EXHIBIT 2.1
STATEMENT OF UNDERSTANDING FOR
PURCHASE OF SHARES OF COMPUPRINT, INC.
THIS STATEMENT OF UNDERSTANDING FOR THE PURCHASE OF SHARES OF COMPUPRINT,
INC. (the "Agreement"), dated as of December 27, 2005, is by and between two
parties: (i) CompuPrint, Inc., a North Carolina corporation with offices at 00
Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("CPPT"), and (ii) ESTERNA
LIMITED, a Cyprus entity with offices at Riga Feraiou 0, Xxxxx Xxxxxxxx, xxx.00,
Xxxxxxxx, Xxxxxx (the "Purchaser").
WHEREAS, the Purchaser wishes to purchase a total of 50,000,000 shares of
CPPT common stock, $.0001 par value, which upon closing is to represent 50% of
the outstanding shares of CPPT; and
WHEREAS, CPPT wishes to sell shares of its common stock to the Purchaser
in the amounts, subject to the conditions precedent stated herein, and on the
terms and conditions referenced herein, and in such contracts of sale and other
documents as are commonly associated as exhibits to such transactions,
including, but not limited to, the shareholders' agreement, voting proxies and
other agreements as referenced hereinbelow;
THEREFORE, IT IS NOW STATED, as follows:
1. Subject to the conditions precedent, including the Purchaser purchasing
from CPPT 500,000 shares of CPPT common stock, $.0001 par value, by payment
leaving Purchaser's account on or before December 31, 2005 for delivery to CPPT
and receipt by CPPT on or before January 3, 2006, and those discussed below,
CPPT agrees to sell 49,500,000 shares of its restricted, legended common stock,
on an "all or none" basis, for $49,500,000 payable at a closing that requires
full cash payment that must be made on or before March 31, 2006 (the "Closing"),
pursuant to and subject to the provisions, conditions, requirements and
agreements described below. If no Closing has occurred on or before March 31,
2006, for whatever reason, the Purchaser shall not have any rights pursuant
hereto.
2. Nothing herein shall preclude CPPT from private placement or other
sales of its equity or debt securities prior to the Closing, on such terms as
CPPT, in its sole discretion shall determine, but provided that CPPT does not
issue equity securities (i) in total amount exceeding $10,000,000 and (ii) at a
price of less than or equal to $1. However, to the extent that any such sales
prior to the Closing result in an amount of CPPT common stock outstanding at the
time of Closing that is greater than 50,000,000 shares, the Purchaser shall also
receive at the Closing, the amount of one-year warrants to purchase such
additional amount of common stock, exercisable at $1 a share, that equals the
amount of common stock of CPPT outstanding immediately prior to the Closing that
is more than 50,000,000 shares, the purpose for which is to insure that the
Purchaser has the ability to purchase up to such amount of shares as equals 50%
of CPPT outstanding shares, should it chose to exercise the warrants. To be
clear, the purpose hereof is to insure that the Purchaser has the right to
ownership of 50% of the outstanding shares of CPPT by
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adding to its 49,500,000 purchase at the Closing the number of one-year warrants
exercisable at $1 a share that will bring its rights to ownership to equal 50%
of the shares outstanding after the Closing on the 49,500,000 shares. In the
foreseeable event that either the Purchaser or the current controlling
shareholders of CPPT (Railyan, Xxxxxxxxx and Xxxxxxx, hereinafter the "Railyan
Group") may not have an equal number of shares on or immediately after the
Closing, such event shall not alter the terms of the shareholders' agreement for
voting as if each of the Purchaser and the Railyan Group had the same number of
shares. Acquisition and voting of more than an equal number of shares of CPPT
after the Closing by the Purchaser or the Railyan Group, or by anyone affiliated
with or acting in concert with either of them, shall be prohibited by the
shareholders' agreement and shall constitute a prohibited "change of control".
3. The parties hereto agree that, immediately after the Closing, CPPT
shall nominate three Board members designated by the Purchaser, subject to the
consent of CPPT and the consent of the Railyan Group as to each of the three
Purchaser designees, which consent shall not be unreasonably withheld. The
Railyan Group shall have the unfettered right to retain the current three Board
membership positions, as designated by the Railyan Group. Xxxx Railyan, shall,
at all times, remain Chairman of the Board of Directors, Xxxxx Xxxxxxxxx and Xxx
Xxxxxxx shall, at all times, remain Directors of CPPT, and the Purchaser and its
designees agree to vote accordingly. The Board of Directors, as soon as
practicable after Closing, shall consist of six directors.
4. The parties agree to enter into a shareholders' agreement that shall
only take effect on Closing, and that shall provide, along with terms and
provisions customary to such agreements, and those consistent herewith, for
voting proxies, and for equal voting as between the Purchaser on the one hand
and the Railyan Group on the other hand. So long as each of the two parties, the
Purchaser and the Railyan Group, retain a total of at least 85% of their
respective equity positions as exist immediately after the Closing, the voting
provisions of the shareholders' agreement shall provide for equal voting, as if
each of the two sides held an equal amount of the voting stock, and neither
party shall vote in a manner objected to by the other party on any material
matter. If one of the parties changes its ownership, the other party remains
entitled to enforce the equal voting provisions of the shareholders' agreement.
The Purchaser represents that it presently has one shareholder, Xxxxxxx Gamzin,
and, that it contemplates the addition of one marquee investor as a shareholder
of the Purchaser, and as the source of the majority of the purchase price for
the 49,500,000 shares of CPPT, subject to the approval of CPPT, which approval
shall not be unreasonably withheld. The shareholders' agreement shall also
provide for voting for the six member Board of Directors of CCPT described in
paragraph 3 above. The shareholders' agreement shall require voting proxies and
voting consistent with the CPPT business model, plan and budget, all of which
shall be provided to the Purchaser at least two weeks prior to Closing. The
shareholders' agreement shall require Board approval for new share issuances,
mergers, material acquisitions, annual approval of budgets consistent with the
business model and obligations existing or disclosed immediately prior to
Closing, and for material sales of assets. The Purchaser acknowledges that
public offerings of securities of subsidiaries and affiliates of CPPT, and
offerings of CPPT securities through recognized regional and national brokers,
are a material part of the CPPT business model. Board approval shall not be
required for transactions in the ordinary course of business or consistent with
the approved budgets, business model or disclosed obligations, as reported in
SEC filings.
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5. This Agreement shall be governed by, and interpreted in accordance
with, the Laws of the State of New York. If there is any dispute with regard to
any agreement between the parties, with regard to any vote had or to be had, or
any matters relating to the control, operations or other aspect of the dealings
between the parties in regard to CPPT or any affiliate, any such matter shall be
referred to an established arbitration forum located in the County, City and
State of New York, that utilizes the services of retired State court judges,
such as JAMS Endispute, or such other forum as is mutually agreed to by the
parties and utilizes a retired State or federal court judge for such resolution
by binding arbitration, if needed; and, a party shall not unreasonably withhold
its consent to such forum. Any order, decision or award resulting from such
arbitration shall be confirmed in a state or federal court located in New York
County, and the parties consent to such jurisdiction and venue.
6. The Purchaser agrees that five year employment agreements with current
management, with increased salaries and benefits, shall be made, mindful that
there are substantially increased responsibilities as a result of the Closing.
7. The CPPT business model, and the proposed annual budget for the 12
months following the Closing, shall be presented to the Purchaser by CPPT at
least two weeks prior to the Closing, for approval by the Purchaser prior to the
Closing, which approval shall not be unreasonably withheld.
8. This agreement is subject to due diligence investigation by the
parties, including, but not limited to, review by the Purchaser of the SEC
filings by CPPT, the financial statements of the parties, the management resumes
and related information as to the parties and control persons. The parties agree
that they shall act in a cooperative manner in exchanging all relevant
information requested by the other party in connection with its due diligence
investigation. The Purchaser acknowledges that it has already been provided with
sufficient information regarding its due diligence investigation in connection
with the technology utilized by CPPT, and further acknowledges that all
information previously or subsequently provided by CPPT to any affiliate, agent
or advisor of the Purchaser is governed by a previously signed confidentiality
agreement. The parties shall enter into a similar confidentiality agreement
contemporaneous with the signing of this agreement.
9. This Agreement is subject to compliance with all applicable rules and
regulations, including, but not limited to, applicable state and federal
corporate and securities laws and rules. The Purchaser acknowledges that CPPT
intends to reincorporate as a Delaware corporation, merge CPPT and Terra Insight
Corporation under the laws of the State of Delaware, change its corporate name
to "Terra Insight Corporation" or such other corporate name as is selected by
CPPT's Board of Directors, and increase its authorized capital to 250,000,000
shares or such other amount as is approved by CPPT stockholders, which are
matters that will be effected upon stockholder approval of those entitled to
vote thereon. The Purchaser represents that it has reviewed the SEC filings of
CPPT to date.
10. The parties acknowledge that each has participated in the drafting of
this agreement, and this agreement shall not be construed as having been drafted
by only one of the
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parties. This is the entire agreement between the parties. All representations
and agreements, express or implied, oral or written, of the parties hereto are
contained herein. In connection with the execution of this agreement, no party
is relying on any prior statements, representations or warranties, express or
implied, oral or written.
11. The provisions of paragraphs 1 through 9 above are each deemed
material to this agreement and the Closing as described herein.
12. Notices hereunder shall be made in writing, and this agreement cannot
be changed orally, but only by a writing signed by the parties. Notices shall be
deemed delivered if sent by a reputable international overnight courier service.
The addresses for such communications shall be:
If to CompuPrint, Inc.:
c/o Terra Insight Corporation
Attn.: Xxxxx Xxxxxxxxx, Chief Executive Officer
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
With a copy (which shall not constitute notice) to:
Attn.: Xxx Xxxxxxx, Esq.
Law Offices of Xxx Xxxxxxx
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
If to Purchaser:
Esterna Limited
Attn.: Xxxxx Xxxxxxxxx, Director
Riga Feraiou 0, Xxxxx Xxxxxxx, xxx.00, Xxxxxxxx, Xxxxxx
Fax: x000-00-000000
13. If, as a result of a determination of a forum provided for in Section
5 above, any provision of this Agreement is held to be invalid, illegal or
unenforceable, the Agreement shall be terminated, except that any
confidentiality provisions contained herein shall survive such termination. The
sole remedy of the Purchaser in the event of any failure to close or breach
hereof is the termination of this agreement. If there is no Closing, there shall
be no injunctive or monetary relief sought or awarded as against either party in
regard to this agreement.
14. The Purchaser, and its employees, agents and affiliates, understand
that CPPT is a publicly held corporation and that all information regarding the
transactions and potential transactions of CPPT, its affiliates and the project
entities is highly confidential, and that it is critical that the Purchaser and
its employees, affiliates and agents not reveal or circumvent any of the
proposed or potential transactions that are discussed with or noticed to the
Purchaser in any way related to the business of CPPT, its affiliates or the
project entities. The Purchaser understands that revealing or circumventing, in
any way any of the proposed transactions or
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project entities would be a breach of duties, representations and obligations
accepted by the Purchaser hereunder and pursuant to its agreement with CPPT. the
Purchaser specifically consents to the jurisdiction of the forum provided for in
paragraph 5 above, and to that of the courts of the County, City and State of
New York for the purpose of enforcement of these duties, obligations and
agreements. The Purchaser specifically acknowledges and agrees that a breach of
any of the duties, representations and obligations as to confidentiality and
non-circumvention related hereto and to its agreements with CPPT will cause
irreparable harm to CPPT, and the Purchaser consents to the entry of judgment
for injunctive remedies in any forum and in any court of competent jurisdiction
as to any such breach. Service of process as to any dispute related to the
agreements between the parties may be made upon the Purchaser by a reputable
international overnight courier service addressed to the Purchaser at the
address as provided for herein.
15. This Agreement is made in the English language in two copies having
equal legal force, and each party hereto retains a copy hereof. This Agreement
may be executed in counterparts.
ESTERNA LIMITED COMPUPRINT, INC.
By: /s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxx Xxxxxxxxx
--------------------------------- -------------------------
Name: Xxxxx Xxxxxxxxx Name: Xxxxx Xxxxxxxxx
Title: Director Title: Chief Executive Officer
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