AGREEMENT AND PLAN OF REORGANIZATION
by and among
Corporate Development Centers, Inc.
a Nevada corporation
and
e-Perception Technologies, Inc.
a Delaware corporation
Effective as of November 20, 2001
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made and
entered into this 20th day of November, 2001, by and among Corporate Development
Centers, Inc., a Nevada corporation ("CDC"), and e-Perception Technologies,
Inc., a Delaware corporation, ("e-Perception").
Premises
A. This Agreement provides for the reorganization of e-Perception with CDC,
with CDC adopting the name e-Perception, Inc., and in connection therewith, the
exchange of the outstanding common stock of e-Perception for shares of common
voting stock of CDC on a four shares of e-Perception for one share of CDC basis,
all for the purpose of effecting a tax-free reorganization pursuant to sections
354 and 368(a) of the Internal Revenue Code of 1986, as amended.
B. The board of directors of e-Perception with respect to e-Perception, and
the board or directors of CDC with respect to CDC, have determined, subject to
the terms and conditions set forth in this Agreement, that the exchange of
shares contemplated hereby, is desirable and in the best interests of the
stockholders of e-Perception and CDC. This Agreement is being entered into for
the purpose of setting forth the terms and conditions of the proposed exchange.
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 e-PERCEPTION
As an inducement to and to obtain the reliance of CDC, e-Perception
represents and warrants as follows:
Section 1.1 Organization. e-Perception is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Delaware
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 jurisdiction 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 Schedule 1.1 are complete
and correct copies of the certificate of incorporation, bylaws and amendments
thereto of e-Perception as in effect on the date hereof. The execution and
delivery of this Agreement do not and the consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof will not
violate any provision of e-Perception's certificate of incorporation or bylaws.
e-Perception has full power, authority and legal right and has taken all action
required by law, its certificate of incorporation, its bylaws or otherwise to
authorize the execution and delivery of this Agreement.
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Section 1.2 Capitalization. All issued and outstanding shares of
e-Perception are legally issued, fully paid and nonassessable and are not issued
in violation of the preemptive or other rights of any person. e-Perception has
no other securities, warrants or options issued other than as set forth in the
Schedule 1.2.
Section 1.3 Subsidiaries. e-Perception does not have any subsidiaries and
does not own, beneficially or of record, any shares of any other corporation.
Section 1.4 Financial Statements. Included in Schedule 1.4 is
e-Perception's financial statements including a balance sheet, statement of
income and retained earnings, statement of cash flows and declaration of cost of
sales, dated as of June 30, 2001. Relevant thereto:
(a) the e-Perception balance sheet presents fairly as of its date the
financial condition of e-Perception and e-Perception does not have, as of
the date of such balance sheet and except as noted and to the extent
reflected or reserved against therein, any liabilities or obligations
(absolute or contingent) which should be reflected in a balance sheet or
the notes thereto and all material assets reflected therein are properly
reported and present fairly the value of the assets of e-Perception, in
accordance with generally accepted accounting principles ("GAAP");
(b) e-Perception has no material 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;
(c) e-Perception has filed or is preparing to file all, state, federal
and local income tax returns required to be filed by it from inception to
the date hereof, if any;
(d) the books and records, financial and others, of e-Perception are
in all material respects complete and correct and have been maintained in
accordance with accepted business accounting practices; and
(e) except as, and to the extent disclosed in, the most recent
e-Perception balance sheet and schedules, e-Perception has no material
liabilities contingent or otherwise, whether direct or indirect, matured or
unmatured.
Section 1.5 Information. The information concerning e-Perception set forth
in this Agreement and in the e-Perception Disclosure Schedule is, to the best of
e-Perception's knowledge, 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.
Section 1.6 List of Shareholders. Attached hereto as Schedule 1.6 is a list
of shareholders who in the aggregate own 100% of the issued and outstanding
capital shares of e-Perception.
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Section 1.7 Absence of Certain Changes or Events. Except as set forth in
this Agreement, the e-Perception Disclosure Schedule, or as otherwise disclosed
to CDC, since October 27, 2001:
(a) there has not been: (i) any material adverse change in the
business, operations, properties, assets or condition of e-Perception; or
(ii) any damage, destruction or loss to e-Perception (whether or not
covered by insurance) materially and adversely affecting the business,
operations, properties, assets or condition of e-Perception;
(b) e-Perception has not: (i) amended its certificate 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 extraordinary or material considering the business of
e-Perception; (iv) made any material change in its method of management,
operation or accounting; (v) entered into any other material transaction;
(vi) made 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) increased the rate of compensation
payable or to become payable by it to any of its officers or directors or
any of its employees whose monthly compensation exceeds $5,000; 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) e-Perception has not: (i) granted or agreed to grant any options,
warrants or other rights for its stocks, bonds or other corporate
securities calling for the issuance thereof; (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 any material obligation or
liability (absolute or contingent) other than current liabilities reflected
in or shown on the most recent e-Perception balance sheet and current
liabilities incurred since that date in the ordinary course of business;
(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
$5,000); (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 e-Perception; or (vi)
issued, delivered or agreed to issue or deliver any stock, bonds or other
corporate securities, including debentures (whether authorized and unissued
or held as treasury stock); and
(d) to the best knowledge of e-Perception, it 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 e-Perception.
Section 1.8 Title and Related Matters. e-Perception has good and
marketable title to, and is the sole and exclusive owner of all of, its
properties, inventory, interests in properties and assets, real and personal
(collectively, the "Assets") which are reflected in the e-Perception
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balance sheet or acquired after that date (except properties, interests 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; and (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. Except as set forth in the e-Perception
Disclosure Schedule attached hereto, e-Perception owns free and clear of any
liens, claims, encumbrances, royalty interests or other restrictions or
limitations of any nature whatsoever any and all procedures, techniques,
marketing plans, business plans, methods of management or other information
utilized in connection with e-Perception's business. No third party has any
right to, and e-Perception 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, singly 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 conditions or
income of e-Perception or any material portion of its properties, assets or
rights.
Section 1.9 Litigation and Proceedings. To the best of e-Perception's
knowledge and belief, there are no actions, suits, proceedings or investigations
pending or threatened by or against e-Perception or affecting e-Perception 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 that would have a material adverse effect on the business, operations,
financial condition or income of e-Perception. e-Perception does not have any
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 of any circumstances which, after
reasonable investigation, would result in the discovery of such a default.
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Section 1.10 Contracts.
(a) Except as included in Schedule 1.10, there are no material
contracts, agreements, franchises, license agreements or other commitments
to which e-Perception is a party or by which it or any of its assets,
products, technology or properties are bound;
(b) except as included or described in the e-Perception Disclosure
Schedule or reflected in the most recent e-Perception balance sheet,
e-Perception 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, agreement or arrangement covered by Title IV of the Employee
Retirement Income Security Act, as amended; (iii) agreement, contract or
indenture relating to the borrowing of money; (iv) guaranty of any
obligation, other than one on which e-Perception is a primary obligor, 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 $5,000
in the aggregate; (v) consulting or other similar contracts with an
unexpired term of more than one year or providing for payments in excess of
$5,000 in the aggregate; (vi) collective bargaining agreements; (vii)
agreement with any present or former officer or director of e-Perception;
or (viii) contract, agreement or other commitment involving payments by it
of more than $5,000 in the aggregate; and
(c) to e-Perception's knowledge, all contracts, agreements,
franchises, license agreements and other commitments to which e-Perception
is a party or by which its properties are bound and which are material to
the operations of e-Perception taken as a whole, are valid and enforceable
by e-Perception in all respects, except as limited by bankruptcy and
insolvency laws and by other laws affecting the rights of creditors
generally.
Section 1.11 Material Contract Defaults. To the best of e-Perception's
knowledge and belief, e-Perception is not in default in any material 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 e-Perception, and there is no event of default in any material
respect under any such contract, agreement, lease or other commitment in respect
of which e-Perception 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, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which e-Perception
is a party or to which any of its properties or operations are subject.
Section 1.13 Governmental Authorizations. To the best of e-Perception's
knowledge, e-Perception has all licenses, franchises, permits or other
governmental authorizations legally required to enable e-Perception to conduct
its business in all material respects as conducted on the date hereof. Except
for compliance with provincial, federal and state securities and corporation
laws, as hereinafter provided, no authorization, approval, consent or order of,
or
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registration, declaration or filing with, any court or other governmental
body is required in connection with the execution and delivery by e-Perception
of this Agreement and the consummation by e-Perception of the transactions
contemplated hereby.
Section 1.14 Compliance With Laws and Regulations. To the best of
e-Perception's knowledge, e-Perception has complied with all applicable statutes
and regulations of any provincial, 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 e-Perception or would not result in e-Perception's incurring any material
liability.
Section 1.15 Insurance. All of the insurable properties owned either
directly or indirectly by e-Perception are insured for e-Perception's benefit
under valid and enforceable policies issued by insurers of recognized
responsibility.
Section 1.16 Approval of Agreement. The board of directors of e-Perception
has authorized the execution and delivery of this Agreement by e-Perception and
have approved the transactions contemplated hereby.
Section 1.17 Material Transactions or Affiliations. There exists no
material contract, agreement or arrangement between e-Perception or 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
e-Perception to own beneficially, ten percent (10%) or more of the issued and
outstanding common shares of e-Perception and which is to be performed in whole
or in part after the date hereof. In all of such transactions, the amount paid
or received, whether in cash, in services or in kind, has been during the full
term thereof, and is required to be during the unexpired portion of the term
thereof, no less favorable to e-Perception than terms available from otherwise
unrelated parties in arms-length transactions. There are no commitments by
e-Perception, whether written or oral, to lend any funds to, borrow any money
from or enter into any other material transactions with, any such affiliated
person.
Section 1.18 Labor Relations. e-Perception has never had a strike, lockout
or work stoppage resulting from labor problems, and has had no material
arbitrations or material grievances. There are no unfair labor practice charges,
grievances or complaints pending, or to e-Perception's knowledge, threatened by
or on behalf of any employee, present or former, of e-Perception, and to the
best of e-Perception's knowledge, there are no facts or circumstances which
could form the basis for any of the foregoing.
Section 1.19 Previous Sales of Securities. Since inception, e-Perception
has sold 26,036,953 common shares to investors in reliance upon applicable
exemptions from the registration requirements under the laws of the United
States and any applicable state laws and in accordance with the laws of said
jurisdictions.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES OF CDC
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As an inducement to, and to obtain the reliance of e-Perception, CDC
represents and warrants as follows:
Section 2.1 Organization. CDC 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 and to carry on its business in all
material respects as it are now being conducted. The execution and delivery of
this Agreement does not, and the consummation of the transactions contemplated
by this Agreement in accordance with the terms hereof will not, violate any
provision of CDC's articles of incorporation, as amended, or bylaws. CDC has
taken all action required by law, its articles of incorporation, its bylaws or
otherwise to authorize the execution and delivery of this Agreement. CDC 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 2.2 Capitalization. The authorized capitalization of CDC consists
of 25,000,000 shares of common stock, par value $0.001 per share. As of the date
hereof there are 1,234,250 restricted common shares of CDC issued and
outstanding. All of the shares of CDC Common Stock to be issued pursuant to this
Agreement will be when issued in accordance with the terms of this Agreement,
duly authorized, validly issued, fully paid and non-assessable and issued in
compliance with all applicable U.S. state and federal securities laws.
Section 2.3 Subsidiaries. CDC has no subsidiaries.
Section 2.4 Financial Statements.
(a) Included in the XXXXX data base of the Securities and Exchange
Commission ("SEC") are the audited balance sheet of CDC for the fiscal
years ended December 31, 2000 and 1999, and the related statements of
operations and deficit, changes in stockholders' equity and cash flows for
the years then ended, and the unaudited balance sheet and related statement
of operations and deficit, changes in stockholders' equity and cash flow
for the three month period ended September 30, 2001 (collectively, the
"Financial Statements").
(b) All such Financial Statements have been prepared in accordance
with GAAPconsistently applied throughout the periods involved. As of their
respective dates, such Financial Statements filed with the SEC by CDC
complied as to form in all material respects with the applicable
requirements of the Securities Act of 1933 ("Securities Act") and the
Securities Exchange Act of 1934 ("Exchange Act"), and did not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(c) The CDC balance sheets present fairly as of their respective dates
the financial condition of CDC. CDC did not have as of the date of any of
such CDC balance sheets, any liabilities or obligations (absolute or
contingent) which should be reflected in a balance sheet or the notes
thereto prepared in accordance with GAAP other
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than as listed herein, and all assets reflected therein are properly
reported and present fairly the value of the assets of CDC, in accordance
with GAAP. The statements of operations and deficit, changes in
stockholders' equity and cash flow reflect fairly the information required
to be set forth therein by GAAP.
(d) The books and records, financial and others, of CDC are in all
material respects complete and correct and have been maintained in
accordance with accepted business accounting practices.
(e) CDC has no liabilities with respect to the payment of any federal,
state, county, local or other taxes (including any deficiencies, interest
or penalties), and no liabilities or obligations of any nature required to
be set forth on a balance sheet under GAAP, whether or not accrued,
contingent or otherwise, and there is no existing condition, situation or
set of circumstances which would be expected to result in such a liability
or obligation, except liabilities and obligations which are not,
individually or in the aggregate, reasonably expected to have a material
adverse effect on CDC.
(f) As of the date hereof, the CDC balance sheets and the notes
thereto, shall reflect that CDC has: (i) no receivables; (ii) no accounts
payable; and (iii) no liabilities contingent or otherwise, whether direct
or indirect, matured or unmatured.
Section 2.5 Information. The information concerning CDC as set forth in
this Agreement 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.
Section 2.6 Options and Warrants. As of the date of this Agreement, (i)
there are no existing options, warrants, calls, preemptive rights, subscriptions
or other rights, agreements, arrangements or commitments of any character
relating to the issued or unissued capital stock of CDC obligating CDC to issue,
transfer or sell or cause to be issued, transferred or sold any shares of
capital stock or other equity interest in CDC or securities convertible into or
exchangeable for such shares or equity interests, or obligating CDC to grant,
extend or enter into any such option, warrant, call, subscription or other
right, agreement, arrangement or commitment, (ii) there are no outstanding
contractual obligations of CDC to repurchase, redeem or otherwise acquire any
shares of capital stock of CDC or to provide funds to make any investment (in
the form of a loan, capital contribution or otherwise) in any entity, and (iii)
there are no shareholder agreements, voting trusts or other agreements to which
CDC is a party or to which it is bound relating to the voting of any shares of
the capital stock of CDC.
Section 2.7 Absence of Certain Changes or Events. Since September 30, 2001,
CDC has not:
(a) (i) amended its articles of incorporation or bylaws; (ii) waived
any rights of value which in the aggregate are extraordinary or material to
the business of CDC; (iii) made any material change in its method of
management, operation or accounting; (iv) made any accrual or arrangement
for or payment of bonuses or special compensation of any kind or any
severance or termination pay (including benefits) to any present or
8
former director, officer or employee; or (v) entered into any contract or
agreement relating to any acquisition or disposition of any assets of CDC;
(b) (i) granted or agreed to grant any options, warrants, calls,
preemptive rights, subscriptions or other rights for its stocks, bonds or
other corporate securities calling for the issuance thereof; (ii) borrowed
or agreed to borrow any funds or incurred or become subject to, through
guarantee, endorsement or otherwise, any material obligation or liability
(absolute or contingent); (iii) declared, set aside or paid any dividend or
other distribution in respect of any shares of capital stock of CDC, or
repurchased, redeemed or otherwise acquired any CDC securities; or (iv)
created or assumed any lien on any asset of CDC; and
(c) to the best knowledge of CDC, (i) 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 CDC; or (ii) made or revoked any material election relating to taxes or
changed any method of reporting income or deductions for federal income tax
purposes.
Section 2.8 Title and Related Matters. CDC owns no real, personal or
intangible property.
Section 2.9 Litigation and Proceedings. There are no actions, suits or
proceedings pending or, to the best of CDC's knowledge and belief, threatened by
or against or affecting CDC, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind that would have a material adverse effect on the
business, operations, financial condition, income or business prospects of CDC.
CDC does not have any knowledge of any default on its part with respect to any
outstanding order, writ, injunction or decree, award, rule or regulation of any
court, arbitrator or governmental agency or instrumentality.
Section 2.10 Contracts.
(a) there are no material contracts, agreements, franchises, license
agreements, or other commitments to which CDC is a party or by which it or
any of its properties are bound.
(b) CDC is not a party to any contract, agreement, commitment or
instrument or subject to any charter or other corporate restriction or any
judgment, order, writ, injunction, decree or award which materially and
adversely affects, or in the future may (as far as CDC can now foresee)
materially and adversely affect, the business, operations, properties,
assets or conditions of CDC; and
(c) CDC is not a party to any material oral or written: (i) contract
for the employment of any director, officer or employee; (ii) profit
sharing, bonus, deferred compensation, stock option, severance pay,
pension, benefit or retirement plan, agreement or arrangement covered by
Title IV of the Employee Retirement Income Security Act, as amended; (iii)
agreement, contract or indenture relating to the borrowing
9
of money; (iv) loan, advance, guaranty or capital contribution to, or
investment in any person or entity, excluding endorsements made for
collection and other guaranties of obligations; (v) consulting or other
similar contract; (vi) collective bargaining agreement; (vii) agreement
with any present or former officer or director of CDC; or (viii) contract,
agreement, or other commitment involving payments by it of more than $1,000
in the aggregate.
Section 2.11 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, or
constitute an event of default under, any material indenture, mortgage, note,
bond, lease, license, deed of trust or other material contract, agreement or
instrument to which CDC is a party or to which any of its assets, properties or
operations are subject.
Section 2.12 Material Contract Defaults. To the best of CDC's knowledge and
belief, CDC is not in default in any material 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 CDC, and there is
no event of default in any material respect under any such contract, agreement,
lease or other commitment in respect of which CDC has not taken adequate steps
to prevent such a default from occurring.
Section 2.13 Governmental Authorizations. To the best of CDC's knowledge,
CDC holds, and has at all times held, all licenses, franchises, permits,
variances, exemptions, orders 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, no authorization, approval, consent or
order of, or registration, declaration or filing with, any court or other
governmental body is required in connection with the execution, delivery or
performance of this Agreement by CDC or the consummation by CDC of the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by CDC will not violate any order, writ, injunction, decree,
judgment, permit, license, ordinance, law, statute, rule or regulation
applicable to CDC or any of its properties or assets.
Section 2.14 Compliance With Laws and Regulations. CDC 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, or condition
of CDC or would not result in CDC's incurring any material liability. Further,
CDC is, as of the date of this Agreement, a "reporting company" under Section 12
of the Exchange Act, as amended, and is current in filing all reports required
to be filed pursuant to said Act.
Section 2.15 Insurance. CDC has no insurable properties or assets and no
insurance policies.
Section 2.16 Approval of Agreement The board of directors of CDC has
authorized the execution and delivery of this Agreement by CDC and has approved
the transactions contemplated hereby.
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Section 2.17 Material Transactions or Affiliations. There is no material
contract, agreement or arrangement between CDC 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 CDC to own beneficially, ten percent (10%) or more
of the issued and outstanding common stock of CDC and which is to be performed
in whole or in part after the date hereof. CDC has no commitment, whether
written or oral, to lend any funds to, borrow any money from or enter into any
other material transactions with, any such affiliated person.
Section 2.18 Labor Relations. CDC has never had a strike, lockout or work
stoppage resulting from labor problems, and has had no material arbitrations or
material grievances. There are no unfair labor practice charges, grievances or
complaints pending, or to CDC's knowledge, threatened by or on behalf of any
employee, present or former, of CDC, and to the best of CDC's knowledge, there
are no facts or circumstances which could form the basis for any of the
foregoing.
Section 2.19 Previous Sales of Securities. CDC has sold common shares to
investors in reliance upon applicable exemptions from the registration
requirements under the laws of the United States and Canada and all such sales
were made in accordance with the laws of said jurisdictions.
ARTICLE III
EXCHANGE PROCEDURE
Section 3.1 Tender Offer/Share Exchange. Within five (5) business days
after the execution hereof or as promptly as practicable, CDC shall commence
(within the meaning of Rule 14d-2 under the Exchange Act, as amended), a tender
offer (the "Offer") for all of the outstanding shares of e-Perception in a one
(1) share of CDC common stock for every four (4) shares of e-Perception common
stock exchange. The Offer shall be made by e-Perception placing in the U.S.
mail, sending via facsimile, or otherwise causing to be delivered to each of its
shareholders a copy of the Subscription Agreement and Information Statement,
each as attached hereto as Exhibit A, which shall indicate that the Offer will
---------
remain open for twenty (20) days from the date of the sending of the
Subscription Agreement and Information Statement. Such communication shall also
contain instructions from e-Perception management instructing each shareholder
to send to e-Perception any of such shareholder's certificate(s) evidencing
shares of e-Perception held by the shareholder endorsed for transfer together
with a copy of the Subscription Agreement signed by the shareholder.
Section 3.2 Issuance of CDC Common Shares. Upon receipt of the e-Perception
shares from the e-Perception shareholders, CDC shall cause to be issued CDC
common shares to the e-Perception shareholders on a basis of one (1) common
share of CDC for every four (4) shares of e-Perception surrendered. The
calculation of the number of CDC common shares issued to each e-Perception
shareholder shall be rounded down to the nearest whole share.
Section 3.3 Appraisal Rights. Shares of e-Perception common stock held by
those stockholders who do not accept the Offer and who comply with all of the
relevant provisions of
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Section 262 of the Delaware General Corporation Law (the "Dissenting
Stockholders") shall not have their shares of e-Perception common stock
exchanged for shares of CDC common stock unless and until such holders fail to
perfect or effectively withdraw or lose such right to appraisal under the
Delaware General Corporation Law. If any Dissenting Stockholder shall have
failed to perfect or shall have effectively withdrawn or lost such right, such
holder's shares shall thereupon be exchanged for the right to receive shares of
CDC common stock at the exchange ratio set forth in Section 3.1, above.
Section 3.4 Options and Warrants. Upon the issuance of CDC shares to the
shareholders of e-Perception, each outstanding option and warrant for the
purchase of e-Perception common stock shall be assumed by CDC, with appropriate
adjustments in the number of shares of stock subject to the option and warrant,
as the case may be, in accordance with the terms and conditions of the holders'
option agreements and warrants.
Section 3.5 Directors of CDC. Upon the issuance of CDC shares to the
shareholders of e-Perception, CDC shall cause the board of directors to be
expanded to five (5) members and one of the two current members shall resign as
director. The remaining director shall then elect Xxxxxxx X. Xxxxxxxxxx, Xxx
Xxxxxxx, Xxxxxx Xxxxxx and Xxxxxx Xxxxxxx to four (4) of the vacancies on the
board of directors following which such remaining director shall resign.
ARTICLE IV
SPECIAL COVENANTS
Section 4.1 Availability of Rule 144. Each of the parties acknowledge that
the stock of CDC to be issued pursuant to this Agreement will be "restricted
securities," as that term is defined in Rule 144 as promulgated pursuant to the
Securities Act. CDC is under no obligation to register such shares under the
Securities Act, or otherwise. Notwithstanding the foregoing, however, CDC will
use its best efforts to: (a) comply with the public information requirements of
Rule 144 so as to make available to the shareholders of CDC the provisions of
Rule 144 pursuant to this paragraph; and (b) within ten (10) days of any written
request of any stockholder of CDC, CDC will provide to such stockholder written
confirmation of compliance with this paragraph. The stockholders of CDC holding
restricted securities of CDC as of the date of this Agreement and their
respective heirs, administrators, personal representatives, successors and
assigns, are intended third party beneficiaries of the provisions set forth
herein. The covenants set forth in this Section 4.1 shall survive the
consummation of the transactions herein contemplated.
Section 4.2 CDC Public Reports. e-Perception will furnish CDC with all
information concerning e-Perception and the stockholders of e-Perception,
including all financial statements, required for inclusion in any registration
statement or public report intended to be filed by CDC pursuant to the
Securities Act, the Exchange Act, or any other applicable federal or state law.
e-Perception covenants that all information so furnished for either such
registration statement or other public release by CDC, including its financial
statements, shall be true and correct in all material respects without omission
of any material fact required to make the information stated not misleading.
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Section 4.3 Special Covenants and Representations Regarding the CDC Common
Shares to be Issued in the Exchange. The consummation of this Agreement,
including the issuance of the CDC common shares to the stockholders of
e-Perception as contemplated hereby, constitutes the offer and sale of
securities under the Securities Act, and applicable state statutes. Such
transaction shall be consummated in reliance on exemptions from the registration
and prospectus delivery requirements of such statutes including Rule 506 under
the Securities Act, which depend, inter alia, upon the circumstances under which
the e-Perception stockholders acquire such securities. In connection with
reliance upon exemptions from the registration and prospectus delivery
requirements for such transactions, the parties agree that requisite copies of
Form D in the form attached hereto as Exhibit B will be filed with the SEC and
---------
with each state in which any e-Perception shareholder is resident together with
requisite state filing fees, if any, to qualify for applicable state exemptions
for federal covered securities. All filings shall be made within 15 days of the
share exchange.
Section 4.4 Notification of Certain Matters. Each party shall give to the
other prompt notice of (a) the occurrence or nonoccurrence of any event the
occurrence or nonoccurrence of which would be likely to cause any representation
or warranty contained in this Agreement to be untrue or inaccurate in any
material respect, (b) any material failure of e-Perception or CDC, as the case
may be, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder, (c) any notice or other
communication from any third party alleging that the consent of such third party
is or may be required in connection with the transactions contemplated by this
Agreement, provided, however, that the delivery of such notice pursuant to this
Section 4.4 shall not cure such breach or non-compliance or limit or otherwise
affect the rights, obligations or remedies available hereunder to the party
receiving such notice.
Section 4.5 Subsequent Actions of CDC. Following the signing hereof, CDC
shall do the following: Sell 65,750 CDC common shares at a price of $1.00 per
share. The proceeds of the sale shall be used as follows:
- Purchase for cancellation 200,000 CDC shares presently held by Xxxxxxx
X. Bench for total consideration of $20,000;
- Retire CDC indebtedness owed to Xxx X. Xxxxx for a total payment of
$25,000; and
- Pay legal costs of CDC associated with this Agreement including legal
costs to Cane & Company necessary to change the name of CDC including
requisite filings with the Securities and Exchange Commission in
conjunction with the necessary meeting of shareholders.
CDC shall also, except as contemplated by this Agreement, conduct its
operations in the ordinary and usual course of business consistent with
past practice and, to the extent consistent therewith, with no less
diligence and effort than would be applied in the absence of this
Agreement, use commercially reasonable efforts to preserve intact its
current business organizations, keep available the service of its current
officers and employees, preserve its
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relationships with customers, suppliers and others having business dealings
with it and preserve the goodwill of CDC.
Section 4.6 Public Announcements. Except as may be required by law, neither
party shall make any public announcement or filing with respect to the
transactions provided for herein without the prior consent of the other party
hereto.
Section 4.7 Shareholder Meeting. In addition to the obligations contained
herein, as soon as practicable after the signing of this Agreement, all parties
to this Agreement shall cooperate to see that a meeting of the shareholders of
CDC be held at which the CDC shareholders shall adopt and approve amendments to
the CDC Articles of Incorporation changing the name of CDC to "e-Perception,
Inc." (or such other name as may be available and acceptable to management of
e-Perception).
ARTICLE V
MISCELLANEOUS
Section 5.1 Brokers and Finders. The parties each agree to indemnify the
other against any claim by any third person for any commission, brokerage or
finder's fee or other payment with respect to this Agreement or 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 5.2 Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Nevada.
Section 5.3 Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered to it or
sent by registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows:
If to e-Perception: Xxxxxxx X. Xxxxxxxxxx, President
e-Perception Technologies, Inc.
00000 Xxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
If to CDC: 0000 X. Xxxxxx Xxxxxx Xxx.
Xxxxxx, Xxxx 00000
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 as of the date so delivered, mailed, or
telegraphed.
Section 5.4 Attorneys' Fees. In the event that any party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parties shall reimburse the
non-breaching party or parties for all costs,
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including reasonable attorneys' fees, incurred in connection therewith and in
enforcing or collecting any judgment rendered therein.
Section 5.5 Confidentiality. Each party hereto agrees with the other
parties that, unless and until the reorganization contemplated by this Agreement
has been consummated, they and their 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 is a matter of public knowledge or is
required by law to be published; and (ii) to the extent that such data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement.
Section 5.6 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 5.7 Third Party Beneficiaries. This contract is solely among
e-Perception and CDC and, except as specifically provided, no director, officer,
stockholder, employee, agent, independent contractor or any other person or
entity shall be deemed to be a third party beneficiary of this Agreement.
Section 5.8 Entire Agreement This Agreement represents the entire agreement
between the parties relating to the subject matter hereof. This Agreement alone
fully and completely expresses the agreement of the parties relating to the
subject matter hereof. There are no other courses of dealing, understandings,
agreements, representations or warranties, written or oral, except as set forth
herein. This Agreement may not be amended or modified, except by a written
agreement signed by all parties hereto.
Section 5.9 Survival; Termination. Except as otherwise provided herein, the
representations, warranties and covenants of the respective parties shall
survive the consummation of the transactions herein contemplated.
Section 5.10 Counterparts Facsimile Execution. For purposes of this
Agreement, a document (or signature page thereto) signed and transmitted by
facsimile machine or telecopier is to be treated as an original document. The
signature of any party thereon, for purposes hereof, is to be considered as an
original signature, and the document transmitted is to be considered to have the
same binding effect as an original signature on an original document. At the
request of any party, a facsimile or telecopy document is to be re-executed in
original form by the parties who executed the facsimile or telecopy document. No
party may raise the use of a facsimile machine or telecopier machine as a
defense to the enforcement of the Agreement or any amendment or other document
executed in compliance with this Section.
Section 5.11 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. This Agreement may be amended by a writing
15
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 hereof may be extended by a writing signed by the party or parties
for whose benefit the provision is intended.
Section 5.12 Incorporation of Recitals. All of the recitals hereof are
incorporated by this reference and are made a part hereof as though set forth at
length herein.
Section 5.13 Expenses. Each party herein shall bear all of their respective
costs and expenses incurred in connection with the negotiation of this Agreement
and in the consummation of the transactions provided for herein and the
preparation therefore.
Section 5.14 Headings; Context. The headings of the sections and paragraphs
contained in this Agreement are for convenience of reference only and do not
form a part hereof and in no way modify, interpret or construe the meaning of
this Agreement.
Section 5.15 Benefit. This Agreement shall be binding upon and shall inure
only to the benefit of the parties hereto, and their permitted assigns
hereunder. This Agreement shall not be assigned by any party without the prior
written consent of the other party.
Section 5.16 Severability. In the event that any particular provision or
provisions of this Agreement or the other agreements contained herein shall for
any reason hereafter be determined to be unenforceable, or in violation of any
law, governmental order or regulation, such unenforceability or violation shall
not affect the remaining provisions of such agreements, which shall continue in
full force and effect and be binding upon the respective parties hereto.
Section 5.17 No Strict Construction. The language of this Agreement shall
be construed as a whole, according to its fair meaning and intendment, and not
strictly for or against either party hereto, regardless of who drafted or was
principally responsible for drafting the Agreement or terms or conditions hereof
Section 5.18 Execution Knowing and Voluntary. In executing this Agreement,
the parties severally acknowledge and represent that each: (a) has fully and
carefully read and considered this Agreement; (b) has been or has had the
opportunity to be fully apprised by its attorneys of the legal effect and
meaning of this document and all terms and conditions hereof; and (c) is
executing this Agreement voluntarily, free from any influence, coercion or
duress of any kind.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers, hereunto duly authorized, and entered
into as of the date first above written.
Corporate Development Centers, Inc., e-Perception Technologies, Inc.,
a Nevada corporation a Delaware corporation
By: /s/ Xxxxxxx X. Bench By: /s/ Xxxxxxx X. Xxxxxxxxxx
----------------------- --------------------------
Xxxxxxx X. Bench Xxxxxxx X. Xxxxxxxxxx
Its: President Its: CEO
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Exhibit A
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Subscription Agreement and Information Statement
1
Exhibit B
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Form D
2
