EXHIBIT 2.2
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger is entered as of July 8, 2004, by
and between CANEUM, INC., a Nevada corporation ("Caneum"), and Pipeline
Software, Inc., a California corporation ("Company").
RECITALS
A. The boards of directors of Company and Caneum desire that
Company will merge with and into Caneum (the "Merger"), so that Caneum will
be the surviving corporation ("Surviving Corporation"), upon the terms and
subject to the conditions of this Agreement and in accordance with the
laws of the States of California and Nevada;
B. For federal income tax purposes, it is intended by the parties
that the Merger shall qualify as a reorganization within the meaning of
Sections 368(a)(1)(A) and (a)(2)(D) of the Internal Revenue Code of
1986, as amended, and that this Agreement shall constitute a Plan of
Reorganization for purposes of Section 368 of such Code.
AGREEMENT
In consideration of the mutual representations, warranties, agreements
and conditions set forth in this Agreement, Company and Caneum agree as
follows:
1. The Merger
1.1 The Merger. At the Effective Time (as defined in Section 1.3),
Company shall be merged with and into Caneum, the separate corporate
existence of Company shall thereupon cease, and Caneum shall be the
Surviving Corporation in the Merger. The name of the Surviving
Corporation immediately following the Effective Time shall continue to
be "Caneum, Inc."
1.2 Filings. Upon fulfillment or waiver of the conditions
specified in this Agreement, and provided that this Agreement has not
been terminated in accordance with its provisions, Caneum and Company
will cause proper articles of merger to be executed and filed with the
offices of the Nevada Secretary of State and the California Secretary of
State.
1.3 Closing and Effective Time of the Merger. The Closing of the
Merger (the "Closing") shall take place at 000 Xxxxxxx Xxxxxx Xx., Xxxxx
000, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, on the business day on which all
of the conditions to closing set forth in Sections 5 and 6 below are
satisfied or waived, or at such other time as shall be mutually agreed
upon by Company and Caneum. The Merger shall be effective at the time
of the completion of filing of the articles of merger with the office of
the Secretary of State of Nevada to complete the Closing (the "Effective
Time").
1.4 Effect of the Merger. The Merger shall have the effects set
forth in Section 92A.250 of the Nevada Revised Statutes and Section 1107
of the California Corporation Code.
1.5 Articles of Incorporation. The Articles of Incorporation of
Caneum as in effect immediately prior to the Effective Time shall
continue to be the Articles of Incorporation of Surviving Corporation
immediately after the Effective Time, and may be amended from time to
time after the Effective Time as provided by applicable laws.
1.6 Bylaws. The Bylaws of Caneum as in effect immediately prior
to the Effective Time shall continue to be the Bylaws of Surviving
Corporation immediately after the Effective Time, and may be amended from
time to time after the Effective Time as provided by the Articles of
Incorporation and Bylaws of Surviving Corporation and applicable laws.
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1.7 Directors and Officers. The directors and officers of Caneum
immediately before the Effective Time shall continue to be the directors
and officers of Surviving Corporation immediately after the Effective
Time, except that Xxxxxxx Xxxxxxxx and Xxxx Xxxxx shall become officers
of Surviving Corporation at the Effective Time in accordance with
their employment agreements with Surviving Corporation. After the
Effective Time, Surviving Corporation's officers and directors may be
removed or cease to be such, and their successors and additional officers
and directors may be appointed, as provided by the Articles of
Incorporation and Bylaws of Surviving Corporation and applicable laws.
1.8 Conversion of Company Shares
1.8.1 At the Effective Time, each then outstanding share of
Company's common stock (the "Company Common Stock") shall be converted into
and become the right of its record holder at the Effective Time (a
"Company Shareholder") to receive:
(a) at the Effective Time, a fraction of one share of the
voting common stock of Caneum (the "Caneum Common Stock") equal to
(i) 500,000, (ii) divided by the total number of outstanding shares of
Company Common Stock at the Effective Time (the "Total Number of Company
Shares");
(b) on the first (1st) anniversary of the Effective Time,
a fraction of one share of the Caneum Common Stock equal to
(iii) 250,000, (iv) divided by the Total Number of Company Shares;
(c) on the second (2nd) anniversary of the Effective Time,
a fraction of one share of the Caneum Common Stock equal to (v) 250,000,
(vi) divided by the Total Number of Company Shares; and
(d) on the monthly anniversary of the day of the
Effective Time for ten (10) consecutive months, a cash payment equal to
(vii) Fifty Thousand Dollars ($50,000), (viii) divided by the Total
Number of Company Shares.
1.8.2 The numbers of shares of Caneum Common Stock to be
issued under Section 1.8.1(a)-1.8.1(c) shall be reduced in the event that
the gross revenues of Company for the year ending December 31, 2003, as
set forth in the audited financial statements of Company to be prepared
under Section 4.7 of this Agreement (the "Audited Revenue Amount"), are
less than ninety percent (90%) of the corresponding gross revenues set
forth in Company's financial statements for the corresponding period
included in Schedule 2.8 to this Agreement (the "Unaudited Amount"). The
adjustment, if any, shall be as follows: the total number of shares
issued at the Effective Time under Section 1.8.1(a) shall be reduced to
equal 500,000 shares, multiplied by a ratio equal to (a) the Audited
Revenue Amount, (b) divided by the Unaudited Amount. Any references in
this Agreement to the shares issuable under Section 1.8.1(a) shall mean
the shares issuable after such adjustment in this paragraph.
1.8.3 If, between the date of this Agreement and the second
anniversary of the Effective Time, Caneum or Surviving Corporation shall
(a) make a distribution on its shares of Caneum Common Stock in shares
of Caneum capital stock or stock equivalents, (b) subdivide or reclassify
its outstanding shares of Caneum Common Stock into a greater number of
shares, or (c) combine or reclassify its outstanding shares of Caneum
Common Stock into a smaller number of shares, the number of shares of
Caneum Common Stock thereafter issuable at any time under Section 1.8.1
to a Company Shareholder shall be adjusted (without accelerating the
actual date of issuance) to equal the number of shares of Caneum Common
Stock such Company Shareholder would have been entitled to receive if
such issuance had occurred immediately prior to the record date for such
event and the shares received in such issuance had been changed or
affected by such event in the same manner as the other outstanding shares
of Caneum Common Stock. For example, if there should be a 2-for-1 stock
split of the Caneum Common Stock, the number of shares of Caneum Common
Stock thereafter issuable under Section 1.8.1 would be doubled. Such an
adjustment shall be made successively whenever any event listed above
shall occur.
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1.8.4 If, between the date of this Agreement and the second
anniversary of the Effective Time, Caneum or Surviving Corporation shall
make any distribution of cash, shares and/or other property to holders
of Caneum Common Stock as a dividend, distribution, spin-off, split-off
or liquidating distribution (other than a transaction described in
Section 1.8.3), then provision shall be made so that the shares of Caneum
Common Stock thereafter issuable at any time under Section 1.8.1 to a
Company Shareholder shall be supplemented (without accelerating the
actual date of issuance) to include the amount, number and type of cash,
shares and/or other property such Company Shareholder would have been
entitled to receive in such distribution if such issuance had occurred
immediately prior to the record date for such distribution. Such an
adjustment shall be made successively whenever any such distribution
shall occur.
1.8.5 If, between the date of this Agreement and the second
anniversary of the Effective Time, there shall occur any
reclassification, capital reorganization or recapitalization of Caneum
or Surviving Corporation directly affecting the then outstanding shares
of Caneum Common Stock, any consolidation or merger of Caneum or
Surviving Corporation with or into another corporation or other entity,
or any sale or disposition of all or substantially all of the assets of
Caneum or Surviving Corporation, but excluding any transaction or
distribution described in Section 1.8.3 or 1.8.4, then, as part of any
such transaction, provision shall be made so that the shares of Caneum
Common Stock thereafter issuable at any time under Section 1.8.1 to any
Company Shareholder shall be adjusted (without accelerating the date of
issuance) to equal the amount, number and type of shares and/or other
property such Company Shareholder would have been entitled to receive if
such issuance had occurred immediately prior to the record date for such
transaction and the shares received in such issuance had been changed or
affected in the same manner in the transaction as the other outstanding
shares of Caneum Common Stock. Such an adjustment shall be made
successively whenever any such transaction shall occur.
1.8.6 In any case covered by Sections 1.8.3-1.8.5, the
provisions set forth in this Agreement relating to the shares issued
under Section 1.8.1 shall be appropriately adjusted so as to be
applicable, as nearly as they may reasonably be, to any shares of stock
and/or other property thereafter deliverable under Sections 1.8.1-1.8.5.
1.8.7 If any fractional share of Caneum Common Stock would
be issued at any time to a Company Shareholder under Section 1.8.1, after
combining all the shares to then be so issued to that Company
Shareholder, a whole share shall be issued instead of that fractional
share. However, if a Company Shareholder's right to receive shares of
Caneum Common Stock at any time under Section 1.8.1 is then held by two
or more individuals or entities (together, Persons) and, after combining
all the shares then to be issued to each of them, two or more of them
would each receive a fractional share under Section 1.8.1, the one of
them receiving the most shares will receive a full share instead of his
or her fractional share and the other(s) of them will receive no
fractional share or full share in replacement of his or her fractional
share.
1.8.8 The numbers of shares of Caneum Common Stock to be
issued under Sections 1.8.1(b) and 1.8.1(c), and/or the cash payments to
be received under Section 1.8.1(d), may be reduced in accordance with
Section 9 below.
1.8.9 All of the holders of shares of outstanding Company
Common Stock at the Effective Time and, if applicable, their spouses
shall, as part of the Closing, sign and enter into a Stock Acquisition
Agreement with Surviving Corporation, in the form attached to this
Agreement as Exhibit A (the "Stock Acquisition Agreement"), and shall
deliver to Caneum the certificates representing their shares of Company
Common Stock for cancellation as of the Effective Time. Also as part of
the Closing, Surviving Corporation shall issue to each Company
Shareholder the certificate for the shares of Caneum Common Stock which
he or she is entitled to receive under Section 1.8.1(a). The certificate
for the Caneum Common Stock to be issued to a Company Shareholder under
Section 1.8.1(b) shall be delivered to him or her on the first
anniversary of the Effective Time, subject to the terms of his or her
Stock Acquisition Agreement. The certificate for the Caneum Common Stock
to be issued to a Company Shareholder under Section 1.8.1(b) shall be
delivered to him or her on the second anniversary of the Effective Time,
subject to the terms of his or her Stock Acquisition Agreement.
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2. Representations and Warranties of Company. Company represents and
warrants to Caneum as set forth below. These representations and
warranties are made as an inducement for Caneum to enter into this
Agreement and, but for the making of such representations and warranties
and their accuracy, Caneum would not be a party to this Agreement.
2.1 Corporate Organization and Authority. Company is a corporation
duly organized, validly existing and in good standing under the laws of
the State of California with full power and authority to enter into and
perform the transactions contemplated by this Agreement. Company does
not have any subsidiaries or own any interest in another entity. Company
has delivered to Caneum complete and accurate copies of Company's
articles of incorporation, as amended, of its current bylaws, and of the
minutes and records of actions and meetings to date of Company's board of
directors and shareholders.
2.2 Authorization and Enforceability. The Merger and this
Agreement have been duly approved by the board of directors of Company
and by all of the Company's shareholders. Each shareholder of Company has
also agreed to enter into the Stock Acquisition Agreement, to cause any
transferee of his or her Company shares also to agree to enter into the
Stock Acquisition Agreement at the Closing and, if he or she is then a
Company employee, to enter into a confidentiality and technology
assignment agreement with Surviving Corporation substantially in the form
attached to this Agreement as Exhibit B (a "Confidentiality and Assignment
Agreement") at the Closing. Copies of the unanimous written consents of
Company's board and shareholders and of such agreements of Company's
shareholders are attached to this Agreement as Schedule 2.2. Company has
taken all corporate actions necessary to authorize the execution,
delivery and performance of this Agreement and the Merger. At the
Effective Time, the Licensor Corporation (as defined in Section 4.4)
shall have taken all corporate actions necessary to authorize the
execution, delivery and performance by it of the License Agreement. This
Agreement constitutes the legal, valid and binding obligations of
Company, enforceable against Company in accordance with its terms, except
as such enforcement may be limited by bankruptcy, insolvency or similar
laws or equitable principles relating to or limiting the rights of
creditors generally. Each agreement referenced in items (d)-(g) of
Section 5 (a "Closing Agreement"), at the Effective Date, will constitute
the legal, valid and binding obligation of the party or parties to that
agreement other than Caneum (the "Other Party" or "Other Parties"),
enforceable against the Other Party or Other Parties in accordance with
its terms, except as such enforcement may be limited by bankruptcy,
insolvency or similar laws or equitable principles relating to or
limiting the rights of creditors generally. The execution delivery and
performance of this Agreement by Company, and of each Closing Agreement
by the Other Party or Other Parties to that agreement will not violate
or constitute a default, or a condition that, if continued, with the
passage of time or notice would constitute a default, under (a) Company's
or an Other Party's articles or bylaws, (b) any agreement to which
Company or an Other Party is a party, or (c) any statute or law or any
judgment, decree, order, regulation or rule of any court or governmental
agency, authority or subunit ("Governmental Authority") to which Company
or an Other Party is subject. Except for any required tax filings, the
filings referred to in Section 1.2 and the actions to be take at the
Closing under this Agreement, no authorization or approval of, or filing
with, any governmental, regulatory or administrative body or any other
Person is required in connection with the execution, delivery and
performance by Company of this Agreement or by the Other Parties of the
Closing Agreements.
2.3 Capitalization. The authorized capital stock of Company
consists of 6,000,000 shares of common stock, of which 3,306,500 shares
are outstanding. The names and holdings of all holders of Company's
outstanding shares, and of all holders of outstanding options or other
rights to acquire shares of capital stock from Company, are set forth on
Schedule 2.3 to this Agreement. All of the outstanding shares of Company
have been duly authorized and validly issued and are fully paid and
nonassessable. Other than as set forth in Schedule 2.3, there are no
options, warrants, debentures, conversion privileges, or other rights,
agreements or commitments obligating Company to issue or to transfer any
additional shares of capital stock to any Person.
2.4 Directors and Officers. The names and titles of all present
directors and officers of Company are as follows: Xxxxxxx Xxxxxxxx -
Chairman of the Board of Directors, President and CEO; Xxxx Xxxxx -
Director and Vice President-Services; and Xxxx Xxxxxx - Director.
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2.5 Material Agreements. Schedule 2.5 to this Agreement lists each
of the written and oral agreements of Company which is any of the
following, and identifies the other party or parties to the agreement and
the item(s) below to which each such agreement corresponds: (a) an
agreement of Company with and any of its employees, directors, officers
or shareholders, or any Affiliate of any such Persons, other than an oral
at will employment agreement; (b) a loan agreement, indenture, bond,
guaranty or other material financing agreement under which Company is
indebted to any Person or any other Person is indebted to Company;
(c) an agreement under which Company has granted to any Person a security
interest in any of Company's assets; (d) an agreement under which a third
party has granted to Company a license, lease, consignment or other right
to use tangible or intangible personal or real property, other than
licenses to Company of non-customized computer software programs used
with Company's personal computers of which the purchase prices and
current royalties per year aggregate less than $10,000; (e) an agreement
under which Company has granted to any Person a license, lease, consignment
or other right to use Company's tangible or intangible personal; (f) an
Agreement restricting rights of Company to engage or compete in any business;
(g) a partnership, joint venture or other agreement under which Company
owns a debt or equity interest in another corporation, partnership, joint
venture, limited liability company or other entity; (h) any agreement
involving sales, licenses or purchases by Company of more than $10,000
during the past 12 months; (i) any agreement involving future binding
obligations of Company or another party of more than $10,000; and (j) any
agreement not terminable by Company without penalty with notice of 90
days or less. For purposes of this Agreement, an "Affiliate" of an entity
means any Person directly or indirectly controlling, controlled by or
under common control with that entity, and an "Affiliate" of an individual
means any entity directly or indirectly controlled by that individual and
his or her Affiliates and any child, spouse or other close relative of
that individual. For purposes of this Section 2.5, a "Listed Agreement"
is an agreement required to be listed or described in Schedule 2.5.
Complete copies of all the existing written Listed Agreements have been
provided to Caneum by company, and complete copies of any other written
agreements which become Listed Agreements after the date of this
Agreement shall be immediately provided to Company to Caneum. Schedule
2.5 also contains a description of the material terms of each existing
oral Listed Agreement and a description of the material terms of each
oral agreement which becomes a Listed Agreement after the date of this
Agreement shall be immediately provided to Caneum by Company. Except as
set forth in Schedule 2.5 or another schedule or exhibit to this
Agreement: (i) Company has not assigned, sublicensed or subleased to any
third party any of Company's rights under any Listed Agreement; and
(ii) neither Company nor, to the best of Company's knowledge, any other party
is in material violation of or default under, nor is there any existing
condition that, if continued, with the passage of time or notice would
constitute a material violation or default by Company or, to the best of
Company's knowledge, by any other party under, any Listed Agreement;
(iii) there have been no requests for equitable adjustment, claims,
demands or any other assertions of liability against Company with respect
to any Listed Agreement which have not been rescinded; (iv) no Listed
Agreement has been terminated or, to the best of the Company's knowledge,
threatened to be terminated by any party thereto; and, (v) to the best
of Company's knowledge, each Listed Agreement is a binding obligation of
each party thereto, enforceable against each such party in all material
respects in accordance with its terms except as limited by bankruptcy and
insolvency laws and by other laws affecting the rights of creditors
generally.
2.6 Intellectual Property. Schedule 2.6 to this Agreement lists
all of the patents, patent applications, copyrights, trademarks, service
marks, names and internet domain names that are presently used by Company
in connection with the conduct of its business, and the present U.S.
registration status of each of them. As used in this Section 2.6,
"Intellectual Property" means patents and patent applications, trade
secrets, copyrights, microcode, designs, maskworks, technology,
inventions, technical data, computer programs, rights to the use of the
name "Pipeline Software" and variations thereof, trademarks, service
marks, trade names, internet domain names, business techniques and other
intellectual property rights and applications therefore. Except as set
forth in Section 4.4 of this Agreement and Schedule 2.6 or 2.5:
(a) Company has received no notice, and Company is not aware, that Company's
activities or any of the Intellectual Property owned or used by Company
has infringed or violated any Intellectual Property right of any third
party; (b) to the best of Company's knowledge, Company owns or is
entitled to use all of the Intellectual Property required for the present
conduct of its business; (c) Company may enter into the Merger under this
Agreement without causing any of Company's Intellectual Property to be
lost or reduced; (d) Surviving Corporation may continue to use Company's
Intellectual Property after the Effective Time in the same manner as it
has been used by Company, except for any expirations of Listed Agreements
or registered Intellectual Property in accordance with their terms;
(e) other than in the ordinary course of
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business, Company does not license, lease or use any material Intellectual
Property owned by other Persons, (f) other than in the ordinary course of
business, Company has not transferred, licensed or leased to any third
party any of its Intellectual Property; (g) Company is not aware of any
infringement or unauthorized use by others of Company's Intellectual Property;
(h) Company has entered into a appropriate confidentiality and technology
assignment agreement with each of its past and current employees, and
with each independent contractor who has provided services relating to
Company's development or modification of its Intellectual Property,
copies of which have been provided to Caneum, and, (i) under their
agreements with the Company or applicable laws, all of the Intellectual
Property developed or generated by Company's past and present employees
and individual independent contractors in the course of their providing
services to the Company have become the sole property of Company.
2.7 Taxes. Within the times and in the manner prescribed by law,
Company has filed all national, local and foreign tax returns and
filings required by applicable tax laws and Company has paid and withheld
all income, employment, property, sales and other taxes (including
estimated taxes), unemployment and disability compensation insurance
contributions, assessments and penalties due and payable or required to
be withheld by Company. Company has provided to Caneum complete copies
of Company's income tax returns and schedules for Company's two (2) most
recently completed fiscal years.
2.8 Financial Statements. Schedule 2.8 to this Agreement contains
unaudited balance sheets, income statements, statements of cash flows and
related financial information of Company as of the end of and for (a) the
year ended December 31, 2003 and (b) the four month period ended April 30,
2004. Such financial statements are complete in all material respects and
calculate and present the data set forth therein in all material respects
fairly and (except for the absence of footnote disclosures in and year-end
adjustments to the monthly statements) in accordance with generally accepted
accounting principles ("GAAP") (as consistently applied by Company).
Company will provide Caneum with comparable financial statements meeting
such requirements for each full calendar month ending before the Effective
Time, not more than thirty (30) days after the end of such month.
2.9 Adverse Changes. Except as set forth in Schedule 2.9 to this
Agreement or the monthly financial statements provided to Caneum under
Section 2.8, since December 31, 2003, there has been no event, change or
development, other than those adversely affecting the economy generally
or both Company and Caneum in a substantially similar manner, which has
had or reasonably can be expected to have a material adverse effect on
Company's operations, revenues, assets or business, taken as a whole (a
"Company Material Adverse Effect"). Except as set forth in Schedule 2.9,
since December 31, 2003, Company has conducted its business only in the
ordinary course consistent with Company's past practice and Company has
not made any material sale or disposition of its assets outside the
ordinary course of its business.
2.10 Liabilities. Except for obligations to be performed in
the future under the Listed Agreements or as set forth in Schedule 2.10
or the other schedules to this Agreement, to the best knowledge of the
Company, (a) there are no liabilities of Company, whether accrued,
absolute, contingent or otherwise, which arose or relate to any action
or transaction of Company occurring before the latest date of the
financial statements delivered to Caneum under Section 2.8, which are not
disclosed by or reflected in such financial statements and individually
or in the aggregate have or reasonably can be expected to have a Company
Material Adverse Effect; and (b) there are no circumstances, conditions,
events or arrangements, contractual or otherwise, known to Company's
officers, which otherwise hereafter will or reasonably can be expected
to give rise to liabilities of Company having a Company Material Adverse
Effect, except for the normal future conduct of Company's business.
2.11 Governmental Authorizations and Violations of Laws.
Company and its employees hold all permits, licenses, consents and
authorizations by Governmental Authorities necessary for the present
conduct of Company's business. Company knows of no threatened
suspension, cancellation or invalidation of any such material permit,
license, consent or authorization. Company has not received notice from
any Governmental Authority or any other Person, that has not been
rescinded, that Company is in violation of or default under any statute,
law, regulation, code or ordinance, or any governmental order, writ,
injunction or decree. Except as set forth in the schedules to this
Agreement, to the best knowledge of the Company, no such violation or
default exists, and there exists no condition or event which with notice,
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lapse of time or both will constitute such a violation or default, where
such violation or default has or reasonably can be expected to have a
Company Material Adverse Effect.
2.12 Employees and Contractors. Schedule 2.12, together with
Schedule 2.5, accurately sets forth: (a) the present names and positions
of all of Company's employees and any individuals retained by Company as
contractors to provide services relating to the development or licensing
of Company's Intellectual Property (together, "Workers"); (b) descriptions
of the compensation, and of the medical, health, severance, retirement,
vacation, sick leave, insurance and other benefits and plans, presently
provided by Company to its Workers; (c) any obligations of Company to
provide compensation or benefits to former Workers; (d) any other
liabilities of or obligations known to the Company to be owed by Company
to its Workers or former Workers on account of their employment, retentions
or terminations by Company or other events or omissions occurring or
claims made against Company, including (without limitation) for any
alleged or actual work-related accidents or injuries, age and sex
discrimination, sexual harassment, violation of employment or safety
laws, wrongful discharge, claims for workers' compensation, medical care
or reimbursements, rights or benefits under Company's employee pension
plans, or health care claims under any plan or policy of Company or
applicable law. True and complete copies of any such plans or agreements
described in Schedule 2.12 have been delivered to Caneum. Company is
in compliance in all material respects with he terms of such plans or
agreements and with all statutes, orders or governmental rules and
regulations applicable to such plans. Company's employees are not
covered by any collective bargaining agreement with a labor union and
Company has not recognized any particular trades unions for industrial
relations purposes. Except as set forth in Schedule 2.12 or Schedule
2.5, (i) there is no employment or contractor agreement between Company
and any of its present or former Workers that may not be terminated at
will without special compensation or penalty by Company giving notice to
the Worker; (ii) the Merger will not violate any agreement of Company
with any present or former Worker or result in any obligation of Company
to any such Worker; and (iii) there exists no agreement between Company
and any present or former Worker which will require Company to issue or
transfer to, or purchase or acquire from, such Worker or any other Person
any shares of stock or other ownership interests in Company or Surviving
Corporation, or any options to sell or acquire other rights with respect
to any such shares or ownership interests.
2.13 Insurance Policies. Company has provided to Caneum
accurate and complete copies of all of Company's policies of malpractice,
product liability, other liability, fire, other casualty, workers'
compensation, group health and other forms of insurance which are
presently in effect or have been in effect during the last two (2) years,
and Caneum has designated which policies are presently in effect.
2.14 Litigation. Except as set forth in Schedule 2.14, no
lawsuit, arbitration, governmental or regulatory investigation or other
legal proceeding against Company, or against a shareholder, Worker or
Affiliate of Company (past or present) relating to Company's business,
or to which Company is otherwise a party, is pending or, to the best
knowledge of Company, threatened.
2.15 Hazardous Materials. No hazardous or toxic substance or
material has been stored, generated, used, manufactured, treated,
deposited, spilled, discharged, released or disposed of on or under any
real property currently or previously owned or leased by Company, and
Company has complied with all laws governing such substances or
materials.
2.16 No Brokers. Neither Company nor any Person acting on
behalf of Company has employed any broker, agent or finder or incurred
any liability or obligation for any brokerage fees, agent's commissions,
finder's fees or similar payments in connection with the transactions
contemplated by this Agreement.
2.17 Accuracy of Statements. No representation or warranty of
Company contained in this Agreement, nor any other schedule, document,
certificate or statement furnished to Caneum by or on behalf of Company
pursuant to or in connection with this Agreement, contains or will
contain any untrue statement of a material fact or omits or will omit a
material fact necessary in order to make the other statements contained
therein or in this Agreement not misleading.
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3. Representations and Warranties of Caneum. Caneum represents and
warrants to Company as set forth below. These representations and
warranties are made as an inducement for Company to enter into this
Agreement and the License Agreement and, but for the making of such
representations and warranties and their accuracy, Company would not be
a party to those agreements.
3.1 Corporate Organization and Authority. Caneum is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Nevada with full power and authority to enter into and
perform the transactions contemplated by this Agreement. Caneum does not
have any subsidiaries or own any interest in another entity. Caneum has
delivered to Company complete and accurate copies of Company's articles
of incorporation, as amended, of its current bylaws, and of the minutes
and records of actions and meetings to date of Company's board of
directors and shareholders.
3.2 Authorization and Enforceability. The Merger and this
Agreement have been duly approved by the board of directors of Caneum.
In addition, the ten (10) largest shareholders, in terms of their share
holdings, have agreed to vote their Caneum shares, and to cause any
transferees of any of their Caneum shares to vote such shares, in favor
of the Merger and this Agreement. Copies of the unanimous written
consent of Caneum's board and of such agreements by Caneum's shareholders
and option holders are attached to this Agreement as Schedule 3.2.
Caneum also agrees that, until the Effective Date or termination of this
Agreement, it will not issue any additional shares of its voting stock
or options to acquire its voting stock unless the issuees or optionees
agree to vote their shares of Caneum stock in favor of the Merger and
this Agreement. Except for obtaining the required approval of its
shareholders, Caneum has taken all corporate actions necessary to
authorize the execution, delivery and performance of this Agreement, the
Closing Agreements and the Merger. This Agreement constitutes, and the
Closing Agreements will constitute at the Effective Time, the legal,
valid and binding obligations of Caneum, enforceable against Caneum in
accordance with their terms, except as such enforcement may be limited
by bankruptcy, insolvency or similar laws or equitable principles
relating to or limiting the rights of creditors generally. Caneum's
execution, delivery and performance of this Agreement and the Closing
Agreements will not violate or constitute a default, or a condition that,
if continued, with the passage of time or notice would constitute a
default, under (a) Caneum's articles or bylaws, (b) any agreement to
which Caneum is a party, or (c) any statute or law or any judgment,
decree, order, regulation or rule of any court or Governmental Authority
to which Caneum is subject. Except for any required tax filings, filings
under federal and California securities laws in connection with the
approval of the Merger by the Caneum shareholders, the exemptions
referred to in Section 1.9 of the Stock Acquisition Agreement and the
registration rights under Section 5 of the Stock Acquisition Agreement,
the filings referred to in Section 1.2 and the actions to be take at the
Closing under this Agreement, no authorization or approval of, or filing
with, any governmental, regulatory or administrative body or any other
Person is required in connection with the execution, delivery and
performance by Caneum of this Agreement and the Closing Agreements.
3.3 Capitalization. As of the date of this Agreement, the
authorized capital stock of Caneum consists of 120,000,000 shares of
capital stock, consisting of 100,000,000 shares of common stock, of which
4,029,190 shares are outstanding, and 20,000,000 shares of preferred
stock, of which 0 shares are outstanding. All of the outstanding shares
of Caneum have been duly authorized and validly issued and are fully paid
and nonassessable. As of the date of this Agreement, there are
outstanding options to purchase up to 3,789,500 shares of Caneum's common
stock, and no other options, warrants, debentures, conversion privileges,
or other rights, agreements or commitments obligating Caneum to issue or
to transfer any additional shares of capital stock to any Person.
3.4 SEC Filings. Caneum has made all filings which it has been
required to make under, and all such filings and the disclosures
contained therein are in compliance in all material respects with, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the rules
and regulations of the Securities and Exchange Commission ("SEC")
thereunder.
3.5 Accuracy of Statements. No representation or warranty of
Caneum contained in this Agreement, nor any other schedule, document,
certificate or statement furnished to Company by or on behalf of Company
pursuant to or in connection with this Agreement, contains or will
contain any untrue statement of a material fact or omits or will omit a
material fact necessary in order to make the other statements contained
therein or in this Agreement not misleading.
8
4. Agreements of the Parties
4.1 Access to Information. Each of Company and Caneum, and its
authorized representatives, shall have full access during normal business
hours to all properties, books, records, contracts and documents of the
other party, and the other party shall furnish or cause to be furnished
to such party and its authorized representatives all information with
respect to the affairs and business of the other party as such party may
reasonably request. Each party shall hold confidential, and shall cause
its employees, contractors and representatives to hold confidential,
subject to any disclosures mandated by applicable laws, all such
information and documents it has received from the other party or its
representatives (both before and after the date of this Agreement), other
than information that (a) is in the public domain at the time of such
disclosure by the other party or its representatives; (b) becomes part of
the public domain after such disclosure through no fault of such party,
(c) is known to such party or any of its officers or directors prior to such
disclosure; or (d) is disclosed in accordance with the written consent
of the other party. In the event this Agreement is terminated prior to
the Closing, each party shall, upon the written request of the other
party, promptly return to the other party all copies of documentation and
information regarding the other party that were provided to such party
by the other party or its representatives. Each party acknowledges that
any investigation under this paragraph by the other party shall be
independent of and in addition to such party's representations and
warranties set forth in this Agreement and that the other party may rely
on the accuracy and completeness of such representations and warranties
notwithstanding such investigation.
4.2 Company Actions Prior to Closing. Until the Effective Time or
termination of this Agreement, unless otherwise approved in writing by
Caneum or provided for in this Agreement:
4.2.1 Company shall: (a) carry on its business diligently
and substantially in the same manner as previously conducted; (b) use its
best efforts (without violating any other item of this Section 4.2) to
preserve intact its business organization, staff and third party
relationships; (c) comply with all laws applicable to it; (d) promptly
notify Caneum of any lawsuit, legal proceeding, investigation or material
claim that may be threatened, brought, asserted or commenced against it,
its officers or its directors involving in any way the business,
properties or assets of Company; and (e) pay its accounts payable and
other contractual payment obligations as they become due; and
4.2.2 Company shall not: (a) enter into any contract or
commitment, or engage in any transaction, not in the ordinary course of
its business consistent with past practices; (b) do any act or omit to
do any act, or permit any act or omission to act, which will cause a
breach of any material contract, commitment or obligation of Company;
(c) sell, license or dispose of any non-cash property or assets, except
products sold in the ordinary course of its business; (d) place or allow
to be imposed on its assets any material security interest or lien
(e) make any change in the compensation, benefits or plans payable or
available to, or to become payable or available to, any employee of
Company or any individual consultant or contractor retained to provide
services to Company; (f) make any cash payment or cash distribution to
any of its shareholders except for salary payments consistent with their
present salaries), earlier than five business days before the Effective
Time or which would cause the condition in Section 5(m) not to be
satisfied; (g) take or agree to take any action that would violate its
obligations under this Agreement or cause its representations in this
Agreement to be inaccurate if made as of the time of such action or the
Effective Time; (h) enter into any agreement to do any of the foregoing;
or (i) permit any subsidiary entity to do any of the foregoing.
4.3 Acquisition Proposal. Until the Effective Time or termination
of this Agreement, Company shall not, and shall cause its officers,
directors, employees or other agents not to, directly or indirectly,
(a) take any action to solicit, initiate or encourage, or enter into, any
Company Acquisition Proposal (as defined below) or (b) engage in
discussions or negotiations with, or disclose any nonpublic information
relating to Company to, or afford access to Company's properties, books
or records to, any Person that may be considering making, or has made,
any Company Acquisition Proposal. The term "Company Acquisition Proposal"
means any offer or proposal for, or any indication of interest in, a
merger, acquisition, consolidation or other business combination directly
or indirectly involving Company or any Company subsidiary, or the
acquisition of all or a substantial equity interest in, or all or a
substantial portion of the assets of, Company or any Company subsidiary,
other than the transactions under this Agreement.
9
4.4 Transfer of Intellectual Property and License to Surviving
Corporation. At or before the Effective Time, Company shall be entitled
to assign to a corporation owned by certain of its shareholders ("Licensor
Corporation") certain of the Company's Intellectual Property rights, all
of which shall be licensed to Caneum pursuant to the License Agreement
attached to this Agreement as Exhibit C (the "License Agreement"). As part
of the Closing, Licensor Corporation and Surviving Corporation will enter
into the License Agreement. Surviving Corporation shall retain all of
Company's rights, titles and interests in and to the xxxx Pipeline
Software, Company's related logos, Pipeline's URL address and related
trademarks, service marks, trade names and copyrights.
4.5 Caneum Shareholder Approval. Subject to the requirements of
Section 14 of the 1934 Act, Caneum shall as soon as reasonably
practicable submit this Agreement and the Merger for approval by its
stockholders, as required by Nevada and California corporate laws, and,
subject to its rights under Section 8 of this Agreement, Caneum shall use
its best efforts to obtain such stockholder approval and adoption of
this Agreement and the Merger. The requested approval by Caneum
shareholders shall also include separately approval of an increase in the
number of shares issuable under Caneum's 2002 Stock Option/Stock Issuance
Plan. In connection with such written action by, or meeting of,
stockholders, Caneum shall prepare a proxy or information statement to
be furnished to the shareholders of Caneum and Company setting forth
information about this Agreement and the transactions contemplated by
this Agreement and shall submit it to the SEC as required by the 1934 Act
and rules thereunder. Company shall promptly furnish to Caneum all
information, and take such other actions, as may reasonably be requested
in connection with any action to be taken by Caneum in connection with
the preparation, regulatory approval and distribution of such information
or proxy statement.
4.6 No Assurance as to Tax or Accounting Consequences. It is
expressly understood and agreed that neither Caneum, nor any of their
officers, counsel or agents, have made any representation, warranty or
agreement (except as set forth in the next sentence), expressed or
implied, as to the tax or accounting consequences of the transactions
contemplated by this Agreement or the tax or accounting consequences of
any action pursuant to or growing out of this Agreement. However,
neither the Company nor Caneum, nor any of their respective officers,
counsel or agents, shall knowingly take any action to cause the Merger
to be treated as other than a tax-deferred reorganization of the type
described in Recital B hereto.
4.7 Audit of Company's Financial Statements. The auditing firm of
White & Xxxxxxx, or another auditing firm selected by Caneum, will be
promptly engaged by the parties to audit the financial statements of
Company for periods ending December 31, 2003, as necessary for such
financial statements and the financial statements and required filings
of Surviving Corporation to be able to satisfy applicable requirements
under the 1934 Act and rules thereunder and of the SEC. Company and
Caneum will each be obligated to pay one-half of the fees of such
auditing firm for such services.
4.8 Expenses. Except as provided in Sections 4.7 and 10.4, each
party shall bear solely all the expenses it incurs in connection with
or related to the due diligence, authorization, preparation, negotiation,
execution and performance of this Agreement, including all reasonable
fees and expenses of its outside counsel.
4.9 Publicity. Company shall not issue or cause the publication
of any press release or other announcement with respect to the Merger
without the prior written consent of Caneum, which shall not be
unreasonably refused.
4.10 Additional Actions. Subject to the terms and conditions
of this Agreement, each party shall use all commercially reasonable
efforts to obtain any consents, approvals and actions by other Persons,
and do all other things, necessary for the Closing of the Merger and
consummation of the transactions contemplated by this Agreement.
4.11 Notification of Certain Matters. Between the date of this
Agreement and the Effective Time, Company and Caneum will each give
prompt notice in writing to the other party upon becoming aware of:
(a) any representation made by such party in this Agreement is no longer
accurate in any material way; or (b) the occurrence or
10
non-occurrence of any event or circumstance which will result, or is
likely to result, in the failure of any condition in this Agreement to
be complied with or satisfied.
5. Conditions to Caneum's Obligations
The obligations of Caneum to proceed with the Closing of the Merger
and the transactions contemplated by this Agreement are subject to the
satisfaction on or before the Effective Time of all the following
conditions, any one or more of which may be waived, in whole or in part,
by Caneum in its sole discretion:
(a) Each of the material covenants and agreements in this Agreement
to be complied with and performed by Company on or before the Effective
Time shall have been duly complied with and performed;
(b) Each of the representations and warranties of Company in
Section 2 above shall continue be accurate as of the date of this
Agreement, except for such inaccuracies that individually or in the
aggregate do not and cannot reasonably be expected to have a Company
Material Adverse Effect;
(c) Each of the Company Shareholders shall have executed and
delivered the Stock Acquisition Agreement;
(d) Each of Company's employees at the Effective Date will have
executed and delivered a Confidentiality and Assignment Agreement;
(e) Licensor Company shall have executed and delivered the License
Agreement;
(f) Xxxxxxx Xxxxxxxx'x Employment Agreement with Caneum, a copy of
which is attached to this Agreement as Exhibit D, will not have been
materially breached by Xxxxxxxx or terminated other than under Section
6(d) thereof;
(g) Xxxx Xxxxx'x Employment Agreement with Caneum, a copy of which
is attached to this Agreement as Exhibit E, will not have been materially
breached by Xxxxx or terminated other than under Section 6(d) thereof;
(h) White & Xxxxxxx, or another auditing firm selected by the
parties, shall have completed its audit of Company's financial statements
described in Section 4.7 above;
(i) No action, suit or proceeding instituted by any Governmental
Authority shall be pending, and no statute, rule, order, decree or
regulation, and no injunction, order, decree or judgment of any court or
Governmental Authority of competent jurisdiction, may be in effect, in
each case which would prohibit, restrain, enjoin or restrict the
consummation of the Merger, provided that Caneum must have used all
reasonable best efforts to prevent the entry of such injunction or other
order;
(j) The Caneum shareholders must have duly consented to or approved
the Merger and this Merger Agreement;
(k) Company shall have positive net income for the year ending
December 31, 2003, as set forth in the audited financial statements of
Company to be prepared under Section 4.7 of this Agreement;
(l) Company shall have at least $700,000 of gross revenues and
positive net income for the period from January 1, 2004 until June 30,
2004, as set forth in unaudited financial statements of Company meeting
the requirements of Section 2.8 above; and
(m) The sum of the following shall not be less than $300,000:
(i) the total amount of Company's cash at the Effective Time, (ii) plus
the total amount of the Company's accounts receivable at the Effective
Time which are not then
11
more than 45 days beyond the invoice due date, (iii) less Company's
accounts payable at the Effective Time. For this purpose, Company's
accounts payable shall be determined in accordance with GAAP and shall
include, if not otherwise included, the amount of all accrued but unpaid
vacation pay then owed by Company to its employees.
6. Conditions to Company's Obligations.
The obligations of Company to proceed with the Merger and the
Closing of the transactions contemplated by this Agreement are subject
to the satisfaction on or before the Effective Time of all the following
conditions, any one or more of which may be waived, in whole or in part,
by Company in its sole discretion:
(a) All of the material covenants and agreements in this Agreement
to be complied with and performed by Caneum on or before the Effective
Time shall have been duly complied with and performed; and
(b) Each of the representations and warranties of Caneum in Section 3
above shall continue to be accurate as of the date of this Agreement,
except for such inaccuracies that individually or in the aggregate do not
and cannot reasonably be expected to have a material adverse effect on
Caneum's operations, revenues, assets or business, taken as a whole (a
"Caneum Material Adverse Effect");
(c) Caneum shall have executed and delivered the Stock Acquisition
Agreement and the License Agreement;
(d) No action, suit or proceeding instituted by any Governmental
Authority shall be pending, and no statute, rule, order, decree or
regulation, and no injunction, order, decree or judgment of any court or
Governmental Authority of competent jurisdiction, may be in effect, in
each case which would prohibit, restrain, enjoin or restrict the
consummation of the Merger, provided that Company must have used all
reasonable best efforts to prevent the entry of such injunction or other
order;
(e) Caneum's shares shall be traded publicly through the
Over-the-Counter Electronic Bulletin Board;
(f) Xxxxxxx Xxxxxxxx'x Employment Agreement with Caneum, a copy of
which is attached to this Agreement as Exhibit D, will not have been
terminated under Section 6(d) thereof or materially breached by Caneum;
and
(g) Xxxx Xxxxx'x Employment Agreement with Caneum, a copy of which
is attached to this Agreement as Exhibit E, will not have been terminated
under Section 6(d) thereof or materially breached by Caneum;
7. Deliveries at the Closing
At the Closing: (a) Company, Caneum, the Company Shareholders and
Licensor Corporation shall sign and deliver to each other, as applicable,
counterparts of the Closing Agreements, and, if applicable, the Stock
Acquisition Agreement shall be signed by each spouse of a Company
Shareholder, (b) each Company Shareholder shall deliver to Caneum for
cancellation the certificate(s) representing his or her shares of Company
stock; (c) Caneum will deliver to the Company Shareholders the
certificates evidencing the shares of Caneum Common Stock issued to them
under Section 1.8.1(a); (d) Company shall deliver to Caneum an officer's
certificate certifying that the conditions specified in Section 5(a)-(c)
have been satisfied as of the Effective Time; (e) Caneum shall deliver
to Company an officer's certificate certifying that the conditions
specified in Section 6(a)-(c) have been satisfied as of the Effective
Time; and (f) the filings described in Section 1.2 shall be made with the
Nevada and California Secretaries of State. Until the Closing or
termination of this Agreement under Section 8, the parties shall use
reasonable efforts and cooperate in order to satisfy the conditions set
forth in Sections 5 and 6 and to consummate the Closing.
12
8. Termination and Break-Up Fee
8.1 Termination Rights. This Agreement may be terminated at any
time prior to the Effective Time: (a) by either party if any event shall
have occurred or any state of facts shall exist that renders any of the
conditions to such party's obligations set forth in Section 5 or 6
incapable of fulfillment by September 15, 2004 (the Termination Date),
provided that such incapability shall not have resulted to a significant
extent from that party's breach(es) of this Agreement or the inaccuracy
of that party's representation(s) in this Agreement, or (b) by either
party if the other party shall have committed a material breach of its
obligation or obligations under this Agreement, or one or more
representations made by the other party in Section 5 or 6 is inaccurate
in a material way, and (c) by either party if the Closing shall not have
occurred by the Termination Date, other than as a result to a significant
extent of that party's breach(es) of this Agreement or the inaccuracy of
that party's representation(s) in this Agreement. Such a termination by
either party shall be made by its giving a written notice of such
termination to the other party setting forth the basis for the termination.
Following such termination of this Agreement, neither party shall have
liability to the other party relating to such termination, other than any
liability resulting from the breach of this Agreement by a party or the
inaccuracy of a party's representations and warranties prior to the date of
termination. Sections 4.8, 8.2, 9 and 10 of this Agreement and the last
two sentences of Section 4.1, as applicable, shall continue to be
applicable and binding after any such termination.
8.2 Break-Up Fee. In the event that the Closing does not take
place and (a) Company has breached Section 4.3, or (b) this Agreement is
terminated by Caneum under Section 8.1(b), or (c) this Agreement is
terminated by Caneum under Section 8.1(a) on account of the inability to
fulfill a condition set forth in Section 5(a)-5(f), or (d) this Agreement
is otherwise terminated by Caneum under Section 8.1, or this Agreement
is terminated by Company under Section 8.1(c), in each such case while
Caneum would then be entitled to terminate this Agreement under Section
8.1(b) if its cure period were eliminated, and, if (in any such case
(a)-(d)) within twelve (12) months after such breach, acceptance or
termination Company closes a transaction proposed in a Company
Acquisition Proposal, then, immediately upon such closing, Company shall
pay to Caneum a cash amount equal to five percent (5%) of the total
consideration (including the assumption of any liabilities of Company),
cash and non-cash (as, when and in such proportions as such consideration
is received by Company and/or its shareholders) paid to the Company
and/or its shareholders in such transaction. This paragraph shall not
limit Caneum's rights to seek other remedies available under this
Agreement or applicable laws (other than specific performance hereof if
the foregoing amounts are paid) for any breach by Company of its
obligations under this Agreement, provided that any amounts paid to
Caneum under this paragraph shall reduce any amounts otherwise payable
to Caneum by the Company on account of the Company's breach of this
Agreement.
9. Offset Rights
In the event that, if Company had not been merged into Caneum and
they were separate entities, any amounts would be owed to Caneum by
Company under this Agreement or applicable laws, including as damages or
rights to indemnification, for any breach by Company of its agreements
in this Agreement or the inaccuracy of any representation or warranty by
Company in this Agreement other than relating to Section 2.8 (insofar as
it applies to the financial statements delivered pursuant to clause (a)
thereof) (together the Deemed Owed Amount), then Surviving Corporation,
in its discretion, may:
(a) reduce the number of shares of Caneum Common Stock to be issued
to the Company Shareholders in the future under Section 1.8.1(b) or
1.8.1(c) of this Agreement pro rata in accordance with their respective
holdings of shares of Company at the Effective Time, by a number of such
shares equal to (i) all or a portion of the Deemed Owed Amount, less any
portions of the Deemed Owed Amount separately taken into account under
Sections 9(b) and 9(c) below, (ii) divided by $.75 (the agreed fair
market value of a share of Caneum Common Stock on the date of this
Agreement); and/or
13
(b) reduce the cash amounts to be paid to the Company Shareholders
in the future under Section 1.8.1(d) of this Agreement, pro rata in
accordance with their respective holdings of shares of Company at the
Effective Time, by all or a portion of the Deemed Owed Amount, less any
portions of the Deemed Owed Amount separately taken into account under
Sections 9(a) and 9(c); and/or
(c) offset or credit all or a portion of the Deemed Owed Amount,
not in excess of the total Deemed Owed Amount less the portions thereof
separately taken into account under Sections 9(a) and 9(b) above, and
thereby satisfy or reduce, any amounts owed by Surviving Corporation
and/or its officers, directors, employees, shareholders, advisors or
agents to any Company Shareholder(s), or assignee(s) or successor(s) of
any Company Shareholder(s), on account of this Agreement, the Stock
Acquisition Agreement or any violations of Caneum's, Surviving
Corporation's or such Persons' duties or obligations under securities laws
or other laws in connection with the Merger, the Stock Acquisition
Agreement, this Agreement or issuances of the shares of Caneum Common
Stock to the Company Shareholders.
No such reduction, offset or credit shall be made or taken under
this Section 9 unless the total Deemed Owed Amount is greater than $20,000,
in which case only the amount of the Deemed Owed Amount (subject to the
following sentence) in excess of such $20,000 deductible may be taken
into account with respect to reductions, offsets and/or credits under
this Section 9. Any portion of the total Deemed Owed Amount in excess
of $100,000 shall be disregarded for purposes of this Section 9. The
Company Shareholders will not otherwise (except for fraud) have personal
liability to Caneum or Surviving Corporation on account of the inaccuracy
of any representation or warranty made by Company in this Agreement or
the breach by Company of any covenant made by it in connection with this
Agreement, but this sentence does not limit a Company Shareholder's
liability for his or her breach of an exhibit to this Agreement to which
he or she is a party or the inaccuracy of any warranty or representation
made by him or her in such an exhibit. In no event shall the Company
or the Company Shareholders have any liability for any accounting
consequences of the failure of the Caneum options granted to Xxxxxxxx and
Xxxxx pursuant to Section 1.8.9 above to qualify as incentive stock
options. Solely for purposes of determining the Deemed Owed Amount,
Company shall be deemed to have agreed under this Agreement to reimburse,
indemnify and hold harmless Caneum against any and all claims, demands,
injunctions, judgments, orders, rulings, penalties, fees, losses,
damages, injuries, obligations and liabilities, including but not limited
to interest, penalties and reasonable attorney's fees, that Caneum may
suffer or incur by reason of the falsity or breach of a representation,
warranty or covenant made by Company in or pursuant to this Agreement.
Solely for purposes of the preceding sentence, Company shall also be
deemed to have made the warranties and representations in Sections
2.10(a) and the last sentence of Section 2.11 without the words to the
best knowledge of the Company and in Section 2.12(c) without the words
known to the Company to be.
10. MISCELLANEOUS
10.1 Amendments and Waivers. This Agreement may be amended or
modified only by an instrument in writing signed by both Caneum and
Company. Any waiver of rights under this Agreement must also be in a
writing signed by the waiving party. No waiver of any breach or
condition of this Agreement shall be deemed to be a waiver of any other
or subsequent breach or condition, whether of like or different nature.
10.2 Severability. If any provision of this Agreement or its
application to any Person or circumstances is held to be unenforceable
or invalid by any court of competent jurisdiction, its other applications
and the remaining provisions of this Agreement will be interpreted so as
best reasonably to effect the intent of the parties.
10.3 Notices. Any notice or other communication to a party
pursuant to this Agreement will be deemed to have been duly given if
given personally to the party or on the date of delivery in writing,
addressed to the party, at the following address:
14
If to Caneum: Caneum, Inc.
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
If to Company: Pipeline Software, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Any party may change its address for purposes of this paragraph by giving
the other parties written notice of the new address in the manner set
forth above.
10.4 Attorneys' Fees. If either party shall bring a legal
action or other proceeding against the other party to enforce or
interpret any of the provisions of this Agreement, or relating to the
agreements under transactions contemplated by this Agreement, the
prevailing party shall be entitled to recover reasonable attorneys' fees
and costs incurred in that action or proceeding.
10.5 Entire Agreement. This Agreement, together with the
agreements to be entered at the Closing, constitutes the entire agreement
between the parties pertaining to its subject matter and supersedes all
prior written or oral agreements and understandings of the parties
relating to the subject matter of this Agreement.
10.6 Governing Law. This Agreement shall be construed under
and governed by the laws of the State of California, excluding conflict
of law provisions.
10.7 Successors and Assigns. Subject to the terms of the Stock
Acquisition Agreement, this Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns.
This Agreement may not be assigned in whole or in part by either party
without the prior written consent of the other party.
10.8 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original agreement,
but all of which together shall constitute one and the same instrument.
10.9 Number and Gender. With respect to words used in this
Agreement, the singular form shall include the plural form, the masculine
gender shall include the feminine or neuter gender, and vice versa, as
the context requires.
10.10 Further Actions. Each party agrees to execute and deliver
any further documents and to do any additional acts reasonably required
to carry out the terms of this Agreement.
10.11 Drafting. Any rule of law (including California Code of
Civil Procedure Section 1864 or California Civil Code Section 1654) or
legal decision that would require interpretation against the drafter of
this Agreement is not applicable and is waived.
10.12 Full Knowledge. By their signatures, the parties
acknowledge that they have carefully read and fully understand the terms
and conditions of this Agreement, that each party has had the benefit of
counsel, and that each party has freely agreed to be bound by the terms
and conditions of this Agreement.
10.13 Headings. The descriptive headings of the various
sections or parts of this Agreement are for convenience only and shall
not affect the meaning or construction of any of the provisions hereof.
10.14 Survival of Covenants, Representations and Warranties.
All covenants, representations and warranties made in this Agreement by
either party, or in any statement or document delivered to either party,
shall survive the making of this Agreement and the Merger and shall
continue thereafter to be binding upon the parties.
15
This Agreement has been entered into at Newport Beach, California
as of the date set forth in the first paragraph above.
Caneum, Inc.,
a Nevada corporation
By /s/ Xxxxxxx Mudan
Xxxxxxx Mudan, President
Pipeline Software, Inc.,
a California corporation
By /s/ Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxx, President
By /s/ Xxxx Xxxxx
Xxxx Xxxxx, Vice President
16
