SHARE EXCHANGE AGREEMENT
by and among
NANTUCKET INDUSTRIES, INC.
a Delaware Corporation
and
COMPREHENSIVE NETWORK SOLUTIONS, INC.
a Texas Corporation
effective as of February 28, 2004
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SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT, made and entered into this 30th day of
January, 2004 by and among Nantucket Industries, Inc.. a Delaware Corporation
with its principal place of business located at 00 Xxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxx, XX 00000 ("Nantucket"); and Comprehensive Network Solutions, Inc.., a
Texas Corporation with its principal place of business at 000 Xxxxxx Xxxx 000
Xxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000 ("Comprehensive") and the individuals of
Comprehensive listed on Exhibit "B" attached hereto and specifically
incorporated herein by this reference (the "Comprehensive Shareholders"),
(Comprehensive and Comprehensive Shareholders jointly referred to as the
"Comprehensive Parties").
Premises
A. This Agreement provides for the acquisition of Comprehensive by
Nantucket whereby Comprehensive shall become a wholly owned subsidiary of
Nantucket and in connection therewith, the issuance of 250,000 ($ 0.10 par value
per share) shares of restricted common stock of Nantucket to the Comprehensive
Shareholders, that the parties have agreed will be valued at one dollar ($1.00)
per share, as designated on Exhibit "A" and the payment of a total of $60,000 to
Comprehensive to be used as working capital.
B. The boards of directors of Comprehensive and Nantucket have
determined, subject to the terms and conditions set forth in this Agreement,
that the transaction contemplated hereby is desirable and in the best interests
of their stockholders, respectively. This Agreement is being entered into for
the purpose of setting forth the terms and conditions of the proposed
acquisition.
Agreement
NOW, THEREFORE, on the stated premises and for and in consideration of
the mutual covenants and agreements hereinafter set forth and the mutual
benefits to the parties to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS AND WARRANTIES OF
NANTUCKET
As an inducement to and to obtain the reliance of Comprehensive,
Nantucket represents and warrants as follows:
Section 1.1 Organization. Nantucket is a corporation duly organized,
validly existing, and in good standing under the laws of Delaware 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, including qualification to do
business as a foreign corporation in the jurisdiction in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification.
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Included in the Nantucket Schedules (as hereinafter defined) are complete and
correct copies of the articles of incorporation, bylaws and amendments thereto
of Nantucket as in effect on the date hereof. 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
Nantucket's articles of incorporation or bylaws. Nantucket has full power,
authority and legal right and has taken all action required by law, its articles
of incorporation, its bylaws or otherwise to authorize the execution and
delivery of this Agreement.
Section 1.2 Capitalization. The authorized capitalization of Nantucket
consists of 20,000,000 Common Shares, $0.10 par value per share, and no
Preferred Shares. As of the date hereof, Nantucket has 10,409,366 common shares
issued and outstanding. Nantucket is presently a public company listed on the
NASDAQ OTC Bulletin Board under the symbol "NTKI".
All issued and outstanding shares are legally issued, fully paid and
nonassessable and are not issued in violation of the preemptive or other rights
of any person. Nantucket has no other securities, warrants or options authorized
or issued.
Section 1.3 Options and Warrants. There are no existing options,
warrants, calls or commitments of any character to which Nantucket is a party
and by which it is bound.
Section 1.4 Claims, Litigation and Xxxxxxxxxxx.Xx the best of
Nantucket's knowledge and belief, there are no actions, suits, proceedings or
investigations pending or threatened by or against Nantucket, affecting
Nantucket 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 that would have a material adverse affect on the
business, operations, financial condition or income of Nantucket. Nantucket does
not have any knowledge of any default on its part with respect to any judgment,
order, writ, injunction, decree, award, rule or regulation of any court,
arbitrator or governmental agency or instrumentality or of any circumstances
which, after reasonable investigation, would result in the discovery of such a
default.
Section 1.5 Material Contract Defaults. To the best of Nantucket's
knowledge and belief, Nantucket is not in default in any material respect under
the terms of any outstanding contract, agreement, lease or other commitment
which is material to the business, operations, properties, assets or condition
of Nantucket, and there is no event of default in any material respect under any
such contract, agreement, lease or other commitment in respect of which
Nantucket has not taken adequate steps to prevent such a default from occurring.
Section 1.6 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 Nantucket is
a party or to which any of its properties or operations are subject.
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Section 1.7 Governmental Authorizations. To the best of Nantucket's
knowledge, Nantucket has all licenses, franchises, permits or other governmental
authorizations legally required to enable Nantucket to conduct its business in
all material respects as conducted on the date hereof. Except for compliance
with federal and state securities and 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 Nantucket of this Agreement and the consummation
of Nantucket of the transactions contemplated hereby.
Section 1.8 Tax Matters; Books & Records
(a) The books and records, financial and others, of Nantucket are in
all material respects complete and correct and have been maintained in
accordance with good business accounting practices; and
(b) Nantucket has no material liabilities with respect to the payment
of any country, federal, state, county, local or other taxes (including
any deficiencies, interest or penalties).
Section 1.9 Information. The information concerning Nantucket as set
forth in this Agreement and in the Nantucket Schedules is 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.
Section 1.10 Title and Related Matters.Nantucket has no assets and no
liabilities or obligations of any nature whatsoever (whether accrued, absolute,
contingent or otherwise) required by GAAP to be set forth on a balance sheet of
Nantucket or in the notes thereto except accounts payable and other liabilities
incurred in the ordinary and customary course of business since October 22,
2003. The financial statements being provided to Comprehensive pursuant to
Section 7.3 of this Agreement shall not contain any liabilities or obligations
of any kind. Except as set forth in the Nantucket Schedules, Nantucket owns free
and clear of any liens, claims, encumbrances, royalty interests or other
restrictions or limitations of any nature whatsoever and all procedures,
techniques, marketing plans, business plans, methods of management or other
information utilized in connection with Nantucket's business. Except as set
forth in the Nantucket Schedules, no third party has any right to, and Nantucket
had not received any notice of infringement of or conflict with asserted rights
of others with respect to any product, technology, data, trade secrets,
know-how, proprietary techniques, trademarks, service marks, trade names or
copyrights which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a materially adverse affect on the
business, operations, financial conditions or income of Nantucket or any
material portion of its properties, assets or rights.
Section 1.11 Contracts. On the Closing Date:
(a) There are no material contracts, agreements,
franchises, license agreements, or other commitments to
which Nantucket is a party or by which it or any of its
properties are bound;
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(b) Nantucket is not a party to any contract, agreement,
commitment or instrument or subject to any charter or other
corporate restriction or any judgment, order, writ,
injunction, decree or award which materially and adversely
affects, or in the future may (as far as Nantucket can now
foresee) materially and adversely affect, the business,
operations, properties, assets or conditions of Nantucket;
and
(c) Nantucket is not a party to any material oral or
written: (i) contract for the employment of any officer or
employee; (ii) profit sharing, bonus, deferred compensation,
stock option, severance pay, pension, benefit or retirement
plan, agreement or arrangement covered by Title IV of the
Employee Retirement Income Security Act, as amended; (iii)
agreement, contract or indenture relating to the borrowing
of money; (iv) guaranty of any obligation for the borrowing
of money or otherwise, excluding endorsements made for
collection and other guaranties of obligations, which, in
the aggregate exceeds $1,000; (v) consulting or other
similar contract with an unexpired term of more than one
year or providing for payments in excess of $10,000 in the
aggregate; (vi) collective bargaining agreement; (vii)
contract, agreement, or other commitment involving payments
by it for more than $10,000 in the aggregate.
Section 1.12 Material Transactions or Affiliations. As of the Closing
Date, there will exist no material contract, agreement or arrangement between
Nantucket 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
Nantucket to own beneficially, ten percent (10%) or more of the issued and
outstanding Common Shares of Nantucket and which is to be performed in whole or
in part after the date hereof. Nantucket has no commitment, whether written or
oral, to lend any funds to, borrow any money from or enter into any other
material transactions with, any such affiliated person.
Section 1.13 Nantucket Schedules. As soon as practicable, but in no
event later than the Closing Date, upon execution hereof, Nantucket shall
deliver to Nantucket the following schedules, which are collectively referred to
as the "Nantucket Schedules" which shall be dated the date of this Agreement,
all certified by an officer of Nantucket to be complete, true and accurate:
(a) the description of any material adverse change in the
business, operations, property, assets, or condition of
Nantucket since November 30, 2003 required to be provided
pursuant to Section 1.6: and
(b) any other information, together with any required copies
of documents, required to be disclosed in the Nantucket
Schedules by this Article I.
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ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
OF COMPREHENSIVE
As an inducement to, and to obtain the reliance of Nantucket,
Comprehensive represents and warrants as follows:
Section 2.1 Organization. Comprehensive is a corporation duly
organized, validly existing and in good standing under the laws of Texas 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, including qualification
to do business as a foreign entity in the country or states 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 Comprehensive Schedules
(as hereinafter defined) are complete and correct copies of the Articles of
Incorporation of Comprehensive as in effect on the date hereof. 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 Comprehensive's Articles of Incorporation.
Comprehensive has full power, authority and legal right and has taken all action
required by law, its Articles of Incorporation or otherwise to authorize the
execution and delivery of this Agreement.
Section 2.2 Capitalization. The authorized capitalization of
Comprehensive consists of 2,500,000 shares of Common Stock and no shares of
Preferred Stock. As of the date hereof there are 250,000 Shares issued and
outstanding. All issued and outstanding Comprehensive shares have been legally
issued and are nonassessable as of January 30, 2004.
Section 2.3 Subsidiaries. Comprehensive does not have any other
subsidiaries and does not own, beneficially or of record, any shares of any
other corporation.
Section 2.4 Tax Matters; Books & Records
(a) The books and records, financial and others, of Comprehensive are
in all material respects complete and correct and have been maintained
in accordance with good business accounting practices; and
(b) Comprehensive has no material liabilities with respect to the
payment of any country, federal, state, county, local or other taxes
(including any deficiencies, interest or penalties).
Section 2.5 Information. The information concerning Comprehensive as
set forth in this Agreement and in the Comprehensive Schedules is 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.
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Section 2.6 Absence of Certain Changes or Events. Except as described
herein or in the Comprehensive Schedules, since January 30, 2004:
(a) Comprehensive has not: (i) amended its Articles of
Association; (ii) waived any rights of value which in the aggregate
are extraordinary or material considering the business of
Comprehensive; (iii) made any material change in its method of
management, operation or accounting; or (iv) 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;
(b) Comprehensive has not: (i) granted or agreed to grant any
options, warrants or other rights for its certificates, bonds or other
corporate securities calling for the issuance thereof, which option,
warrant or other right has not been canceled as of the Closing Date;
(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; and
(c) to the best knowledge of Comprehensive, 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 Comprehensive.
Section 2.7 Title and Related Matters.Comprehensive has good and
marketable title to and is the sole and exclusive owner of all of its
properties, inventory, interests in properties and assets, real and personal
(collectively, the "Assets") which are reflected in the most recent
Comprehensive balance sheet, dated January 30, 2004, and the Comprehensive
Schedules or acquired after that date (except properties, interests 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 as set forth in the Comprehensive Schedules, Comprehensive
owns free and clear of any liens, claims, encumbrances, royalty interests or
other restrictions or limitations of any nature whatsoever and all procedures,
techniques, marketing plans, business plans, methods of management or other
information utilized in connection with Comprehensive's business. Except as set
forth in the Comprehensive Schedules, no third party has any right to, and
Comprehensive had not received any notice of infringement of or conflict with
asserted rights of others with respect to any product, technology, data, trade
secrets, know-how, proprietary techniques, trademarks, service marks, trade
names or copyrights which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a materially adverse affect
on the business, operations, financial conditions or income of Comprehensive or
any material portion of its properties, assets or rights.
Section 2.8 Litigation and Proceedings. There are no actions, suits or
proceedings pending or, to the best of Comprehensive's knowledge and belief,
threatened by or against or affecting Comprehensive, at law or in equity, before
any court or other governmental agency or instrumentality, domestic or foreign
or before any arbitrator of any kind that would have a material adverse effect
on the business, operations, financial condition, income or business prospects
of Comprehensive. Comprehensive does not have any knowledge of any default on
its part with respect to any judgment, order, writ, injunction, decree, award,
rule or regulation of any court, arbitrator or governmental agency or
instrumentality.
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Section 2.9 Contracts. On the Closing Date:
(a) Comprehensive is not a party to any contract, agreement,
commitment or instrument or subject to any charter or other
corporate restriction or any judgment, order, writ, injunction,
decree or award which materially and adversely affects, or in the
future may (as far as Comprehensive can now foresee) materially
and adversely affect, the business, operations, properties,
assets or conditions of Comprehensive; and
(b) Comprehensive is not a party to any material oral or
written: (i) contract for the employment of any officer or
employee; (ii) profit sharing, bonus, deferred compensation,
stock option, severance pay, pension, benefit or retirement plan,
agreement or arrangement covered by Title IV of the Employee
Retirement Income Security Act, as amended; (iii) agreement,
contract or indenture relating to the borrowing of money; (iv)
guaranty of any obligation for the borrowing of money or
otherwise, excluding endorsements made for collection and other
guaranties of obligations, which, in the aggregate exceeds
$1,000; (v) consulting or other similar contract with an
unexpired term of more than one year or providing for payments in
excess of $10,000 in the aggregate; (vi) collective bargaining
agreement; (vii) contract, agreement, or other commitment
involving payments by it for more than $10,000 in the aggregate.
Section 2.10 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 an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which Comprehensive
is a party or to which any of its properties or operations are subject.
Section 2.11 Material Contract Defaults. To the best of Comprehensive's
knowledge and belief, Comprehensive is not in default in any material respect
under the terms of any outstanding contract, agreement, lease or other
commitment which is material to the business, operations, properties, assets or
condition of Comprehensive, and there is no event of default in any material
respect under any such contract, agreement, lease or other commitment in respect
of which Comprehensive has not taken adequate steps to prevent such a default
from occurring.
Section 2.12 Governmental Authorizations. To the best of
Comprehensive's knowledge, Comprehensive has all licenses, franchises, permits
and other governmental 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, 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 Comprehensive of
the transactions contemplated hereby.
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Section 2.13 Compliance With Laws and Regulations. To the best of
Comprehensive's knowledge and belief, Comprehensive has complied with all
applicable statutes and regulations of any federal, state 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 Comprehensive or would not result in Comprehensive's incurring any
material liability.
Section 2.14 Insurance. To the best of our knowledge we do not possess
any insurable properties. As a result, we do not maintain any insurance policies
on any person or property.
Section 2.15 Approval of Agreement. The holders of all of the Common
Voting Shares of Comprehensive and the Board of Directors of Comprehensive
shall, in accordance with Section 5.2 of this Agreement, authorize the execution
and delivery of the Agreement by Comprehensive and have approved the
transactions contemplated hereby.
Section 2.16 Material Transactions or Affiliations. As of the Closing
Date, there will exist no material contract, agreement or arrangement between
Comprehensive 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
Comprehensive to own beneficially, ten percent (10%) or more of the issued and
outstanding Common Shares of Comprehensive and which is to be performed in whole
or in part after the date hereof. Comprehensive has no commitment, whether
written or oral, to lend any funds to, borrow any money from or enter into any
other material transactions with, any such affiliated person.
Section 2.17 Labor Relations. Comprehensive has never had a work
stoppage resulting from labor problems.
Section 2.18 Comprehensive Schedules. At Closing Comprehensive shall
deliver to Nantucket the following schedules, which are collectively referred to
as the "Comprehensive Schedules" which shall be dated the date of this
Agreement, all certified by an officer of Comprehensive to be complete, true and
accurate:
(a) complete and correct copies of the certificate of
incorporation, bylaws and any amendments thereto of
Comprehensive as in effect as of the date of this Agreement;
(b) all contracts of Comprehensive presently in effect;
(c) the description of any material adverse change in the
business, operations, property, assets, or condition of
Comprehensive since January 30, 2004 required to be provided
pursuant to Section 2.5; and
(d) any other information, together with any required copies of
documents, required to be disclosed in the Comprehensive
Schedules by Sections 2.1 through 2.17.
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Comprehensive shall cause the Comprehensive Schedules and the
instruments to be delivered to Nantucket hereunder to be updated after the date
hereof up to and including the Closing Date.
Schedule 2.19 Nature of Books and Records. The books and records of
Comprehensive are in auditable condition. Comprehensive has received
confirmation from , its independent auditor, that such
----------- ----------
books and records are auditable and that such audit should be timely completed.
ARTICLE III
EXCHANGE PROCEDURE AND OTHER CONSIDERATION
Section 3.1 Share Exchange/Delivery of Comprehensive Securities. Upon
the Closing Date and upon satisfaction of all conditions set forth here in,
including but not limited to the execution of the shareholders' and directors
consents set forth in Section 5.2 of this Agreement, the Comprehensive
Shareholders, shall deliver to Nantucket (i) certificates or other documents
evidencing all of the issued and outstanding Comprehensive Common Shares, duly
endorsed in blank or with executed power attached thereto in transferrable form.
On the Closing Date, all previously issued and outstanding Common Shares of
Comprehensive shall be transferred to Nantucket, so that Comprehensive shall
become a wholly owned subsidiary of Nantucket. Until such time that a fully
executed shareholders' and directors consent has been received by Nantucket's
counsel pursuant to Section 5.2 of this Agreement, share certificates for a
total of two hundred and fifty thousand (250,000) shares of Nantucket Common
Stock issued to the Comprehensive shareholders set forth on Exhibit A. shall be
held in the possession by Nantucket's counsel. Once such fully executed consents
have been received (facsimile copy shall suffice) Nantucket's counsel shall
promptly deliver such share certificates to Comprehensive's counsel.
Section 3.2 Transfer of Comprehensive Common Shares. In exchange for
all of the Comprehensive Common Shares tendered pursuant to Section 3.1,
Nantucket Shareholders shall issue an aggregate of 250,000 "restricted"
Nantucket Common Shares to the Comprehensive Shareholders (ie. each
Comprehensive Common Share shall be exchanged for one (1) Nantucket Common
Shares). Fifty percent (50%) of such shares shall be "restricted" in accordance
with Rule 144 of the Securities Act of 1933, as amended and the remaining fifty
percent (50%) shall be restricted for a period of two (2) years.
Section 3.3 Other Consideration. Comprehensive shall receive additional
consideration from Nantucket of $60,000 to be used as working capital in the
following manner: $40,000.00 payable on or about the Closing Date and an
additional $20,000 within sixty (60) business days of the Closing Date of this
Agreement.
Section 3.4 Events Prior to Closing. Upon execution hereof or as soon
thereafter as practicable, management of Comprehensive and Nantucket shall
execute, acknowledge and deliver (or shall cause to be executed, acknowledged
and delivered) any and all certificates, opinions, financial statements,
schedules, agreements, resolutions rulings or other instruments required by this
Agreement to be so delivered, 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, subject
only to the conditions to Closing referenced herein below.
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Section 3.5 Closing. The closing ("Closing") of the transactions
contemplated by this Agreement shall be on or about February 28, 2004 ("Closing
Date").
Section 3.6 Termination.
(a) This Agreement may be terminated by the board of directors or
majority interest of Shareholders of either Nantucket or
Comprehensive, respectively, at any time prior to the Closing
Date if:
(i) there shall be any 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; or
(ii) any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval
is required to consummate such transactions.
In the event of termination pursuant to this paragraph (a) of this
Section 3.7, 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;
(b) This Agreement may be terminated at any time prior to the Closing
Date by action of the board of directors of Nantucket if
Comprehensive 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 Comprehensive
contained herein shall be inaccurate in any material respect,
which noncompliance or inaccuracy is not cured after 20 days
written notice thereof is given to Comprehensive. If this
Agreement is terminated pursuant to this paragraph (b) of this
Section 3.7, this Agreement shall be of no further force or
effect and no obligation, right or liability shall arise
hereunder.
Section 3.7 Directors of Comprehensive After Acquisition. Upon the
Closing, the current Board of directors of Comprehensive will contemporaneously
appoint Xxxx X. Xxxxxxx to the Board of Directors of Comprehensive.
ARTICLE IV
SPECIAL COVENANTS
Section 4.1 Access to Properties and Records. Prior to Closing,
Comprehensive and Nantucket will each afford to the officers and authorized
representatives of the other full access to the properties, books and records of
Comprehensive and Nantucket as the case may be, 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 Comprehensive and Nantucket as the case may be, as the other shall
from time to time reasonably request.
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Section 4.2 Availability of Rule 144. Each of the parties acknowledge
that the stock of Nantucket to be issued pursuant to this Agreement will be
"restricted securities, " as that term is defined in Rule 144 promulgated
pursuant to the Securities Act. Nantucket is under no obligation to register
such shares under the Securities Act, or otherwise. The stockholders of
Nantucket holding restricted securities of Nantucket as of the date of this
Agreement and their respective heirs, administrators, personal representatives,
successors and assigns, are intended third party beneficiaries of the provisions
set forth herein. The covenants set forth in this Section 4.2 shall survive the
Closing and the consummation of the transactions herein contemplated.
Section 4.3 Special Covenants and Representations Regarding the
Comprehensive Common Shares to be Issued in the Exchange. The consummation of
this Agreement, including the issuance of the Nantucket Common Shares to the
Shareholders of Comprehensive as contemplated hereby, constitutes the offer and
sale of securities under the Securities Act, and applicable state statutes. Such
transaction shall be consummated in reliance on exemptions from the registration
and prospectus delivery requirements of such statutes which depend, inter alia,
upon the circumstances under which the Comprehensive Shareholders acquire such
securities.
Section 4.4 Third Party Consents. Comprehensive and Nantucket agree to
cooperate with each other in order to obtain any required third party consents
to this Agreement and the transactions herein contemplated.
Section 4.5 Actions Prior and Subsequent to Closing.
(a) From and after the Closing Date and except as set forth in the
Comprehensive Schedules or as permitted or contemplated by
this Agreement, Comprehensive and Nantucket will each use its
best efforts to:
(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 obligations
under material contracts, leases and instruments
relating to or affecting its assets, properties and
business;
(v) maintain and preserve its business organization intact,
to retain its key employees and to maintain its
relationship with its material suppliers and customers;
and
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(vi) fully comply with and perform in all material respects
all obligations and duties imposed on it by all federal
and state laws.
(b) From and after the Closing Date, Comprehensive will not, without
the prior consent of Nantucket:
(i) except as otherwise specifically set forth herein, make
any change in its articles of incorporation or bylaws;
(ii) declare or pay any dividend on its outstanding Common
Shares, except as may otherwise be required by law, or
effect any stock split or otherwise change its
capitalization, except as provided herein;
(iii) enter into or amend any employment, severance or
similar agreements or arrangements with any directors
or officers;
(v) grant, confer or award any options, warrants,
conversion rights or other rights not existing on the
date hereof to acquire any Common Shares; or
(vi) purchase or redeem any Common Shares.
Section 4.6 Indemnification.
(a) Comprehensive hereby agrees to indemnify Nantucket and each of
the officers, agents and directors of Nantucket as of the date of
execution of this Agreement including, but not limited to Xxxx
Xxxxxxx, 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 and litigation, commenced or threatened or any claim
whatsoever), to which it or they may become subject to arising
out of or based on any inaccuracy appearing in or
misrepresentation made in this Agreement in addition to any
shareholder action filed against Xxxx Xxxxxxx and the other
Nantucket officers or directors based on this Agreement. The
indemnification provided for in this paragraph shall survive the
Closing and consummation of the transactions contemplated hereby
and termination of this Agreement; and
(b) Nantucket and its officers and directors hereby agrees to
indemnify Comprehensive and each of the officers, agents,
directors and current shareholders of Comprehensive as of the
Closing Date 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 this Agreement and particularly the
representation regarding no liabilities referred to in Section
2.4 (b). The indemnification provided for in this Section shall
survive the Closing and consummation of the transactions
contemplated hereby and termination of this Agreement.
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ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF NANTUCKET
The obligations of Nantucket under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 5.1 Accuracy of Representations. The representations and
warranties made by Comprehensive 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 the Closing Date (except for changes
therein permitted by this Agreement), and Comprehensive shall have performed or
compiled with all covenants and conditions required by this Agreement to be
performed or complied with by Comprehensive prior to or at the Closing.
Nantucket shall be furnished with a certificate, signed by a duly authorized
officer of Comprehensive and dated the Closing Date, to the foregoing effect.
Section 5.2 Shareholder and Director Approval. All of the Shareholders
of Comprehensive shall have approved this Agreement and the transactions
contemplated herein and the Board of Directors of Comprehensive shall have
approved this Agreement and the transactions contemplated herein..
Section 5.3 Officer's Certificate. Nantucket shall have been furnished
with a certificate dated the Closing Date and signed by a duly authorized
officer of Comprehensive to the effect that: (a) the representations and
warranties of Comprehensive set forth in the Agreement and in all Exhibits,
Schedules and other documents furnished in connection herewith are in all
material respects true and correct as if made on the Effective Date; (b)
Comprehensive has performed all covenants, satisfied all conditions, and
complied with all other terms and provisions of this Agreement to be performed,
satisfied or complied with by it as of the Effective Date; (c) since such date
and other than as previously disclosed to Nantucket and Comprehensive has not
entered into any material transaction other than transactions which are usual
and in the ordinary course if its business; and (d) No litigation, proceeding,
investigation or inquiry is pending or, to the best knowledge of Comprehensive,
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 Comprehensive Schedules, by or against Comprehensive
which might result in any material adverse change in any of the assets,
properties, business or operations of Comprehensive.
Section 5.4 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 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 or
Comprehensive.
Section 5.5 Opinion of Counsel to Comprehensive. Nantucket shall
receive an opinion dated the Closing Date by counsel to Comprehensive, in
substantially the following form:
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(a) Comprehensive is a corporation duly organized, validly
existing, and in good standing under the laws of Texas and has
the corporate power and is duly authorized, qualified,
franchised and licensed under all material applicable laws,
regulations, ordinances and orders of public authorities to
own all of its properties and assets and to conduct its
business as now conducted, including qualification to do
business as a foreign corporation in the states in which the
character and location of the assets owned by it or the nature
of the business transacted by it requires qualifications;
(b) To the best knowledge of such legal counsel, the execution and
delivery by Comprehensive of this Agreement and the
consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof will not
conflict with or result in the breach of any term or provision
of Comprehensive's certificate of incorporation or Bylaws or
violate any court order, writ, injunction or decree applicable
to Comprehensive, or its properties or assets;
(c) All issued and outstanding Share Certificates are legally
issued, fully paid and nonassessable. Except as set forth in
the Comprehensive Schedules, to the best knowledge of such
legal counsel, there are no outstanding subscriptions,
options, rights, warrants, convertible securities or other
agreements or commitments obligating Comprehensive to issue
any additional Share Certificates;
(d) This Agreement has been duly and validly authorized, executed
and delivered by Comprehensive; and
(e) To the best knowledge of such legal counsel, except as set
forth in the Comprehensive Schedules, there are no actions,
suits or proceedings pending or threatened by or against or
affecting Comprehensive or its properties, at laws or in
equity, before any court or other governmental agency or
instrumentality, domestic or foreign or before any arbitrator
of any kind.
Section 5.6 Other Items. Nantucket shall have received such
further documents, certificates or instruments relating to the transactions
contemplated hereby as Nantucket may reasonably request.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF COMPREHENSIVE
The obligations of Comprehensive under this Agreement are subject to
the satisfaction, at or before the Closing date (unless otherwise indicated
herein), of the following conditions:
Section 6.1 Accuracy of Representations. The representations and
warranties made by Nantucket 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 Nantucket shall have
performed and complied with all covenants and conditions required by this
Agreement to be performed or complied with by Nantucket prior to or at the
Closing. Comprehensive shall have been furnished with a certificate, signed by a
duly authorized executive officer of Nantucket and dated the Closing Date, to
the foregoing effect.
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Section 6.2 Director Approval. The Board of Directors of Nantucket
shall have approved this Agreement and the transactions contemplated herein.
Section 63 Officer's Certificate. Comprehensive shall be furnished with
a certificate dated the Closing date and signed by a duly authorized officer of
Nantucket to the effect that: (a) the representations and warranties of
Nantucket set forth in the Agreement and in all Exhibits, Schedules and other
documents furnished in connection herewith are in all material respects true and
correct as if made on the Effective Date; and (b) Nantucket had performed all
covenants, satisfied all conditions, and complied with all other terms and
provisions of the Agreement to be performed, satisfied or complied with by it as
of the Effective Date.
Section 6.4 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 or 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 Nantucket.
Section 6.5 Opinion of Counsel to Nantucket. Comprehensive shall
receive an opinion dated the Closing Date of Xxxxxx & Xxxxxx, LLP, counsel to
Nantucket, in substantially the following form:
(a) Nantucket is a corporation duly organized, validly existing,
and in good standing under the laws of the state of Delaware
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, including qualification to do business as a foreign
corporation in the states in which the character and location
of the assets owned by it or the nature of the business
transacted by it requires qualification;
(b) To the best knowledge of such legal counsel, the execution and
delivery by Nantucket of this Agreement and the consummation
of the transactions contemplated by this Agreement in
accordance with the terms hereof will not conflict with or
result in the breach of any term or provision of Nantucket's
articles of incorporation or bylaws or constitute a default or
give rise to a right of termination, cancellation or
acceleration under any material mortgage, indenture, deed of
trust, license agreement or other obligation or violate any
court order, writ, injunction or decree applicable to
Nantucket or its properties or assets;
(c) The authorized capitalization of Nantucket consists of
20,000,000 shares of Common Stock, par value $0.10 per share
and no shares of Preferred Stock.
(d) The Nantucket Common Shares to be issued to the Comprehensive
Shareholders pursuant to the terms of this Agreement will be,
when issued in accordance with the terms hereof, legally
issued, fully paid and non-assessable;
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(e) This Agreement has been duly and validly authorized, executed,
and delivered and constitutes the legal and binding obligation
of Nantucket, except as limited by bankruptcy and insolvency
laws and by other laws affecting the rights of creditors
generally;
(f) To the best knowledge of such counsel, there are no actions,
suits or proceedings pending or threatened by or against
Nantucket or affecting Nantucket's 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;
(g) Nantucket has taken all actions required by the applicable
laws of the state of Delaware to permit the issuance of the
Nantucket Common Shares to the Comprehensive Shareholders; and
ARTICLE VII
CONDITIONS SUBSEQUENT TO OBLIGATIONS OF NANTUCKET
Section 7.1 Comprehensive Audited Financial Statements. As soon as
practicable, but in no event more than sixty(60) calendar days from the Closing
Date, Comprehensive shall deliver to Nantucket's counsel audited financial
statements prepared in accordance with generally accepted accounting principles.
Section 7.2 Nantucket Financial Statements. As soon as practicable, but
in no event more than forty-five (45) calendar days from the Closing Date,
Nantucket shall deliver to Comprehensive's counsel financial statements
including balance sheet, income statement, statement of cash flows and statement
of stockholders' equity prepared in accordance with generally accepted
accounting principals, as of the fiscal year ended February 28, 2003 and all
subsequent forms 10QSB as filed with the Securities and Exchange Commission.
Such financial statements shall reflect no material liabilities in any form.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Brokers and Finders. Each party hereto hereby represents
and warrants that it is under no obligation, express or implied, to pay certain
finders in connection with the bringing of the parties together in the
negotiation, execution, or consummation of this Agreement. The parties each
agree to indemnify the other against any claim by any third person not listed in
Schedule 8.1 for any commission, brokerage or finder's fee or other payment with
respect to this Agreement or the transactions contemplated hereby based on any
alleged agreement or understanding between the indemnifying party and such third
person, whether express or implied from the actions of the indemnifying party.
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Section 8.2 Law, Forum and Jurisdiction. This Agreement shall be
construed and interpreted in accordance with the laws of the State of New York,
United States of America.
Section 8.3 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 addressed as follows:
If to Nantucket: 00 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
If to Comprehensive: 000 Xxxxx Xxxx, 000 Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have given as of the date so delivered, mailed or telegraphed.
Section 8.4 Attorneys' 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 parities shall reimburse the
non-breaching party or parties for all costs, including reasonable attorneys'
fee, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
Section 8.5 Confidentiality. Each party hereto agrees with the other
parties that, unless and until the reorganization contemplated by this Agreement
has been consummated, they and their representatives will hold in strict
confidence all data and information obtained with respect to another party or
any subsidiary thereof from any representative, officer, director or employee,
or from any books or records or from personal inspection, of such other party,
and shall not used such data or information or disclose the same to others,
except: (i) to the extent such data is a matter of public knowledge or is
required by law to be published; and (ii) to the extent that such data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement.
Section 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.
Section 8.7 Third Party Beneficiaries.This contract is solely among
Comprehensive, Comprehensive Shareholders, Nantucket 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.
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Section 8.8 Entire Agreement.This Agreement represents the entire
agreement between the parties relating to the subject matter hereof. This
Agreement alone fully and completely expresses the agreement of the parties
relating to the subject matter hereof. There are no other courses of dealing,
understanding, agreements, representations or warranties, written or oral,
except a set forth herein. This Agreement may not be amended or modified, except
by a written agreement signed by all parties hereto.
Section 8.9 Survival; Termination. The representations, warranties and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for 12 months.
Section 8.10 Counterparts. This Agreements 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.
Section 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.
Section 8.12 Incorporation of Recitals.All of the recitals hereof are
incorporated by this reference and are made a part hereof as though set forth at
length herein.
Section 8.13 Expenses. Each party herein shall bear all of their
respective costs and expenses incurred in connection with the negotiation of
this Agreement and in the consummation of the transactions provided for herein
and the preparation thereof.
Section 8.14 Headings; Context. The headings of the sections and
paragraphs contained in this Agreement are for convenience of reference only and
do not form a part hereof and in no way modify, interpret or construe the
meaning of this Agreement.
Section 8.15 Benefit. This Agreement shall be binding upon and shall
insure only to the benefit of the parties hereto, and their permitted assigns
hereunder. This Agreement shall not be assigned by any party without the prior
written consent of the other party.
Section 8.16 Severability. In the event that any particular provision
or provisions of this Agreement or the other agreements contained herein shall
for any reason hereafter be determined to be unenforceable, or in violation of
any law, governmental order or regulation, such unenforceability or violation
shall not affect the remaining provisions of such agreements, which shall
continue in full force and effect and be binding upon the respective parties
hereto.
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Section 8.17 Failure of Conditions; Xxxxxxxxxxx.Xx the event of any of
the conditions specified in this Agreement shall not be fulfilled on or before
the Closing Date, either of the parties have the right either to proceed or,
upon prompt written notice to the other, to terminate and rescind this Agreement
without liability to any other party. The election to proceed shall not affect
the right of such electing party reasonably to require the other party to
continue to use its efforts to fulfill the unmet conditions.
Section 8.18 No Strict Construction. The language of this Agreement
shall be construed as a whole, according to its fair meaning and intendment, and
not strictly for or against wither party hereto, regardless of who drafted or
was principally responsible for drafting the Agreement or terms or conditions
hereof.
Section 8.19 Execution Knowing and Voluntary. In executing this
Agreement, the parties severally acknowledge and represent that each: (a) has
fully and carefully read and considered this Agreement; (b) has been or has had
the opportunity to be fully apprized of its attorneys of the legal effect and
meaning of this document and all terms and conditions hereof; and (c) is
executing this Agreement oluntarily, free from any influence, coercion or duress
of any kind.
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IN WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly authorized,
and entered into as of the date first above written.
ATTEST: NANTUCKET INDUSTRIES, INC.
By: /s/ Xxxx Xxxxxxx
XXXX X. XXXXXXX
PRESIDENT
ATTEST: COMPREHENSIVE NETWORK SOLUTIONS, INC.
By: /s/ Xxxxx Xxxxxxxxx
XXXXX XXXXXXXXX
PRESIDENT
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EXHIBIT "A"
--------------------------------------
LIST OF COMPREHENSIVE SHAREHOLDERS
---------------------------------------
Name # of Shares
---- -----------
Xxxxx X. Xxxxxxxxx 111,950
Xxxxxxx X. Xxxxxxxx, D.C. 23,575
Xxxxxx X. Xxxxxx 93,000
Xxxx X. Xxxxx, D.C. 21,475
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EXHIBIT "B"
--------------------------------------
ADDENDUM "A"
---------------------------------------
* Participating provider application agreement
* Texas state master bidder list
* Proposal letter to Association of Counties
* WC Predictive Model
* CNS fee schedule
* Insurance and managed care survival seminar
* Network utilization review agents license
* CNS Utilization Review Plan
* Policy & Procedure Manual
* Participating provider manual with evidence based treatment guidelines
* Latest amended Articles of Incorporation
* Provider list for each network
* Chiro Care client list
* Digial Publishing & Scanning,Inc. Agent Agreement
* Other proprietary documents not listed
23
