A G R E E M E N T A N D P L A N O F R E O R G A N I Z A T I O N
This Agreement ("Agreement") is made and entered into on April 25,
2000, by and among ISO-BLOCK PRODUCTS (USA), INC., a Colorado corporation, as
buyer (the "Company"); CRYOCON INC., a Utah corporation, as the acquired company
("Acquired Company" or "Cryocon"); and certain persons executing this Agreement
in their capacity as shareholders of Cryocon (the "Cryocon Holders").
R E C I T A L S:
A. The Cryocon Holders collectively own of record and beneficially
11,000,000 shares of common stock, with no par value, of Cryocon (collectively,
the "Cryocon Shares"), which are all the shares of Cryocon capital stock issued
and outstanding; and
B. The Cryocon Holders desire to sell to the Company, and the Company
desires to purchase from the Cryocon Holders, all of the Cryocon Shares, on the
terms and subject to the conditions of this Agreement; and
C. The respective boards of directors of Cryocon and the Company have
approved the execution of this Agreement and performance of the parties'
respective obligations herein.
NOW THEREFORE, for and in consideration of the premises and the mutual
promises and undertakings contained herein, and for other good and valuable
consideration, and subject to the terms and conditions of this Agreement, the
parties hereto agree as follows:
1. THE EXCHANGE.
1.1 Sale and Purchase of the Cryocon Shares. On the terms and
subject to conditions of this Agreement, at the Closing (defined below), the
Cryocon Holders shall sell, transfer, assign, convey and deliver to the Company,
free and clear of all adverse claims, security interests, liens, claims and
encumbrances (other than restrictions under applicable securities laws or as
expressly agreed to herein by the Company), and the Company or its subsidiary
shall purchase, accept and acquire, all of the 11,000,000 Cryocon Shares from
the Cryocon Holders, such purchase and sale being herein sometimes referred to
as the "Exchange." The Company shall receive good and merchantable title to the
Cryocon Shares. It is intended among all the parties that the Exchange shall
constitute a tax free reorganization within the meaning of Sections 351 and
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended ("Code").
1.2 Issuance of Exchange Shares. In full payment for the
Cryocon Shares, the Company shall ratably issue and deliver to the Cryocon
Holders in proportion to their respective ownership of the Cryocon Shares, as
set forth on SCHEDULE 1.1 to this Agreement, attached hereto and incorporated
herein, an aggregate of 44,000,000 shares of the Company's common stock, no par
value per share (the "Exchange Shares"), being four (4) Exchange Shares for
every Cryocon Share exchanged.
The Exchange Shares will, when issued, be validly issued, fully paid,
and nonassessable; the sale, issuance and delivery of the Exchange Shares on the
terms herein contemplated has been authorized by all requisite corporate action
of the Company; and the Exchange Shares will not be subject to any preemptive
rights, options or similar rights on the part of any shareholder or creditor of
the Company or any other person. The Exchange Shares shall be issued to the
Cryocon Holders in the respective denominations set forth on SCHEDULE 1.2 to
this Agreement.
1.3 Exchange Shares Not Registered. The Exchange Shares when
issued will not be registered under the Securities Act of 1933, as amended
("Act"), or the securities laws of any state or states, but shall be issued in
reliance upon the exemptions from registration provided by Section 4(2) of the
Act and/or Rule 505 or 506 of Regulation D under the Act and under analogous
state securities laws, on the grounds that the Exchange does not involve any
public offering. The Exchange Shares will be "restricted securities" as that
term is defined in Rule 144(a) of the General Rules and Regulations under the
Act and must be held indefinitely, unless they are subsequently registered under
the Act or an exemption from the Act's registration requirements is available
for their resale. The prior written consent of the Company will be necessary for
any transfer of any or all of the Exchange Shares, unless the shares have been
duly registered under the Act or the transfer is made in accordance with Rule
144 or other available exemption under the Act. Nothing in this Agreement,
however, precludes the subsequent registration of the Exchange Shares under the
Act for resale on any appropriate form. All certificates evidencing the Exchange
Shares shall, unless and until removed in accordance with law, bear a
restrictive legend substantially in the following form:
"The shares represented by this Certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"),
and are "restricted securities" as that term is defined in Rule 144
under the Act. These shares may not be offered for sale, sold or
otherwise transferred except pursuant to an effective registration
statement under the Act, or pursuant to an exemption from registration
under the Act."
1.4 Registration of Conversion Shares. The Company
acknowledges that Cryocon has sold convertible promissory notes (the "Cryocon
Notes") in the aggregate principal amount of US$4,275,000. The Cryocon Notes are
convertible into shares of the common stock of Cryocon, any successor, or
Cryocon's parent company. The Company agrees that, following the Closing, the
Cryocon Notes shall be convertible into shares of the Company's common stock.
The parties agree that as soon as practicable following the Closing, the Company
shall file a registration statement on an appropriate form for the purpose of
registering under the Act all of the shares issuable upon conversion of
principal and interest owed under the Notes.
1.5 Closing. Subject to the conditions precedent set forth
herein, the consummation of the Control Exchange and any other transactions
herein contemplated ("Closing") shall take place either at the offices of
Xxxxxxx & Company, 00 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 or by
the exchange of documents via courier, on or before May 31, 2000, which is
herein referred to as the "Closing Date". The parties may by unanimous agreement
provide for one or more postponements of the Closing.
1.6 Officers and Directors of the Company. At the Closing, the
current officers and directors of the Company shall resign as necessary, each
resignation to confirm in writing that the resigning persons do not owe and are
not owed anything by the Company, and the persons named below shall be elected
to the offices and directorships shown next to their respective names:
Name Position
---- --------
Xxxxxx Xxxxxxx DIRECTOR, Chairman of the Board, President
Xxxxx Xxxxxxx DIRECTOR, Vice Chairman of the Board
Xxxxx Xxxxxxx DIRECTOR
Xxxxx Xxxx DIRECTOR
1.7 Further Assurances. Cryocon and the Cryocon Holders agree
to execute all documents and instruments and to take or to cause to be taken all
actions which the Company deems necessary or appropriate to complete the
transactions contemplated by this Agreement, whether before or after the
Closing.
2. OTHER AGREEMENTS OF THE PARTIES.
2.1 Initial Reverse Split; Etc. The parties agree that as soon
as possible following the Closing, the common stock of the Company shall undergo
a 1:4 reverse split pursuant to which every common share of the Company then
issued and outstanding shall be changed into one-fourth (1/4th) of a common
share (the "Initial Reverse Split"). The parties also agree that, in conjunction
with the Initial Reverse Split, the number of common shares authorized shall be
increased so that 50,000,000 common shares shall be authorized and available
after giving effect to the Initial Reverse Split.
2.2 Reverse Splits and Certain Recapitalizations Prohibited.
The parties acknowledge that, following the Closing, the persons who are
shareholders of the Company immediately preceding the Closing, will no longer
hold a majority of the Company's voting power. The Company and all other parties
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expressly agree that, during the two-year period following the Closing
("Period"), the Company shall not effect any "prohibited recapitalization." The
term "prohibited recapitalization" being defined as any reverse split or
combination of its common shares other than the Initial Reverse Split, or any
merger, stock exchange or other reorganization which has the effect of changing
any issued and outstanding common share of the Company into less than one common
share; provided, that the term "prohibited recapitalization" shall not include
any cancellation, partial cancellation or readjustment of shares issued by the
Company in the normal course of business which relates only to shares issued
after the Closing Date and not to all common shares of the Company then issued
and outstanding. The Cryocon Holders expressly agree that, during the Period,
they will not vote for or support any prohibited recapitalization nor grant a
proxy or other voting right to a person other than a Cryocon Holder to vote at
any meeting or act by written consent on a proposal to effect a prohibited
recapitalization, and will affirmatively oppose any attempt to effect a
prohibited recapitalization during the Period unless approved in a manner
permitted by this Agreement.
2.3 Right to Enforce Provisions. The provisions set forth in
Section 2.2 are intended for the protection and benefit of all persons who are
shareholders of the Company immediately prior to the Closing and their
respective successors (the "Protected Shareholders"), all of whom are and shall
be deemed third party beneficiaries of such provisions, and all parties agree
that such provisions and the duration of the Period are reasonable. Any one or
more Protected Shareholders may bring an injunctive action to prevent a
prohibited recapitalization, an action to force the Company to revoke or rescind
a prohibited recapitalization as if it had never been effected, an action to
recover on the Company's behalf any damages suffered by effecting the prohibited
recapitalization, or any one or more of such actions, or may otherwise
judicially enforce such provisions. Any Protected Shareholder prevailing in such
injunctive or other action shall be entitled to reimbursement from the Company
and all officers and directors involved in effecting the prohibited
recapitalization for costs and reasonable attorneys' fees incurred in bringing
such action(s).
2.4 Change of the Company's Name. The parties agree that, as
soon as reasonably possible following the Closing, a special meeting of the
Company's shareholders shall be called for the purpose of voting upon a change
of the Company's name to Cryocon Inc. or a substantially similar name. The
Cryocon Holders agree to vote their Exchange Shares in favor of the name change.
2.5 Company and Cryocon to Obtain Audited Financial
Statements. The parties acknowledge that the Company has not yet obtained its
audited financial statements for fiscal year ended March 31, 2000. It is agreed
that as soon as reasonably possible after the Closing, the Company and Cryocon
(including all Cryocon subsidiaries) shall obtain the audited financial
statements called for by Item 310 of Regulation S-B of the Securities and
Exchange Commission, including the required balance sheets, and statements of
cash flows, operations and changes in stockholders' equity, together with all
required footnotes and schedules, audited by certified public accountants who
are members of the SEC Practice Section of the AICPA. Such statements shall be
prepared in accordance with generally accepted accounting principles and
applicable SEC rules and regulations, applied on a consistent basis.
2.6 Stipulation as to Status of Certain Shareholders of the
Company; Etc. The Company, Cryocon and the Cryocon Holders stipulate and
acknowledge that following the Closing, current Company officers Egin Bresnig
and Xxxx Xxxxxx and Company counsel Xxxx X. Xxxxxxx Xx. will cease to be
affiliates of the Company, as the term "affiliates" is defined in Rule 144(a)
under the Act, for any reason. The Company, Cryocon and the Cryocon Holders have
done such investigation as they have deemed necessary and have satisfied
themselves fully on this point. Egin Bresnig and Xxxx Xxxxxx will be, at any
time commencing three months after the Closing Date, entitled to removal of all
restrictive legends from and stop transfer orders affecting the certificate(s)
evidencing their outstanding shares of the Company at any time upon request
without need of legal opinion. The Company has issued to Bresnig, Wicker and
Xxxxxxx certain options exercisable for a two-year period to purchase an
aggregate of 1,500,000 common shares of the Company at a price of $0.125 per
share (the "Options"), as shown below:
Options Held
------------
Egin Bresnig 500,000
Xxxx Xxxxxx 500,000
Xxxx X. Xxxxxxx Xx. 500,000
---------
TOTALS 1,500,000
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The Company, Cryocon and the Cryocon Holders acknowledge and agree that the
foregoing shares issuable to Bresnig, Wicker and Xxxxxxx upon exercise of the
Options (i) have been or prior to Closing will be registered under the Act under
cover of Form S-8, and (ii) when the 1,500,000 shares are purchased by them upon
due exercise of the Options following the Closing, such shares will be duly
authorized, validly issued and fully paid, and all such shares will be
unrestricted and free trading.
2.7 The Company's Capitalization at Closing; Sale of Certain
Shares. At the Closing, the Company shall have issued and outstanding not more
than 4,995,730 shares of common stock, 5,930 shares of Series A Preferred Stock,
and the Options to purchase an aggregate of 1,500,000 shares common stock as
disclosed in Section 2.6. Other than such shares and Options, at the Closing the
Company will not without the prior written consent of Cryocon have issued or
outstanding any other shares of stock, nor any options or other rights to
purchase its common stock, nor any instrument convertible into or exchangeable
for its common stock. No shareholder of the Company will have any preemptive
right or similar right to purchase the Exchange Shares or other stock of the
Company.
2.8 Issuance and Distribution of Rights. As promptly as
practicable after the Closing, the Company shall distribute to persons who are
shareholders of the Company immediately prior to the Closing (or their
successors) rights or warrants permitting each holder to purchase up to three
shares of common stock of the Company for each share held by them immediately
following the Initial Reverse Split. Such rights or warrants shall be
exercisable at a formula that results in an exercise price of eighty percent
(80%) of the Market Price on the date of exercise, Market Price being defined as
the closing sale price on the date of exercise. Notwithstanding the foregoing
sentence, however, the minimum exercise price shall be $2.00 per share. The date
of exercise shall be the date the right or warrant is duly surrendered to the
Company's transfer agent for exercise, with proper payment attached, and every
exercise shall be deemed made after the market close on the date of exercise.
Such rights or warrants and the common shares purchasable upon their exercise
shall be registered under the Act prior to distribution. Prior to distribution,
such rights or warrants and the common stock purchasable upon their exercise
shall have been registered under the Act on an appropriate form.
3. CRYOCON'S REPRESENTATIONS AND WARRANTIES. Cryocon hereby represents
and warrants that the following are true and correct as of the date hereof and
will be true and correct through the Closing Date as if made on that date:
(a) Organization and Standing. Cryocon is a corporation duly
organized, validly existing and in good standing under the laws of Utah, with
all requisite power and authority to carry on the business in which it is
engaged, to own the properties and assets it owns, and is duly qualified and
licensed to do business and is in good standing in all jurisdictions where the
nature of its business makes such qualification necessary.
(b) Capitalization. Cryocon's authorized capital stock
consists of 20,000,000 shares of common stock, with no par value, of which
11,000,000 shares have been issued and are outstanding, and no shares of
Preferred Stock are authorized. All of the Cryocon Shares have been duly
authorized, validly issued, and are fully paid and nonassessable. Cryocon has
sold convertible promissory notes (the "Cryocon Notes") in the aggregate
principal amount of US $4,275,000. The Cryocon Notes are convertible into shares
of the common stock of either Cryocon, any successor, Cryocon's parent company,
or the Company, after the Closing. Except as expressed in this section, Cryocon
does not have any other outstanding equity securities, options, warrants or
similar instruments, and is not a party to or bound by any agreement,
instrument, arrangement, contract, obligation, commitment or understanding of
any character, whether written or oral, express or implied, whereby Cryocon is
bound to issue shares of its capital stock or any instrument or right
convertible into or exchangeable for shares of its capital stock, nor relating
to the sale, assignment, encumbrance, conveyance, transfer or delivery of any
capital stock of Cryocon of any type or class. SCHEDULE 1.2 sets forth the names
and addresses of all holders of capital stock of Cryocon and the number of
shares of common stock held by each, which is an accurate and complete list. No
person has preemptive or similar rights as to the Cryocon Shares. Cryocon will
prior to Closing provide to the Company a copy of all agreements and
understandings between Cryocon and any third parties.
(c) Subsidiaries. Cryocon currently has and at Closing will
have no subsidiaries.
(d) Litigation. There are no claims, actions, suits,
proceedings or investigations pending or threatened against or affecting the
Cryocon Shares, Cryocon or any of its properties or assets in any court or by or
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before any federal, state, municipal or other governmental department,
commission, board, bureau, agency or other instrumentality, domestic or foreign,
or arbitration tribunal or other forum which, if determined adversely to
Cryocon, would materially affect its business, prospects, properties or
financial condition or Cryocon's right to conduct its business as being
conducted or expected to be conducted, except as disclosed on SCHEDULE 3(d).
There are no judgments, decrees, injunctions, writs, orders or other mandates
outstanding to which the Cryocon Shares or Cryocon is a party or by which it is
bound or affected, except as disclosed on SCHEDULE 3(d). Copies of material
pleadings shall accompany such schedule.
(e) Estoppel. All statements made in this Agreement, or in any
Exhibit or Schedule hereto, or in any document or certificate executed and
delivered herewith, by Cryocon are true, correct and complete as of the date of
this Agreement and will be so as of the Closing Date. All statements contained
in any certificate made by any official of Cryocon and delivered to the Company
shall be deemed representations and warranties of Cryocon.
(f) Compliance with Laws and Permits. Cryocon has complied in
all material respects with its articles of incorporation and bylaws (each as
amended to date), all applicable laws, regulations and rules, all applicable
orders, judgments, writs, decrees or injunctions of federal, state and municipal
governments or any department, agency or other instrumentality thereof, domestic
or foreign, applicable to its business or properties, and has not done or
omitted to do any act or acts which singly or in the aggregate are in violation
of any of the foregoing. Cryocon has obtained all federal, provincial and
municipal licenses and permits necessary to its properties and operations, is
not in violation of any such license or permit and has not received any
notification that any revocation or limitation thereof is pending or threatened.
(g) No Undisclosed Material Liabilities. Cryocon has not
incurred any liabilities or obligations whatever (whether direct, indirect,
accrued, contingent, absolute, secured or unsecured or otherwise), including
liabilities as guarantor or surety or otherwise for the obligations of others
and tax liabilities due or to become due, except as described in writing to the
Company or on SCHEDULE 3(g). There is no basis for any material claim against
Cryocon's assets, which involves an amount in excess of $10,000, except as
disclosed in writing to the Company. Cryocon has no creditors whose prior
consent might be required by law to the Exchange.
(h) Material Transactions and Adverse Changes. Except as has
been disclosed in writing to the Company, Cryocon has not and as of the Closing
Date will not have: (i) suffered any materially adverse change in its assets
taken as a whole; (ii) suffered any damage or destruction in the nature of a
casualty loss to any one or more of its assets, whether or not covered by
insurance, which singly or in the aggregate are materially adverse to the
properties or business of Cryocon; (iii) made any change in any method of
accounting or accounting practice, including the revaluation of any of its
assets; or (iv) agreed in writing or otherwise to take any action prohibited in
this Section.
(i) Taxes. All income, excise, unemployment, social security,
occupational, franchise, ad valorem and other taxes, duties, assessments or
charges levied, assessed or imposed upon Cryocon by any federal, state or
municipal government or subdivision or instrumentality thereof have been duly
paid or adequately provided for, and all required tax returns or reports
concerning any such items have been duly filed. Adequate reserves have been
established for all income and other tax liabilities, except as otherwise
disclosed on SCHEDULE 3(i). Cryocon has not waived any statute of limitations
with respect to any tax liability whatever for any period prior to the date of
this Agreement or agreed to any extension of time with respect to a tax
assessment or liability. No consents have been filed by Cryocon pursuant to
Section 341(f) of the Internal Revenue Code of 1986, as amended.
(j) Contracts. Attached to this Agreement, as SCHEDULE 3(j) is
a listing of all material contracts to which Cryocon is a party. With respect to
each such contract, except as disclosed in writing to the Company, Cryocon is
not in default, the contract is legal, valid, binding, in full force and effect
and enforceable in accordance with its terms, and the contract will continue
after the Closing to be legal, valid, binding, in full force and effect in
accordance with its terms. Contracts or commitments described in any other
Schedule need not be disclosed in SCHEDULE 3(j).
(k) Indebtedness to and from Affiliates. Except as disclosed
on SCHEDULE 3(k), Cryocon is not indebted to any officer, director, employee or
shareholder thereof as of the date of this Agreement, and no money or property
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is owed to Cryocon by any officer, director, employee or shareholder thereof,
and none will be owed as of the Closing Date.
(l) Documents Genuine. All originals and/or copies of
Cryocon's articles of incorporation and bylaws, each as amended to date, and all
minutes of meetings and written consents in lieu of meetings of directors and
shareholders of Cryocon, financial data, and any and all other documents,
material, data, files, or information which have been or will be furnished to
the Company, are and will be true, complete, correct and unmodified originals
and/or copies of such documents, information, data, files or material.
(m) Financial Statements and Records. Cryocon will provide to
the Company two years' of financial statements, and all such statements shall
fairly present the assets, liabilities and financial condition of Cryocon as of
the respective dates thereof, and all shall have been prepared in conformity
with generally accepted accounting principles, consistently applied during the
periods covered. For purposes of this Agreement, such statements shall include
all notes thereto. Cryocon also will furnish to the Company copies of its other
books, accounts and records as requested.
(n) Officers and Directors Salaries. Cryocon will provide to
the Company a list of all its officers and directors, reflecting the job
description and salary of each person.
(o) Insurance. Cryocon has insurance policies in effect.
(p) Authorization and Validity. The execution, delivery and
performance by Cryocon of this Agreement and any other agreements contemplated
hereby, and the consummation of the transactions contemplated hereby and
thereby, have been duly authorized by Cryocon and all necessary approvals of the
shareholder(s) of Cryocon will have been obtained by the Closing Date. This
Agreement and any other agreement contemplated hereby have been or will be as of
the Closing Date duly executed and delivered by Cryocon and constitutes and will
constitute legal, valid and binding obligations of Cryocon, enforceable against
it in accordance with their respective terms, except as may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
generally or the availability of equitable remedies.
(q) Consents; Approvals; Conflict. Except for compliance with
applicable federal and state securities laws, no consent, approval,
authorization or order of any court or governmental agency or other body is
required for Cryocon and the Cryocon Holders to consummate the Exchange. Neither
the execution, delivery, consummation or performance of this Agreement shall
conflict with, or constitute a breach of, and no prior approval is necessary by
or under, Cryocon's articles of incorporation, bylaws or any note, mortgage,
indenture, deed of trust, lease, obligation, or other agreement or instrument to
which Cryocon is a party.
(r) Intellectual Property. Attached to this Agreement, as
SCHEDULE 3(r) is a description of all registered trademarks, trademarks, service
marks, copyrights, trade names and licenses, owned or held by Cryocon and
applications pending therefor. Copies of each such right or application shall be
furnished to the Company. Cryocon has not interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any patent, trademark,
trade name, service xxxx or copyright belonging to any third person, and Cryocon
has never received any charge, complaint, claim, demand or notice alleging any
such interference, infringement or misappropriation. Cryocon owns or hold
adequate licenses or other rights to use all patents, trademarks, trade names,
service marks and copyrights used in its business as now conducted, and such use
does not conflict with, infringe upon or violate the rights of any third party
in a manner which might have a materially adverse effect upon Cryocon.
(s) Restrictive Covenants. Prior to the consummation of the
Exchange, Cryocon shall conduct its business in the ordinary and usual course
without unusual commitments and in compliance with all applicable laws, rules,
and regulations. Furthermore, Cryocon will not, without the prior written
consent of the Company, (i) make any changes in its capital structure, (ii)
incur any liability or obligation other than current liabilities incurred in the
ordinary and usual course of business, (iii) incur any material indebtedness for
borrowed money, (iv) make any loans or advances other than in the ordinary and
usual course of business, (v) declare or pay any dividend or make any other
distribution with respect to its capital stock, (vi) issue, sell, or deliver or
purchase or otherwise acquire for value any of its stock or other securities, or
(vii) mortgage, pledge, or subject to encumbrance any of its assets or
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properties or sell or transfer any of its assets or properties, except in the
ordinary and usual course of business.
(t) Disclaimer of Further Warranties; Etc. Except as expressly
set forth in this Agreement and the Schedules and Exhibits hereto, Cryocon has
made no other representations or warranties to Company in connection with the
Exchange. Cryocon's decision to enter into the Exchange is based upon its own
independent judgment and investigation and not on any representations and
warranties of the Company other than those expressly stated in this Agreement
and in the Schedules and Exhibits hereto.
4. REPRESENTATIONS AND WARRANTIES OF THE CRYOCON HOLDERS. The Cryocon
Holders each represent and warrant to the Company that the following are true
and correct as of the date hereof and will be true and correct through the
Closing Date as if made on that date:
(a) Each Cryocon Holder owns of record and beneficially all
the Cryocon Shares respectively shown next to his, her or its name on SCHEDULE
1.2 to this Agreement; and his, her or its Cryocon Shares are free and clear of
all liens, claims, rights or other encumbrances whatever and of all options and
similar rights of third persons; and no person has or will have any right in and
to such shares except as are created by force of law under any marital,
community property or similar rights. No third party has or at Closing will have
any right of first refusal, pre-emptive right, option or similar right to
acquire any of the Cryocon Shares except as disclosed to the Company in writing
prior to the Closing. Each Cryocon Holder represents and warrants that he, she
or it is not now insolvent and will not be insolvent after selling and
delivering the Cryocon Shares to the Company on the terms of this Agreement, and
each Cryocon Holder is receiving new consideration at least equal to the full
and fair value of the Cryocon Shares being sold. Each Cryocon Holder has the
full right, power and legal capacity to enter into this Agreement and sell and
deliver the Cryocon Shares to the Company. As to each Cryocon Holder, which is a
corporation or other entity, all requisite corporate or equivalent action has
been taken necessary to approve the execution and performance of this Agreement.
(b) Cryocon and the Cryocon Holders understand and acknowledge
that the Company is not profitable and does not have full-time or professional
management, and that the officers and directors of the Company after the Closing
will be the current officers and directors of or persons designated by Cryocon.
Each Cryocon Holder recognizes that the Exchange Shares are speculative and
involve a high degree of risk, and that the prospects and future success of the
Company depend principally upon the Cryocon Holders and management designated by
Cryocon.
(c) Each Cryocon Holder acknowledges and agrees that he, she
or it or his, her or its representatives have been furnished with or offered
substantially the same kind of information regarding the Company and its
business, assets, financial condition and plan of operation as would be
contained in a registration statement and included prospectus prepared in
connection with a public offering of the Exchange Shares. Each Cryocon Holder
further represents that he, she or it has had an opportunity to ask questions of
and receive answers from the Company regarding the Company and its business,
assets, results of operations, financial condition and plan of operation and the
terms and conditions of the issuance of the Exchange Shares.
(d) In connection with the issuance and delivery of the
Exchange Shares, each of the Cryocon Holders understands and acknowledges that
the Exchange Shares have not been registered under the Act or any state laws in
reliance upon exemptions from registration and that such shares will be
restricted and subject to significant restrictions on transfer, as described in
Section 1.3 of this Agreement. Each Cryocon Holder is acquiring the Exchange
Shares for his, her or its own account, and not for the account of any other
person and not for distribution, assignment or resale to others, or for pledge
or hypothecation, and no other person has or is intended to have a direct or
indirect ownership or contractual interest in the Exchange Shares except as may
exist or arise under marital property laws or otherwise by operation of law.
(e) The Cryocon Holder, alone or together with the Cryocon
Holder's adviser(s), has such knowledge and experience in financial, tax and
business matters as to enable Cryocon Holder to utilize the information made
available by the Company, in connection with the Exchange and issuance of the
Exchange Shares, to evaluate the merits and risks of acquiring the Exchange
Shares and to make an informed investment decision with respect thereto.
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(f) All information which each Cryocon Holder has provided or
will provide to the Company is or will be correct and complete as of the date
furnished to the Company, and, if there should be any material change in such
information prior to the Closing as to a Cryocon Holder, that Cryocon Holder
will immediately provide the Company with such information.
(g) No Cryocon Holder was solicited by the Company by any form
of general solicitation or general advertising, including but not limited to any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio, or
made available over telephone lines by any information service, or any seminar
or meeting whose attendees had been invited by any means of general solicitation
or general advertising.
(h) Except as expressly set forth in this Agreement and the
Schedules and Exhibits hereto, the Company has not made any representation or
warranty to any Cryocon Holder in connection with this Agreement. Each Cryocon
Holder's decision to enter into the Exchange is based upon his, her or its own
independent judgment and investigation and not on any representations and
warranties of the Company other than those expressly stated in this Agreement
and in the Schedules and Exhibits hereto.
(i) To the best of the knowledge of each Cryocon Holder, all
of the representations and warranties of Cryocon set forth in this Agreement are
accurate and true.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Unless specifically
stated otherwise, the Company represents and warrants to the other parties that
the following are true and correct as of the date hereof and will be true and
correct through the Closing Date as if made on that date.
(a) Organization and Good Standing; Authority. The Company is
and on the Closing Date will be duly organized, validly existing and in good
standing under the laws of the State of Colorado, entitled to own its properties
and operate its business as now being conducted. The Company has corporate power
and authority to enter into this Agreement and the related agreements
contemplated herein, to executive and deliver and perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby.
(b) Authorized Capitalization. As provided in its Articles of
Incorporation, the authorized capital stock of the Company consists of
50,000,000 shares of common stock, no par value, of which 4,995,730 are
outstanding; 1,000,000 shares of Series A, non-voting convertible preferred
stock, no par value, of which 5,390 shares of preferred stock are and at Closing
will be outstanding; 1,000,000 shares of Series B, non-voting convertible
preferred stock, no par value, of which no shares are or shall at Closing be
outstanding; 1,000,000 shares of Series C, non-voting convertible preferred
stock, no par value, of which no shares are or shall at Closing be outstanding;
and 1,500,000 shares of Series 1996, non-voting convertible preferred stock, no
par value, of which no shares are or shall at Closing be outstanding.
(c) Outstanding Options, Warrants or Other Rights. As
disclosed in Section 2.6, the Company has granted and issued certain Options
entitling the holders thereof to purchase an aggregate of 1,500,000 shares of
common stock for a period of two years at a price of US$0.125 per share. Copies
of the Options have been or will be furnished to Cryocon. Except as expressly
set forth, herein, the Company does not have outstanding any option, warrant or
similar instrument and is not a party to or bound by any agreement, instrument,
arrangement, contract, obligation, commitment or understanding of any character,
whether written or oral, express or implied, whereby the Company is bound to
issue shares of its capital stock or any instrument or right convertible into or
exchangeable for shares of its capital stock, nor relating to the sale,
assignment, encumbrance, conveyance, transfer or delivery of any capital stock
of the Company of any type or class. The Company shall provide to Cryocon a list
of all holders of the Company's capital stock and stock options, the number of
shares held by each and the number of each certificate held, duly certified by
the Secretary of the Company.
(d) Subsidiaries. The Company has and as of the Closing will
have no subsidiaries.
(e) Documents Genuine. All originals and/or copies of the
Company's articles of incorporation and bylaws, each as amended to date, and all
minutes of meetings and written consents in lieu of meetings of shareholders,
8
directors and committees of directors of the Company, financial data, and any
and all other documents, material, data, files, or information which have been
or will be furnished to Cryocon, are and will be true, complete, correct and
unmodified originals and/or copies of such documents, information, data, files
or material.
(f) Litigation. There are no claims, actions, suits,
proceedings or investigations pending or threatened against or affecting the
Company in any court or by or before any federal, state, municipal or other
governmental department, commission, board, bureau, agency or other
instrumentality, domestic or foreign, or arbitration tribunal or other forum.
There are no judgments, decrees, injunctions, writs, orders or other mandates
outstanding to which the Company is a party or by which it is bound or affected.
(g) Compensation Plans. Except as described below, the Company
has not authorized and does not have in effect any stock options or stock
purchase plans, dividend reinvestment plans or similar plans pursuant to which
any person is entitled to acquire capital stock of the Company or any securities
convertible into or exchangeable for its capital stock. The Company has
delivered to Cryocon a copy of each plan and grant of common shares and options
described below. No shares will be awarded or issued pursuant to such plans, or
otherwise, without the prior written authorization of Cryocon.
(i) The Company has in effect a 1993 Compensatory
Stock Option Plan, covering 1,000,000 shares of the Company's common
stock. No options have been granted and none will be granted prior to
Closing pursuant to this Plan.
(ii) The Company has in effect a 1993 Employee Stock
Compensation Plan covering 500,000 of the Company's common shares,
pursuant to which the Company may award shares of common stock to
persons defined therein as employees. The Company has not awarded any
shares under this plan, and no shares will be awarded under this plan
prior to Closing without Cryocon's prior written consent.
(h) Authorization and Validity. The execution, delivery and
performance by the Company of this Agreement and any other agreements
contemplated hereby, and the consummation of the transactions contemplated
hereby and thereby, have been duly authorized by the Company. This Agreement and
any other agreement contemplated hereby have been or will be as of the Closing
Date duly executed and delivered by the Company and constitute and will
constitute legal, valid and binding obligations of the Company, enforceable
against it in accordance with their respective terms, except as may be limited
by applicable bankruptcy, insolvency or similar laws affecting creditors' rights
generally or the availability of equitable remedies.
(i) Financial Statements. The Company will provide to Cryocon
all of the Company's financial books and records such audited and unaudited
financial statements of the Company, back to inception, as exist and as Cryocon
requests. All such statements shall fairly present the assets, liabilities and
financial condition of the Company as of the respective dates thereof, and all
shall have been prepared in conformity with generally accepted accounting
principles, consistently applied during the periods covered. For purposes of
this Agreement, such statements shall include all notes thereto.
(j) No Undisclosed Material Liabilities. The Company has not
incurred any liabilities or obligations whatever (whether direct, indirect,
accrued, contingent, absolute, secured or unsecured or otherwise), which singly
or in the aggregate are material to it, except as disclosed in the Company's
financial statements or otherwise disclosed in writing to Cryocon.
(k) Taxes. All income, excise, unemployment, social security,
occupational, franchise and other taxes, duties, assessments or charges levied,
assessed or imposed upon the Company by the United States or by any state or
municipal government or subdivision or instrumentality thereof have been duly
paid or adequately provided for, and all required tax returns or reports
concerning any such items have been duly filed or will be so filed.
(l) Indebtedness to or from Affiliates. The Company is not and
will not be indebted to any officer, director, employee or shareholder thereof
9
as of the Closing Date. No money or property is owed to the Company by any
officer, director, employee or shareholder thereof, and none will be owed as of
the Closing.
(m) Salaries. No person currently receives a salary or other
cash compensation from the Company, and no person will receive a salary or other
cash compensation from the Company prior to Closing.
(n) Insurance. The Company does not now have any insurance
policy in effect and will not obtain any insurance policy prior to Closing.
(o) Books, Records and Accounts. Except for the minute book
and accounting and corporate records of the Company furnished to Cryocon, there
are no other books, records or accounts of the Company. Cryocon shall have the
right to review and obtain the records, books and accounts of the Company, all
and sundry.
(p) Estoppel. All statements made herein, or in any Exhibit or
Schedule hereto, or in any document or certificate executed and delivered
herewith by the Company are true, correct and complete as of the date of this
Agreement and will be so as of the Closing. All statements contained in any
certificate made by any officer or director of the Company and delivered to
Cryocon shall be deemed representations and warranties of the Company.
(q) Consents; Approvals; Conflict. No consent, approval,
authorization or order of any court or governmental agency or other body is
required for the Company to execute and perform its obligations under this
Agreement. Neither the execution, delivery, consummation or performance of this
Agreement shall conflict with, constitute a breach of the Company's articles of
incorporation and bylaws, as amended to date, or any note, mortgage, indenture,
deed of trust or other agreement of instrument to which the Company is a party
or by which it is bound nor, to the best of the Company's knowledge and belief,
any existing law, rule, regulation, or any decree of any court or governmental
department, agency, commission, board or bureau, domestic or foreign, having
jurisdiction over the Company.
(r) Restrictive Covenants. Prior to the consummation of the
proposed Exchange, the Company shall not engage in any business or activity
other than attempting to consummate the Exchange. Furthermore, the Company will
not, without the prior written authorization of Cryocon, (i) make any changes in
its capital structure, (ii) incur any liability or obligation other than current
liabilities incurred in the ordinary and usual course, (iii) declare or pay any
dividend or make any other distribution with respect to its capital stock, (iv)
issue, sell, or deliver or purchase or otherwise acquire for value any of its
stock or other securities, (v) make any investment of a capital nature, or (vi)
enter into any contract, agreement, or other commitment which is material to the
Company.
(s) Disclaimer of Further Warranties; Etc. Except as expressly
set forth in this Agreement and the Schedules and Exhibits hereto, Cryocon has
made no other representation or warranty to the Company in connection with the
Exchange. The Company's decision to enter into the Exchange is based upon the
Company's own independent judgment and investigation and not on any
representations and warranties of Cryocon other than those expressly stated in
this Agreement and in the Schedules and Exhibits hereto.
6. CONDITIONS TO OBLIGATIONS OF THE PARTIES; DELIVERIES. All
obligations of the parties under this Agreement are subject to the accuracy and
truthfulness of all representations of the other parties, and the fulfillment,
prior to the Closing, of all conditions precedent and to performance of all
covenants and agreements and completion of all deliveries contemplated herein,
unless specifically waived in writing by the party entitled to performance or to
demand fulfillment of the covenant or delivery of the documents.
6.1 Documents to be Delivered to the Company. At the Closing,
the following documents shall be delivered to the Company by Cryocon or the
Cryocon Holders, as the case may be, which documents shall be satisfactory in
form and content to the Company's counsel:
(a) Certificates executed by the chief executive officer
and the chief financial or accounting officer of
Cryocon, dated the Closing Date, certifying that the
representations and warranties of Cryocon contained
in this Agreement and the information set forth in
all Schedules and Exhibits of Cryocon hereto are then
true and correct and that Cryocon has complied with
10
all agreements and conditions required by this
Agreement and all related agreements to be performed
or complied with by Cryocon.
(b) A copy of the directors' resolution or the minutes of
the meeting of the directors of Cryocon approving the
execution and performance of this Agreement.
(c) All certificates evidencing the Cryocon Shares, each
endorsed on the reverse side for transfer or
accompanied by a signed stock power in form
satisfactory to the Company.
(d) All Schedules, properly filled out, and all documents
and Exhibits called for in this Agreement.
(e) The same information as to Cryocon as called for in
Section 6.2(a) through (l).
6.2 Documents to be Delivered to Cryocon and the Cryocon
Holders. Prior to the Closing, and as a condition precedent to Closing, each of
the following documents shall be delivered to Cryocon and the Cryocon Holders by
the Company, and the documents must be satisfactory in form and content to
Cryocon Holders, Cryocon and its counsel:
(a) Current Company Bylaws.
(b) Articles of Incorporation, including all amendments.
(c) All Certificates of Amendment and Restatements to
Articles of Incorporation.
(d) Certificate of Designation Establishing Series A,
Series B, Series C, and 1996 Non Voting Preferred
Stock. -
(e) Minutes from all Board of Directors Meetings and
Shareholders Meetings from inception.
(f) All State and Federal Tax Returns filed from 1996 to
present (including extensions).
(g) Description of all Company Assets and evidence of
ownership, including all deeds, judgments and
contracts.
(h) Documentation regarding legal actions to foreclose on
Mortgages in Germany, including the attorney (s)
names that handled the manners.
(i) Explanation of the preferred shares issued, including
the name of holders, number of shares held, and their
rights pursuant to the ownership of the shares.
(j) Description of all real property owned by Company,
including copies of title reports and deeds of
trusts.
(k) List of all Persons holding options to purchase
common stock.
(l) Shareholder List from Transfer Agent, and copies of
all written instructions to Transfer Agent to issue
shares from April 1993 to present.
(m) A copy of the Options granted by the Company to Egin
Bresnig, Xxxx Xxxxxx, and Xxxx X. Xxxxxxx Xx., and
described in Section 2.6.
(n) To the Cryocon Holders, certificates evidencing the
Exchange Shares in the proper denominations.
(o) To Cryocon, a certificate executed by the Company
11
dated the Closing Date, certifying that the
representations and warranties of the Company
contained in this Agreement and the information set
forth in all Schedules and Exhibits of the Company
are then true and correct and that the Company has
complied with all agreements and conditions required
by this Agreement to be performed or complied with by
it.
(p) To Cryocon, a copy of the directors' resolution or
the minutes of the meeting of the directors of the
Company approving the execution and performance of
this Agreement.
(q) All Schedules, properly filled out, and all Exhibits
called for in this Agreement.
6.3 Conditions Precedent. The obligations of the parties under
this Agreement are subject to the satisfaction of the following conditions (in
addition to other conditions and terms of this Agreement), unless waived in
writing, on or prior to the Closing:
(a) Representations and Warranties Correct. The
representations and warranties of every party contained in this Agreement shall
be in all material respects true and correct on and as of the Closing Date as if
made on such date.
(b) Compliance. The Company, Cryocon and the Cryocon Holders
each shall have performed all covenants and agreements, satisfied all conditions
and complied with all other terms and provisions of this Agreement to be
respectively performed, satisfied or complied with by it as of the Closing Date.
(c) No Errors or Misrepresentations. The Company shall not
have discovered any material error, misstatement or omission in or failure of
any representation or warranty made by any of the other parties, and Cryocon
shall not have discovered any material error, misstatement or omission in or
failure of any representation or warranty made by the Company.
(d) Due Diligence Examination. The Company and Cryocon shall
have completed their due diligence examination of the other party to their
satisfaction, including all books, records, contracts, documents listed in
paragraph 6.2 and other documents and all financial affairs of the other party.
(e) Legal Matters. All legal matters in connection with this
Agreement and the consummation of all transactions herein contemplated, and all
documents and instruments delivered in connection herewith shall be reasonably
satisfactory in form to each party.
(f) No Litigation or Proceedings. No injunction or restraining
order of any federal or state court is in effect which prevents the purchase of
the Assets or issuance and delivery of the Exchange Shares, and no lawsuit or
other proceeding has been filed by any person by the Closing Date contesting or
attempting to enjoin either action, and no action is taken and no law is passed
after the date of this Agreement which prevents the Exchange.
7. OTHER COVENANTS OF THE PARTIES. The parties agree that, prior to the
Closing:
(a) Effectuation of this Agreement. The parties hereto each
will use their best efforts to cause this Agreement and all related agreements
to become effective, and all transactions herein and therein contemplated to be
consummated, in accordance with its and their terms, to obtain all required
consents, waivers and authorizations of governmental entities and other third
parties, to make all filings and give all notices to those regulatory
authorities or other third parties which may be necessary or reasonably required
in order to effect the transactions contemplated in this Agreement, and to
comply with all federal, local and state laws, rules and regulations as may be
applicable to the contemplated transactions.
(b) Restriction on Action. The parties each agree that he or
it will not do any thing or act prohibited by this Agreement or any related
agreement, or fail to do any thing or act which he or it has undertaken to do in
this Agreement or any related agreement.
12
(c) Access and Information. To the extent each party deems
necessary for purposes of this Agreement and the transactions contemplated
hereby, Cryocon and the Company each shall permit the other, its counsel,
accountants and other representatives to have full access, upon reasonable
notice and during regular business hours, throughout the period prior to
Closing, to its equipment, assets, properties, books and records, and will cause
to be furnished to the requesting party and its representatives during such
period all information it or its representatives may reasonably request.
(d) Public Release of Information. The Company shall not issue
any press release or make any other public release of information concerning the
Exchange or this Agreement without the prior written consent of Cryocon, and
neither Cryocon nor any Cryocon Holder shall issue any press release or make any
other public release of information concerning the Exchange or this Agreement
without the Company's prior written consent.
(e) SEC Filings. Cryocon and the Cryocon Holders acknowledge
and agree that, at least ten (10) calendar days prior to consummation of the
Exchange, an information statement containing the information required by SEC
Rule 14f-1 shall be filed by the Company with the Securities and Exchange
Commission and mailed to the Company's shareholders. Cryocon and the Cryocon
holders also acknowledge and agree that, no later than fifteen (15) calendar
days following the Closing, the Company is required to file a report on Form 8-K
with the Securities and Exchange Commission containing (or incorporating by
reference) all required information, except for required financial information,
which may be filed within the additional time period permitted by Form 8-K. Both
the Company and Cryocon will participate in the preparation of the Rule 14f-1
information statement and Form 8-K report, and neither document shall be filed
or mailed out until both the Company and Cryocon have given their consent
thereto.
8. INDEMNIFICATION.
8.1 Indemnification by Cryocon. Cryocon agrees to defend,
indemnify and hold the Company, any subsidiary or affiliate thereof, and its
respective successors, officers, directors and controlling persons (the
"Indemnified Company Group") harmless from and against any and all losses,
liabilities, damages, costs or expenses (including reasonable attorney's fees,
penalties and interest) payable to or for the benefit of, or asserted by, any
party resulting from, arising out of, or incurred as a result of (a) the breach
of any representation made by Cryocon or a Cryocon Holder herein or in
accordance herewith; (b) the breach of any warranty or covenant made by Cryocon
or a Cryocon Holder herein or in accordance herewith; or (c) any claim, whether
made before or after the date of this Agreement, or any litigation, proceeding
or governmental investigation, whether commenced before or after the date of
this Agreement, arising out of the business of Cryocon or arising out of any act
or occurrence prior to, or any state of facts existing as of the Closing.
8.2 Indemnification by the Company. The Company agrees to
defend, indemnify and hold Cryocon, any subsidiary or affiliate thereof, and its
respective successors, officers, directors and controlling persons (the
"Indemnified Cryocon Group") harmless from and against any and all losses,
liabilities, damages, costs or expenses (including reasonable attorney's fees,
penalties and interest) payable to or for the benefit of, or asserted by, any
party resulting from, arising out of, or incurred as a result of (a) the breach
of any representation made by the Company herein or in accordance herewith; (b)
the breach of any warranty or covenant made by the Company herein or in
accordance herewith; or (c) any claim, litigation, proceeding or governmental
investigation, whether commenced before or after the date of this Agreement,
arising out of any act or occurrence prior to, or any state of facts existing as
of the Closing.
8.3 Survival of Covenants and Warranties. The representations,
warranties, covenants and agreements made by Cryocon on the one hand, and the
Company on the other hand, shall survive the Closing and shall be fully
enforceable at law or in equity against such other party and its successors and
assigns for a period of one year after the Closing Date. Any investigation at
any time made by or on behalf of (or any disclosure to) any party hereto shall
not diminish in any respect whatsoever its right to rely on the representations
and warranties of the other party hereto.
8.4 Notice of Claims. The Company and Cryocon each agree to
give prompt written notice to the other of any claim against the party giving
notice which might give rise to a claim by it against the other party hereto
based upon the indemnity provisions contained herein, stating the nature and
basis of the claim and the actual or estimated amount thereof; provided,
13
however, that failure to give such notice will not affect the obligation of the
indemnifying party to provide indemnification in accordance with the provisions
of this Section 10 unless, and only to the extent that, such indemnifying party
is actually prejudiced thereby. In the event that any action, suit or proceeding
is brought against any member of the Indemnified Cryocon Group or the
Indemnified Company Group with respect to which any party hereto may have
liability under the indemnification provisions contained herein, the
indemnifying party shall have the right, at its sole cost and expense, to defend
such action in the name of or on behalf of the indemnified party and, in
connection with any such action, suit or proceeding, the parties hereto agree to
render to each other such assistance as may reasonably be required in order to
ensure the proper and adequate defense of any such action, suit or proceeding;
provided, however, that an indemnified party shall have the right to retain its
own counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate because of actual or potential
differing interests between such indemnified party and any other party
represented by such counsel. Neither party hereto shall make any settlement of
any claim which might give rise to liability of the other party under the
indemnification provisions contained herein without the written consent of such
other party, which consent such other party covenants shall not be unreasonably
withheld.
9. TERMINATION OF THIS AGREEMENT.
9.1 Grounds for Termination. This Agreement shall terminate:
(a) By mutual written consent of the Company and Cryocon;
(b) By Cryocon or the Company, if:
(i) all the conditions precedent to its respective
obligations hereunder have not been satisfied or waived prior to the
Closing Date, as it may be accelerated or extended, or if any Cryocon
Holder refuses to execute this Agreement;
(ii) any party shall have defaulted or refused to
perform in any material respect under this Agreement, or if the Company
or Cryocon should have reasonable cause to believe there has been a
material representation concerning, or failure or breach of, any
representation or warranty by the other party, or if it appears that
either Cryocon or the Company has committed any unlawful acts affecting
the other party;
(iii) the transactions contemplated in this Agreement
and related agreements have not been consummated on the Closing Date,
as it may be mutually accelerated or extended, or
(iv) either the Company or Cryocon shall reasonably
determine that the transactions contemplated in this Agreement have
become inadvisable by reason of the institution or threat by any
federal, state or municipal governmental authorities or by other person
whatever of a formal investigation or of any action, suit or proceeding
of any kind against either or both parties which in one party's
reasonable belief is material in light of the other party's business,
prospects, properties or financial condition;
9.2 Manner of Termination. Any termination of this Agreement
(other than an automatic termination) shall be made in accordance with the above
listed grounds and, if terminated by Cryocon or the Company, shall be
accompanied by a copy of the resolution of the terminating party's board of
directors. Written notice of termination shall be given to the other party as
required in this Agreement as promptly as is practical under the circumstances.
Upon a party's receipt of such termination notice, this Agreement shall
terminate and the transactions herein contemplated shall be abandoned without
further action by the parties.
9.3 Survival of Confidentiality Provisions. Upon termination
of this Agreement for any reason, (i) the covenants of the parties concerning
the confidentiality and proprietary nature of all documents and other
information furnished hereunder shall remain in force except as to information
which has otherwise become public knowledge, and (ii) each party shall promptly
return all documents received from the other party in connection with this
Agreement. This Section constitutes a mutual covenant of the parties, and either
may judicially enforce it.
10. CONFIDENTIALITY PROVISIONS. In connection with the proposed
14
Exchange, the Company may, from time to time, furnish Cryocon and/or its
representatives with certain Confidential Information (as defined below). As
used in this Section, the terms "Company", "Cryocon" and "Cryocon Holders"
includes their respective advisers, representatives, employees and agents and
all successors and assigns. In consideration of the Company furnishing (prior to
and subsequent to the date hereof) such Confidential Information, Cryocon and
the Cryocon Holders agree as follows:
(a) Confidential Information. Confidential Information means
any and all memoranda, manuals, data, reports, interpretations, forecasts,
market plans, market analyses, and records containing or otherwise reflecting
information concerning the Company which is not available to the general public
and which the Company later provides or has previously provided to Cryocon or
any Cryocon Holder, together with analyses, compilations, forecasts, studies or
other documents prepared by the Company, its agents, representatives (including
lawyers, accountants and financial advisors) or employees which contain or
otherwise reflect the foregoing described information, as well as any oral
communications with respect to the foregoing.
The term Confidential Information shall not include any
information which (i) is or becomes generally available to the public other than
as a result of a disclosure by Cryocon or a Cryocon Holder, or (ii) become
available to Cryocon or a Cryocon Holder on a non-confidential basis from a
source other than the Company or its agents which is not known to Cryocon or the
Cryocon Holder to be prohibited from disclosing such Confidential Information to
it by a legal, contractual or fiduciary obligation to the Company.
(b) Confidentiality. The Confidential Information will be kept
confidential and shall not, without the prior written consent of the Company, be
disclosed by Cryocon or a Cryocon Holder, other than in connection with this
Agreement. Cryocon and the Cryocon Holders agree to reveal the Confidential
Information only to their representatives and employees who need to know the
Confidential Information for the purposes described herein, who are informed by
Cryocon or the Cryocon Holder, as the case may be, of the confidential nature of
the Confidential Information and who shall agree in writing to act in accordance
with the terms and conditions of this Confidential Agreement. Cryocon and the
Cryocon Holders shall be liable for any breach of this Confidentiality provision
by its or his respective representatives or employees.
Without the prior written consent of the Company, except as
required by law, Cryocon and the Cryocon Holders will not disclose to any person
the fact that the Confidential Information has been made available, nor make any
announcement that discussions or negotiations are taking place or have taken
place concerning the matters set forth in this Agreement or any of the terms,
conditions or other facts with respect to any transaction the Company is
negotiating, including the status thereof.
(c) Return of Confidential Information. Promptly upon
completion or termination of this Agreement, all copies of the Confidential
Information, except for that portion of the Confidential Information that
consists of analyses, compilations, forecasts, studies or other documents
prepared by Cryocon or a Cryocon Holder, will be returned to the Company. That
portion of the Confidential Information that consists of analyses, compilations,
forecasts, studies or other documents prepared by Cryocon or a Cryocon Holder
and oral Confidential Information may be retained by Cryocon or the Cryocon
Holder and kept confidential and subject to the terms of this Confidentiality
Agreement or destroyed upon the request of the Company. Such destruction will be
confirmed in writing to the Company.
(d) Accuracy of Confidential Information. Cryocon and the
Cryocon Holders acknowledge that the Company makes no express or implied
representation or warranty as to the accuracy or completeness of the
Confidential Information, and the Company expressly disclaims any and all
liability that may be based on the Confidential Information, errors therein or
omissions therefrom.
(e) Protective Order. In the event that Cryocon or a Cryocon
Holder or anyone to whom it or he transmits the Confidential Information becomes
legally compelled to disclose any of the Confidential Information or any
information relating to Cryocon's or a Cryocon Holder's opinion, judgment or
recommendations concerning the Company as developed from the Confidential
Information, Cryocon or the Cryocon Holder, as the case may be, will provide the
Company with prompt notice so that the Company may seek a protective order or
other appropriate remedy and/or waive compliance with the provisions of this
Confidentiality Agreement. In the event that such waiver or such protective
order or other remedy is not obtained, Cryocon or the affected Cryocon Holder(s)
will furnish only that portion of the Confidential Information which it or they
are advised by written opinion of legal counsel is legally required, and will
15
exercise its best efforts to obtain reliable assurance that confidential
treatment will be accorded the Confidential Information. Neither Cryocon nor any
Cryocon Holder shall oppose action by the Company to obtain an appropriate
protective order or other reliable assurance that confidential treatment will be
accorded the Confidential Information.
(f) Reciprocal Nature of this Covenant. In the event that
Cryocon or a Cryocon Holder provides Confidential Information to the Company,
then the Company shall have the same obligation as Cryocon and the Cryocon
Holders in this Section, and Cryocon or such Cryocon Holder(s) shall have the
same rights and remedies as the Company set forth in this Section with respect
to such Confidential Information.
11. MISCELLANEOUS PROVISIONS.
(a) Assignment. Neither this Agreement nor any right created
hereby or in any agreement entered into in connection with the transactions
contemplated hereby shall be assignable by any party hereto without the written
consent of the party not seeking assignment, except that the Company may direct
such an assignment to a wholly owned subsidiary corporation. No such assignment
shall relieve the assignor of any obligations created under this Agreement.
(b) Parties in Interest; No Third Party Beneficiaries. Except
as otherwise provided herein, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the parties and their respective
heirs, legal representatives, successors and assigns. Neither this Agreement nor
any other agreement contemplated hereby shall be deemed to confer upon any
person not a party hereto or thereto any rights or remedies hereunder or
thereunder, except as expressly set forth in this Agreement.
(c) Entire Agreement. This Agreement and the agreements
contemplated hereby constitute the entire agreement of the parties regarding the
subject matter hereof, and supersede all prior agreements and understandings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof.
(d) Severability. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision never comprised a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its severance
herefrom. Further, in lieu of such illegal, invalid or unenforceable provision,
there shall be added automatically as part of this Agreement a provision as
similar in terms to such illegal, invalid, or unenforceable provision as may be
possible and be legal, valid and enforceable.
(e) Survival of Representations, Warranties and Covenants. The
representations, warranties and covenants of all parties contained herein shall
survive the Closing, and all statements contained in any certificate, exhibit or
other instrument delivered by or on behalf of the Company or Cryocon, as the
case may be, and, notwithstanding any provision in this Agreement to the
contrary, shall survive the Closing.
(f) Interpretation. This Agreement shall be governed by and
construed under the laws of the State of Colorado and shall be interpreted as if
all parties participated equally in its drafting. The captions in this Agreement
are for convenience of reference only and shall not limit or otherwise affect
any of the terms or provisions hereof. Whenever the context requires, the gender
of all words used herein shall include the masculine, feminine and neuter, and
the number of all words shall include the singular and plural. Use of the words
"herein", "hereof", "hereto" and the like in this Agreement shall be construed
as references to this Agreement as a whole and not to any particular provision
in this Agreement, unless otherwise noted.
(g) Notice. Any notice or communication hereunder or in any
agreement entered into in connection with the transactions contemplated hereby
must be in writing and given by depositing the same in the United States mail,
addressed to the party to be notified, postage prepaid and registered or
certified with return receipt requested, by telefax transmission or by delivery
by use of a messenger which regularly retains its delivery receipts. Such notice
shall be deemed received on the date on which it is delivered to the addressee.
For purposes of notice, the addresses of the parties shall be, if to a Cryocon
Holder, sent to Cryocon for forwarding, and:
16
If to Cryocon Inc.: 0000 Xxxxx, 0000 Xxxx
Xxxxx, Xxxx 00000
ATTN: Xx. Xxxxxx Xxxxxxx
If to the Company: Mr. Egin Bresnig
c/x Xxxxxxx & Company
00 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
(h) No Finders. Each party represents and warrants to the
others and agrees that it has not employed or engaged, and will not employ or
engage, any person as a finder or broker in connection with the transactions
contemplated herein, and that no person is entitled to compensation as a finder
or broker. Each party hereby indemnifies the other parties and holds the other
parties harmless from and against any claims of any third persons claiming to
have acted as a finder or broker in connection with the transactions herein
contemplated, and such indemnity shall include all expenses, costs and damages
arising from or related to such claims, including reasonable attorneys fees.
(i) Expenses. Except as otherwise provided in this letter, the
Company and Cryocon shall bear their own fees and expenses incurred in
connection with the transactions contemplated herein.
(j) Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument. Execution and delivery of
this Agreement by exchange of facsimile copies bearing facsimile signature of a
party shall constitute a valid and binding execution and delivery of this
Agreement by such party. Such facsimile copies shall constitute enforceable
original documents.
(k) Prevailing Party Clause. In the event of any litigation or
proceeding arising as a result of the breach of this Agreement or the failure to
perform hereunder, or failure or untruthfulness of any representation or
warranty herein, the party or parties prevailing in such litigation or
proceeding shall be entitled to collect the costs and expenses of bringing or
defending such litigation or proceeding, including reasonable attorneys' fees,
from the party or parties not prevailing.
(l) Relationship of the Parties. Nothing in this Agreement is
intended to be construed so as to suggest that the parties hereto are partners
or joint venturers, or that any party or its employees is the employee or agent
of the other. Neither Cryocon nor the Company has any express or implied right
or authority under this Agreement to assume or create any obligations on behalf
of or in the name of the other party to any contract, agreement, arrangement,
understanding or undertaking with any third party.
(m) No Purchases of Common Stock. Cryocon and the Cryocon
Holders agree that neither they nor their respective affiliates will directly or
indirectly purchase or cause any other person to purchase shares of the
Company's common stock, whether publicly or privately, until a press release
announcing this Agreement and the general terms of the Exchange has been
publicly disseminated.
(n) Exhibits, Schedules, etc. Each Exhibit to this Agreement
shall be initialed by Cryocon and the Company, and each Schedule shall be
initialed by the party providing it. Any Schedule provided by Cryocon Holders
shall be initialed by all of the Cryocon Holders. If a Schedule does not apply,
it must nonetheless be furnished and marked "not applicable." The information
contained in every Schedule shall be updated as necessary as of a date as close
as possible to the Closing Date and must be accurate and complete as of the
Closing Date. Each party signing this Agreement represents and warrants, to all
other parties, by such signature that he, she or it has carefully read this
Agreement in its entirety and understands the provisions of this Agreement.
(o) No Advice Given. Cryocon and the Cryocon Holders
acknowledge and agree that they have neither asked for nor received any legal or
tax advice from the Company or its counsel, Xxxx X. Xxxxxxx Xx., Esquire, or any
other person associated with the Company, in regard to this Agreement or the
transactions herein contemplated, and have instead relied on advice and counsel
furnished by their own legal or other advisers in order to satisfy themselves as
17
to the tax and other legal implications to them of the Exchange and issuance of
the Exchange Shares.
IN WITNESS WHEREOF, all parties have executed this Agreement, and
Cryocon and the Company have initialed every preceding page hereof, as of the
dates respectively indicated below.
ISO-BLOCK PRODUCTS (USA), INC. CRYOCON INC.
s/s Egin Bresnig s/s Xxxxxx Xxxxxxx
By.................... By........................
Egin Bresnig, President Xxxxxx Xxxxxxx, President
18
SHAREHOLDERS' SIGNATURE PAGE
to Agreement and Plan of Reorganization
s/s Xxxxxx Xxxxxxx s/s Xxxxx Xxxxxxx
X............................... X............................
Xxxxxx Xxxxxxx Xxxxx Xxxxxxx
s/s Xxxxxx Pacanos Jr. s/s Xxxxxxx Xxxxxxx
X............................... X............................
Xxxxxx Pacanos Jr. Xxxxxxx Xxxxxxx
s/s Xxxxx Xxxxxxx s/s Xxxx Xxxxxx
s/s Xxxx Xxxxxxx s/s Xxxxxx Xxxxxx
X............................... X............................
Xxxxx Xxxxxxx Xxxx Xxxxxx
Xxxx Xxxxxxx Xxxxxx Xxxxxx
s/s Xxxxxxxx Xxxx Xxxxx Xxxxxxxxx
X............................... X............................
Xxxxxxxx Xxxx Xxxxx Xxxxxxxxx
s/s Xxx Xxxxxx s/s Xxx Xxxxxxxxx
X............................... X............................
Xxx Xxxxxx Xxx Xxxxxxxxx
19
EXHIBITS and SCHEDULES
Cryocon Schedules:
Schedule 1.2 - Names and addresses of Cryocon shareholders, no. of Cryocon
Shares owned by each and number of exchange shares that go to
each person
Schedule 3(d) litigation
Schedule 3(g) disclosure of material liabilities
Schedule 3(i) taxes owed
Schedule 3(j) material contracts
Schedule 3(k) affiliate relationships
Schedule 3(o) insurance policies in effect
Schedule 3(r) patents, trademarks, service marks, licenses, franchises and
other intellectual property
20
S C H E D U L E 1.2
Names and addresses of Cryocon shareholders, number of Cryocon Shares owned by
each and number of Exchange Shares going to each person
No. Cryocon No. Exchange
Name and Address Shares Owned Shares Issuable
---------------- ------------ ---------------
1. Xxxxxx X. Xxxxxxx 10,225,000 40,900,000
0000 Xxxxx 000 Xxxx
Xxxxxxxx Xxxx, XX 00000
2. Xxxxx X. Xxxxxxx 500,000 2,000,000
0000 Xxxxx 000 Xxxx
Xxxxxxxx Xxxx, XX 00000
3. Xxxxxx Pacanos Jr. 100,000 400,000
0000 Xxxxxxx Xx.
Xxxxxxxx, XX 00000
4. Xxxxxxx Xxxxxxx 100,000 400,000
00 Xxxxxxxxxx Xx.
Xxxxxxx, XX 00000
5. Xxxxx and Xxxx Xxxxxxx 20,000 80,000
000 Xxxxx 0xx Xxxx
Xxxxxxx, XX 00000
6. Xxxxx X. Xxxxxxxxx 15,000 60,000
0000 Xxxxx, 0000 Xxxx
Xxxxx Xxxx, XX 00000
7. Xxxxxxxx X. Xxxx 10,000 40,000
0000 Xxxxx Xxxx Xxxxxx Xxx.
Xxxxxxxx Xxxxx, XX 00000
8. Mick & Xxxxxx Xxxxxxx 10,000 40,000
000 Xxxx Xxxx
Xx. Xxxxxxx, XX 00000
9. Xxxxxx X. Xxxxxx 10,000 40,000
000 Xxxx 0000 Xxxxx
Xxxxxxxx Xxxx, XX 00000
10. Xxxxxx X. Xxxxxxxxx 10,000 40,000
00 Xxxxxxxx Xx. c/x Xxxxxx ---------- -----------
Xxxxxx, XX 00000
Totals 11,000,000 44,000,000
00
X X X X X X X X 3(d)
Litigation
None
22
S C H E D U L E 3(g)
Material Liabilities
Name and Address Amount of Summary of
of Creditor Outstanding Prin. Terms
1. Xxxxxx X. Xxxxxxx $50,000 10%, Interest and Principal
4381 North 000 Xxxx Xxxxxxx Xxx Xxxxxxxxx
Xxxxxxxx Xxxx, Xx 00000 Due Year 2003
Convertible into
1,785,714 shares of
Common stock
2. Paragon Venture Fund I $288,000 10%, Interest and Principal
000 X. Xxxxxx, Xxxxxxx Xxx Xxxxxxxxx
Xxxxxxxxxxx, XX 00000 Due Year 2003
Convertible into
2,880,000 shares of
Common Stock
3. Paragon Venture Fund II $647,300 10%, Interest and Principal
000 X. Xxxxxx, Xxxxxxx Xxx Xxxxxxxxx
Xxxxxxxxxxx, XX 00000 Due Year 2003
Convertible into
1,294,600 shares of
Common Stock
4 Paragon Venture Fund III $1,404,437 10%, Interest and Principal
000 X. Xxxxxx, Xxxxxxx Xxx Xxxxxxxxx
Xxxxxxxxxxx, XX 00000 Due Year 2003
Convertible into
1,404,437 shares of
Common Stock
5. Paragon Venture Fund IV $475,400 10%, Interest and Principal
000 X. Xxxxxx, Xxxxxxx Xxx Xxxxxxxxx
Xxxxxxxxxxx, XX 00000 Due Year 2003
Convertible into
237,700 shares of
Common Stock
6. Bourns, Inc. $1,794,725 8% Interest and Principal
c/o Xxx Xxxxx Balance Due and payable
0000 Xxxxxxxx Xxxxxx September 9, 2000
Xxxxxxxxx, XX 00000 (Down payment of
$500,000. financing
arranged)
23
7. 300 Below $163,205 8% Interest and Principal
0000 X. Xxxxx Xxxxxx 81 month term.
Xxxxxxx, XX 00000 Payment of $3,116.89 due
monthly.
8. Centennial Bank $22,920 9.5% Interest and Principal
0000 X. Xxxxxxxx Xxxx. 48 month term
Xxxxx, XX 00000 Payment of $575.87 due
monthly.
9. Arcadia (two notes: $18,845.50
and $22,346.50) $41,192 21% Interest and Principal
PO Box 4367 60 month term
Xxxxx Xxxxxx, XX 00000 Total payment of $1,129
Due monthly.
24
S C H E D U L E 3(i)
Taxes Owed
1. Property Taxes $5,555.86 Prorated portion of property
taxes on purchase of building
building due in full 11-30-00
25
S C H E D U L E 3(j)
Material Contracts
1. Asset Purchase Agreement, Dated December 10, 1999 (Agreement re:
Purchase of Cryo-Accurizing Division from Xxxxxx X. Xxxxxxx by Cryocon,
Inc.)
2. Real Estate Purchase Contract, Dated February 9, 2000 (Re: Purchase of
the Bourns Building)
26
S C H E D U L E 3(k)
Affiliate Relationships
None
27
S C H E D U L E 3(o)
Insurance Policies in Effect
Automotive:
Company Name:State Automobile Mutual Insurance Company
Policy No.: BAP2005925
Coverage: Comprehensive
Building and Equipment:
Company Name:State Automobile Mutual Insurance Company
Policy No.: SPP2005924
Coverage: Building: 1,800,000 Contents: 250,000
Corporate Liability:
Company Name: St. Xxxx Surplus Lines Insurance Company
Policy No.: SFO5505744
Coverage: $2,000,000.00
Company Name:Athena Assurance Company
Policy No.: 900BA5478
Coverage: $1,000,000.00
Key Man Life Insurance:
Company Name:Pekin Life Insurance Company
Policy No.: 0001993850
Coverage: $1,000,000
00
X X X X X X X X 3(r)
Patents, Trademarks, Service Marks, Licenses, Franchises and Other Intellectual
Property
Patent No.: 05865913. Deep Cryogenic Tempering process based on flashing liquid
nitrogen through a dispersal system (Cryo-Accurizing).
Reg. No.: 2,240,720: Service Xxxx "Tri-Lax"
Reg. No.: 1,969,850 Trademark " Cryo-Accurizing "
29
S C H E D U L E 3(n)
List of Officers & Directors, Job and Salary for Each
Other Restricted Securities LTIP All Other
Annual Stock underlying payouts Compensation
Name and Principal Position Year Salary Bonus Compensation award(s) options/SARs ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h) (i)
-----------------------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxxx, CEO 2000 112,500.00 00 00 00 00 00 00
Xxxxx Xxxxxxx, Dir/VP., HR 2000 75,000.00 (1) 00 00 00 00 00
Xxxxx Xxxxxxxx, VP, Projects 2000 105,000 00 (1) 00 00 00 00
Xxxxxxx Xxx, VP, Marketing 2000 105,000 00 (1) 00 00 00 00
Xxxxx Xxxxxxxxx,, VP, Legal 2000 75,000 00 (1) 00 00 00 00
Xxxx Xxxxxx, VP, Sales 2000 100,000 00 (1) 00 00 00 00
Rant Sant, Director 2000 00
Xxxxx Xxxxxxx, Director 2000 00
(1) All Vice Presidents have stock options for 50,000 shares of common stock
which vests in increments of 10,000 shares per year.
30
CRYOCON INC. OFFICERS' CERTIFICATE
Cryocon Inc., a Utah Corporation, entered into an Agreement dated April
25, 2000 with Iso-Block Products (USA), Inc., a Colorado Corporation, pursuant
to which Cryocon, shall sell, transfer, assign, convey and deliver to Iso-Block,
free and clear of all adverse claims, security, interests, liens, claims and
encumbrances (other than restrictions under applicable securities laws or as
expressly agreed to therein by Iso-Block), and Iso-Block agreed to purchase,
accept and acquire, all of Cryocon Shares from the Cryocon Holders, pursuant to
the Agreement and Plan of Reorganization. All terms contained herein, not
otherwise defined herein, shall have the meanings ascribed to them in the April
25, 2000, Agreement. As provided in Section 6.1 (a) of the Securities Purchase
Agreement, the undersigned officer of the Company, being duly authorized, hereby
certify as follows:
(1) The representations and warranties of Cryocon contained in the
Agreement, and the information set forth in all of Cryocon's
Schedules and Exhibits attached to the Agreement were true and
correct when made. Since April 25, 2000, the Board of
Directors has approved the extension of an Option to Mr. Xxxx
Xxxxx for 1,000,000 post split shares with an offer price of
.10 per share for services to be rendered by him and/or
assigns to promote the Company;
(2) All agreements and conditions required in the Agreement to be
performed or complied with Cryocon prior to the date of this
Certificate have been fully performed by Cryocon.
Dated this 14th day of August, 2000
BY:/s/ Xxxxxx x. Xxxxxxx
------------------------
Xxxxxx X. Xxxxxxx, Chief Executive Officer; and,
Acting Chief Financial Officer
31
