AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made as of the day of January, 2002
AMONG:
CIRUS TELECOM, INC., a body corporate formed pursuant to the
laws of the State of Delaware and having an office for
business located at 0000 Xxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000
("Cirus")
AND:
THC MERGER CORP., a body corporate formed pursuant to the laws
of the State of Delaware and a wholly owned subsidiary of
Cirus
(the "Acquirer")
AND:
THC INTERNET SOLUTIONS, INC., a body corporate formed pursuant
to the laws of the State of Delaware and having an office for
business located at 0000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000
("THC")
AND: XXXXX XXXXXXXXXXX, c/o THC Internet Solutions, 0000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("Xxxxxxxxxxx")
AND: XXXXXXX X. XXXX, c/o THC Internet Solutions, 0000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("Xxxx")
AND:
XXXXX XXXXX, 00 Xxxxxxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxx
Xxxx 00000
("Xxxxx")
AND:
XXXXX XXXXX, c/o THC Internet Solutions, 0000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("Xxxxx", and Lewandowski, Cook, Xxxxx and Xxxxx are
hereinafter referred to as the "THC Shareholders")
WHEREAS:
A. THC is a Delaware State corporation engaged in the business of reselling
value added telecommunications products including phone cards;
B. The THC Shareholders own 1,500 THC Shares, being 100% of the presently issued
and outstanding THC Shares;
C. Cirus is a reporting company whose common stock is quoted on the NASD
"Bulletin Board" and which is engaged in the business of providing long distance
telecommunications services;
D. The respective Boards of Directors of Cirus, THC and the Acquirer deem it
advisable and in the best interests of Cirus, THC and the Acquirer that THC
merge with and into the Acquirer (the "Merger") pursuant to this Agreement and
the Certificate of Merger, and the applicable provisions of the laws of the
State of Delaware; and
E. It is intended that the Merger shall qualify for United States federal income
tax purposes as a reorganization within the meaning of Section 368 of the
Internal Revenue Code of 1986, as amended.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises
and the mutual covenants, agreements, representations and warranties contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
Definitions
1.1 In this Agreement the following terms will have the following meanings:
(a) "Acquisition Shares" means the Initial Acquisition Shares and
Additional Acquisition Shares, if any;
(b) "Additional Acquisition Shares" means the additional Cirrus
Common Shares issued to the THC Shareholders as a result of
Section 12.2 below.
(c) "Agreement" means this agreement and plan of merger among
Cirus, the Acquirer, THC, and the THC Shareholders;
(d) "Cirus Accounts Payable and Liabilities" means all accounts
payable and liabilities of Cirus, on a consolidated basis, due
and owing or otherwise constituting a binding obligation of
Cirus and its subsidiaries (other than a Cirus Material
Contract) as of December 31, 2001 as set forth is Schedule "B"
hereto;
(e) "Cirus Accounts Receivable" means all accounts receivable and
other debts owing to Cirus, on a consolidated basis, as of
December 31, 2001 as set forth in Schedule "C" hereto;
(f) "Cirus Assets" means the undertaking and all the property and
assets of the Cirus Business of every kind and description
wheresoever situated including, without limitation, Cirus
Equipment, Cirus Inventory, Cirus Material Contracts, Cirus
Accounts Receivable, Cirus Cash, Cirus Intangible Assets and
Cirus Goodwill, and all credit cards, charge cards and banking
cards issued to Cirus;
(g) "Cirus Bank Accounts" means all of the bank accounts, lock
boxes and safety deposit boxes of Cirus and its subsidiaries
or relating to the Cirus Business as set forth in Schedule "D"
hereto;
(h) "Cirus Business" means all aspects of the business conducted
by Cirus and its subsidiaries, including, without limitation,
providing long distance telecommunications services;
(i) "Cirus Cash" means all cash on hand or on deposit to the
credit of Cirus and its subsidiaries on the Closing Date;
(j) "Cirus Common Shares" means the shares of common stock in the
capital of Cirus;
(k) "Cirus Debt to Related Parties" means the debts owed by Cirus
and its subsidiaries to any affiliate, director or officer of
Cirus as described in Schedule "E" hereto;
(l) "Cirus Equipment" means all machinery, equipment, furniture,
and furnishings used in the Cirus Business, including, without
limitation, the items more particularly described in Schedule
"F" hereto;
(m) "Cirus Financial Statements" means, collectively, the audited
consolidated financial statements of Cirus for the fiscal year
ended September 30, 2001, together with the unqualified
auditors' report thereon, true copies of which are attached as
Schedule "A" hereto;
(n) "Cirus Goodwill" means the goodwill of the Cirus Business
including the right to all corporate, operating and trade
names associated with the Cirus Business, or any variations of
such names as part of or in connection with the Cirus
Business, all books and records and other information relating
to the Cirus Business, all necessary licenses and
authorizations and any other rights used in connection with
the Cirus Business;
(o) "Cirus Insurance Policies" means the public liability
insurance and insurance against loss or damage to the Cirus
Assets and the Cirus Business as described in Schedule "G"
hereto;
(p) "Cirus Intangible Assets" means all of the intangible assets
of Cirus and its subsidiaries, including, without limitation,
Cirus Goodwill, all trademarks, logos, copyrights, designs,
and other intellectual and industrial property of Cirus and
its subsidiaries;
(q) "Cirus Inventory" means all inventory and supplies of the
Cirus Business as of , 2001 as set forth in Schedule "H"
hereto;
(r) "Cirus Material Contracts" means the burden and benefit of and
the right, title and interest of Cirus and its subsidiaries
in, to and under all trade and non-trade contracts,
engagements or commitments, whether written or oral, to which
Cirus or its subsidiaries are entitled whereunder Cirus or its
subsidiaries are obligated to pay or entitled to receive the
sum of $10,000 or more including, without limitation, any
pension plans, profit sharing plans, bonus plans, loan
agreements, security agreements, indemnities and guarantees,
any agreements with employees, lessees, licensees, managers,
accountants, suppliers, agents, distributors, officers,
directors, attorneys or others which cannot be terminated
without liability on not more than one month's notice, and
those contracts listed in Schedule "I" hereto;
(s) "Closing" means the completion, on the Closing Date, of the
transactions contemplated hereby in accordance with Article 9
hereof;
(t) "Closing Date" means the day on which all conditions precedent
to the completion of the transaction as contemplated hereby
have been satisfied or waived;
(u) "Effective Time" means the date of the filing of an
appropriate Certificate of Merger in the form required by the
State of Delaware, which certificate shall provide that the
Merger shall become effective upon such filing;
(v) "Initial Acquisition Shares" means the 71,025,145 Cirus Common
Shares to be issued to the THC Shareholders at Closing
pursuant to the terms of the Merger;
(w) "Merger" means the merger, at the Effective Time, of THC and
the Acquirer pursuant to this Agreement and Plan of Merger;
(x) "Merger Consideration" means the Acquisition Shares;
(y) "Place of Closing" means the offices of Sichenzia Xxxx
Xxxxxxxx Xxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx,
XX 00000 or such other place as Cirus and THC may mutually
agree upon;
(z) "State Corporation Law" means the General Corporation Law of
the State of Delaware;
(aa) "Surviving Company" means the Acquirer following the merger
with THC;
(bb) "THC Accounts Payable and Liabilities" means all accounts
payable and liabilities of THC, on a consolidated basis, due
and owing or otherwise constituting a binding obligation of
THC (other than a THC Material Contract) as of December 31,
2001 as set forth in Schedule "K" hereto;
(cc) "THC Accounts Receivable" means all accounts receivable and
other debts owing to THC, on a consolidated basis, as of
December 31, 2001 as set forth in Schedule "L" hereto;
(dd) "THC Assets" means the undertaking and all the property and
assets of the THC Business of every kind and description
wheresoever situated including, without limitation, THC
Equipment, THC Inventory, THC Material Contracts, THC Accounts
Receivable, THC Cash, THC Intangible Assets and THC Goodwill,
and all credit cards, charge cards and banking cards issued to
THC;
(ee) "THC Bank Accounts" means all of the bank accounts, lock boxes
and safety deposit boxes of THC or relating to the THC
Business as set forth in Schedule "M" hereto;
(ff) "THC Business" means all aspects of the business conducted by
THC, as the case may be, including, without limitation,
reselling value added telecommunications products including
phone cards;
(gg) "THC Cash" means all cash on hand or on deposit to the credit
of THC on the Closing Date;
(hh) "THC Debt to Related Parties" means the debts owed by THC to
the THC Shareholders or to any family member thereof, or to
any affiliate, director or officer of THC or the THC
Shareholders as described in Schedule "N";
(ii) "THC Equipment" means all machinery, equipment, furniture, and
furnishings used in the THC Business, including, without
limitation, the items more particularly described in Schedule
"O" hereto;
(jj) "THC Financial Statements" means THC's internal statements of
account, reviewed by Cirus;
(kk) "THC Goodwill" means the goodwill of the THC Business together
with the exclusive right of Cirus to represent itself as
carrying on the THC Business in succession of THC subject to
the terms hereof, and the right to use any words indicating
that the THC Business is so carried on including the right to
use the name "THC" or "THC International" or any variation
thereof as part of the name of or in connection with the THC
Business or any part thereof carried on or to be carried on by
THC, the right to all corporate, operating and trade names
associated with the THC Business, or any variations of such
names as part of or in connection with the THC Business, all
telephone listings and telephone advertising contracts, all
lists of customers, books and records and other information
relating to the THC Business, all necessary licenses and
authorizations and any other rights used in connection with
the THC Business;
(ll) "THC Insurance Policies" means the public liability insurance
and insurance against loss or damage to THC Assets and the THC
Business as described in Schedule "P" hereto;
(mm) "THC Intangible Assets" means all of the intangible assets of
THC, including, without limitation, THC Goodwill, all
trademarks, logos, copyrights, designs, and other intellectual
and industrial property of THC;
(nn) "THC Inventory" means all inventory and supplies of the THC
Business as of December 31, 2001 as set forth in Schedule "Q"
hereto;
(oo) "THC Material Contracts" means the burden and benefit of and
the right, title and interest of THC in, to and under all
trade and non-trade contracts, engagements or commitments,
whether written or oral, to which THC are entitled in
connection with the THC Business whereunder THC are obligated
to pay or entitled to receive the sum of $10,000 or more
including, without limitation, any pension plans, profit
sharing plans, bonus plans, loan agreements, security
agreements, indemnities and guarantees, any agreements with
employees, lessees, licensees, managers, accountants,
suppliers, agents, distributors, officers, directors,
attorneys or others which cannot be terminated without
liability on not more than one month's notice, and those
contracts listed in Schedule "R" hereto; and
(pp) "THC Shares" means all of the issued and outstanding shares of
THC's equity stock.
Any other terms defined within the text of this Agreement will have the meanings
so ascribed to them.
Captions and Section Numbers
1.2 The headings and section references in this Agreement are for convenience of
reference only and do not form a part of this Agreement and are not intended to
interpret, define or limit the scope, extent or intent of this Agreement or any
provision thereof.
Section References and Schedules
1.3 Any reference to a particular "Article", "section", "paragraph", "clause" or
other subdivision is to the particular Article, section, clause or other
subdivision of this Agreement and any reference to a Schedule by letter will
mean the appropriate Schedule attached to this Agreement and by such reference
the appropriate Schedule is incorporated into and made part of this Agreement.
The Schedules to this Agreement are as follows:
Information concerning Cirus
Schedule "A" Cirus Financial Statements
Schedule "B" Cirus Accounts Payable and Liabilities
Schedule "C" Cirus Accounts Receivable
Schedule "D" Cirus Bank Accounts
Schedule "E" Cirus Debts to Related Parties
Schedule "F" Cirus Equipment
Schedule "G" Cirus Insurance Policies
Schedule "H" Cirus Inventory
Schedule "I" Cirus Material Contracts
Information concerning THC
Schedule "J" None
Schedule "K" THC Accounts Payable and Liabilities
Schedule "L" THC Accounts Receivable
Schedule "M" THC Bank Accounts
Schedule "N" THC Debts to Related Parties
Schedule "O" THC Equipment
Schedule "P" THC Insurance Policies
Schedule "Q" THC Inventory
Schedule "R" THC Material Contracts
Severability of Clauses
1.4 If any part of this Agreement is declared or held to be invalid for any
reason, such invalidity will not affect the validity of the remainder which will
continue in full force and effect and be construed as if this Agreement had been
executed without the invalid portion, and it is hereby declared the intention of
the parties that this Agreement would have been executed without reference to
any portion which may, for any reason, be hereafter declared or held to be
invalid.
ARTICLE 2
THE MERGER
The Merger
2.1 At Closing, THC shall be merged with and into the Acquirer pursuant to this
Agreement and Plan of Merger and the separate corporate existence of THC shall
cease and the Acquirer, as it exists from and after the Closing, shall be the
Surviving Company.
Effect of the Merger
2.2 The Merger shall have the effect provided therefor by the State Corporation
Law. Without limiting the generality of the foregoing, and subject thereto, at
Closing (i) all the rights, privileges, immunities, powers and franchises, of a
public as well as of a private nature, and all property, real, personal and
mixed, and all debts due on whatever account, including without limitation
subscriptions to shares, and all other choses in action, and all and every other
interest of or belonging to or due to THC or the Acquirer, as a group, subject
to the terms hereof, shall be taken and deemed to be transferred to, and vested
in, the Surviving Company without further act or deed; and all property, rights
and privileges, immunities, powers and franchises and all and every other
interest shall be thereafter as effectually the property of the Surviving
Company, as they were of THC and the Acquirer, as a group, and (ii) all debts,
liabilities, duties and obligations of THC and the Acquirer, as a group, subject
to the terms hereof, shall become the debts, liabilities and duties of the
Surviving Company and the Surviving Company shall thenceforth be responsible and
liable for all debts, liabilities, duties and obligations of THC and the
Acquirer, as a group, and neither the rights of creditors nor any liens upon the
property of THC or the Acquirer, as a group, shall be impaired by the Merger,
and may be enforced against the Surviving Company.
Certificate of Incorporation; Bylaws; Directors and Officers
2.3 The Certificate of Incorporation of the Surviving Company from and after the
Closing shall be the Certificate of Incorporation of the Acquirer until
thereafter amended in accordance with the provisions therein and as provided by
the applicable provisions of the State Corporation Law. The Bylaws of the
Surviving Company from and after the Closing shall be the Bylaws of THC as in
effect immediately prior to the Closing, continuing until thereafter amended in
accordance with their terms, the Certificate of Incorporation of the Surviving
Company and as provided by the State Corporation Law. The Directors of the
Acquirer at the Effective Time shall continue to be the Directors of the
Surviving Company.
Conversion of Securities
2.4 At the Effective Time, by virtue of the Merger and without any action on the
part of the Acquirer, THC or the THC Shareholders, the shares of capital stock
of each of THC and the Acquirer shall be converted as follows:
(a) Capital Stock of the Acquirer. Each issued and outstanding
share of the Acquirer's capital stock shall continue to be
issued and outstanding and shall be converted into one share
of validly issued, fully paid, and non-assessable common stock
of the Surviving Company. Each stock certificate of the
Acquirer evidencing ownership of any such shares shall
continue to evidence ownership of such shares of capital stock
of the Surviving Company.
(b) Conversion of THC Shares. Each THC Share that is issued and
outstanding at the Effective Time shall automatically be
cancelled and extinguished and converted, without any action
on the part of the holder thereof, into the right to receive
at the time and in the amounts described in this Agreement an
amount of Acquisition Shares equal to the number of
Acquisition Shares divided by the number of THC Shares
outstanding immediately prior to Closing. All such THC Shares,
when so converted, shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to
exist, and each holder of a certificate representing any such
shares shall cease to have any rights with respect thereto,
except the right to receive the Acquisition Shares paid in
consideration therefor upon the surrender of such certificate
in accordance with this Agreement.
Adherence with Applicable Securities Laws
2.5 The THC Shareholders agree that they are acquiring the Acquisition Shares
for investment purposes and will not offer, sell or otherwise transfer, pledge
or hypothecate any of the Acquisition Shares issued to them (other than pursuant
to an effective Registration Statement under the Securities Act of 1933 (United
States), as amended) directly or indirectly unless:
(a) the sale is to Cirus;
(b) the sale is made pursuant to the exemption from registration
under the Securities Act of 1933 (United States) provided by
Rule 144 thereunder; or
the Acquisition Shares are sold in a transaction that does not require
registration under the Securities Act of 1933 (United States) or any applicable
United States state laws and regulations governing the offer and sale of
securities, and the vendor has furnished to Cirus a written opinion of counsel,
reasonably acceptable to Cirus to that effect.
The THC Shareholders acknowledge that the certificates representing the
Acquisition Shares shall bear the following legend:
NO SALE, OFFER TO SELL, OR TRANSFER OF THE SHARES REPRESENTED
BY THIS CERTIFICATE SHALL BE MADE UNLESS A REGISTRATION
STATEMENT UNDER THE FEDERAL SECURITIES ACT OF 1933, AS
AMENDED, IN RESPECT OF SUCH SHARES IS THEN IN EFFECT OR IN THE
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT THE SHARES
MAY BE TRANSFERRED WITHOUT REGISTRATION PURSUANT TO AN
EXEMPTION.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF CIRUS
Representations and Warranties
3.1 Cirus represents and warrants in all material respects to THC, with the
intent that THC will rely thereon in entering into this Agreement and in
approving and completing the transactions contemplated hereby, that:
Cirus - Corporate Status and Capacity
(a) Incorporation. Cirus is a corporation duly incorporated and
validly subsisting under the laws of the State of Delaware,
and is in good standing with the office of the Secretary of
State for the State of Delaware;
(b) Carrying on Business. Cirus carries on business primarily in
the States of New York and Florida only and does not carry on
any material business activity in any other jurisdictions.
Cirus has offices in Flushing, New York, Huntington, New York,
Copaigue, New York, Freeport, New York, and Miami, Florida and
in no other locations. The nature of the Cirus Business does
not require Cirus to register or otherwise be qualified to
carry on business in any other jurisdictions;
(c) Corporate Capacity. Cirus has the corporate power, capacity
and authority to own the Cirus Assets and to enter into and
complete this Agreement;
(d) Reporting Status; Listing. Cirus is required to file current
reports with the Securities and Exchange Commission pursuant
to section 15(d) of the Securities Exchange Act of 1934, the
Cirus Common Shares are quoted on the NASD "Bulletin Board",
and all reports required to be filed by Cirus with the
Securities and Exchange Commission or NASD have been timely
filed;
Acquirer - Corporate Status and Capacity
(e) Incorporation. The Acquirer is a corporation duly incorporated
and validly subsisting under the laws of the State of
Delaware, and is in good standing with the office of the
Secretary of State for the State of Delaware;
(f) Carrying on Business. Other than corporate formation and
organization, the Acquirer has not carried on business
activities to date.
(g) Corporate Capacity. The Acquirer has the corporate power,
capacity and authority to enter into and complete this
Agreement;
Cirus - Capitalization
(h) Authorized Capital. The authorized capital of Cirus consists
of 100,000,000 Cirus Common Shares, $0.0001 par value and
5,000,000 shares of preferred stock. $0.0001 par value, of
which 51,820,890 Cirus Common Shares, 1,000 shares of Series A
Convertible Preferred Stock and 360 shares of Series B
Convertible Preferred Stock are presently issued and
outstanding;
(i) No Option. No person, firm or corporation has any agreement or
option or any right capable of becoming an agreement or option
for the acquisition of Cirus Common Shares or for the
purchase, subscription or issuance of any of the unissued
shares in the capital of Cirus;
(j) Capacity. Cirus has the full right, power and authority to
enter into this Agreement on the terms and conditions
contained herein;
Acquirer Capitalization
(k) Authorized Capital. The authorized capital of the Acquirer
consists of 200 shares of common stock, $.001 par value, of
which one share of common stock is presently issued and
outstanding;
(l) No Option. No person, firm or corporation has any agreement or
option or any right capable of becoming an agreement or option
for the acquisition of any common or preferred shares in
Acquirer or for the purchase, subscription or issuance of any
of the unissued shares in the capital of Acquirer;
(m) Capacity. The Acquirer has the full right, power and authority
to enter into this Agreement on the terms and conditions
contained herein;
Cirus - Records and Financial Statements
(n) Charter Documents. The charter documents of Cirus and the
Acquirer have not been altered since the incorporation of
each, respectively, except as filed in the record books of
Cirus or the Acquirer, as the case may be;
(o) Corporate Minute Books. The corporate minute books of Cirus
and its subsidiaries are complete and each of the minutes
contained therein accurately reflect the actions that were
taken at a duly called and held meeting or by consent without
a meeting. All actions by Cirus and its subsidiaries which
required director or shareholder approval are reflected on the
corporate minute books of Cirus and its subsidiaries. Cirus
and its subsidiaries are not in violation or breach of, or in
default with respect to, any term of their respective
Certificates of Incorporation (or other charter documents) or
by-laws.
(p) Cirus Financial Statements. The Cirus Financial Statements
present fairly, in all material respects, the assets and
liabilities (whether accrued, absolute, contingent or
otherwise) of Cirus, on a consolidated basis, as of the
respective dates thereof, and the sales and earnings of the
Cirus Business during the periods covered thereby, in all
material respects and have been prepared in substantial
accordance with generally accepted accounting principles
consistently applied;
(q) Cirus Accounts Payable and Liabilities. There are no material
liabilities, contingent or otherwise, of Cirus or its
subsidiaries which are not disclosed in Schedule "B" hereto or
reflected in the Cirus Financial Statements except those
incurred in the ordinary course of business since the date of
the said schedule and the Cirus Financial Statements, and
neither Cirus nor its subsidiaries have guaranteed or agreed
to guarantee any debt, liability or other obligation of any
person, firm or corporation. Without limiting the generality
of the foregoing, all accounts payable and liabilities of
Cirus and its subsidiaries as of December 31, 2001 are
described in Schedule "B" hereto;
(r) Cirus Accounts Receivable. All the Cirus Accounts Receivable
result from bona fide business transactions and services
actually rendered without, to the knowledge and belief of
Cirus, any claim by the obligor for set-off or counterclaim;
(s) Cirus Bank Accounts. All of the Cirus Bank Accounts, their
location, numbers and the authorized signatories thereto are
as set forth in Schedule "D" hereto;
(t) No Debt to Related Parties. Except as disclosed in Schedule
"E" hereto, neither Cirus nor its subsidiaries are, and on
Closing will not be, materially indebted to any affiliate,
director or officer of Cirus except accounts payable on
account of bona fide business transactions of Cirus incurred
in normal course of the Cirus Business, including employment
agreements, none of which are more than 30 days in arrears;
(u) No Related Party Debt to Cirus. No director or officer or
affiliate of Cirus is now indebted to or under any financial
obligation to Cirus or its subsidiaries on any account
whatsoever, except for advances on account of travel and other
expenses not exceeding $5,000 in total;
(v) No Dividends. No dividends or other distributions on any
shares in the capital of Cirus have been made, declared or
authorized since the date of Cirus Financial Statements;
(w) No Payments. No payments of any kind have been made or
authorized since the date of the Cirus Financial Statements to
or on behalf of officers, directors, shareholders or employees
of Cirus or its subsidiaries or under any management
agreements with Cirus or its subsidiaries, except payments
made in the ordinary course of business and at the regular
rates of salary or other remuneration payable to them;
(x) No Pension Plans. There are no pension, profit sharing, group
insurance or similar plans or other deferred compensation
plans affecting Cirus or its subsidiaries;
(y) No Adverse Events. Since the date of the Cirus Financial
Statements
(i) there has not been any material adverse change in the
financial position or condition of Cirus, its
subsidiaries, its liabilities or the Cirus Assets or
any damage, loss or other change in circumstances
materially affecting Cirus, the Cirus Business or the
Cirus Assets or Cirus' right to carry on the Cirus
Business, other than changes in the ordinary course
of business,
(ii) there has not been any damage, destruction, loss or
other event (whether or not covered by insurance)
materially and adversely affecting Cirus, its
subsidiaries, the Cirus Business or the Cirus Assets,
(iii) there has not been any material increase in the
compensation payable or to become payable by Cirus to
any of Cirus' officers, employees or agents or any
bonus, payment or arrangement made to or with any of
them,
(iv) the Cirus Business has been and continues to be
carried on in the ordinary course,
(v) Cirus has not waived or surrendered any right of
material value,
(vi) Neither Cirus nor its subsidiaries have discharged or
satisfied or paid any lien or encumbrance or
obligation or liability other than current
liabilities in the ordinary course of business, and
(vii) no capital expenditures in excess of $10,000
individually or $30,000 in total have been authorized
or made;
(z) Current fixed operating expenses. The monthly fixed operating
expenses for Cirus (consisting of lease commitments, interest
and amortization of debt) for the six months ending June 30,
2002, on a consolidated basis excluding such expenses for THC,
shall not exceed $55,000 per month.
Cirus - Income Tax Matters
(z) Tax Returns. All tax returns and reports of Cirus and its
subsidiaries required by law to be filed have been filed and
are true, complete and correct, and any taxes payable in
accordance with any return filed by Cirus and its subsidiaries
or in accordance with any notice of assessment or reassessment
issued by any taxing authority have been so paid;
(aa) Current Taxes. Adequate provisions have been made for taxes
payable for the current period for which tax returns are not
yet required to be filed and there are no agreements, waivers,
or other arrangements providing for an extension of time with
respect to the filing of any tax return by, or payment of, any
tax, governmental charge or deficiency by Cirus or its
subsidiaries. Cirus is not aware of any contingent tax
liabilities or any grounds which would prompt a reassessment
including aggressive treatment of income and expenses in
filing earlier tax returns;
Cirus - Applicable Laws and Legal Matters
(bb) Licenses. Cirus and its subsidiaries hold all licenses and
permits as may be requisite for carrying on the Cirus Business
in the manner in which it has heretofore been carried on,
which licenses and permits have been maintained and continue
to be in good standing except where the failure to obtain or
maintain such licenses or permits would not have a material
adverse effect on the Cirus Business;
(cc) Applicable Laws. Neither Cirus nor its subsidiaries have been
charged with or received notice of breach of any laws,
ordinances, statutes, regulations, by-laws, orders or decrees
to which they are subject or which apply to them the violation
of which would have a material adverse effect on the Cirus
Business, and to Cirus' knowledge, neither Cirus nor its
subsidiaries are in breach of any laws, ordinances, statutes,
regulations, bylaws, orders or decrees the contravention of
which would result in a material adverse impact on the Cirus
Business;
(dd) Pending or Threatened Litigation. There is no material
litigation or administrative or governmental proceeding
pending or threatened against or relating to Cirus, its
subsidiaries, the Cirus Business, or any of the Cirus Assets
nor does Cirus have any knowledge of any deliberate act or
omission of Cirus or its subsidiaries that would form any
material basis for any such action or proceeding;
(ee) No Bankruptcy. Neither Cirus nor its subsidiaries have made
any voluntary assignment or proposal under applicable laws
relating to insolvency and bankruptcy and no bankruptcy
petition has been filed or presented against Cirus or its
subsidiaries and no order has been made or a resolution passed
for the winding-up, dissolution or liquidation of Cirus or its
subsidiaries;
(ff) Labor Matters. Neither Cirus nor its subsidiaries are party to
any collective agreement relating to the Cirus Business with
any labor union or other association of employees and no part
of the Cirus Business has been certified as a unit appropriate
for collective bargaining or, to the knowledge of Cirus, has
made any attempt in that regard;
(gg) Finder's Fees. Neither Cirus nor its subsidiaries are party to
any agreement which provides for the payment of finder's fees,
brokerage fees, commissions or other fees or amounts which are
or may become payable to any third party in connection with
the execution and delivery of this Agreement and the
transactions contemplated herein;
Execution and Performance of Agreement
(hh) Authorization and Enforceability. The execution and delivery
of this Agreement, and the completion of the transactions
contemplated hereby, have been duly and validly authorized by
all necessary corporate action on the part of Cirus and the
Acquirer;
(ii) No Violation or Breach. The execution and performance of this
Agreement will not
(i) violate the charter documents of Cirus or the
Acquirer or result in any breach of, or default
under, any loan agreement, mortgage, deed of trust,
or any other agreement to which Cirus or its
subsidiaries are party,
(ii) give any person any right to terminate or cancel any
agreement including, without limitation, the Cirus
Material Contracts, or any right or rights enjoyed by
Cirus or its subsidiaries,
(iii) result in any alteration of Cirus' or its
subsidiaries' obligations under any agreement to
which Cirus or its subsidiaries are party including,
without limitation, the Cirus Material Contracts,
(iv) result in the creation or imposition of any lien,
encumbrance or restriction of any nature whatsoever
in favor of a third party upon or against the Cirus
Assets,
(v) result in the imposition of any tax liability to
Cirus or its subsidiaries relating to the Cirus
Assets, or
(vi) violate any court order or decree to which either
Cirus or its subsidiaries are subject;
The Cirus Assets - Ownership and Condition
(jj) Business Assets. The Cirus Assets comprise all of the property
and assets of the Cirus Business, and no other person, firm or
corporation owns any assets used by Cirus or its subsidiaries
in operating the Cirus Business, whether under a lease, rental
agreement or other arrangement, other than as disclosed in
Schedules "F" or "I" hereto;
(kk) Title. Cirus or its subsidiaries are the legal and beneficial
owner of the Cirus Assets, free and clear of all mortgages,
liens, charges, pledges, security interests, encumbrances or
other claims whatsoever, save and except as disclosed in
Schedules "F" or "I" hereto;
(ll) No Option. No person, firm or corporation has any agreement or
option or a right capable of becoming an agreement for the
purchase of any of the Cirus Assets;
(mm) Cirus Insurance Policies. Cirus and its subsidiaries maintain
the public liability insurance and insurance against loss or
damage to the Cirus Assets and the Cirus Business as described
in Schedule "G" hereto; -
(nn) Cirus Material Contracts. The Cirus Material Contracts listed
in Schedule "I" constitute all of the material contracts of
Cirus and its subsidiaries;
(oo) No Default. There has not been any default in any material
obligation of Cirus or any other party to be performed under
any of the Cirus Material Contracts, each of which is in good
standing and in full force and effect and unamended (except as
disclosed in Schedule "I" hereto), and Cirus is not aware of
any default in the obligations of any other party to any of
the Cirus Material Contracts;
(pp) No Compensation on Termination. There are no agreements,
commitments or understandings relating to severance pay or
separation allowances on termination of employment of any
employee of Cirus or its subsidiaries. Neither Cirus nor its
subsidiaries are obliged to pay benefits or share profits with
any employee after termination of employment except as
required by law;
Cirus Assets - Cirus Equipment
(qq) Cirus Equipment. The Cirus Equipment has been maintained in a
manner consistent with that of a reasonably prudent owner and
such equipment is in good working condition;
Cirus Assets - Cirus Goodwill and Other Assets
(rr) Cirus Goodwill. Cirus and its subsidiaries carry on the Cirus
Business only under the name "Cirus Telecom" and "Cirus Talk"
and variations thereof and under no other business or trade
names. Cirus does not have any knowledge of any infringement
by Cirus or its subsidiaries of any patent, trademarks,
copyright or trade secret;
The Cirus Business
(ss) Maintenance of Business. Since the date of the Cirus Financial
Statements, the Cirus Business has been carried on in the
ordinary course and Cirus and its subsidiaries have not
entered into any material agreement or commitment except in
the ordinary course and except as disclosed herein;
(tt) Subsidiaries. Except for the Acquirer, Cirus Talk, Inc. and
Cirus Communications Inc., Cirus does not own any subsidiaries
and does not otherwise own, directly or indirectly, any shares
or interest in any other corporation, partnership, joint
venture or firm; and
Cirus - Acquisition Shares
(uu) Acquisition Shares. The Acquisition Shares when delivered to
the holders of THC Shares pursuant to the Merger shall be
validly issued and outstanding as fully paid and
non-assessable shares and the Acquisition Shares shall be
transferable upon the books of Cirus, in all cases subject to
the provisions and restrictions of all applicable securities
laws.
Non-Merger and Survival
3.2 The representations and warranties of Cirus contained herein will be true at
and as of Closing in all material respects as though such representations and
warranties were made as of such time. Notwithstanding the completion of the
transactions contemplated hereby, the waiver of any condition contained herein
(unless such waiver expressly releases a party from any such representation or
warranty) or any investigation made by THC or the THC Shareholders, the
representations and warranties of Cirus shall survive the Closing in the manner
set forth in Article 11 below.
ARTICLE 4
COVENANTS OF CIRUS
Covenants
4.1 Cirus covenants and agrees with THC that it will:
(a) Conduct of Business. Until the Closing, conduct its business
diligently and in the ordinary course consistent with the
manner in which it generally has been operated up to the date
of execution of this Agreement;
(b) Preservation of Business. Until the Closing, use its best
efforts to preserve the Cirus Business and the Cirus Assets
and, without limitation, preserve for THC Cirus' and its
subsidiaries' relationships with their suppliers, customers
and others having business relations with them;
(c) Access. Until the Closing, give THC, the THC Shareholders, and
their representatives full access to all of the properties,
books, contracts, commitments and records of Cirus, and
furnish to THC, the THC Shareholders and their representatives
all such information as they may reasonably request;
(d) Procure Consents. Until the Closing, take all reasonable steps
required to obtain, prior to Closing, any and all third party
consents required to permit the Merger and to preserve and
maintain the Cirus Assets notwithstanding the change in
control of THC arising from the Merger; and
Authorization
4.2 Cirus hereby agrees to authorize and direct any and all federal, state,
municipal, foreign and international governments and regulatory authorities
having jurisdiction respecting Cirus and its subsidiaries to release any and all
information in their possession respecting Cirus and its subsidiaries to THC.
Cirus shall promptly execute and deliver to THC any and all consents to the
release of information and specific authorizations which THC reasonably requires
to gain access to any and all such information.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF
THC AND THE THC SHAREHOLDERS
Representations and Warranties
5.1 THC and the THC Shareholders jointly and severally represent and warrant in
all material respects to Cirus, with the intent that it will rely thereon in
entering into this Agreement and in approving and completing the transactions
contemplated hereby, that:
THC - Corporate Status and Capacity
(a) Incorporation. THC is a corporation duly incorporated and
validly subsisting under the laws of the State of Delaware,
and is in good standing with the office of the Secretary of
State for the State of Delaware;
(b) Carrying on Business. THC carries on business primarily in the
States of New York and Florida and does not carry on any
material business activity in any other jurisdiction. THC has
offices in , New York and ___Florida and in no other
locations. The nature of the THC Business does not require THC
to register or otherwise be qualified to carry on business in
any other jurisdiction;
(c) Corporate Capacity. THC has the corporate power, capacity and
authority to own THC Assets, to carry on the Business of THC
and to enter into and complete this Agreement;
THC - Capitalization
(d) Authorized Capital. The authorized capital of THC consists of
1,500 common shares, no par value;
(e) Ownership of THC Shares. The issued and outstanding share
capital of THC will on Closing consist of 1,500 common shares
(being the THC Shares), which shares on Closing shall be
validly issued and outstanding as fully paid and
non-assessable shares. The THC Shareholders will be at Closing
the registered and beneficial owner of 1,500 THC Shares. The
THC Shares owned by the THC Shareholders will on Closing be
free and clear of any and all liens, charges, pledges,
encumbrances, restrictions on transfer and adverse claims
whatsoever;
(f) No Option. No person, firm or corporation has any agreement,
option, warrant, preemptive right or any other right capable
of becoming an agreement or option for the acquisition of THC
Shares held by the THC Shareholders or for the purchase,
subscription or issuance of any of the unissued shares in the
capital of THC;
(g) No Restrictions. There are no restrictions on the transfer,
sale or other disposition of THC Shares contained in the
charter documents of THC or under any agreement;
THC - Records and Financial Statements
(h) Charter Documents. The charter documents of THC have not been
altered since its incorporation date, except as filed in the
record books of THC;
(i) Corporate Minute Books. The corporate minute books of THC are
complete and each of the minutes contained therein accurately
reflect the actions that were taken at a duly called and held
meeting or by consent without a meeting. All actions by THC
which required director or shareholder approval are reflected
on the corporate minute books of THC. THC is not in violation
or breach of, or in default with respect to, any term of its
Certificates of Incorporation (or other charter documents) or
by-laws.
(j) THC Financial Statements. Representatives of Cirus have
reviewed financial information of THC and have satisfied
themselves as to the accuracy of information maintained by
THC's management. THC does not have any financial statements
available which are prepared and presented in accordance with
generally accepted accounting principles. Cirus and Acquirer
further acknowledge that the losses reported by THC in their
Federal income tax returns for the year ended December 31,
2000 may have been understated or may have to be adjusted for
uncollectable receivables of up to $400,000. Accordingly,
Cirus and Acquirer acknowledge that the losses form operations
of THC may be $700,000 for the year ended December 31, 2001;
(k) THC Accounts Payable and Liabilities. There are no material
liabilities, contingent or otherwise, of THC which are not
disclosed in Schedule "K" hereto or reflected in the THC
Financial Statements except those incurred in the ordinary
course of business since the date of the said schedule and the
THC Financial Statements, and neither THC nor its subsidiaries
have guaranteed or agreed to guarantee any debt, liability or
other obligation of any person, firm or corporation. Without
limiting the generality of the foregoing, all accounts payable
and liabilities of THC as of December 31, 2001 are described
in Schedule "K" hereto;
(l) THC Accounts Receivable. All THC Accounts Receivable result
from bona fide business transactions and services actually
rendered without, to the knowledge and belief of THC, any
claim by the obligor for set-off or counterclaim (provided,
however, that the writing off of uncollectable accounts may
reduce the accounts receivable by up to $400,000);
(m) THC Bank Accounts. All of the THC Bank Accounts, their
location, numbers and the authorized signatories thereto are
as set forth in Schedule "M" hereto;
(n) No Debt to Related Parties. Except as disclosed in Schedule
"N" hereto, neither THC nor its subsidiaries are, and on
Closing will not be, materially indebted to the THC
Shareholders nor to any family member thereof, nor to any
affiliate, director or officer of THC or the THC Shareholders
except accounts payable on account of bona fide business
transactions of THC incurred in normal course of THC Business,
including employment agreements with the THC Shareholders,
none of which are more than 30 days in arrears;
(o) No Related Party Debt to THC. Neither the THC Shareholders nor
any director, officer or affiliate of THC are now indebted to
or under any financial obligation to THC on any account
whatsoever, except for advances on account of travel and other
expenses not exceeding $5,000 in total;
(p) No Dividends. No dividends or other distributions on any
shares in the capital of THC have been made, declared or
authorized since the date of the THC Financial Statements;
(q) No Payments. No payments of any kind have been made or
authorized since the date of the THC Financial Statements to
or on behalf of the THC Shareholders or to or on behalf of
officers, directors, shareholders or employees of THC or under
any management agreements with THC, except payments made in
the ordinary course of business and at the regular rates of
salary or other remuneration payable to them;
(r) No Pension Plans. There are no pension, profit sharing, group
insurance or similar plans or other deferred compensation
plans affecting THC;
(s) No Adverse Events. Since the date of the THC Financial
Statements:
(i) there has not been any material adverse change in the
consolidated financial position or condition of THC,
its subsidiaries, its liabilities or the THC Assets
or any damage, loss or other change in circumstances
materially affecting THC, the THC Business or the THC
Assets or THC's right to carry on the THC Business,
other than changes in the ordinary course of
business,
(ii) there has not been any damage, destruction, loss or
other event (whether or not covered by insurance)
materially and adversely affecting THC, the THC
Business or the THC Assets,
(iii) there has not been any material increase in the
compensation payable or to become payable by THC to
the THC Shareholders or to any of THC's officers,
employees or agents or any bonus, payment or
arrangement made to or with any of them,
(iv) the THC Business has been and continues to be carried
on in the ordinary course,
(v) neither THC nor its subsidiaries have waived or
surrendered any right of material value,
(vi) neither THC nor its subsidiaries have has discharged
or satisfied or paid any lien or encumbrance or
obligation or liability other than current
liabilities in the ordinary course of business, and
(vii) no capital expenditures in excess of $10,000
individually or $30,000 in total have been authorized
or made;
THC - Income Tax Matters
(t) Tax Returns. All tax returns and reports of THC required by
law to be filed have been filed and are true, complete and
correct, and any taxes payable in accordance with any return
filed by THC or in accordance with any notice of assessment or
reassessment issued by any taxing authority have been so paid;
(u) Current Taxes. Adequate provisions have been made for taxes
payable for the current period for which tax returns are not
yet required to be filed and there are no agreements, waivers,
or other arrangements providing for an extension of time with
respect to the filing of any tax return by, or payment of, any
tax, governmental charge or deficiency by THC. THC is not
aware of any contingent tax liabilities or any grounds which
would prompt a reassessment including aggressive treatment of
income and expenses in filing earlier tax returns;
THC - Applicable Laws and Legal Matters
(v) Licenses. THC hold all licenses and permits as may be
requisite for carrying on the THC Business in the manner in
which it has heretofore been carried on, which licenses and
permits have been maintained and continue to be in good
standing except where the failure to obtain or maintain such
licenses or permits would not have a material adverse effect
on the THC Business;
(w) Applicable Laws. Neither THC nor its subsidiaries have been
charged with or received notice of breach of any laws,
ordinances, statutes, regulations, by-laws, orders or decrees
to which they are subject or which apply to them the violation
of which would have a material adverse effect on the THC
Business, and, to THC's knowledge, neither THC nor its
subsidiaries are in breach of any laws, ordinances, statutes,
regulations, by-laws, orders or decrees the contravention of
which would result in a material adverse impact on the THC
Business;
(x) Pending or Threatened Litigation. There is no material
litigation or administrative or governmental proceeding
pending or threatened against or relating to THC, the THC
Business, or any of the THC Assets, nor does THC have any
knowledge of any deliberate act or omission of THC that would
form any material basis for any such action or proceeding;
(y) No Bankruptcy. Neither THC nor its subsidiaries have made any
voluntary assignment or proposal under applicable laws
relating to insolvency and bankruptcy and no bankruptcy
petition has been filed or presented against THC and no order
has been made or a resolution passed for the winding-up,
dissolution or liquidation of THC;
(z) Labor Matters. Neither THC nor its subsidiaries are party to
any collective agreement relating to the THC Business with any
labor union or other association of employees and no part of
the THC Business has been certified as a unit appropriate for
collective bargaining or, to the knowledge of THC, has made
any attempt in that regard and neither THC nor its
subsidiaries have any reason to believe that any current
employees will leave THC's employ as a result of this Merger.
(aa) Finder's Fees. Neither THC nor its subsidiaries are party to
any agreement which provides for the payment of finder's fees,
brokerage fees, commissions or other fees or amounts which are
or may become payable to any third party in connection with
the execution and delivery of this Agreement and the
transactions contemplated herein;
Execution and Performance of Agreement
(bb) Authorization and Enforceability. The execution and delivery
of this Agreement, and the completion of the transactions
contemplated hereby, have been duly and validly authorized by
all necessary corporate action on the part of THC;
(cc) No Violation or Breach. The execution and performance of this
Agreement will not
(i) violate the charter documents of THC or result in any
breach of, or default under, any loan agreement,
mortgage, deed of trust, or any other agreement to
which THC are party,
(ii) give any person any right to terminate or cancel any
agreement including, without limitation, THC Material
Contracts, or any right or rights enjoyed by THC,
(iii) result in any alteration of THC's or its
subsidiaries' obligations under any agreement to
which either THC are party including, without
limitation, the THC Material Contracts,
(iv) result in the creation or imposition of any lien,
encumbrance or restriction of any nature whatsoever
in flavor of a third party upon or against the THC
Assets,
(v) result in the imposition of any tax liability to THC
relating to THC Assets, THC Shares or shares of its
subsidiaries' equity stock, or
(vi) violate any court order or decree to which either THC
are subject;
THC Assets - Ownership and Condition
(dd) Business Assets. The THC Assets comprise all of the property
and assets of the THC Business, and neither the THC
Shareholders nor any other person, firm or corporation owns
any assets used by THC in operating the THC Business, whether
under a lease, rental agreement or other arrangement, other
than as disclosed in Schedules "O" or "R" hereto;
(ee) Title. THC are the legal and beneficial owner of the THC
Assets, free and clear of all mortgages, liens, charges,
pledges, security interests, encumbrances or other claims
whatsoever, save and except as disclosed in Schedules "O" or
"R" hereto;
(ff) No Option. No person, firm or corporation has any agreement or
option or a right capable of becoming an agreement for the
purchase of any of the THC Assets;
(gg) THC Insurance Policies. THC maintain the public liability
insurance and insurance against loss or damage to the THC
Assets and the THC Business as described in Schedule "P"
hereto;
(hh) THC Material Contracts. The THC Material Contracts listed in
Schedule "R" constitute all of the material contracts of THC;
(ii) No Default. There has not been any default in any material
obligation of THC or any other party to be performed under any
of THC Material Contracts, each of which is in good standing
and in full force and effect and unamended (except as
disclosed in Schedule "R"), and THC is not aware of any
default in the obligations of any other party to any of the
THC Material Contracts;
(jj) No Compensation on Termination. There are no agreements,
commitments or understandings relating to severance pay or
separation allowances on termination of employment of any
employee of THC. Neither THC nor its subsidiaries is obliged
to pay benefits or share profits with any employee after
termination of employment except as required by law;
THC Assets - THC Equipment
(kk) THC Equipment. The THC Equipment has been maintained in a
manner consistent with that of a reasonably prudent owner and
such equipment is in good working condition;
THC Assets - THC Goodwill and Other Assets
(ll) THC Goodwill. THC carry on the THC Business only under the
names "THC" and "THC International" and variations thereof and
under no other business or trade names. THC does not have any
knowledge of any infringement by THC of any patent, trademark,
copyright or trade secret;
The Business of THC
(mm) Maintenance of Business. Since the date of the THC Financial
Statements, the THC Business has been carried on in the
ordinary course and neither THC nor its subsidiaries have
entered into any material agreement or commitment except in
the ordinary course; and
(nn) Subsidiaries. THC does not own any subsidiaries and does not
otherwise own, directly or indirectly, any shares or interest
in any other corporation, partnership, joint venture or firm
and THC does not own any subsidiary and does not otherwise
own, directly or indirectly, any shares or interest in any
other corporation, partnership, joint venture or firm.
Non-Merger and Survival
5.2 The representations and warranties of THC and the THC Shareholders contained
herein will be true at and as of Closing in all material respects as though such
representations and warranties were made as of such time. Notwithstanding the
completion of the transactions contemplated hereby, the waiver of any condition
contained herein (unless such waiver expressly releases a party from any such
representation or warranty) or any investigation made by Cirus, the
representations and warranties of THC and the THC Shareholders shall survive the
Closing in the manner set forth in Article 11, below.
ARTICLE 6
COVENANTS OF THC AND
THE THC SHAREHOLDERS
Covenants
6.1 THC and the THC Shareholders covenant and agree with Cirus that they will:
(a) Conduct of Business. Until the Closing, conduct the THC
Business diligently and in the ordinary course consistent with
the manner in which the THC Business generally has been
operated up to the date of execution of this Agreement;
(b) Preservation of Business. Until the Closing, use their best
efforts to preserve the THC Business and the THC Assets and,
without limitation, preserve for Cirus THC's and its
subsidiaries' relationships with their suppliers, customers
and others having business relations with them;
(c) Access. Until the Closing, give Cirus and its representatives
full access to all of the properties, books, contracts,
commitments and records of THC relating to THC, the THC
Business and the THC Assets, and furnish to Cirus and its
representatives all such information as they may reasonably
request;
(d) Procure Consents. Until the Closing, take all reasonable steps
required to obtain, prior to Closing, any and all third party
consents required to permit the Merger and to preserve and
maintain the THC Assets, including the THC Material Contracts,
notwithstanding the change in control of THC arising from the
Merger;
(e) Reporting and Internal Controls. From and after the Effective
Time, the THC Shareholders shall forthwith take all required
actions to implement internal controls on the business of the
Surviving Company to ensure that the Surviving Company and
Cirus comply with Section 13b(2) of the Securities and
Exchange Act of 1934;
(f) Audited Financial Statements. Following the Closing, THC will
cooperate with Cirus in the preparation of audited financial
statements of THC in compliance with the requirements of
Regulation SB as promulgated by the Securities and Exchange
Commission.
Authorization
6.2 THC hereby agrees to authorize and direct any and all federal, state,
municipal, foreign and international governments and regulatory authorities
having jurisdiction respecting THC to release any and all information in their
possession respecting THC to Cirus. THC shall promptly execute and deliver to
Cirus any and all consents to the release of information and specific
authorizations which Cirus reasonably require to gain access to any and all such
information.
Survival
6.3 The covenants set forth in this Article shall survive the Closing for the
benefit of Cirus.
ARTICLE 7
CONDITIONS PRECEDENT
Conditions Precedent in favor of Cirus
7.1 Cirus' obligations to carry out the transactions contemplated hereby are
subject to the fulfillment of each of the following conditions precedent on or
before the Closing:
(a) all documents or copies of documents required to be executed
and delivered to Cirus hereunder will have been so executed
and delivered;
(b) all of the terms, covenants and conditions of this Agreement
to be complied with or performed by THC or the THC
Shareholders at or prior to the Closing will have been
complied with or performed;
(c) Cirus shall have completed its review and inspection of the
books and records of THC and shall be satisfied with same in
all material respects;
(d) title to the THC Shares held by the THC Shareholders and to
the THC Assets will be free and clear of all mortgages, liens,
charges, pledges, security interests, encumbrances or other
claims whatsoever, save and except as disclosed herein;
(e) the Certificate of Merger shall be executed by THC in form
acceptable for filing with the Delaware Secretary of State;
(f) subject to Article 8 hereof, there will not have occurred
(i) any material adverse change in the financial position
or condition of THC, its subsidiaries, their
liabilities or the THC Assets or any damage, loss or
other change in circumstances materially and
adversely affecting the THC Business or the THC
Assets or THC's right to carry on the THC Business,
other than changes in the ordinary course of
business, none of which has been materially adverse,
or
(ii) any damage, destruction, loss or other event,
including changes to any laws or statutes applicable
to THC or the THC Business (whether or not covered by
insurance) materially and adversely affecting THC,
its subsidiaries, the THC Business or the THC Assets;
(g) Cirus' issued and outstanding common share capital shall be
reduced to 27,620,890 Cirus Common Shares by the return to
treasury of 24,200,000 Cirus Common Shares and Cirus shall
have received a release in form satisfactory to THC from the
persons returning such shares in that regard; and
(h) the transactions contemplated hereby shall have been approved
by all other regulatory authorities having jurisdiction over
the subject matter hereof, if any.
Waiver by Cirus
7.2 The conditions precedent set out in the preceding section are inserted for
the exclusive benefit of Cirus and any such condition may be waived in whole or
in part by Cirus at or prior to Closing by delivering to THC a written waiver to
that effect signed by Cirus. In the event that the conditions precedent set out
in the preceding section are not satisfied on or before the Closing Cirus shall
be released from all obligations under this Agreement.
Conditions Precedent in Favor of THC and the THC Shareholders
7.3 The obligation of THC and the THC Shareholders to carry out the transactions
contemplated hereby is subject to the fulfillment of each of the following
conditions precedent on or before the Closing:
(a) all documents or copies of documents required to be executed
and delivered to THC hereunder will have been so executed and
delivered;
(b) all of the terms, covenants and conditions of this Agreement
to be complied with or performed by Cirus at or prior to the
Closing will have been complied with or performed;
(c) THC shall have completed its review and inspection of the
books and records of Cirus and its subsidiaries and shall be
satisfied with same in all material respects;
(d) Cirus will have delivered the Acquisition Shares to be issued
pursuant to the terms of the Merger to THC at the Closing and
the Acquisition Shares will be registered on the books of
Cirus in the names of the holders of THC Shares at the
Effective Time;
(e) title to the Acquisition Shares will be free and clear of all
mortgages, liens, charges, pledges, security interests,
encumbrances or other claims whatsoever;
(f) the Certificate of Merger shall be executed by the Acquirer in
form acceptable for filing with the Delaware Secretary of
State;
(g) subject to Article 8 hereof, there will not have occurred
(i) any material adverse change in the financial position
or condition of Cirus, its subsidiaries, their
liabilities or the Cirus Assets or any damage, loss
or other change in circumstances materially and
adversely affecting Cirus, the Cirus Business or the
Cirus Assets or Cirus' right to carry on the Cirus
Business, other than changes in the ordinary course
of business, none of which has been materially
adverse, or
(ii) any damage, destruction, loss or other event,
including changes to any laws or statutes applicable
to Cirus or the Cirus Business (whether or not
covered by insurance) materially and adversely
affecting Cirus, its subsidiaries, the Cirus Business
or the Cirus Assets;
(h) Cirus' issued and outstanding common share capital shall be
reduced to 26,620,890 Cirus Common Shares by the return to
treasury of 24,200,000 Cirus Common Shares and Cirus shall
have received a release in form satisfactory to THC from the
persons returning such shares in that regard;
(i) the transactions contemplated hereby shall have been approved
by all other regulatory authorities having jurisdiction over
the subject matter hereof, if any;
(j) Cirus shall have filed all reports due from it under the
Securities Exchange Act of 1934, as amended and each such
report shall comply in all material respects with applicable
forms and regulations applicable thereto;
(k) the Cirus Common Shares shall be continually quoted on the
National Association of Securities Dealers, Inc. OTCBB and
Cirus shall not have received any notice that any process has
been initiated to stop such quotations, or be aware that any
condition exists which would result in such Shares no longer
being quoted after the passage of time; and
(l) Cirus has not received any Notice that the Securities Exchange
Commission or any state securities agency initiated a
proceeding to suspend trading of the Cirus Common Shares nor
shall such an order shall be in effect.
Waiver by THC and the THC Shareholders
7.4 The conditions precedent set out in the preceding section are inserted for
the exclusive benefit of THC and the THC Shareholders and any such condition may
be waived in whole or in part by THC or the THC Shareholders at or prior to the
Closing by delivering to Cirus a written waiver to that effect signed by THC and
the THC Shareholders. In the event that the conditions precedent set out in the
preceding section are not satisfied on or before the Closing THC and the THC
Shareholders shall be released from all obligations under this Agreement.
Nature of Conditions Precedent
7.5 The conditions precedent set forth in this Article are conditions of
completion of the transactions contemplated by this Agreement and are not
conditions precedent to the existence of a binding agreement. Each party
acknowledges receipt of the sum of $1.00 and other good and valuable
consideration as separate and distinct consideration for agreeing to the
conditions of precedent in favor of the other party or parties set forth in this
Article.
Termination
7.6 Notwithstanding any provision herein to the contrary, if the Closing does
not occur on or before January 18, 2002, this Agreement will be at an end and
will have no further force or effect, unless otherwise agreed upon by the
parties in writing.
Confidentiality
7.7 Notwithstanding any provision herein to the contrary, the parties hereto
agree that the existence and terms of this Agreement are confidential and that
if this Agreement is terminated pursuant to the preceding section the parties
agree to return to one another any and all financial, technical and business
documents delivered to the other party or parties in connection with the
negotiation and execution of this Agreement and shall keep the terms of this
Agreement and all information and documents received from THC and Cirus and the
contents thereof confidential and not utilize nor reveal or release same,
provided, however, that Cirus will be required to issue news releases regarding
the execution and consummation of this Agreement and file a Current Report on
Form 8-K with the Securities and Exchange Commission respecting the proposed
Merger contemplated hereby together with such other documents as are required to
maintain the currency of Cirus' filings with the Securities and Exchange
Commission.
No-Shop Provision
7.8 From the date hereof until the close of business on January 18, 2002, the
parties hereto agree that they shall not, nor will they cause their directors,
officers, employees, agents and representatives to, directly or indirectly,
solicit or entertain offers from, hold meetings or discussions with, or in any
manner encourage, accept or consider any proposal of, any other person relating
to the acquisition of either THC or CTLE, shares of their capital stock,
securities convertible into or exchangeable for shares of their capital stock,
or their assets or business, in whole or in part, whether directly or
indirectly, through purchase, merger, consolidation, original issuance, or
otherwise. THC or CTLE will immediately notify the other parties hereto in
writing regarding any such contact from the date hereof until the close of
business on January 18, 2002.
ARTICLE 8
RISK
Material Change in the Business of THC
8.1 If any material loss or damage to the THC Business occurs prior to Closing
and such loss or damage, in Cirus' reasonable opinion, cannot be substantially
repaired or replaced within sixty (60) days, Cirus shall, within two (2) days
following any such loss or damage, by notice in writing to THC, at its option,
either:
(a) terminate this Agreement, in which case no party will be under
any further obligation to any other party; or
(b) elect to complete the Merger and the other transactions
contemplated hereby, in which case the proceeds and the rights
to receive the proceeds of all insurance covering such loss or
damage will, as a condition precedent to Cirus' obligations to
carry out the transactions contemplated hereby, be vested in
THC or otherwise adequately secured to the satisfaction of
Cirus on or before the Closing Date.
Material Change in the Cirus Business
8.2 If any material loss or damage to the Cirus Business occurs prior to Closing
and such loss or damage, in THC's reasonable opinion, cannot be substantially
repaired or replaced within sixty (60) days, THC shall, within two (2) days
following any such loss or damage, by notice in writing to Cirus, at its option,
either:
(a) terminate this Agreement, in which case no party will be under
any further obligation to any other party; or
(b) elect to complete the Merger and the other transactions
contemplated hereby, in which case the proceeds and the rights
to receive the proceeds of all insurance covering such loss or
damage will, as a condition precedent to THC's obligations to
carry out the transactions contemplated hereby, be vested in
Cirus or otherwise adequately secured to the satisfaction of
THC on or before the Closing Date.
ARTICLE 9
CLOSING
Closing
9.1 The Merger and the other transactions contemplated by this Agreement will be
closed at the Place of Closing in accordance with the closing procedure set out
in this Article.
Documents to be Delivered by THC
9.2 On or before the Closing, THC and the THC Shareholders will deliver or cause
to be delivered to Cirus:
(a) the original or certified copies of the charter documents of
THC and all corporate records documents and instruments of
THC, the corporate seal of THC and all books and accounts of
THC;
(b) all reasonable consents or approvals required to be obtained
by THC for the purposes of completing the Merger and
preserving and maintaining the interests of THC under any and
all THC Material Contracts and in relation to THC Assets;
(c) certified copies of such resolutions of the shareholders and
directors of THC as are required to be passed to authorize the
execution, delivery and implementation of this Agreement;
(d) an acknowledgement from THC and the THC Shareholders of the
satisfaction of the conditions precedent set forth in section
7.3 hereof;
(e) the Certificate of Merger, duly executed by THC; and
(f) such other documents as Cirus may reasonably require to give
effect to the terms and intention of this Agreement.
Documents to be Delivered by Cirus
9.3 On or before the Closing, Cirus shall deliver or cause to be delivered to
THC and the THC Shareholders:
(a) share certificates representing the Acquisition Shares duly
registered in the names of the holders of shares of THC Common
Stock;
(b) certified copies of such resolutions of the directors of Cirus
as are required to be passed to authorize the execution,
delivery and implementation of this Agreement;
(c) a certified copy of a resolution of the directors of Cirus
dated as of the Closing Date appointing the nominees of THC as
officers of THC;
(d) an undated resolution of the directors of Cirus appointing the
nominees of the THC Shareholders listed below in Article 10 to
the board of directors of Cirus;
(e) undated resignation of Xxxxxx Xxxx as a director of Cirus;
(f) an acknowledgement from Cirus of the satisfaction of the
conditions precedent set forth in section 7.1 hereof;
(g) documentation evidencing the return to treasury of 24,200,000
Cirus Common Shares and release in form satisfactory to THC
from the persons returning such shares;
(h) the Certificate of Merger, duly executed by the Acquirer; and
(i) such other documents as THC may reasonably require to give
effect to the terms and intention of this Agreement.
ARTICLE 10
POST-CLOSING MATTERS
10.1 Forthwith after the Closing, Cirus, THC and the THC Shareholders agree to
use all their best efforts to:
(a) file the Certificate of Merger with Secretary of State of the
State of Delaware;
(b) issue a news release reporting the Closing;
(c) file with the Securities and Exchange Commission a report on
Form 14f1 disclosing the change in control of Cirus and, 10
days after such filing, date the resolutions appointing to the
board of directors of Cirus Xxxxx Xxxxx and Xxxxx Xxxxx and
forthwith date and accept the resignation of Xxxxxx Xxxxx as a
director of Cirus;
(d) file Form 8-K with the Securities and Exchange Commission
disclosing the terms of this Agreement and, not less than 60
days following the filing of such Form 8-K, to file and
amended Form 8-K which includes audited financial statements
of THC as well as pro forma financial information of THC and
Cirus as required by Regulation SB as promulgated by the
Securities and Exchange Commission; and
(e) file reports on Forms 13D and 3 with the Securities and
Exchange Commission disclosing the acquisition of the
Acquisition Shares by the THC Shareholders.
10.2 In the event Cirus does not raise $1,000,000 of gross proceeds from the
sale or sales of equity securities of Cirus on or before the 90th day following
the filing of a Form 8-K report containing all of the audited financial
statements of THC and proforma financial information required under Regulation
S-B (the "Measurement Date"), Cirus will issue the number additional Cirus
Common Shares (the "Additional Acquisition Shares") to the THC Shareholders, in
the proportion that each THC Shareholder received Initial Acquisition Shares,
determined by subtracting the amount of gross proceeds raised from $1,000,000
and dividing the resulting sum by average closing bid prices for such shares for
the ten trading days preceeding the Measurement Date. Such Additional
Acquisition Shares will be issued and delivered to the THC Shareholders within
five business days of the Measurement Date, fully paid and free of any liens and
shall be deemed to be part of the initial consideration for the Merger.
ARTICLE 11
SURVIVAL OF REPRESENTATIONS; INDEMNITY; SET-OFF
11.1 Survival of Covenants and Agreements. The respective representations,
warranties, material covenants and agreements of the THC Shareholders and Cirus
contained in this Agreement, or any Schedule attached hereto or any agreement or
document delivered pursuant to this Agreement shall survive for a period of two
years from the consummation of the transactions contemplated hereby; provided,
however, that the representations, warranties and agreements made with regard to
taxes and ERISA matters shall survive until the applicable statutes of
limitations have expired; and provided further, however, that with respect to
any covenant, term or provision to be performed hereunder or in any of the
Schedules hereto or any documents or agreements delivered hereunder, the right
of indemnification under this Article 11 shall survive until such covenant, term
or provision has been fully paid, performed or discharged.
11.2 Indemnification.
(a) The THC Shareholders agree to indemnify and hold Cirus and its
officers, directors, shareholders, employees, affiliates and
agents harmless from damages, losses, liabilities,
assessments, judgments, costs or expenses (including, without
limitation, penalties, interest and reasonable counsel fees
and expenses), (each a "Claim"), in excess of $10,000 in the
aggregate, as a result of or arising out of the material
breach of any representation or warranty made by the
Shareholders, or the failure of any material representation or
warranty made by the Shareholders in this Agreement or in any
Schedule attached hereto or any document or agreement
delivered hereunder to be true and correct in all material
respects as of the date of this Agreement and as of the
Closing Date or the non-performance by the THC Shareholders of
any covenant, term or provision to be performed by them
hereunder or in any of the documents or agreements delivered
hereunder which may be imposed or sought to be imposed on
Cirus.
(b) Cirus agrees to indemnify and hold the THC Shareholders and
each of their officers, directors, shareholders, employees,
affiliates and agents harmless from Claims in excess of
$10,000, in the aggregate, suffered or paid, directly or
indirectly, as a result of or arising out of the material
breach of any representation or warranty made by Cirus, or the
failure of any material representation or warranty made by
Cirus in this Agreement or in any Schedule attached hereto or
any document or agreement delivered hereunder to be true and
correct in all material respects as of the date of this
Agreement and as of the Closing Date or the non-performance by
Cirus of any covenant, term or provision to be performed by
them hereunder or in any of the documents or agreements
delivered hereunder which may be imposed or sought to be
imposed on the THC Shareholders, THC or Cirus.
11.3 Conditions of Indemnification.
(a) A party entitled to indemnification hereunder (the
"Indemnified Party") shall notify the party or parties liable
for such indemnification (the "Indemnifying Party") in writing
of any Claim or potential liability for Taxes ("Tax Claim")
which the Indemnified Party has determined has given or could
give rise to a right of indemnification under this Agreement.
Such notice shall be given within a reasonable (taking into
account the nature of the Claim or Tax Claim) period of time
after the Indemnified Party has actual knowledge thereof. The
Indemnifying Party shall satisfy its obligations under this
Article 11 within forty days after receipt of subsequent
written notice from the Indemnified Party if an amount is
specified therein, or promptly following receipt of subsequent
written notice or notices specifying the amount of such Claim
or Tax Claim additions thereto; provided, however, that for so
long as the Indemnifying Party is in good faith defending a
Claim or Tax Claim pursuant to Section 8.3(b) hereof, its
obligation to indemnify the Indemnified Party with respect
thereto shall be suspended (other than with respect to any
costs, expenses or other liabilities incurred by the
Indemnified Party prior to the assumption of the defense by
the Indemnifying Party). Failure to provide a notice of Claim
or Tax Claim within the time period referred to above shall
not constitute a defense to a Claim or Tax Claim or release
the Indemnifying Party from any obligation hereunder to the
extent that such failure does not prejudice the position of
the Indemnifying Party.
(b) If the facts giving rise to any such indemnification involve
any actual, threatened or possible Claim or demand or Tax
Claim by any person not a party to this Agreement against the
Indemnified Party, the Indemnifying Party shall be entitled to
contest or defend such Claim or demand Tax Claim at its
expense and through counsel of its own choosing, which counsel
shall be reasonably acceptable to the Indemnified Party, such
right to contest or defend shall only apply if the
Indemnifying Party gave written notice of its intention to
assume the contest and defense of such Claim or demand Tax
Claim to the Indemnified Party as soon as practicable, but in
no event more than thirty days after receipt of the notice of
Claims or Tax Claim, and provided the Indemnified Party with
appropriate assurances as to the creditworthiness of the
Indemnifying Party, and that the Indemnifying Party will be in
a position to pay all fees, expenses and judgments that might
arise out of such Claim or demand Tax Claim. The Indemnified
Party shall have the obligation to cooperate in the defense of
any such Claim or demand Tax Claim and the right, at its own
expense, to participate in the defense of any Claim or Tax
Claim. So long as the Indemnifying Party is defending in good
faith any such Claim or demand Tax Claim asserted by a third
party against the Indemnified Party, the Indemnified Party
shall not settle or compromise such Claim or demand Tax Claim.
The Indemnifying Party shall have the right to settle or
compromise any such Claim or demand Tax Claim without the
consent of the Indemnified Party at any time utilizing its own
funds to do so if in connection with such settlement or
compromise the Indemnified Party is fully released by the
third party and is paid in full any indemnification amounts
due hereunder. The Indemnified Party shall make available to
the Indemnifying Party or its agents all records and other
materials in the Indemnified Party's possession reasonably
required by it for its use in contesting any third party Claim
or demand Tax Claim and shall otherwise cooperate, at the
expense of the Indemnifying Party, in the defense thereof in
such manner as the Indemnifying Party may reasonably request.
Whether or not the Indemnifying Party elects to defend such
Claim or demand Tax Claim, the Indemnified Party shall have no
obligation to do so.
11.4 Limitations on Indemnification for Breaches of Representations and
Warranties. Notwithstanding anything contained in this Agreement to the
contrary, (a) the individual liability of the THC Shareholders under Section
11.2 for any liability arising as a result of the failure of Shareholders
representations and warranties to be true and correct or arising for any other
reason under Section 11.2, shall not exceed the number of shares received by the
shareholder at Closing multiplied by the price of the shares (NASDAQ:OTC BB) on
the day this Agreement is signed (the "Closing Value") and (b) the aggregate
liability of Cirus and its affiliates under Section 11.2 for any liability
arising as a result of the failure of Cirus' representations and warranties to
be true and correct, shall not exceed the Closing Value.
11.5 Payment of Indemnification Liabilities.
(a) Except as set forth in Section 11.5(b), all payments of claims
to an indemnified party may be made by wire transfer of
immediately available funds within 10 business days after the
date of the notice of sums due and owing provided for in
Section 11.2, each THC Shareholder or Cirus may elect, at its
option, to pay any claims to an indemnified party in shares of
Cirus Common Stock, and the number of shares of Cirus Common
Stock to be transferred or issued in satisfaction of such
liabilities, and the terms of any such satisfaction of such
liabilities, and the terms of any such transfer, shall be
determined as set forth in Section 11.5(b).
(b) In the event that a THC Shareholder or Cirus, in accordance
with Section 11.5(a), elects or is required to pay any
liabilities owing by it in shares of Cirus Common Stock, the
number of shares to be transferred with respect to any such
liability shall be determined by dividing the amount of such
liability by the Applicable Average Share Value. The
"Applicable Average Share Value" shall be equal to the average
of the Daily Closing Prices for each of the ten business days
immediately preceding the date of the notice provided for in
Section 11.2; and the "Daily Closing Price" for each such day
shall be average of the last bid and ask price of Cirus Common
Stock quoted on such day on the SmallCap Market (or such
exchange or quotation system as shall report the trading
prices of Purchaser Common Stock at the relevant time).
(c) Cirus covenants and agrees that, in the event it issues any
shares of Cirus Common Stock to THC Shareholder in payment of
any claim of Shareholder ("Issued Indemnification Shares")
hereby, it will take such actions as may be necessary to
assure that, upon issuance, such Issued Indemnification Shares
will be duly authorized, validly issued, fully paid and
non-assessable and free of preemptive rights, and will be
registered on the stock certificate books and stock transfer
ledgers of Cirus solely in the name of THC Shareholders. THC
Shareholders will receive good and marketable title to any
Issued Indemnification Shares within 10 business days after
the date of the notice provided for in Section 11.2, free and
clear of any and all liens.
(d) THC Shareholders covenant and agree that, in the event it
transfers any shares of Purchaser Common Stock to Purchaser in
payment of any claims hereunder ("Surrendered Indemnification
Shares"), it will take such actions as may be reasonably
necessary to assure that, upon such transfer, the THC
Shareholder shall have delivered to Cirus good and marketable
title to such Surrendered Indemnification Shares, free and
clear of any and all liens. Any such transfers of Surrendered
Indemnification Shares will be made within 10 business days
after the date of the notice provided for in Section 11.2.
ARTICLE 12
INTERIM MANAGEMENT
12.1 Appointment of Interim Operating Officer. Amar Bahadoordingh is hereby
appointed Interim Operating Officer of the Purchaser with the all powers and
responsibilities of a chief executive officer from the date of this Agreement
until either the tenth calendar day following the Closing and mailing of the
statement required under Rule 14f-1or termination of this Agreement the
("Effective Date").
12.2 Operation of Cirus and THC in the Ordinary Course. Amar Bahadoordingh
covenants and agrees that pending the Closing, the business of THC and Cirus
shall be operated in the ordinary course of business consistent with past
practice and except (i) the hiring of personnel set forth in Schedule 5A.2
hereto, which discloses name, title and salary; (ii) the payment of professional
fees and services reasonably necessary to complete the transactions contemplated
by the Agreement; or (iii) as otherwise agreed in writing by Amar Bahadoordingh:
(a) Maintenance of Physical Assets. Cirus and THC shall continue
to maintain and service the physical assets used in the
conduct of their respective businesses in the same manner as
has been its consistent past practice.
(b) Employees and Business Relations. Cirus and THC shall use
their respective best efforts to keep available the services
of the present employees and agents of their respective
businesses and to maintain the relations and goodwill with the
suppliers, customers, distributors and any others having
business relations with them.
(d) Compliance with Laws, etc. Cirus and Ascot shall comply with
all laws, ordinances, rules, regulations and orders applicable
to their respective businesser, or operations, assets or
properties in respect thereof, the noncompliance with which
might materially affect their business or the assets.
(e) Sale of Assets; Negotiations. Cirus shall not, directly or
indirectly, sell or encumber all or any part of the assets of
THC, other than in the ordinary course of THC's business
consistent with past practice, or initiate or participate in
any discussions or negotiations or enter into any agreement to
do any of the foregoing. Cirus shall not provide any
confidential information concerning the THC's business or its
properties or assets or any third party.
(f) Checks. Amar Bahadoordingh will not permit Cirus to issue any
check in an amount of $1,000 or group of checks in an amount
exceeding $10,000 except the payment of existing liabilities
or ordinary expenses of Cirus or professionals necessary for
the transaction contemplated hereby.
12.3 Termination. In the event the transactions contemplated by this Agreement
are not consummated by January 18, 2002, Amar Bahadoordingh and the persons set
forth on Schedule 12.2 shall resign and return all documents and property of the
Cirus in their possession to Amar Bahadoordingh .
12.4 Survival. Notwithstanding anything to the contrary contained herein, the
covenants of Cirus and Amar Bahadoordingh contained in this Article 12 shall
survive the termination of this Agreement and THC shall indemnify Cirus from any
damages resulting from breach of these covenants and agreements whether or not
the transactions contemplated hereby are consummated.
ARTICLE 13
GENERAL PROVISIONS
Arbitration
13.1 The parties hereto shall attempt to resolve any dispute, controversy,
difference or claim arising out of or relating to this Agreement by negotiation
in good faith. If such good negotiation fails to resolve such dispute,
controversy, difference or claim within fifteen (15) days after any party
delivers to any other party a notice of its intent to submit such matter to
arbitration, then any party to such dispute, controversy, difference or claim
may submit such matter to arbitration in the City of New York, New York.
Notice
13.2 Any notice required or permitted to be given by any party will be deemed to
be given when in writing and delivered to the address for notice of the intended
recipient by personal delivery, prepaid single certified or registered mail, or
telecopier. Any notice delivered by mail shall be deemed to have been received
on the fourth business day after and excluding the date of mailing, except in
the event of a disruption in regular postal service in which event such notice
shall be deemed to be delivered on the actual date of receipt. Any notice
delivered personally or by telecopier shall be deemed to have been received on
the actual date of delivery.
Addresses for Service
13.3 The address for service of notice of each of the parties hereto is as
follows:
(a) Cirus or the Acquirer:
Cirus Telecom Inc.
Attention: Xxxx Xxxxxxxxxxxxx
0000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Telecopier: (000) 000-0000
(b) THC or the THC Shareholders
THC Internet Solutions, Inc.
0000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier: (000) 000-0000
with a required copy to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Telecopier: (000) 000-0000
Change of Address
13.4 Any party may, by notice to the other parties change its address for notice
to some other address in North America and will so change its address for notice
whenever the existing address or notice ceases to be adequate for delivery by
hand. A post office box may not be used as an address for service.
Further Assurances
13.5 Each of the parties will execute and deliver such further and other
documents and do and perform such further and other acts as any other party may
reasonably require to carry out and give effect to the terms and intention of
this Agreement.
Time of the Essence
13.6 Time is expressly declared to be the essence of this Agreement.
Entire Agreement
13.7 The provisions contained herein constitute the entire agreement among THC,
the THC Shareholders, the Acquirer and Cirus respecting the subject matter
hereof and supersede all previous communications, representations and
agreements, whether verbal or written, among THC, the THC Shareholders, the
Acquirer and Cirus with respect to the subject matter hereof.
Enurement
13.8 This Agreement will enure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors, administrators, successors and
permitted assigns.
Assignment
13.9 This Agreement is not assignable without the prior written consent of the
parties hereto.
Counterparts
13.10 This Agreement may be executed in counterparts, each of which when
executed by any party will be deemed to be an original and all of which
counterparts will together constitute one and the same Agreement. Delivery of
executed copies of this Agreement by telecopier will constitute proper delivery,
provided that originally executed counterparts are delivered to the parties
within a reasonable time thereafter.
Applicable Law
13.11 This Agreement is subject to the laws of the State of New York.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF the parties have executed this Agreement effective as of the
day and year first above written.
CIRUS TELECOM, INC.
By:
----------------------------------------
Xxxx Xxxxxxxxxxxxx, President
THC ACQUISITION CORP.
By:
----------------------------------------
Xxxx Xxxxxxxxxxxxx, President
THC INTERNET SOLUTIONS, INC.
By:
----------------------------------------
Xxxxxxx X. Xxxx, President
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XXXXX XXXXXXXXXXX
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XXXXXXX X. XXXX
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XXXXX XXXXX
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XXXXX XXXXX
This is Page 35 to the Agreement and Plan of Merger dated January __, 2002 among
Cirus Telecom, Inc., THC Acquisition Corp., THC Internet Solutions, Inc., Xxxxx
Xxxxxxxxxxx, Xxxxxxx X. Xxxx, Xxxxx Xxxxx and Xxxxx Xxxxx.
