Exhibit 10.1
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (THE "AGREEMENT") is made as of this
____ day of _________________ 2002, by and among XXXXXXXXXXXX.XXX, INC., a
Florida corporation ("ABIL"), CRYSTALIX USA GROUP, INC., a Nevada corporation
("CUSA"), XXXXXX XXXXXXX, an individual, XXXXX XXX XXXXX, an individual and XXXX
XXXXXXXX, an individual (collectively, the "Stockholders") Certain terms are
used herein as defined below in Article I or elsewhere in this Agreement.
RECITALS
WHEREAS, ABIL is a publicly held company with its common stock trading on
the OTC bulletin board and is looking to acquire the stock of growing privately
held company;
WHEREAS, Stockholders collectively own all of the outstanding shares of
Common Stock of CUSA (the "CUSA Shares").
WHEREAS, CUSA is a growing privately held company which is desirous of
being acquired by a publicly held company;
WHEREAS, CUSA is currently subject to a licensing agreement with Crystalix
Technology, which provides CUSA with the exclusive right to utilize its
intellectual property in connection with the operation of CUSA's laser etching
machines; and
WHEREAS, after good faith negotiations, ABIL, the Stockholders and CUSA
have agreed upon certain terms and conditions which will govern the sale of CUSA
to ABIL and have set forth these terms and conditions in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the respective covenants contained
herein and intending to be legally bound hereby, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
For convenience, certain terms used in more than one part of this Agreement
are listed in alphabetical order and defined or referred to below (such terms as
well as any other terms defined elsewhere in this Agreement shall be equally
applicable to both the singular and plural forms of the terms defined).
"ABIL Common Stock" means the 300,000,000 authorized shares of Common Stock
of ABIL, $0.001par value per share.
"ABIL Shares" means the shares of ABIL Common Stock and ABIL Series A
Preferred Stock to be provided in connection with the Transactions.
"Affiliates" means, with respect to a particular party, persons or entities
controlling, controlled by or under common control with that party, including
but not limited to any officers, directors of that party and of its other
Affiliates and any entity in which that party owns more than 5% of the voting
securities on a fully diluted basis.
"Code" means the Internal Revenue Code of 1986, as amended, and the
Regulations promulgated thereunder.
"Crystalix Technology" means Crystalix Technology, Inc., a Nevada
corporation.
"CUSA Assets" means all of the assets, properties, claims, contracts,
goodwill and rights of every kind and description, real and personal, tangible
and intangible, wherever situated, whether or not reflected in the most recent
financial statements, that CUSA has a right, title or interest to or in and
whether or not used by CUSA in the CUSA Business.
"CUSA Business" means the entire business, operations and facilities of
CUSA unless otherwise specified.
"CUSA Common Stock" means the 100 shares of validly issued and outstanding
Common Stock, with par value of $0.001 per share, held by the Stockholders.
"CUSA's knowledge" or "ABIL's knowledge" means the actual knowledge of CUSA
or ABIL, as the case may be, or of any director, officer or other employee of
CUSA or ABIL, respectively, and such knowledge as any of the foregoing should
have obtained upon reasonable inquiry.
"CUSA Shares" means all of the outstanding shares of CUSA Common Stock.
"Encumbrances" means any lien, mortgage, security interest, pledge,
restriction on transferability, defect of title or other claim, charge or
encumbrance of any nature whatsoever on any property or property interest.
"FGCL" means the Florida General Corporations Law.
"Intellectual Property" is defined in Section 3.17.
"Material Adverse Effect" means a material adverse effect on the financial
condition, results of operations, liquidity, products, competitive position,
customers and customer relations of any Representing Party.
"Minor Contracts" is defined in Section 3.16(a).
"Non-Real Estate Leases" is defined in Section 3.9.
"Person" means any natural person, corporation, partnership,
proprietorship, association, trust or other legal entity.
"Securities Act" means the Securities Act of 1933, as amended, and the
Regulations promulgated thereunder.
"Termination Date" is defined in Section 9.1(b).
ARTICLE 2
SALE AND PURCHASE OF CUSA SHARES
2.1 SALE AND PURCHASE OF CUSA SHARES. Subject to the terms and conditions
of this Agreement, at the Closing, CUSA and the Stockholders shall sell,
transfer, convey, assign and deliver to ABIL, and ABIL shall purchase, acquire
and accept from CUSA, all the CUSA Shares free and clear of all liens, claims,
charges, restrictions, equities and encumbrances of any kind.
2.2 ISSUANCE AND TRANSFER OF SHARES. In consideration for the CUSA Shares,
ABIL shall issue and deliver to the Stockholders Twenty Three Million Three
Hundred (23,300,000) shares of ABIL Common Stock.
2.3 CLOSING. Unless this Agreement shall have been terminated and the
Transactions abandoned pursuant to Article X, subject to satisfaction or waiver
of the conditions to the Transactions set forth in Article VIII, the Closing
shall take place within thirty (30) days after satisfaction or waiver of the
conditions to the Transactions set forth in Article VIII, at the offices of ABIL
in Las Vegas, Nevada, unless the parties hereto agree in writing to another date
or place. The date on which the Closing occurs is referred to herein as the
"Closing Date."
2.4 DELIVERY TO ABIL. At the Closing, the Stockholders and/or CUSA will
deliver to ABIL (i) certificates representing the CUSA Shares, together with
stock power duly endorsed, (ii) all such other endorsements, assignments and
other instruments as are necessary to vest in ABIL title to the CUSA Shares free
and clear of any adverse claimsand (iv) all other previously undelivered
documents required to be delivered to ABIL at or prior to the Closing in
connection with the Transactions, including those contemplated by Article 8.
2.5 DELIVERY OF THE ABIL SHARES. At the Closing, ABIL shall deliver the
ABIL Shares referred to in Section 2.02. ABIL shall also deliver all previously
undelivered documents required hereunder to be delivered by ABIL at or prior to
the Closing, including those contemplated by Article 8.
2.6 FURTHER ASSURANCES. After the Closing, the Stockholders, CUSA and ABIL
shall each from time to time, at the request of a party hereto and without
further cost or expense to the requesting party, execute and deliver such other
instruments of conveyance and transfer and take such other actions as the
requesting party may reasonably request, in order to more effectively consummate
the Transactions and to vest in ABIL, the Stockholders or Crystalix Technology,
as the case may be, title to the CUSA Shares or ABIL Shares, as the case may be,
being transferred hereunder.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF CUSA
CUSA hereby represents and warrants to ABIL as follows:
3.1 CORPORATE STATUS. CUSA is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada. CUSA is
qualified to do business as a foreign corporation in any jurisdiction where it
is required to be so qualified, except where the failure to so qualify would not
have a Material Adverse Effect. The Charter Documents and bylaws of CUSA that
have been delivered to ABIL have been duly adopted and are current, correct and
complete.
3.2 AUTHORIZATION. CUSA has the requisite power and authority to execute
and deliver the Transaction Documents to which it is or will be a party and to
perform the Transactions to be performed by it. Such execution, delivery and
performance by CUSA has been duly authorized by all necessary corporate action.
The Transaction Documents executed on or before the date hereof constitute, and
the Transaction Documents to be executed after the date hereof will constitute,
valid and binding obligations of CUSA, enforceable in accordance with their
terms.
3.3 CONSENTS AND APPROVALS. Except for the consents specified in Schedule
3.03 (the "Required Consents"), neither the execution and delivery by CUSA of
the Transaction Documents to which it is or will be a party, nor the performance
of the Transactions to be performed by CUSA, will require any filing, consent or
approval or constitute a Default under (a) any Regulation or Court Order to
which CUSA is subject, (b) the Charter Documents or bylaws of CUSA or (c) any
Contract, Governmental Permit or other document to which CUSA is a party.
3.4 CAPITALIZATION AND STOCK OWNERSHIP. The total authorized capital stock
of CUSA consists of 100 shares of CUSA Common Stock, all of which are issued and
outstanding on the date hereof and no shares of which are issued and held by
CUSA as treasury stock. There are no issued shares of Preferred Stock. All of
the CUSA Shares are duly and validly authorized and issued, fully paid and
non-assessable. Schedule 3.04 correctly lists the record owners of all of the
CUSA Shares. CUSA complied with all applicable Regulations in connection with
the issuance of all of the CUSA Shares.
3.5 FINANCIAL STATEMENTS. CUSA has delivered to ABIL correct and complete
copies of CUSA's unaudited financial statements consisting of (i) Balance Sheets
of CUSA, and (ii) Income Statements. All such unaudited financial statements are
referred to herein collectively as the "CUSA Financial Statements" and fairly
represent the current financial condition of CUSA.
3.6 TITLE TO CUSA ASSETS AND RELATED MATTERS. CUSA has good and marketable
title to, or valid leasehold interests in, all of the CUSA Assets, free from any
Encumbrances except those specified in Schedule 3.06. The use of the CUSA Assets
is not subject to any Encumbrances (other than those specified in the preceding
sentence), and such use does not materially encroach on the property or rights
of anyone else. All Real Property and tangible personal property of CUSA are
suitable for the purposes for which they are used, in good working condition and
reasonable repair, free from any known defects, except such minor defects that
would not in the aggregate exceed $10,000.
3.7 REAL PROPERTY. Schedule 3.07 describes all real estate used in the
operation of the CUSA Business as well as any other real estate that is in the
possession of or leased by CUSA and the improvements (including buildings and
other structures) located on such real estate (collectively, the "Real
Property"), and lists any leases under which any such Real Property is possessed
(the "Real Estate Leases"). CUSA is not currently in Default under any of the
Real Estate Leases, and CUSA is not aware of any Default by any of the lessors
thereunder. Except as listed on Schedule 3.07, CUSA does not have an ownership
interest in any Real Property. Schedule 3.07 also describes any real estate
previously owned, leased or otherwise operated by CUSA during the five years
immediately preceding the date of execution of this Agreement and the time
periods of any such ownership, lease or operation.
3.8 CERTAIN PERSONAL PROPERTY. Schedule 3.08 is an asset schedule,
describing and specifying the location of all items of tangible personal
property that were included in the CUSA Balance Sheet. Since the CUSA Balance
Sheet Date, CUSA has not acquired or disposed of any items of tangible personal
property that have, in each case, a carrying value in excess of $10,000. All of
CUSA's tangible personal property is in good operating condition, reasonable
wear and tear excepted.
3.9 NON-REAL ESTATE LEASES. CUSA is not currently in Default under any of
the Non-Real Estate Leases, and CUSA is not aware of any Default by any of the
lessors thereunder. There are no existing Non-Real Estate Leases under which the
obligations of CUSA exceed $10,000 with respect to any individual Non-Real
Estate Lease. "Non-Real Estate Leases" refers to any and all leases that relate
to an asset or property (other than Real Property) used in the operation of the
CUSA Business or otherwise possessed by CUSA, including but not limited to all
trucks, automobiles, machinery, equipment, furniture and computers.
3.10 INVENTORY. All inventory of CUSA consists of items of quality and
quantity saleable in the ordinary course of business at regular sales prices of
CUSA in the ordinary course of its business. A complete and accurate listing of
all of the inventory of CUSA is set forth on Schedule 3.11.
3.11 TAXES. Except as disclosed in Schedule 3.13, CUSA has duly filed all
foreign, federal, state, local and other tax returns that are required to be
filed and that were due, and has paid all material taxes and assessments that
have become due pursuant to such returns or pursuant to any assessment received.
Except as disclosed in Schedule 3.13, all taxes and other assessments and levies
that CUSA has been required by law to withhold or to collect have been duly
withheld and collected and have been paid over to the proper governmental
authorities or are properly held by CUSA for such payment. Except as disclosed
in Schedule 3.13, there are no proceedings or other actions, nor is there any
basis for any proceedings or other actions, for the assessment and collection of
additional taxes of any kind for any period for which returns have or should
have been filed. CUSA is not being audited nor has any audit in the past five
years resulted in the claim or imposition of any penalty or additional tax on
CUSA.
3.12 SUBSIDIARIES. CUSA does not own, directly or indirectly, any interest
or investment (whether equity or debt) in any corporation, partnership,
business, trust, joint venture or other legal entity, other than shares in a
publicly traded company not exceeding 2% of the voting securities of that
company.
3.13 LEGAL PROCEEDINGS AND COMPLIANCE WITH LAW. Except as disclosed in
Schedule 3.15, there is no Litigation that is pending or threatened against or
related to CUSA. There has been no Default under any Regulations applicable to
CUSA. There has been no Default with respect to any Court Order applicable to
CUSA.
3.14 EMPLOYEE RELATIONS. CUSA is not (a) a party to, involved in or
threatened by, any labor dispute or unfair labor practice charge or (b)
currently negotiating any collective bargaining agreement, and CUSA has not
experienced any work stoppage during the three years immediately preceding the
execution of this Agreement. Schedule 3.18 is a complete and correct list of the
names and salaries, bonus and other cash compensation of all executive officers
of CUSA.
3.15 BENEFIT PLANS. There are no Benefit Plans sponsored or maintained by
CUSA or under which CUSA may be obligated.
3.16 CORPORATE RECORDS. The minute books of CUSA contain complete, correct
and current copies of its Charter Documents and bylaws and of all minutes of
meetings, resolutions and other proceedings of its Board of Directors or
committees thereof and stockholders. The stock record book of CUSA is complete,
correct and current.
3.17 ABSENCE OF CERTAIN CHANGES. Since the CUSA Balance Sheet Date, CUSA
has conducted the CUSA Business in the ordinary course and there has not been:
(a) any material adverse change in the CUSA Business or its
Liabilities;
(b) any distribution or payment declared or made in respect of its
capital stock by way of dividends, purchase or redemption of shares or
otherwise;
(c) any sale, assignment or transfer of the CUSA Assets, or any
additions to or transactions involving any CUSA Assets, other than those made in
the ordinary course of business;
(d) other than in the ordinary course of business, any waiver or
release of any claim or right or cancellation of any debt held; or
3.18 CUSTOMERS AND LICENSEES. CUSA has used commercially reasonable efforts
to maintain, and currently maintains, good working relationships with all of its
customers and licensees. None of such licensees has given CUSA notice
terminating, canceling or threatening to terminate or cancel any Contract or
relationship with CUSA.
3.19 FINDER'S FEES. No Person retained by CUSA is or will be entitled to
any commission or finder's or similar fee in connection with the Transactions.
3.20 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made in reliance
upon the representations of the Stockholders to ABIL, which by their execution
of this Agreement each hereby confirms, that the ABIL Shares will be acquired
for investment for each party's own account, not as a nominee or agent, and not
with a view to distribution (as such term is defined under the Securities Act of
1933, as amended (the "Act")) of any part thereof. Each party represents that it
has full power and authority to enter into this Agreement.
3.21 RESTRICTED SECURITIES. The Stockholders understand that the ABIL
Shares are characterized as "restricted securities" under the federal securities
laws inasmuch as they are being acquired from ABIL in a transaction not
involving a public offering and that under such laws and applicable regulations
such shares may be resold without registration under the Act, only in certain
limited circumstances. It is understood that the ABIL Shares shall bear a legend
to such effect.
3.22 ACCURACY OF INFORMATION. No representation or warranty by CUSA in any
Transaction Document, and no information contained therein or otherwise
delivered to ABIL in connection with the Transactions, contains any untrue
statement of a material fact or omits to state any material fact necessary in
order to make the statements contained herein or therein not misleading. There
is no fact known to CUSA that may materially adversely affect the CUSA Assets or
the CUSA Business that has not been set forth in this Agreement or the other
documents furnished to ABIL on or prior to the date hereof in connection with
the Transactions.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF ABIL
ABIL hereby represents and warrants to CUSA as follows:
4.1 CORPORATE STATUS. ABIL is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida. ABIL is
qualified to do business as a foreign corporation in any jurisdiction where it
is required to be so qualified, except where the failure to so qualify would not
have a Material Adverse Effect. The Charter Documents and bylaws of ABIL that
have been delivered to CUSA have been duly adopted and are current, correct and
complete.
4.2 AUTHORIZATION. ABIL has the requisite power and authority to execute
and deliver the Transaction Documents to which it is or will be a party and to
perform the Transactions to be performed by it. Such execution, delivery and
performance by ABIL have been duly authorized by all necessary corporate action.
The Transaction Documents executed on or before the date hereof constitute, and
the Transaction Documents to be executed after the date hereof will constitute,
valid and binding obligations of ABIL, enforceable in accordance with their
terms.
4.3 CONSENTS AND APPROVALS. Neither the execution and delivery by ABIL of
the Transaction Documents to which it is or will be a party, nor the performance
of the Transactions to be performed by ABIL, will require any filing, consent or
approval or constitute a Default under (a) any Regulation or Court Order to
which ABIL is subject, (b) the Charter Documents or bylaws of ABIL or (c) any
Contract, Governmental Permit or other document to which ABIL is a party.
4.4 CAPITALIZATION AND STOCK OWNERSHIP. The total authorized capital stock
of ABIL currently consists of 300,000,000 shares of Common Stock with par value
of $0.001 per share, 6,700,000 of which are issued and outstanding on the date
hereof and no shares of which are issued and held by ABIL as treasury stock.
ABIL has caused its authorized capital stock to be increased to consist of: (a)
300,000,000 shares of Common Stock with par value of $0.001 per share; (b)
10,000,000 shares of Series A Preferred Stock with par value of $0.001 per
share; and (c) 5,000,000 shares of Series B Preferred Stock with par value of
$0.001 per share. There will not be any shares of Series A or Series B Preferred
Stock issued as of the Closing Date in connection with this Transaction. All of
the ABIL Shares are duly and validly authorized and issued, fully paid and
non-assessable. Schedule 4.04 correctly lists the record owners of all of the
ABIL Shares. ABIL complied with all applicable Regulations in connection with
the issuance of all of the ABIL Shares.
4.5 FINANCIAL STATEMENTS. ABIL has delivered to CUSA correct and complete
copies of ABIL's latest 10SB; 10KSB; 10QSB; 8K, along with the last six (6)
months of press releases and all other relevant materials. Additionally, ABIL
has provided CUSA with its audited financial statements consisting of (i)
Balance Sheets of ABIL for the years ending 1999, 2000 and 2001, and (ii) Income
Statements for the years ending 1999, 2000 and 2001. All such audited financial
statements are referred to herein collectively as the "ABIL Financial
Statements."
4.6 TITLE TO ABIL ASSETS AND RELATED MATTERS. ABIL has good and marketable
title to, or valid leasehold interests in, all of the ABIL Assets, free from any
Encumbrances The use of the ABIL Assets is not subject to any Encumbrances and
such use does not materially encroach on the property or rights of anyone else.
All Real Property and tangible personal property of ABIL are suitable for the
purposes for which they are used, in good working condition and reasonable
repair, free from any known defects, except such minor defects that would not in
the aggregate exceed $10,000.
4.7 REAL PROPERTY. Schedule 4.07 describes all real estate used in the
operation of the ABIL Business as well as any other real estate that is in the
possession of or leased by ABIL and the improvements (including buildings and
other structures) located on such real estate (collectively, the "Real
Property"), and lists any leases under which any such Real Property is possessed
(the "Real Estate Leases"). ABIL is not currently in Default under any of the
Real Estate Leases, and ABIL is not aware of any Default by any of the lessors
thereunder. Excepted as listed on Schedule 4.07, ABIL does not have an ownership
interest in any Real Property. Schedule 4.07 also describes any real estate
previously owned, leased or otherwise operated by ABIL during the five years
immediately preceding the date of execution of this Agreement and the time
periods of any such ownership, lease or operation.
4.8 CERTAIN PERSONAL PROPERTY. Schedule 4.08 is an asset schedule,
describing and specifying the location of all items of tangible personal
property that were included in the ABIL Balance Sheet. Since the ABIL Balance
Sheet Date, ABIL has not acquired or disposed of any items of tangible personal
property that have, in each case, a carrying value in excess of $10,000. All of
CUSA's tangible personal property is in good operating condition, reasonable
wear and tear excepted.
4.9 ABSENCE OF UNDISCLOSED LIABILITIES. Except as specified in Schedule
4.12, ABIL does not have any Liabilities, and none of the CUSA Assets is subject
to any Liabilities.
4.10 TAXES. Except as disclosed in its financials, ABIL has duly filed all
foreign, federal, state, local and other tax returns that are required to be
filed and that were due, and has paid all material taxes and assessments that
have become due pursuant to such returns or pursuant to any assessment received.
Except as disclosed in Schedule 4.13, all taxes and other assessments and levies
that ABIL has been required by law to withhold or to collect have been duly
withheld and collected and have been paid over to the proper governmental
authorities or are properly held by ABIL for such payment. Except as disclosed
in Schedule 4.13, there are no proceedings or other actions, nor is there any
basis for any proceedings or other actions, for the assessment and collection of
additional taxes of any kind for any period for which returns have or should
have been filed. ABIL is not being audited nor has any audit in the past five
years resulted in the claim or imposition of any penalty or additional tax on
ABIL.
4.11 LEGAL PROCEEDINGS AND COMPLIANCE WITH LAW. There is no Litigation that
is pending or threatened against or related to ABIL. There has been no Default
under any Regulations applicable to ABIL. There has been no Default with respect
to any Court Order applicable to ABIL.
4.12 PATENTS AND OTHER INTELLECTUAL PROPERTY. To the best knowledge of
ABIL, ABIL neither currently uses nor has used in the operation of the ABIL
Business during the three years immediately preceding the execution of this
Agreement (including in the development or marketing of products and services)
any patent, trademark, trade name, service xxxx, copyright, trade secret or
know-howABIL is not infringing upon or unlawfully or wrongfully using any
patent, trademark, trade name, service xxxx, copyright or trade secret owned or
claimed by another Person. ABIL has not received any notice of any claim of
infringement or any other claim or proceeding, with respect to any such patent,
trademark, trade name, service xxxx, copyright or trade secret. No current or
former employee of ABIL and no other Person owns or has any proprietary,
financial or other interest, direct or indirect, in whole or in part, in any of
the Intellectual Property, or in any application therefor.
4.13 EMPLOYEE RELATIONS. ABIL is not (a) a party to, involved in or
threatened by, any labor dispute or unfair labor practice charge or (b)
currently negotiating any collective bargaining agreement, and ABIL has not
experienced any work stoppage during the three years immediately preceding the
execution of this Agreement. Schedule 4.18 is a complete and correct list of the
names and salaries, bonus and other cash compensation of all executive officers
of ABIL.
4.14 BENEFIT PLANS. There are no Benefit Plans sponsored or maintained by
ABIL or under which ABIL may be obligated.
4.15 CORPORATE RECORDS. The minute books of ABIL contain complete, correct
and current copies of its Charter Documents and bylaws and of all minutes of
meetings, resolutions and other proceedings of its Board of Directors or
committees thereof and stockholders. The stock record book of ABIL is complete,
correct and current.
4.16 ABSENCE OF CERTAIN CHANGES. Since the ABIL Balance Sheet Date, ABIL
has conducted the ABIL Business in the ordinary course and there has not been:
(a) any material adverse change in the ABIL Business or its
Liabilities;
(b) any distribution or payment declared or made in respect of its
capital stock by way of dividends, purchase or redemption of shares or
otherwise;
(c) any sale, assignment or transfer of the ABIL Assets, or any
additions to or transactions involving any ABIL Assets, other than those made in
the ordinary course of business;
(d) other than in the ordinary course of business, any waiver or
release of any claim or right or cancellation of any debt held; or
4.17 PREVIOUS SALES; WARRANTIES. To the best knowledge of ABIL, all goods
sold or distributed and services performed by ABIL were of merchantable and
satisfactory quality, and ABIL has not breached any express or implied
warranties in connection with the sale or distribution of such goods and
performances of such services.
4.18 CUSTOMERS. ABIL has used commercially reasonable efforts to maintain,
and currently maintains, good working relationships with all of its customers
and licensees.
4.19 FINDER'S FEES. No Person retained by ABIL is or will be entitled to
any commission or finder's or similar fee in connection with the Transactions.
4.20 ACCURACY OF INFORMATION. No representation or warranty by ABIL in any
Transaction Document, and no information contained therein or otherwise
delivered to ABIL in connection with the Transactions, contains any untrue
statement of a material fact or omits to state any material fact necessary in
order to make the statements contained herein or therein not misleading. There
is no fact known to ABIL that may materially adversely affect the ABIL Assets or
the ABIL Business that has not been set forth in this Agreement or the other
documents furnished to ABIL on or prior to the date hereof in connection with
the Transactions.
ARTICLE V
COVENANTS OF CUSA
5.1 OPERATION OF THE CUSA BUSINESS.
(a) From the date hereof to the Closing, CUSA shall conduct the CUSA
Business solely in the ordinary course, and shall refrain from the following
actions in furtherance of and in addition to such restriction (except as
contemplated by this Agreement): amending its Charter Documents or bylaws;
merging or consolidating with, or acquiring all or substantially all of, or
otherwise acquiring any business operations of, any Person; selling or otherwise
disposing of any CUSA Assets other than in the ordinary course; entering into
any Contract or otherwise incurring any Liability, even if in the ordinary
course, if CUSA's executory obligation in any such individual case, or series of
related cases, exceeds $1,000, except that entering into contracts to provide
events is permitted without restriction; discharging or satisfying any
Encumbrance or paying or satisfying any material Liability except pursuant to
the terms thereof or compromising, settling or otherwise modifying any material
claim or litigation; or making any capital expenditure involving in any
individual case, or series of related cases, more than $1,000.
(b) From and after the Closing, CUSA shall cease to conduct any
business in the field of laser etching except as a wholly owned subsidiary of
ABIL.
5.2 STOCKHOLDER MEETING. CUSA shall cause a meeting of its stockholders
(the "CUSA Stockholder Meeting") to be duly called and held as soon as
reasonably practicable for the purpose of voting on the approval of this
Agreement and the Transactions. In connection with such meeting, CUSA (a) will
use all reasonable efforts to obtain the necessary approvals by its stockholders
of this Agreement and the Transactions and (b) will otherwise comply with all
legal requirements applicable to such meeting.
5.3 ACCESS. CUSA shall give ABIL and its accountants, counsel and other
representatives full access, without unreasonably interfering with business
operations, to all properties, books, Contracts and records of CUSA and shall
furnish to ABIL all such documents, records and information as ABIL shall from
time to time reasonably request.
5.4 NO OTHER NEGOTIATIONS. Until the earlier of the Closing or the
termination of this Agreement, CUSA shall not (a) solicit, encourage, directly
or indirectly, any inquiries, discussions or proposals for, (b) continue,
propose or enter into any negotiations or discussions looking toward or (c)
enter into any agreement or understanding providing for any acquisition of any
capital stock of CUSA or of any part of the CUSA Assets or the CUSA Business,
other than as contemplated or authorized hereby, nor shall CUSA provide any
information to any Person (other than as contemplated by Section 5.3) for the
purpose of evaluating or determining whether to make or pursue any such
inquiries or proposals with respect to any such acquisition. CUSA shall
immediately notify ABIL of any such inquiries or proposals or requests for
information for such purpose. CUSA shall use commercially reasonable efforts to
cause the directors, officers, employees, agents and other representatives of
CUSA to comply, with the provisions of this Section 5.4.
5.5 MAINTENANCE OF THE CUSA ASSETS. CUSA shall continue to maintain and
service the CUSA Assets consistent with past practice. CUSA shall not, directly
or indirectly, sell or encumber all or any part of the CUSA Assets, other than
sales in the ordinary course of business, or initiate or participate in any
discussions or negotiations or enter into any agreement to do any of the
foregoing.
5.6 EMPLOYEES AND BUSINESS RELATIONS. CUSA shall use commercially
reasonable efforts to keep available the services of its current employees,
licensees, independent contractors and agents and to maintain its relations and
goodwill with its suppliers, customers, distributors and any others having
business relations with it.
5.7 CONFIDENTIALITY. Prior to and after the Closing, CUSA will hold, and
will use commercially reasonable efforts to cause the officers, directors,
employees, accountants, counsel, consultants, advisors and agents of CUSA to
hold, in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law, all confidential documents and
information concerning ABIL furnished to CUSA in connection with the
Transactions, except to the extent that such information can be shown to have
been (a) previously known on a non-confidential basis by CUSA, (b) in the public
domain through no fault of CUSA or (c) later acquired by CUSA from sources other
than ABIL so long as, to the knowledge of CUSA, such sources are not subject to
a contractual or fiduciary duty of confidentiality with respect to such
information; provided that CUSA may disclose such information to its officers,
directors, employees, accountants, counsel, consultants, advisors and agents in
connection with the Transactions so long as such Persons are informed by CUSA of
the confidential nature of such information and are directed by CUSA to treat
such information confidentially. The obligation of CUSA to hold any such
information in confidence shall be satisfied if it exercises the same care with
respect to such information as it would take to preserve the confidentiality of
its own similar information. If this Agreement is terminated, CUSA will, and
will use commercially reasonable efforts to cause the officers, directors,
employees, accountants, counsel, consultants, advisors and agents of CUSA to,
destroy or deliver to ABIL all documents and other materials, and all copies
thereof, obtained by CUSA or on its behalf from ABIL in connection with this
Agreement that are subject to such confidence.
5.8 FULFILLMENT OF CONDITIONS. CUSA shall use commercially reasonable
efforts to fulfill the conditions specified in Article 7 to the extent that the
fulfillment of such conditions is within its control. The foregoing obligation
includes (a) the execution and delivery of the Transaction Documents and (b)
taking or refraining from such actions as may be necessary to fulfill such
conditions (including conducting the CUSA Business in such manner that on the
Closing Date the representations and warranties of CUSA contained herein shall
be accurate as though then made, except as contemplated by the terms hereof).
5.9 DISCLOSURE OF CERTAIN MATTERS. During the period from the date hereof
through the Closing Date, CUSA shall give ABIL prompt written notice of any
event or development that occurs that (a) had it existed or been known on the
date hereof would have been required to be disclosed under this Agreement, (b)
would cause any of the representations and warranties of CUSA contained herein
to be inaccurate or otherwise misleading, (c) gives CUSA any reason to believe
that any of the conditions set forth in Article 7 will not be satisfied prior to
the Termination Date, or (d) is of a nature that is or may be materially adverse
to the operations, prospects or condition (financial or otherwise) of CUSA.
5.10 SATISFACTION OF LIABILITIES. Except as otherwise prohibited herein,
prior to and after the Closing, CUSA will perform all of its obligations,
contractual or otherwise, and discharge all of its Liabilities in accordance
with the terms thereof.
5.11 NO VIOLATION OF SECURITIES LAWS. CUSA will not sell, transfer or
otherwise dispose of any of the ABIL Shares in violation of the Securities Act.
5.12 EXPENSES. CUSA shall pay all of the legal, accounting and other
expenses incurred by CUSA in connection with the Transactions.
ARTICLE 6
COVENANTS OF ABIL
6.1 OPERATION OF THE ABIL BUSINESS. From the date hereof to the Closing,
ABIL shall conduct the ABIL Business solely in the ordinary course, and shall
refrain from the following actions in furtherance of and in addition to such
restriction (except as contemplated by this Agreement): amending its Charter
Documents or bylaws; merging or consolidating with, or acquiring all or
substantially all of, or otherwise acquiring any business operations of, any
Person; selling or otherwise disposing of any ABIL Assets other than in the
ordinary course; entering into any Contract or otherwise incurring any
Liability, even if in the ordinary course, if ABIL's executory obligation in any
such individual case, or series of related cases, exceeds $1,000, except that
entering into contracts to provide events is permitted without restriction;
discharging or satisfying any Encumbrance or paying or satisfying any material
Liability except pursuant to the terms thereof or compromising, settling or
otherwise modifying any material claim or litigation; or making any capital
expenditure involving in any individual case, or series of related cases, more
than $1,000.
6.2 STOCKHOLDER MEETING. ABIL shall cause a meeting of its stockholders
(the "ABIL Stockholder Meeting") to be duly called and held as soon as
reasonably practicable for the purpose of voting on the approval of this
Agreement and the Transactions. In connection with such meeting, ABIL (a) will
use all reasonable efforts to obtain the necessary approvals by its stockholders
of this Agreement and the Transactions and (b) will otherwise comply with all
legal requirements applicable to such meeting.
6.3 ACCESS. ABIL shall give CUSA and its accountants, counsel and other
representatives full access, without unreasonably interfering with business
operations, to all properties, books, Contracts and records of ABIL and shall
furnish to CUSA all such documents, records and information as CUSA shall from
time to time reasonably request.
6.4 NO OTHER NEGOTIATIONS. Until the earlier of the Closing or the
termination of this Agreement, ABIL shall not (a) solicit, encourage, directly
or indirectly, any inquiries, discussions or proposals for, (b) continue,
propose or enter into any negotiations or discussions looking toward or (c)
enter into any agreement or understanding providing for any acquisition of any
capital stock of ABIL or of any part of the ABIL Assets or the ABIL Business,
other than as contemplated or authorized hereby, nor shall ABIL provide any
information to any Person (other than as contemplated by Section 6.3) for the
purpose of evaluating or determining whether to make or pursue any such
inquiries or proposals with respect to any such acquisition. ABIL shall
immediately notify CUSA of any such inquiries or proposals or requests for
information for such purpose. ABIL shall use commercially reasonable efforts to
cause the directors, officers, employees, agents and other representatives of
CUSA to comply, with the provisions of this Section 6.4.
6.5 MAINTENANCE OF THE ABIL ASSETS. ABIL shall continue to maintain and
service the ABIL Assets consistent with past practice. ABIL shall not, directly
or indirectly, sell or encumber all or any part of the ABIL Assets, other than
sales in the ordinary course of business, or initiate or participate in any
discussions or negotiations or enter into any agreement to do any of the
foregoing.
6.6 EMPLOYEES AND BUSINESS RELATIONS. ABIL shall use commercially
reasonable efforts to keep available the services of its current employees,
licensees, independent contractors and agents and to maintain its relations and
goodwill with its suppliers, customers, distributors and any others having
business relations with it.
6.7 CONFIDENTIALITY. Prior to the Closing, ABIL will hold, and will use
commercially reasonable efforts to cause the officers, directors, employees,
accountants, counsel, consultants, advisors and agents of ABIL to hold, in
confidence, unless compelled to disclose by judicial or administrative process
or by other requirements of law, all confidential documents and information
concerning CUSA furnished to ABIL in connection with the Transactions, except to
the extent that such information can be shown to have been (a) previously known
on a non-confidential basis by ABIL, (b) in the public domain through no fault
of ABIL or (c) later acquired by ABIL from sources other than CUSA so long as,
to the knowledge of ABIL, such sources are not subject to a contractual or
fiduciary duty of confidentiality with respect to such information; provided
that ABIL may disclose such information to its officers, directors, employees,
accountants, counsel, consultants, advisors and agents in connection with the
Transactions so long as such Persons are informed by ABIL of the confidential
nature of such information and are directed by ABIL to treat such information
confidentially. The obligation of ABIL to hold any such information in
confidence shall be satisfied if it exercises the same care with respect to such
information as it would take to preserve the confidentiality of its own similar
information. If this Agreement is terminated, ABIL will, and will use
commercially reasonable efforts to cause the officers, directors, employees,
accountants, counsel, consultants, advisors and agents of ABIL to, destroy or
deliver to CUSA all documents and other materials, and all copies thereof,
obtained by ABIL or on its behalf from CUSA in connection with this Agreement
that are subject to such confidence.
6.8 EXPENSES. ABIL shall pay all of the legal, accounting and other
expenses incurred by ABIL in connection with the Transactions.
6.9 FULFILLMENT OF CONDITIONS. From the date hereof to the Closing, ABIL
shall use commercially reasonable efforts to fulfill the conditions specified in
Article 7 to the extent that the fulfillment of such conditions is within its
control. The foregoing obligation includes (a) the execution and delivery of the
Transaction Documents and (b) taking or refraining from such actions as may be
necessary to fulfill such conditions (including conducting the business of CUSA
in such manner that on the Closing Date the representations and warranties of
CUSA contained herein shall be accurate as though then made).
6.10 BOARD OF DIRECTORS MEETING. ABIL shall cause a meeting of its Board of
Directors (the "ABIL Directors Meeting") to be duly called and held as soon as
reasonably practicable for the purpose of voting on the approval of this
Agreement and the Transactions.
6.11 DISCLOSURE OF CERTAIN MATTERS. During the period from the date hereof
through the Closing Date, ABIL shall give CUSA prompt written notice of any
event or development that occurs that (a) had it existed or been known on the
date hereof would have been required to be disclosed under this Agreement, (b)
would cause any of the representations and warranties of ABIL contained herein
to be inaccurate or otherwise misleading or (c) gives ABIL any reason to believe
that any of the conditions set forth in Article 7 will not be satisfied prior to
the Termination Date.
ARTICLE 7
CONDITIONS PRECEDENT TO THE TRANSACTIONS
7.1 CONDITIONS TO OBLIGATIONS OF ABIL. The obligations of ABIL to
consummate the Transactions shall be subject to the satisfaction or waiver, on
or before the Closing, of each of the following conditions:
(a) CUSA STOCKHOLDER APPROVAL. The Transactions shall have been
approved and adopted by the stockholders of CUSA in accordance with CUSA's
Articles of Incorporation and bylaws.
(b) REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of CUSA contained herein shall be true and correct in all material
respects at and as of the date hereof and at and as of the Closing as though
such representations and warranties were made again at and as of the Closing,
except for changes contemplated by this Agreement.
(c) PERFORMANCE. CUSA shall have performed and complied in all
material respects with the agreements contained in this Agreement required to be
performed or complied with by it on or prior to the Closing.
(d) CONSENTS AND APPROVALS. CUSA shall have obtained all governmental
and third party consents and approvals necessary, proper or advisable to
consummate the Transactions, except for those which would not have a Material
Adverse Effect. Such third party consents shall include the Required Consents.
(e) NO GOVERNMENTAL ORDER OR REGULATION. There shall not be in effect
any order, decree or injunction (whether preliminary, final or appealable) of a
United States federal or state court of competent jurisdiction, and no
Regulation shall have been enacted or promulgated by any governmental authority
or agency, that prohibits consummation of the Transactions.
(f) OTHER DOCUMENTS. ABIL shall have received executed copies of all
Transaction Documents to which CUSA or any CUSA stockholder is a party to the
extent that they shall not have been received prior to the Closing. ABIL shall
have received all other documents required under the terms of any of the
Transaction Documents and any other documents reasonably requested on or prior
to the Closing Date.
7.2 CONDITIONS TO OBLIGATIONS OF CUSA. The obligations of CUSA to
consummate the Transactions shall be subject to the satisfaction or waiver, on
or before the Closing, of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of ABIL contained herein shall be true and correct in all material
respects at and as of the date when made and at and as of the Closing as though
such representations and warranties were made again at and as of the Closing,
except for changes contemplated by this Agreement.
(b) PERFORMANCE. ABIL shall have performed and complied in all
material respects with the agreements contained in this Agreement required to be
performed or complied with by them on or prior to the Closing.
(c) NO GOVERNMENTAL ORDER OR REGULATION. There shall not be in effect
any order, decree or injunction (whether preliminary, final or appealable) of a
United States federal or state court of competent jurisdiction, and no
Regulation shall have been enacted or promulgated by any governmental authority
or agency, that prohibits consummation of the Transactions.
(d) OTHER DOCUMENTS. CUSA shall have received executed copies of all
Transaction Documents to which ABIL is a party to the extent that they shall not
have been received prior to the Closing. CUSA shall have received all other
documents required under the terms of any of the Transaction Documents and any
other documents reasonably requested on or prior to the Closing Date.
(e) INCREASE OF AUTHORIZED SHARES. ABIL shall have caused the number
of authorized shares to be increased from 50,000,000 to 300,000,000 of Common
Stock, par value of $0.001 per share and shall authorize 10,000,000 shares of
Series A Preferred Stock and 5,000,000 shares of Series B Preferred Stock.
ARTICLE 9
TERMINATION
9.1 GROUNDS FOR TERMINATION. This Agreement may be terminated at any time
prior to the Closing Date:
(a) by mutual written consent of ABIL, CUSA or the Stockholders;
(b) by either ABIL, CUSA or the Stockholders, if the Closing has not
occurred by October 31, 2002 (such date, as it may be extended from time to time
by the written agreement of ABIL, CUSA or the Stockholders, is referred to
herein as the "Termination Date"); provided, however, that the right to
terminate this Agreement under this paragraph (b) of Section 9.1 shall not be
available to any party that has breached any of its covenants, representations
or warranties in this Agreement;
(c) by CUSA, if ABIL shall have breached any of its covenants
hereunder in any material respect or if the representations and warranties of
ABIL contained in this Agreement shall not be true and correct, except for such
changes as are contemplated by this Agreement, in all material respects, and in
either event, if such breach is subject to cure, ABIL has not cured such breach
within 10 business days of CUSA's notice of an intent to terminate;
(d) by ABIL, if CUSA or the Stockholders shall have breached any of
its covenants hereunder in any material respect or if the representations and
warranties of CUSA contained in this Agreement shall not be true and correct,
except for such changes as are contemplated by this Agreement, in all material
respects, and in either event, if such breach is subject to cure, CUSA has not
cured such breach within 10 business days of ABIL's notice of an intent to
terminate; or
(e) by CUSA, if at the ABIL Stockholder Meeting (including any
adjournments thereof), this Agreement and the Transactions shall fail to be
approved and adopted by the affirmative vote of the holders of ABIL Common Stock
required under the FGCL.
9.2 EFFECT OF TERMINATION. If this Agreement is terminated pursuant to
Section 9.1, the agreements contained in Sections 5.7 and 6.7 shall survive the
termination hereof. In addition, any party may pursue any legal or equitable
remedies that may be available if such termination is based on a breach of
another party.
ARTICLE 10
CONTENTS OF AGREEMENT, AMENDMENT,
PARTIES IN INTEREST, ASSIGNMENT, ETC.
This Agreement sets forth the entire understanding of the parties hereto
with respect to the subject matter hereof. This Agreement may be amended,
modified or supplemented only by a written instrument duly executed by each of
the parties hereto. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective heirs, legal representatives,
successors and permitted assigns of the parties hereto. No party hereto shall
assign this Agreement or any right, benefit or obligation hereunder. Any term or
provision of this Agreement may be waived at any time by the party entitled to
the benefit thereof by a written instrument duly executed by such party. The
parties hereto shall execute and deliver any and all documents and take any and
all other actions that may be deemed reasonably necessary by their respective
counsel to complete the Transactions.
ARTICLE 11
INTERPRETATION
Unless the context of this Agreement clearly requires otherwise, (a)
references to the plural include the singular, the singular the plural, the part
the whole, (b) "or" has the inclusive meaning frequently identified with the
phrase "and/or" and (c) "including" has the inclusive meaning frequently
identified with the phrase "but not limited to." The section and other headings
contained in this Agreement are for reference purposes only and shall not
control or affect the construction of this Agreement or the interpretation
thereof in any respect. Section, subsection, schedule and exhibit references are
to this Agreement unless otherwise specified. Each accounting term used herein
that is not specifically defined herein shall have the meaning given to it under
GAAP.
ARTICLE 12
NOTICES
All notices that are required or permitted hereunder shall be in writing
and shall be sufficient if personally delivered or sent by mail, facsimile
message or Federal Express or other delivery service. Any notices shall be
deemed given upon the earlier of the date when received at, or the third day
after the date when sent by registered or certified mail or the day after the
date when sent by Federal Express to, the address or fax number set forth below,
unless such address or fax number is changed by notice to the other party
hereto:
If to ABIL:
------------------------------------
------------------------------------
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If to CUSA:
Xxxxxxxxxxx X. Xxxxx, Esq.
Silver State Legal
0000 Xxxx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
If to Stockholders:
Xxxxx Xxx Xxxxx
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ARTICLE 13
GOVERNING LAW
This Agreement shall be construed and interpreted in accordance with the
laws of the State of Nevada, without regard to its provisions concerning
conflict of laws.
ARTICLE 14
COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of which
shall be binding as of the date first written above, and all of which shall
constitute one and the same instrument. Each such copy shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart.
ARTICLE 15
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All representations and warranties made by any party in this Agreement or
pursuant hereto shall survive the Closing hereunder and any investigation at any
time made by or on behalf of the other party and for a period of one year
following the Closing.
ARTICLE 16
REMEDIES CUMULATIVE
The remedies provided herein shall be cumulative and shall not preclude a
party from asserting any other rights or seeking any other remedies against the
other party or its successors or assigns.
ARTICLE 17
SEVERABILITY
The invalidity of any one or more of the words, phrases, sentences, clauses
or sections contained in this Agreement shall not affect the enforceability of
the remaining portions of this Agreement or any part thereof, all of which are
inserted conditionally on their being valid in law, and, in the event that any
one or more of the words, phrases, sentences, clause or sections contained in
this Agreement shall be declared invalid, this Agreement shall be construed as
if such invalid word or words, phrase or phrases, sentence or sentences, clause
or clauses, or section or sections had not been inserted. If such invalidity is
caused by length of time or size of area, or both, the otherwise invalid
provision will be considered to be reduced to a period or area which would cure
such invalidity.
ARTICLE 19
ARBITRATION
The parties agree that all disputes, claims, and controversies between or
among them arising from or relating to this Agreement shall be arbitrated in
Xxxxx County, Nevada, pursuant to the Rules of the American Arbitration
Association, upon the request of any party.
ARTICLE 20
TAX FREE EXCHANGE
It is understood that the parties intend that this transaction represents a
tax free exchange under the Internal Revenue Code. However, this Agreement is
not contingent upon a ruling from the Internal Revenue Service (the "IRS") that
the transactions contemplated herein constitute a tax free exchange and the
parties' agreements herein are effective and binding on them irrespective of any
favorable or negative ruling from the IRS.
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the day and year first written above.
XXXXXXXXXXXX.XXX, INC.
A FLORIDA CORPORATION
By:___________________________________
Name:
Title:
CRYSTALIX USA GROUP, INC.
A NEVADA CORPORATION
By:___________________________________
Name:
Title:
XXXXXX XXXXXXX, AN INDIVIDUAL
________________________________________
XXXXX XXX XXXXX, AN INDIVIDUAL
________________________________________
XXXX XXXXXXXX, AN INDIVIDUAL
________________________________________
SCHEDULE 3.11
INVENTORY
SCHEDULE 3.13
TAXES
SCHEDULE 3.15
LITIGATION
SCHEDULE 4.04
CAPITALIZATION AND STOCK OWNERSHIP
SCHEDULE 4.07
REAL PROPERTY
SCHEDULE 4.08
PERSONAL PROPERTY
