STOCK ACQUISITION AND REORGANIZATION AGREEMENT
THIS STOCK ACQUISITION AND REORGANIZATION AGREEMENT ("Agreement") is
made and entered into in duplicate effective the 6th day of July, 2001
("Effective Date"), by and among CCB Corp., a Nevada corporation ("CCB");
xxxxxxxxxxxxxxx.xxx, a Nevada corporation ("xxxxxxxxxxxxxxx.xxx"); and those
persons specified more particularly on that schedule attached to this Agreement
marked as Exhibit A, the provisions of which, by this reference, are made a part
of this Agreement as though specified completely and specifically at length in
this Agreement. For convenience, the persons specified in Exhibit A of this
Agreement shall be referred to in this Agreement, collectively, as the
"Shareholders" and any of them may be referred to in this Agreement,
individually, as a "Shareholder".
RECITALS
A. The Shareholders own 10,555,714 shares of the $.001 par value common
stock of xxxxxxxxxxxxxxx.xxx, which are all of the issued and outstanding shares
of $.001 par value common stock of xxxxxxxxxxxxxxx.xxx ("Shares").
B. The Shareholders desire to exchange all of the Shares for 10,555,714
shares of the $.001 par value common stock of CCB ("CCB Common Stock"), on the
terms and subject to the conditions specified by the provisions of this
Agreement.
C. The Board of Directors of (i) xxxxxxxxxxxxxxx.xxx and (ii) CCB have
determined that it is advisable and appropriate and in the best interests of the
those corporations and their respective shareholders that the exchange
contemplated by the provisions of Recital B of this Agreement occur, on the
terms and subject to the conditions specified by the provisions of this
Agreement.
D. The parties to this Agreement desire that the transaction contemplated
by the provisions of this Agreement satisfy the requirements of Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated pursuant thereto.
NOW, THEREFORE, IN CONSIDERATION OF THE RECITALS SPECIFIED ABOVE THAT SHALL BE
DEEMED TO BE A SUBSTANTIVE PART OF THIS AGREEMENT, AND THE MUTUAL COVENANTS,
PROMISES, UNDERTAKINGS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES SPECIFIED IN
THIS AGREEMENT AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, WITH THE INTENT TO BE OBLIGATED
LEGALLY AND EQUITABLY, THE PARTIES DO HEREBY COVENANT, PROMISE, AGREE, REPRESENT
AND WARRANT AS FOLLOWS:
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ARTICLE I
DEFINITIONS
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For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Article I:
"Applicable Contract" -- any Contract (a) pursuant to which a Person
(defined below) has or may acquire any rights, (b) pursuant to which such Person
has or may become subject to any obligation or liability, or (c) by which such
person or any of the assets owned or used by such Person is or may become
obligated.
"Best Efforts" -- the efforts that a prudent Person desiring to achieve
a result would use in similar circumstances to ensure that such result is
achieved as expeditiously as possible.
"Breach" -- a "Breach" of a representation, warranty, covenant,
obligation, or other provision of this Agreement or any instrument delivered
pursuant to this Agreement will be deemed to have occurred if there is or has
been (a) any inaccuracy in or breach of, or any failure to perform or comply
with, such representation, warranty, covenant, obligation, or other provision,
or (b) any claim (by any Person) or other occurrence or circumstance that is or
was inconsistent with such representation, warranty, covenant, obligation, or
other provision, and the term "Breach" means any such inaccuracy, breach,
failure, claim, occurrence, or circumstance.
"CCB"-- CCB Corp., a Nevada corporation, as defined in the preamble of
this Agreement.
"CCB Common Stock" -- the $.001 par value common stock of CCB, for
which the Shareholders will transfer all the issued and outstanding stock of
xxxxxxxxxxxxxxx.xxx.
"Consent" -- any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization (defined below)).
"Contemplated Transactions" -- all of the transactions contemplated by
this Agreement, including; but not limited to:
(a) the transfer of the Shares by the Shareholders to CCB in
exchange for 10,555,714 shares of $.001 par value common stock of CCB;
(b) the performance by CCB and the Shareholders of their
respective covenants and obligations pursuant to this Agreement;
(c) CCB's acquisition and ownership of the Shares and assumption
of control of xxxxxxxxxxxxxxx.xxx;
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(d) the appointment of Xxxxx X. Pink as a director of CCB;
(e) the appointment of Xxx Xxxxx as a director of CCB;
(f) the appointment of Xxxx X. Xxxxx as a director of CCB;
(g) the appointment of Xxxxxxx Xxxxxxx as a director of CCB;
(h) the appointment of Xxxxx Xxxxx as a director of CCB; and
(i) the resignation of Xxxx Xxxxxxx as an officer and director
of CCB.
"Contract" -- any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally obligating.
"Effective Date" -- the date upon which this Agreement is signed and
delivered by the parties hereto, as defined in the preamble of this Agreement.
"Employee Benefit Plan" -- any "Employee Pension Benefit Plan" (as
defined in Section 3(2) of ERISA (defined below), "Employee Welfare Benefit
Plan" (as defined in Section 3(1) of ERISA), "Multi-employer Plan" (as defined
in Section 3(37) of ERISA), plan of deferred compensation, medical plan, life
insurance plan, long-term disability plan, dental plan or other plan providing
for the welfare of any of employees or former employees of a Person or
beneficiaries thereof (as applicable), personnel policy (including, but not
limited to, vacation time, holiday pay, bonus programs, moving expense
reimbursement programs and sick leave), excess benefit plan, bonus or incentive
plan (including, but not limited to, stock options, restricted stock, stock
bonus and deferred bonus plans), salary reduction agreement, change-of-control
agreement, employment agreement, consulting agreement or any other benefit,
program, agreement or contract.
"Encumbrance" -- any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right of
first refusal, or restriction of any nature whatsoever, including any
restriction on use, voting, transfer, receipt of income, or exercise of any
other attribute of ownership.
"Environment" -- soil, land surface or subsurface strata, surface
waters (including navigable waters, ocean waters, streams, ponds, drainage
basins, and wetlands), groundwaters, drinking water supply, stream sediments,
ambient air (including indoor air), plant and animal life, and any other
environmental medium or natural resource.
"Environmental, Health, and Safety Liabilities" -- any cost, damages,
expense, liability, obligation, or other responsibility arising from or pursuant
to applicable Environmental Law (defined below) or Occupational Safety and
Health Law (defined below) and consisting of or relating to:
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(a) any environmental, health, or safety matters or conditions
(including on-site or off-site contamination, occupational safety and health,
and regulation of chemical substances or products);
(b) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and response,
investigative, remedial, or inspection costs and expenses arising pursuant to
Environmental Law or Occupational Safety and Health Law, including consultant
and attorney fees;
(c) financial responsibility pursuant to Environmental Law or
Occupational Safety and Health Law for cleanup costs or corrective action,
including any investigation, cleanup, removal, containment, or other remediation
or response actions ("Cleanup") required by applicable Environmental Law or
Occupational Safety and Health Law (whether or not such Cleanup has been
required or requested by any Governmental Body (defined below) or any other
Person) and for any natural resource damages; or
(d) any other compliance, corrective, investigative, or remedial
measures required pursuant to Environmental Law or Occupational Safety and
Health Law.
The terms "removal," "remedial," and "response action," include the
types of activities specified by the United States Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. Sections 9601 et seq., as
amended ("CERCLA").
"Environmental Law" -- any Legal Requirement (defined below) that
requires or relates to:
(a) advising appropriate authorities, employees, and the public of
intended or actual releases of Hazardous Materials (defined below), violations
of discharge limits, or other prohibitions and of the commencements of
activities, such as resource extraction or construction, that could have
significant impact on the Environment;
(b) preventing or reducing to acceptable amounts the release of
Hazardous Materials into the Environment;
(c) reducing the quantities, preventing the release, or
minimizing the hazardous characteristics of wastes that are generated;
(d) assuring that products are designed, formulated, packaged, and used
so that these products do not present unreasonable risks to human health or the
Environment when used or disposed of;
(e) protecting resources, species, or ecological amenities;
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(f) reducing to acceptable amounts the risks inherent in the
transportation of Hazardous Materials;
(g) cleaning up Hazardous Materials that have been released,
preventing the threat of release, or paying the costs of such clean up or
prevention; or
(h) making responsible parties pay private parties, or groups of them,
for damages done to their health or the Environment, or permitting
self-appointed representatives of the public interest to recover for injuries
done to public assets.
"ERISA" -- the Employee Retirement Income Security Act of 1974, or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"Exchange Act" -- the Securities Exchange Act of 1934, or any successor
law, and regulations and rules issued pursuant that Act of any successor law.
"Facilities" -- any real property, leaseholds, or other interests
currently or formerly owned or operated by a Person and any buildings, plants,
structures, or equipment (including motor vehicles, aircraft, and rolling stock)
currently or formerly owned or operated by such Person.
"GAAP" -- generally accepted accounting principles, applied on a
consistent basis.
"Governmental Authorization" -- any approval, consent, license, permit,
waiver, or other authorization issued, granted, given, or otherwise made
available by or pursuant to the authority of any Governmental Body or pursuant
to any Legal Requirement (defined below).
"Governmental Body" -- any:
(a) nation, state, commonwealth, county, city, town, village,
district, xxxx, or other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other government;
(c) governmental or quasi-governmental authority of any nature
whatsoever (including any governmental agency, branch,
department, official, or entity and any court or other
tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature whatsoever.
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"Hazardous Activity" -- the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
Release (defined below), storage, transfer, transportation, treatment, disposal
or use (including any withdrawal or other use of groundwater) of Hazardous
Materials in, on, under, about, or from Facilities or any part thereof into the
Environment, and any other act, omission, business, operation, or thing that
increases the danger, or risk of danger, or poses an unreasonable risk of harm
to persons or property on or off Facilities, or that may affect the value of
Facilities.
"Hazardous Materials" -- any waste or other substance that is
regulated, listed, defined, designated, or classified as, or otherwise
determined to be, hazardous, radioactive, or toxic or a pollutant or a
contaminant pursuant to any Environmental Law, including any mixture or solution
thereof, and specifically including petroleum and all derivatives thereof or
synthetic substitutes therefor, polychlorinated biphenyls ("PCBs") and asbestos
or asbestos-containing materials.
"Intellectual Property" -- (i) works of authorship including, without
limitation, computer programs, source code and executable code, whether embodied
in software, firmware or otherwise, documentation, designs, files, records, data
and mask works; (ii) inventions (whether or not patentable), improvements, and
technology; (iii) proprietary and confidential information, trade secrets and
know how; (iv) databases, data compilations and collections and technical data;
(v) logos, trade names, trade dress, trademarks and service marks; (vi) domain
names, web addresses and sites; (vii) tools, methods and processes; and (viii)
all instantiations of the foregoing in any form and embodied in any media.
"IRC" -- the Internal Revenue Code of 1986, or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code or any
successor law.
"IRS" -- the United States Internal Revenue Service, or any successor
agency, and, to the extent relevant, the United States Department of the
Treasury.
"Knowledge" -- an individual will be deemed to have "Knowledge" of a
particular fact or other matter if such individual should have been aware of
such fact or other matter, after reasonable investigation thereof.
A Person (other than an individual) will be deemed to have "Knowledge"
of a particular fact or other matter if any individual who is serving, or who
has at any time served, as a director, officer, partner, manager, executor, or
trustee of such Person (or in any similar capacity) has, or at any time had,
Knowledge of such fact or other matter.
"Legal Requirement" -- any and every federal, state, local, municipal,
foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation, statute, or
treaty, including but not limited to, filings required to be filed with the SEC
pursuant to the Securities Act and Exchange Act.
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"xxxxxxxxxxxxxxx.xxx"-- xxxxxxxxxxxxxxx.xxx, a Nevada corporation, as
defined in the preamble of this Agreement.
"Occupational Safety and Health Law" -- any Legal Requirement designed
to provide safe and healthful working conditions and to reduce occupational
safety and health hazards, and any program, whether governmental or private
(including those promulgated or sponsored by industry associations and insurance
companies), designed to provide safe and healthful working conditions.
"Order" -- any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"Ordinary Course of Business" -- an action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business" only if:
(a) such action is consistent with the past practices of such
Person and is taken in the ordinary course of the normal day-to-day operations
of such Person;
(b) such action is not required to be authorized by the Board
of Directors of such Person (or by any Person or group of Persons having
similar authority); and
(c) such action is similar in nature and magnitude to actions
customarily taken, without any authorization by the Board of Directors of such
Person (or by any Person or group of Persons exercising similar authority), in
the ordinary course of the normal day-to-day operations of other Persons that
are in the same business as such Person.
"Organizational Documents" -- (a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) the partnership agreement and
any statement of partnership of a general partnership; (c) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership; (d) the articles of organization and the operating agreement of a
limited liability company; (e) any charter or similar document adopted or filed
in connection with the creation, formation, or organization of a Person; and (f)
any amendment to any of the foregoing.
"Person" -- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company,
fraternal organization, group, joint venture, estate, trust, association,
organization, labor union, or other entity or Governmental Body.
"Plan Affiliate" -- with respect to any Person, any other person or
entity with whom the Person constitutes all or part of a controlled group, or
which would be treated with the Person as under common control or whose
employees would be treated as employed by the Person, pursuant to Section 414 of
the IRC and any regulations, administrative rulings and case law interpreting
the foregoing.
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"Proceeding" -- any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.
"Related Person"
(a) with respect to a particular individual:
(i) each other member of such individual's Family (defined
below);
(ii) any Person that is directly or indirectly controlled by
such individual or one or more members of such individual's Family;
(iii) any Person in which such individual or members of such
individual's Family hold (individually or in the aggregate) a Material
Interest (defined below); and
(iv) any Person with respect to which such individual or one or
more members of such individual's Family serves as a director,
officer, partner, executor, or trustee (or in a similar capacity).
(b) With respect to a specified Person other than an individual:
(i) any Person that directly or indirectly controls, is directly
or indirectly controlled by, or is directly or indirectly under common
control with such specified Person;
(ii) any Person that holds a Material Interest in such specified
Person;
(iii) each Person that serves as a director, officer, partner,
executor, or trustee of such specified Person (or in a similar
capacity);
(iv) any Person in which such specified Person holds a Material
Interest;
(v) any Person with respect to which such specified Person
serves as a general partner, manager or a trustee (or in a similar
capacity); and
(vi) any Related Person of any individual described in clause
(ii) or (iii) of this Subsection (b).
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For purposes of this definition, (a) the "Family" of an individual
includes (i) the individual, (ii) the individual's spouse, (iii) any other
natural person who is related to the individual or the individual's spouse
within the second degree, and (iv) any other natural person who resides with
such individual, and (b) "Material Interest" means direct or indirect beneficial
ownership (as defined in Rule 13d-3 pursuant to the Exchange Act) of voting
securities or other voting interests representing at least 10% of the
outstanding voting power of a Person or equity securities or other equity
interests representing at least 10% of the outstanding equity securities or
equity interests in a Person.
"Release" -- any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping, or other release into the Environment, whether
intentional or unintentional.
"Reorganization" -- The exchange of CCB Common Stock for all of the
Shares, pursuant to Section 368(a)(1)(B) of the Code.
"Representative" -- with respect to a particular Person, any director,
officer, manager, employee, agent, consultant, advisor, or other representative
of such Person, including legal counsel, accountants, and financial advisors.
"SEC" -- the Securities and Exchange Commission.
"Securities Act" -- the Securities Act of 1933, or any successor law,
and regulations and rules issued pursuant that Act or any successor law.
"Shareholders" -- the persons specified in Exhibit A of this Agreement.
"Shares" -- as defined in the Recital A of this Agreement.
"Subsidiary" -- with respect to any Person (the "Owner"), any
corporation or other Person of which securities or other interests having the
power to elect a majority of that corporation's or other Person's Board of
Directors or similar governing body, or otherwise having the power to direct the
business and policies of that corporation or other Person (other than securities
or other interests having such power only upon the happening of a contingency
that has not occurred) are held by the Owner or one or more of its Subsidiaries.
"Tax" -- Any tax, charge, fee, levy, interest, penalty, addition to tax
or other assessment, including, but not limited to, income, provincial, excise,
property "real, tangible personal or intangible personal", sales, use, gross
receipts, business and occupation, value added and franchise tax, license,
recording, documentation and registration fee and customs duty, imposed by any
Governmental Body and any payment with respect thereto required pursuant to any
tax sharing agreement.
"Tax Return" -- any return (including any information return), report,
statement, schedule, notice, form, or other document or information filed with
or submitted to, or required to be filed with or submitted to, any Governmental
Body in connection with the determination, assessment, collection, or payment of
any Tax or in connection with the administration, implementation, or enforcement
of or compliance with any Legal Requirement relating to any Tax.
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"Threat of Release" -- a substantial probability of a Release that may
require action in order to prevent or mitigate damage to the Environment that
may result from such Release.
"Threatened" -- a claim, Proceeding, dispute, action, or other matter
will be deemed to have been "Threatened" if any demand or statement has been
made (orally or in writing) or any notice has been given (orally or in writing),
or if any other event has occurred or any other circumstances exist, that would
cause a prudent Person to conclude that such a claim, Proceeding, dispute,
action, or other matter probably will be asserted, commenced, taken, or
otherwise pursued in the future.
ARTICLE II
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REORGANIZATION AND REGISTRATION
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2.1 Qualifying "B" Reorganization. Pursuant to the requirements of
Section 368(a)(1)(B) of the IRC and the regulations promulgated pursuant
thereto, on the Effective Date CCB will issue and deliver or cause to be issued
and delivered to the Shareholders 10,555,714 shares of CCB $.001 par value
Common Stock in exchange for the Shares. Immediately following such exchange,
CCB shall have "control" (as defined in Section 368(c) of the IRC) of
xxxxxxxxxxxxxxx.xxx.
2.2 Implementation of Reorganization. No later than the Effective Date,
xxxxxxxxxxxxxxx.xxx shall to (i) take all corporate actions and obtain all
approvals and consents necessary to complete the reorganization contemplated by
the provisions of this Agreement ("Reorganization"); (ii) obtain the consent of
each Person (if such consent is necessary) to the consummation of the
reorganization; (iii) file any and all necessary documents, returns, notices and
applications with all Governmental Bodies necessary or appropriate to complete
the Reorganization; (iv) deliver and transfer the certificates representing and
evidencing the Shares, together with stock powers duly endorsed in blank with
signatures guaranteed by xxxxxxxxxxxxxxx.xxx's transfer agent.
2.3 Obligations upon Execution. On the Effective Date
xxxxxxxxxxxxxxx.xxx shall deliver or cause to be delivered to CCB certificates
representing the Shares, duly endorsed (or accompanied by duly executed stock
powers), for transfer to CCB.
(b) CCB shall deliver to or cause to be delivered the Shareholders
certificates evidencing and representing 10,555,714 shares of CCB $.001 par
value Common Stock.
(c) CCB shall deliver or cause to be delivered to nightclubaccess
.com:
(i) a director's resolution appointing Xxxx X. Xxxxx, Xxx Xxxxx
and Xxxxxxx Xxxxxxx as members of CCB's Board of Directors; and
(ii) a letter of resignation executed by Xxxx Xxxxxxx pursuant
to which Xxxx Xxxxxxx resigns as the only officer and director of CCB.
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2.4 Shareholders Representative. The Shareholders hereby irrevocably,
unconditionally and forever designate and appoint, Xxxx Xxxxx as their agent and
attorney in fact (the "Shareholders' Representative") with full and complete
power and authority to execute, deliver, and receive on their behalf all
notices, requests, and other communications pursuant to this Agreement; to
waive, amend, or modify any provisions of this Agreement, and to take such other
action on their behalf in connection with this Agreement and the Contemplated
Transactions as the Shareholders' Representative determines to be necessary or
appropriate; provided, however, that no such waiver, amendment, or modification
may be made if it would decrease the number of shares of CCB Common Stock to be
issued to the Shareholders pursuant to this Agreement or increase the extent of
their obligations, if any.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF SHAREHOLDERS AND XXXXXXXXXXXXXXX.XXX
---------------------------------------
XxxxxXxxxXxxxxx.xxx and the Shareholders jointly and severally
represent and warrant to CCB as follows:
3.1 Organization and Good Standing.
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(a) Xxxxxxxxxxxxxxx.xxx is a corporation duly organized, validly
existing, and in good standing pursuant to the laws of its jurisdiction of
incorporation, with full and complete corporate power and authority to conduct
its business as it is now being conducted, to own or use the properties and
assets that it purports to own or use, and to perform all its obligations
pursuant to Applicable Contracts. Xxxxxxxxxxxxxxx.xxx is duly qualified to do
business as a foreign corporation and is in good standing pursuant to the laws
of each state or other jurisdiction in which either the ownership or use of the
properties owned or used by it, or the nature of the activities conducted by it,
requires such qualification.
(b) Xxxxxxxxxxxxxxx.xxx has delivered to CCB true and correct
copies of the Organizational Documents of xxxxxxxxxxxxxxx.xxx, as currently
in effect.
3.2 Authority; No Conflict.
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(a) This Agreement constitutes the legal, valid, and binding obligation
of xxxxxxxxxxxxxxx.xxx and the Shareholders, enforceable against
xxxxxxxxxxxxxx.xxx and the Shareholders, and each of them, in accordance with
its terms. Xxxxxxxxxxxxxxx.xxx and the Shareholders, and each of them have the
absolute and unrestricted right, power, authority, and capacity to execute and
deliver this Agreement and to perform their obligations pursuant to this
Agreement, and the Shareholders and xxxxxxxxxxxxxxx.xxx, and each of them, have
the absolute and unrestricted right, power, authority, and capacity to execute
and deliver this Agreement.
(b) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated Transactions will,
directly or indirectly (with or without notice or lapse of time):
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(i) contravene, conflict with, or result in a violation of (A)
any provision of the Organizational Documents of xxxxxxxxxxxxxxx.xxx,
or (B) any resolution adopted by the Board of Directors or the
shareholders of xxxxxxxxxxxxxxx.xxx;
(ii) contravene, conflict with, or result in a violation of, or
give any Governmental Body or other Person the right to challenge any
of the Contemplated Transactions or to exercise any remedy or obtain
any relief pursuant to, any Legal Requirement or any Order to which
xxxxxxxxxxxxxxx.xxx or any Shareholder, or any of the assets owned or
used by xxxxxxxxxxxxxxx.xxx, may be subject;
(iii) contravene, conflict with, or result in a violation of any
of the terms or requirements of, or give any Governmental Body the
right to revoke, withdraw, suspend, cancel, terminate, or modify, any
Governmental Authorization that is held by xxxxxxxxxxxxxxx.xxx or that
otherwise relates to the business of, or any of the assets owned or
used by xxxxxxxxxxxxxxx.xxx;
(iv) cause CCB or xxxxxxxxxxxxxxx.xxx to become subject to, or
to become liable for the payment of, any Tax;
(v) cause any of the assets owned by xxxxxxxxxxxxxxx.xxx to be
reassessed or revalued by any taxing authority or other Governmental
Body;
(vi) contravene, conflict with, or result in a violation or
breach of any provision of, or give any Person the right to declare a
default or exercise any remedy pursuant to, or to accelerate the
maturity or performance of, or to cancel, terminate, or modify, any
Applicable Contract; or
(vii) result in the imposition or creation of any Encumbrance
upon or with respect to any of the assets owned or used by
xxxxxxxxxxxxxxx.xxx.
(c) Neither xxxxxxxxxxxxxxx.xxx nor any Shareholder is or will be
required to give any notice to or obtain any Consent from any Person in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of the Contemplated Transactions.
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(d) The Shareholders are acquiring the CCB Common Stock for their own
accounts and not with an intention of distribution (as that term is contemplated
by the provisions of Section 2(11) of the Securities Act). Each of the
Shareholders, each a shareholder of xxxxxxxxxxxxxxx.xxx who is signing this
Agreement, severally and not jointly, represents and warrants to CCB that such
Shareholder (i) is an accredited investor within the meaning of Rule 501(a) of
Regulation D or, if not such an accredited investor, has, alone or together with
a purchaser representative within the meaning of Rule 501(h) of Regulation D,
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of an acquisition of the CCB Common Stock, on
the terms and subject to the conditions specified in this Agreement; (ii) is
aware of the restriction regarding the transferability of the CCB Common Stock
imposed because of the nature of the Contemplated Transactions resulting from
the provisions of Rule 144; and (iii) is receiving the CCB Common Stock without
registration pursuant to the Securities Act, in reliance on the exemption from
the registration and prospectus delivery requirements of the Securities Act
specified in Section 4(2) of the Securities Act and Rule 506 of Regulation D for
investment purposes only, and without any intent to sell, resell, or otherwise
distribute any of the CCB Common Stock in any manner that is in violation of the
Securities Act. The certificates representing and evidencing the CCB Common
Stock, when delivered to the Shareholders, may have appropriate orders
restricting transfer placed against them on the records of the transfer agent
for that common stock, and may have placed upon them the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE BEEN ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION PURSUANT TO THE SECURITIES ACT OF 1933. THOSE
SECURITIES MAY NOT BE TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF, UNLESS THE TRANSFEROR FIRST SATISFIES THE ISSUER AND ITS COUNSEL THAT THE
PROPOSED TRANSFER, IN THE MANNER PROPOSED, DOES NOT VIOLATE THE REGISTRATION
REQUIREMENTS OF THAT ACT.
Each Shareholder shall not attempt to transfer of any of the CCB Common
Stock without first complying with the substance of that legend and agrees that
the satisfaction of CCB may, if CCB so requests, depend in part upon an opinion
of counsel acceptable in form and substance to CCB, a no-action letter of the
United States Securities and Exchange Commission, or equivalent evidence. Each
Shareholder acknowledges, without limitation, that the foregoing agreement and
representation shall apply to the CCB Common Stock issued to such Shareholder.
3.3 Capitalization. The authorized capitalization of
xxxxxxxxxxxxxxx.xxx consists of 200,000,000 shares of $.001 par value common
stock, of which 10,555,714 shares of stock are issued and outstanding, all of
which issued and outstanding shares constitute the "Shares." The Shareholders
are the record and beneficial owners and holders of the Shares, free and clear
of all Encumbrances. Exhibit A to this Agreement sets forth the ownership of the
Shares. No legend or other reference to any purported Encumbrance appears on any
certificate representing the Shares. All of the Shares have been duly authorized
and validly issued and are fully paid and nonassessable. Except for the
Contemplated Transactions, there are no Contracts relating to the issuance,
sale, or transfer of any equity securities or other securities of
xxxxxxxxxxxxxxx.xxx. None of the Shares were issued in violation of the
Securities Act or any other Legal Requirement. Except for the Contemplated
Transactions, xxxxxxxxxxxxxxx.xxx does not own, or has any Contract to acquire,
any equity securities or other securities of any Person or any direct or
indirect equity or ownership interest in any other business.
3.4 Options, Warrants and Other Rights and Agreements Affecting
xxxxxxxxxxxxxxx.xxx's Capital Stock. Xxxxxxxxxxxxxxx.xxx has no authorized or
outstanding options, warrants, calls, subscriptions, rights, convertible
securities or other "securities", as defined by the provisions of the Securities
Act, or any commitments, agreements, arrangements or understandings of any
manner or nature whatsoever obligating xxxxxxxxxxxxxxx.xxx, in any event, to
issue shares of xxxxxxxxxxxxxxx.xxx's capital stock or other securities or
securities convertible into or evidencing the right to purchase shares of
xxxxxxxxxxxxxxx.xxx's capital stock or other securities. Neither
xxxxxxxxxxxxxxx.xxx nor any officer, director, or shareholder of
xxxxxxxxxxxxxxx.xxx is a party to any agreement, understanding, arrangement or
commitment, or obligated by any provision which creates any rights in any person
with respect to the authorization, issuance, voting, sale or transfer of any
shares of xxxxxxxxxxxxxxx.xxx's capital stock or other securities.
13
3.5 Financial Statements. Xxxxxxxxxxxxxxx.xxx has delivered to CCB an
unaudited balance sheet of xxxxxxxxxxxxxxx.xxx as of December 31, 2000,
("xxxxxxxxxxxxxxx.xxx Balance Sheet"), and the related unaudited financial
statements for the fiscal year then ended (collectively, the
"xxxxxxxxxxxxxxx.xxx Financial Statements"). The xxxxxxxxxxxxxxx.xxx Financial
Statements and notes thereto fairly present the financial condition and the
results of operations, of xxxxxxxxxxxxxxx.xxx as at the respective dates of and
for the periods referred to in the xxxxxxxxxxxxxxx.xxx Financial Statements, all
in accordance with GAAP, and the xxxxxxxxxxxxxxx.xxx Financial Statements
present the consistent application of GAAP throughout the periods involved.
3.6 Books and Records. The books of account, minute books, stock record
books, and other records of xxxxxxxxxxxxxxx.xxx, all of which have been
delivered to CCB, are complete and correct and have been maintained in
accordance with competent business practices. The minute book of
xxxxxxxxxxxxxxx.xxx contains accurate and complete records of all meetings held
of, and corporate actions taken by, the stockholders, the Boards of Directors,
and committees of the Boards of Directors of xxxxxxxxxxxxxxx.xxx, and no meeting
of any such stockholders, Board of Directors, or committee has been held for
which minutes have not been prepared and are not contained in such minute book.
Upon the execution of this Agreement, all of those books and records will be in
the possession of xxxxxxxxxxxxxxx.xxx.
3.7 Title to Properties; Encumbrances. Xxxxxxxxxxxxxxx.xxx owns no real
property or any interest therein. Xxxxxxxxxxxxxxx.xxx owns all the properties
and assets (whether tangible or intangible) that xxxxxxxxxxxxxxx.xxx purports to
own, including all of the properties and assets specified in the
xxxxxxxxxxxxxxx.xxx Balance Sheet (except for assets and property sold since the
date of the xxxxxxxxxxxxxxx.xxx Balance Sheet, in the Ordinary Course of
Business), and all of the properties and assets purchased or otherwise acquired
by xxxxxxxxxxxxxxx.xxx since the date of the xxxxxxxxxxxxxxx.xxx Balance Sheet
(except for personal property acquired and sold since the date of the
xxxxxxxxxxxxxxx.xxx Balance Sheet in the Ordinary Course of Business and
consistent with past practice). All properties and assets specified in that
Balance Sheet are free and clear of all Encumbrances. Neither the whole nor any
portion of any property held by xxxxxxxxxxxxxxx.xxx is subject to any
governmental decree or Order to be sold or is being condemned, expropriated or
otherwise taken by any Governmental Body or any Person with or without payment
compensation therefor, nor, is any such condemnation, expropriation or taking
being proposed.
3.8 Condition and Sufficiency of Assets. The assets and properties of
xxxxxxxxxxxxxxx.xxx are in good operating condition and repair, and are adequate
for the uses to which they are being put, and none of those assets and
properties is in need of maintenance or repairs except for ordinary, routine
maintenance and repairs that are not material in nature or cost. The equipment
of xxxxxxxxxxxxxxx.xxx are sufficient for the continued conduct of
xxxxxxxxxxxxxxx.xxx's business after the Effective Date in substantially the
same manner as conducted prior to the Effective Date.
14
3.9 Accounts Receivable. All accounts receivable of xxxxxxxxxxxxxxx.xxx
that are specified on the xxxxxxxxxxxxxxx.xxx Financial Statements or in the
accounting records of xxxxxxxxxxxxxxx.xxx as of the Effective Date
(collectively, the "xxxxxxxxxxxxxxx.xxx Accounts Receivable") represent or will
represent valid obligations resulting from sales actually made or services
actually performed in the Ordinary Course of Business. The xxxxxxxxxxxxxxx.xxx
Accounts Receivable are current and collectible net of the respective reserves
shown on the xxxxxxxxxxxxxxx.xxx Balance Sheet or in the accounting records of
xxxxxxxxxxxxxxx.xxx as of the Effective Date (which reserves are adequate and
calculated consistent with past practice and, in the case of the reserve as of
the Effective Date, will not represent a greater percentage of the
xxxxxxxxxxxxxxx.xxx Accounts Receivable as of the Effective Date than the
reserve specified in the xxxxxxxxxxxxxxx.xxx Balance Sheet and will not
represent a material adverse change in the composition of the
xxxxxxxxxxxxxxx.xxx Accounts Receivable in terms of aging). Subject to such
reserves, each of the xxxxxxxxxxxxxxx.xxx Accounts Receivable either has been or
will be collected in full, without any set-off, within 90 days after the day on
which it first becomes due and payable. There is no contest, claim, or right of
set-off, other than returns in the Ordinary Course of Business, pursuant to any
Contract with any obligor of a xxxxxxxxxxxxxxx.xxx Accounts Receivable relating
to the amount or validity of such xxxxxxxxxxxxxxx.xxx Accounts Receivable.
3.10 Inventory. All inventory of xxxxxxxxxxxxxxx.xxx, whether or not
specified in the Balance Sheet, consists of a quality and quantity usable and
salable in the Ordinary Course of Business, except for obsolete items and items
of below-standard quality, all of which have been written off or written down to
net realizable value in the xxxxxxxxxxxxxxx.xxx Balance Sheet or on the
accounting records of xxxxxxxxxxxxxxx.xxx as of the Effective Date, as the case
may be. All such inventories not written off have been priced at the lower of
cost or market on a first in, first out basis. The quantities of each item of
inventory of xxxxxxxxxxxxxx.xxx are not excessive, but are reasonable in the
present circumstances of xxxxxxxxxxxxxxx.xxx.
3.11 No Undisclosed Liabilities. Xxxxxxxxxxxxxxx.xxx has no liabilities
or obligations of any nature (whether known or unknown and whether absolute,
accrued, contingent, or otherwise) except for liabilities or obligations
specified or reserved against in the xxxxxxxxxxxxxxx.xxx Balance Sheet and
current liabilities incurred in the Ordinary Course of Business since the date
of the xxxxxxxxxxxxxxx.xxx Balance Sheet.
3.12 Taxes.
------
(a) Xxxxxxxxxxxxxxx.xxx has filed or caused to be filed on a timely
basis all Tax Returns that are or were required to be filed by
xxxxxxxxxxxxxxx.xxx pursuant to applicable Legal Requirements.
Xxxxxxxxxxxxxxx.xxx has delivered to CCB copies of all such Tax Returns filed
since the date of formation of xxxxxxxxxxxxxxx.xxx. Xxxxxxxxxxxxxxx.xxx has
paid, or made provision for the payment of, all Taxes that have or may have
become due pursuant to those Tax Returns or otherwise, or pursuant to any
assessment received by xxxxxxxxxxxxxxx.xxx, except such Taxes, if any, as are
being contested in good faith and as to which adequate reserves (determined in
accordance with GAAP) have been provided in the xxxxxxxxxxxxxxx.xxx Balance
Sheet.
15
(b) All deficiencies proposed as a result of all audits of such Tax
Returns have been paid, reserved against, settled, or, are being contested in
good faith by appropriate proceedings. There have been no adjustments to the
United States federal income Tax Returns filed by xxxxxxxxxxxxxxx.xxx for all
taxable years since the date of formation of xxxxxxxxxxxxxxx.xxx and the
resulting deficiencies proposed by the IRS. Xxxxxxxxxxxxxxx.xxx has not given or
been requested to give any waiver or extension (or is or would be subject to a
waiver or extension given by any other Person) of any statute of limitations
relating to the payment of Taxes of xxxxxxxxxxxxxxx.xxx or for which
xxxxxxxxxxxxxxx.xxx may be liable.
(c) The charges, accruals and reserves with respect to Taxes on the
xxxxxxxxxxxxxxx.xxx Financial Statements are adequate (determined in accordance
with GAAP) and are at least equal to xxxxxxxxxxxxxxx.xxx's liability for Taxes.
There exists no proposed tax assessment against xxxxxxxxxxxxxxx.xxx, except as
disclosed in the xxxxxxxxxxxxxxx.xxx Balance Sheet. No consent to the
application of Section 341(f)(2) of the IRC has been filed with respect to any
property or asset held, acquired, or to be acquired by xxxxxxxxxxxxxxx.xxx. All
Taxes that xxxxxxxxxxxxxxx.xxx is or was required by Legal Requirements to
withhold or collect have been duly withheld or collected and, to the extent
required, have been paid to the proper Governmental Body or other Person.
(d) All Tax Returns filed by (or that include on a consolidated basis)
xxxxxxxxxxxxxxx.xxx are true, correct, and complete. There is no tax sharing
agreement that will require any payment by xxxxxxxxxxxxxxx.xxx after the
Effective Date. Xxxxxxxxxxxxxxx.xxx is not, nor during any period preceding the
Effective Date has been, an "S" corporation. During the consistency period (as
defined in Section 338(h)(4) of the IRC with respect to the sale of the Shares),
xxxxxxxxxxxxxxx.xxx has not sold and will not sell any property or assets to CCB
or to any member of an affiliated group (as defined in Section 338(h)(5) of the
IRC) that includes CCB.
3.13 No Material Adverse Change. Since the date of the
xxxxxxxxxxxxxxx.xxx Balance Sheet there has not been any material adverse change
in the business, operations, properties, prospects, assets, or condition of
xxxxxxxxxxxxxxx.xxx, and no event has occurred or circumstance exists that may
result in such a material adverse change.
3.14 Employee Benefits. Neither xxxxxxxxxxxxxxx.xxx nor any Plan
Affiliate of xxxxxxxxxxxxxxx.xxx has maintained, sponsored, adopted, made
contributions to or obligated itself to make contributions to or to pay any
benefits or grant rights pursuant to or with respect to any Employee Benefit
Plan, whether or not written, which could result in xxxxxxxxxxxxxxx.xxx or such
Plan Affiliate having any material debt, liability, claim or obligation of any
kind or nature whatsoever, whether accrued, absolute, contingent, direct,
indirect, known or unknown, perfected or inchoate or otherwise and whether or
not due or to become due. There has not been any act or omission by
xxxxxxxxxxxxxxx.xxx pursuant to ERISA or the terms of the Employee Benefit
Plans, or any other applicable law or agreement which could result in any
liability of xxxxxxxxxxxxxxx.xxx, whether pursuant to ERISA, the IRC or other
laws or agreements.
16
3.15 Compliance with Legal Requirements; Governmental Authorizations.
----------------------------------------------------------------
(a) xxxxxxxxxxxxxxx.xxx is and has been in full compliance with
each Legal Requirement that is or was applicable to
xxxxxxxxxxxxxxx.xxx or to the conduct or operation of the business of
xxxxxxxxxxxxxxx.xxx or the ownership or use of any of the assets of
xxxxxxxxxxxxxxx.xxx;
(b) no event has occurred or circumstance exists that (with or
without notice or lapse of time) (A) may constitute or result in a
violation by xxxxxxxxxxxxxxx.xxx of, or a failure on the part of
xxxxxxxxxxxxxxx.xxx to comply with, any Legal Requirement, or (B) may
result, in any obligation on the part of xxxxxxxxxxxxxxx.xxx to
undertake, or to pay all or any portion of the cost of, any remedial
action of any nature, including pursuant to any Environmental, Health,
and Safety Liability; and
(c) xxxxxxxxxxxxxxx.xxx has not received any notice or other
communication (whether oral or written) from any Governmental Body or
any other Person regarding (A) any actual, alleged, possible, or
potential violation of, or failure to comply with, any Legal
Requirement, or (B) any actual, alleged, possible, or potential
obligation on the part of xxxxxxxxxxxxxxx.xxx to undertake, or to pay
all or any portion of the cost of, any remedial action of any nature,
including pursuant to any Environmental, Health, and Safety Liability.
(d) xxxxxxxxxxxxxxx.xxx is and has been in full compliance with
all of the terms and requirements of each Governmental Authorization
held by nightclubaccess or that otherwise relates to the business of,
or to any of the assets owned or used by, xxxxxxxxxxxxxxx.xxx.
(e) no event has occurred or circumstance exists that may (with
or without notice or lapse of time) (A) constitute or result, directly
or indirectly, in a violation of or a failure to comply with any term
or requirement of any such Governmental Authorization, or (B) result,
directly or indirectly, in the revocation, withdrawal, suspension,
cancellation, or termination of, or any modification to, any such
Governmental Authorization.
(f) xxxxxxxxxxxxxxx.xxx has not received any notice or other
communication (whether oral or written) from any Governmental Body or
any other Person regarding (A) any actual, alleged, possible, or
potential violation of or failure to comply with any term or
requirement of any Governmental Authorization, or (B) any actual,
proposed, possible, or potential revocation, withdrawal, suspension,
cancellation, termination of, or modification to any Governmental
Authorization; and
(g) all applications required to have been filed for the renewal
of such Governmental Authorizations have been duly filed on a timely
basis with the appropriate Governmental Bodies, and all other filings
required to have been made with respect to such Governmental
Authorizations have been duly made on a timely basis with the
appropriate Governmental Bodies.
(h) Such Governmental Authorizations, collectively, constitute
all of the Governmental Authorizations necessary to permit
xxxxxxxxxxxxxxx.xxx to conduct and operate its business lawfully in
the manner xxxxxxxxxxxxxxx.xxx currently conducts and operates such
business and to permit xxxxxxxxxxxxxxx.xxx to own and use its assets
in the manner in which xxxxxxxxxxxxxxx.xxx currently owns and uses
such assets.
17
3.16 Legal Proceedings; Orders.
-----------------------------------
(a) that has been commenced by or against xxxxxxxxxxxxxxx.xxx or
that otherwise relates to or may affect the business of, or any of the
assets owned or used by, xxxxxxxxxxxxxxx.xxx; or
(b) that challenges, or that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions.
(c) To the Knowledge of the Shareholders and
xxxxxxxxxxxxxxx.xxx, (1) no such Proceeding has been Threatened, and
(2) no event has occurred or circumstance exists that may result in or
serve as a basis for the commencement of any such Proceeding, which
will not have a material adverse effect on the business, operations,
assets, condition, or prospects of xxxxxxxxxxxxxxx.xxx.
(d) there is no Order to which xxxxxxxxxxxxxxx.xxx, or any of
the assets owned or used by xxxxxxxxxxxxxxx.xxx, is subject;
(e) no Shareholder is subject to any Order that relates to the
business of, or any of the assets owned or used by,
xxxxxxxxxxxxxxx.xxx; and
(f) no officer, director, agent, or employee of
xxxxxxxxxxxxxxx.xxx is subject to any Order that prohibits such
officer, director, agent, or employee from engaging in or continuing
any conduct, activity, or practice relating to the business of
xxxxxxxxxxxxxxx.xxx.
(g) xxxxxxxxxxxxxxx.xxx is and has been in full compliance with
all of the terms and requirements of each Order to which
xxxxxxxxxxxxxxx.xxx, or any of the assets owned or used by
xxxxxxxxxxxxxxx.xxx, is or has been subject;
(h) no event has occurred or circumstance exists that may
constitute or result in (with or without notice or lapse of time) a
violation of or failure to comply with any term or requirement of any
Order to which xxxxxxxxxxxxxxx.xxx, or any of the assets owned or used
by xxxxxxxxxxxxxxx.xxx, is subject; and
(i) xxxxxxxxxxxxxxx.xxx has not received any notice or other
communication (whether oral or written) from any Governmental Body or
any other Person regarding any actual, alleged, possible, or potential
violation of, or failure to comply with, any term or requirement of
any Order to which xxxxxxxxxxxxxxx.xxx, or any of the assets owned or
used by xxxxxxxxxxxxxxx.xxx, is or has been subject.
18
3.17 Absence of Certain Changes and Events. Since the date of the
xxxxxxxxxxxxxxx.xxx Balance Sheet, xxxxxxxxxxxxxxx.xxx has conducted
xxxxxxxxxxxxxxx.xxx's business only in the Ordinary Course of Business and
there has not been any:
(a) change in xxxxxxxxxxxxxxx.xxx's authorized or issued capital stock;
grant of any stock option or right to purchase shares of capital stock of
xxxxxxxxxxxxxxx.xxx; issuance of any security convertible into such capital
stock; grant of any registration rights; purchase, redemption, retirement, or
other acquisition by xxxxxxxxxxxxxxx.xxx of any shares of any such capital
stock; or declaration or payment of any dividend or other distribution or
payment in respect of shares of capital stock;
(b) amendment to the Organizational Documents of xxxxxxxxxxxxxxx.xxx;
(c) payment or increase by xxxxxxxxxxxxxxx.xxx of any bonuses,
salaries, or other compensation to any stockholder, director, officer, or
(except in the Ordinary Course of Business) employee or entry into any
employment, severance, or similar Contract with any director, officer, or
employee;
(d) adoption of, or increase in the payments to or benefits pursuant
to, any profit sharing, bonus, deferred compensation, savings, insurance,
pension, retirement, or other employee benefit plan for or with any employees of
xxxxxxxxxxxxxxx.xxx;
(e) damage to or destruction or loss of any asset or property of
xxxxxxxxxxxxxxx.xxx, whether or not covered by insurance, materially and
adversely affecting the properties, assets, business, financial condition, or
prospects of xxxxxxxxxxxxxxx.xxx, taken as a whole;
(f) entry into, termination of, or receipt of notice of termination of
(i) any license, distributorship, dealer, sales representative, joint venture,
credit, or similar agreement, or (ii) any Contract or transaction involving a
total remaining commitment by or to xxxxxxxxxxxxxxx.xxx equal to or exceeding
$10,000.00;
(g) sale (other than sales of inventory in the Ordinary Course of
Business), lease, or other disposition of any asset or property of
xxxxxxxxxxxxxxx.xxx or mortgage, pledge, or imposition of any lien or other
encumbrance on any material asset or property of xxxxxxxxxxxxxxx.xxx, including
the sale, lease, or other disposition of any of the xxxxxxxxxxxxxxx.xxx
Intellectual Property Assets;
(h) cancellation or waiver of any claims or rights with a value
to xxxxxxxxxxxxxxx.xxx equal to or exceeding $10,000.00;
(i) material change in the accounting methods used by
xxxxxxxxxxxxxxx.xxx; or
(j) agreement, whether oral or written, by xxxxxxxxxxxxxxx.xxx to
do any of the foregoing.
19
3.18 Contracts; No Defaults.
--------------------------------
(a) Xxxxxxxxxxxxxxx.xxx has delivered to CCB true and complete copies
of all the Contracts with a value of at least $10,000.00 to which
xxxxxxxxxxxxxxx.xxx is a party or pursuant to which xxxxxxxxxxxxxxx.xxx or any
of its properties is obligated.
(b) no Shareholder (and no Related Person of any Shareholder) has or
may acquire any rights pursuant to, and no Shareholder has or may become subject
to any obligation or liability pursuant to, any Contract that relates to the
business of, or any of the assets owned or used by, xxxxxxxxxxxxxxx.xxx; and
(c) no officer, director, agent, employee, consultant, or contractor
of xxxxxxxxxxxxxxx.xxx is obligated by any Contract that purports to limit the
ability of such officer, director, agent, employee, consultant, or contractor to
(A) engage in or continue any conduct, activity, or practice relating to the
business of xxxxxxxxxxxxxxx.xxx, or (B) assign to xxxxxxxxxxxxxxx.xxx or to any
other Person any rights to any invention, improvement, or discovery.
(d) Each such Contract is in full force and effect and is valid and
enforceable in accordance with its terms.
(e) xxxxxxxxxxxxxxx.xxx is and has been in full compliance with all
applicable terms and requirements of each Contract pursuant to which
xxxxxxxxxxxxxxx.xxx has or had any obligation or liability or by which
xxxxxxxxxxxxxxx.xxx or any of the assets owned or used by xxxxxxxxxxxxxxx.xxx is
or was obligated;
(f) each other Person that has or had any obligation or liability
pursuant to any Contract pursuant to which xxxxxxxxxxxxxxx.xxx has or had any
rights is and has been in full compliance with all applicable terms and
requirements of such Contract;
(g) no event has occurred or circumstance exists that (with or without
notice or lapse of time) may contravene, conflict with, or result in a violation
or breach of, or give xxxxxxxxxxxxxxx.xxx or any other Person the right to
declare a default or exercise any remedy pursuant to, or to accelerate the
maturity or performance of, or to cancel, terminate, or modify, any Applicable
Contract; and
(h) xxxxxxxxxxxxxxx.xxx has not given to or received from any other
Person any notice or other communication (whether oral or written) regarding any
actual, alleged, possible, or potential violation or breach of, or default
pursuant to, any Contract.
(i) There are no renegotiations of, attempts to renegotiate, or
outstanding rights to renegotiate any material amounts paid or payable to
xxxxxxxxxxxxxxx.xxx pursuant to current or completed Contracts with any Person
and no such Person has made written demand for such renegotiation.
20
(j) Any and all Contracts relating to the sale, design, manufacture, or
provision of products or services by xxxxxxxxxxxxxxx.xxx have been entered into
in the Ordinary Course of Business and have been entered into without the
commission of any act either alone or in concert with any other Person, or any
consideration having been paid or promised, that is or would be in violation of
any Legal Requirement.
3.19 Insurance.
-------------------
(a) Xxxxxxxxxxxxxxx.xxx has delivered to CCB:
(i) true and complete copies of all policies of insurance to
which xxxxxxxxxxxxxxx.xxx is a party, or any director or officer of
xxxxxxxxxxxxxxx.xxx, is or has been covered at any time from and after
the date of formation of xxxxxxxxxxxxxxx.xxx;
(ii) true and complete copies of all pending applications for
policies of insurance; and
(iii) any statement by the auditor of xxxxxxxxxxxxxxx.xxx
Financial Statements with regard to the adequacy of such entity's
coverage or of the reserves for claims.
(iv) any self-insurance arrangement by or affecting
xxxxxxxxxxxxxxx.xxx, including any reserves established pursuant
thereto;
(v) any contract or arrangement, other than a policy of
insurance, for the transfer or sharing of any risk by
xxxxxxxxxxxxxxx.xxx; and
(vi) all obligations of xxxxxxxxxxxxxxx.xxx to third parties
with respect to insurance (including such obligations pursuant to
leases and service agreements) and identifies the policy pursuant to
which such coverage is provided.
(vii) a summary of the loss experienced pursuant to each policy;
(viii) a description of each claim pursuant to an insurance
policy for an amount in excess of $10,000.00, which sets forth:
(A) the name of the claimant;
(B) a description of the policy by insurer, type of
insurance, and period of coverage; and
(C) the amount and a brief description of the claim; and
21
(ix) a description of the loss experience for all claims that
were self-insured, including the number and aggregate cost of such
claims.
(b) All policies to which xxxxxxxxxxxxxxx.xxx is a party or that
provide coverage to a Shareholder, xxxxxxxxxxxxxxx.xxx, or any director or
officer of xxxxxxxxxxxxxxx.xxx:
(i) are valid, outstanding, and enforceable;
(ii) are issued by an insurer that is financially capable and
reputable;
(iii) taken together, provide adequate insurance coverage for
the assets and the operations of xxxxxxxxxxxxxxx.xxx for all risks
normally insured against by a Person carrying on the same business or
businesses as xxxxxxxxxxxxxxx.xxx;
(iv) are sufficient for compliance with all Legal Requirements,
Governmental Authorizations and Contracts to which xxxxxxxxxxxxxxx.xxx
is a party or by which xxxxxxxxxxxxxxx.xxx is obligated;
(v) will continue in full force and effect following the
consummation of the Contemplated Transactions; and
(vi) do not provide for any retrospective premium adjustment or
other experienced-based liability on the part of xxxxxxxxxxxxxxx.xxx.
(c) Xxxxxxxxxxxxxxx.xxx has not received (A) any refusal of coverage or
any notice that a defense will be afforded with reservation of rights, or (B)
any notice of cancellation or any other indication that any insurance policy is
not now in full force or effect or will not be renewed or that the issuer of any
policy is not willing or able to perform its obligations pursuant thereto.
(d) Xxxxxxxxxxxxxxx.xxx has paid all premiums due, and have otherwise
performed all of its obligations, pursuant to each policy to which
xxxxxxxxxxxxxxx.xxx is a party or that provides coverage to xxxxxxxxxxxxxxx.xxx
or any director or officer of xxxxxxxxxxxxxxx.xxx.
(e) Xxxxxxxxxxxxxxx.xxx has given notice to the insurer of all
claims that may be insured thereby.
22
3.20 Employees. No employee, officer or director of xxxxxxxxxxxxxxx.xxx
is a party to, or is otherwise obligated by, any agreement or arrangement,
including any confidentiality, noncompetition, or proprietary rights agreement,
between such employee or director and any other Person ("xxxxxxxxxxxxxxx.xxx
Proprietary Rights Agreement") that in any way adversely affects or will affect
(i) the performance of his or her duties as an employee or director of
xxxxxxxxxxxxxxx.xxx, or (ii) the ability of xxxxxxxxxxxxxxx.xxx to conduct its
business, including any xxxxxxxxxxxxxxx.xxx Proprietary Rights Agreement with
any Shareholder or any such employee, officer or director. To the Knowledge of
xxxxxxxxxxxxxxx.xxx, no director, officer, or other key employee of
xxxxxxxxxxxxxxx.xxx intends to terminate his or her employment with
xxxxxxxxxxxxxxx.xxx.
3.21 Labor Relations; Compliance. Xxxxxxxxxxxxxxx.xxx has not been or
is a party to any collective bargaining or other labor Contract. There has not
been, there is not presently pending or existing, and there is not Threatened,
(a) any strike, slowdown, picketing, work stoppage, or employee grievance
process: (b) any Proceeding against or affecting xxxxxxxxxxxxxxx.xxx relating to
the alleged violation of any Legal Requirement pertaining to labor relations or
employment matters, including any charge or complaint filed by an employee or
union with the National Labor Relations Board, the Equal Employment Opportunity
Commission, or any comparable Governmental Body, organizational activity, or
other labor or employment dispute against or affecting xxxxxxxxxxxxxxx.xxx or
its Facilities: or (c) any application for certification of a collective
bargaining agent. No event has occurred or circumstance exists that could
provide the basis for any work stoppage or other labor dispute. There is no
lockout of any employees by xxxxxxxxxxxxxxx.xxx, and no such action is
contemplated by xxxxxxxxxxxxxxx.xxx. Xxxxxxxxxxxxxxx.xxx has complied in all
respects with all Legal Requirements relating to employment, equal employment
opportunity, nondiscrimination, immigration, wages, hours, benefits, collective
bargaining, the payment of social security and similar taxes, occupational
safety and health, and plant closing. Xxxxxxxxxxxxxxx.xxx is not liable for the
payment of any compensation, damages, taxes, fines, penalties, or other amounts,
however designated, for failure to comply with any of the foregoing Legal
Requirements.
3.22 Intellectual Property.
-------------------------------
(a) Xxxxxxxxxxxxxxx.xxx (i) owns all the Intellectual Property listed
and attributed to xxxxxxxxxxxxxxx.xxx in the xxxxxxxxxxxxxxx.xxx Balance Sheet
(the "xxxxxxxxxxxxxxx.xxx Intellectual Property Assets"); (ii) neither owns nor
uses any Intellectual Property not specified in the xxxxxxxxxxxxxxx.xxx Balance
Sheet; (iii) pays no royalties to any Person with respect to any Intellectual
Property; and (iv) has full, complete, unfettered and lawful right to bring
actions for the infringement thereof. Xxxxxxxxxxxxxxx.xxx owns, or possesses
adequate and enforceable rights to use, without payment of royalties, all
licenses, trademarks, tradenames, copyrights, patents, trade secrets and
processes necessary for the conduct of, or use in, its business as the same is
presently being conducted.
(b) xxxxxxxxxxxxxxx.xxx has no Knowledge nor has received any notice to
the effect that any service or product that xxxxxxxxxxxxxxx.xxx provides or
sells, or any process, method, part or material xxxxxxxxxxxxxxx.xxx in its
business may infringe, or is in conflict with, any asserted right of another
Person. There is no pending or Threatened claim or litigation action against
xxxxxxxxxxxxxxx.xxx contesting its right to use or the validity of any of the
xxxxxxxxxxxxxxx.xxx Intellectual Property assets or asserting the misuse by
xxxxxxxxxxxxxxx.xxx of any of the foregoing, which would deprive
xxxxxxxxxxxxxxx.xxx of the right to assert the rights pursuant thereto or which
would prevent the sale of any service provided or sold by xxxxxxxxxxxxxxx.xxx.
3.23 Certain Payments. Neither xxxxxxxxxxxxxxx.xxx nor any director,
officer, agent, or employee of xxxxxxxxxxxxxxx.xxx or any other Person
associated with or acting for or on behalf of xxxxxxxxxxxxxxx.xxx has, directly
or indirectly, (a) made any contribution, gift, bribe, rebate, payoff, influence
payment, kickback, or other payment to any Person, private or public, regardless
of form, whether in money, property, or services (i) to obtain favorable
treatment in securing business; (ii) to pay for favorable treatment for business
secured; (iii) to obtain special concessions or for special concessions already
obtained, for or in respect of xxxxxxxxxxxxxxx.xxx; or (iv) in violation of any
Legal Requirement, or (b) established or maintained any fund or asset that has
not been recorded in the Financial Statements of xxxxxxxxxxxxxxx.xxx.
23
3.24 Disclosure.
--------------------
(a) No representation or warranty of the xxxxxxxxxxxxxxx.xxx in this
Agreement omits to specify a material fact necessary to make the information
specified herein or therein, considering the circumstances in which that
information was furnished, not misleading.
(b) There is no fact known to xxxxxxxxxxxxxx.xxx that has specific
application to xxxxxxxxxxxxxxx.xxx (other than general economic or industry
conditions) and that materially adversely affects or, as far as
xxxxxxxxxxxxxxx.xxx can reasonably foresee, materially threatens, the assets,
business, prospects, financial condition, or results of operations of
xxxxxxxxxxxxxxx.xxx that has not been set forth in this Agreement.
3.25 Relationships with Related Persons. No Shareholder or any Related
Person of the Shareholders or of xxxxxxxxxxxxxxx.xxx has or has had any interest
in any property (whether real, personal, or mixed and whether tangible or
intangible), used in or pertaining to xxxxxxxxxxxxxxx.xxx's business. No
Shareholder or any Related Person of any Shareholder or of xxxxxxxxxxxxxxx.xxx
is or has owned (of record or as a beneficial owner) an equity interest or any
other financial or profit interest in, a Person that has (i) had business
dealings or a material financial interest in any transaction with
xxxxxxxxxxxxxxx.xxx, or (ii) engaged in competition with xxxxxxxxxxxxxxx.xxx
with respect to any line of the products or services of xxxxxxxxxxxxxxx.xxx in
any market presently served by xxxxxxxxxxxxxxx.xxx. No Shareholder or any
Related Person of any Shareholder or of xxxxxxxxxxxxxxx.xxx is a party to any
Contract with, or has any claim or right against, xxxxxxxxxxxxxxx.xxx.
3.26 Brokers or Finders. Neither xxxxxxxxxxxxxxx.xxx nor any
Shareholder nor any of their agents has incurred any obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or other similar payment in connection with this Agreement or the Contemplated
Transactions.
3.27 Corporate Resolutions. Xxxxxxxxxxxxxxx.xxx has delivered to CCB a
certified copy of the resolutions adopted by the Board of Directors of
xxxxxxxxxxxxxxx.xxx authorizing the execution, delivery and performance of this
Agreement and the consummation of the Contemplated Transactions and a
certificate of the Secretary of xxxxxxxxxxxxxxx.xxx, dated the Effective Date,
to the effect that those resolutions were duly adopted and are in full force and
effect and with respect to the authority and incumbency of the officers of
xxxxxxxxxxxxxxx.xxx executing this Agreement.
24
3.28 Take or Pay Contracts. Xxxxxxxxxxxxxxx.xxx is not a party to any
Contracts pursuant to which xxxxxxxxxxxxxxx.xxx is required to purchase a
minimum quantity of utilities, products or services or to make payment therefor.
Xxxxxxxxxxxxxxx.xxx has made no prepayments for utilities, products or services
that xxxxxxxxxxxxxxx.xxx has not utilized.
3.29 Banking Relationships. Xxxxxxxxxxxxxxx.xxx has delivered to CCB
the names and locations of all banks, trust companies, savings and loans
associations and other financial institutions at which xxxxxxxxxxxxxxx.xxx
maintains its safe deposit boxes or accounts of any nature and the names of all
persons authorized to have access there to, draw thereon or make withdrawals
therefrom. Upon request, xxxxxxxxxxxxxxx.xxx will deliver to CCB copies of all
records, including all signatures or authorization cards and the keys pertaining
to safe deposit boxes.
3.30 Further Assurances. Each Shareholder shall cooperate with CCB and
provide such Shareholder's best efforts to assist CCB in connection with the
continuity and orderly transition of the xxxxxxxxxxxxxxx.xxx businesses. At any
time or from time to time, each Shareholder shall, at the request of CCB, take
any and all action necessary or appropriate to put CCB in actual possession and
control of xxxxxxxxxxxxxxx.xxx and shall execute and deliver such further
instruments of sale, conveyance, transfer, assignment and consent and take such
other action as CCB may request in order to sell, convey, transfer, deliver,
assign, and set over to CCB all of the Shares and to confirm the title and
possession thereto or to assist CCB in exercising its rights with respect
thereto.
3.31 Inspection of Books and Records. As CCB is a reporting company
pursuant to the Exchange Act and as CCB may be required to include
xxxxxxxxxxxxxxx.xxx's history, financial or otherwise, in documents to be filed
by xxxxxxxxxxxxxxx.xxx with the SEC in the future, xxxxxxxxxxxxxxx.xxx agrees
that, in order to assist CCB and its attorneys, auditors, officers, directors
and agents (collectively, "CCB Agents") to comply with applicable disclosure
requirements, CCB and CCB Agents shall have the right at any reasonable time to
inspect all books, records and documents of any kind of xxxxxxxxxxxxxxx.xxx.
Such inspection by CCB and CCB Agents may be made in person or by an agent or
attorney, and the right of inspection includes the right to copy and make
abstracts of documents. Xxxxxxxxxxxxxxx.xxx and its officers, directors,
employees, agents and attorneys shall cooperate fully with CCB and CCB Agents in
the preparation of any and all reports which require the reporting of
xxxxxxxxxxxxxxx.xxx's history.
3.32 Representation By Counsel. Xxxxxxxxxxxxxxx.xxx and the
Shareholders, and each of them, hereby acknowledge that they are aware that
xxxxxxxxxxxxxxx.xxx and CCB, and each of them, are represented by Xxxxx Law
Group, as legal counsel, and xxxxxxxxxxxxxxx.xxx and CCB have consented in
writing to the multiple representation of xxxxxxxxxxxxxxx.xxx and CCB by the
Xxxxx Law Group and the resulting conflict of interests. Each Shareholder
acknowledges that such Shareholder has not been represented by Xxxxx Law Group
in connection with any matter whatsoever, including, but not limited, to the
negotiation and preparation of this Agreement or the Contemplated Transactions
and such Shareholder has been advised, urged and encouraged to consult with and
retain such Shareholder's own legal and tax advisors with respect to this
Agreement and Contemplated Transactions. The Shareholders, and each of them,
hereby acknowledge and agree that Xxxxx Law Group has not represented the
Shareholders, or any of them, in connection with this Agreement or the
Contemplated Transactions. Additionally, the Shareholders, and each of them,
hereby acknowledge and agree that they have been advised, urged and encouraged
to seek separate counsel to represent them in connection with this Agreement and
the Contemplated Transactions.
25
ARTICLE IV
----------
REPRESENTATIONS AND WARRANTIES
OF CCB
------------------------------
CCB represents and warrants to xxxxxxxxxxxxxxx.xxx and the
Shareholders, and each of them, as follows:
4.1 Organization and Good Standing.
----------------------------------------
(a) CCB is a corporation duly organized, validly existing, and in good
standing pursuant to the laws of its jurisdiction of incorporation, with full
and complete corporate power and authority to conduct its business as it is now
being conducted, to own or use the properties and assets that it purports to own
or use, and to perform all its obligations pursuant to Applicable Contracts. CCB
is duly qualified to do business as a foreign corporation and is in good
standing pursuant to the laws of each state or other jurisdiction in which
either the ownership or use of the properties owned or used by it, or the nature
of the activities conducted by it, requires such qualification.
(b) CCB has delivered to xxxxxxxxxxxxxxx.xxx true and correct copies
of the Organizational Documents of CCB, as currently in effect.
4.2 Authority; No Conflict.
--------------------------------
(a) This Agreement constitutes the legal, valid, and binding obligation
of CCB, enforceable against CCB in accordance with its terms. CCB has the
absolute and unrestricted right, power, authority, and capacity to execute and
deliver this Agreement and to perform their obligations pursuant to this
Agreement and CCB has the absolute and unrestricted right, power, authority, and
capacity to execute and deliver this Agreement.
(b) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated Transactions by CCB will,
directly or indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a violation of (A)
any provision of the Organizational Documents of CCB, or (B) any
resolution adopted by the Board of Directors or the shareholders of
CCB;
(ii) contravene, conflict with, or result in a violation of, or
give any Governmental Body or other Person the right to challenge any
of the Contemplated Transactions or to exercise any remedy or obtain
any relief pursuant to, any Legal Requirement or any Order to which
CCB, or any of the assets owned or used by CCB, may be subject;
26
(iii) contravene, conflict with, or result in a violation of any
of the terms or requirements of, or give any Governmental Body the
right to revoke, withdraw, suspend, cancel, terminate, or modify, any
Governmental Authorization that is held by CCB or that otherwise
relates to the business of, or any of the assets owned or used by CCB;
(iv) cause xxxxxxxxxxxxxxx.xxx or CCB to become subject to, or
to become liable for the payment of, any Tax;
(v) cause any of the assets owned by CCB to be reassessed or
revalued by any taxing authority or other Governmental Body;
(vi) contravene, conflict with, or result in a violation or
breach of any provision of, or give any Person the right to declare a
default or exercise any remedy pursuant to, or to accelerate the
maturity or performance of, or to cancel, terminate, or modify, any
Applicable Contract; or
(vii) result in the imposition or creation of any Encumbrance
upon or with respect to any of the assets owned or used by CCB.
CCB is not and will not be required to give any notice to or obtain any
Consent from any Person in connection with the execution and delivery of this
Agreement or the consummation or performance of any of the Contemplated
Transactions.
4.3 Capitalization. The authorized capitalization of CCB consists of
(a) 50,000,000 shares of common stock, $.001 par value, of which 5,000,000
shares are issued and outstanding, and (b) 10,000,000 shares of preferred stock,
$.001 par value, of which none are issued and outstanding ("Shares"). All of the
shares of CCB's common stock have been duly authorized and validly issued and
are fully paid and nonassessable. Except for the Contemplated Transactions,
there are no Contracts relating to the issuance, sale, or transfer of any equity
securities or other securities of CCB. None of the shares were issued in
violation of the Securities Act or any other Legal Requirement. Except for the
Contemplated Transactions, CCB does not own, or has any Contract to acquire, any
equity securities or other securities of any Person or any direct or indirect
equity or ownership interest in any other business.
4.4 Options, Warrants and Other Rights and Agreements Affecting CCB
Capital Stock. CCB has no authorized or outstanding options, warrants, calls,
subscriptions, rights, convertible securities or other securities, as defined by
the provisions of the Securities Act, or any commitments, agreements,
arrangements or understandings of any manner or nature whatsoever obligating
CCB, in any event, to issue shares of CCB's capital stock or other securities or
securities convertible into or evidencing the right to purchase shares of CCB's
capital stock or other securities. Neither CCB nor any officer, director, or
shareholder of CCB is a party to any agreement, understanding, arrangement or
commitment, or obligated by any provision which creates any rights in any person
with respect to the authorization, issuance, voting, sale or transfer of any
shares of CCB capital stock or other securities.
27
4.5 Financial Statements. CCB has delivered to xxxxxxxxxxxxxxx.xxx (i)
an audited balance sheet dated July 1, 2000; (ii) an unaudited balance sheet of
CCB as of September 30, 2000, ("CCB Balance Sheets"), and (iii) the related
unaudited financial statements for the period ending September 30, 2000
(collectively, the "CCB Financial Statements"). The CCB Financial Statements and
notes there to fairly present the financial condition and the results of
operations, of CCB as at the respective dates of and for the periods referred to
in the CCB Financial Statements, all in accordance with GAAP, and the CCB
Financial Statements present the consistent application of GAAP throughout the
periods involved.
4.6 Books and Records. The books of account, minute books, stock record
books, and other records of CCB, all of which have been delivered to
xxxxxxxxxxxxxxx.xxx, are complete and correct and have been maintained in
accordance with competent business practices. The minute book of CCB contains
accurate and complete records of all meetings held of, and corporate actions
taken by, the stockholders, the Boards of Directors, and committees of the
Boards of Directors of CCB, and no meeting of any such stockholders, Board of
Directors, or committee has been held for which minutes have not been prepared
and are not contained in such minute books. Upon the execution of this
Agreement, all of those books and records will be in the possession of CCB.
4.7 Title to Properties; Encumbrances. CCB owns no real property or any
interest therein. CCB owns all the properties and assets (whether tangible or
intangible) that CCB purports to own, including all of the properties and assets
specified in the CCB Balance Sheets (except for assets held pursuant to
capitalized leases disclosed in the CCB Balance Sheets and personal property
sold since the dates of the CCB Balance Sheets, as the case may be, in the
Ordinary Course of Business), and all of the properties and assets purchased or
otherwise acquired by CCB since the dates of the CCB Balance Sheets (except for
personal property acquired and sold since the dates of the CCB Balance Sheets in
the Ordinary Course of Business and consistent with past practice). All material
properties and assets specified in the CCB Balance Sheets are free and clear of
all Encumbrances. Neither the whole nor any portion of any property held by CCB
is subject to any governmental decree or Order to be sold or is being condemned,
expropriated or otherwise taken by any Governmental Body or any Person with or
without payment compensation therefor, nor, if any such condemnation,
expropriation or taking being proposed.
4.8 Condition and Sufficiency of Assets. The assets and properties of
CCB are in good operating condition and repair, and are adequate for the uses to
which they are being put, and none of those assets and properties is in need of
maintenance or repairs except for ordinary, routine maintenance and repairs that
are not material in nature or cost. The assets and properties of CCB are
sufficient for the continued conduct of CCB's business after the Effective Date
in substantially the same manner as conducted prior to the Effective Date.
28
4.9 Accounts Receivable. All accounts receivable of CCB that are
specified on the CCB Financial Statements or on the accounting records of CCB as
of the Effective Date (collectively, the "CCB Accounts Receivable") represent or
will represent valid obligations resulting from sales actually made or services
actually performed in the Ordinary Course of Business. The CCB Accounts
Receivable are current and collectible net of the respective reserves shown on
the CCB Balance Sheets or on the accounting records of CCB as of the Effective
Date (which reserves are adequate and calculated consistent with past practice
and, in the case of the reserve as of the Effective Date, will not represent a
greater percentage of the CCB Accounts Receivable as of the Effective Date than
the reserves specified in the CCB Balance Sheets and will not represent a
material adverse change in the composition of the CCB Accounts Receivable in
terms of aging). Subject to such reserves, each of the CCB Accounts Receivable
either has been or will be collected in full, without any set-off, within 90
days after the day on which it first becomes due and payable. There is no
contest, claim, or right of set-off, other than returns in the Ordinary Course
of Business, pursuant to any Contract with any obligor of a CCB Accounts
Receivable relating to the amount or validity of such CCB Accounts Receivable.
4.10 Inventory. All inventory of CCB, whether or not specified in the
CCB Balance Sheets, consists of a quality and quantity usable and salable in the
Ordinary Course of Business, except for obsolete items and items of
below-standard quality, all of which have been written off or written down to
net realizable value in the CCB Balance Sheet or on the accounting records of
CCB as of the Effective Date, as the case may be. All inventories not written
off have been priced at the lower of cost or market on a first in, first out
basis. The quantities of each item of inventory (whether raw materials,
work-in-process, or finished goods) are not excessive, but are reasonable in the
present circumstances of CCB.
4.11 No Undisclosed Liabilities. CCB has no liabilities or obligations
of any nature (whether known or unknown and whether absolute, accrued,
contingent, or otherwise) except for liabilities or obligations specified or
reserved against in the CCB Balance Sheets and current liabilities incurred in
the Ordinary Course of Business since the respective dates of the CCB Balance
Sheets.
4.12 Taxes.
------
(a) CCB has filed or caused to be filed on a timely basis all Tax
Returns that are or were required to be filed by it, either separately or as a
member of a group of corporations, pursuant to applicable Legal Requirements.
CCB has delivered to xxxxxxxxxxxxxxx.xxx copies of all such Tax Returns filed
since the date of formation of CCB. CCB has paid, or made provision for the
payment of, all Taxes that have or may have become due pursuant to those Tax
Returns or otherwise, or pursuant to any assessment received by Shareholders or
CCB, except such Taxes, if any, as are being contested in good faith and as to
which adequate reserves (determined in accordance with GAAP) have been provided
in the CCB Balance Sheets.
(b) All deficiencies proposed as a result of any audits of such Tax
Returns have been paid, reserved against, settled, or, are being contested in
good faith by appropriate proceedings. There have been no adjustments to the
United States federal income Tax Returns filed by CCB for all taxable years
since the date of formation of CCB, and the resulting deficiencies proposed by
the IRS. CCB has not given or been requested to give waivers or extensions (or
is or would be subject to a waiver or extension given by any other Person) of
any statute of limitations relating to the payment of Taxes of CCB or for which
CCB may be liable.
(c) The charges, accruals and reserves with respect to Taxes on the CCB
Balance Sheets are adequate (determined in accordance with GAAP) and are at
least equal to CCB's liability for Taxes. There exists no proposed tax
assessment against CCB, except as disclosed in the CCB Balance Sheets. No
consent to the application of Section 341(f)(2) of the IRC has been filed with
respect to any property or assets held, acquired, or to be acquired by CCB. All
Taxes that CCB is or was required by Legal Requirements to withhold or collect
have been duly withheld or collected and, to the extent required, have been paid
to the proper Governmental Body or other Person.
29
(d) All Tax Returns filed by CCB are true, correct, and complete. There
is no tax sharing agreement that will require any payment by CCB after the
Effective Date. CCB is not, nor during any period preceding the Effective Date
has been, an "S" corporation.
4.13 No Material Adverse Change. Since the dates of the CCB Balance
Sheets there has not been any material adverse change in the business,
operations, properties, prospects, assets, or condition of CCB, and no event has
occurred or circumstance exists that may result in such a material adverse
change.
4.14 Employee Benefits. Neither CCB nor any Plan Affiliate of CCB has
maintained, sponsored, adopted, made contributions to or obligated itself to
make contributions to or to pay any benefits or grant rights pursuant to or with
respect to any Employee Benefit Plan, whether or not written, which could result
in CCB or such Plan Affiliate having any material debt, liability, claim or
obligation of any kind or nature whatsoever, whether accrued, absolute,
contingent, direct, indirect, known or unknown, perfected or inchoate or
otherwise and whether or not due or to become due. There has not been any act or
omission by CCB pursuant to ERISA or the terms of the Employee Benefit Plans, or
any other applicable law or agreement which could result in any liability of
CCB, whether pursuant to ERISA, the IRC or other laws or agreements.
4.15 Compliance with Legal Requirements; Governmental Authorizations.
----------------------------------------------------------------
(a) CCB is and has been in full compliance with each Legal
Requirement that is or was applicable to it or to the conduct or operation of
its business or the ownership or use of any of its assets;
(b) no event has occurred or circumstance exists that (with or without
notice or lapse of time) (A) may constitute or result in a violation by CCB of,
or a failure on the part of CCB to comply with, any Legal Requirement, or (B)
may result in any obligation on the part of CCB to undertake, or to pay all or
any portion of the cost of, any remedial action of any nature, including
pursuant to any Environmental, Health, and Safety Liability; and
(c) CCB has not received any notice or other communication (whether
oral or written) from any Governmental Body or any other Person regarding (A)
any actual, alleged, possible, or potential violation of, or failure to comply
with, any Legal Requirement, or (B) any actual, alleged, possible, or potential
obligation on the part of CCB to undertake, or to pay all or any portion of the
cost of, any remedial action of any nature, including pursuant to any
Environmental, Health, and Safety Liability.
(d) CCB is and has been in full compliance with all of the terms
and requirements of each Governmental Authorization
30
(e) no event has occurred or circumstance exists that may (with or
without notice or lapse of time) (A) constitute or result directly or indirectly
in a violation of or a failure to comply with any term or requirement of any
such Governmental Authorization, or (B) result directly or indirectly in the
revocation, withdrawal, suspension, cancellation, or termination of, or any
modification to, any Governmental Authorization.
(f) CCB has not received any notice or other communication (whether
oral or written) from any Governmental Body or any other Person regarding (A)
any actual, alleged, possible, or potential violation of or failure to comply
with any term or requirement of any Governmental Authorization, or (B) any
actual, proposed, possible, or potential revocation, withdrawal, suspension,
cancellation, termination of, or modification to any Governmental Authorization.
(g) all applications required to have been filed for the renewal of
such Governmental Authorizations have been duly filed on a timely basis with the
appropriate Governmental Bodies, and all other filings required to have been
made with respect to such Governmental Authorizations have been duly made on a
timely basis with the appropriate Governmental Bodies.
4.16 Legal Proceedings; Orders.
-----------------------------------
(a) there is no pending Proceeding:
(i) that has been commenced by or against CCB or that otherwise
relates to or may affect the business of, or any of the assets owned
or used by, CCB; or
(ii) that challenges, or that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions.
To the Knowledge of the Shareholders and CCB, (1) no such Proceeding has been
Threatened, and (2) no event has occurred or circumstance exists that may result
in or serve as a basis for the commencement of any such Proceeding.
(b) there is no Order to which CCB, or any of the assets owned or used
by CCB, is subject;
(c) no shareholder of CCB is subject to any Order that relates to the
business of, or any of the assets owned or used by, CCB; and
(d) no officer, director, agent, or employee of CCB is subject to any
Order that prohibits such officer, director, agent, or employee from
engaging in or continuing any conduct, activity, or practice relating
to the business of CCB.
31
(e) CCB is and has been in full compliance with all of the terms and
requirements of each Order to which CCB, or any of the assets owned or
used by CCB, is or has been subject.
(f) No event has occurred or circumstance exists that may constitute
or result in (with or without notice or lapse of time) a violation of
or failure to comply with any term or requirement of any Order to
which CCB, or any of the assets owned or used by CCB, is subject.
(g) CCB has not received any notice or other communication (whether
oral or written) from any Governmental Body or any other Person
regarding any actual, alleged, possible, or potential violation of, or
failure to comply with, any term or requirement of any Order to which
CCB, or any of the assets owned or used by CCB, is or has been
subject.
4.17 Absence of Certain Changes and Events. Since the dates of
the CCB Balance Sheets, CCB has conducted CCB's business only in the Ordinary
Course of Business and there has not been any:
(a) change in CCB's authorized or issued capital stock; grant of any
stock option or right to purchase shares of capital stock of CCB;
issuance of any security convertible into such capital stock; grant of
any registration rights; purchase, redemption, retirement, or other
acquisition by CCB of any shares of any such capital stock; or
declaration or payment of any dividend or other distribution or
payment in respect of shares of capital stock;
(b) amendment to the Organizational Documents of CCB;
(c) payment or increase by CCB of any bonuses, salaries, or other
compensation to any stockholder, director, officer, or (except in the
Ordinary Course of Business) employee or entry into any employment,
severance, or similar Contract with any director, officer, or
employee;
(d) adoption of, or increase in the payments to or benefits pursuant
to, any profit sharing, bonus, deferred compensation, savings,
insurance, pension, retirement, or other employee benefit plan for or
with any employees of CCB;
(e) damage to or destruction or loss of any asset or property of CCB,
whether or not covered by insurance, materially and adversely
affecting the properties, assets, business, financial condition, or
prospects of CCB, taken as a whole;
(f) entry into, termination of, or receipt of notice of termination of
(i) any license, distributorship, dealer, sales representative, joint
venture, credit, or similar agreement, or (ii) any Contract or
transaction involving a total remaining commitment by or to CCB in an
amount equal to or in excess of $10,000.00;
32
(g) sale (other than sales of inventory in the Ordinary Course of
Business), lease, or other disposition of any asset or property of CCB
or mortgage, pledge, or imposition of any lien or other encumbrance on
any material asset or property of CCB, including the sale, lease, or
other disposition of any of the CCB Intellectual Property Assets;
(h) cancellation or waiver of any claims or rights with a value to CCB
in excess of $10,000.00;
(i) material change in the accounting methods used by CCB; or
(j) agreement, whether oral or written, by CCB to do any of the
foregoing.
33
4.18 Contracts; No Defaults.
--------------------------------
(a) CCB has delivered to xxxxxxxxxxxxxxx.xxx true and complete copies,
of all the Contracts with a value of at least $10,000.00 of CCB.
(b) No shareholder of CCB (and no Related Person of any such
shareholder) has or may acquire any rights pursuant to, and no such
shareholder has or may become subject to any obligation or liability
pursuant to, any Contract that relates to the business of, or any of
the assets owned or used by, CCB.
(c) no officer, director, agent, employee, consultant, or contractor
of CCB is obligated by any Contract that purports to limit the ability
of such officer, director, agent, employee, consultant, or contractor
to (A) engage in or continue any conduct, activity, or practice
relating to the business of CCB, or (B) assign to CCB or to any other
Person any rights to any invention, improvement, or discovery.
(d) Each such Contract is in full force and effect and is valid and
enforceable in accordance with its terms.
(e) CCB is and has been in full compliance with all applicable terms
and requirements of each Contract pursuant to which CCB has or had any
obligation or liability or by which CCB or any of the assets owned or
used by CCB is or was obligated.
(f) each other Person that has or had any obligation or liability
pursuant to any Contract pursuant to which CCB has or had any rights
is and has been in full compliance with all applicable terms and
requirements of such Contract.
(g) no event has occurred or circumstance exists that (with or without
notice or lapse of time) may contravene, conflict with, or result in a
violation or breach of, or give CCB or other Person the right to
declare a default or exercise any remedy pursuant to, or to accelerate
the maturity or performance of, or to cancel, terminate, or modify,
any Applicable Contract.
(h) CCB has not given to or received from any other Person any notice
or other communication (whether oral or written) regarding any actual,
alleged, possible, or potential violation or breach of, or default
pursuant to, any Contract.
(i) There are no renegotiations of, attempts to renegotiate, or
outstanding rights to renegotiate any material amounts paid or payable
to CCB pursuant to current or completed Contracts with any Person and
no such Person has made written demand for such renegotiation.
(j) The Contracts relating to the sale, design, manufacture, or
provision of products or services by CCB have been entered into in the
Ordinary Course of Business and have been entered into without the
commission of any act alone or in concert with any other Person, or
any consideration having been paid or promised, that is or would be in
violation of any Legal Requirement.
34
4.19 Insurance.
-------------------
(a) CCB has delivered to xxxxxxxxxxxxxxx.xxx:
(i) true and complete copies of all policies of insurance to
which CCB is a party, or any director of CCB, is or has been covered
at any time from and after the date of formation of CCB;
(ii) true and complete copies of all pending applications for
policies of insurance;
(iii) any statement by the auditor of the CCB Financial
Statements with regard to the adequacy of such entity's coverage or of
the reserves for claims;
(iv) any self-insurance arrangement by or affecting CCB,
including any reserves established pursuant thereto;
(v) any contract or arrangement, other than a policy of
insurance, for the transfer or sharing of any risk by CCB; and
(vi) all obligations of CCB to third parties with respect to
insurance (including such obligations pursuant to leases and service
agreements) and identifies the policy pursuant to which such coverage
is provided.
(vii) a summary of the loss experienced pursuant to each
policy;
(viii) a description of each claim pursuant to an insurance
policy for an amount in excess of $10,000.00, which sets forth:
(A) the name of the claimant;
(B) a description of the policy by insurer, type of
insurance, and period of coverage;
(C) the amount and a brief description of the claim; and
(ix) a description of the loss experience for all claims that
were self-insured, including the number and aggregate cost of such
claims.
(x) All policies to which CCB is a party or that provide
coverage to any shareholder, director or officer of CCB:
35
(A) are valid, outstanding, and enforceable;
(B) are issued by an insurer that is financially capable
and reputable;
(C) taken together, provide adequate insurance coverage for
the assets and the operations of CCB for all risks normally insured
against by a Person carrying on the same business or businesses as CCB;
(D) are sufficient for compliance with all Legal Requirements,
Governmental Authorizations and Contracts to which CCB is a party or by
which CCB is obligated;
(E) will continue in full force and effect following the
consummation of the Contemplated Transactions; and
(F) do not provide for any retrospective premium adjustment or
other experienced-based liability on the part of CCB.
(b) CCB has not received (A) any refusal of coverage or any notice
that a defense will be afforded with reservation of rights, or (B) any
notice of cancellation or any other indication that any insurance policy is
not now in full force or effect or will not be renewed or that the issuer
of any policy is not willing or able to perform its obligations pursuant
thereto.
(c) CCB has paid all premiums due, and have otherwise performed all of
its obligations, pursuant to each policy to which CCB is a party or that
provides coverage to CCB or director or officer thereof.
(d) CCB has given notice to the insurer of all claims that may be
insured thereby.
4.20 Employees. No employee or director of CCB is a party to, or is
otherwise obligated by, any agreement or arrangement, including any
confidentiality, non-competition, or proprietary rights agreement, between such
employee or director and any other Person ("CCB Proprietary Rights Agreement")
that in any way adversely affects or will affect (i) the performance of his or
her duties as an employee or director of CCB, or (ii) the ability of CCB to
conduct its business, including any CCB Proprietary Rights Agreement with any
Shareholder or CCB by any such employee or director. To the CCB's Knowledge, no
director, officer, or other key employee of CCB intends to terminate his or her
employment with CCB.
36
4.21 Labor Relations; Compliance. CCB has not been or is a party to any
collective bargaining or other labor Contract. There has not been, there is not
presently pending or existing, and there is not Threatened, (a) any strike,
slowdown, picketing, work stoppage, or employee grievance process, (b) any
Proceeding against or affecting CCB relating to the alleged violation of any
Legal Requirement pertaining to labor relations or employment matters, including
any charge or complaint filed by an employee or union with the National Labor
Relations Board, the Equal Employment Opportunity Commission, or any comparable
Governmental Body, organizational activity, or other labor or employment dispute
against or affecting CCB or its Facilities, or (c) any application for
certification of a collective bargaining agent. No event has occurred or
circumstance exists that could provide the basis for any work stoppage or other
labor dispute. There is no lockout of any employees by CCB, and no such action
is contemplated by CCB. CCB has complied in all respects with all Legal
Requirements relating to employment, equal employment opportunity,
nondiscrimination, immigration, wages, hours, benefits, collective bargaining,
the payment of social security and similar taxes, occupational safety and
health, and plant closing. CCB is not liable for the payment of any
compensation, damages, taxes, fines, penalties, or other amounts, however
designated, for failure to comply with any of the foregoing Legal Requirements.
4.22 Intellectual Property.
-------------------------------
(a) CCB (i) owns all the Intellectual Property specified in the CCB
Balance Sheets (the "CCB Intellectual Property Assets"), (ii) neither owns nor
uses any Intellectual Property not specified in the CCB Balance Sheets, (iii)
pays no royalties to any Person with respect to any CCB Intellectual Property
Assets, and (iv) has full, complete, unfettered and lawful right to bring
actions for the infringement thereof. CCB owns, or possesses adequate and
enforceable rights to use, without payment of royalties, all licenses,
trademarks, tradenames, copyrights, patents, trade secrets and processes
necessary for the conduct of, or use in, its business as the same is presently
being conducted.
(b) CCB has no Knowledge nor has received any notice to the effect that
any service or product it provides or sells, or any process, method, part or
material it employees in its business for the use by it or another of any such
service, may infringe, or is in conflict with, any asserted right of another
Person. There is no pending or Threatened claim or litigation action against CCB
contesting its right to use or the validity of any of the CCB Intellectual
Property Assets or asserting CCB's misuse of any of the foregoing, which would
deprive it of the right to assert its rights pursuant thereto or which would
prevent the sale of any service provided or sold by CCB.
4.23 Certain Payments. Neither CCB nor any director, officer, agent, or
employee of CCB, or to CCB's Knowledge any other Person associated with or
acting for or on behalf of CCB, has directly or indirectly (a) made any
contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other
payment to any Person, private or public, regardless of form, whether in money,
property, or services (i) to obtain favorable treatment in securing business,
(ii) to pay for favorable treatment for business secured, (iii) to obtain
special concessions or for special concessions already obtained, for or in
respect of CCB, or (iv) in violation of any Legal Requirement, or (b)
established or maintained any fund or asset that has not been recorded in the
books and records of CCB.
37
4.24 Disclosure.
--------------------
(a) No representation or warranty of CCB in this Agreement omits to
specify a material fact necessary to make the information specified herein,
considering the circumstances in which that information was furnished, not
misleading.
(b) There is no fact known to CCB that has specific application to CCB
(other than general economic or industry conditions) and that materially
adversely affects or, as far as CCB can reasonably foresee, materially
threatens, the assets, business, prospects, financial condition, or results of
operations of CCB that has not been set forth in this Agreement.
4.25 Relationships with Related Persons. No shareholder of CCB or any
Related Person of any shareholder of CCB has or has had any interest in any
property (whether real, personal, or mixed and whether tangible or intangible),
used in or pertaining to CCB's business. No shareholder of CCB or any Related
Person of any shareholder of CCB is or has owned (of record or as a beneficial
owner) an equity interest or any other financial or profit interest in, a Person
that has (i) had business dealings or a material financial interest in any
transaction with CCB, or (ii) engaged in competition with CCB with respect to
any line of the products or services of CCB in any market presently served by
CCB. No shareholder of CCB or any Related Person of any shareholders of CCB is a
party to any Contract with, or has any claim or right against, CCB.
4.26 Brokers or Finders. CCB has not incurred any obligation or
liability, contingent or otherwise, for brokerage or finders' fees or agents'
commissions or other similar payment in connection with this Agreement or the
Contemplated Transactions.
4.27 Corporate Resolutions. CCB has delivered to xxxxxxxxxxxxxxx.xxx a
certified copy of the resolutions adopted by the Board of Directors of CCB
authorizing the execution, delivery and performance of this Agreement and the
consummation of the Contemplated Transactions and a certificate of the Secretary
of CCB, dated the Effective Date, to the effect that those resolutions were duly
adopted and are in full force and effect and with respect to the authority and
incumbency of the officers of CCB executing this Agreement.
4.28 Take or Pay Contracts. CCB is not required to purchase a minimum
quantity of utilities, products or services or to make payment therefor. CCB
has made no prepayments for utilities, products or services that CCB has not
utilized.
4.29 Banking Relationships. CCB has disclosed to xxxxxxxxxxxxxxx.xxx
the names and locations of all banks, trust companies, savings and loans
associations and other financial institutions at which CCB maintains its safe
deposit boxes or accounts of any nature and the names of all persons authorized
to have access there to, draw thereon or make withdrawals therefrom.
4.30 Representation By Counsel. CCB hereby acknowledges that it is
aware that CCB and xxxxxxxxxxxxxxx.xxx, and each of them, are represented by
Xxxxx Law Group, as legal counsel, and CCB and xxxxxxxxxxxxxxx.xxx have
consented in writing to the multiple representation of CCB and
xxxxxxxxxxxxxxx.xxx by the Xxxxx Law Group and the resulting conflict of
interests.
38
ARTICLE V
---------
INDEMNIFICATION; REMEDIES
-------------------------
5.1 Survival; Right to Indemnification Not Affected by Knowledge. All
representations, warranties, covenants, and obligations in this Agreement and
any certificate or document delivered pursuant to this Agreement will survive
this Agreement. The right to indemnification, payment of Damages (defined later
in this Agreement) or other remedy based on such representations, warranties,
covenants, and obligations will not be affected by any investigation conducted
with respect to, or any Knowledge acquired (or capable of being acquired) at any
time, whether before or after the execution and delivery of this Agreement, with
respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant, or obligation. The waiver of any condition
based on the accuracy of any representation or warranty, or on the performance
of or compliance with any covenant or obligation, will not affect the right to
indemnification, payment of Damages, or other remedy based on such
representations, warranties, covenants, and obligations.
5.2 Indemnification and Payment of Damages by the Shareholders. The
Shareholders, jointly and severally, will indemnify and hold harmless CCB, and
CCB's respective Representatives, stockholders, controlling persons, and
affiliates (collectively, the "CCB Indemnified Persons") for, and will pay to
the CCB Indemnified Persons the amount of, any loss, liability, claim, damage
(including incidental and consequential damages), expense (including reasonable
costs of investigation and defense and reasonable attorneys' fees) or diminution
of value, whether or not involving a third-party claim (for all purposes of this
Article V, collectively, "Damages"), resulting, directly or indirectly, from or
in connection with:
(a) any Breach of any representation or warranty made by the
Shareholders or xxxxxxxxxxxxxxx.xxx in this Agreement, or any certificate
or document delivered by the Shareholders or xxxxxxxxxxxxxxx.xxx pursuant
to this Agreement;
(b) any Breach by any Shareholder or xxxxxxxxxxxxxxx.xxx of any
covenant or obligation of such Shareholder or xxxxxxxxxxxxxxx.xxx in this
Agreement; or
(c) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by any such Person with any Shareholder or
xxxxxxxxxxxxxxx.xxx (or any Person acting on their behalf) in connection
with any of the Contemplated Transactions.
The remedies provided in this Section 5.2 will not be exclusive of or
limit any other remedies that may be available to CCB or the CCB Indemnified
Persons.
5.3 Indemnification and Payment of Damages by CCB. CCB will indemnify
and hold harmless the Shareholders and xxxxxxxxxxxxxxx.xxx, and the
Shareholders' and xxxxxxxxxxxxxxx.xxx's respective representatives,
stockholders, controlling persons, and affiliates (collectively, the
"Shareholders and xxxxxxxxxxxxxxx.xxx Indemnified Persons") for, and will pay to
the Shareholders' and xxxxxxxxxxxxxxx.xxx Indemnified Persons the amount of, any
and all Damages, resulting, directly or indirectly, from or in connection with:
39
(a) any Breach of any representation or warranty made by CCB in this
Agreement, or any other certificate or document delivered by CCB pursuant
to this Agreement;
(b) any Breach by CCB of any covenant or obligation of CCB in this
Agreement; or
(c) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by any such Person with CCB (or any Person acting
on it's behalf) in connection with any of the Contemplated Transactions.
The remedies provided in this Section 5.3 will not be exclusive of or
limit any other remedies that may be available to the Shareholders and
xxxxxxxxxxxxxxx.xxx or the Shareholders' and xxxxxxxxxxxxxxx.xxx Indemnified
Persons.
40
5.4 Procedure for Indemnification -- Third Party Claims.
-------------------------------------------------------------
(a) Promptly after receipt by a Person indemnified pursuant to this
Article V of notice of the commencement of any Proceeding against it, such
indemnified Person will, if a claim is to be made against an indemnifying Person
pursuant to this Article V, give notice to the indemnifying Person of the
commencement of such claim, but the failure to notify the indemnifying Person
will not relieve the indemnifying Person of any liability that it may have to
any indemnified Person, except to the extent that the indemnifying Person
demonstrates that the defense of such claim is prejudiced by the indemnifying
Person's failure to give such notice.
(b) If any Proceeding referred to in Section 5.4(a) is brought against
an indemnified Person and it gives notice to the indemnifying Person of the
commencement of such Proceeding, the indemnifying Person will, unless the claim
involves Taxes, be entitled to participate in such Proceeding and, to the extent
that it desires (unless (i) the indemnifying Person is also a party to such
Proceeding and the indemnified Person determines in good faith that joint
representation would be inappropriate, or (ii) the indemnifying Person fails to
provide reasonable assurance to the indemnified Person of its financial capacity
to defend such Proceeding and provide indemnification with respect to such
Proceeding), to assume the defense of such Proceeding with counsel satisfactory
to the indemnified Person and, after notice from the indemnifying Person to the
indemnified Person of its election to assume the defense of such Proceeding, the
indemnifying Person will not, as long as it diligently conducts such defense, be
liable to the indemnified Person pursuant to this Article V for any fees of
other counsel or any other expenses with respect to the defense of such
Proceeding, in each case subsequently incurred by the indemnified Person in
connection with the defense of such Proceeding, other than reasonable costs of
investigation. If an indemnifying Person assumes the defense of a Proceeding,
(i) it will be conclusively established for purposes of this Agreement that the
claims made in that Proceeding are within the scope of and subject to
indemnification; (ii) no compromise or settlement of such claims may be effected
by the indemnifying Person without the indemnified Person's consent, unless (A)
there is no finding or admission of any violation of Legal Requirements or any
violation of the rights of any Person and no effect on any other claims that may
be made against the indemnified Person, and (B) the sole relief provided is
monetary damages that are paid in full by the indemnifying Person; and (iii) the
indemnified Person will have no liability with respect to any compromise or
settlement of such claims effected without its consent. If notice is given to an
indemnifying Person of the commencement of any Proceeding and the indemnifying
Person does not, within 10 days after the indemnified Person's notice is given,
give notice to the indemnified Person of its election to assume the defense of
such Proceeding, the indemnifying Person will be obligated by any determination
made in such Proceeding or any compromise or settlement effected by the
indemnified Person.
(c) Notwithstanding the foregoing, if an indemnified Person determines
in good faith that there is a reasonable probability that a Proceeding may
adversely affect it or its affiliates other than as a result of monetary damages
for which it would be entitled to indemnification under this Agreement, the
indemnified Person may, by notice to the indemnifying Person, assume the
exclusive right to defend, compromise, or settle such Proceeding, but the
indemnifying Person will not be obligated by any determination of a Proceeding
so defended or any compromise or settlement effected without its consent (which
shall not be unreasonably withheld).
41
5.5 Procedure for Indemnification-- Other Claims. A claim for
indemnification for any matter not involving a third-party claim may be
asserted by notice to the party from whom indemnification is sought.
ARTICLE VI
GENERAL PROVISIONS
------------------
6.1 Expenses. Except as otherwise expressly provided in this Agreement,
each party shall pay all expenses, costs and fees (including attorneys' fees)
incurred by that party in connection with the Contemplated Transactions,
including the preparation, execution and delivery of this Agreement and the
ancillary agreements, schedules and documents related to the Contemplated
Transactions.
6.2 Public Announcements. Any public announcement or similar publicity
with respect to this Agreement or the Contemplated Transactions will be issued,
if at all, at such time and in such manner as CCB and Shareholders shall
mutually determine. Shareholders and CCB will consult with each other concerning
the communication by which XxxxxXxxxXxxxxx.xxx's employees, customers, and
suppliers and other Persons having dealings with XxxxxXxxxXxxxxx.xxx will be
informed of the Contemplated Transactions, and CCB will have the right to be
present for any such communication.
6.3 Notices. All notices, consents, waivers, and other communications
pursuant to this Agreement must be in writing and will be deemed to have been
duly given when (a) delivered by hand (with written confirmation of receipt),
(b) sent by facsimile machine (with written confirmation of receipt), provided
that a copy is mailed by registered mail, return receipt requested, or (c) when
received by the addressee, if sent by a nationally recognized overnight delivery
service (receipt requested), in each case to the appropriate addresses and
facsimile machine numbers set forth below (or to such other addresses and
facsimile machine numbers as a party may designate by notice to the other
parties):
If to the Shareholders:
To the individuals, at the addresses set forth in Exhibit A.
XxxxxXxxxXxxxxx.xxx:
xxxxxxxxxxxxxxx.xxx
Xxxxx 000, 000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 2C
CCB:
CCB Corp.
00 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
42
6.4 Jurisdiction; Service of Process. Any action or proceeding seeking
to enforce any provision of, or based on any right resulting from, this
Agreement may be brought against any of the parties in the courts of the State
of Nevada, and each of the parties consents to the jurisdiction of such courts
(and of the appropriate appellate courts) in any such action or proceeding and
waives any objection to venue. Process in any action or proceeding referred to
in the preceding sentence may be served on any party anywhere in the world.
6.5 Further Assurances. The parties agree (a) to furnish upon request
to each other such additional information, (b) to execute and deliver to each
other such other documents, and (c) to do such other acts and things, all as the
other parties may reasonably request for the purpose of carrying out the intent
of this Agreement and the documents referred to in this Agreement.
6.6 Waiver. The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay by any
party in exercising any right, power, or privilege pursuant to this Agreement or
the documents referred to in this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right,
power, or privilege or the exercise of any other right, power, or privilege. To
the maximum extent permitted by applicable law, (a) no claim or right resulting
from this Agreement or the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no waiver that
may be given by a party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one party will be deemed to
be a waiver of any obligation of such party or of the right of the party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this Agreement.
6.7 Entire Agreement and Modification. This Agreement supersedes all
prior agreements between the parties with respect to its subject matter and
constitutes (along with the documents referred to in this Agreement) a complete
and exclusive statement of the terms of the Agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by a
written Agreement executed by the party to be charged with any such amendment.
6.8 Assignments, Successors, and No Third-party Rights. No party may
assign any of its rights pursuant to this Agreement without the prior written
consent of the other parties, and any such assignment shall be null and void ab
initio. Subject to the preceding sentence, this Agreement will apply to,
obligate in all respects, and inure to the benefit of, the successors and
permitted assigns of the parties. Nothing expressed or referred to in this
Agreement will be construed to give any Person, other than the parties to this
Agreement, any legal or equitable right, remedy, or claim pursuant to or with
respect to this Agreement or any provision of this Agreement. This Agreement and
all of its provisions and conditions are for the sole and exclusive benefit of
the parties to this Agreement and their successors and assigns.
43
6.9 Severability. If any provision of this Agreement is determined to
be invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any provision
of this Agreement determined to be invalid or unenforceable only in part or
degree will remain in full force and effect to the extent not determined to be
invalid or unenforceable.
6.10 Section Headings, Construction. The headings of sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to "section" or "sections" refer to the
corresponding section or sections of this Agreement. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word "including" does not
limit the preceding words or terms.
6.11 Time of Essence. With regard to all dates and time periods
set forth or referred to in this Agreement, time is of the essence.
6.12 Governing Law. This Agreement will be governed by the laws
of the State of Nevada, without regard to conflicts of laws principles.
6.13 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same Agreement.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
44
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the Effective Date.
CCB Corp.,
a Nevada corporation
By: /s/ Xxxx Xxxxxxx
------------------------------------------
Xxxx Xxxxxxx
Its: President
By: /s/ Xxxx Xxxxxxx
------------------------------------------
Xxxx Xxxxxxx
Its: Secretary
xxxxxxxxxxxxxxx.xxx, Inc.,
a Nevada corporation
By: /s/ Xxxx X. Xxxxx
-----------------------------------------
Xxxx X. Xxxxx
Its: President, Secretary
Shareholders of xxxxxxxxxxxxxxx.xxx, Inc.
By: /s/ Xxxx X. Xxxxx
-----------------------------------------
Xxxx X. Xxxxx
Their: Agent and Attorney-in-Fact
================================================================================
EXHIBIT "A"
-----------
--------------------------------------------------------------------
Name and Address of Number
Shareholder of Shares
--------------------------------------------------------------------
--------------------------------------------------------------------
Xxxxxxxxx Estates, Ltd.
Xxxxx 00, Xxxxx Xxxxx, Xxxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxxx Street
Victoria, Mahe, Seychelles 500,000
--------------------------------------------------------------------
Xxxxx Pink
0000 - 0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 250,000
Canada V6B 3G2
--------------------------------------------------------------------
Xxxxx Entertainment Group, Inc.
101 - 0000 Xxxx Xxxxxxxx, Xxxx. 000
Xxxxxxxxx, XX 250,000
Canada V6H 4E4
--------------------------------------------------------------------
Longlane International, Inc.
No. 0 Xxxxxxxxxx Xxxxxx Xxxxxx 500,000
Alofi, Niue
--------------------------------------------------------------------
Ottoman Overseas S.A.
No. 2 Commercial Centre Square 500,000
Alofi, Niue
--------------------------------------------------------------------
Xxxxxxx Xxxxxxx
55 Falcon Way
Clippers Quay, Isle of Dogs 50,000
London, UK E14 9U0
--------------------------------------------------------------------
Matador Compagnia S.A.
00 Xxxxxxx Xxxx 000,000
Xxxxxx Xxxx, Xxxxxx
--------------------------------------------------------------------
--------------------------------------------------------------------
Xxxxxxx Xxxxxx
000 Xxxx Xxxxx
Xxxxx Xxxxxxxxx, XX 500,000
Canada I7N 2L2
--------------------------------------------------------------------
Alliance Associates, Ltd.
Saffrey Square, Suite 205 500,000
Nassau, Bahamas
--------------------------------------------------------------------
Xxx Xxxxxx
0000 X. 00xx Xxxxxx
Xxxxxxxxx, XX 10,000
Canada V5P 1X9
--------------------------------------------------------------------
Xxxxxxxx Consulting, Ltd.
0000 - 0X Xxxxxx
Xxxxx, XX 000,000
Xxxxxx X0X 0X0
--------------------------------------------------------------------
Xxxx Xxxxx
000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 000,000
Xxxxxx X0X 0X0
--------------------------------------------------------------------
Xxxxxx Xxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 20,000
Canada
--------------------------------------------------------------------
Xxx XxXxxxx
000 Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxx Xxxxxxxx 000,000
Xxxxxx, X0X 0X0
--------------------------------------------------------------------
Xxxx Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 500,000
Xxxxxx, X0X 0X0
--------------------------------------------------------------------
--------------------------------------------------------------------
Xxxx Xxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, XX 000,000
Xxxxxx, X0X 0X0
--------------------------------------------------------------------
Xxxxx Xxxx
#000 - 000 Xxxx Xxxxxx
Xxxxxxxxx, XX 500,000
Canada V6Z 1N9
--------------------------------------------------------------------
Techven Finance Corp.
000 - 000 Xxxx Xxxxxx
Xxxxxxxxx, XX 500,000
Canada
--------------------------------------------------------------------
Xxxxxx Xxxx Xxxxxxxxx
0000 Xxxxxxx Xxxx 000,000
Xxxxxxxxx, XX Xxxxxx
--------------------------------------------------------------------
Internet Television Network
Xxxxx 000 - 0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 3,000,000
Canada V6E 4A6
-------------------------------------------------------------------------------
Xxx XxXxx
Apt 311 - 0000 Xxxx Xxxxxx
Xxxxxxxxx, XX 20,000 August 22, 2000
Canada
-------------------------------------------------------------------------------
502250 BC Ltd.
0 - 0000 Xxxxx Xxxxxx
Xxxxxxxxx, XX
Xxxxxx 40,000
--------------------------------------------------------------------
Xxxxxxxxx Pink
0000 Xxxxxx Xxxxxx
Xxxxx Xxxxxxxxx, XX 20,000
Canada V7N 2C3
--------------------------------------------------------------------
--------------------------------------------------------------------
Iuano Veshini
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxxxxxx, XX 20,000
Canada V7C 3Z2
--------------------------------------------------------------------
Xxxxx X. Pink
0000 Xxxxxx Xxxxxx
Xxxxx Xxxxxxxxx, XX 40,000
Canada X0X 0X0
--------------------------------------------------------------------
Xxxxxx Xxxxxx
0000 - 0000 Xxxx Xxxx.
Xxxxxxxxx, XX 00,000
Xxxxxx X0X 0X0
--------------------------------------------------------------------
Xxxx Xxxxxxxxx
Xxxx X 000 Xxxx 0xx
Xxxxx Xxxxxxxxx 20,000
Canada
--------------------------------------------------------------------
Nawaz (Aussie) Xxxxxx
#000 - 0000 Xxxx Xxxxxx
Xxxxxxxxx, XX 6,700
Xxxxxx X0X 0X0
--------------------------------------------------------------------
Xxxxxxx X. Xxxxxxx
0000 Xxxxxx Xxxxxx 00,000
Xxxxxx X0X 0X0
--------------------------------------------------------------------
Xxxxxx Xxxxxxx
0000 000 Xx.
Xxxxxx, XX 6,667
Canada
--------------------------------------------------------------------
Xxxxx Xxxxx
0000 - 0000 Xxxx Xx.
Xxxxxxxxx, XX 13,000
Canada V6Z 1P5
--------------------------------------------------------------------
--------------------------------------------------------------------
Xxxx Xxxxxx
210 - 0000 Xxxxxxxx Xx. 00,000
Xxxxxxxxx, XX Xxxxxx
--------------------------------------------------------------------
Xxxxxx Xxxx
0000 Xxxxxxxx Xx.
Xxxxxxx, XX 000,000
Xxxxxx X0X 0X0
--------------------------------------------------------------------
Xxxxx Xxxx-Xxxxxxxx
0000 X. Xxxx Xxxxxx Xxx.
Xxxxxxxxx, XX 20,000
Xxxxxx X0X 0X0
--------------------------------------------------------------------
Xxxxxxxxx X. Xxxx
0000 Xxxxx Xxxx Xx.
Xxxxxxxxx, XX
Xxxxxx VGK 1B3 2,200
--------------------------------------------------------------------
Xxxx Xxxx
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 4,468
Xxxxxx X0X 0X0
--------------------------------------------------------------------
Xxxxx Xxxxx
0000 Xxxxxx Xx.
Xxxxxxxxx, XX 00,000
Xxxxxx X0X 0X0
--------------------------------------------------------------------
Xxxxxx Xxxxxxxx
000 - 0000 Xxx Xxxxxx
Xxxxx Xxxx, XX 6,000
Xxxxxx X0X 0X0
--------------------------------------------------------------------
Xxx Xxxxxx
#000 - 0000 Xxxxxxxx Xx.
Xxxxxxxxx, XX
Xxxxxx X0X 0X0 13,333
--------------------------------------------------------------------
--------------------------------------------------------------------
Xxxxx Xxxxxxxx
0000 Xxxxxxxxxx Xxx.
Xxxxxxxx, XX 6,667
Canada V7E 4T8
--------------------------------------------------------------------
Norwegian Holdings Ltd.
Romasco Place, Wickhams Cay 1 13,335
Road Town, Tortola, BV1
--------------------------------------------------------------------
Xxxxx X.X. Xxxxx
000 - 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 6,670
Canada V6Z 2X6
--------------------------------------------------------------------
Xxxxx Xxxxxx
000 - 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 6,670
Canada V6Z 2X6
--------------------------------------------------------------------
Xxxxx XxXxxxx
#0 - 000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, XX 6,667
Xxxxxx X0X 0X0
--------------------------------------------------------------------
Xxxxxxx Xxxxxx
0000 Xxxxx Xx.
Xxxxxxx, XX 00,000
Xxxxxx X0X 0X0
--------------------------------------------------------------------
Xxxxx Xxxxxx
0000 - 0000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 13,334
Canada V6A H21
--------------------------------------------------------------------
