AMENDED SHARE EXCHANGE AGREEMENT
Between
CLAREMONT TECHNOLOGIES CORP.
and
SAFE CELL TAB INC.
Dated March 12, 2004
AMENDED SHARE EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (hereinafter referred to as this "Agreement") is
entered into as of this 22nd day of August, 2003, and amended this 12th day of
March 2004, by and between CLAREMONT TECHNOLOGIES CORP., a Nevada corporation
(hereinafter referred to as the "Company"), SAFE CELL TAB INC., a corporation
registered in British Columbia, Canada (hereinafter referred to as "Safe Cell"),
and the persons executing this Agreement listed on the signature page hereto
(referred to collectively as "Safe Cell Shareholders") who own one hundred
percent (100%) of the outstanding shares of Safe Cell, upon the following
premises:
Premises.
WHEREAS, the Safe Cell Shareholders own one hundred percent (100%) of the
issued and outstanding shares of the capital stock of Safe Cell;
WHEREAS, the Company is a publicly held corporation whose common stock is
quoted on the OTC Bulletin Board under the symbol "CTTG";
WHEREAS, Safe Cell is a privately held corporation organized under the laws of
the Province of British Columbia, Canada;
WHEREAS, the Company desires to acquire 100% of the issued and outstanding
shares of Common Stock of Safe Cell in exchange for unissued shares of its
Common Stock (the "Common Stock") (the "Exchange Offer"), so that Safe Cell
will become a wholly owned subsidiary of the Company; and
WHEREAS, Safe Cell Shareholders desire to exchange all of their shares of
capital stock of Safe Cell solely in exchange for the shares of authorized but
unissued Common Stock, $.001 par value, of the Company.
Agreement.
NOW THEREFORE, on the stated premises and for and in consideration of the
mutual covenants and agreements hereinafter set forth and the mutual benefits
to the parties to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF SAFE CELL
AND THE SAFE CELL SHAREHOLDERS
As an inducement to and to obtain the reliance of the Company, except as set
forth on the Safe Cell Schedules (as hereinafter defined), Safe Cell and the
Safe Cell Shareholders represent and warrant as follows:
Section 1.01 Organization. Safe Cell is a corporation [Corporate I.D. #
519599] duly organized, validly existing, and in good standing under the laws
of the Province of British Columbia, Canada and has the corporate power and is
duly authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, including qualification to do business as a foreign
corporation in the provinces, states or countries in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification, except where failure to be so qualified would not
have a material adverse effect on its business. Included in the Safe Cell
Schedules are complete and correct copies of the Articles of Incorporation and
Bylaws of Safe Cell as in effect on the date hereof. The execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated hereby will not, violate any provision of Safe Cell's Articles of
Incorporation or Bylaws. Safe Cell has taken all actions required by law, its
Articles of Incorporation, or otherwise to authorize the execution and delivery
of this Agreement. Safe Cell has full power, authority, and legal right and
has taken all action required by law, its Articles of Incorporation, and
otherwise to consummate the transactions herein contemplated.
Section 1.02 Capitalization. The authorized capitalization of Safe Cell
consists of 10,000 authorized shares of common stock, of which 8,680 shares
are currently issued and outstanding. All issued and outstanding shares are
legally issued, fully paid, and non-assessable and not issued in violation of
the preemptive or other rights of any person.
Section 1.03 Subsidiaries and Predecessor Corporations. Safe Cell was
originally incorporated in the Province of British Columbia, Canada on May 9,
1996 as "Liberty Resources Inc." [Corporate I.D.# 519599] and on March 01, 2001
the sole director and shareholder of Liberty Resources Inc. adopted, filed and
duly registered with the British Columbia Registrar of Companies a corporate
name change and Liberty Resources Inc., then became known as "Clearline Xxx.xxx
Online Inc.,". On December 3, 2001, the sole director and shareholder of
Clearline Xxx.xxx Online Inc., adopted, filed and duly registered a corporate
name change with the British Columbian Registrar of Companies and Clearline
Xxx.xxx online Inc.,then became known as "Safe Cell Tab Inc." To date, Safe
Cell Tab Inc., is a duly registered British Columbia corporation and maintains
Corporate ID# 519599 with the British Columbia Registrar of Companies. Safe
Cell Tab Inc., does not have any subsidiary, and does not own, beneficially or
of record, any shares of any other corporation.
Section 1.04 Other Information.
(a) Safe Cell has no liabilities with respect to the payment of any
provincial, federal, state, county, local or other taxes (including any
deficiencies, interest or penalties), except for taxes accrued but not yet due
and payable.
(b) Safe Cell has filed all provincial state, federal or local income,
franchise tax returns and or GST/PST tax submission required to be filed by it
from inception to the date hereof. Each of such income tax returns and or GST
and PST tax submissions reflect the taxes due for the period covered thereby,
except for amounts which, in the aggregate, are immaterial.
(c) The books and records of Safe Cell are in all material respects
complete and correct and have been maintained in accordance with good business
and general accounting practices.
(d) Safe Cell has no material liabilities, direct or indirect, matured or
unmatured, contingent or otherwise in excess of Twenty-Five Thousand Dollars
($25,000).
Section 1.05 Information. The information concerning Safe Cell set forth in
this Agreement and in the Safe Cell Schedules is complete and accurate in all
material respects and does not contain any untrue statement of a material fact
or omit to state a material fact required to make the statements made, in light
of the circumstances under which they were made, not misleading. In addition,
Safe Cell has fully disclosed in writing to the Company (through this Agreement
or the Safe Cell Schedules) all information relating to matters involving Safe
Cell or its assets or its present or past operations or activities which (i)
indicated or may indicate, in the aggregate, the existence of a greater than
Twenty-Five Thousand Dollars ($25,000) liability or diminution in value, (ii)
have led or may lead to a competitive disadvantage on the part of Safe Cell, or
(iii) either alone or in aggregation with other information covered by this
Section, otherwise have led or may lead to a material adverse effect on the
transactions contemplated herein or on Safe Cell, its assets, or its operations
or activities as presently conducted or as contemplated to be conducted after
the Closing Date, including, but not limited to, information relating to
governmental, employee, environmental, litigation and securities matters and
transactions with affiliates.
Section 1.06 Options or Warrants. There are no existing options, warrants,
calls, or commitments of Safe Cell of any character relating to the authorized
and unissued Safe Cell common stock, except options, warrants, calls or
commitments, if any, to which Safe Cell is not a party and by which it is not
bound.
Section 1.07 Absence of Certain Changes or Events. Except as set forth in
this Agreement or the Safe Cell Schedules, since March 12, 2004:
(a) there has not been (i) any material adverse change in the proposed
business, operations, properties, assets, or condition of Safe Cell or (ii) any
damage, destruction, or loss to Safe Cell (whether or not covered by insurance)
materially and adversely affecting the business or financial condition of Safe
Cell;
(b) Safe Cell has not (i) amended its Articles of Incorporation or Bylaws;
(ii) declared or made, or agreed to declare or make, any payment of dividends
or distributions of any assets of any kind whatsoever to stockholders or
purchased or redeemed, or agreed to purchase or redeem, any of its capital
stock; (iii) waived any rights of value which in the aggregate are outside of
the ordinary course of business or material considering the business of Safe
Cell; (iv) made any material change in its method of management, operation or
accounting; (v) entered into any other material transaction other than sales in
the ordinary course of its business; (vi) made any accrual or arrangement for
payment of bonuses or special compensation of any kind or any severance or
termination pay to any present or former officer or employee; (vii) increased
the rate of compensation payable or to become payable by it to any of its
officers or directors or any of its salaried employees whose monthly
compensation exceeds Ten Thousand Dollars ($10,000); or (viii) made any
increase in any profit sharing, bonus, deferred compensation, insurance,
pension, retirement, or other employee benefit plan, payment, or arrangement
made to, for, or with its officers, directors, or employees;
(c) Safe Cell has not (i) borrowed or agreed to borrow any funds or
incurred, or become subject to, any material obligation or liability (absolute
or contingent) in excess of $25,000 except as disclosed herein and except
liabilities incurred in the ordinary course of business; (ii) paid or agreed to
pay any material obligations or liability (absolute or contingent) other than
current liabilities, and current liabilities incurred in the ordinary course of
business and professional and other fees and expenses in connection with the
preparation of this Agreement and the consummation of the transactions
contemplated hereby; (iii) sold or transferred, or agreed to sell or transfer,
any of its assets, properties, or rights (except assets, properties, or rights
not used or useful in its business which, in the aggregate have a value of less
than Twenty-Five Thousand Dollars [$25,000]), or canceled, or agreed to cancel,
any debts or claims (except debts or claims which in the aggregate are of a
value of less than Twenty-Five Thousand Dollars [$25,000]); or (iv) made or
permitted any amendment or termination of any contract, agreement, or license
to which it is a party if such amendment or termination is material,
considering the business of Safe Cell; and
(d) To the best knowledge of Safe Cell, Safe Cell has not become subject
to any law or regulation which materially and adversely affects, or in the
future may adversely affect, the business, operations, properties, assets, or
condition of Safe Cell.
Section 1.08 Title and Related Matters. No third party has any right to,
and Safe Cell has not received any notice of infringement of or conflict with
asserted rights of others with respect to, any product, technology, data,
trade secrets, know-how, proprietary techniques, trademarks, service marks,
trade names, or copyrights which, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a materially
adverse effect on the proposed business, operations, financial condition,
income, or business prospects of Safe Cell or any material portion of its
current properties, assets, or rights.
Section 1.09 Litigation and Proceedings. There are no actions, suits, or
proceedings pending or, to the knowledge of Safe Cell after reasonable
investigation, threatened by or against Safe Cell or affecting Safe Cell or
its properties, at law or in equity, before any court or other governmental
agency or instrumentality, domestic or foreign, or before any arbitrator of
any kind. Safe Cell does not have any knowledge of any material default on
its part with respect to any judgment, order, injunction, decree, award, rule,
or regulation of any court, arbitrator, or governmental agency or
instrumentality or of any circumstances which, after reasonable investigation,
would result in the discovery of such a default.
Section 1.10 Contracts.
(a) There are no material contracts, agreements, franchises, license
agreements, debt instruments or other commitments to which Safe Cell is a
party or by which it or any of its assets, products, technology, or properties
are bound other than those incurred in the ordinary course of business (as
used in this Agreement, a "material" contract, agreement, franchise, license
agreement, debt instrument or commitment is one which (i) will remain in effect
for more than six (6) months after the date of this Agreement and (ii) involves
aggregate obligations of at least Twenty-Five Thousand Dollars ($25,000);
(b) All contracts, agreements, franchises, license agreements, and other
commitments, if any, to which Safe Cell is a party and which are material to
the operations of Safe Cell taken as a whole are valid and enforceable by Safe
Cell in all respects, except as limited by bankruptcy and insolvency laws and
by other laws affecting the rights of creditors generally;
(c) Safe Cell is not a party to or bound by, and the properties of Safe
Cell are not subject to, any contract, agreement, other commitment or
instrument; any charter or other corporate restriction; or any judgment, order,
writ, injunction, decree, or award which materially and adversely affects, the
business operations, properties, assets, or condition of Safe Cell; and
(d) Except as included or described in the Safe Cell Schedules attached
hereto, Safe Cell is not a party to any oral or written (i) contract for the
employment of any officer or employee which is not terminable on ninety (90)
days, or less notice, provided that ; (ii) profit sharing, bonus, deferred
compensation, stock option, severance pay, pension benefit or retirement plan;
(iii) agreement, contract, or indenture relating to the borrowing of money;
(iv) guaranty of any obligation, other than one on which Safe Cell is a primary
obligor, for the borrowing of money or otherwise, excluding endorsements made
for collection and other guaranties of obligations which, in the aggregate do
not exceed more than one (1) year or providing for payments in excess of Twenty-
Five Thousand Dollars ($25,000) in the aggregate; (v) collective bargaining
agreement; or (vi) agreement with any present or former officer or director of
Safe Cell.
Section 1.11 Material Contract Defaults. Safe Cell is not in default in
any material respect under the terms of any outstanding material contract,
agreement, lease, or other commitment which is material to the business,
operations, properties, assets or condition of Safe Cell and there is no event
of default in any material respect under any such contract, agreement, lease,
or other commitment in respect of which Safe Cell has not taken adequate steps
to prevent such a default from occurring.
Section 1.12 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, constitute
an event of default under, or terminate, accelerate or modify the terms of any
material indenture, mortgage, deed of trust, or other material contract,
agreement, or instrument to which Safe Cell is a party or to which any of its
properties or operations are subject.
Section 1.13 Governmental Authorizations. Except as set forth in the Safe
Cell Schedules, and where limited to only those territories wherein Safe Cell
is currently commercially selling it various products and services. Safe Cell
has all licenses, franchises, permits, and other governmental authorizations
that are legally required to enable it to conduct its business in all material
respects as conducted on the date hereof. Except for compliance with federal
and state securities and corporation laws, as hereinafter provided, no
authorization, approval, consent, or order of, or registration, declaration,
or filing with, any court or other applicable governmental body is required in
connection with the execution and delivery by Safe Cell of this Agreement and
the consummation by Safe Cell of the transactions contemplated hereby.
Section 1.14 Compliance With Laws and Regulations. Except as set forth in
the Safe Cell Schedules, to the best of its knowledge Safe Cell has complied
with all applicable statutes and regulations of any federal, state, or other
governmental entity or agency thereof, except to the extent that noncompliance
would not materially and adversely affect the business, operations, properties,
assets, or condition of Safe Cell or except to the extent that noncompliance
would not result in the occurrence of any material liability for Safe Cell.
Section 1.15 Approval of Agreement. The Board of Directors of Safe Cell
which is currently comprised of a single Board of Director - Xx. Xxx Xxxxx,
Chief Executive Officer and President, Secretary/Treasurer, has authorized the
execution and delivery of this Agreement by Safe Cell and has approved this
Agreement and the transactions contemplated hereby, and will recommend to the
Safe Cell Shareholders that the Exchange Offer be accepted by them.
Section 1.16 Material Transactions or Affiliations. Set forth in the Safe
Cell Schedules is a description, if applicable, of every contract, agreement,
or arrangement between Safe Cell and any predecessor and any person who was at
the time of such contract, agreement, or arrangement an officer, director, or
person owning of record, or known by Safe Cell to own beneficially, five
percent (5%) or more of the issued and outstanding common stock of Safe Cell
and which is to be performed in whole or in part after the date hereof or which
was entered into not more than three (3) years prior to the date hereof. Except
as disclosed in the Safe Cell Schedules or otherwise disclosed herein, no
officer, director, or five percent (5%) shareholder of Safe Cell has, or has
had since inception of Safe Cell, any known interest, direct or indirect, in
any transaction with Safe Cell which was material to the business of Safe
Cell. There are no commitments by Safe Cell, whether written or oral, to
lend any funds, or to borrow any money from, or enter into any other
transactions with, any such affiliated person.
Section 1.17 Safe Cell Schedules. Safe Cell will deliver to the Company
the following schedules, if such schedules are applicable to the business of
Safe Cell, which are collectively referred to as the " Safe Cell Schedules"
and which consist of separate schedules dated as of the date of execution of
this Agreement, all certified by the chief executive officer of Safe Cell as
complete, true, and correct as of the date of this Agreement in all material
respects:
(a) Schedule A - schedule containing complete and correct copies of the
Articles of Incorporation in effect as of the date of this Agreement;
(b) Schedule B - schedule containing complete and correct copies of the
Bylaws of Safe Cell in effect as of the date of this Agreement;
(c) Schedule C - schedule containing any Corporate Resolutions of the
Shareholders of Safe Cell;
(d) Schedule D - schedule containing Minutes of meetings of the Board of
Directors of Safe Cell;
(e) Schedule E - schedule containing a list indicating the name and
address of each shareholder of Safe Cell together with the number of shares
owned by him, her or it; and
(f) Schedule F - schedule containing copies of Safe Cell?s Exclusive
Worldwide Agreement with its contract manufacturer - Milae Electronics,
Kyounggy-do, Korea;
(g) Schedule G - schedule containing terms of Safe Cell's agreement with
0000-0000 Xxxxxx Xxx., Xxxxxxxxxxxx, Xxxxxx Xxxxxx ;
(h) Schedule H - schedule containing terms of Safe Cell's license/re-
seller agreement with Softhill Technologies Ltd., Port Coquitlam, BC Canada;
(i) Schedule I - schedule containing list of Safe Cell's registered
officers, senior management team and their annual compensation.
(j) Schedule J - schedule setting forth any other information, together
with any required copies of documents, required to be disclosed by Safe Cell.
Safe Cell shall cause the Safe Cell Schedules and the instruments and data
delivered to the Company hereunder to be promptly updated after the date
hereof up to and including the Closing Date. It is understood and agreed that
not all of the schedules referred to above have been completed or are
available to be furnished by Safe Cell. Safe Cell shall have until March 31,
2004 to provide such schedules. If Safe Cell cannot or fails to do so, or if
the Company acting reasonably finds any such schedules or updates provided
after the date hereof to be unacceptable according to the criteria set forth
herein, the Company may terminate this Agreement by giving written notice to
Safe Cell within ten (10) days after the schedules or updates were due to be
produced or were provided. For purposes of the foregoing, the Company may
consider a disclosure in the Safe Cell Schedules to be "unacceptable" only if
that item would have a material adverse impact on the financial condition of
Safe Cell, taken as a whole.
Section 1.18 Valid Obligation. This Agreement and all agreements and other
documents executed by Safe Cell in connection herewith constitute the valid
and binding obligation of Safe Cell, enforceable in accordance with its or
their terms, except as may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and
subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefor may
be brought. The Exchange of the Safe Cell shares by the Safe Cell Shareholders
is not contingent upon any other agreement, conditions or understandings.
Section 1.19 Acquisition of the Shares by the Safe Cell Shareholders. The
Safe Cell Shareholders are acquiring the Shares for their own account without
the participation of any other person and with the intent of holding the
Shares for investment and without the intent of participating, directly or
indirectly, in a distribution of the Shares, or any portion thereof, and not
with a view to, or for resale in connection with, any distribution of the
Shares, or any portion thereof. The Safe Cell Shareholders have read,
understand and consulted with their legal counsel regarding the limitations
and requirements of Section 5 of the 1933 Act. The Safe Cell Shareholders will
offer, sell, pledge, convey or otherwise transfer the Shares, or any portion
thereof, only if: (i) pursuant to an effective registration statement under the
1933 Act and any and all applicable state securities or Blue Sky laws or in a
transaction which is otherwise in compliance with the 1933 Act and such laws;
or (ii) pursuant to a valid exemption from registration.
Section 1.20 Accredited Investor Status. Each Safe Cell Shareholder is
either a US resident and accredited investor as that term is defined in Rule
501 of Regulation D promulgated under the 1933 Act or the Safe Cell
Shareholders satisfy an exemption from registration under Regulation S.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF THE COMPANY
As an inducement to, and to obtain the reliance of Safe Cell and the Safe Cell
Shareholders, except as set forth in the Company Schedules (as hereinafter
defined), the Company represents and warrants as follows:
Section 2.01 Organization. The Company is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Nevada
and has the corporate power and is duly authorized, qualified, franchised, and
licensed under all applicable laws, regulations, ordinances, and orders of
public authorities to own all of its properties and assets, to carry on its
business in all material respects as it is now being conducted, and except
where failure to be so qualified would not have a material adverse effect on
its business, there is no jurisdiction in which it is not qualified in which
the character and location of the assets owned by it or the nature of the
business transacted by it requires qualification. Included in the Company
Schedules are complete and correct copies of the Articles of Incorporation and
Bylaws of the Company as in effect on the date hereof. The execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated hereby will not, violate any provision of the Company's Articles
of Incorporation or Bylaws. The Company has taken all action required by law,
its Articles of Incorporation, its Bylaws, or otherwise to authorize the
execution and delivery of this Agreement, and the Company has full power,
authority, and legal right and has taken all action required by law, its
Articles of Incorporation, Bylaws, or otherwise to consummate the transactions
herein contemplated.
Section 2.02 Capitalization. The Company is authorized to issue 25,000,000
shares of Common Stock, par value $.001 per share, of which 16,320,000 shares
will be issued and outstanding on the closing date prior to the issuance of
the shares to the Safe Cell shareholders as set forth in Section 3.01(ii), as
defined herein. All issued and outstanding shares are legally issued, fully
paid, and non-assessable and not issued in violation of the preemptive or
other rights of any person.
Section 2.03 Subsidiaries and Predecessor Corporations. The Company does
not have any predecessor corporation(s) or subsidiaries, and does not own,
beneficially or of record, any shares of any other corporation.
Section 2.04 Financial Statements.
(a) Included in the Company Schedules are (i) the audited balance sheets
of the Company and the related statements of operations and cash flows as of
and for the twelve (12) months ended September 30, 2002 and (ii) the unaudited
balance sheets of the Company and the related statements of operations and
cash flows for the nine (9) months ended June 30, 2003.
(b) All such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved. The Company balance sheets present fairly as of their
respective dates the financial condition of the Company. As of the date of
such balance sheets, except as and to the extent reflected or reserved against
therein, the Company had no liabilities or obligations (absolute or contingent)
which should be reflected in the balance sheets or the notes thereto prepared
in accordance with generally accepted accounting principles, and all assets
reflected therein are properly reported and present fairly the value of the
assets of the Company, in accordance with generally accepted accounting
principles. The statements of operations, stockholders' equity and cash flows
reflect fairly the information required to be set forth therein by generally
accepted accounting principles.
(c) The Company has no liabilities with respect to the payment of any
federal, state, county, local or other taxes (including any deficiencies,
interest or penalties), except for taxes accrued but not yet due and payable.
(d) The books and records, financial and otherwise, of the Company are in
all material aspects complete and correct and have been maintained in
accordance with good business and accounting practices.
(e) All of the Company's assets are reflected on its financial statements,
and, except as set forth in the Company Schedules or the financial statements
of the Company or the notes thereto, the Company has no material liabilities,
direct or indirect, matured or unmatured, contingent or otherwise.
Section 2.05 Information. The information concerning the Company set forth
in this Agreement and the Company Schedules is complete and accurate in all
material respects and does not contain any untrue statements of a material fact
or omit to state a material fact required to make the statements made, in light
of the circumstances under which they were made, not misleading. In addition,
the Company has fully disclosed in writing to Safe Cell (through this Agreement
or the Company Schedules) all information relating to matters involving the
Company or its assets or its present or past operations or activities which
(i)indicated or may indicate, in the aggregate, the existence of a greater than
One Thousand Dollars ($1,000) liability or diminution in value, (ii) have led
or may lead to a competitive disadvantage on the part of the Company or (iii)
either alone or in aggregation with other information covered by this Section,
otherwise have led or may lead to a material adverse effect on the transactions
contemplated herein or on the Company, its assets, or its operations or
activities as presently conducted or as contemplated to be conducted after the
Closing Date, including, but not limited to, information relating to
governmental, employee, environmental, litigation and securities matters and
transactions with affiliates.
Section 2.06 Options or Warrants. There are no existing options, warrants,
calls, or commitments of any character relating to the authorized and unissued
stock of the Company.
Section 2.07 Absence of Certain Changes or Events. Except as disclosed in
Schedule 2.07, or permitted in writing by Safe Cell, since the date of the most
recent Company balance sheet:
(a) there has not been (i) any material adverse change in the business,
operations, properties, assets or condition of the Company or (ii) any
damage, destruction or loss to the Company (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets or condition of the Company;
(b) The Company has not and will not (i) amend its Articles of
Incorporation or Bylaws except to complete the performance of the Company as
set forth herein; (ii) declare or make, or agree to declare or make any
payment of dividends or distributions of any assets of any kind whatsoever to
stockholders or purchase or redeem, or agree to purchase or redeem, any of its
capital stock; (iii) waive any rights of value which in the aggregate are
outside of the ordinary course of business or material considering the
business of the Company; (iv) make any material change in its method of
management, operation, or accounting; (v) enter into any transaction or
agreement other than in the ordinary course of business; (vi) make any accrual
or arrangement for or payment of bonuses or special compensation of any kind
or any severance or termination pay to any present or former officer or
employee; (vii) increase the rate of compensation payable or to become payable
by it to any of its officers or directors or any of its salaried employees
whose monthly compensation exceed One Thousand Dollars ($1,000); or (viii)
make any increase in any profit sharing, bonus, deferred compensation,
insurance, pension, retirement, or other employee benefit plan, payment, or
arrangement, made to, for or with its officers, directors, or employees;
(c) The Company has not (i) granted or agreed to grant any options or
warrants; (ii) borrowed or agreed to borrow any funds or incurred, or become
subject to, any material obligation or liability (absolute or contingent)
except liabilities incurred in the ordinary course of business; (iii) paid or
agreed to pay any material obligations or liabilities (absolute or contingent)
other than current liabilities reflected in or shown on the most recent the
Company balance sheet and current liabilities incurred since that date in the
ordinary course of business and professional and other fees and expenses in
connection with the preparation of this Agreement and the consummation of the
transaction contemplated hereby; (iv) sold or transferred, or agreed to sell
or transfer, any of its assets, properties, or rights (except assets,
properties, or rights not used or useful in its business which, in the
aggregate have a value of less than One Thousand Dollars [$1,000]), or
canceled, or agreed to cancel, any debts or claims (except debts or claims
which in the aggregate are of a value less than One Thousand Dollars [$1,000]);
and (v) made or permitted any amendment or termination of any contract,
agreement, or license to which it is a party if such amendment or termination
is material, considering the business of the Company; and
(d) The Company has not become subject to any law or regulation which
materially and adversely affects, or in the future, may adversely affect, the
business, operations, properties, assets or condition of the Company.
Section 2.08 Title and Related Matters. The Company has good and marketable
title to all of its properties, inventory, interest in properties, and assets,
real and personal, which are reflected in the most recent Company balance sheet
or acquired after that date (except properties, inventory, interest in
properties, and assets sold or otherwise disposed of since such date in the
ordinary course of business), free and clear of all liens, pledges, charges, or
encumbrances except (a) statutory liens or claims not yet delinquent; (b) such
imperfections of title and easements as do not and will not materially detract
from or interfere with the present or proposed use of the properties subject
thereto or affected thereby or otherwise materially impair present business
operations on such properties; and (c) as described in the Company Schedules.
Except as set forth in the Company Schedules, the Company owns, free and clear
of any liens, claims, encumbrances, royalty interests, or other restrictions or
limitations of any nature whatsoever, any and all products it is currently
manufacturing, including the underlying technology and data, and all procedures,
techniques, marketing plans, business plans, methods of management, or other
information utilized in connection with the Company's business. Except as set
forth in the Company Schedules, no third party has any right to, and the
Company has not received any notice of infringement of or conflict with
asserted rights of others with respect to any product, technology, data, trade
secrets, know-how, proprietary techniques, trademarks, service marks, trade
names, or copyrights which, individually or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would have a materially adverse
effect on the business, operations, financial condition, income, or business
prospects of the Company or any material portion of its properties, assets,
or rights.
Section 2.09 Litigation and Proceedings. There are no actions, suits,
proceedings or investigations pending or, to the knowledge of the Company
after reasonable investigation, threatened by or against the Company or
affecting the Company or its properties, at law or in equity, before any court
or other governmental agency or instrumentality, domestic or foreign, or
before any arbitrator of any kind. The Company has no knowledge of any
default on its part with respect to any judgment, order, writ, injunction,
decree, award, rule or regulation of any court, arbitrator, or governmental
agency or instrumentality, or any circumstance which after reasonable
investigation would result in the discovery of such default.
Section 2.10 Contracts.
(a) The Company is not a party to, and its assets, products, technology
and properties are not bound by, any material contract, franchise, license
agreement, agreement, debt instrument or other commitments whether such
agreement is in writing or oral.
(b) All contracts, agreements, franchises, license agreements, and other
commitments to which the Company is a party or by which its properties are
bound and which are material to the operations of the Company taken as a whole
are valid and enforceable by the Company in all respects, except as limited by
bankruptcy and insolvency laws and by other laws affecting the rights of
creditors generally;
(c) The Company is not a party to or bound by, and the properties of the
Company are not subject to any contract, agreement, other commitment or
instrument; any charter or other corporate restriction; or any judgment, order,
writ, injunction, decree, or award which materially and adversely affects, the
business operations, properties, assets, or condition of the Company; and
(d) Except as included or described in the Company Schedules or reflected
in the most recent Company balance sheet, the Company is not a party to any
oral or written (i) contract for the employment of any officer or employee
which is not terminable on thirty (30) days, or less notice; (ii) profit
sharing, bonus, deferred compensation, stock option, severance pay, pension
benefit or retirement plan, (iii) agreement, contract, or indenture relating
to the borrowing of money, (iv) guaranty of any obligation, other than one on
which the Company is a primary obligor, for the borrowing of money or
otherwise, excluding endorsements made for collection and other guaranties of
obligations which, in the aggregate do not exceed more than one year or
providing for payments in excess of Twenty-Five Thousand Dollars ($25,000) in
the aggregate; (v) collective bargaining agreement; or (vi) agreement with any
present or former officer or director of the Company.
Section 2.11 Material Contract Defaults. The Company is not in default
in any respect under the terms of any outstanding contract, agreement, lease,
or other commitment which is material to the business, operations, properties,
assets or condition of the Company and there is no event of default in any
material respect under any such contract, agreement, lease, or other
commitment in respect of which the Company has not taken adequate steps to
prevent such a default from occurring.
Section 2.12 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of,
constitute a default under, or terminate, accelerate or modify the terms of,
any indenture, mortgage, deed of trust, or other material agreement or
instrument to which the Company is a party or to which any of its assets or
operations are subject.
Section 2.13 Governmental Authorizations. The Company has all licenses,
franchises, permits, and other governmental authorizations, that are legally
required to enable it to conduct its business operations in all material
respects as conducted on the date hereof. Except for compliance with federal
and state securities or corporation laws, as hereinafter provided, no
authorization, approval, consent or order of, of registration, declaration or
filing with, any court or other governmental body is required in connection
with the execution and delivery by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby.
Section 2.14 Compliance With Laws and Regulations. To the best of its
knowledge, the Company has complied with all applicable statutes and
regulations of any federal, state, or other applicable governmental entity or
agency thereof, except to the extent that noncompliance would not materially
and adversely affect the business, operations, properties, assets or condition
of the Company or except to the extent that noncompliance would not result in
the occurrence of any material liability. This compliance includes, but is n
ot limited to, the filing of all reports, filings and schedules to date with
federal and state securities authorities.
Section 2.15 Approval of Agreement. The Board of Directors of the Company
has authorized the execution and delivery of this Agreement by the Company and
has approved this Agreement and the transactions contemplated hereby.
Section 2.16 Material Transactions or Affiliations. Except as disclosed
herein and in the Company Schedules, there exists no contract, agreement or
arrangement between the Company and any predecessor and any person who was at
the time of such contract, agreement or arrangement an officer, director, or
person owning of record or known by the Company to own beneficially, five
percent (5%) or more of the issued and outstanding Common Stock of the Company
and which is to be performed in whole or in part after the date hereof or was
entered into not more than three years prior to the date hereof. Neither any
officer, director, nor five percent (5%) shareholder of the Company has, or
has had since inception of the Company, any known interest, direct or indirect,
in any such transaction with the Company which was material to the business of
the Company. The Company has no commitment, whether written or oral, to lend
any funds to, borrow any money from, or enter into any other transaction with,
any such affiliated person.
Section 2.17 The Company Schedules. Within ten (10) days subsequent to
Closing, the Company will deliver to Safe Cell the following schedules, which
are collectively referred to as the "Company Schedules" and which consist of
separate schedules, which are dated the date of this Agreement, all certified
by the chief executive officer of the Company to be complete, true, and
accurate in all material respects as of the date of this Agreement:
(a) a schedule containing complete and accurate copies of the Articles of
Incorporation and Bylaws of the Company as in effect as of the date of this
Agreement;
(b) a schedule containing the financial statements of the Company
identified herein;
(c) a certified list from the Company's Transfer Agent setting forth the
name and address of each shareholder of the Company together with the number
of shares owned by him, her or it;
(d) a schedule containing a description of all real property owned by the
Company, together with a description of every mortgage, deed of trust, pledge,
lien, agreement, encumbrance, claim, or equity interest of any nature
whatsoever in such real property;
(e) copies of all licenses, permits, and other governmental authorizations
(or requests or applications therefor) pursuant to which the Company carries on
or proposes to carry on its business (except those which, in the aggregate, are
immaterial to the present or proposed business of the Company);
f) a schedule listing the accounts receivable and notes and other
obligations receivable of the Company as of June 30, 2003, or thereafter other
than in the ordinary course of business of the Company, indicating the debtor
and amount, and classifying the accounts to show in reasonable detail the
length of time, if any, overdue, and stating the nature and amount of any
refunds, set offs, reimbursements, discounts, or other adjustments which are
in the aggregate material and due to or claimed by such debtor;
(g) a schedule listing the accounts payable and notes and other obligations
payable of the Company as of June 30, 2003, or that arose thereafter other than
in the ordinary course of the business of the Company, indicating the creditor
and amount, classifying the accounts to show in reasonable detail the length of
time, if any, overdue, and stating the nature and amount of any refunds, set
offs, reimbursements, discounts, or other adjustments, which in the aggregate
are material and due to or claimed by the Company respecting such obligations;
(h) a schedule setting forth a description of any material adverse change
in the business, operations, property, inventory, assets, or condition of the
Company since June 30, 2003; and
(i) a schedule setting forth any other information, together with any
required copies of documents, required to be disclosed in the Company Schedules
by Sections 2.01 through 2.18.
The Company shall cause the Company Schedules and the instruments and data
delivered to Safe Cell hereunder to be promptly updated after the date hereof
up to and including the Closing Date.
If the Company cannot or fails to provide the schedules required by this
Section, or if Safe Cell or the Safe Cell Shareholders find any such schedules
or updates provided after the date hereof to be unacceptable, Safe Cell or the
Safe Cell Shareholders may terminate this Agreement by giving written notice to
the Company within five (5) days after the schedules or updates were due to be
produced or were provided. For purposes of the foregoing, Safe Cell may
consider a disclosure in the Company Schedules to be "unacceptable" only if
that item would have a material adverse impact on the financial condition of
the Company, taken as a whole.
Section 2.18 Valid Obligation. This Agreement and all agreements and other
documents executed by the Company in connection herewith constitute the valid
and binding obligation of the Company, enforceable in accordance with its or
their terms, except as may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting the enforcement of creditors' rights generally
and subject to the qualification that the availability of equitable remedies
is subject to the discretion of the court before which any proceeding therefor
may be brought.
Section 2.19 Liabilities. The Company acknowledges that it will have
no liabilities outstanding on the Closing Date (as defined in Section 3.02).
Section 2.20 Reporting Requirements of the Company. The Company is subject
to the reporting and filing requirements of the Securities Exchange Act of
1934 ("the Exchange Act") including (1) the periodic reporting requirements
and (2) the Proxy Rules set forth thereunder. The Company and its officers,
directors, and beneficial owners are subject to the provisions of the Exchange
Act Section 16 relating to short-swing profit recapture, reports of beneficial
ownership and short sale prohibitions and the Company and its officers,
directors, and beneficial owners have timely complied in all respects with the
filing requirements of the Exchange Act.
Section 2.21 Quotation on the OTC Bulletin Board. The Company's Common
Stock is quoted on the OTC Bulletin Board under the symbol "CTTG" and the
Company will retain such quotation on the OTC Bulletin Board until the Closing
of the transactions contemplated herein.
Section 2.22 Approval of the Exchange by the Company's Shareholders. The
transactions contemplated by this Agreement do not require the approval of the
Company's shareholders and the Company is not required to file a Schedule 14A
or 14C with the Securities and Exchange Commission as a result of the
transactions contemplated herein.
Section 2.23 The Directors of the Company shall have approved the Exchange
Offer and the related transactions described herein.
Section 2.24 Approval of the Exchange Offer and related transactions by the
Company's Shareholders is not required by Nevada law or the Company's Articles
of Incorporation or Bylaws or any amendments thereto.
ARTICLE III
PLAN OF EXCHANGE
Section 3.01 The Exchange. (i)On the terms and subject to the conditions
set forth in this Agreement, on the Closing Date (as defined in Section 3.02),
each Safe Cell Shareholder who shall elect to accept the Exchange Offer
described herein shall assign, transfer and deliver, free and clear of all
liens, pledges, encumbrances, charges, restrictions or known claims of any
kind, nature, or description, the number of shares of common stock of Safe
Cell set forth herein, in the aggregate constituting 100% of the issued and
outstanding shares of common stock of Safe Cell. After the acquisition of
100% of the outstanding shares of Safe Cell, Safe Cell shall become a wholly
owned subsidiary of the Company.
Section 3.01(ii) The Safe Cell Shareholders will receive One Thousand
(1,000) shares of the Company's common stock for every One (1) share of Safe
Cell common stock held or an aggregate amount of Eight Million Six Hundred and
Eighty Thousand (8,680,000) shares of the Company's Common Stock, representing
approximately Thirty-Four Percent (34.7%) of the Company's then outstanding
Common Stock.
Section 3.02 Closing. The closing ("Closing") of the transaction
contemplated by this Agreement shall be on a date and at such time as the
parties may agree ("Closing Date") but not later than March 31, 2004, subject
to the right of the Company or Safe Cell to extend such Closing Date by up to
an additional ten (10) days. Such Closing shall take place at a mutually
agreeable time and place. At Closing, or immediately thereafter, the
following will occur:
a) The Safe Cell Shareholders shall surrender the certificates evidencing
100% of the shares of Safe Cell stock, duly endorsed with Medallion Guaranteed
or a chartered bank signature guaranteed stock powers so as to make the Company
the sole owner thereof ;
b) The Company will issue and deliver 8,680,000 newly issued treasury
shares of the Company's Common Stock in the name of Shareholders in accordance
with this Agreement;
c) At Closing, Xxxx Xxxxxx shall remain on the Board until December 1,
2003 and Xxxxx Xxxxxx shall resign as a Board member and Safe Cell shall
designate Xx. Xxx Xxxxx to be appointed to the Board of Directors to fill the
vacancy created by such resignation. Upon the appointment of Safe Cell's
Designee, the Company will have a total of three (3) Directors;
d) The Closing shall be consummated by the execution and acknowledgment
by the Company and Safe Cell of Articles of Share Exchange in accordance with
applicable Nevada law. The Articles of Share Exchange executed and acknowledged
shall be delivered for filing to the Secretary of State of the State of Nevada
as promptly as possible after the consummation of the Closing. The Articles of
Share Exchange shall specify the effective date and time of the Share Exchange;
and
e) At the Closing, the Company, Safe Cell and each of the Safe Cell
Shareholders shall execute, acknowledge, and deliver (or shall ensure to be
executed, acknowledged, and delivered) any and all certificates, opinions,
financial statements, schedules, agreements, resolutions, rulings or other
instruments required by this Agreement to be so delivered at or prior to the
Closing, together with such other items as may be reasonably requested by the
parties hereto and their respective legal counsel in order to effectuate or
evidence the transactions contemplated hereby. Among other things, the Company
shall provide an opinion of counsel acceptable to Safe Cell as to such matters
as Safe Cell may reasonably request, which shall include, but not be limited to,
a statement, to the effect that to such counsel's best knowledge, after
reasonable investigation, from inception until the Closing Date, the Company
has complied with all applicable statutes and regulations of any federal,
state, or other applicable governmental entity or agency thereof, except to
the extent that noncompliance would not materially and adversely affect the
business, operations, properties, assets or condition of the Company or except
to the extent that noncompliance would not result in the occurrence of any
material liability (such compliance including, but not being limited to, the
filing of all reports to date with federal and state securities authorities).
Section 3.03 Name Change. Subsequent to the Closing, the Company's legal
name, Cusip # and related OTC:BB trading symbol [ticker - CTTG] shall not be
changed and Safe Cell Tab Inc., shall become known as a wholly owned subsidiary
of the Company.
Section 3.04 Tradability of Shares. The shares of the Common Stock of the
Company to be issued to the Safe Cell Shareholders have not been registered
under the 1933 Act, nor registered under any state securities law, and are
"restricted securities" as that term is defined in Rule 144 under the 0000 Xxx.
The securities may not be offered for sale, sold or otherwise transferred
except pursuant to an effective registration statement under the 1933 Act, or
pursuant to an exemption from registration under the 1933 Act. The shares to
be issued to the Safe Cell Shareholders will bear the following restrictive
legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND
MAY NOT BE SOLD, TRANSFERRED, PLEDGED, OR HYPOTHECATED WITHOUT EITHER: i)
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE
STATE SECURITIES LAWS, OR ii) SUBMISSION TO THE CORPORATION OF AN OPINION OF
COUNSEL, SATISFACTORY TO THE CORPORATION THAT SAID SHARES AND THE TRANSFER
THEREOF ARE EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
OF 1933 AND APPLICABLE STATE SECURITIES LAWS."
Section 3.05 Anti-Dilution. The number of shares of the Company's Common
Stock issuable upon the Exchange Offer shall be appropriately adjusted to
take into account any other stock split, stock dividend, reverse stock split,
recapitalization, or similar change in the Company?s Common Stock which may
occur (i) between the date of the execution of this Agreement and the Closing
Date.
Section 3.06 Termination.
(a) This Agreement may be terminated by the Board of Directors of either
the Company or Safe Cell or by the Safe Cell Shareholders at any time prior to
the Closing Date if:
(i) there shall be any actual or threatened action or proceeding before
any court or any governmental body which shall seek to restrain, prohibit, or
invalidate the transactions contemplated by this Agreement and which, in the
judgment of such Board of Directors, made in good faith and based upon the
advice of its legal counsel, makes it inadvisable to proceed with the Exchange;
(ii) any of the transactions contemplated hereby are disapproved by any
regulatory authority whose approval is required to consummate such transactions
(which does not include the Securities and Exchange Commission) or in the
judgment of such board of directors, made in good faith and based on the advice
of counsel, there is substantial likelihood that any such approval will not be
obtained or will be obtained only on a condition or conditions which would be
unduly burdensome, making it inadvisable to proceed with the Exchange; or
(iii) if less than one hundred percent (100%) of the Safe Cell Shareholders
agree to the Exchange Offer.
In the event of termination pursuant to this paragraph, no obligation, right or
liability shall arise hereunder, and each party shall bear all of the expenses
incurred by it in connection with the negotiation, drafting, and execution of
this Agreement and the transactions herein contemplated.
(b) This Agreement may be terminated by the Board of Directors of the
Company at any time prior to the Closing Date if:
(i) the Board of Directors of the Company determines in good faith that one
or more of the Company's conditions to Closing has not occurred, but only after
the offending party has been given twenty days notice and an opportunity to
cure, through no fault of the Company.
(ii) The Company takes the termination action specified in Section 1.17 as a
result of Safe Cell Schedules or updates thereto which the Company finds
unacceptable; or
(iii) Safe Cell shall fail to comply in any material respect with any of its
covenants or agreements contained in this Agreement or if any of the
representations or warranties of Safe Cell contained herein shall be inaccurate
in any material respect, where such noncompliance or inaccuracy has not been
cured within ten (10) days after written notice thereof.
If this Agreement is terminated pursuant to this paragraph, this Agreement shall
be of no further force or effect, and no obligation, right or liability shall
arise hereunder, except that Purchaser shall bear the costs in connection with
the negotiation, preparation, and execution of this Agreement and qualifying
the offer and sale of securities to be issued in the Exchange under the
registration requirements, or exemption from the registration requirements, of
state and federal securities laws.
(c) This Agreement may be terminated by the Board of Directors of Safe Cell
or by the Safe Cell Shareholders at any time prior to the Closing Date if:
(i) there shall have been any change after the date of the latest balance
sheet of the Company in the assets, properties, business or financial condition
of the Company which could have a material adverse effect on the financial
statements of the Company listed in Section 2.04(a) and 2.04(b) taken as a
whole, except any changes disclosed in the Company Schedules;
(ii) the Board of Directors of Safe Cell determines in good faith that one
or more of Safe Cell's conditions to Closing has not occurred, through no fault
of Safe Cell;
(iii) Safe Cell takes the termination action specified in Section 2.17 as a
result of the Company Schedules or updates thereto which Safe Cell finds
unacceptable;
(iv) on or before March 31,2004, if Safe Cell notifies the Company that Safe
Cell's investigation pursuant to Section 4.01 below has uncovered information
which it finds unacceptable by the same criteria set forth herein; or
(v) The Company shall fail to comply in any material respect with any of
its covenants or agreements contained in this Agreement or if any of the
representations or warranties of the Company contained herein shall be
inaccurate in any material respect, where such noncompliance or inaccuracy has
not been cured within ten (10) days after written notice thereof.
If this Agreement is terminated pursuant to this paragraph, this Agreement
shall be of no further force or effect, and no obligation, right or liability
shall arise hereunder.
No revenue ruling or opinion of counsel will be sought as to the tax-free
nature of the subject Exchange and such tax treatment is not a condition to
Closing herein.
ARTICLE IV
SPECIAL COVENANTS
Section 4.01 Access to Properties and Records. The Company and Safe Cell
will each afford to the officers and authorized representatives of the other
full access to the properties, books and records of the Company, as the case
may be, in order that each may have a full opportunity to make such reasonable
investigation as it shall desire to make of the affairs of the other, and each
will furnish the other with such additional financial and operating data and
other information as to the business and properties of the Company or Safe
Cell, as the case may be, as the other shall from time to time reasonably
request. Any such investigation and examination shall be conducted at
reasonable times and under reasonable circumstances, and each party hereto
shall cooperate fully therein. No investigation by a party hereto shall,
however, diminish or waive in any way any of the representations, warranties,
covenants or agreements of the other party under this Agreement. In order
that each party may investigate as it may wish the business affairs of the
other, each party shall furnish the other during such period with all such
information and copies of such documents concerning the affairs of it as the
other party may reasonably request, and cause its officer, employees,
consultants, agents, accountants, and attorneys to cooperate fully in
connection with such review and examination, and to make full disclosure to
the other parties all material facts affecting its financial condition,
business operations, and the conduct of operations. Without limiting the
foregoing, as soon as practicable after the end of each fiscal quarter (and
in any event through the last fiscal quarter prior to the Closing Date), the
Company shall provide Safe Cell with quarterly internally prepared and un-
audited financial statements for all periods up to the date of Closing.
Section 4.02 Delivery of Books and Records. At the Closing, Safe Cell
shall deliver to the Company copies of the corporate minute books, books of
account, contracts, records, and all other books or documents of Safe Cell now
in the possession of Safe Cell or its representatives.
Section 4.03 Third Party Consents and Certificates. The Company and Safe
Cell agree to cooperate with each other in order to obtain any required third
party consents to this Agreement and the transactions herein contemplated.
Section 4.04 Consent of Safe Cell Shareholders. Safe Cell shall use its
best efforts to obtain the consent of 100% of the Safe Cell Shareholders to
participate in the Exchange.
Section 4.05 Exclusive Dealing Rights. Until 5:00 P.M. Eastern Daylight
Time on March 31, 2004.
(a) In recognition of the substantial time and effort which the Company
has spent and will continue to spend in investigating Safe Cell and its
business and in addressing the matters related to the transactions contemplated
herein, each of which may preempt or delay other management activities, neither
Safe Cell, nor any of its officers, employees, representatives or agents will
directly or indirectly solicit or initiate any discussions or negotiations
with, or, except where required by fiduciary obligations under applicable law
as advised by counsel, participate in any negotiations with or provide any
information to or otherwise cooperate in any other way with, or facilitate or
encourage any effort or attempt by, any corporation, partnership, person or
other entity or group (other than the Company and its directors, officers,
employees, representatives and agents) concerning any merger, sale of
substantial assets, sale of shares of capital stock, (including without
limitation, any public or private offering of the common stock of Safe Cell)
or similar transactions involving Safe Cell (all such transactions being
referred to as " Safe Cell Acquisition Transactions"). If Safe Cell receives
any proposal with respect to a Safe Cell Acquisition Transaction, it will
immediately communicate to the Company the fact that it has received such
proposal and the principal terms thereof.
(b) In recognition of the substantial time and effort which Safe Cell has
spent and will continue to spend in investigating the Company and its business
and in addressing the matters related to the transactions contemplated herein,
each of which may preempt or delay other management activities, neither the
Company, nor any of its officers, employees, representatives, shareholders or
agents will directly or indirectly solicit or initiate any discussions or
negotiations with, or, except where required by fiduciary obligations under
applicable law as advised by counsel, participate in any negotiations with or
provide any information to or otherwise cooperate in any other way with, or
facilitate or encourage any effort or attempt by, any corporation, partnership,
person or other entity or group (other than Safe Cell and its directors,
officers, employees, representatives and agents) concerning any merger, sale
of substantial assets, sale of shares of capital stock, (including without
limitation, any public or private offering of the Common Stock of the Company
or similar transactions involving the Company (all such transactions being
referred to as "Company Acquisition Transactions"). If the Company receives
any proposal with respect to a Company Acquisition Transaction, it will
immediately communicate to Safe Cell the fact that it has received such
proposal and the principal terms thereof.
Section 4.06 Actions Prior to Closing.
(a) From and after the date of this Agreement until the Closing Date and
except as set forth in the Company Schedules or Safe Cell Schedules or as
permitted or contemplated by this Agreement, the Company (subject to paragraph
(b) below) and Safe Cell respectively, will each:
(i) carry on its business in substantially the same manner as it has
heretofore;
(ii) maintain and keep its properties in states of good repair and condition
as at present, except for depreciation due to ordinary wear and tear and damage
due to casualty;
(iii) maintain in full force and effect insurance comparable in amount and in
scope of coverage to that now maintained by it;
(iv) perform in all material respects all of its obligations under material
contracts, leases, and instruments relating to or affecting its assets,
properties, and business;
(v) use its best efforts to maintain and preserve its business organization
intact, to retain its key employees, and to maintain its relationship with its
material suppliers and customers; and
(vi) fully comply with and perform in all material respects all obligations
and duties imposed on it by all federal and state laws and all rules,
regulations, and orders imposed by federal or state governmental authorities.
(b) From and after the date of this Agreement until the Closing Date,
neither the Company nor Safe Cell will:
(i) make any changes in their Articles of Incorporation or Bylaws, except
as otherwise provided in this Agreement;
(ii) take any action described in Section 1.07 in the case of Safe Cell, or
in Section 2.07, in the case of the Company (all except as permitted therein or
as disclosed in the applicable party's schedules);
(iii) enter into or amend any contract, agreement, or other instrument of any
of the types described in such party's schedules, except that a party may enter
into or amend any contract, agreement, or other instrument in the ordinary
course of business involving the sale of goods or services; or
(iv) sell any assets or discontinue any operations (other than the
Divestiture), sell any shares of capital stock (other than as contemplated in
Section 4.06 hereof and the sale of securities underlying existing warrants
or options of the Company) or conduct any similar transactions other than in
the ordinary course of business.
Section 4.07 Indemnification.
(a) The Company hereby agrees to indemnify Safe Cell and each of the
officers, agents, and directors of Safe Cell and each of the Safe Cell
Shareholders as of the date of execution of this Agreement against any loss,
liability, claim, damage, or expense (including, but not limited to, any and
all expense whatsoever reasonably incurred in investigating, preparing, or
defending against any litigation, commenced or threatened, or any claim
whatsoever), to which it or they may become subject arising out of or based on
any inaccuracy appearing in or misrepresentation made by the Company under
this Agreement. The indemnification provided for in this paragraph shall
survive the Closing and consummation of the transactions contemplated hereby
and termination of this Agreement.
Section 4.08 Limitation of Subsequent Corporate Actions.
It is expressly understood and agreed that the Company, the shareholders of
Safe Cell, and their affiliates will take all steps necessary to ensure that:
(1) The Company will not enact a reverse split of its Common Stock for a
period of twelve (12) months after execution of this Agreement;
(2) The assets of Safe Cell, if any, shall remain in the Company as part
of its on-going business operations;
(3) No shares of the Company's common stock shall be registered pursuant to
an S-8 registration statement for a period of twelve (12) months following the
date of execution of this Agreement being August 22, 2003;
(4) The Company will not file a registration statement for a period of six
months after execution of this Agreement being August 22, 2003;
Notwithstanding items (1), (2), (3), and 4 the Company may waive such
conditions stated above with a written waiver. Other than (1), (2), (3), and
4 of this Section, there are no restrictions upon the Company to inhibit,
prevent, limit or restrict the Company from issuing additional securities of
any class, preference or type after the date of the Closing.
Section 4.09 Audited Financial Statements. The Company shall file audited
financial statements of Safe Cell as required by the Securities and Exchange
Commission within seventy-five (75) days from the date of Closing.
Section 4.10 Blue Sky Manual Exemption. The Company shall file with
Standard & Poors or Xxxxx'x within one hundred twenty (120) days from the date
of Closing.
Section 4.11 Repayment of Loan. In the event the Company successfully
raises more than $250,000 within twelve months from Closing this Agreement via
a private placement, the Company agrees to repay Xxxxxx Xxxxxx $25,000 pursuant
to the terms of a demand note.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY
The obligations of the Company under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 5.01 Accuracy of Representations and Performance of Covenants. The
representations and warranties made by Safe Cell in this Agreement were true
when made and shall be true at the Closing Date with the same force and effect
as if such representations and warranties were made at and as of the Closing
Date (except for changes therein permitted by this Agreement). Safe Cell shall
have performed or complied with all covenants and conditions required by this
Agreement to be performed or complied with by Safe Cell prior to or at the
Closing. The Company shall be furnished with a certificate, signed by a duly
authorized executive officer of Safe Cell and dated the Closing Date, to the
foregoing effect.
Section 5.02 Officer's Certificate. The Company shall have been furnished
with a certificate dated the Closing Date and signed by a duly authorized
officer of Safe Cell to the effect that no litigation, proceeding,
investigation, or inquiry is pending, or to the best knowledge of Safe Cell
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement, or, to the
extent not disclosed in the Safe Cell Schedules, by or against Safe Cell,
which might result in any material adverse change in any of the assets,
properties, business, or operations of Safe Cell.
Section 5.03 No Material Adverse Change. Prior to the Closing Date, there
shall not have occurred any material change in the financial condition,
business, or operations of Safe Cell nor shall any event have occurred which,
with the lapse of time or the giving of notice, is determined to be u
nacceptable using the criteria set forth in Section 1.17.
Section 5.04 Approval by Safe Cell Shareholders. The Exchange shall have
been approved, and shares delivered in accordance with Section 3.01, by the
holders of not less than one hundred percent (100%) of the outstanding common
stock of Safe Cell.
Section 5.05 No Governmental Prohibition. No order, statute, rule,
regulation, executive order, injunction, stay, decree, judgment or restraining
order shall have been enacted, entered, promulgated or enforced by any court
or governmental or regulatory authority or instrumentality which prohibits the
consummation of the transactions contemplated hereby.
Section 5.06 Consents. All consents, approvals, waivers or amendments
pursuant to all contracts, licenses, permits, trademarks and other intangibles
in connection with the transactions contemplated herein, or for the continued
operation of the Company and Safe Cell after the Closing Date on the basis as
presently operated shall have been obtained.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF SAFE CELL AND THE SAFE CELL
SHAREHOLDERS
The obligations of Safe Cell and the Safe Cell Shareholders under this
Agreement are subject to the satisfaction, at or before the Closing Date, of
the following conditions:
Section 6.01 Accuracy of Representations and Performance of Covenants. The
representations and warranties made by the Company in this Agreement were true
when made and shall be true as of the Closing Date (except for changes therein
permitted by this Agreement) with the same force and effect as if such
representations and warranties were made at and as of the Closing Date.
Additionally, the Company shall have performed and complied with all covenants
and conditions required by this Agreement to be performed or complied with by
the Company and shall have satisfied all conditions set forth herein prior to
or at the Closing. Safe Cell shall have been furnished with certificates,
signed by duly authorized executive officers of the Company and dated the
Closing Date, to the foregoing effect.
Section 6.02 Officer's Certificate. Safe Cell shall have been furnished
with certificates dated the Closing Date and signed by the duly authorized
executive officer of the Company, to the effect that no litigation, proceeding,
investigation or inquiry is pending, or to the best knowledge of the Company
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement or, to the
extent not disclosed in the Company Schedules, by or against the Company, which
might result in any material adverse change in any of the assets, properties or
operations of the Company.
Section 6.03 No Material Adverse Change. Prior to the Closing Date, there
shall not have occurred any change in the financial condition, business or
operations of the Company nor shall any event have occurred which, with the
lapse of time or the giving of notice, is determined to be unacceptable using
the criteria set forth in Section 2.17.
Section 6.04 No Governmental Prohibition. No order, statute, rule,
regulation, executive order, injunction, stay, decree, judgment or restraining
order shall have been enacted, entered, promulgated or enforced by any court or
governmental or regulatory authority or instrumentality which prohibits the
consummation of the transactions contemplated hereby.
Section 6.05 Consents. All consents, approvals, waivers or amendments
pursuant to all contracts, licenses, permits, trademarks and other intangibles
in connection with the transactions contemplated herein, or for the continued
operation of the Company and Safe Cell after the Closing Date on the basis as
presently operated shall have been obtained.
Section 6.06 Other Items. Safe Cell shall have received further opinions,
documents, certificates, or instruments relating to the transactions
contemplated hereby as Safe Cell may reasonably request.
ARTICLE VII
MISCELLANEOUS
Section 7.01 No Bankruptcy and No Criminal Convictions.
None of the Parties to the Agreement, nor their officers, directors or
affiliates, promoters, beneficial shareholders or control persons, nor any
predecessor thereof have been subject to the following:
(a) Any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer within the past five (5)
years;
(b) Any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses);
(c) Being subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; and
(d) Being found by a court of competent jurisdiction (in a civil action),
the Securities and Exchange Commission (the ?SEC?) or the Commodity Futures
Trading Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended, or vacated.
Section 7.02 Brokers. No broker's or finder's fee will be paid in
connection with the transaction contemplated by this Agreement other than fees
payable to persons registered as broker-dealers pursuant to Section 15 of the
Securities Exchange Act of 1934. The Company and Safe Cell agree that, except
as set forth herein and on Schedule 7.02 attached hereto, there were no brokers
or finders involved in bringing the parties together or who were instrumental
in the negotiation, execution or consummation of this Agreement. The Company
and Safe Cell each agree to indemnify the other against any claim by any third
person other than those described above for any commission, brokerage, or
finder's fee arising from the transactions contemplated hereby based on any
alleged agreement or understanding between the indemnifying party and such
third person, whether express or implied from the actions of the indemnifying
party.
Section 7.03 Governing Law and Arbitration. This Agreement shall be
governed by, enforced, and construed under and in accordance with the laws of
the United States of America and, with respect to the matters of state law,
with the laws of the State of Nevada without giving effect to principles of
conflicts of law thereunder. All controversies, disputes or claims arising
out of or relating to this Agreement shall be resolved by binding arbitration.
The arbitration shall be conducted in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. All arbitrators
shall possess such experience in, and knowledge of, the subject area of the
controversy or claim so as to qualify as an "expert" with respect to such
subject matter. The governing law for the purposes of any arbitration
arising hereunder shall be in Florida. The prevailing party shall be
entitled to receive its reasonable attorney's fees and all costs relating to
the arbitration. Any award rendered by arbitration shall be final and
binding on the parties, and judgment thereon may be entered in any court of
competent jurisdiction.
Section 7.04 Notices. Any notice or other communications required or
permitted hereunder shall be in writing and shall be sufficiently given if
personally delivered to it or sent by telecopy, overnight courier or
registered mail or certified mail, postage prepaid, addressed as follows:
If to the Company, to: Attention: Xxxxxx Xxxxxxx, Chief Executive Officer
Claremont Technology Corp.
Xxxxx 000, 0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx X0X 0X0
Ph: 000.000.0000
Fax: 000.000.0000
E.Mail: xxxxxxxxxx@xxxxx.xx
If to Safe Cell, to: Attention: Xx Xxx Xxxxx, Chief Executive Officer
Safe Cell Tab, Inc.
0000 Xxxxxxx Xxxxx,
Xxxxxxxxx, X.X., Xxxxxx X0X 0X0
Ph: 000.000.0000
Fax: 000.000.0000
E.Mail: xxxxxxxx@xxxxxxxx.xxx
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given (i) upon receipt, if personally delivered, (ii) on
the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if
transmitted by telecopy and receipt is confirmed by telephone and (iv) three (3)
days after mailing, if sent by registered or certified mail.
Section 7.05 Attorney's Fees. In the event that either party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the prevailing party shall be reimbursed by the
losing party for all costs, including reasonable attorney's fees, incurred in
connection therewith and in enforcing or collecting any judgment rendered
therein.
Section 7.06 Confidentiality. Each party hereto agrees with the other
that, unless and until the transactions contemplated by this Agreement have
been consummated, it and its representatives will hold in strict confidence
all data and information obtained with respect to another party or any
subsidiary thereof from any representative, officer, director or employee, or
from any books or records or from personal inspection, of such other party,
and shall not use such data or information or disclose the same to others,
except (i) to the extent such data or information is published, is a matter
of public knowledge, or is required by law to be published; or (ii) to the
extent that such data or information must be used or disclosed in order to
consummate the transactions contemplated by this Agreement. In the event of
the termination of this Agreement, each party shall return to the other party
all documents and other materials obtained by it or on its behalf and shall
destroy all copies, digests, work papers, abstracts or other materials
relating thereto, and each party will continue to comply with the
confidentiality provisions set forth herein.
Section 7.07 Public Announcements and Filings. Unless required by
applicable law or regulatory authority, none of the parties will issue any
report, statement or press release to the general public, to the trade, to
the general trade or trade press, or to any third party (other than its
advisors and representatives in connection with the transactions contemplated
hereby) or file any document, relating to this Agreement and the transactions
contemplated hereby, except as may be mutually agreed by the parties. Copies
of any such filings, public announcements or disclosures, including any
announcements or disclosures mandated by law or regulatory authorities, shall
be delivered to each party at least one (1) business day prior to the release
thereof.
Section 7.08 Schedules; Knowledge. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules
delivered pursuant to this Agreement.
Section 7.09 Third Party Beneficiaries. This contract is strictly between
the Company and Safe Cell and the Safe Cell Shareholders, and, except as
specifically provided, no director, officer, stockholder (other than the Safe
Cell Shareholders), employee, agent, independent contractor or any other
person or entity shall be deemed to be a third party beneficiary of this
Agreement.
Section 7.10 Expenses. The Company agrees to pay all costs and expenses
incurred in negotiating this Agreement including legal fees, incurred in
connection with the Exchange. All additional professional fees, costs and
expenses incurred in consummating the transactions described herein and
contemplated by this Exchange shall be the responsibility of the affected
party.
Section 7.11 Entire Agreement. This Agreement represents the entire
agreement between the parties relating to the subject matter thereof and
supersedes all prior agreements, understandings and negotiations, written or
oral, with respect to such subject matter.
Section 7.12 Survival; Termination. The representations, warranties, and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of two (2)
years.
Section 7.13 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
Section 7.14 Amendment or Waiver. Every right and remedy provided herein
shall be cumulative with every other right and remedy, whether conferred
herein, at law, or in equity, and may be enforced concurrently herewith, and
no waiver by any party of the performance of any obligation by the other shall
be construed as a waiver of the same or any other default then, theretofore,
or thereafter occurring or existing. At any time prior to the Closing Date,
this Agreement may by amended by a writing signed by all parties hereto, with
respect to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance may be extended by a
writing signed by the party or parties for whose benefit the provision is
intended.
Section 7.15 Best Efforts. Subject to the terms and conditions herein
provided, each party shall use its best efforts to perform or fulfill all
conditions and obligations to be performed or fulfilled by it under this
Agreement so that the transactions contemplated hereby shall be consummated as
soon as practicable. Each party also agrees that it shall use its best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective this Agreement and the transactions contemplated
herein.
Section 7.16 Faxed Copies. For purposes of this Agreement, a faxed
signature will constitute an original signature.
Section 7.17 Severability. The invalidity or unenforceability of any term,
phrase, clause, paragraph, restriction, covenant, agreement or other provision
of this Agreement shall in no way affect the validity or enforcement of any
other provision or any part thereof.
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement to
be executed by their respective officers, hereunto duly authorized, as of the
date first-above written.
CLAREMONT TECHNOLOGIES CORP.
/s/ Xxxxxx Xxxxxxx
BY:_________________________________
Xxxxxx Xxxxxxx,
Director & Chief Executive Officer
SAFE CELL TAB INC.
/s/ Xxx Xxxxx
BY:_________________________________
Xxx Xxxxx,
Director & Chief Executive Officer
SAFE CELL SHAREHOLDERS:
/s/ Xxx Xxxxx
____________________________
By: DJ Modern Mill Consultants, Inc, corporately
Xxx Xxxxx, President
Number of Shares: 3,151
/s/ Xxxxxxx XxXxxx
____________________________
By: Xxx. Xxxxxxx XxXxxx, individually
Number of Shares: 1,323
/s/ Xxxxx XxXxxx
____________________________
By: Xx. Xxxxx XxXxxx individually
Number of Shares: 1,323
/s/ Xxxx Beciaris
____________________________
By: Mrs. Xxxx Beciaris, individually
Number of Shares: 850
/s/ Xxx Xxxxxx
____________________________
By: Xx. Xxx Xxxxxx , individually
Number of Shares: 907
/s/ Xxx Xxxxxx
____________________________
By: Xx. Xxx Xxxxxx , individually
Number of Shares: 1,125
Safe Cell Schedules
Schedule A
schedule containing complete and correct copies of the Articles of Incorporation
in effect as of the date of this Agreement;
Schedule B
schedule containing complete and correct copies of the Bylaws of Safe Cell
in effect as of the date of this Agreement;
Schedule C
schedule containing any Corporate Resolutions of the Shareholders of Safe Cell;
Schedule D
schedule containing Minutes of meetings of the Board of Directors of Safe Cell;
Schedule E
schedule containing a list indicating the name and address of each shareholder
of Safe Cell together with the number of shares owned by him, her or it;
SAFE CELL TAB INC. SHAREHOLDERS LIST
Full Name and Address No. Shares
Xxx X. Xxxxx 1
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX X0X 0X0
Ph: 604. 266. 0132
DJ Modern Xxxxx Consultants, Inc 3,151
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, X.X. Xxxxxx X0X 0X0
Ph: 604. 266. 0132
Xxx. Xxxxxxx XxXxxx 1,323
0000 Xxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
604. 472. 0177
Xx. Xxxxx XxXxxx 1,323
0000 Xxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
604. 472. 0177
Mrs. Xxxx Beciaris 000
000 Xxxx Xxxxxx
Xxxxxxx, XX X0X0X0
(604) 294 - 5429
Xx. Xxx Xxxxxx 2,032
0000 Xxxxxxx Xxxxx
Xxxxxxxx, XX X0X 0X0
(000) 000-0000
----------
TOTAL 8,680 Shares
Schedule F
schedule containing copies of Safe Cell's Exclusive Worldwide Agreement with its
contract manufacturer - Milae Electronics, Kyounggy-do, Korea;
Schedule G
- schedule containing terms of Safe Cell's agreement with 0000-0000 Xxxxxx Xxx.,
Xxxxxxxxxxxx, Xxxxxx Xxxxxx ;
Schedule H
schedule containing terms of Safe Cell's license/re-seller agreement with
Softhill Technologies Ltd., Port Coquitlam, BC Canada
Schedule I
schedule containing list of Safe Cell's registered officers, senior management
team, consultants and advisors and their annual compensation.
Xxx Xxxxx US $12,000 per year
President, CEO and Director
Schedule I
schedule setting forth any other information, together with any required copies
of documents, required to be disclosed by Safe Cell.
