AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger, dated as of May 19, 2005 (the
"Effective Date"), is entered into by and among XBR Acquisition, Inc., a
Delaware corporation ("XBRA"), CNH Holdings Company, a Nevada corporation and
the parent corporation of XBRA ("CNH"), XBridge Software, Inc., a Delaware
corporation (the "Company"), and the undersigned stockholders of the Company set
forth on the signature page hereto under the heading "Stockholders" (each, a
"Stockholder", and collectively, the "Stockholders").
RECITALS
WHEREAS, the board of directors of CNH, XBRA and the Company have
adopted this Agreement and Plan of Merger, providing for the merger of XBRA with
and into the Company (the "Merger") under the Delaware General Corporation Law
(the "DGCL") in accordance with the provisions of this Agreement and have
recommended the Merger to their respective shareholders and members for
approval;
WHEREAS, the parties intend for the Merger to qualify as a
reorganization within the meaning of Section 368(a) of the Code (as defined
below).
ARTICLE I
DEFINITIONS
Certain terms used in this Agreement but not otherwise defined shall
have the meanings ascribed thereto in Exhibit A attached hereto.
ARTICLE II
THE MERGER
2.1 The Merger. Subject to the terms and conditions of this Agreement, at the
Effective Time, XBRA will be merged with and into the Company in accordance with
this Agreement, and the separate existence of XBRA shall cease, and the Company
shall continue as the surviving entity and wholly owned subsidiary of CNH. The
Company as it exists from and after the Effective Time, is sometimes referred to
hereinafter as the "Surviving Company."
2.2 Effect of the Merger. Upon the effectiveness of the Merger, the Surviving
Company shall possess all the rights, privileges, immunities and franchises, as
well of a public as of a private nature, and be subject to all the restrictions,
disabilities and duties, of each of the Constituent Companies; and all property,
real, personal and mixed, and all debts due to any of the Constituent Companies
on whatever account, including subscriptions to shares, and all other things in
action and all and every other interest, of or belonging to each of the
Constituent Companies, shall be vested in the Surviving Company without further
act or deed and without any transfer or assignment having occurred; and all
property, rights, privileges, immunities and franchises, and all and every other
interest shall be thereafter as effectually the property of the Surviving
Company as they were of the Constituent Companies, and the title to any real
estate vested by deed or otherwise in either of the Constituent Companies shall
not revert or be in any way impaired by reason of the Merger; but all rights of
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creditors and all liens upon any property of either of the Constituent Companies
shall be preserved unimpaired, and all debts, liabilities and duties of the
Constituent Companies shall thenceforth attach to the Surviving Company, and may
be enforced against it to the same extent as if said debts, liabilities and
duties had been incurred or contracted by it; and all other effects of the
Merger specified in the DGCL shall result therefrom.
2.3 Consummation of the Merger. As soon as practicable after the satisfaction or
waiver of the conditions to this Agreement, the parties hereto will cause the
Merger to be consummated by filing with the appropriate agency of the State of
Delaware properly executed Certificate of Merger, substantially in the form
attached as Exhibit B, incorporating, to the extent required by the laws of the
State of Delaware, this Agreement.
2.4 Certificate of Incorporation; Directors and Officers. The Certificate of
Incorporation of the Company from and after the Effective Time shall be the
Certificate of Incorporation of the Surviving Company until thereafter amended
in accordance with the provisions therein and as provided by the DGCL. The
directors of the Company shall be the directors of the Surviving Company, until
their successors are duly elected and qualified, and the officers of the Company
shall be the officers of the Surviving Company holding such positions
immediately prior to the Effective Time until their respective successors are
duly appointed and qualified.
2.5 Conversion of Securities. At the Effective Time, by virtue of the Merger and
without any action on the part of the Company, XBRA or any holder of any
interest as a member of the Company or XBRA:
(a) All 2,150,000 shares of CNH Common Stock held by the Company shall
automatically be cancelled;
(b) All shares of Company Common Stock shall automatically be converted into the
right to receive a proportionate share of an aggregate of 4,150,000 shares of
duly authorized, validly issued, fully paid and non-assessable shares of CNH
Common Stock, without interest (the "Merger Price").
(c) The outstanding shares of XBRA Common Stock shall be converted into one
thousand (1000) shares of the issued and outstanding common stock of the
Surviving Company.
(d) All outstanding options and warrants to purchase Company Common Stock shall
be converted into options and warrants to receive shares of CNH Common Stock
based on the conversion ratio of Company Common Stock converted into CNH Common
Stock in the Merger.
2.6 Merger Payment Procedure. As soon as practicable after the Effective Time,
the Surviving Company will distribute to holders of record of Company Common
Stock so converted, a certificate representing the proportionate share of CNH
Common Stock due as a result of the Merger. In no event shall any holder of
Company Common Stock be entitled to receive interest on account of any shares of
CNH Common Stock due as a result of the Merger.
2.7 Closing of the Company Books. At the Effective Time, the books of the
Company shall be closed and no transfer of shares of Company Common Stock shall
thereafter be made.
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2.8 Reorganization under Section 368(a) of the Code. The parties intend that the
Merger will qualify as a tax-free reorganization under Section 368(a) of the
Code and this Agreement are to be interpreted to that effect. Each party agrees
to render to the other parties reasonable assistance to preserve that tax
treatment, however, no representation is made by any party hereto as to whether
the transactions contemplated hereby will so qualify.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND
STOCKHOLDERS
The Company and the Stockholders represent and warrant to XBRA and CNH
that the statements contained in this Article III are true and correct as of the
date hereof and will be true and correct as of the Closing Date as if made on
such date, except as set forth in the Schedules delivered by the Company to CNH
concurrently herewith and which are attached hereto. Notwithstanding any
provision in this Agreement to the contrary, any representation or warranty made
by a Stockholder is made only with respect to the Company and himself or herself
and not with respect any other Stockholder.
3.1 Organization. The Company is a corporation, duly organized, validly existing
and in good standing under the laws of the State of Delaware. The Company (a) is
qualified or licensed in all jurisdictions where such qualification or license
is required to own and operate its properties and conduct its business in the
manner and at the places presently conducted; (b) holds all franchises, grants,
licenses, certificates, permits, consents and orders, all of which are valid and
in full force and effect, from all applicable United States and foreign
regulatory authorities necessary to own and operate its properties and to
conduct its business in the manner and at the places presently conducted; and
(c) has full power and authority (corporate and other) to own, lease and operate
its respective properties and assets and to carry on its business as presently
conducted and as proposed to be conducted, except, in each case, where the
failure to be so qualified or licensed or to hold such franchises, grants,
licenses, certificates, permits, consents and orders or to have such power and
authority would not, when taken together with all other such failures,
reasonably be expected to have a Material Adverse Effect with respect to the
Company, as the case may be. The Company does not directly or indirectly own any
equity or similar interest in, or any interest convertible into or exchangeable
or exercisable for, any equity or similar interest in, any corporation,
partnership, joint venture or other business association or entity.
3.2 Capital Structure.
(a) As of the Effective Date, the authorized capital stock of the Company
consists of 2,000,000 shares of Company Common Stock, and no shares of preferred
stock. As of the Effective Date, (i) 1,530,380 shares of Company Common Stock
were issued and outstanding, (ii) except as set forth in Schedule 3.2, no
options or warrants for shares of Company Common Stock were issued and
outstanding; and (iii) no shares of Company Common Stock were held in the
treasury of the Company. All the outstanding shares of Company Common Stock are
duly authorized, validly issued, fully paid and non-assessable. There are no
bonds, debentures, notes or other indebtedness having voting rights (or
convertible or exchangeable into securities having such rights) ("Company Voting
Debt") of the Company issued and outstanding. Except as set forth above and in
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Schedule 3.2, there are no equity interests of the Company authorized, issued or
outstanding and there are no existing (i) options, warrants, calls, preemptive
rights, subscriptions or other rights, convertible or exchangeable securities,
agreements, arrangements or commitments of any character, relating to the issued
or unissued equity interests of the Company, obligating the Company to issue,
transfer or sell or cause to be issued, transferred or sold any equity interest
or Company Voting Debt of, or other equity interest in, the Company, (ii)
securities convertible into or exchangeable for such equity interests or (iii)
obligations of the Company or to grant, extend or enter into any such option,
warrant, call, preemptive right, subscription or other right, convertible
security, agreement, arrangement or commitment.
(b) There are no voting trusts, proxies, shareholders agreements or other
agreements or understandings to which the Company is a party with respect to the
voting or transfer of the equity interests or capital stock of the Company. The
Company is not a party to any agreement or obligation, contingent or otherwise,
to redeem, repurchase or otherwise acquire or retire any equity interests of the
Company, whether as a result of the transactions contemplated by this Agreement
or otherwise.
(c) The Company has not (i) made or agreed to make any split of its equity
interests or dividend, or issued or permitted to be issued any equity interests,
or securities exercisable for or convertible into equity interests, of the
Company, (ii), repurchased, redeemed or otherwise acquired any equity or
membership interests of the Company, or (iii) declared, set aside, made or paid
any dividends or other distributions on the outstanding equity interests of the
Company.
3.3 Authorization and Validity. Each of the Company and the Stockholders has the
appropriate power and authority and legal right to execute and deliver this
Agreement and to perform its obligations hereunder. The execution and delivery
by the Company and the Stockholders of this Agreement and the performance of
their respective obligations hereunder have been duly authorized by proper
corporate and other proceedings, and this Agreement constitutes the legal, valid
and binding obligation of the Company and the Stockholders enforceable against
it and them in accordance with their terms, except as enforceability may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.
3.4 No Conflict; Government Consent. Neither the execution and delivery by the
Company or the Stockholders of this Agreement, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will violate (a) any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on the Company or the Stockholders, or (b) the Company's
certificate of incorporation or bylaws, (c) the provisions of any indenture,
instrument or agreement to which the Company is a party or is subject, or by
which it, or its Property, is bound, or conflict with or constitute a default
thereunder, or result in, or require, the creation or imposition of any Lien in,
of or on the Property of the Company pursuant to the terms of any such
indenture, instrument or agreement. No order, consent, adjudication, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, or other action in respect of any governmental or public
body or authority, or any subdivision thereof, which has not been obtained by
the Company or the Stockholders is required to be obtained by the Company or the
Stockholders in connection with the execution and delivery of this Agreement, or
the legality, validity, binding effect or enforceability of any of this
Agreement. Except for the approval of this Agreement by the Company's
stockholders and as set forth in Schedule 3.4, no consent, approval or
authorization of, or notice to, any other person or entity, including, without
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limitation, parties to loans, contracts, leases or other agreements, is required
in connection with the execution, delivery and performance of this Agreement by
the Company or the Stockholders or the consummation by it of the transactions
contemplated hereby.
3.5 Company Financial Statements.
(a) The Company has delivered to CNH the following financial statements of the
Company: unaudited balance sheet of the Company as of December 31, 2004 and the
related statements of operations, members' equity and cash flows for the year
ended December 31, 2004 (ii) unaudited balance sheets of the Company as of March
31, 2005 (the "Company's Latest Balance Sheet") and the related statements of
operations, members' equity and cash flows for the three months then ended.
(b) Each of the unaudited financial statements of the Company have been prepared
in accordance with GAAP, applied on a consistent basis during the relevant
periods (except as may be disclosed in the notes thereto), and present fairly
the consolidated financial position and consolidated results of operations and
changes in cash flows of the Company as of the respective dates or for the
respective periods reflected therein, except, in the case of the unaudited
interim financial statements, for normal and recurring year-end adjustments that
are not material.
(c) Except as set forth in Schedule 3.5(c) and on the Company's Latest Balance
Sheet, or in the notes thereto, the Company does not have any liabilities,
debts, claims or obligations of any nature (whether accrued, absolute, direct or
indirect, contingent or otherwise, whether due or to become due), and there is
no existing condition or set of circumstances which would reasonably be
expected, individually or in the aggregate, to result in such a liability.
3.6 Liabilities and Obligations. Except as set forth in Schedule 3.6, the
Financial Statements reflect all liabilities of the Company, accrued, contingent
or otherwise (known or unknown and asserted or unasserted), arising out of
transactions effected or events occurring on or prior to the date hereof. All
reserves shown in the Financial Statements are appropriate, reasonable and
sufficient to provide for losses thereby contemplated. Except as set forth in
the Financial Statements, the Company is not liable upon or with respect to, or
obligated in any other way to provide funds in respect of or to guarantee or
assume in any manner, any debt, obligation or dividend of any person,
corporation, association, partnership, joint venture, trust or other entity.
3.7 Employee Matters.
(a) Schedule 3.7(a) contains a complete and accurate list of the names, titles
and cash compensation, including without limitation wages, salaries, bonuses
(discretionary and formula) and other cash compensation (the "Cash
Compensation") of all employees of the Company who are currently compensated at
a rate in excess of $50,000 per year and who earned in excess of such amount
during the Company's preceding fiscal year. In addition, Schedule 3.7(a)
contains a complete and accurate description of (i) all increases in Cash
Compensation of employees of the Company during the current and immediately
preceding fiscal years of the Business and (ii) any promised increases in Cash
Compensation of employees of the Company that have not yet been effected.
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(b) Schedule 3.7(b) contains a complete and accurate list of all compensation
plans, arrangements or practices (the "Compensation Plans") sponsored by the
Company or to which the Company contributes on behalf of its employees, other
than Employee Benefit Plans listed in Schedule 3.7(a). The Compensation Plans
include without limitation plans, arrangements or practices that provide for
severance pay, deferred compensation, incentive, bonus or performance awards,
and stock ownership or stock options.
(c) Schedule 3.7(c) contains a complete and accurate list of all employment
agreements (the "Employment Agreements") to which the Company is a party with
respect to its employees or is otherwise obligated.
(d) Schedule 3.7(d) contains a complete and accurate list of all employee
manuals, policies, procedures and work-related rules (the "Employee Policies and
Procedures") that apply to employees of the Company.
(e) The Company: (i) has been and is in compliance with all laws, rules,
regulations and ordinances respecting employment and employment practices, terms
and conditions of employment and wages and hours; and (ii) is not liable for any
arrears of wages or penalties for failure to comply with any of the foregoing.
The Company has not engaged in any unfair labor practice or discriminated on the
basis of race, color, religion, sex, national origin, age or handicap in its
employment conditions or practices. There are no: (i) unfair labor practice
charges or complaints or racial, color, religious, sex, national origin, age or
handicap discrimination charges or complaints pending or threatened against the
Company before any federal, state or local court, board, department, commission
or agency nor does any basis therefor exist; or (ii) existing or threatened
labor strikes, disputes, grievances, controversies or other labor troubles
affecting the Company, nor does any basis therefor exist.
(f) The Company has never been a party to any agreement with any union, labor
organization or collective bargaining unit. No employees of the Company are
represented by any union, labor organization or collective bargaining unit. To
the best knowledge of the Company, the employees of the Company have no
intention to and have not threatened to organize or join a union, labor
organization or collective bargaining unit.
(g) All employees of the Company are citizens of, or are authorized to be
employed in, the United States.
3.8 Employee Benefit Plans.
(a) Schedule 3.8(a) contains a complete and accurate list of all employee
benefit plans (the "Employee Benefit Plans") (within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
sponsored by the Company or to which the Company contributes or may be obligated
to contribute on behalf of its employees and all Employee Benefit Plans
previously sponsored or contributed to on behalf of the Company's or
Shareholder's employees within the three years preceding the date hereof. Each
Employee Benefit Plan has been administered and maintained in compliance with
all laws, rules and regulations. No Employee Benefit Plan is currently the
subject of an audit, investigation, enforcement action or other similar
proceeding conducted by any state or federal agency. No prohibited transactions
(within the meaning of Section 4975 of the Code) have occurred with respect to
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any Employee Benefit Plan. No threatened or pending claims, suits or other
proceedings exist with respect to any Employee Benefit Plan other than normal
benefit claims filed by participants or beneficiaries.
(b) The Company has received a favorable determination letter or ruling from the
Internal Revenue Service for each Employee Benefit Plan intended to be qualified
within the meaning of Section 401(a) of the Code and/or tax-exempt within the
meaning of Section 501(a) of the Code. No proceedings exist or have been
threatened that could result in the revocation of any such favorable
determination letter or ruling. No accumulated funding deficiency (within the
meaning of Section 412 of the Code), whether waived or unwaived, exists with
respect to any Employee Benefit Plan or any plan sponsored by any member of a
controlled group (within the meaning of Section 412(n)(6)(B) of the Code) in
which the Company is a member (a "Controlled Group"). With respect to each
Employee Benefit Plan subject to Title IV of ERISA, the assets of each such plan
are at least equal in value to the present value of accrued benefits determined
on an ongoing basis as of the date hereof. With respect to each Employee Benefit
Plan described in Section 501(c)(9) of the Code, the assets of each such plan
are at least equal in value to the present value of accrued benefits as of the
date hereof. Neither the Company or any member of a Controlled Group has any
liability to pay excise taxes with respect to any Employee Benefit Plan under
applicable provisions of the Code or ERISA. Neither the Company nor any member
of a Controlled Group is or ever has been obligated to contribute to a
multiemployer plan within the meaning of Section 3(37) of ERISA.
(c) No facts or circumstances exist that would result in the imposition of
liability against Purchaser by the Pension Benefit Guaranty Corporation as a
result of any act or omission by the Company or any member of a Controlled
Group. No reportable event (within the meaning of Section 4043 of ERISA) for
which the notice requirement has not been waived has occurred with respect to
any Employee Benefit Plan subject to the requirements of Title IV of ERISA. the
Company has no obligation or commitment to provide medical, dental or life
insurance benefits to or on behalf of any of its employees who may retire or any
of its former employees who have retired from employment with the Company
(d) Schedule 3.8(d) contains a complete and accurate list of all claims made
(without identifying specific individuals) under any medical or dental care plan
or commitment offered by the Company to its employees involving hospitalization,
medical or dental care claims that have exceeded $5,000 per year for an
individual during the Company's current fiscal year or any of Shareholder three
fiscal years preceding the date hereof.
3.9 Title; Leased Assets. A description of all interests in real property owned
by the Company (collectively, the "Real Property") is set forth in Schedule
3.9(a). Except as set forth in Schedule 3.9(a), the Company has good, valid and
marketable title to all the Real Property. Except as set forth in Schedule
3.9(b), the Company has good, valid and marketable title to all tangible and
intangible personal property owned by it (collectively, the Personal Property").
A list of all leases of real and personal property to which the Company is a
party, either as lessor or lessee, are set forth in Schedule 3.9(c). All such
leases are valid and enforceable in accordance with their respective terms
except as may be limited by applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally or the availability of equitable remedies.
Except for those assets acquired since September 30, 2004, all tangible and
intangible assets used in the conduct of the business of the Company are
reflected in the Financial Statements in a manner that is in conformity with
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generally accepted accounting principles applied on a consistent basis with
prior periods. the Company owns, leases or otherwise possesses a right to use
all assets used in the conduct of the business of the Company, which will not be
impaired by the consummation of the transactions contemplated hereby.
3.10 Commitments.
(a) Except as set forth in Schedule 3.10, the Company has not entered into, nor
are the shares of Company Common Stock, or the assets of the Company bound by,
whether or not in writing, any (i) partnership or joint venture agreement; (ii)
deed of trust or other security agreement; (iii) guaranty or suretyship,
indemnification or contribution agreement or performance bond; (iv) employment,
consulting or compensation agreement or arrangement, including the election or
retention in office of any director or officer; (v) labor or collective
bargaining agreement; (vi) debt instrument, loan agreement or other obligation
relating to indebtedness for borrowed money or money lent or to be lent to
another; (vii) deed or other document evidencing an interest in or contract to
purchase or sell real property; (viii) agreement with dealers or sales or
commission agents, public relations or advertising agencies, accountants or
attorneys; (ix) lease of real or personal property, whether as lessor, lessee,
sublessor or sublessee; (x) agreement between the Company and any affiliate of
the Company; (xi) agreement relating to any material matter or transaction in
which an interest is held by a person or entity that is an affiliate of the
Company; (xii) any agreement for the acquisition of services, supplies,
equipment or other personal property and involving more than $25,000 in the
aggregate; (xiii) powers of attorney; (xiv) contracts containing noncompetition
covenants; (xv) any other agreement or commitment not made in the ordinary
course of business or that is material to the business or financial condition of
the Company.
All of the foregoing are hereinafter collectively referred to as the
"Commitments." There are no existing defaults, events of default or events,
occurrences, acts or omissions that, with the giving of notice or lapse of time
or both, would constitute defaults by the Company, and no penalties have been
incurred nor are amendments pending, with respect to the Commitments, except as
described in Schedule 3.10. The Commitments are in full force and effect and are
valid and enforceable obligations of the parties thereto in accordance with
their respective terms, and no defenses, off-sets or counterclaims have been
asserted or, to the best knowledge of the Company and Shareholders, may be made
by any party thereto, nor has the Company waived any rights thereunder. The
Company has not received notice of any default with respect to any Commitment.
(b) Except as contemplated hereby, neither the Company nor the Stockholders has
received notice of any plan or intention of any other party to any Commitment to
exercise any right to cancel or terminate any Commitment, and neither the
Company nor the Stockholders knows of any fact that would justify the exercise
of such a right. Neither the Company nor the Stockholders currently
contemplates, or has reason to believe any other person or entity currently
contemplates, any amendment or change to any Commitment. Except as listed in
Schedule 3.10, none of the customers or suppliers of the Company has refused, or
communicated that it will or may refuse, to purchase or supply goods or
services, as the case may be, or has communicated that it will or may
substantially reduce the amounts of goods or services that it is willing to
purchase from, or sell to, the Company.
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3.11 Adverse Agreements. the Company is not a party to any agreement or
instrument or subject to any charter or other corporate restriction or any
judgment, order, writ, injunction, decree, rule or regulation that materially
and adversely affects, or so far as the Company or the Stockholders can now
foresee, may in the future materially and adversely affect, the condition
(financial or otherwise), operations, assets, liabilities, business or prospects
of the Company.
3.12 Insurance. A list of all insurance policies of the Company are set forth in
Schedule 3.12. All of such policies are valid and enforceable policies, issued
by insurers of recognized responsibility in amounts and against such risks and
losses as is customary in the industry of the insured. Such insurance shall be
outstanding and duly in force without interruption up to and including the
Closing Date.
3.13 Patents, Trade-marks, Service Marks and Copyrights.
(a) The Company owns all patents, trade-marks, service marks and copyrights, if
any, necessary to conduct its business, or possesses adequate licenses or other
rights, if any, therefor, without conflict with the rights of others. Set forth
in Schedule 3.13 is a true and correct description of the following (the
"Proprietary Rights"): (i) all trade-marks, trade-names, service marks and other
trade designations, including common law rights, registrations and applications
therefor, and all patents, copyrights and applications currently owned, in whole
or in part, by the Company with respect to the business of the Company, and all
licenses, royalties, assignments and other similar agreements relating to the
foregoing to which the Company is a party (including expiration date if
applicable); and (ii) all agreements relating to technology, know-how or
processes that the Company is licensed or authorized to use by others, or which
it licenses or authorizes others to use.
(b) The Company has the sole and exclusive right to use the Proprietary Rights
without infringing or violating the rights of any third parties. Use of the
Proprietary Rights does not require the consent of any other person and the
Proprietary Rights are freely transferable. No claim has been asserted by any
person to the ownership of or right to use any Proprietary Right or challenging
or questioning the validity or effectiveness of any license or agreement
constituting a part of any Proprietary Right, and neither the Company nor any
Shareholder knows of any valid basis for any such claim. Each of the Proprietary
Rights is valid and subsisting, has not been cancelled, abandoned or otherwise
terminated and, if applicable, has been duly issued or filed.
(c) The Company and the Stockholders have no knowledge of any claim that, or
inquiry as to whether, any product, activity or operation of the Company
infringes upon or involves, or has resulted in the infringement of, any
proprietary right of any other person, corporation or other entity; and no
proceedings have been instituted, are pending or are threatened that challenge
the rights of the Company with respect thereto.
3.14 Trade Secrets and Customer Lists. The Company has the right to use, free
and clear of any claims or rights of others all trade secrets, customer lists
and proprietary information required for the marketing of all merchandise and
services formerly or presently sold or marketed by the Company. The Company is
not using or in any way making use of any confidential information or trade
secrets of any third party, including without limitation any past or present
employee of the Company.
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3.15 Material Adverse Change. Since September 30, 2004, there has been no change
in the business, property, condition (financial or otherwise) or results of
operations of the Company which could reasonably be expected to have a Material
Adverse Effect with respect to the Company.
3.16 Taxes. The Company has filed all United States federal tax returns and all
other tax returns which are required to be filed and have paid all taxes due
pursuant to said returns or pursuant to any assessment received by the Company,
except such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided on the Company Latest Balance Sheet and as
to which no Lien exists. No tax liens have been filed and no claims are being
asserted with respect to any such taxes. The charges, accruals and reserves on
the books of the Company in respect of any taxes or other governmental charges
are adequate. The Company is taxable as a "C" corporation for federal income tax
purposes.
3.17 Litigation and Contingent Obligations. There is no litigation, arbitration,
governmental investigation, proceeding or inquiry pending or, to best knowledge
of any of its officers, threatened against or affecting the Company. The Company
has no contingent obligations not provided for or disclosed in the Company
Latest Balance Sheet.
3.18 Material Agreements. Schedule 3.18 lists all agreements, contracts, leases,
licenses and other instruments to which the Company is a party.
3.19 Compliance With Laws. The Company has complied with all applicable
statutes, rules, regulations, orders and restrictions of any domestic or foreign
government or any instrumentality or agency thereof having jurisdiction over the
conduct of their respective businesses or the ownership of their respective
Property except for any failure to comply with any of the foregoing which could
not reasonably be expected to have a Material Adverse Effect with respect to the
Company.
3.20 Information Furnished to the Company and Stockholders. The Company and each
of the Stockholders have been provided with, and is familiar with, the financial
and other information regarding the business and operations of CNH, including,
but not limited to, the CNH SEC Documents that the Company and the Stockholders
deem necessary for evaluating the merits and risks of the transactions
contemplated by this Agreement. Each of the Stockholders are knowledgeable and
experienced in financial and business matters and is capable of evaluating the
merits and risks of the transactions contemplated by this Agreement.
3.21 Investment Purposes. The Stockholders are acquiring the CNH Common Stock
for investment purposes and not with a view toward resale or distribution
thereof, and has no present intention of selling, granting any participation in,
or otherwise distributing the CNH Common Stock.
3.22 Restricted Securities. The Stockholders understand that the shares of CNH
Common Stock will be issued by CNH pursuant to an exemption from the
registration requirements of the Securities Act, and are characterized as
"restricted securities" under the Securities Act and may be resold without
registration under the Securities Act only in limited circumstances. In
connection with the foregoing, each of the Stockholders is familiar with Rule
144 and understand the resale limitations imposed thereby on the CNH Common
Stock.
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3.23 Broker's or Finder's Commissions. No broker's or finder's or placement fee
or commission will be payable to any broker or agent engaged by the Company or
any of its officers, directors or agents or the Stockholders with respect to the
transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES CNH AND XBRA
CNH and XBRA represent and warrant to the Company and the Stockholders
that the statements contained in the Article IV are true and correct as of the
date hereof and will be true and correct as of the Closing Date as if made on
such date, except as set forth in the Schedules delivered by CNH to the Company
concurrently herewith.
4.1 Organization. CNH is a corporation, duly organized, validly existing and in
good standing under the laws of the State of Nevada. XBRA is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Each of XBRA and CNH (a) is qualified or licensed in all jurisdictions
where such qualification or license is required to own and operate its
properties and conduct its business in the manner and at the places presently
conducted; (b) holds all franchises, grants, licenses, certificates, permits,
consents and orders, all of which are valid and in full force and effect, from
all applicable United States and foreign regulatory authorities necessary to own
and operate its properties and to conduct its business in the manner and at the
places presently conducted; and (b) has full power and authority (corporate and
other) to own, lease and operate its respective properties and assets and to
carry on its business as presently conducted and as proposed to be conducted,
except, in each case, where the failure to be so qualified or licensed or to
hold such franchises, grants, licenses, certificates, permits, consents and
orders or to have such power and authority would not, when taken together with
all other such failures, reasonably be expected to have a Material Adverse
Effect with respect to XBRA or CNH, as the case may be. Except for CNH'
ownership of the equity interest in XBRA or as otherwise as contemplated herein,
neither XBRA nor CNH directly or indirectly own any equity or similar interest
in, or any interest convertible into or exchangeable or exercisable for, any
equity or similar interest in, any corporation, partnership, joint venture or
other business association or entity.
4.2 Capital Structure.
(a) As of the Effective Date, the authorized capital stock of CNH consists of
10,000,000 shares of CNH Common Stock, and 1,000,000 shares of preferred stock,
par value $0.01 per share. As of the Effective Date, (i) 4,778,385 shares of CNH
Common Stock and no shares of preferred stock were issued and outstanding, (ii)
except as set forth in Schedule 4.2, no options for shares of CNH Common Stock
were issued and outstanding; and (iii) no shares of CNH Common Stock were held
in the treasury of the Company. All the outstanding shares of CNH Common Stock
are duly authorized, validly issued, fully paid and non-assessable. As of the
Effective Date, CNH is the sole stockholder of XBRA. Except as set forth in
Schedule 4.2, there are no bonds, debentures, notes or other indebtedness having
voting rights (or convertible or exchangeable into securities having such
rights) ("Voting Debt") of CNH or XBRA issued and outstanding. Except as set
forth above and in Schedule 4.2, there are no equity interests of CNH or XBRA
authorized, issued or outstanding and there are no existing (i) options,
warrants, calls, preemptive rights, subscriptions or other rights, convertible
or exchangeable securities, agreements, arrangements or commitments of any
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character, relating to the issued or unissued equity interests of CNH or XBRA,
obligating CNH or XBRA to issue, transfer or sell or cause to be issued,
transferred or sold any equity interest or Voting Debt of, or other equity
interest in, CNH or XBRA, (ii) securities convertible into or exchangeable for
such equity interests or (iii) obligations of CNH or XBRA to grant, extend or
enter into any such option, warrant, call, preemptive right, subscription or
other right, convertible security, agreement, arrangement or commitment. Except
as contemplated under this Agreement or as set forth in Schedule 4.2, CNH has
not granted to any Person any rights to have any securities registered under the
Securities Act.
(b) There are no voting trusts, proxies, shareholders agreements or other
agreements or understandings to which CNH is a party with respect to the voting
or transfer of the equity interests or capital stock of CNH. CNH is not a party
to any agreement or obligation, contingent or otherwise, to redeem, repurchase
or otherwise acquire or retire any equity interests of CNH, whether as a result
of the transactions contemplated by this Agreement or otherwise.
(c) CNH has not (i) made or agreed to make any split of its equity interests or
dividend, or issued or permitted to be issued any equity interests, or
securities exercisable for or convertible into equity interests, of CNH, (ii),
repurchased, redeemed or otherwise acquired any equity or membership interests
of CNH, or (iii) declared, set aside, made or paid any dividends or other
distributions on the outstanding equity interests of CNH.
4.3 Authorization and Validity. Each of XBRA and CNH has the appropriate power
and authority and legal right to execute and deliver this Agreement and to
perform its obligations hereunder. The execution and delivery by XBRA and CNH of
this Agreement and the performance of their respective obligations hereunder
have been duly authorized by proper corporate and other proceedings, and this
Agreement constitutes the legal, valid and binding obligation of XBRA and CNH
enforceable against it and them in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.
4.4 No Conflict; Government Consent. Neither the execution and delivery by XBRA
and CNH of this Agreement, nor the consummation of the transactions therein
contemplated, nor compliance with the provisions thereof will violate (a) any
law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on XBRA or CNH, or (b) CNH' or XBRA's articles of incorporation or
bylaws, (c) the provisions of any indenture, instrument or agreement to which
either XBRA or CNH is a party or is subject, or by which it, or its Property, is
bound, or conflict with or constitute a default thereunder, or result in, or
require, the creation or imposition of any Lien in, of or on the Property of
XBRA or CNH pursuant to the terms of any such indenture, instrument or
agreement. No order, consent, adjudication, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, or
other action in respect of any governmental or public body or authority, or any
subdivision thereof, which has not been obtained by XBRA, CNH or the CNH
Shareholder is required to be obtained by XBRA or CNH in connection with the
execution and delivery of this Agreement, or the legality, validity, binding
effect or enforceability of any of this Agreement. Except as set forth in
Schedule 4.4, no consent, approval or authorization of, or notice to, any other
person or entity, including, without limitation, parties to loans, contracts,
leases or other agreements, is required in connection with the execution,
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delivery and performance of this Agreement by XBRA or CNH or the consummation by
it of the transactions contemplated hereby.
4.5 CNH Financial Statements.
(a) CNH has filed all forms, reports, statements, schedules, registration
statements and other documents required to be filed with the SEC since January
1, 2003 (the "CNH SEC Documents"), each of which complied in all material
respects with the applicable requirements of the Securities Act, and the rules
and regulations promulgated thereunder, or the Exchange Act and the rules and
regulations promulgated thereunder, each as in effect on the date so filed. No
Subsidiary of CNH is required to file any form, report, statement, schedule,
registration statement or other document with the SEC. No CNH SEC Document, when
filed (or, if amended or superseded by a filing prior to the Closing Date, on
the date of such filing) contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(b) Each of the audited and unaudited consolidated financial statements of CNH
(including any related notes thereto) included in the CNH SEC Documents have
been prepared in accordance with GAAP, applied on a consistent basis during the
relevant periods (except as may be disclosed in the notes thereto), and present
fairly the consolidated financial position and consolidated results of
operations and changes in cash flows of CNH and its Subsidiaries as of the
respective dates or for the respective periods reflected therein, except, in the
case of the unaudited interim financial statements, for normal and recurring
year-end adjustments that are not material.
(c) Except as set forth in Schedule 4.5(c) and on the balance sheet of CNH as of
December 31, 2004 included in the CNH SEC Documents (the "CNH Latest Balance
Sheet"), or in the notes thereto, CNH does not have any liabilities, debts,
claims or obligations of any nature (whether accrued, absolute, direct or
indirect, contingent or otherwise, whether due or to become due), and there is
no existing condition or set of circumstances which would reasonably be
expected, individually or in the aggregate, to result in such a liability.
(d) XBRA is a newly formed entity, formed for the purpose of the Merger, and has
no assets or liabilities of any kind whatsoever.
4.6 Material Adverse Change. Since December 31, 2004, there has been no change
in the business, property, condition (financial or otherwise) or results of
operations of CNH which could reasonably be expected to have a Material Adverse
Effect with respect to CNH.
4.7 Taxes. CNH has filed all United States federal tax returns and all other tax
returns which are required to be filed and have paid all taxes due pursuant to
said returns or pursuant to any assessment received by CNH, except such taxes,
if any, as are being contested in good faith and as to which adequate reserves
have been provided on the CNH Latest Balance Sheet and as to which no Lien
exists. No tax liens have been filed and no claims are being asserted with
respect to any such taxes. The charges, accruals and reserves on the books of
CNH in respect of any taxes or other governmental charges are adequate. CNH is
taxable as a "C" corporation for federal income tax purposes.
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4.8 Litigation and Contingent Obligations. Except as set forth in Schedule 4.8,
there is no material litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to best knowledge of any of its officers,
threatened against or affecting CNH. CNH has no contingent obligations not
provided for or disclosed in the CNH Latest Balance Sheet.
4.9 Material Agreements. Schedule 4.9 lists all agreements, contracts, leases,
licenses and other instruments to which CNH is a party.
4.10 Compliance With Laws. CNH has complied with all applicable statutes, rules,
regulations, orders and restrictions of any domestic or foreign government or
any instrumentality or agency thereof having jurisdiction over the conduct of
their respective businesses or the ownership of their respective Property except
for any failure to comply with any of the foregoing which could not reasonably
be expected to have a Material Adverse Effect with respect to CNH.
4.11 Operations. XBRA has ever had any operations.
4.12 Issuance of CNH Common Stock. The shares of CNH Common Stock to be
delivered to the Stockholders hereunder have been duly and validly authorized
and when issued in accordance with this Agreement, will be duly and validly
issued, fully paid and nonassessable and will not have been issued in violation
of any statutory preemptive rights, or any other preemptive right, co-sale
right, right of first refusal or other similar right.
4.13 Broker's or Finder's Commissions. No broker's or finder's or placement fee
or commission will be payable to any broker or agent engaged by XBRA, CNH or any
of its officers, directors or agents or the CNH Shareholder with respect to the
transactions contemplated by this Agreement.
ARTICLE V
CLOSING
5.1 Closing. The closing of the transactions contemplated under this Agreement
(the "Closing") shall take place at the offices of Xxxxxxx Xxxxxx L.L.P., 0000
X. Xxxxxxx Xxxxxxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxx, 00000 on or before April
30, 2005, or such other date as mutually agreed to by the parties (the "Closing
Date")
5.2 XBRA and CNH Conditions. The obligation of XBRA and CNH to consummate the
transactions contemplated under this Agreement is subject to the satisfaction,
prior to or at the Closing, of the following conditions:
(a) Representations and Warranties. The representations and warranties of the
Company and the Stockholders contained in Article III shall be true and correct
in all material respects and the covenants and agreements of such parties set
forth in Article VI shall have been complied with at and as of the Closing Date
as though then made, except to the extent of changes caused by the transactions
expressly contemplated herein.
(b) Consents. The Company and the Stockholders shall have received all approvals
and consents required under its loan agreements, leases, and indentures,
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shareholders agreements or other debt documents or contracts necessary to
consummate the transactions contemplated herein, including without limitation,
those set forth on Schedule 3.4.
(c) Debt Conversion. CNH shall have obtained the agreement of Xx. Xxxxx Xxxx,
Xxxx Royal and Xxxxx Xxxxx to convert aggregate of $482,394.31 of debt standing
on the balance sheets of the Company at the Effective Date, into shares of CNH
Common Stock, at a conversion price equal to the average closing price of a
share of CNH Common Stock on ten trading days immediately prior to the Effective
Date.
(d) No Injunctions. There shall be no effective injunction, writ, preliminary
restraining order or any order of any nature issued by a court of competent
jurisdiction prohibiting or imposing any condition on the consummation of any of
the transactions contemplated hereby.
5.3 The Company and the Stockholders Conditions. The obligation of the Company
and the Stockholders to consummate the transactions contemplated under this
Agreement is subject to the satisfaction, prior to or at the Closing, of the
following conditions:
(a) Representations and Warranties. The representations and warranties of XBRA
and CNH contained in Article IV hereof shall be true and correct in all material
respects and the covenants and agreements of such parties set forth in Article
VI shall have been complied with at and as of the Closing Date as though then
made, except to the extent of changes caused by the transactions expressly
contemplated herein.
(b) Consents. The XBRA and CNH shall have received all approvals and consents
required under their respective loan agreements, leases, and indentures,
shareholders agreements or other debt documents or contracts necessary to
consummate the transactions contemplated herein including without limitation,
those set forth on Schedule 4.4.
(c) Approval of Company Shareholders. The Company shall have obtained the
consent of the holders of a majority of the outstanding shares of Company Common
Stock.
(d) No Injunctions. There shall be no effective injunction, writ, preliminary
restraining order or any order of any nature issued by a court of competent
jurisdiction prohibiting or imposing any condition on the consummation of any of
the transactions contemplated hereby.
5.4 Closing Deliverables.
(a) At the Closing, the Company will have delivered or caused to be delivered to
CNH all of the following in form and substance satisfactory to CNH:
(i) a certificate of the secretary of the Company, certifying (A) that a true,
correct and complete copy of the certificate of incorporation of the Company is
attached, and (B) that a true, correct and complete copy of the bylaws of the
Company is attached;
(ii) copies of the resolutions unanimously and duly adopted by the Company's
board of directors, authorizing the execution, delivery and performance by the
Company of this Agreement, and the consummation of all of the other transactions
hereunder and thereunder, certified as of the Closing Date by the secretary of
the Company;
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(iii) a certificate dated as of the Closing Date from an officer of the Company
and from each of the Stockholders stating that the conditions specified in
Section 5.2(a), (b) and (e), and Section 5.3(c) have been fully satisfied;
(iv) Exchange and Settlement Agreements, in the form set forth in the attached
Exhibit C, signed by each of Messrs. Xxxxx Xxxxx, Xxxxxxx Royal and Xx. Xxxxx
Xxxx; and
(b) At the Closing, CNH will have delivered or caused to be delivered to the
Company and the Stockholders each of the following in form and substance
satisfactory to the Company and the Stockholders:
(i) copies of the resolutions unanimously and duly adopted by the boards of
directors of CNH and of XBRA, respectively, authorizing the execution, delivery
and performance by CNH and XBRA of this Agreement, and the consummation of all
of the other transactions hereunder and thereunder, certified as of the Closing
Date by the secretary of CNH and XBRA, as applicable; and
(ii) a certificate of existence and good standing from the Secretaries of State
of the States of Texas and Delaware, each of a recent date, with respect to CNH
and XBRA, as applicable.
ARTICLE VI
PRE-CLOSING COVENANTS
6.1 Covenants of CNH and XBRA. After the Effective Date and until the earlier of
(a) the Closing Date or (b) the expiration or termination of this Agreement,
unless the Company shall otherwise consent in writing:
(a) Conduct of Business. CNH will carry on and conduct there respective
businesses in substantially the same manner as it is presently conducted and do
all things necessary to remain duly organized, validly existing and in good
standing in its jurisdiction of organization and maintain all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted. XBRA will not conduct any business of any kind whatsoever.
(b) Compliance with Laws. Each of CNH and XBRA will comply with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject.
6.2 Covenants of the Company. After the Effective Date and until the earlier of
(a) the Closing Date, or (b) the expiration or termination of this Agreement,
unless CNH shall otherwise consent in writing;
(a) Conduct of Business. the Company will carry on and conduct its business in
substantially the same manner as it is presently conducted and do all things
necessary to remain duly incorporated or organized, validly existing and in good
standing in its jurisdiction of incorporation or organization and maintain all
requisite authority to conduct its business in each jurisdiction in which its
16
business is conducted. Without limiting the generality of the foregoing, the
Company will not: (i) declare, pay or set aside for payment any dividend or
other distribution payable in cash, stock, property or otherwise in respect of
its equity ownership; or directly or indirectly redeem, purchase, repurchase
(except as required to consummate the transactions contemplated herein) or
otherwise acquire any the Company Common Stock or any securities or obligations
convertible into or exchangeable for any of its the Company Common Stock, as the
case may be; (ii)(A) incur or assume any debt or issue any debt securities,
except under its existing lines of credit, but not exceeding the current credit
limit under such lines of credit, (B) assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise) for
the obligations of any other person, (C) make any loans or advances to any
person, other than with respect to extensions of credit to their respective
customers in the ordinary course of business consistent with past practice, or
(D) mortgage or pledge any of its assets, tangible or intangible, or create any
material Lien thereupon; (iii) enter into any lines of business or otherwise
commence operation of any business; or (iv) take any action or agree, in writing
or otherwise, to take any of the foregoing actions or any action which would
make any representation or warranty in Article IV hereof materially untrue or
incorrect.
(b) Compliance with Laws. The Company will comply with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject.
(c) Merger. Except as contemplated by this Agreement, the Company will not merge
or consolidate with or into any other Person.
(d) Dilution of Ownership. The Company will not consent to or approve of the
issuance of (i) any additional stock, securities or other equity securities or
interests, (ii) any instrument convertible voluntarily by the Company or
automatically upon the occurrence or non-occurrence of any event or condition
into, or exchangeable for, any such stock, securities or interests, or (iii) any
warrants, options, contracts or other commitments entitling any third party to
purchase or otherwise acquire any such stock, securities or interests.
6.3 Access. From the Effective Date until the Closing Date (or the termination
of this Agreement), each party shall afford to the other party and such other
party's representatives reasonable access, upon reasonable notice during normal
business hours, to all its properties, books, contracts, commitments, personnel
and records and shall furnish promptly to such other party all information
concerning its business, properties and personnel as may reasonably be
requested. All such information as may be furnished by or on behalf of a party
to another party or such other party's representatives pursuant to this Section
6.3 shall be and remain confidential. No investigation pursuant to this Section
6.3 shall affect any representation or warranty in this Agreement of any party
hereto or any condition to the obligations of the parties hereto.
6.4 Notification of Certain Matters. Each of the Company, XBRA, CNH, and the
Stockholders shall promptly advise the other parties orally and in writing of
(a) any representation or warranty made by it contained in this Agreement that
is qualified as to materiality becoming untrue or inaccurate in any respect or
any such representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect or (b) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement or (c) any event or change
or impending occurrence of any event or change of which it has knowledge and
which has resulted, or which, insofar as can reasonably be foreseen, is likely
17
to result, in any of the conditions to the transactions contemplated hereby set
forth in Article V not being satisfied; provided, however, that no such
notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
ARTICLE VII
REGISTRATION; LIMITATION ON TRANSFER OF CNH COMMON STOCK
7.1 Registration and Listing. CNH will cause the CNH Common Stock to be issued
pursuant to this Agreement to continue to be registered under Sections 12(b) or
12(g) of the Exchange Act and will comply in all material respects with its
reporting and filing obligations under the Exchange Act. In addition, on or
before July 31, 2005, pursuant to the registration rights covenants set forth in
the attached Exhibit D, CHN will file a registration statement with the SEC
covering the shares of CNH Common Stock to be issued under this Agreement.
7.2 Restriction on Transfer. Except pursuant to Section 7.1, the shares of CNH
Common Stock to be issued to the Stockholders in the Merger will not be
registered under the Securities Act on the Closing Date and may not be
transferred, sold or otherwise disposed of by any Stockholder, except pursuant
to an effective registration statement under the Securities Act or in accordance
with an exemption from the registration requirements of the Securities Act.
7.3 Restrictive Legend. Each certificate representing shares of CNH Common Stock
issued by CNH in accordance with Section 2.5 shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND
ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE
144 UNDER THE ACT, AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF BY THE HOLDER EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE ACT, AS
AMENDED, AND IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS OF
ANY STATE WITH RESPECT THERETO OR IN ACCORDANCE WITH AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE
AND ALSO MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
BY THE HOLDER WITHOUT COMPLIANCE WITH THE APPLICABLE
SECURITIES AND EXCHANGE COMMISSION RULES AND REGULATIONS.
7.4 Removal of Restrictive Legend. CNH agrees to remove such legend (or any
relevant portion thereof), by prompt delivery of substitute certificates upon
the request of the holder if at such time such legend (or portion thereof) is no
longer required for purposes of, or applicable pursuant to, the prior provisions
of this Article VII.
ARTICLE VIII
INDEMNIFICATION; TERMINATION
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8.1 Indemnification by the Stockholders. Each of the Stockholders hereby agrees
to defend, indemnify and hold CNH and its officers, directors, shareholders,
employees, successors, heirs, assigns, attorneys and representatives harmless
against all losses, claims, damages, penalties, judgments, liabilities and
expenses (including, without limitation, all expenses of litigation or
preparation therefor whether or not CNH is a party thereto) which CNH may pay or
incur arising out of or relating to a breach of any representation, warranty or
covenant of the Company or the Stockholders under this Agreement.
Notwithstanding the foregoing, a Stockholder's obligation to indemnify CNH shall
only apply to the extent (a) that the Company or such Stockholder breached his
representations, warranties or covenants (and not those of any other
Stockholder) and (b) of such Stockholder's Gross Proceeds.
8.2 Indemnification by CNH. CNH agrees to defend, indemnify and hold the Company
and the Stockholders, and their respective officers, directors, shareholders,
members, employees, successors, assigns, attorneys and representatives harmless
against all losses, claims, damages, penalties, judgments, liabilities and
expenses (including, without limitation, all expenses of litigation or
preparation therefor whether or not the Company or the Stockholder is a party
thereto) which the Company or the Stockholders may pay or incur arising out of
or relating to a breach of any representation, warranty or covenant of CNH under
this Agreement.
8.3 Survival of Representations and Warranties. The representations and
warranties made by parties in this Agreement and in any certificate or schedule
furnished hereunder shall survive the Effective Time for a period of one (1)
year thereafter. None of the covenants or agreements in this Agreement shall
survive the Effective Time, except for those covenants and agreements contained
herein or therein that by their terms apply or are to be performed in whole or
in part after the Effective Time, including without limitation, the covenants
and agreements contained in Section 8.1 and 8.2 above.
8.4 Termination. This Agreement may be terminated, and the transactions
contemplated hereby abandoned, prior to the Closing as follows:
(a) by mutual written consent of all the parties;
(b) by CNH or XBRA in the event any of the conditions in Section 5.2 have not
been satisfied on or before May 31, 2005 through no fault of XBRA or CNH; or
(c) by the Company in the event any of the conditions in Section 5.3 have not
been satisfied on or before May 31, 2005, through no fault of the Company or any
of the Stockholders;
8.5 Effect of Termination. If this Agreement is terminated pursuant to Sections
8.4 all rights and obligations of the parties hereunder shall terminate without
liability of any party to any other party.
ARTICLE IX
GENERAL PROVISIONS
9.1 Headings. Section headings in this Agreement are for convenience of
reference only, and shall not govern the interpretation of any of the provisions
of this Agreement.
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9.2 Expenses. Each of the parties shall bear their own expenses (including
reasonable attorneys' fees and time charges of attorneys) paid or incurred by
such party in connection with the preparation, negotiation, execution, delivery,
review, amendment, modification, and administration of this Agreement and the
Merger.
9.3 Entire Agreement; Assignment. This Agreement and the attached Exhibits and
Schedules embodies the entire agreement and understanding among XBRA, CNH, the
Company and the Stockholders and supersede all prior agreements and
understandings among such parties relating to the subject matter thereof. This
Agreement may not be assigned without the prior written consent of the other
parties.
9.4 Benefits of this Agreement. This Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns.
9.5 Amendment. No amendment or modification to this Agreement shall be
effective, unless in writing and signed by all the parties.
9.6 Severability. Any provision in this Agreement that is held to be
inoperative, unenforceable, or invalid in any jurisdiction shall, as to that
jurisdiction, be inoperative, unenforceable, or invalid without affecting the
remaining provisions in that jurisdiction or the operation, enforceability, or
validity of that provision in any other jurisdiction, and to this end the
provisions of this Agreement are declared to be severable.
9.7 Notices. All notices, requests and other communications to any party
hereunder shall be in writing (including electronic transmission, facsimile
transmission or similar writing) and shall be given to such party at (a) its
address or facsimile number set forth on the signature pages hereof or (b) such
other address or facsimile number as such party may hereafter specify. Each such
notice, request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, (ii) if given by mail, 72
hours after such communication is deposited in the mail, certified or registered
with first class postage prepaid, addressed as aforesaid, or (iii) if given by
any other means, when delivered (or, in the case of electronic transmission,
received) at the address specified in this Section.
9.8 Choice Of Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEVADA, WITHOUT REGARD TO ITS CHOICE OF LAWS
PROVISIONS.
9.9 Venue. THE EXCLUSIVE JURISDICTION FOR ANY CLAIM OR CONTROVERSY ARISING OUT
OF OR RELATING TO THIS AGREEMENT SHALL BE IN THE STATE AND FEDERAL COURTS
LOCATED IN DALLAS COUNTY, TEXAS AND EACH PARTY HERETO IRREVOCABLY WAIVES ANY
OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT
FORUM.
9.10 Counterparts; Facsimile. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
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any of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement may be executed and delivered by facsimile copy.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
CNH HOLDINGS COMPANY
By:______/s/____________________________________________
Name: Xxxxx Xxxxx
Title: President
Address: 00000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax: 000-000-0000_
XBR ACQUISITION, INC.
By:____/s/_______________________________________________
Name: Xxxxx Xxxx
Title: President
Address: 00000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax: 000-000-0000
XBRIDGE SOFTWARE, INC.
By:____/s/_______________________________________________
Name: Xxxxx Xxxx
Title: President
Address: 00000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax: 000-000-0000
21
STOCKHOLDERS:
/s/
--------------------------------------------------
Xxxxx Xxxx
Address: ___________________________________
Fax: ___________________________________
/s/
--------------------------------------------------
Xxxxxxx Royal
Address: ___________________________________
Fax: ___________________________________
22
EXHIBIT A
DEFINITIONS
As used in this Agreement:
"Affiliate" has the meaning ascribed to such term in the Exchange Act.
"Agreement" means this agreement, as it may be amended or modified and
in effect from time to time.
"Cash Compensation" is defined in Section 3.7(a).
"Closing" is defined in Section 5.1.
"Closing Date" is defined in Section 5.1.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitments" is defined in Section 3.10.
"Company" is defined in the preamble to this Agreement.
"Company Voting Debt" is defined in Section 3.2.
"Company's Latest Balance Sheet" is defined in Section 3.5.
"Compensation Plans" is defined in Section 3.7(b).
"Constituent Companies" means the Company and XBRA.
"Effective Date" is defined in the preamble to this Agreement.
"Effective Time" means the time at which the Certificate of Merger are
filed with the Secretary of State of the State of Delaware, in accordance with
the DGCL.
"Employee Benefit Plan" is defined in Section 3.8(a).
"Employee Policies and Procedures" is defined in Section 3.7(d).
"Employment Agreement" is defined in Section 3.7(c).
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended from time to time, and any rule and regulation issued thereunder.
A-1
"Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
"GAAP" means generally accepted accounting principles as in effect from
time to time, applied in a consistent manner.
"CNH Common Stock" means shares of CNH' common stock, $0.0001 par
value.
"CNH Latest Balance Sheet" is defined in Section 4.5(c).
"CNH SEC Documents" is defined in Section 4.5(a).
"CNH" is defined in the preamble to this Agreement.
"XBRA" is defined in the preamble to this Agreement.
"Company Common Stock" means the Company's common stock, $.01 par value
per share.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, capitalized lease or other title retention
agreement).
"Material Adverse Effect" means, with respect to a Person, a material
adverse effect on (i) the business, Property, condition (financial or
otherwise), or results of operations of the Person taken as a whole, (ii) the
ability of the Person to perform its obligations under this Agreement, or (iii)
the validity or enforceability of this Agreement or the rights or remedies of
hereunder.
"DGCL" is defined in the Recitals to the Agreement.
"Merger" is defined in the Recitals to this Agreement.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Personal Property" is defined in Section 3.9.
"Property Rights" is defined in Section 3.13.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Real Property" is defined in Section 3.9.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, and any rule and regulation issued thereunder.
A-2
"Subsidiary" of a Person means (a) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(b) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
"Substantial Portion" means, with respect to the Property of the
Company, Property which (a) represents more than 10% of the consolidated assets
of the Company as would be shown in the consolidated financial statements of the
Company as at the beginning of the twelve-month period ending with the month in
which such determination is made, or (b) is responsible for more than 10% of the
consolidated net sales or of the consolidated net income of the Company as
reflected in the financial statements referred to in clause (a) above.
"Surviving Company" is defined in Section 2.1.
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes.
"Voting Debt" is defined in Section 4.2.
A-3
EXHIBIT B
CERTIFICATE OF MERGER
[See attached document]
B-1
CERTIFICATE OF MERGER
MERGING
XBR ACQUISITION, INC.
(A DELAWARE CORPORATION)
WITH AND INTO
XBRIDGE SOFTWARE, INC.
(A DELAWARE CORPORATION)
The following certificate of merger ("CERTIFICATE OF MERGER") is
submitted in accordance with the Delaware General Corporation Law ("DGCL"),
pursuant to Section Std. 251.
FIRST: The name and jurisdiction of the surviving corporation shall be
XBridge Software, Inc., a Delaware corporation.
SECOND: The name and jurisdiction of the merging corporation is XBR
Acquisition, Inc., a Delaware corporation.
THIRD: The Merger shall become effective at such time as XBridge
Software, Inc. and XBR Acquisition, Inc. file this Certificate of Merger in
accordance with Section 251 of the DGCL with the Secretary of State of the State
of Delaware.
FOURTH: Agreement and Plan of Merger dated as of April 29, 2005, by and
among XBridge Software, Inc., XBR Acquisition, Inc., CNH Holdings Company and
the stockholders of XBridge Software, Inc. listed therein (the "AGREEMENT AND
PLAN OF MERGER"), has been approved, adopted, certified, executed and
acknowledged by each of XBridge Software, Inc., and XBR Acquisition, Inc. in
accordance with Section 251 of the DGCL.
FIFTH: The Agreement and Plan of Merger is on file at the office of
XBridge Software, Inc., being the surviving corporation, 00000 Xxxxxxx Xxxx,
Xxxxx 000, Xxxxxx, Xxxxx 00000.
SIXTH: A copy of the Agreement and Plan of Merger will be furnished by
XBridge Software, Inc., as the surviving corporation, on request and without
cost, to any stockholder of XBridge Software, Inc. or XBR Acquisition, Inc.
*************
B-2
2
IN WITNESS WHEREOF, the undersigned have caused this Certificate of
Merger to be executed by their respective duly authorized officers as of April
29, 2005.
XBR ACQUISITION, INC.
By: /s/
-------------------------------------------------
Xxxxx Xxxx,
President
XBRIDGE SOFTWARE, INC.
By: /s/
-------------------------------------------------
Xxxxx Xxxx,
President
B-3
EXHIBIT C
EXCHANGE AND SETTLEMENT AGREEMENT
[See attached document]
C-1
SCHEDULE 3.2
Strike
2000 Option Pool Price
----------------
Technacity LLC 45,000 0.01
2001 Option Pool
Xxxxx Xxxxxxxx 5,000 0.625
Xxxxx Xxxxxxxx 20,000 0.625
Xxxxx Xxxxxxx Xxxxxxxx 5,000 0.625
Xxxxx Xxxx 5,000 1.25
Xxxxxxx Royal 100,000 1.25
Xxx Xxxxxx 60,824 1.25
Xxxxxxx X Xxxx 15,426 1.25
Warrants
Warrants Strike Price
King Xxxxxx 45,000 1.25
King Xxxxxx 25,000 1.25
Xxxxx Xxxxx 25,457 1.25
Xxxxxxx XxXxxx 7,543 1.25
King Xxxxxx 12,217 1.25
S-1
SCHEDULE 3.4
NONE
S-2
SCHEDULE 3.5 (C)
NONE
S-3
SCHEDULE 3.6
NONE
S-4
SCHEDULE 3.7 (A)
Xxxxxxx X. Royal__ President Cistera Networks Canada $130,000 USD
Xxxxxxx A Garr____ Independent Contractor $ 96,000 USD
Xxxxxx Guntor_____ Independent Contractor $105,000 USD
Xxxxx Wood________ Independent Contractor $ 75,000 USD
S-5
SCHEDULE 3.7 (B)
NONE
S-6
SCHEDULE 3.7 (C)
Xxxxxxx X. Royal Employment Agreement Dated October 1, 2004
S-7
SCHEDULE 3.7 (D)
NONE
S-8
SCHEDULE 3.8 (A)
NONE
S-9
SCHEDULE 3.8 (D)
NONE
S-10
SCHEDULE 3.9 (A)
NONE
S-11
SCHEDULE 3.9 (B)
NONE
S-12
SCHEDULE 3.9 (C)
NONE
S-13
SCHEDULE 3.10
Agreements set forth in Schedule 3.7(A)
Xxxxxxx X. Xxxx __Promissory Notes $ 72,725.19
Xxxxxxx X. Garr___Unreimbursed Expenses $ 30,510.00
Xxxxxxx X. Royal__Deferred Wages $300,466.12
Xxxxxxx X. Royal__Unreimbursed Expenses $ 8,563.94
S-14
SCHEDULE 3.12
NONE
S-15
SCHEDULE 3.13
XSwitch
XCommand
QSwitch
QCommand
VSwitch
VCommand
QuickRecord Call Recording (On Demand)
QuickRecord Call Recording (Continuous)
Rapid Broadcast Text/Audio Broadcasting
Rapid Broadcast Paging/Intercom - IP Phones
Rapid Broadcast Paging/Intercom - Analog devices
Virtual Directory Integration (LDAP)
Phone Assist CTI Desktop Client (Enhanced)
XBridge Phone Object Platform - Rules Engine
XBridge Phone Object Platform - Grouping Engine
XBridge Service Level Manager Platform - Security Management
XBridge Service Level Manager Platform - Monitoring Management
XBridge Conference Connect Bridge
Phone Verify Pin Code Confirmation
XBridge Content Streaming
Phone Modeler
XBridge Integrated Media Architecture Platform Clustering
XBridge Integrated Media Architecture Platform Replication
XBridge Integrated Media Architecture Platform Master/SalveCall Recording (On
Demand)
RapidBroadcast Text/Audio Broadcasting
XBridge Integration H.323 Stack
XBridge Integration SIP Stack
XBridge Integration SOAP Integration
Software License Agreement with CNH Holdings Company dated 05/05/2003
S-16
SCHEDULE 3.18
Family Information Systems Agreement dated 05/01/2003 Software License Agreement
with CNH Holdings Company dated 05/05/2003 Maintenance and Services Agreement
with Statement of Works dated 06/30/2003 All Agreements in Schedule 3.10
S-17
SCHEDULE 4.2
Convertible Note Purchase Agreements dated 12/13/2004 for $1,145,000 Warrant
Agreements dated 12/31/2004 for 1,145,000 shares
------- ----------------------------------------------- -------------- ----------------------------
NAME TOTAL NOTE TOTAL NUMBER OF WARRANTS
AGREEMENTS
------- ----------------------------------------------- -------------- ----------------------------
1. Xxxxxx Xxxxxxx $50,000 50,000
------- ----------------------------------------------- -------------- ----------------------------
2. Xxxxxxx X. Xxxxxxxx $15,000 15,000
------- ----------------------------------------------- -------------- ----------------------------
3. Xxxxxx X. Xxxxxxx $15,000 15,000
------- ----------------------------------------------- -------------- ----------------------------
4. Xxxxxx or Xxxx Xxxxx Xxxxxxxxx $10,000 10,000
------- ----------------------------------------------- -------------- ----------------------------
5. Xxxx X. & Xxxxx X. Xxxxx $15,000 15,000
------- ----------------------------------------------- -------------- ----------------------------
6. Xxxxx Xxxxxxx $30,000 30,000
------- ----------------------------------------------- -------------- ----------------------------
7. Xxxxxxx Family Trust Dated January 9, 1989 $15,000 15,000
------- ----------------------------------------------- -------------- ----------------------------
8. Xxx Xxxxxxxxx $20,000 20,000
------- ----------------------------------------------- -------------- ----------------------------
9. Xxxx Family Limited Partnership $50,000 50,000
------- ----------------------------------------------- -------------- ----------------------------
10. Xxxxxxxxx X. Xxxx or Xxxxxxx Xxxx $59,000 59,000
------- ----------------------------------------------- -------------- ----------------------------
11. Xxxxx X. Xxxxxxxx Trustee of Xxxxx X. $50,000 50,000
Xxxxxxxx Trust UDT dated May 9, 2001
------- ----------------------------------------------- -------------- ----------------------------
12. Xxxx Xxxxxxxxx $20,000 20,000
------- ----------------------------------------------- -------------- ----------------------------
13. Xxxxxxxx X. Xxxxxx $22,000 22,000
------- ----------------------------------------------- -------------- ----------------------------
14. Xxxxx Xxxxx $10,000 10,000
------- ----------------------------------------------- -------------- ----------------------------
15. Xxxx Xxxxxxx $50,000 50,000
------- ----------------------------------------------- -------------- ----------------------------
16. Xxxxxx Xxxxxx $26,000 26,000
------- ----------------------------------------------- -------------- ----------------------------
17. Xxxxxx Xxxx II or Xxxxxxx Xxxx $15,000 15,000
------- ----------------------------------------------- -------------- ----------------------------
18. Mellon Bank of New England Xxxxx X. Xxxxxxxx $50,000 50,000
XXX
------- ----------------------------------------------- -------------- ----------------------------
19. Xxxxxxx X. Xxxxx $45,000 40,000
------- ----------------------------------------------- -------------- ----------------------------
20. American Corp Register Inc $50,000 50,000
------- ----------------------------------------------- -------------- ----------------------------
21. Xxxxxxxxx Xxxx XXX Xxxxxxx Xxxxxx & Co Inc. $15,000 15,000
SEP-XXX DTD 04/07/98
------- ----------------------------------------------- -------------- ----------------------------
22. Xxxxxxxx X. Xxxxxx XXX Contributory Xxxxxxx $20,000 20,000
Schwab Custodian
------- ----------------------------------------------- -------------- ----------------------------
23. Xxxxxxx X. Xxxxxxxx Xx. and Xxxxx X. Xxxxxxxx $15,000 15,000
Family Trust dated 12/20/90
------- ----------------------------------------------- -------------- ----------------------------
24. Xxxx Xxxxxx $15,000 15,000
------- ----------------------------------------------- -------------- ----------------------------
25. Xxxxxxx X. Xxxxxxx $15,000 15,000
------- ----------------------------------------------- -------------- ----------------------------
26. Xxxxxxx xx Xxxxxxxxx $100,000 100,000
------- ----------------------------------------------- -------------- ----------------------------
27. Xxx Xxxx $81,000 81,000
------- ----------------------------------------------- -------------- ----------------------------
28. Xxxxx Xxxxxx $20,000 20,000
------- ----------------------------------------------- -------------- ----------------------------
29. Xxxxxx X. Xxxxxxx Trustee for 2004 Xxxxxx X. $15,000 15,000
Xxxxxxx Revocable Trust
------- ----------------------------------------------- -------------- ----------------------------
30. Rocky Mountain Customer Services, Inc. $110,000 110,000
------- ----------------------------------------------- -------------- ----------------------------
31. T.C.R LP Trust $50,000 50,000
------- ----------------------------------------------- -------------- ----------------------------
32. Xxxxx or Kon Cherewan $15,000 15,000
------- ----------------------------------------------- -------------- ----------------------------
33. X. X. Xxxxxxxx $15,000 15,000
------- ----------------------------------------------- -------------- ----------------------------
34. Xxxxxxx Xxxx MD $13,000 13,000
------- ----------------------------------------------- -------------- ----------------------------
35. Xxxx Xxxxxxxx $30,000 30,000
------- ----------------------------------------------- -------------- ----------------------------
S-18
SCHEDULE 4.2 (CONT.)
Stock Option Agreements:
---------------------------- ------------------------ ------------------------
Number of Shares Strike Price
---------------------------- ------------------------ ------------------------
Xxxxx X Xxxxx 275,000 $1.30
---------------------------- ------------------------ ------------------------
Xxxxxxx T Royal 275,000 $1.10
---------------------------- ------------------------ ------------------------
Xxxxxxx X Xxxx 275,000 $1.10
---------------------------- ------------------------ ------------------------
Xxxxxx Xxxxxxxx 40,000 $1.30
---------------------------- ------------------------ ------------------------
Xxxxx Xxxxxx 40,000 $1.30
---------------------------- ------------------------ ------------------------
Xxx Xxxxxx 30,000 $1.10
---------------------------- ------------------------ ------------------------
Xxxx Xxxxxxxx 15,000 $1.30
---------------------------- ------------------------ ------------------------
Xxxxxx Xxxxxx 10,000 $1.30
---------------------------- ------------------------ ------------------------
Xxxxx Xxxxx 10,000 $1.10
---------------------------- ------------------------ ------------------------
Xxxx Xxxxx 10,000 $1.10
---------------------------- ------------------------ ------------------------
Xxxx Xxxxxx 10,000 $1.10
---------------------------- ------------------------ ------------------------
Xxxxxxx Xxxxxxx 10,000 $1.10
---------------------------- ------------------------ ------------------------
Xxxxxx Xxxxxxxx 10,000 $1.10
---------------------------- ------------------------ ------------------------
Xxxxxxxxx Xxxxxx 5,000 $1.10
---------------------------- ------------------------ ------------------------
Xxxxxxx Xxxxxxx 400,000 $2.00
---------------------------- ------------------------ ------------------------
Xxxx X Xxxxxx 400,000 $2.00
---------------------------- ------------------------ ------------------------
S-19
SCHEDULE 4.4
NONE
S-20
SCHEDULE 4.5 (C)
NONE
S-21
SCHEDULE 4.8
In January 2005, the Company was served as a third party defendant in a law suit
stemming from certain transactions that occurred in 2000. The plaintiff's are
claiming right to approximately 60,000 shares of the Company's common stock. The
Company believes that the plaintiff's have no rights to these shares and that
the matter's alleged were settled in prior litigation.
S-22
SCHEDULE 4.9
Maintenance and Services Agreement with Statement of Works dated 06/30/2003
Memshalah Realty 11/01/2003 - Lease period ending 11/30/09 (Office Lease)
S-23
