SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT, (hereinafter the "Agreement") is made
and entered into this 29 day of January, 2003 by and between RAKO CAPITAL
CORPORATION, a Nevada corporation (hereinafter "Rako") on the one hand; and
CENTRA INDUSTRIES, INC., a Delaware corporation (hereinafter "Centra") and the
shareholders of Centra on the other hand.
RECITALS
WHEREAS, Rako desires to acquire up to all of the issued and
outstanding shares of Centra capital stock solely in exchange for up to
17,000,000 shares of authorized but previously unissued Rako common stock, par
value $.001 per share, on a one-to-one ratio pursuant to the applicable laws of
the States of Nevada and Delaware.
WHEREAS, the respective board of directors of Rako and Centra have
approved and adopted this Agreement and it is the intent of the parties hereto
that the transactions contemplated hereby be structured so as to qualify as a
tax-free exchange under Subchapter C of the Internal Revenue Code of 1986, as
amended (the "IRC"), and the provisions of this Agreement will be interpreted in
a manner consistent with this intent; and
WHEREAS, the shareholder of Centra signatory to this Agreement
(hereinafter "Shareholders") desire to exchange all of their shares of Centra
capital stock solely for shares of Rako common stock in the respective amounts
set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties and covenants herein contained, the parties hereby
agree as follows:
ARTICLE I
ACQUISITION AND EXCHANGE OF SHARES
SECTION 1.1. The Agreement. The parties hereby agree that Rako will acquire up
to all of the issued and outstanding shares of Centra common stock, preferred
stock and/or other securities ("Centra capital stock") solely in exchange for up
to seventeen million (17,000,000) shares of authorized but previously unissued
Rako common stock, par value $.001 per share, on a one-to-one ratio. The parties
hereto agree that at the Closing of this Agreement as hereinafter defined: (i)
Centra will become a wholly-owned subsidiary of Rako subject to the conditions
and provisions of Section 1.6 hereof; (ii) the management and business
operations of Rako will be reorganized; and (iii) the name of Rako will be
changed to CENTRA INDUSTRIES, INC.
SECTION 1.2. Exchange of Shares.
(a) Upon the Closing of this Agreement, Rako will cause to be issued
and held for delivery to the Shareholders of Centra or their designees,
stock certificates representing an aggregate of up to 17,000,000 shares
of Rako common stock (the "Rako shares"), on a one-to-one ratio solely
in exchange for up to all the issued and outstanding shares of Centra
capital stock, which shares will be delivered to Rako at the Closing.
(b) The Rako shares to be issued hereunder will be authorized, but
previously unissued shares of Rako common stock. The Rako shares will
be issued to the Shareholders in the respective amounts set forth in
Schedule 1.2 annexed hereto and, by this reference, made a part hereof.
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(c) All Rako shares to be issued hereunder are deemed "restricted
securities" as defined by Rule 144 of the Securities Act of 1933, as
amended (the "1933 Act"), and each recipient will represent in writing
that he or she is acquiring said shares for investment purposes only
and without the intent to make a further distribution of the shares.
All Rako shares to be issued under the terms of this Agreement will be
issued pursuant to an exemption from the registration requirements of
the 1933 Act, under Section 4(2) of the 1933 Act and the rules and
regulations promulgated thereunder. Certificates representing the Rako
shares to be issued hereunder will bear a restrictive legend in
substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED
EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH
ACT OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION
PROVISIONS, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO
THE SATISFACTION OF THE COMPANY.
SECTION 1.3. Closing. The closing of this Agreement and the transactions
contemplated hereby (the "Closing") will take place at a date and time (the
"Closing Date") and place to be mutually agreed upon by the parties hereto, and
will be subject to the provisions of Article X of this Agreement. At the
Closing:
(a) Centra will deliver to Rako stock certificates representing not
less than ninety percent (90%) of the issued and outstanding shares of
Centra capital stock of the Shareholders, duly endorsed, so as to make
Rako the holder thereof, free and clear of all claims and encumbrances;
(b) Rako will deliver to the Shareholders, stock certificates
representing up to an aggregate of 17,000,000 shares of Rako common
stock, which certificates will bear a standard restrictive legend in
the form customarily used with restricted securities and as set forth
in Section 1.2(c) above;
(c) Rako will deliver an Officer's Certificate as described in Sections
9.1, 9.2 and 9.4 hereof, dated the Closing Date, that all
representations, warranties, covenants and conditions set forth herein
by Rako are true and correct as of, or have been fully performed and
complied with by, the Closing Date; and
(d) Centra will deliver an Officer's Certificate as described in
Sections 8.1, 8.2 and 8.4 hereof, dated the Closing Date, that all
representations, warranties, covenants and conditions set forth herein
by Centra are true and correct as of, or have been fully performed and
complied with by, the Closing Date;
SECTION 1.4. Ratification by Board of Directors and by Written Consent of
Shareholders. In anticipation of this Agreement, Rako has taken all necessary
and requisite action to call for and hold a Special Meeting of its Board of
Directors, and/or to obtain the written consent from more than a majority of its
shareholders, as required, in order to transact the following business:
(a) To ratify this Agreement and all transactions contemplated hereby;
and
(b) To ratify the proposed amendment to Rako's Articles of
Incorporation to change the corporate name to Centra Industries, Inc.
SECTION 1.5. Consummation of Transaction. If at the Closing, no condition exists
which would permit any of the parties to terminate this Agreement, or a
condition then exists and the party entitled to terminate because
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of that condition elects not to do so, then the transactions herein contemplated
will be consummated upon such date, and then and thereupon, Rako will file any
additional necessary documents that may be required by the State of Nevada.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF XXXX
Xxxx hereby represents, warrants and agrees that:
SECTION 2.1. Organization, Good Standing and Corporate Power of Rako. Rako is a
corporation duly organized, validly existing and presently in good standing
under the laws of the State of Nevada, is duly qualified to do business and is
in good standing as a foreign corporation in each jurisdiction in which such
qualification is necessary, and has the corporate power and authority to own its
properties and assets and to transact the business in which it is engaged. There
are no corporations or other entities with respect to which (a) Rako owns any of
the outstanding stock or other interest, or (b) Rako may be deemed to be in
control because of factors or relationships other than the quantity of stock or
other interest owned.
SECTION 2.2. Capitalization of Rako. The authorized capital stock of Rako
consists of 50,000,000 shares of common stock, par value $.001 per share, of
which 2,205,968 shares are issued and outstanding, and 20,000 shares of
preferred stock, par value $.001 per share, of which none are outstanding. All
shares of Rako common stock currently issued and outstanding have been duly
authorized, validly issued and are fully paid and non-assessable. There are no
preemptive rights, or other outstanding rights, options, warrants, conversion
rights, stock appreciation rights, redemption rights, repurchase rights, calls,
agreements or commitments of any character obligating Rako to issue any shares
of its capital stock or any security representing the right to acquire, purchase
or otherwise receive any such stock. Shares of Rako common stock to be issued
pursuant to this Agreement, when so issued, will be duly authorized, validly
issued, fully paid and non-assessable.
SECTION 2.3. Charter Documents. Certified copies of the Rako Articles of
Incorporation and By-Laws and all amendments thereto, have been or will be
delivered to Centra prior to the Closing.
SECTION 2.4. Corporate Documents. The most recent Rako shareholders' list and
corporate minute books, which have been made available to Centra, are complete
and accurate as of the date hereof, and the corporate minute books contain the
recorded minutes of all corporate meetings of shareholders and directors. There
are no shareholder agreements, voting agreements, registration right agreements
or other such agreement among Rako's shareholders or with Rako.
SECTION 2.5. Financial Statements. Rako's financial statements for the periods
ended September 30, 2002 and December 31, 2001, copies of which are annexed
hereto as Schedule 2.5 and, by this reference, made a part hereof, are true and
complete in all material respects, having been prepared in accordance with
generally accepted accounting principles applied on a consistent basis for the
periods covered by such statements, and fairly present, in accordance with
generally accepted accounting principles, the financial condition of Rako and
results of its operations for the periods covered thereby. Except as otherwise
disclosed to Centra in writing and as set forth herein and in Schedule 2.5, and
other than according to the ordinary and usual course of Rako's business
consistent with such practice, (a) Rako has not engaged in any material
transaction since the date of its financial statements, and (b) there has not
been any material adverse change in the business operations, assets, properties,
prospects or condition (financial or otherwise) of Rako, taken as a whole, from
that reflected in the financial statements referred to in this Section 2.5.
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SECTION 2.6. Absence of Certain Changes or Events. Since the date of the Rako
financial statements set forth in Schedule 2.5 and except as disclosed otherwise
herein, Rako has not (a) issued or sold any promissory note, stock, bond, option
or other corporate security of which it was an issuer or other obligor, (b)
discharged or satisfied any lien or encumbrance or paid any obligation or
liability, absolute or contingent, direct of indirect, (c) incurred or suffered
to be incurred any liability or obligation other than in the ordinary and usual
course of business, (d) caused or permitted any lien, encumbrance or security
interest to be created or arise on or in any of its properties or assets, (e)
declared, set aside or made any dividend, payment or other distribution to any
shareholder or purchased or redeemed or agreed to purchase or redeem any shares
of its capital stock, (f) reclassified its shares of capital stock, or (g)
entered into any agreement or transaction except in the ordinary and usual
course of business or in connection with the execution and performance of this
Agreement.
SECTION 2.7. Tax Returns and Payments. Rako has filed with the appropriate
governmental authority, all tax returns, whether based upon income, sales or
franchise, as required by law to be filed on or before the date of this
Agreement, and Rako has paid all taxes to be due on said returns, any
assessments made against Rako and all other taxes, fees and similar charges
imposed on Rako by any governmental authority. No tax liens have been filed and
no claims are being assessed and no returns are under audit with respect to any
such taxes, fees or other similar charges.
SECTION 2.8. Contracts. Rako is not a party to or bound by any material contract
or commitment, including guaranty whether written or oral, except as may
otherwise be disclosed in Schedule 2.8, annexed hereto and, by this reference,
made a part hereof.
SECTION 2.9. Compliance with Law and Government Regulations. Rako is in
compliance with and is not in violation of applicable federal, state, local or
foreign statutes, laws and regulations (including without limitation, any
applicable building, zoning or other law, ordinance or regulation) affecting its
properties or the operation of its business. Rako is not subject to any order,
decree, judgment or other sanction of any court, administrative agency or other
tribunal.
SECTION 2.10. Litigation. There is no material litigation, arbitration,
proceeding or investigation pending or threatened to which Rako is a party or
which may result in any material adverse change in the business or condition,
financial or otherwise, of Rako or in any of its properties or assets, or which
might result in any liability on the part of Rako, or which questions the
validity of this Agreement or of any action taken or to be taken pursuant to or
in connection with the provisions of this Agreement and, to the best knowledge
of Rako, there is no basis for any such litigation, arbitration, proceeding or
investigation.
SECTION 2.11. Trade Names and Rights. Rako does not use any trade xxxx, service
xxxx, trade name, or copyright in its business, nor does it own any trade marks,
trade xxxx registrations or application, trade name, service marks, copyrights,
copyright registrations or application. No person owns any trade xxxx, trade
xxxx registration or application, service xxxx, trade name, copyright, or
copyright registration or application, the use of which is necessary or
contemplated in connection with the operation of Rako's business.
SECTION 2.12. Environmental Matters. There are no actions, proceedings or
investigations pending or, to Rako's best knowledge after making appropriate
investigation, threatened before any federal or state environmental regulatory
body, or before any federal or state court, alleging noncompliance by Rako with
the Comprehensive Environmental Response, Compensation and Liability Act of 1990
("CERCLA") or any other Environmental Laws. To Rako's best knowledge after due
investigation: (a) there is no reasonable basis for the institution of any
action, proceeding or investigation against Rako under any Environmental Law;
(b) Rako is not responsible under any Environmental Law for any release by any
person at or in the vicinity of real
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property of any hazardous substance (as defined by CERCLA), caused by the
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping or disposing of any such hazardous substance into
the environment; (c) Rako is not responsible for any costs of any remedial
action required by virtue of any release of any toxic or hazardous substance,
pollutant or contaminant into the environment including, without limitation,
costs arising from security fencing, alternative water supplies, temporary
evacuation and housing and other emergency assistance undertaken by any
environmental regulatory body; (d) Rako is in material compliance with all
applicable Environmental Laws; and (e) no real property used, owned, managed or
controlled by Rako contains any toxic or hazardous substance including, without
limitation, any asbestos, PCBs or petroleum products or byproducts in any form,
the presence, location or condition of which (i) violates any Environmental Law,
or (ii) cannot be cleaned by ordinary reclamation procedures customary in the
oil and gas industry. For purposes of this Agreement, "Environmental Laws" will
mean any federal, state, local or municipal statute, ordinance or regulation, or
order, ruling or other decision of any court, administrative agency or other
governmental authority pertaining to the release of hazardous substances (as
defined in CERCLA) into the environment.
SECTION 2.13. Governmental Consent. No notices, reports or other filings are
required to be made nor are any consents, registrations, approvals, permits,
authorizations or designations required to be obtained by Rako from any court,
governmental or regulatory authority, agency, commission, body or other
governmental entity, in connection with the execution and delivery of this
Agreement by Rako or the carrying out and consummation of any transactions
contemplated hereby, except those that the failure to make or obtain are not,
individually or in the aggregate, reasonably likely to have a material adverse
effect or prevent, materially delay or materially impair the ability of Rako to
consummate the transactions contemplated by this Agreement.
SECTION 2.14. Corporate Authority. Rako has all requisite corporate power and
authority and has taken all corporate actions necessary in order to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated herein, subject to approval of this Agreement by its
Board of Directors and by the unanimous written consent of its shareholders. The
execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby and compliance by Rako with the provisions hereof will not:
(a) Conflict with or result in a breach of any provisions of, or
constitute a default (or an event which, with notice or lapse of time
or both, would constitute a default) under, or result in the creation
of any lien, security interest, charge or encumbrance upon any of the
properties or assets of Rako under, any of the terms, conditions or
provisions of the Articles of Incorporation or By-Laws of Rako, or any
note, bond, mortgage, indenture, license, lease, agreement or any
instrument or obligation to which Rako is a party or by which it is
bound; or
(b) Violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Rako or any of its properties or assets.
Assuming due execution and delivery by the parties hereto, this
Agreement is the valid and binding agreement of Rako enforceable
against Rako in accordance with its respective terms, except as such
enforceability may be limited by applicable bankruptcy laws or
creditors' rights generally or by general principles of equity.
SECTION 2.15. Employee Benefit Plans. Rako is not a party to, or bound by, any
bonus, deferred compensation, incentive compensation, stock purchase, stock
option, severance or termination pay, hospitalization or other medical, life or
other insurance, supplemental unemployment benefits, profit-sharing, pension, or
retirement plan, program, agreement or arrangement, other employee benefit plan,
program, agreement or arrangement (other than arrangements involving the payment
of wages), sponsored, maintained or
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contributed to or required to be contributed to by Rako or any of its
subsidiaries or by any trade or business, whether or not incorporated (an "ERISA
Affiliate") that together with Rako or any of its subsidiaries would be deemed a
"single employer" within the meaning of Section 4001(a)(14) of the Employee
Retirement Income Security Act of 1974, as amended, and the rules and
regulations promulgated thereunder ("ERISA"), for the benefit of any current or
former employee, director or officer of Rako or any of its subsidiaries or any
ERISA Affiliate whether formal or informal and whether legally binding or not
with respect to which Rako or any of its subsidiaries or any ERISA Affiliate has
or may in the future have any liability or obligation to contribute or make
payments or any kind.
SECTION 2.16. Legal Proceedings and History. Rako hereby represents that, unless
otherwise disclosed herein or by a written attachment hereto, no officer,
director or affiliate of Rako, will have been, within the past five years; a
party to any bankruptcy petition against such person or against any business of
which such person was affiliated; convicted in a criminal proceeding or subject
to a pending criminal proceeding (excluding traffic violations and other minor
offenses; subject to any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting their
involvement in any type of business, securities or banking activities; or found
by a court of competent jurisdiction in a civil action, by the Securities
Exchange Commission or the Commodity Futures Trading Commission to have violated
a federal or state securities or commodities law, and the judgment has not been
reversed, suspended or vacated.
SECTION 2.17. Accuracy of Information Furnished. No representation, statement,
or information contained in this Agreement (including the schedules) or any
contract or document executed in connection herewith or delivered pursuant
hereto, or thereto or made available or furnished to Centra or its
representatives by Rako or its representatives contains or will contain any
untrue statement of a material fact, or omits or will omit any material fact
necessary to make the information contained therein not misleading. Rako has
provided (or caused to be provided) to Centra correct and complete copies of all
documents listed or described in the Schedules provided by Rako hereunder.
SECTION 2.18. SEC Documents; Undisclosed Liabilities. Other than as referenced
on Schedule 2.18, since September 30, 2002 Rako has filed with the Securities
and Exchange Commission ("SEC") on a timely basis all reports, schedules, forms,
statements and other documents (including schedules and all other information
incorporated therein) required to be filed under the Securities Act and the
Securities and Exchange Act of 1934, as amended (the "1934 Act") (the "SEC
Documents"). As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the 1933 Act or the 1934 Act, as the
case may be, and the rules and regulations of the SEC promulgated thereunder
applicable to such SEC Documents. The Rako financial statements included in the
SEC Documents comply as to form, as of their respective dates of filing with the
SEC, in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto.
SECTION 2.19. Absence of Certain Changes. Except for liabilities incurred in
connection with this Agreement or the transactions contemplated hereby or
thereby and except as disclosed in the SEC Documents filed and publicly
available prior to the date of this Agreement (the "Filed SEC Documents"), since
September 30, 2002 Rako has conducted its business only in the ordinary course,
and there has not been (i) any event or occurrence which could have a material
adverse effect on Rako's business or assets, (ii) except insofar as may have
been or required by a change in GAAP, any change in accounting methods,
principles or practices by Rako materially affecting its assets, liabilities or
business or (iii) any tax election that individually or in the aggregate could
reasonably be expected to have a material adverse effect on Rako's business or
assets, or any of its tax attributes or any settlement or compromise of any
material income tax liability.
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SECTION 2.20. Tax Issues. Rako has not taken any action or failed to take any
action which action or failure would reasonably be expected to jeopardize the
exchange of shares provided herein as tax-free under Subchapter C of the IRC.
Rako has not taken any action or failed to take any action on which would
reasonably be expected to make Rako's loss carry forwards unavailable after the
Closing.
ARTICLE III
COVENANTS OF RAKO
SECTION 3.1. Conduct Prior to the Closing. Rako covenants and agrees as to
itself that, after the date hereof and prior to the Closing (unless Centra will
otherwise approve in writing, which approval will not be unreasonably withheld):
(a) Except within the regular course of business and for the
transactions contemplated by this Agreement, Rako will not enter into
any material agreement, contract or commitment, whether written or
oral, or engage in any substantive transaction;
(b) Rako will not declare, set aside or pay any dividends or
distributions payable in cash, stock or property, in respect of its
capital stock;
(c) Rako will not amend its Articles of Incorporation or By-Laws,
except as set forth in Section 1.4 above or except for any amendment
which will not hinder, delay or make more costly to Centra the
transactions contemplated by this Agreement;
(d) Rako will not authorize, issue, sell, purchase or redeem or
repurchase any shares of its capital stock or any options, rights or
other securities convertible, exchangeable or exercisable for any
shares of its capital stock, except as set forth in Section 1.2 above;
(e) Rako will comply with all requirements which federal or state law
may impose on it with respect to this Agreement and the transactions
contemplated hereby, and will promptly cooperate with and furnish
written information to Centra in connection with any such requirements
imposed upon the parties hereto in connection therewith;
(f) Except within the regular course of business, Rako will not incur
any indebtedness for money borrowed, issue or sell any debt securities,
incur or suffer to be incurred any liability or obligation of any
nature whatsoever, cause or permit any lien, encumbrance or security
interest to be created or arise on or in any of its properties or
assets, acquire or dispose of fixed assets, change employment terms,
enter into any material or long-term contract, guarantee obligations of
any third party, settle or discharge any balance sheet receivable for
less than its stated amount or enter into any other transaction, except
to comply with the terms of this Agreement;
(g) Rako will not take any action, other than in the ordinary course of
business and consistent with past practice, with respect to accounting
policies or procedures, including, without limitation, procedures with
respect to the payment of accounts payable and collection of accounts
receivables;
(h) Rako will not make any material tax election or settle or
compromise any material federal, state, local or foreign tax liability;
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(i) Rako will not settle or compromise any pending or threatened suit,
action or claim which is material or which relates to any of the
transactions contemplated by this Agreement;
(j) Rako will not sell, assign, transfer, license, sublicense, pledge
or otherwise encumber any of its intellectual property rights;
(k) Rako will not enter into any employment agreement or consulting or
similar agreement, increase any salary, bonus or other compensation
under any existing employment agreement or consulting or similar
agreement, waive any of its rights under any such agreement, adopt any
stock option plan, bonus plan, executive compensation plan, benefit
plan or otherwise incur any liability to any of its employees or
consultants, independent contractors, officers directors, or
shareholders;
(l) Rako will not either directly, through any of its affiliates or any
of its or their respective officers, directors, employees, consultants,
independent contractors, representatives, agents, through any brokers
or "finders" or otherwise, other than pursuant to judicial compulsion,
(i) solicit, encourage or negotiate any proposal, whether solicited or
unsolicited, relating to any merger, consolidation, recapitalization or
similar transaction involving Rako and any third party (each, an
Acquisition Proposal@), (ii) provide any information regarding Rako to
any third party for the purpose of soliciting or encouraging or
negotiating any transaction which could give rise to an Acquisition
Proposal;
(m) Rako will not announce an intention, or commit or agree to do any
of the foregoing; and
(n) Rako will grant to Centra and its counsel, accountants and other
representatives, full access during normal business hours during the
period prior to the Closing, to all its respective properties, books,
contracts, commitments and records and, during such period, furnish
promptly to Centra and such representatives all information relating to
Rako as Centra may reasonably request and will extend to Centra the
opportunity to meet with Rako's accountants and attorneys to discuss
the financial condition of Rako.
SECTION 3.2. Affirmative Covenants. Prior to Closing, Rako will do the
following:
(a) Use its best efforts to accomplish all actions necessary to
consummate this Agreement, including satisfaction of all conditions
contained in this Agreement;
(b) Promptly notify Centra in writing of any material adverse change in
the financial condition, business, operations or key personnel of Rako,
any threatened material litigation or investigation, any breach of its
representations or warranties contained herein, and any material
contract, agreement, license or other agreement which, if in effect on
the date of this Agreement, should have been included in this Agreement
or in a schedule annexed hereto and made a part hereof;
(c) Reserve, and promptly after the Closing, issue and deliver to the
Shareholders and/or their designees, the number of shares of Rako
common stock required hereunder; and
(d) Take any and all other necessary and requisite corporate actions to
accomplish the transactions anticipated by this Agreement.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF CENTRA AND SHAREHOLDERS
Centra and Shareholders hereby represent, warrant and agree that:
SECTION 4.1. Organization, Good Standing and Corporate Power of Centra. Centra
is a corporation duly organized, validly existing and presently in good standing
under the laws of the State of Delaware, is duly qualified to do business and is
in good standing as a foreign corporation in each jurisdiction in which such
qualification is necessary, and has the corporate power and authority to own its
properties and assets and to transact the business in which it is engaged.
Except as set forth in Schedule 4.1, are no corporations or other entities with
respect to which (a) Centra owns any of the outstanding stock or other interest,
or (b) Centra may be deemed to be in control because of factors or relationships
other that the quantity of stock or other interest owned.
SECTION 4.2. Charter Documents. Complete and correct copies of the Articles of
Incorporation and By-Laws of Centra and all amendments thereto, have been or
will be delivered to Rako prior to the Closing.
SECTION 4.3. Financial Statements / Assets and Liabilities. Centra's financial
statements for the years ended December 31, 2001 and 2000, copies of which are
annexed hereto as Schedule 4.3 and, by this reference, made a part hereof, are
true and complete in all material respects, having been prepared in accordance
with generally accepted accounting principles applied on a consistent basis for
the periods covered by such statements, and fairly present the financial
condition of Centra and results of its operations for the periods covered
thereby. Centra has good and marketable title to all of its assets, free and
clear of any and all liens, claims and encumbrances, except as may be otherwise
set forth herein and in its financial statements. Except as otherwise disclosed
to Rako in writing and as set forth herein and in Schedule 4.3, and other than
according to the ordinary and usual course of Centra's business, consistent with
such practice, (a) Centra has engaged only in its routine daily business since
the date of its financial statements, and (b) there has not been any material
adverse change in the business operations, assets, properties, prospects or
condition (financial or otherwise) of Centra taken as a whole, from that
reflected in the financial statements referred to in this Section 4.3.
SECTION 4.4. Tax Returns and Payments. All tax returns for Centra (federal,
state, city, county or foreign) which are required by law to be filed on or
before the date of this Agreement, have been duly filed or extended with the
appropriate governmental authority. Centra has paid all taxes to be due on said
returns, any assessments made against Centra, and all other taxes, fees and
similar charges imposed on Centra by any governmental authority (other than
those, the amount or validity of which is being contested in good faith by
appropriate proceedings). No tax liens have been filed and no claims are being
assessed with respect to any such taxes, fees or other similar charges.
SECTION 4.5. Required Authorizations. There have been or will be timely filed,
given, obtained or taken, all applications, notices, consents, approvals,
orders, registrations, qualifications waivers or other actions of any kind
required by virtue of execution and delivery of this Agreement by Centra or the
consummation by it of the transactions contemplated hereby.
SECTION 4.6. Compliance with Law and Government Regulations. Centra is in
material compliance with all applicable federal, state, local or foreign
statutes, laws and regulations (including without limitation, any applicable
building, zoning or other law, ordinance or regulation) affecting their
properties or operation of their
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businesses. Centra is not subject to any order, decree, judgment or other
sanction of any court, administrative agency or other tribunal.
SECTION 4.7. Litigation. Except as set forth in Schedule 4.7, there is no
material litigation, arbitration, proceeding or investigation pending or
threatened to which Centra is a party or which may result in any material change
in the business or condition, financial or otherwise, of Centra or in any of its
properties or assets, or which if determined against Centra, would have a
material adverse effect against Centra, or which might result in any liability
on the part of Centra, or which questions the validity of this Agreement or of
any action taken or to be taken pursuant to or in connection with the provisions
of this Agreement, and to the best knowledge of Centra, there is no basis for
any such litigation, arbitration, proceeding or investigation.
SECTION 4.8. Patents, Trade Names and Rights. Schedule 4.8 contains a complete
list of all patents, trademarks and service marks and all trademark, service
xxxx and copyright registrations, applications and licenses owned or held by
Centra. Centra has no knowledge of any facts and nothing has come to its
attention that would lead it to believe that Centra has infringed,
misappropriated, or is infringing upon any trademark, copyright, patent or other
similar right of any person. No claim relating thereto is pending or, to the
knowledge of Centra, is threatened.
SECTION 4.9. Employee Benefit Plans. Schedule 4.9 lists Centra's bonus, deferred
compensation, incentive compensation, stock purchase, stock option, severance or
termination pay, hospitalization or other medical, life or other insurance,
supplemental unemployment benefits, profit-sharing, pension, or retirement plan,
program, agreement or arrangement, other employee benefit plan, program,
agreement or arrangement (other than arrangements involving the payment of
wages), sponsored, maintained or contributed to or required to be contributed to
by Centra or any of its subsidiaries or by any trade or business, whether or not
incorporated (an "ERISA Affiliate") that together with Centra or any of its
subsidiaries would be deemed a "single employer" within the meaning of Section
4001(a)(14) of the Employee Retirement Income Security Act of 1974, as amended,
and the rules and regulations promulgated thereunder ("ERISA"), for the benefit
of any current or former employee, director or officer of Centra or any of its
subsidiaries or any ERISA Affiliate whether formal or informal and whether
legally binding or not with respect to which Centra or any of its subsidiaries
or any ERISA Affiliate has or may in the future have any liability or obligation
to contribute or make payments or any kind.
SECTION 4.10. Governmental Consent. No notices, reports or other filings are
required to be made nor are any consents, registrations, approvals, permits,
authorizations or designations required to be obtained by Centra from any court,
governmental or regulatory authority, agency, commission, body or other
governmental entity, in connection with the execution and delivery of this
Agreement by Centra or the carrying out and consummation of any transactions
contemplated hereby, except those that the failure to make or obtain are not,
individually or in the aggregate, reasonably likely to have a material adverse
effect or prevent, materially delay or materially impair the ability of Centra
to consummate the transactions contemplated by this Agreement.
SECTION 4.11. Authority. Centra and its Shareholders representing no less than
ninety percent (90%) of the issued and outstanding shares of Centra capital
stock of record, have approved this Agreement and duly authorized the execution
and delivery hereof. Centra has full power, authority and legal right to enter
into this Agreement on behalf of Centra, to consummate the transactions
contemplated hereby, and to take all corporate action necessary to authorize the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby. The execution and delivery of this Agreement,
the consummation of the transactions contemplated hereby and compliance by
Centra with the provisions hereof will not (a) conflict with or result in a
breach of any provisions of, or constitute a default (or an event which, with
notice or lapse of
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time or both, would constitute a default) under, or result in the creation of
any lien, security interest, charge or encumbrance upon any of the properties or
assets of Centra under, any of the terms, conditions or provisions of the
Articles of Incorporation or By-Laws of Centra, or any note, bond, mortgage,
indenture, license, agreement or any instrument or obligation to which Centra is
party or by which it is bound; or (b) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to Centra or any of its
properties or assets. Assuming due execution and delivery by the parties hereto,
this Agreement represents the valid and binding agreement of Centra enforceable
against Centra in accordance with its respective term, except as such
enforceability may limited by applicable bankruptcy laws or creditors' rights
generally or by general principles or equity.
SECTION 4.12. Legal Proceedings and History. Except as set forth in Schedule
4.12, Centra represents that no officer, director or affiliate of Centra, will
have been, within the past five years; a party to any bankruptcy petition
against such person or against any business of which such person was affiliated;
convicted in a criminal proceeding or subject to a pending criminal proceeding
(excluding traffic violations and other minor offenses; subject to any order,
judgment or decree, not subsequently reversed, suspended or vacated, of any
court of competent jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting their involvement in any type of business,
securities or banking activities; or found by a court of competent jurisdiction
in a civil action, by the Securities Exchange Commission or the Commodity
Futures Trading Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or vacated.
SECTION 4.13. Ownership of Shares. Shareholders representing not less than
ninety percent (90%) of the Centra capital stock currently issued and
outstanding and which stock is to be transferred to Rako under this Agreement,
have full power and authority to transfer such shares of Centra capital stock to
Rako hereunder, and such shares are free and clear of any liens, charges,
mortgages, pledges or encumbrances and such shares are not subject to any claims
as to the ownership thereof, or any rights, powers or interest therein, by any
third party.
SECTION 4.14. Investment Representations and Covenants.
(i) Centra and Shareholders represent that they are acquiring the Rako
Shares for their own account and for investment only and not with a
view to distribution or resale thereof within the meaning of such
phrase as defined under the Securities Act. The Shareholders may not
dispose of any part or all of the Rako Shares in violation of the
provisions of the Securities Act and the rules and regulations
promulgated under such Act by the Securities and Exchange Commission
("SEC") and all applicable provisions of State securities laws and
regulations.
(ii) Legend. The certificate or certificates representing the Rako
Shares shall bear a legend in substantially the following form:
"The Shares represented hereby have not been registered under the
Securities Act of 1933 and have been acquired for investment and not
with a view to distribution or resale. Such Shares may not be sold,
mortgaged, pledged, hypothecated or otherwise transferred except in
compliance with the terms of an Agreement dated December 13, 2002. A
copy of the Agreement may be examined at the Company's offices.
(iii) Acknowledgment of Restrictions. The Shareholders acknowledge
being informed that the Rako Shares are unregistered and must be held
indefinitely unless they (i) are subsequently registered under the
Securities Act, or (ii) an exemption from such registration is
available, and (iii) Rako will not have
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an obligation to currently register the Rako Shares for the account of
Shareholders other than as contemplated in the Stockholders Agreement.
(iv) Access to Information. The Shareholders acknowledge that they have
been afforded access to all material information which they have
requested relevant to Shareholders' decision to acquire the Rako Shares
and to ask questions of Rako's management and that, except as set forth
herein, neither Rako nor anyone acting on behalf of Rako has made any
representations or warranties to the Shareholders which have induced,
persuaded or stimulated Shareholders to acquire the Rako Shares.
(v) Eligibility. Either alone, or together with their investment
advisor(s), the Shareholders have the knowledge and experience in
financial and business matters to be capable of evaluating the merits
and risks of the prospective investment in the Rako Shares, and the
Shareholders are and will be able to bear the economic risk of the
investment in the Rako Shares.
SECTION 4.15. Full Disclosure. None of the representations and warranties made
by Centra herein, or in any schedule, certificate or memorandum furnished or to
be furnished by Centra, contains or will contain any untrue statement of
material fact, or omit any material fact, the omission of which would be
misleading.
ARTICLE V
COVENANTS OF CENTRA
SECTION 5.1. Conduct Prior to the Closing. Centra covenants and agrees that
after the date hereof and prior to the Closing (unless Rako will otherwise
approve in writing, which approval will not be unreasonably withheld):
(a) Centra will not declare, set aside or pay any dividends or
distributions payable in cash, stock or property, in respect of its
capital stock;
(b) Centra will not amend its Articles of Incorporation or By-Laws,
except for any amendment which will not hinder, delay or make more
costly to Rako the transactions contemplated by this Agreement;
(c) Centra will comply with all requirements which federal or state law
may impose on it with respect to this Agreement and the transactions
contemplated hereby, and will promptly cooperate with and furnish
written information to Rako in connection with any such requirements
imposed upon the parties hereto in connection therewith;
(d) Except within the regular course of business, Centra will not incur
any indebtedness for money borrowed, issue or sell any debt securities,
incur or suffer to be incurred any liability or obligation of any
nature whatsoever, cause or permit any lien, encumbrance or security
interest to be created or arise on or in any of its properties or
assets, acquire or dispose of fixed assets, change employment terms,
enter into any material or long-term contract, guarantee obligations of
any third party, settle or discharge any balance sheet receivable for
less than its stated amount or enter into any other transaction, except
to comply with the terms of this Agreement; and
(e) Centra will grant to Rako and its counsel, accountants and other
representatives, full access during normal business hours during the
period prior to the Closing to all its respective properties,
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books, contracts, commitments and records and, during such period,
furnish promptly to Rako and such representatives all information
relating to Centra as Rako may reasonably request, and will extend to
Rako the opportunity to meet with Centra's accountants and attorneys to
discuss the financial condition of Centra.
SECTION 5.2. Affirmative Covenants. Prior to Closing, Centra will do the
following:
(a) Use its best efforts to accomplish all actions necessary to
consummate this Agreement, including satisfaction of all the conditions
contained in this Agreement; and
(b) Promptly notify Rako in writing of any materially adverse change in
the financial condition, business, operations or key personnel of
Centra, any breach of its representations or warranties contained
herein, and any material contract, agreement, license or other
agreement which, if in effect on the date of this Agreement, should
have been included in this Agreement.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby, will be paid by the
party incurring such expense or as otherwise agreed to herein.
SECTION 6.2. Brokers and Finders. Each of the parties hereto represents, as to
itself, that no agent, broker, investment banker or firm or person is or will be
entitled to any broker's or finder's fee or any other commission or similar fee
in connection with any of the transactions contemplated by this Agreement,
except as may be otherwise set forth herein or by separate document.
SECTION 6.3. Necessary Actions. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use all reasonable efforts to
take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
In the event at any time after the Closing, any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper executive
officers and/or directors of Rako or Centra, as the case may be, will take all
such necessary action.
SECTION 6.4. Indemnification.
(a) From and after the Closing of this Agreement, Centra and
Shareholders agree to indemnify, defend and hold harmless Rako and each
person who is now, or has been at any time prior to the date of this
Agreement, or who becomes prior to the Closing a director or officer of
Rako, against any costs or expenses (including reasonable attorneys'
fees), judgments, fines, losses, claims, demands, liabilities, damages
and deficiencies, including interest and penalties, incurred or
suffered in connection with any claim action, suit, proceeding or
investigation, whether civil, criminal or administrative, arising out
of matters existing or occurring prior to the Closing, whether asserted
or claimed prior to, at or after the Closing, which is based in whole
or in part on, or arising in whole or in part out of the fact that such
person is or was a director or officer of Rako including, without
limitation, all losses, claims, damages, costs, expenses, liabilities,
judgments or settlement amounts based in whole or in part on, or
arising in whole or in part out of, or pertaining to this Agreement or
the transactions contemplated hereby to the fullest extent that Rako
could have been permitted under
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applicable state laws and its certificate of incorporation, by-laws and
other agreements in effect on the date hereof to indemnify such
individual. Notwithstanding the foregoing, no indemnity shall be
provided to Rako or any such director or officer in respect of the
following:
(i) any matter alleging a violation of the 1933 Act or 1934
Act in respect of events or filings made with the SEC, NASD,
NASDAQ, any State agency or any stock exchange prior to the
Closing;
(ii) any matter alleging a breach of Rako's representations,
warranties and/or covenants in this Agreement; or
(iii) any matter alleging the director or office willfully
acted in violation of his duty under applicable law.
(b) From and after the Closing of this Agreement, Rako agrees to
indemnify, defend and hold harmless Centra, the Shareholders and each
person who is now, or has been at any time prior to the date of this
Agreement, or who becomes prior to the Closing a director or officer of
Centra, against any costs or expenses (including reasonable attorneys'
fees), judgments, fines, losses, claims, demands, liabilities, damages
and deficiencies, including interest and penalties, incurred or
suffered in connection with any claim action, suit, proceeding or
investigation, whether civil, criminal or administrative, arising out
of matters existing or occurring prior to the Closing, whether asserted
or claimed prior to, at or after the Closing, which is based in whole
or in part on, or arising in whole or in part out of the fact that such
person is or was a director or officer of Rako including, without
limitation, all losses, claims, damages, costs, expenses, liabilities,
judgments or settlement amounts based in whole or in part on, or
arising in whole or in part out of, or pertaining to this Agreement or
the transactions contemplated hereby to the fullest extent that Centra
could have been permitted under applicable state laws and its
certificate of incorporation, by-laws and other agreements in effect on
the date hereof to indemnify such individual. Notwithstanding the
foregoing, no indemnity shall be provided to Centra or any such
Shareholder, director or officer in respect of the following:
(i) any matter alleging a breach of Centra's representations,
warranties and/or covenants in this Agreement; or
(ii) any matter alleging the Shareholder, director or officer
willfully acted in violation of his duty under applicable law.
(c) Any indemnified party wishing to claim indemnification under
subsection (a) or (b) of this Section 6.4, upon leaning of any such
claim, action , suit, proceeding or investigation, will promptly notify
Centra if under subsection (a), or Rako if under subsection (b), but
failure to so notify the appropriate party will not relieve the
indemnifying party from any liability which it may have under this
Section 6.4 except to the extent such failure materially prejudices
such party. In the event of any such claim, action, suit, proceeding or
investigation, (i) the indemnifying party will have the right to assume
the defense thereof and will not be liable to any such indemnified
party in connection with the defense thereof, (ii) the indemnified
party will cooperate in all respects as requested by the indemnifying
party in the defense of any such matter, and (iii) the indemnifying
party will not be liable for any settlement effected without its prior
written consent, which consent will not be unreasonably withheld;
provided, however, that the indemnifying party will not have any
obligation hereunder to any indemnified party if and when a court will
ultimately determine, and such determination will have
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become final, that the indemnification of such indemnified party in the
manner contemplated hereby is prohibited by law.
SECTION 6.5. Confidentiality. All parties hereto agree to keep confidential this
Agreement and all information and documents relating to this Agreement until
such time as the Agreement and the transactions contemplated hereunder are made
public by means of an appropriate press release or by any other means reasonably
assured to make such information publicly available.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE PARTIES
The respective obligations of each party to this Agreement are subject
to the fulfillment, satisfaction or waiver at or prior to the Closing of each of
the following conditions:
SECTION 7.1. Legal Action. No federal or state court or other governmental
entity of competent jurisdiction will have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, judgment, decree, preliminary
or permanent injunction or other order that is in effect and restrains, enjoins
or otherwise prohibits consummation of the transactions contemplated by this
Agreement (collectively, an "Order"), and no governmental entity will have
instituted any proceeding or formally threatened to institute any proceeding
seeking any such Order and such proceeding or threat remains unresolved.
SECTION 7.2. Absence of Termination. The obligations to consummate the
transactions contemplated hereby will not have been canceled pursuant to Article
X hereof.
SECTION 7.3. Required Approvals. Rako and Centra will have received all such
approvals, consents, authorizations or modifications as may be required to
permit the performance by Rako and Centra of the respective obligations under
this Agreement, and the consummation of the transactions herein contemplated,
whether from governmental authorities or other persons, and Rako and Centra will
each have received any and all permits and approvals from any regulatory
authority having jurisdiction required for the lawful consummation of this
Agreement.
SECTION 7.4. Blue Sky Compliance. There will have been obtained any and all
permits, approvals and consents of the Securities or "Blue Sky" Commissions of
any jurisdictions, and of any other governmental body or agency, which counsel
for Rako may reasonably deem necessary or appropriate so that consummation of
the transactions contemplated by this Agreement may be in compliance with all
applicable laws.
SECTION 7.5. Accounting and Tax Compliance. Rako and Centra shall have received
from Van Buren & Xxxxx LLC, CPA's, a "cold comfort" letter providing written
assurances that the financial statements of Rako and Centra are in proper form
to meet all pertinent filing requirements of the SEC under the 1933 Act and the
1934 Act and the consolidation of such financial statements and income tax
returns after the Closing will comply with generally accepted accounting
principles and all applicable rules and regulations of the SEC and the IRS.
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ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF RAKO
All obligations of Rako under this Agreement are subject to the
fulfillment and satisfaction by Centra prior to or at the time of the Closing,
of each of the following conditions, any one or more of which may be waived by
Rako.
SECTION 8.1. Representations and Warranties True at the Closing. All
representations and warranties of Centra contained in this Agreement will be
true and correct in all material respects as of the date of this Agreement and,
except to the extent such representations and warranties speak as of an earlier
date, as of the time of the Closing as though made on and as of the Closing, and
Centra will have delivered to Rako a closing certificate, dated the date of the
Closing, to such effect and in the form and substance reasonably satisfactory to
Rako, and signed, in the case of Centra, by its president and secretary.
SECTION 8.2. Performance. Each of the obligations of Centra to be performed on
or before the Closing pursuant to the terms of this Agreement will have been
duly performed at such time, and Centra will have delivered to Rako a closing
certificate, dated the date of the Closing, to such effect and in form and
substance reasonably satisfactory to Rako.
SECTION 8.3. Authority. All action required to be taken by, or on the part of
Centra to authorize the execution, delivery and performance of this Agreement by
Centra and the consummation of the transactions contemplated hereby, will have
been duly and validly taken.
SECTION 8.4. Absence of Certain Changes or Events. There will not have occurred,
since the date hereof, any adverse change in the business, condition, (financial
or otherwise), assets or liabilities of Centra, or any event or condition of any
character adversely affecting Centra, and Centra will have delivered to Rako, a
closing certificate, dated the date of the Closing, to such effect and in form
and substance reasonably satisfactory to Rako and signed, in the case of Centra,
by its president and secretary.
SECTION 8.5. Acceptance by Centra Shareholders . The holders of record as of the
Closing of an aggregate of not less than ninety percent (90%) of the issued and
outstanding shares of capital stock of Centra will have agreed to exchange their
shares for the Rako shares specified herein.
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ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF CENTRA
All obligations of Centra under this Agreement are subject to the
fulfillment and satisfaction by Rako, prior to or at the time of Closing, of
each of the following conditions, any one or more of which may be waived by
Centra.
SECTION 9.1. Representations and Warranties True at the Closing. All
representations and warranties of Rako contained in this Agreement will be true
and correct in all material respects as of the date of this Agreement and,
except to the extent such representations and warranties speak as of an earlier
date, as of the time of the Closing as though made on and as of the Closing, and
Rako will have delivered to Centra a certificate, dated the date of the Closing,
to such effect and in the form and substance reasonably satisfactory to Centra,
and signed, in the case of Rako, by its president and secretary.
SECTION 9.2. Performance. Each of the obligations of Rako to be performed on or
before the Closing pursuant to the terms of this Agreement will have been duly
performed at the time of the Closing, and Rako will have delivered to Centra a
closing certificate, dated the date of the Closing, to such effect and in form
and substance reasonably satisfactory to Centra, and signed, in the case of
Rako, by its president and secretary.
SECTION 9.3. Authority. All action required to be taken by, or on the part of
Rako, to authorize the execution, delivery and performance of this Agreement by
Rako, and the consummation of the transactions contemplated hereby will be duly
and validly taken.
SECTION 9.4. Absence of Certain Changes or Events. There will not have occurred,
since the date hereof, any adverse change in the business, condition, (financial
or otherwise), assets or liabilities of Rako or any event or condition of any
character adversely affecting Rako and Rako will have delivered to Centra, a
closing certificate, dated the date of the Closing, to such effect and in form
and substance reasonably satisfactory to Centra and signed, in the case of Rako
by its president and secretary.
ARTICLE X
TERMINATION
SECTION 10.1. Termination. Notwithstanding anything herein or elsewhere to the
contrary, this Agreement may be terminated and the transactions contemplated
hereby abandoned and/or rescinded:
(a) By mutual written agreement of all the parties hereto at any time,
whether before or after the approval of this Agreement by the
respective parties;
(b) By the board of directors of Rako at any time prior to the Closing
if:
(i) a condition to Rako's performance under this Agreement or
a covenant of Centra contained herein will not be fulfilled on
or before the time of the Closing or at such other time and
date specified for the fulfillment for such covenant or
condition;
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(ii) a material default or breach of this Agreement will be
made by Centra, or
(iii) the Closing will not have taken place on or prior to
December 31, 2002.
(c) By the board of directors of Centra at any time prior to the
Closing if:
(i) a condition to Centra's performance under this Agreement
or a covenant of Rako contained in this Agreement will not be
fulfilled on or before the Closing or at such other time and
date specified for the fulfillment of such covenant or
conditions;
(ii) a material default or breach of this Agreement will be
made by Rako; or
(iii) the Closing will not have taken place on or prior to
December 31, 2002.
SECTION 10.2. Effect of Termination. If this Agreement is terminated, this
Agreement, except as to Section 11.1 and Section 11.2, will become void and of
no further effect and there will be no liability on the part of any party hereto
or any of its respective directors, officers, employees, agents, shareholders,
legal, accounting and financial advisors or other representatives; provided
however, that in the case of a termination pursuant to Sections 10.1(b)(i) or
(ii) or 10.1(c)(i) or (ii) hereof, the damages which the aggrieved party or
parties may recover from the defaulting party or parties will in no event exceed
the amount of out-of-pocket costs and expenses actually incurred by such
aggrieved party or parties in connection with this Agreement, and no party to
this Agreement will be entitled to any injunctive relief. It is further agreed
to by the parties hereto that upon the termination of this Agreement pursuant to
Section 10.1 above, all shares of Rako common stock (Rako shares) issued
hereunder will be returned to Rako to be canceled on its stock ledger and, in
the event such Rako shares are not returned to Rako, Rako will have the absolute
right to immediately proceed with the cancellation of the Rako shares without
having possession thereof.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Cost and Expenses. All costs and expenses incurred in connection
with this Agreement will be paid by the party incurring such expenses. In the
event of any termination of this Agreement pursuant to Section 10.1, subject to
the provisions of Section 10.2, Rako and Centra will each bear their own
respective expenses.
SECTION 11.2. Extension of Time: Waivers. At any time prior to the Closing date:
(a) Rako may (i) extend the time for the performance of any of the
obligations or other acts of Centra, (ii) waive any inaccuracies in the
representations and warranties of Centra contained herein or in any
document delivered pursuant hereto by Centra, and (iii) waive
compliance with any of the agreements or conditions contained herein to
be performed by Centra. Any agreement on the part of Rako to any such
extension or waiver will be valid only if set forth in an instrument,
in writing, signed on behalf of Rako;
(b) Centra may (i) extend the time for the performance of any of the
obligations or other acts of Rako, (ii) waive any inaccuracies in the
representations and warranties of Rako contained herein or in any
document delivered pursuant hereto by Rako and (iii) waive compliance
with any of the
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agreements or conditions contained herein to be performed by Rako. Any
agreement on the part of Centra and to any such extension or waiver
will be valid only if set forth in an instrument, in writing, signed on
behalf of Centra.
SECTION 11.3. Notices. Any notice to any party hereto pursuant to this Agreement
will be in writing and given by Certified or Registered Mail or by facsimile,
addressed as follows:
RAKO CAPITAL CORPORATION CENTRA INDUSTRIES, INC.
c/x Xxxxxxx Xxxxx LLC Two North College Avenue
000 Xxxxx Xxxxxx, 00xx Xxxxx Xxxxxxxxxxxx, Xxxxxxxx 00000
Xxx Xxxx, Xxx Xxxx 00000 Attn.: Xxxx Xxxxxxxx
Fax: (000) 000-0000 Fax: (000) 000-0000
Attention: Xxx X. Xxxxxx, Esq.
Copy to: Copy to:
Xxx X. Xxxxxx, Esq. Xxx X. Xxxxxx, Esq.
Reitler Xxxxx LLC Reitler Xxxxx LLC
000 Xxxxx Xxxxxx, 21st Floor 000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000 Fax: (000) 000-0000
Additional notices are to be given as to each party, at such other
address as should be designated in writing complying as to delivery with the
terms of this Section 11.3. All such notices will be effective when received.
SECTION 11.4. No Personal Liability. This Agreement will not create or be deemed
to create any personal liability or obligation on the part of any direct or
indirect shareholder of Rako, Centra, or any of their respective officers,
directors, employees, agents or representative.
SECTION 11.5. Parties in Interest. This Agreement will inure to the benefit of
and be binding upon the parties hereto and the respective successors and
assigns. Nothing in this Agreement is intended to confer, expressly or by
implication, upon any other person any rights or remedies under or by reason of
this Agreement.
SECTION 11.6. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all together will
constitute one document. The delivery by facsimile of an executed counterpart of
this Agreement will be deemed to be an original and will have the full force and
effect of an original executed copy.
SECTION 11.7. Severability. The provisions of this Agreement will be deemed
severable and the invalidity or unenforceability of any provision hereof will
not affect the validity or enforceability of any of the other provisions hereof.
If any provisions of this Agreement, or the application thereof to any person or
any circumstance, is illegal, invalid or unenforceable, (a) a suitable and
equitable provision will be substituted therefor in order to carry out, so far
as may be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision, and (b) the remainder of this Agreement and the
application of such provision to other persons or circumstances will not be
affected by such invalidity or unenforceability, nor will such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
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SECTION 11.8. Headings. The Article and Section headings are provided herein for
convenience of reference only and do not constitute a part of this Agreement and
will not be deemed to limit or otherwise affect any of the provisions hereof.
SECTION 11.9. Governing Law. This Agreement will be deemed to be made in and in
all respects will be interpreted, construed and governed by and in accordance
with the law of the State of Nevada without regard to the conflict of law
principles thereof.
SECTION 11.10. Survival of Representations and Warranties. All terms,
conditions, representations and warranties set forth in this Agreement or in any
instrument, certificate, opinion, or other writing providing for in it, will
survive the Closing and the delivery of the Shares of Rako common stock to be
issued hereunder at the Closing for a period of one year after Closing,
regardless of any investigation made by or on behalf of any of the parties
hereto.
SECTION 11.11. Assignability. This Agreement will not be assignable by operation
of law or otherwise and any attempted assignment of this Agreement in violation
of this subsection will be void.
SECTION 11.12. Amendment. This Agreement may be amended with the approval of
Shareholders and the boards of directors of Rako and Centra at any time before
or after approval thereof by shareholders of Rako and Centra, if required; but
after such approval, if required, no amendment will be made which substantially
and adversely changes the terms hereof. This Agreement may not be amended except
by an instrument, in writing, signed on behalf of each of the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement in a manner legally binding upon them as of the date first above
written.
"RAKO" "CENTRA"
RAKO CAPITAL CORPORATION CENTRA INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxx X. Xxxxx
--------------------------------- ----------------------------------
Xxxx X. Xxxxx, President Xxxx X. Xxxxx, C.E.O.
Attest: Attest:
/s/ Xxxx X. Xxxxxxxx /s/ Xxxx X. Xxxxxxxx
------------------------------------ -------------------------------------
Xxxx X. Xxxxxxxx, Secretary Xxxx X. Xxxxxxxx, Secretary
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"SHAREHOLDERS" OF CENTRA INDUSTRIES, INC. NO. OF SHARES
LAGO LIMITED LIABILITY COMPANY
By:/s/ XXXXX X. XXXXXXXX 11,946,263
-------------------------------------
XXXXX X. XXXXXXXX
/s/ XXXX X. XXXXXXXX 481,728
----------------------------------------
XXXX X. XXXXXXXX
/s/ XXXXXX XXXXXXX XXXXXX 329,878
----------------------------------------
XXXXXX XXXXXXX XXXXXX
/s/ XXXXX XXXXX 329,878
----------------------------------------
XXXXX XXXXX
/s/ XXXX XXXXX 663,847
----------------------------------------
XXXX XXXXX
THE XXXXXXX TRUST
By /s/ XXXX XXXXXXX 663,847
----------------------------------------
XXXX XXXXXXX, TRUSTEE
/s/ XXXX X. XXXXX 435,762
----------------------------------------
XXXX X. XXXXX
XXXXX FAMILY TRUST 42,513
By:/s/ XXXX X. XXXXX
-------------------------------------
TRUSTEE
TOTAL 14,893,716
-22-
