaws; (ii) take any action described in Section
2.6
in the case of CPI, or in Section 3.6, in the case of ECSR (all except
as
permitted therein or as disclosed in the applicable party’s schedules);
(iii) enter into or amend any contract, agreement, or other instrument
of
any of the types described in such party’s schedules, except that a party
may enter into or amend any contract, agreement, or other instrument
in
the ordinary course of business involving the sale of goods or services,
or (iv) make or change any material tax election, settle or compromise
any
material tax liability or file any amended tax
return.
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4.7 Indemnification.
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(a)
|
CPI
hereby agrees to indemnify ECSR and each of the officers, agents
and
directors of ECSR as of the date of execution of this Agreement against
any loss, liability, claim, damage, or expense (including, but not
limited
to, any and all expense whatsoever reasonably incurred in investigating,
preparing, or defending against any litigation, commenced or threatened,
or any claim whatsoever), to which it or they may become subject
arising
out of or based on any inaccuracy appearing in or misrepresentation
made
in Article II. The indemnification provided for in this paragraph
shall
not survive the Closing and consummation of the transactions contemplated
hereby but shall survive the termination of this Agreement pursuant
to
Section 7.1(b) of this Agreement.
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|
(b)
|
ECSR
hereby agrees to indemnify CPI and each of the officers, agents and
directors of CPI as of the date of execution of this Agreement against
any
loss, liability, claim, damage, or expense (including, but not limited
to,
any and all expense whatsoever reasonably incurred in investigating,
preparing, or defending against any litigation, commenced or threatened,
or any claim whatsoever), to which it or they may become subject
arising
out of or based on any inaccuracy appearing in or misrepresentation
made
under Article III. The indemnification provided for in this paragraph
shall not survive the Closing and consummation of the transactions
contemplated hereby but shall survive the termination of this Agreement
pursuant to Section 7.1(c) of this
Agreement.
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ARTICLE
V
CONDITIONS
PRECEDENT TO OBLIGATIONS OF ECSR
The
obligations of ECSR under this
Agreement are subject to the satisfaction, at or before the Closing, of the
following conditions:
5.1 Accuracy
of Representations; Performance. The representations and
warranties made by CPI in this Agreement were true when made and shall be true
at the Closing Date with the same force and effect as if such representations
and warranties were made at and as of the Closing Date (except for changes
therein permitted by this Agreement), and CPI shall have performed or complied
with all covenants and conditions required by this Agreement to be performed
or
complied with by CPI prior to or at the Closing. ECSR may request to be
furnished with a certificate, signed by a duly authorized officer of CPI and
dated the Closing Date, to the foregoing effect.
5.2 Officer’s
Certificates. ECSR shall have been furnished with a certificate
dated the Closing Date and signed by a duly authorized officer of CPI to the
effect that no litigation, proceeding, investigation, or inquiry is pending
or,
to the best knowledge of CPI threatened, which might result in an action to
enjoin or prevent the consummation of the transactions contemplated by this
Agreement, or, to the extent not disclosed in the CPI Schedules, by or against
CPI which might result in any material adverse change in any of the assets,
properties, business, or operations of CPI.
5.3 No
Material Adverse Change. Prior to the Closing Date, there shall
not have occurred any material adverse change in the financial condition,
business, or operations of CPI, nor shall any event have occurred which, with
the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business, or operations.
5.4 Other
Items.
|
(a)
|
ECSR
shall have received such further documents, certificates, or instruments
relating to the transactions contemplated hereby as ECSR may reasonably
request.
|
|
(b)
|
Complete
and satisfactory due diligence review of CPI by
ECSR.
|
|
(c)
|
Approval
of the Transaction by the CPI Board and the CPI
Shareholders.
|
|
(d)
|
Any
necessary third-party consents shall be obtained prior to Closing,
including but not limited to consents necessary from CPI’s lenders,
creditors, vendors and lessors.
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ARTICLE
VI
CONDITIONS
PRECEDENT TO OBLIGATIONS OF CPI
The
obligations of CPI under this Agreement are subject to the satisfaction, at
or
before the Closing, of the following conditions:
6.1 Accuracy
of Representations; Performance. The representations and
warranties made by ECSR in this Agreement were true when made and shall be
true
as of the Closing Date (except for changes therein permitted by this Agreement)
with the same force and effect as if such representations and warranties were
made at and as of the Closing Date, and ECSR shall have performed and complied
with all covenants and conditions required by this Agreement to be performed
or
complied with by ECSR prior to or at the Closing. CPI shall have been
furnished with a certificate, signed by a duly authorized executive officer
of
ECSR and dated the Closing Date, to the foregoing effect.
6.2 Officer’s
Certificate. CPI shall have been furnished with a certificate
dated the Closing Date and signed by a duly authorized executive officer of
ECSR
to the effect that no litigation, proceeding, investigation, or inquiry is
pending or, to the best knowledge of ECSR threatened, which might result in
an
action to enjoin or prevent the consummation of the transactions contemplated
by
this Agreement.
6.3 No
Material Adverse Change. Prior to the Closing Date, there shall
not have occurred any material adverse change in the financial condition,
business, or operations of ECSR nor shall any event have occurred which, with
the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business, or operations of
ECSR.
6.4 Good
Standing. CPI shall have received a certificate of good standing
from the Secretary of State of the State of Florida or other appropriate office,
dated as of a date within ten days prior to the Closing Date certifying that
ECSR is in good standing as a corporation in the State of Vevada and has filed
all tax returns required to have been filed by it to date and has paid all
taxes
reported as due thereon.
6.5 Other
Items.
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(a)
|
CPI
shall have received a stockholder list of ECSR containing the name,
address, and number of shares held by each ECSR stockholder as of
the date
of Closing certified by an executive officer of ECSR as being true,
complete, and accurate.
|
|
(b)
|
CPI
shall have received such further documents, certificates, or instruments
relating to the transactions contemplated hereby as CPI may reasonably
request.
|
|
(c)
|
Complete
and satisfactory due diligence review of ECSR by
CPI.
|
|
(d)
|
Approval
of the Transaction by the ECSR Board and the stockholders of
ECSR.
|
|
(e)
|
There
shall have been no material adverse changes in ECSR, financial or
otherwise.
|
|
(f)
|
There
shall be no ECSR Common Stock Equivalents outstanding as of immediately
prior to the Closing. For purposes of the foregoing, “ECSR
Common Stock Equivalents” shall mean any subscriptions, warrants, options
or other rights or commitments of any character to subscribe for
or
purchase from ECSR, or obligating ECSR to issue, any shares of any
class
of the capital stock of ECSR or any securities convertible into or
exchangeable for such shares.
|
|
(g)
|
Any
necessary third-party consents shall be obtained prior to Closing,
including but not limited to consents necessary from ECSR’s lenders,
creditors; vendors, and lessors.
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ARTICLE
VII
TERMINATION
7.1 Termination.
|
(a)
|
This
Agreement may be terminated by either the CPI Board or the ECSR Board
at
any time prior to the Closing Date if: (i) there shall be any actual
or
threatened action or proceeding before any court or any governmental
body
which shall seek to restrain, prohibit, or invalidate the transactions
contemplated by this Agreement and which, in the judgment of such
board of
directors, made in good faith and based on the advice of its legal
counsel, makes it inadvisable to proceed with the exchange contemplated
by
this Agreement; (ii) any of the transactions contemplated hereby
are
disapproved by any regulatory authority whose approval is required
to
consummate such transactions or in the judgment of such board of
directors, made in good faith and based on the advice of counsel,
there is
substantial likelihood that any such approval will not be obtained
or will
be obtained only on a condition or conditions which would be unduly
burdensome, making it inadvisable to proceed with the exchange; (iii)
there shall have been any change after the date of the latest balance
sheets of CPI and ECSR, respectively, in the assets, properties,
business,
or financial condition of CPI and ECSR, which could have a materially
adverse affect on the value of the business of CPI and ECSR respectively,
except any changes disclosed in the CPI and ECSR Schedules, as the
case
may be, dated as of the date of execution of this Agreement. In the
event
of termination pursuant to this paragraph (a) of Section 7.1, no
obligation, right, or liability shall arise hereunder, and each party
shall bear all of the expenses incurred by it in connection with the
negotiation, drafting, and execution of this Agreement and the
transactions herein contemplated; (iv) the Closing Date shall not
have
occurred by January 31, 2008; or (v) if ECSR shall not have provided
responses satisfactory in CPI’s reasonable judgment to CPI’s request for
due diligence materials.
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|
(b)
|
This
Agreement may be terminated at any time prior to the Closing by action
of
the ECSR Board if CPI shall fail to comply in any material respect
with
any of its covenants or agreements contained in this Agreement or
if any
of the representations or warranties of CPI contained herein shall
be
inaccurate in any material respect, and, in either case if such failure
is
reasonably subject to cure, it remains uncured for seven days after
notice
of such failure is provided to CPI. If this Agreement is terminated
pursuant to this paragraph (b) of Section 7.1, this Agreement shall
be of
no further force or effect, and no obligation, right, or liability
shall
arise hereunder, except that CPI shall bear its own costs as well
as the
costs incurred by ECSR in connection with the negotiation, preparation,
and execution of this Agreement and qualifying the offer and sale
of
securities contemplated hereby for exemption from the registration
requirements of state and federal securities
laws.
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|
(c)
|
This
Agreement may be terminated at any time prior to the Closing by action
of
the CPI Board if ECSR shall fail to comply in any material respect
with
any of its covenants or agreements contained in this Agreement or
if any
of the representations or warranties of ECSR contained herein shall
be
inaccurate in any material respect, and, in either case if such failure
is
reasonably subject to cure, it remains uncured for seven days after
notice
of such failure is provided to ECSR. If this Agreement is
terminated pursuant to this paragraph (c) of Section 7.1, this Agreement
shall be of no further force or effect, and no obligation, right,
or
liability shall arise hereunder, except that ECSR shall bear its
own costs
as well as the costs of CPI incurred in connection with the negotiation,
preparation, and execution of this
Agreement.
|
ARTICLE
VIII
MISCELLANEOUS
8.1 Governing
Law. This Agreement shall be governed by, enforced, and construed
under and in accordance with the laws of the United States of America and,
with
respect to matters of state law, with the laws of New York. Any
dispute arising under or in any way related to this Agreement will be submitted
to binding arbitration before a single arbitrator by the American Arbitration
Association in accordance with the Association’s commercial rules then in
effect. The arbitration will be conducted in New York, New York. The decision
of
the arbitrator will set forth in reasonable detail the basis for the decision
and will be binding on the parties. The arbitration award may be confirmed
by
any court of competent jurisdiction.
8.2 Notices. Any
notices or other communications required or permitted hereunder shall be
sufficiently given if personally delivered to it or sent by registered mail
or
certified mail, postage prepaid, or by prepaid telegram and any such notice
or
communication shall be deemed to have been given as of the date so delivered,
mailed, or telegraphed.
8.3 Attorney’s
Fees. In the event that any party institutes any action or suit to enforce
this Agreement or to secure relief from any default hereunder or breach hereof,
the breaching party or parties shall reimburse the non-breaching party or
parties for all costs, including reasonable attorneys’ fees, incurred in
connection therewith and in enforcing or collecting any judgment rendered
therein.
8.4 Confidentiality.
ECSR, on the one hand, and CPI and the CPI Shareholders, on the other hand,
will
keep confidential all information and materials regarding the other Party
designated by such Party as confidential. The provisions of this
Section 8.4 shall not apply to any information which is or shall become part
of
the public domain through no fault of the Party subject to the obligation from
a
third party with a right to disclose such information free of obligation of
confidentiality. ECSR and CPI agree that no public disclosure will be made
by
either Party of the existence of the Transaction or the letter of intent or
any
of its terms without first advising the other Party and obtaining its prior
written consent to the proposed disclosure, unless such disclosure is required
by law, regulation or stock exchange rule.
8.5 Expenses. Except
as otherwise set forth herein, each party shall bear its own costs and expenses
associated with the transactions contemplated by this
Agreement. Without limiting the generality of the foregoing, all
costs and expenses incurred by CPI and ECSR after the Closing shall be borne
by
the surviving entity. After the Closing, the costs and expenses of
the CPI Shareholders shall be borne by the CPI Shareholders.
8.6 Schedules;
Knowledge. Each party is presumed to have full knowledge of all
information set forth in the other party’s schedules delivered pursuant to this
Agreement.
8.7 Third
Party Beneficiaries. This contract is solely between ECSR, CPI
and the CPI Shareholders, and, except as specifically provided, no director,
officer, stockholder, employee, agent, independent contractor, or any other
person or entity shall be deemed to be a third party beneficiary of this
Agreement.
8.8 Entire
Agreement. This Agreement represents the entire agreement between
the parties relating to the transaction. There are no other courses of dealing,
understandings, agreements, representations, or warranties, written or oral,
except as set forth herein.
8.9 Survival. The
representations and warranties of the respective parties shall survive the
Closing Date and the consummation of the transactions herein
contemplated.
8.10 Counterparts. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original and all of which taken together shall be but a single
instrument.
8.11 Amendment
or Waiver. Every right and remedy provided herein shall be
cumulative with every other right and remedy, whether conferred herein, at
law,
or in equity, and may be enforced concurrently herewith, and no waiver by any
party of the performance of any obligation by the other shall be construed
as a
waiver of the same or any other default then, theretofore, or thereafter
occurring or existing. At any time prior to the Closing Date, this Agreement
may
be amended by a writing signed by all parties hereto, with respect to any of
the
terms contained herein, and any term or condition of this Agreement may be
waived or the time for performance hereof may be extended by a writing signed
by
the party or parties for whose benefit the provision is intended.
(The
rest of this page left intentionally blank.)
IN
WITNESS WHEREOF, the corporate parties hereto have caused this Agreement to
be
executed by their respective officers, hereunto duly authorized, as of the
date
first above-written.
By:___/s/
Xxxxx Schwartz________________
Xxxxx
Xxxxxxxx, President, CEO
CELLCEUTIX
PHARMA, INC.
By:___/s/
Xxxxxx X. Evans_______________
Xxxxxx
X. Xxxxx, President
SCHEDULE
II
to
STOCK
EXCHANGE AGREEMENT
|
Name:
|
Position(s)
|
Signature
|
|
Xxxxxx
X. Xxxxx
|
Chief
Executive Officer, Director
|
/s/
Xxxxxx X. Xxxxx
|
|
Xxxxxxx
Xxxxx
|
President,
Director
|
/s/
Xxxxxxx Xxxxx
|
