AGREEMENT AND PLAN OF MERGER by and among AMERASIA KHAN ENTERPRISES LTD SZC ACQUISITION, INC. and SHIELDZONE CORPORATION February 8, 2007
AGREEMENT
AND PLAN OF MERGER
by
and
among
AMERASIA
KHAN ENTERPRISES LTD
SZC
ACQUISITION, INC.
and
SHIELDZONE
CORPORATION
February
8, 2007
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ARTICLE
I
DEFINITIONS
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1
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Section
1.1
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Definitions
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1
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ARTICLE
II
THE MERGER
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6
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Section
2.1
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Merger
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6
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Section
2.2
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Effective
Time
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6
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Section
2.3
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Certificate
of Incorporation
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6
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Section
2.4
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Effects
of the Merge
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7
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Section
2.5
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Closing
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7
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Section
2.6
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Tax-Free
Merger
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7
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| ARTICLE III MERGER CONSIDERATION; CONVERSION AND EXCHANGE OF SECURITIES |
7
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Section
3.1
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Manner
and Basis of Converting and Exchanging Capital Stock
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7
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Section
3.2
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Surrender
and Exchange of Certificates
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8
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Section
3.3
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Options,
Warrants
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10
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Section
3.4
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Parent
Common Stock
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10
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| ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
10
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Section
4.1
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Organization
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10
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Section
4.2
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Authorization;
Validity of Agreement
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10
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Section
4.3
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Capitalization
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11
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Section
4.4
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Consents
and Approvals; No Violations
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11
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Section
4.5
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Financial
Statements
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11
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Section
4.6
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No
Undisclosed Liabilities
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12
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Section
4.7
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Litigation
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12
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Section
4.8
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No
Default; Compliance with Applicable Laws
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12
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Section
4.9
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Broker’s
and Finder’s Fees
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12
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Section
4.10
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Contracts
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12
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Section
4.11
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Tax
Returns and Audits
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13
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Section
4.12
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Patents
and Other Intangible Assets
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13
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Section
4.13
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Employee
Benefit Plans; ERISA
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14
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Section
4.14
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Title
to Property and Encumbrances
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14
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Section
4.15
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Condition
of Properties
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15
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Section
4.16
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Insurance
Coverage
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15
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Section
4.17
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Environmental
Matters
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15
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Section
4.18
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Disclosure
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16
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| ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION CORP. |
16
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Section
5.1
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Organization
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16
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Section
5.2
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Authorization;
Validity of Agreement
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16
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ii
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Section
5.3
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Consents
and Approvals; No Violations
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17
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Section
5.4
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Litigation
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17
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Section
5.5
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No
Default; Compliance with Applicable Laws
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17
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Section
5.6
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Broker’s
and Finder’s Fees; Broker/Dealer Ownership
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18
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Section
5.7
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Capitalization
of Parent
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18
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Section 5.8
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Acquisition Corp. |
18
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Section
5.9
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Validity
of Shares
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18
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Section
5.10
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SEC
Reporting and Compliance
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18
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Section
5.11
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Financial
Statements
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19
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Section
5.12
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No
General Solicitation
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20
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Section
5.13
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Absence
of Undisclosed Liabilities
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20
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Section
5.14
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Changes
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20
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Section
5.15
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Tax
Returns and Audits
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21
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Section
5.16
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Employee
Benefit Plans; ERISA.
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21
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Section
5.17
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Interested
Party Transactions
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22
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Section
5.18
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Questionable
Payments
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22
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Section
5.19
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Obligations
to or by Stockholders
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22
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Section
5.20
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Schedule
of Assets and Contracts
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22
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Section
5.21
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Environmental
Matters
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23
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Section
5.22
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Employees
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24
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Section
5.23
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Title
to Property and Encumbrances
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24
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Section
5.24
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Condition
of Properties
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24
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Section
5.25
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Insurance
Coverage
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24
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Section
5.26
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Disclosure
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24
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Section 5.27
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No Liabilities |
24
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| ARTICLE VI CONDUCT OF BUSINESSES PENDING THE MERGER |
25
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Section
6.1
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Conduct
of Business by the Company Pending the Merger
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25
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Section
6.2
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Conduct
of Business by Parent and Acquisition Corp
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25
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| ARTICLE VII ADDITIONAL AGREEMENTS |
26
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Section
7.1
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Access
and Information
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26
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Section
7.2
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Additional
Agreements
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27
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Section
7.3
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Publicity
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27
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Section
7.4
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Appointment
of Directors
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28
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Section
7.5
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Name
Changes
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28
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Section
7.6
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Stockholder
Consent
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28
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| ARTICLE VIII CONDITIONS OF PARTIES’ OBLIGATIONS |
29
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Section
8.1
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Company
Obligations
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29
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Section
8.2
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Parent
and Acquisition Corp. Obligations
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30
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| ARTICLE IX INDEMNIFICATION AND RELATED MATTERS |
31
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Section
9.1
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Indemnification
by Parent
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31
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Section
9.2
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Survival
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31
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Section
9.3
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Time
Limitations
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32
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Section
9.4
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Limitation
on Liability
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32
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Section
9.5
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Notice
of Claims
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32
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iii
| ARTICLE X TERMINATION PRIOR TO CLOSING |
33
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Section
10.1
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Termination
of Agreement
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33
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Section
10.2
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Termination
of Obligations
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33
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| ARTICLE XI MISCELLANEOUS |
34
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Section
11.1
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Amendments
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34
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Section
11.2
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Notices
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34
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Section
11.3
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Entire
Agreement
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35
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Section
11.4
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Expenses
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35
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Section
11.5
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Severability
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35
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Section
11.6
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Successors
and Assigns; Assignment
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36
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Section
11.7
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No
Third Party Beneficiaries
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36
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Section
11.8
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Counterparts;
Delivery by Facsimile
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36
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Section
11.9
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Waiver
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36
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Section
11.10
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No
Constructive Waivers
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36
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Section
11.11
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Further
Assurances
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36
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Section
11.12
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Recitals
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37
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Section
11.13
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Headings
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37
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Section
11.14
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Governing
Law
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37
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Section
11.15
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Dispute
Resolution
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37
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Section
11.16
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Interpretation
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37
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LIST
OF
EXHIBITS
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Exhibit
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Description
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Exhibit
A
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Certificate
of Incorporation of Surviving Corporation
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Exhibit
B
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By-laws
of Surviving Corporation
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Exhibit
C
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Directors
of Parent Pre-Effective Time and Post-Effective Time
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Exhibit
D
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Convertible
Notes
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Exhibit
E
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Certificate
of Incorporation of Parent
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Exhibit
F
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Bylaws
of Parent
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iv
AGREEMENT
AND PLAN OF MERGER
THIS
AGREEMENT AND PLAN OF MERGER is entered into as of
February
8, 2007 by and among AMERASIA KHAN ENTERPRISES LTD, a Nevada corporation
(“Parent”),
SZC
ACQUISITION, INC., a Nevada corporation and a wholly-owned subsidiary of Parent
(“Acquisition
Corp.”),
and
SHIELDZONE CORPORATION, a Utah corporation (the “Company”).
W
I T
N E S S E T H:
WHEREAS,
the respective Boards of Directors of each of Parent, Acquisition Corp. and
the
Company have approved, and deem it advisable and in the best interests of their
respective stockholders to consummate, the acquisition of the Company by Parent,
which acquisition is to be effected by the merger of Acquisition Corp. with
and
into the Company, with the Company being the surviving entity (the “Merger”),
upon
the terms and subject to the conditions set forth in this Agreement (as defined
herein);
WHEREAS,
the parties hereto intend that the Merger
shall
qualify as a reorganization within the meaning of Section 368(a)(1)(A) of the
Internal Revenue Code of 1986, as amended (the “Code”),
by
reason of Section 368(a)(2)(E) of the Code; and
NOW,
THEREFORE, in consideration of the mutual agreements and covenants hereinafter
set forth, the parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.1 Definitions.
Capitalized terms used in this Agreement shall have the following
meanings:
“Acquisition
Corp.”
shall
have the meaning given to such term in the preamble to this
Agreement.
“Acquisition
Proposal”
shall
have the meaning given to such term in Section
6.2
hereof.
“Action”
shall
mean any claim, action, suit, proceeding, investigation or order.
“Affiliate”
shall
mean, with respect to any Person, any Person directly or indirectly controlling,
controlled by or under common control with, such Person. For the purposes of
this definition, “control”
(including, with correlative meaning, the terms “controlling,”
“controlled
by”
and
“under
common control with”)
means
the possession, directly or indirectly, of the power to direct or cause the
direction of management and policies of such Person through the ownership of
voting securities, by contract or otherwise.
“Agreement”
shall
mean this Agreement and Plan of Merger, including the exhibits attached hereto
or referred to herein, as the same may be amended or modified from time to
time
in accordance with the provisions hereof.
Draft
1/30/07
“Balance
Sheet”
shall
have the meaning given to such term in Section
4.5
hereof.
“Balance
Sheet Date”
shall
have the meaning given to such term in Section
4.5
hereof.
“By-laws”
shall
have the meaning given to such term in Section
2.3(b)
hereof.
“Certificate
of Incorporation”
shall
have the meaning given to such term in Section
2.3(a)
hereof.
“Closing”
shall
have the meaning given to such term in Section
2.5
hereof.
“Closing
Date”
shall
have the meaning given to such term in Section
2.5
hereof.
“Code”
shall
have the meaning given to such term in the third recital to this
Agreement.
“Commission”
shall
mean the United States Securities and Exchange Commission.
“Company”
shall
have the meaning given to such term in the preamble to this
Agreement.
“Company
Capital Stock”
shall
mean, collectively, the Company Common Stock and the Company Preferred
Stock.
“Company
Common Stock”
shall
mean the common stock, no par value, of the Company.
“Company
Material Adverse Effect”
shall
mean any change, effect or circumstance that is materially adverse or is
reasonably likely to be materially adverse to the business, assets, liabilities,
condition (financial or otherwise) or operations of the Company and its
subsidiaries, taken as a whole, other than any such change, effect or
circumstance relating to general economic, regulatory or political conditions,
except to the extent such change, effect or circumstance disproportionately
affects the Company and its subsidiaries, taken as a whole.
“Company
Preferred Stock”
shall
mean, collectively, all Preferred Stock, if any, issued or issuable by the
Company.
“Company
Stock Options”
shall
have the meaning given to such term in Section
3.3(a)
hereof.
“Contract”
shall
have the meaning given to such term in Section
4.4
hereof.
“Consents”
shall
mean any permits, filings, notices, licenses, consents, authorizations,
accreditation, waivers, approvals and the like of, to, with or by any
Person.
“Convertible
Notes”
shall
mean the issued and outstanding Convertible Promissory Notes of the
Company.
“Dissenting
Shares”
shall
have the meaning given to such term in Section
3.2(d)
hereof.
2
“Effective
Time”
shall
have the meaning given to such term in Section
2.2 hereof.
“Employee
Benefit Plans”
shall
have the meaning assigned to it in Section
4.13
hereof.
“Environmental
Law”
shall
mean the Comprehensive Environmental Response, Compensation and Liability Act,
42 U.S.C. §§ 9601 et seq.; the Emergency Planning and Community Right-to-Know
Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Resource Conservation and Recovery
Act, 42 U.S.C. §§ 6901 et seq.; the Toxic Substances Control Act, 15 U.S.C. §§
2601 et seq.; the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
§§ 136 et seq. and comparable state statutes dealing with the registration,
labeling and use of pesticides and herbicides; the Clean Air Act, 42 U.S.C.
§§
7401 et seq.; the Clean Water Act (Federal Water Pollution Control Act), 33
U.S.C. §§ 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C. §§ 300f et seq.;
and the Hazardous Materials Transportation Act, 49 U.S.C. §§ 1801 et seq., as
any of the above referenced statutes have been amended as of the date hereof,
all rules, regulations and policies promulgated pursuant to any of the above
referenced statutes, and any other foreign, federal, state or local law,
statute, ordinance, rule, regulation or policy governing environmental matters,
as the same have been amended as of the date hereof.
“ERISA”
shall
mean the Employee Retirement Income Securities Act of 1974, as amended, and
the
regulations issued thereunder.
“Exchange
Act”
shall
mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations issued thereunder.
“GAAP”
shall
mean generally accepted accounting principles as in effect from time to time
in
the United States consistently applied.
“Hazardous
Material”
means
any substance or material meeting any one or more of the following criteria:
(a)
it is or contains a substance designated as or meeting the characteristics
of a
hazardous waste, hazardous substance, hazardous material, pollutant, chemical
substance or mixture, contaminant or toxic substance under any Environmental
Law; (b) its presence at some quantity requires investigation, notification
or
remediation under any Environmental Law; (c) it contains, without limiting
the
foregoing, asbestos, polychlorinated biphenyls, petroleum hydrocarbons,
petroleum derived substances or waste, pesticides, herbicides, crude oil or
any
fraction thereof, nuclear fuel, natural gas or synthetic gas; or (d)
mold.
“Incentive
Plans”
shall
have the meaning given to such term in Section
3.3(d)
hereof.
“Indebtedness”
shall
mean any obligation of the Company that under GAAP is required to be shown
on
the Balance Sheet of the Company as a Liability. Any obligation secured by
a
Lien on, or payable out of the proceeds of production from, property of the
Company shall be deemed to be Indebtedness even though such obligation is not
assumed by the Company.
“Indebtedness
for Borrowed Money”
shall
mean (a) all Indebtedness in respect of money borrowed including, without
limitation, Indebtedness which represents the unpaid amount of the purchase
price of any property and is incurred in lieu of borrowing money or using
available funds to pay such amounts and not constituting an account payable
or
expense accrual incurred or assumed in the ordinary course of business of the
Company, (b) all Indebtedness evidenced by
3
a
Promissory note, bond or similar written obligation to pay money, or (c)
all
such Indebtedness guaranteed by the Company or for which the Company is
otherwise contingently liable.
“Information
Statement”
shall
have the meaning given to such term in Section
7.7
hereof.
“Intellectual
Property”
shall
have the meaning given to such term in Section
4.12(b)
hereof.
“Investment
Company Act”
shall
mean the Investment Company Act of 1940, as amended.
“Letter
of Transmittal”
shall
have the meaning assigned to it in Section
3.2
hereof.
“Liability”
shall
mean any and all liability, debt, obligation, deficiency, Tax, penalty, fine,
claim, cause of action or other loss, cost or expense of any kind or nature
whatsoever, whether asserted or unasserted, absolute or contingent, accrued
or
unaccrued, liquidated or unliquidated, and whether due or to become due and
regardless of when asserted.
“Lien”
shall
mean any mortgage, pledge, security interest, encumbrance, lien or charge of
any
kind, including, without limitation, any conditional sale or other title
retention agreement, any lease in the nature thereof and the filing of or
agreement to give any financing statement under the Uniform Commercial Code
of
any jurisdiction and including any lien or charge arising by statute or other
law.
“Merger”
shall
have the meaning given to such term in the second recital to this
Agreement.
“Parent”
shall
have the meaning given to such term in the preamble to this
Agreement.
“Parent
Balance Sheet”
shall
have the meaning assigned to such term in Section
5.13
hereof.
“Parent
Balance Sheet Date”
shall
have the meaning assigned to it in Section
5.13
hereof.
“Parent
Common Stock”
shall
mean the common stock, par value $0.001 per share, of Parent.
“Parent
Employee Benefit Plans”
shall
have the meaning assigned to such term in Section
5.16
hereof.
“Parent
Financial Statements”
shall
have the meaning assigned to such term in Section
5.10
hereof.
4
“Parent
Material Adverse Effect”
means
any change, effect or circumstance that is materially adverse or is reasonably
likely to be materially adverse to the business, assets, liabilities, condition
(financial or otherwise) or operations of Parent and its subsidiaries, taken
as
a whole, other than any such change, effect or circumstance relating to general
economic, regulatory or political conditions, except to the extent such change,
effect or circumstance disproportionately affects Parent and its subsidiaries,
taken as a whole.
“Parent
Preferred Stock”
shall
mean the preferred stock, par value $0.001 per share, of Parent.
“Parent
SEC Documents”
shall
have the meaning assigned to such term in Section
5.9
hereof.
“Permitted
Liens”
shall
mean (a) Liens for taxes and assessments or governmental charges or levies
not
at the time due or in respect of which the validity thereof shall currently
be
contested in good faith by appropriate proceedings; (b) Liens in respect of
pledges or deposits under workmen’s compensation laws or similar legislation,
carriers’, warehousemen’s, mechanics’, laborers’ and materialmens’ and similar
Liens, if the obligations secured by such Liens are not then delinquent or
are
being contested in good faith by appropriate proceedings; and (c) Liens
incidental to the conduct of the business of the Company that were not incurred
in connection with the borrowing of money or the obtaining of advances or
credits and which do not in the aggregate materially detract from the value
of
its property or materially impair the use made thereof by the Company in its
business.
“Parent
Stockholder Consent”
shall
have the meaning assigned to such term in Section 7.6 hereof.
“Person”
shall
mean any individual, corporation, limited liability company, partnership, joint
venture, trust or other entity or organization, including any government or
political subdivision or an agency or instrumentality thereof.
“Securities
Act”
shall
mean the Securities Act of 1933, as amended, and the rules and regulations
issued thereunder.
“Stockholder”
shall
mean any record holder of Company Capital Stock.
“Surviving
Corporation”
shall
have the meaning given to such term in Section
2.1
hereof.
“Tax”
or
“Taxes”
shall
mean (a) any and all taxes, assessments, customs, duties, levies, fees, tariffs,
imposts, deficiencies and other governmental charges of any kind whatsoever
(including, but not limited to, taxes on or with respect to net or gross income,
franchise, profits, gross receipts, capital, sales, use, ad valorem, value
added, transfer, real property transfer, transfer gains, transfer taxes,
inventory, capital stock, license, payroll, employment, social security,
unemployment, severance, occupation, real or personal property, estimated taxes,
rent, excise, occupancy, recordation, bulk transfer, intangibles, alternative
minimum, doing business, withholding and stamp), together with any interest
thereon, penalties, fines, damages costs, fees, additions to tax or additional
amounts with respect thereto, imposed by the United States (federal, state
or
local) or other applicable jurisdiction; (b) any liability for the payment
of
any
5
amounts
described in clause (a) as a result of being a member of an affiliated,
consolidated, combined, unitary or similar group or as a result of transferor
or
successor liability, including, without limitation, by reason of Code Section
1.1502-6; and (c) any liability for the payments of any amounts as a result
of
being a party to any Tax Sharing Agreement or as a result of any express
or
implied obligation to indemnify any other Person with respect to the payment
of
any amounts of the type described in either clauses (a) or
(b).
“Tax
Return”
shall
include all returns and reports (including elections, declarations, disclosures,
schedules, estimates and information returns (including Form 1099 and
partnership returns filed on Form 1065)) required to be supplied to a Tax
authority relating to Taxes.
“Tax
Sharing Agreements”
shall
have the meaning given to such term in Section
4.15
hereof.
ARTICLE
II
THE
MERGER
Section
2.1 Merger.
Upon
the terms and subject to the conditions of this Agreement, at the Effective
Time, Acquisition Corp. shall be merged with and into the Company in accordance
with the Utah Corporations Statutes (Utah Revised Business Corporations Act)
(“UCS”). Following the Effective Time, the separate corporate existence of
Acquisition Corp. shall cease, and the Company shall continue as the corporation
surviving the Merger (sometimes hereinafter referred to as the “Surviving
Corporation”).
Section
2.2 Effective
Time.
The
Parent, the Company and Acquisition Corp. shall cause a certificate of merger
to
be filed on the Closing Date (or on such other date as the Company and Parent
may agree in writing) with the Secretary of State of the State of Nevada as
provided in the NRS and the Secretary of the State of Utah as provided in the
UCS, and shall make all other filings or recordings required by the NRS or
UCS
in connection with the Merger. The Merger shall become effective at such time
as
the certificate of merger is duly filed in accordance with the NRS and UCS
with
the Secretary of States of the State of Nevada and Utah or such later time
as
specified in the certificate of merger, and such time is hereinafter referred
to
as the “Effective
Time.”
Section
2.3 Certificate
of Incorporation; By-laws; Directors and Officers.
(a) The
certificate of incorporation of ShieldZone as in effect immediately prior to
the
Effective Time, a copy of which is attached as Exhibit
A
hereto,
shall be the certificate of incorporation of the Surviving Corporation (the
“Certificate
of Incorporation”)
from
and after the Effective Time until thereafter changed or amended as provide
therein or in accordance with applicable law.
(b) The
by-laws of Acquisition Corp. as in effect immediately prior to the Effective
Time, a copy of which is attached as Exhibit
B
hereto,
shall be the by-laws of the Surviving Corporation (the “By-laws”)
from
and after the Effective Time until thereafter changed or amended as provided
therein or in accordance with applicable law.
6
(c) One or
more of the directors
of the Company immediately prior
to the
Effective Time shall be the initial directors of the
Surviving Corporation and shall hold office from
the Effective Time until their
respective successors
have been duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the Certificate of Incorporation
and
By-laws. The officers of the Company immediately prior to the Effective Time shall
be the initial officers of the Surviving Corporation and shall hold office from the Effective Time
until
their respective
successors have been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the Certificate of
Incorporation and By-laws.
(d) Upon
the
filing of the certificate of merger with the Secretary of State of the State
of
Nevada
and the Secretary of State of the State of Utah as contemplated by Section
2.2
hereof, the officers and directors of the Parent designated on Exhibit
C
hereto
shall resign, to be replaced by the officers and directors designated on
Exhibit
C
hereto,
who shall immediately take such offices or who shall take such offices upon
compliance with the Federal Securities Laws, as the case may be. The appointment
of new directors in accordance with the terms of this Section 2.3(d) shall
be
accomplished through the filling of vacancies in the Board of Directors of
the
Parent in compliance with the applicable provisions of the NRS and the by-laws
of the Parent and without the vote (by written consent or otherwise) of the
shareholders of the Parent.
Section
2.4 Effects
of the Merger.
The
Merger shall have the effects set forth in the UCS. Without limiting the
generality of the foregoing, at the Effective Time, except as otherwise provided
herein, all of the property, rights, privileges, powers and franchises of the
Company and Acquisition Corp. shall vest in the Surviving Corporation, and
all
debts, liabilities and duties of the Company and Acquisition Corp. shall become
the debts, liabilities and duties of the Surviving Corporation. The Company
acknowledges that, from and after the Effective Time, Parent shall have the
absolute and unqualified right to deal with the assets and business of the
Surviving Corporation as its own property without limitation on the disposition
or use of such assets or the conduct of such business.
Section
2.5 Closing.
The
consummation of the transactions contemplated by this Agreement, including
the
Merger (the “Closing”),
shall
take place: (a) at the offices of Cane Xxxxx, 0000 X. Xxxx Xxxxxxx Xx., Xxx
Xxxxx, XX at 10:00 a.m. local time on the date on which all of the conditions
to
the Closing set forth in Article
VIII
hereof
shall be fulfilled or waived in accordance with this Agreement (other than
conditions that can be satisfied only at the Closing, but subject to the
fulfillment or waiver of those conditions at the Closing); or (b) at such other
place, time and date as the Company and Parent may agree in writing (the
“Closing
Date”).
Section
2.6 Tax-Free
Merger.
The
parties hereto intend that the Merger will be treated as a tax-free
reorganization under Section 368 of the Code.
ARTICLE
III
MERGER
CONSIDERATION; CONVERSION AND EXCHANGE OF SECURITIES
Section
3.1 Manner
and Basis of Converting and
Exchanging
Capital Stock.
At the
Effective Time, by virtue of the Merger and without any action on the part
of
the Company, Parent or Acquisition Corp. or the holders of any outstanding
shares of capital stock or other securities of the Company, Parent or
Acquisition Corp.:
7
(a) Acquisition
Corp. Stock.
Each
share of common stock, par value $0.001 per share, of Acquisition Corp. issued
and outstanding immediately prior to the Effective Time shall be converted
into
and become one validly issued, fully paid and non-assessable share of capital
stock, no par value per share, of the Surviving Corporation, such that Parent
shall be the holder of all of the issued and outstanding shares of capital
stock
of the Surviving Corporation following the Merger.
(b) Company
Common Stock.
Each
share of Company Common Stock issued and outstanding immediately prior to the
Effective Time shall be exchanged for the right to receive one (1) share of
Parent Common Stock.
(c) Convertible
Notes.
At the
effective time of the merger the Convertible Notes of the Company set forth
on
Exhibit D shall be converted into the right to receive one (1) share of Parent
Common Stock in accordance with their terms. Exhibit
D
hereto
sets forth the number of shares of Parent Common Stock into which such
Convertible Notes issued and outstanding on the date hereof shall become
convertible at the Effective Time.
(d) Treasury
Stock.
Notwithstanding any provision of this Agreement to the contrary, each share
of
Company Capital Stock held in the treasury of the Company and each share of
Company Capital Stock, if any, owned by Parent or any direct or indirect
wholly-owned subsidiary of Parent immediately prior to the Effective Time shall
be canceled in the Merger and shall not be converted or exchanged into the
right
to receive any shares of capital stock or other securities of
Parent.
(e) No
Fractional Shares.
No
fractional shares of Parent Common Stock shall be issued in, or as a result
of,
the Merger. Any fractional shares of Parent Common Stock that a holder of record
of Company Capital Stock would otherwise be entitled to receive as a result
of
the Merger shall be aggregated. If a fractional share of Parent Common Stock
results from such aggregation, the number of shares required to be issued to
such record holder shall be rounded up to the nearest whole number of shares
of
Parent Common Stock.
Section
3.2 Surrender
and Exchange of Certificates.
(a) Letter
of Transmittal.
Promptly after the Effective Time, Parent shall mail, or cause to be mailed,
to
each record holder of certificate(s) formerly representing ownership of Company
Capital Stock that was converted into the right to receive Parent Common Stock
pursuant to Section
3.1
hereof
(i) a letter of transmittal (“Letter
of Transmittal”)
for
delivery of such certificate(s) to Parent and (ii) instruction for use in
effecting the surrender of certificate(s), in each case in form and substance
mutually agreeable to the Company and Parent. Delivery shall be effected, and
risk of loss and title to the Parent Common Stock shall pass, only upon delivery
to the Parent (or a duly authorized agent of Parent) of certificate(s) formerly
representing ownership of Company Capital Stock (or an affidavit of lost
certificate and indemnification or surety bond) and a properly completed and
duly executed Letter of Transmittal, as described in Section
3.2(b)
hereof.
Notwithstanding the foregoing, Parent shall not be required to mail, or cause
to
be mailed, a Letter of Transmittal to any record holder of certificate(s)
formerly representing ownership of Company Capital Stock if such holder has
previously agreed or consented to the exchange of certificates that are held
in
custody by the Company for the benefit of such holder.
8
(b) Exchange
Procedures.
Parent
shall issue to each former record holder of Company Capital Stock, upon delivery
to Parent (or a duly authorized agent of Parent) of (i) certificate(s) formerly
representing ownership of Company Capital Stock endorsed in blank or accompanied
by duly executed stock powers (or an affidavit of lost certificate and
indemnification in form and substance reasonably acceptable to Parent stating
that, among other things, the former record holder has lost his or her
certificate(s) or that such certificate(s) have been destroyed) and (ii) a
properly completed and duly executed Letter of Transmittal in form and substance
reasonably satisfactory to Parent, a certificate or certificates registered
in
the name of such former record holder representing the number of shares of
Parent Common Stock that such former record holder is entitled to receive in
accordance with Section
3.1
hereof.
Subject to Section
3.2(d)
hereof,
until the certificate(s) (or affidavit) is delivered together with the Letter
of
Transmittal in the manner contemplated by this Section
3.2(b),
each
certificate (or affidavit) previously representing ownership of Company Capital
Stock shall be deemed at and after the Effective Time to represent only the
right to receive Parent Common Stock and the former record holders thereof
shall
cease to have any other rights with respect to his or her Company Capital
Stock.
(c) Termination
of Exchange Process.
Any
Parent Common Stock that remains unclaimed by a former record holder of Company
Capital Stock at the first anniversary of the Effective Time may be deemed
“abandoned property” subject to applicable abandoned property, escheat and other
similar laws in the State in which the former record holder resides. None of
the
Company, Parent, Acquisition Corp. or the Surviving Corporation shall be liable
to any person in respect of any Parent Company Stock delivered to a public
official pursuant to any applicable abandoned property, escheat or similar
law.
(d) Dissenting
Shares.
Notwithstanding any provision of this Agreement to the contrary, shares of
Company Capital Stock issued and outstanding immediately prior to the Effective
Time and held by a Stockholder who has not voted in favor of the Merger or
consented thereto in writing and who has demanded appraisal for such shares
of
Company Capital Stock in accordance with the UCS (“Dissenting
Shares”)
shall
not be entitled to vote for any purpose or receive dividends, shall not be
converted into the right to receive Parent Common Stock in accordance with
Section
3.1
hereof,
and shall only be entitled to receive such consideration as shall be determined
pursuant to the NRS; provided,
however,
that
if, after the Effective Time, such Stockholder fails to perfect or withdraws
or
loses his or her right to appraisal or otherwise fails to establish the right
to
be paid the value of such Stockholder’s shares of Company Capital Stock under
the NRS, such shares of Company Capital Stock shall be treated as if they had
converted as of the Effective Time into the right to receive Parent Common
Stock
in accordance with Section
3.1
hereof,
and such shares of Company Capital Stock shall no longer be Dissenting Shares.
All negotiations with respect to payment for Dissenting Shares shall be handled
jointly by Parent and the Company prior to the Closing and exclusively by Parent
thereafter. In
the
event that one percent (1%) or more of the outstanding shares of the Company
are
Dissenting Shares, the Parent has the sole discretion to terminate this
Agreement, which shall forthwith become void and of no further force and effect
and the parties hereto shall be released from any and all obligations hereunder;
provided, however, that nothing herein shall relieve any party hereto from
liability for the breach of any of its representations, warranties, covenants
or
agreements set forth in this Agreement.
9
(e) Stock
Transfer Books.
At the
Effective Time, the stock transfer books of the Company will be closed and
there
will be no further registration of transfers of shares of Company Capital Stock
thereafter on the records of the Company. If, after the Effective Time,
certificates formerly representing Company Capital Stock are presented to the
Surviving Corporation, these certificates shall be canceled and exchanged for
the number of shares of Parent Common Stock to which the former record holder
may be entitled pursuant to Section
3.1
hereof.
(f) Further Rights in Company Stock.
All shares of Parent Common Stock issued
upon exchange of shares of Company Capital Stock in accordance with the terms hereof
shall be deemed to have been issued in full satisfaction of all rights pertaining to such shares of
Company Capital Stock.
Section
3.3 Options,
Warrants. The
Company has no issued or outstanding warrants and options to purchase shares
of
Company Common Stock (collectively, the “Company
Stock Options”)
and
therefore at the Effective Time none will be issued.
Section
3.4 Parent
Common Stock.
Parent
shall reserve a sufficient number of shares of Parent Common Stock to complete
the conversion and exchange of Company Capital Stock into Parent Common Stock
contemplated by Sections
3.1
and
3.2
hereof,
and the issuance of any Parent Common Stock underlying options and warrants,
notes or other rights to acquire Parent Common Stock in accordance with
Section
3.3
hereof.
Parent covenants and agrees that immediately prior to the Effective Time there
will be 9,000,000 shares of Parent Common Stock issued and outstanding, and
that
no other common or preferred stock or equity securities of the Parent, or any
options, warrants, rights or other agreements or instruments convertible,
exchangeable or exercisable into common or preferred stock or equity securities
of the Parent, shall be issued or outstanding immediately prior to the Effective
Time.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
The
Company hereby represents and warrants to Parent as follows:
Section
4.1 Organization.
The
Company (i) is duly organized, validly existing and in good standing (or its
equivalent) under the laws of the State of Utah, (ii) has all licenses, permits,
authorizations and other Consents necessary to own, lease and operate its
properties and assets and to carry on its business as it is now being conducted
and (iii) has all requisite corporate or other applicable power and authority
to
own, lease and operate its properties and assets and to carry on its business
as
it is now being conducted and presently proposed to be conducted, except where
such failure would not have, or be reasonably likely to have, a Company Material
Adverse Effect. The Company is duly qualified or authorized to conduct business
and is in good standing (or its equivalent) as a foreign corporation or other
entity in all jurisdictions in which the ownership or use of its assets or
nature of the business conducted by it makes such qualification or authorization
necessary, except where the failure to be so duly qualified, authorized and
in
good standing would not have a Company Material Adverse Effect.
Section
4.2 Authorization;
Validity of Agreement.
The
Company has all requisite corporate power and authority to execute and deliver
this Agreement and to consummate the
10
transactions
contemplated hereby. The execution, delivery and performance by the Company
of
this Agreement and the consummation of the transactions contemplated hereby
have
been duly authorized by the Board of Directors of the Company and no other
action (except the approval of the requisite Stockholders solely with respect
to
consummation of the Merger) on the part of the Company or any of its
Stockholders or subsidiaries is necessary to authorize the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby. This Agreement has been duly executed and delivered by the Company
and
(assuming due and valid authorization, execution and delivery hereof by Parent
and Acquisition Corp.) is a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as such
enforcement is limited by bankruptcy, insolvency and other similar laws
affecting the enforcement of creditors’ rights generally and by general
principles of equity.
Section
4.3 Capitalization.
As
of the
date hereof, the authorized capital stock of the Company consists of 10,500,000
shares of Company Common Stock. As of the date hereof, there are 10,175,000
shares of Company Common Stock issued and outstanding. As of the date hereof,
the Company has Convertible Notes issued and outstanding in the aggregate
principal amount of $350,000, of which $250,000 of such Notes at the effective
time will be converted into 714,286 shares of Company Common Stock. All the
outstanding shares of Company Capital Stock are duly authorized, validly issued,
fully paid and non-assessable.
Section
4.4 Consents
and Approvals; No Violations.
Except
for (a) approval of the Merger by the requisite Stockholders and (b) filing
of
the certificate of merger with the Secretary of State of the State of Utah,
neither the execution, delivery or performance of this Agreement by the Company
nor the consummation of the transactions contemplated hereby will (i) violate
any provision of its certificate of incorporation or by-laws; (ii) violate,
conflict with or result in a breach of any provision of, or constitute a default
(or an event which, with notice or lapse of time or both, would constitute
a
default) under, require the consent of or result in the creation of any
encumbrance upon any of the properties of the Company or any of its subsidiaries
under any material note, bond, mortgage, indenture, deed of trust, license,
franchise, permit, lease, contract, agreement or other instrument (collectively,
“Contract”)
to
which the Company or any its subsidiaries or any of their respective properties
may be bound; (iii) require any Consent, approval or authorization of, or notice
to, or declaration, filing or registration with, any governmental entity by
or
with respect to the Company or any of its subsidiaries; or (iv) violate any
order, writ, judgment, injunction, decree, law, statute, rule or regulation
applicable to the Company or any of its subsidiaries or any of their respective
properties or assets; except, in the cases of clauses (ii), (iii) and (iv),
any
such violations, conflicts, breaches, defaults or encumbrances, or any failure
to receive any such Consent, approval or authorization, or to make any such
notice, declaration, filing or registration as will not result in, or could
reasonably be expected to result in, a Company Material Adverse
Effect.
Section
4.5 Financial
Statements.
The
Company has delivered or made available as of the date hereof or shall, prior
to
the Closing Date, deliver or make available to Parent the audited balance sheets
of the Company for the fiscal year ended December 31, 2005 and unaudited balance
sheets for the nine month period ended September 30, 2006 (the “Balance
Sheet Date”)
and
the related consolidated and consolidating statements of income, stockholders’
equity and cash flows of the Company for the fiscal year ended December 31,
2005
and the nine month period ended September 30, 2006. The foregoing financial
statements (including any notes
11
thereto)
(i) have been prepared based upon the books and records of the Company, (ii)
have been prepared in accordance with GAAP (except as otherwise noted therein),
and (iii) present fairly, in all material respects, the financial position,
results of operations and cash flows of the Company as at their respective
dates
and for the periods then ended. To the knowledge of the Company, since the
Balance Sheet Date, no fact or condition exists that has not been disclosed
to
Parent that has had or could reasonably be expected to have a Company Material
Adverse Effect.
Section
4.6 No
Undisclosed Liabilities.
As of
the date hereof, except (a) for Liabilities reflected on the face of the balance
sheet for the nine month period ended September 30, 2006 (the “Balance
Sheet”)
and
(b) Liabilities of the same type, magnitude and scope as those reflected on
the
Balance Sheet which have arisen since the Balance Sheet Date in the ordinary
course of business, and which would not, in the aggregate, result in a Company
Material Adverse Effect, the Company does not have any Liability.
Section
4.7 Litigation.
There
is no Action pending or, to the knowledge of the Company, threatened, involving
the Company or its subsidiaries or affecting any of the officers, directors
or
employees of the Company or its subsidiaries with respect to the Company’s or
any subsidiary’s business by or before any governmental entity or by any third
party that has had or could reasonably be expected to have a Company Material
Adverse Effect and neither the Company nor any of its subsidiaries have received
written notice that any such Action is threatened. Neither the Company nor
any
of its subsidiaries is in default under any judgment, order or decree of any
governmental entity applicable to its business, which default could reasonably
be expected to have a Company Material Adverse Effect.
Section
4.8 No
Default; Compliance with Applicable Laws.
The
Company is not in default or violation of any material term, condition or
provision of (i) its certificate of incorporation or by-laws or (ii) to the
Company’s knowledge, any law applicable to the Company or its property and
assets, and the Company has not received written notice of any violation of
or
Liability under any of the foregoing (whether material or not).
Section
4.9 Broker’s
and Finder’s Fees.
To the
knowledge of the Company, no Person has, or as a result of the transactions
contemplated or described herein will have, any right or valid claim against
the
Company for any commission, fee or other compensation as a finder or broker,
or
in any similar capacity.
Section
4.10 Contracts.
(a) The
Company is not in violation or breach of any material contract, except such
violations that, in the aggregate, would not result in, or would not reasonably
be expected to result in, a Company Material Adverse Effect. There does not
exist any event or condition that, after notice or lapse of time or both, would
constitute an event of default or breach under any material Contract on the
part
of the Company or, to the knowledge of the Company, any other party thereto
or
would permit the modification, cancellation or termination of any material
Contract or result in the creation of any lien upon, or any person acquiring
any
right to acquire, any assets of the Company, other than any events or conditions
that, in the aggregate would not result in, or would not reasonably be expected
to result in, a Company Material Adverse Effect. The Company has not received
in
writing any claim or threat that the Company has breached any of the terms
and
conditions of any material Contract, other than any material Contracts the
12
breach
of
which, in the aggregate, would not result in, or would not reasonably be
expected to result in, a Company Material Adverse Effect.
(b) The
consent of, or the delivery of notice to or filing with, any party to a material
Contract is not required for the execution and delivery by the Company of this
Agreement or the consummation of the transactions contemplated under the
Agreement.. The
Company has made available to Parent and Acquisition Corp. true and complete
copies of all Contracts and other documents requested by Parent or Acquisition
Corp.
Section
4.11 Tax
Returns and Audits.
All
required federal, state and local Tax Returns of the Company have been
accurately prepared and duly and timely filed, and all federal, state and local
Taxes required to be paid with respect to the periods covered by such returns
have been paid. The Company is not and has not been delinquent in the payment
of
any Tax. The Company has not had a Tax deficiency proposed or assessed against
it and has not executed a waiver of any statute of limitations on the assessment
or collection of any Tax. None of the Company’s federal income Tax Returns nor
any state or local income or franchise Tax Returns has been audited by
governmental authorities. The reserves for Taxes reflected on the Balance Sheet
are and will be sufficient for the payment of all unpaid Taxes payable by the
Company as of the Balance Sheet Date. Since the Balance Sheet Date, the Company
has made adequate provisions on its books of account for all Taxes with respect
to its business, properties and operations for such period. The Company has
withheld or collected from each payment made to each of its employees the amount
of all Taxes (including, but not limited to, federal, state and local income
taxes, Federal Insurance Contribution Act taxes and Federal Unemployment Tax
Act
taxes) required to be withheld or collected therefrom, and has paid the same
to
the proper Tax receiving officers or authorized depositaries. There are no
federal, state, local or foreign audits, actions, suits, proceedings,
investigations, claims or administrative proceedings relating to Taxes or any
Tax Returns of the Company now pending, and the Company has not received any
notice of any proposed audits, investigations, claims or administrative
proceedings relating to Taxes or any Tax Returns. The Company is not obligated
to make a payment, nor is it a party to any agreement that under certain
circumstances could obligate it to make a payment, that would not be deductible
under Section 280G of the Code. The Company has not agreed nor is required
to
make any adjustments under Section 481(a) of the Code (or any similar provision
of state, local and foreign law) by reason of a change in accounting method
or
otherwise for any Tax period for which the applicable statute of limitations
has
not yet expired. The Company is not a party to, is not bound by and does not
have any obligation under, any Tax sharing agreement, Tax indemnification
agreement or similar contract or arrangement, whether written or unwritten
(collectively, “Tax
Sharing Agreements”),
nor
does it have any potential liability or obligation to any Person as a result
of,
or pursuant to, any Tax Sharing Agreements.
Section
4.12 Patents
and Other Intangible Assets.
(a) To
the
knowledge of the Company, the Company (i) owns or has the right to use, pursuant
to a valid
license, sublicense, agreement, or permission,
free and
clear of all Liens, all patents, trademarks, service marks, trade names,
copyrights, licenses and rights with respect to the foregoing used in or
necessary for the conduct of its business as now conducted or proposed to be
conducted without infringing upon
or
otherwise acting adversely to the right or claimed right of any Person under
or
with respect to any of the foregoing.
13
(b) To
the
knowledge of the Company, the Company owns and has the right to use all trade
secrets, if any, including know-how, negative know-how, formulas, patterns,
programs, devices, methods, techniques, inventions, designs, processes, computer
programs and technical data and all information that derives independent
economic value, actual or potential, from not being generally known or known
by
competitors (collectively, “Intellectual
Property”)
required for or incident to the development, operation and sale of all products
and services sold by the Company, free and clear of any right, Lien or claim
of
others. All Intellectual Property can and will be transferred by the Company
to
the Surviving Corporation as a result of the Merger and without the consent
of
any Person other than the Company.
Section
4.13 Employee
Benefit Plans; ERISA.
(a) All
“employee benefit plans” (within the meaning of Section 3(3) of the ERISA) of
the Company and other employee
benefit
or fringe benefit arrangements, practices, contracts, policies or programs
of
every type, other than programs merely involving the regular payment of wages,
commissions, or bonuses established, maintained or contributed to by the
Company, whether written or unwritten and whether or not funded, are
in
material compliance with the applicable requirements of ERISA, the Code and
any
other applicable state, federal or foreign law.
(b) There
are
no pending claims or lawsuits that have been asserted or instituted against
any
Employee Benefit Plan, the assets of any of the trusts or funds under the
Employee Benefit Plans, the plan sponsor or the plan administrator of any of
the
Employee Benefit Plans or against any fiduciary of an Employee Benefit Plan
with
respect to the operation of such plan, nor does the Company have any knowledge
of any incident, transaction, occurrence or circumstance which might reasonably
be expected to form the basis of any such claim or lawsuit.
(c) There
is
no pending or, to the knowledge of the Company, threatened investigation, or
pending or possible enforcement action by the Pension Benefit Guaranty
Corporation, the Department of Labor, the Internal Revenue Service or any other
government agency with respect to any Employee Benefit Plan and the Company
has
no knowledge of any incident, transaction, occurrence or circumstance which
might reasonably be expected to trigger such an investigation or enforcement
action.
(d) No
actual
or, to the knowledge of the Company, contingent Liability exists with respect
to
the funding of any Employee Benefit Plan or for any other expense or obligation
of any Employee Benefit Plan, except as disclosed on the Balance Sheet, and
no
contingent Liability exists under ERISA with respect to any “multi-employer
plan,” as defined in Section 3(37) or Section 4001(a)(3) of ERISA.
(e) No
events
have occurred or are reasonably expected to occur with respect to any Employee
Benefit Plan that would cause a material change in the costs of providing
benefits under such Employee Benefit Plan or would cause a material change
in
the cost of providing such Employee Benefit Plan.
Section
4.14 Title
to Property and Encumbrances.
The
Company has good and valid title to all properties and assets used in the
conduct of its business (except for property held
14
under
valid and subsisting leases which are in full force and effect and which
are not
in default) free of all Liens except Permitted Liens and such ordinary and
customary imperfections of title, restrictions and encumbrances as do not
in the
aggregate constitute a Company Material Adverse Effect.
Section
4.15 Condition
of Properties.
All
facilities, machinery, equipment, fixtures and other properties owned, leased
or
used by the Company are in operating condition, subject to ordinary wear and
tear, and are adequate and sufficient for the Company’s existing
business.
Section
4.16 Insurance
Coverage.
There
is in full force and effect one or more policies of insurance issued by insurers
of recognized responsibility insuring the Company and its properties, products
and business against such losses and risks, and in such amounts, as are
customary for corporations of established reputation engaged in the same or
similar business and similarly situated. The Company has not been refused any
insurance coverage sought or applied for, and the Company has no reason to
believe that it will be unable to renew its existing insurance coverage as
and
when the same shall expire upon terms at least as favorable to those currently
in effect, other than possible increases in premiums that do not result from
any
act or omission of the Company. No suit, proceeding or action or, to the
knowledge of the Company, threat of suit, proceeding or action has been asserted
or made against the Company due to alleged bodily injury, disease, medical
condition, death or property damage arising out of the function or malfunction
of a product, procedure or service designed, manufactured, sold or distributed
by the Company.
Section
4.17 Environmental
Matters.
(a) To
the
knowledge of the Company, the Company has never generated, used, handled,
treated, released, stored or disposed of any Hazardous Materials on any real
property on which it now has or previously had any leasehold or ownership
interest, except in compliance with all applicable Environmental
Laws.
(b) To
the
knowledge of the Company, the historical and present operations of the business
of the Company are in compliance with all applicable Environmental Laws, except
where any non-compliance has not had and would not reasonably be expected to
have a Company Material Adverse Effect.
(c) There
are
no material pending or, to the knowledge of the Company, threatened, demands,
claims, information requests or notices of noncompliance or violation against
or
to the Company relating to any Environmental Law; and, to the knowledge of
the
Company, there are no conditions or occurrences on any of the real property
used
by the Company in connection with its business that would reasonably be expected
to lead to any such demands, claims or notices against or to the Company, except
such as have not had, and would not reasonably be expected to have, a Company
Material Adverse Effect.
(d) To
the
knowledge of the Company, (i) the Company has not, sent or disposed of,
otherwise had taken or transported, arranged for the taking or disposal of
(on
behalf of itself, a customer or any other party) or in any other manner
participated or been involved in the taking of or disposal or release of a
Hazardous Material to or at a site that is contaminated by any Hazardous
Material or that, pursuant to any Environmental Law, (A) has been placed on
the
15
“National
Priorities List”, the “CERCLIS” list, or any similar state or federal list, or
(B) is subject to or the source of a claim, an administrative order or other
request to take “removal”, “remedial”, “corrective” or any other “response”
action, as defined in any Environmental Law, or to pay for the costs of any
such
action at the site; (ii) the Company is not involved in (and has no basis
to
reasonably expect to be involved in) any suit or proceeding and has not received
(and has no basis to reasonably expect to receive) any written notice, request
for information or other communication from any governmental authority or
other
third party with respect to a release or threatened release of any Hazardous
Material or a violation or alleged violation of any Environmental Law, and
has
not received (and has no basis to reasonably expect to receive) written notice
of any claims from any Person relating to property damage, natural resource
damage or to personal injuries from exposure to any Hazardous Material; and
(iii) the Company has timely filed every report required to be filed, acquired
all necessary certificates, approvals and permits, and generated and maintained
all required data, documentation and records under all Environmental Laws,
in
all such instances except where the failure to do so would not reasonably
be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.
Section
4.18 Disclosure.
There
is no fact relating to the Company that the Company has not disclosed to Parent
in writing that has had or is currently having a Company Material Adverse
Effect. No representation or warranty by the Company herein and no information
disclosed in the exhibits hereto by the Company contains any untrue statement
of
a material fact or omits to state a material fact necessary to make the
statements contained herein or therein not misleading.
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES OF PARENT AND ACQUISITION CORP.
Parent
and Acquisition Corp. hereby represent and warrant to the Company as
follows:
Section
5.1 Organization.
Each of
Parent and Acquisition Corp. (i) is duly organized, validly existing and in
good
standing under the laws of its State of incorporation or organization, (ii)
has
all licenses, permits, authorizations and other Consents necessary to own,
lease
and operate its properties and assets and to carry on its business as it is
now
being conducted and (iii) has all requisite corporate or other applicable power
and authority to own, lease and operate its properties and assets and to carry
on its business as it is now being conducted and presently proposed to be
conducted, in each case except where such failures would not have, or be
reasonably likely to have, a Parent Material Adverse Effect. Each of Parent
and
Acquisition Corp. is duly qualified or authorized to conduct business and is
in
good standing (or its equivalent) as a foreign corporation or other entity
in
all jurisdictions in which the ownership or use of its assets or nature of
the
business conducted by it makes such qualification or authorization necessary,
except where the failure to be so duly qualified, authorized and in good
standing would not have a Parent Material Adverse Effect.
Section
5.2 Authorization;
Validity of Agreement.
Each of
Parent and Acquisition Corp. has all requisite corporate power and authority
to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance by each of Parent
and Acquisition Corp. of this Agreement and all other agreements and instruments
to be executed pursuant to this Agreement, and the consummation of the
transactions
16
contemplated
hereby and thereby, have been duly authorized by the Board of Directors of
each
of Parent and Acquisition Corp. and the stockholder of Acquisition Corp.,
and no
other action on the part of either of Parent or Acquisition Corp. is necessary
to authorize the execution and delivery of this Agreement and all other
agreements and instruments to be executed pursuant to this Agreement and
the
consummation by either of Parent or Acquisition Corp. of the transactions
contemplated hereby and thereby. This Agreement has been duly executed and
delivered by the Parent and Acquisition Corp. and (assuming due and valid
authorization, execution and delivery hereof by the Company) is a valid and
binding obligation of each of Parent and Acquisition Corp., enforceable against
each of them in accordance with its terms, except as such enforcement is
limited
by bankruptcy, insolvency and other similar laws affecting the enforcement
of
creditors’ rights generally and by general principles of
equity.
Section
5.3 Consents
and Approvals; No Violations.
Except
for filing of the certificate of merger with the Secretary of State of the
State
of Nevada, neither the execution, delivery or performance of this Agreement
by
either of Parent and Acquisition Corp. nor the consummation of the transactions
contemplated hereby will (i) violate any provision of the certificate of
incorporation or by-laws of Parent or Acquisition Corp.; (ii) violate, conflict
with or result in a breach of any provision of, or constitute a default (or
an
event which, with notice or lapse of time or both, would constitute a default)
under, require the consent of or result in the creation of any Lien upon any
of
the properties of Parent or Acquisition Corp. under any Contract to which Parent
or Acquisition Corp. or any of their properties may be bound; (iii) require
any
Consent, approval or authorization of, or notice to, or declaration, filing
or
registration with, any governmental entity by or with respect to Parent or
any
subsidiary of Parent, or (iv) violate any order, written, judgment, injunction,
decree, law, statute, rule or regulation applicable to any of Parent or
Acquisition Corp. or any of their respective properties or assets; except,
in
the cases of clauses (ii), (iii) and (iv), any such violations, conflicts,
breaches, defaults or encumbrances, or any failure to receive any such Consent,
approval or authorization, or to make any such notice, declaration, filing
or
registration as will not result in, or could reasonably be expected to result
in, a Parent Material Adverse Effect.
Section
5.4 Litigation.
There
is no Action pending or, to the knowledge of the Parent, threatened, involving
Parent or Acquisition Corp. or any subsidiary of Parent or affecting the
officers, directors or employees of Parent or Acquisition Corp. or any
subsidiary of Parent with respect to Parent’s, Acquisition Corp.’s, or any of
Parent’s subsidiaries’, businesses by or before any governmental entity or by
any third party and none of Parent, Acquisition Corp. nor any subsidiary of
Parent has received written notice that any such Action is threatened. None
of
Parent, Acquisition Corp. nor any subsidiary of Parent is in default under
any
judgment, order or decree of any governmental entity applicable to its business
which could reasonably be expected to have a Parent Material Adverse
Effect.
Section
5.5 No
Default; Compliance with Applicable Laws.
Neither
Parent nor any of Parent’s subsidiaries is in default or violation of any
material term, condition or provision of (i) their respective certificate of
incorporation, by-laws or similar organizational documents or (ii) any law
applicable to Parent or any of Parent’s subsidiaries or its property and assets
and neither Parent nor any of Parent’s subsidiaries has received written notice
of any violation of or Liability under any of the foregoing (whether material
or
not).
17
Section
5.6 Broker’s
and Finder’s Fees; Broker/Dealer Ownership.
No
person(s), firm, corporation or other entity is entitled by reason of any act
or
omission of Parent or Acquisition Corp. to any broker’s or finder’s fees,
commission or other similar compensation, nor, with respect to the execution,
delivery and performance of this Agreement or with respect to the consummation
of the transactions contemplated hereby will any such person have any right
or
valid claim against the Company, Parent or Acquisition Corp. to any such
payment.
Section
5.7 Capitalization
of Parent.
As of
the date hereof, the authorized capital stock of Parent consists of 50,000,000
shares of Parent Common Stock. As of the date hereof and immediately prior
to
the Effective Time, there are 9,000,000 shares of Parent Common Stock, par
value
$0.001, issued and outstanding. Other than as provided in Article
III
and
Section
7.9
of this
Agreement in connection with securities to be issued or to become issuable
in
connection with or as a result of the Merger, Parent has no outstanding options,
warrants, rights or commitments to issue shares of Parent Common Stock or any
capital stock or other securities of Parent or Acquisition Corp., and there
are
no outstanding securities convertible or exercisable into or exchangeable for
shares of Parent Common Stock or any capital stock or other securities of Parent
or Acquisition Corp. There is no voting trust, agreement or arrangement among
any of the beneficial holders of Parent Common Stock affecting the nomination
or
election of directors or the exercise of the voting rights of Parent Common
Stock. There are no registration rights or similar rights applicable to any
shares of Parent Common Stock or any capital stock or other securities of Parent
or Acquisition Corp. All outstanding shares of the capital stock of Parent
are
validly issued and outstanding, fully paid and non-assessable, and none of
such
shares have been issued in violation of the preemptive rights of any
person.
All of
the shares of Parent Common Stock issued and outstanding immediately prior
to
the Effective Time have been issued in compliance with the Securities Act and
applicable state securities laws and (i) pursuant to effective registration
statements filed with the Securities and Exchange Commission and/or (ii) in
reliance on valid exemptions from registration or qualification
thereunder.
Section
5.8 Acquisition
Corp.
Acquisition Corp. is a Nevada corporation and a wholly-owned subsidiary of
Parent that was formed on January 31, 2007 specifically for the purpose of
the
Merger and that has not conducted any business or acquired any property, and
will not conduct any business or acquire any property prior to the Closing
Date,
except in preparation for and otherwise in connection with the transactions
contemplated by this Agreement. Parent owns all of the issued and outstanding
capital stock of Acquisition Corp. free and clear of all Liens, and Acquisition
Corp. has no outstanding options, warrants or rights to purchase capital stock
or other securities of Acquisition Corp., other than the capital stock of
Acquisition Corp. owned by Parent. Except for Acquisition Corp., Parent has
no
subsidiaries.
Acquisition Corp. has no subsidiaries.
Section
5.9 Validity
of Shares.
The
shares of Parent Common Stock to be issued in accordance with Article
III
hereof,
when issued and delivered in accordance with the terms hereof, shall be duly
authorized, validly issued, fully paid and non-assessable.
Section
5.10 SEC
Reporting and Compliance.
18
(a) Parent
filed a registration statement on Form SB-2 under the Securities Act which
became effective on May 8, 2006. Since that date, Parent has timely filed with
the Commission all registration statements, proxy statements, information
statements and reports required to be filed by Parent pursuant to the Exchange
Act (collectively, the “Parent
SEC Documents”).
Parent has not filed with the Commission a certificate on Form 15 pursuant
to
the Exchange Act.
(b) None
of
the Parent SEC Documents, as of their respective dates, contained any untrue
statement of a material fact or omitted to state a material fact necessary
in
order to make the statements contained therein not misleading. Each of the
Parent SEC Documents complied, and each Parent SEC Document to be filed with
the
Commission prior to the Effective Date shall comply, in all material respects,
with the applicable requirements of the Securities Act and the Securities
Exchange, as the case may be. Each of the financial statements (including,
in
each case, any related notes), contained in the Parent SEC Documents, including
any Parent SEC Documents filed after the date of this Agreement until the
Closing, complied, as of its respective filing date, in all material respects
with all applicable accounting requirements and the published rules and
regulations of the Commission with respect thereto.
(c) Parent
has not filed, and nothing has occurred with respect to which Parent would
be
required to file, any report on Form 8-K since December 31, 2006. Prior to
and
until the Closing, Parent will provide to the Company copies of any and all
amendments or supplements to the Parent SEC Documents filed with the Commission
since December 31, 2006 and all subsequent registration statements and reports
filed by Parent subsequent to the filing of the Parent SEC Documents with the
Commission and any and all subsequent information statements, proxy statements,
reports or notices filed by the Parent with the Commission or delivered to
the
stockholders of Parent.
(d) Parent
is
not an “investment company” within the meaning of Section 3 of the Investment
Company Act.
(e) The
Parent Common Stock is not listed on any exchange or traded or quoted on any
Over-The-Counter
Bulletin Board or quotation services and there are no market makers publishing
bid
and/or ask price(s) for shares of the Parent’s capital stock.
(f) Between
the date hereof and the Closing Date, Parent shall continue to satisfy any
applicable filing requirements of the Exchange Act or the Securities Act, as
the
case may be, and all other requirements of applicable securities
laws.
(g) To
the
knowledge of Parent, Parent has complied with the Securities Act, Exchange
Act
and all other applicable federal and state securities laws.
Section
5.11 Financial
Statements.
The
balance sheets, and statements of income, stockholders’ equity and cash flows
(including any notes thereto) contained in the Parent SEC Documents (the
“Parent
Financial Statements”)
(i)
have been prepared in accordance with GAAP, (ii) are in accordance with the
books and records of the Parent, and (iii) present fairly in all material
respects the financial condition of the Parent at the dates therein specified
and the results of its operations and changes in financial position for the
periods therein specified.
19
Section
5.12 No General Solicitation. In
issuing Parent Common Stock in the Merger hereunder, neither Parent nor anyone
acting on its behalf has offered to sell Parent Common Stock by any form of
general solicitation or advertising.
Section
5.13 Absence
of Undisclosed Liabilities.
Neither
Parent nor Acquisition Corp. has any Liability at or prior to the Closing,
except (a) as disclosed in the Parent SEC Documents, (b) to the extent set
forth
on or reserved against in the balance sheet of Parent as of September 30, 2006
(the “Parent
Balance Sheet”)
or the
notes to the Parent Financial Statements, (c) current Liabilities incurred
and
obligations under agreements entered into in the usual and ordinary course
of
business, consistent with past practice, since September 30, 2006 (the
“Parent
Balance Sheet Date”),
none
of which, individually or in the aggregate, constitutes a Parent Material
Adverse Effect and (d) by the specific terms of any written agreement, document
or arrangement attached as an exhibit to the Parent SEC Documents.
Section
5.14 Changes.
Since
the Parent Balance Sheet Date, except as disclosed in the Parent SEC Documents,
Parent has not (a) incurred any debts, obligations or Liabilities, absolute,
accrued or, to the Parent’s knowledge, contingent, whether due or to become due,
except for current Liabilities incurred in the usual and ordinary course of
business, (b) discharged or satisfied any Liens other than those securing,
or
paid any obligation or Liability other than, current liabilities shown on the
Parent Balance Sheet and current Liabilities incurred since the Parent Balance
Sheet Date, in each case in the usual and ordinary course of business, (c)
mortgaged, pledged or subjected to Lien any of its assets, tangible or
intangible, other than in the usual and ordinary course of business, (d) sold,
transferred or leased any of its assets, except in the usual and ordinary course
of business, (e) cancelled or compromised any debt or claim, or waived or
released any right of material value, (f) suffered any physical damage,
destruction or loss (whether or not covered by insurance) that could reasonably
be expected to have a Parent Material Adverse Effect, (g) entered into any
transaction other than in the usual and ordinary course of business, (h)
encountered any labor union difficulties, (i) made or granted any wage or salary
increase or made any increase in the amounts payable under any profit sharing,
bonus, deferred compensation, severance pay, insurance, pension, retirement
or
other employee benefit plan, agreement or arrangement, other than in the
ordinary course of business consistent with past practice, or entered into
any
employment agreement, (j) issued or sold any shares of capital stock, bonds,
notes, debentures or other securities or granted any options (including employee
stock options), warrants or other rights with respect thereto, (k) declared
or
paid any dividends on or made any other distributions with respect to, or
purchased or redeemed, any of its outstanding capital stock, (l) suffered or
experienced any change in, or condition affecting, the financial condition
of
the Parent other than changes, events or conditions in the usual and ordinary
course of its business, none of which (either by itself or in conjunction with
all such other changes, events and conditions) could reasonably be expected
to
have a Parent Material Adverse Effect, (m) made any change in the accounting
principles, methods or practices followed by it or depreciation or amortization
policies or rates theretofore adopted, (n) made or permitted any amendment
or
termination of any material Contract, agreement or license to which it is a
party, (o) suffered any material loss not reflected in the Parent Balance Sheet
or its statement of income for the year ended on the Parent Balance Sheet Date,
(p) paid, or made any accrual or arrangement for payment of, bonuses or special
compensation of any kind or any severance or termination pay to any present
or
former officer, director, employee, stockholder or consultant, (q) made or
agreed to make any charitable contributions or incurred any
non-business
20
expenses
in excess of $1,000 in the aggregate, or (r) entered into any Contract,
agreement or license, or otherwise obligated itself, to do any of the
foregoing.
Section
5.15 Tax
Returns and Audits.
All
required federal, state and local Tax Returns of the Parent have been accurately
prepared in all material respects and duly and timely filed, and all federal,
state and local Taxes required to be paid with respect to the periods covered
by
such returns have been paid to the extent that the same are material and have
become due, except where the failure so to file or pay could not reasonably
be
expected to have a Parent Material Adverse Effect. The Parent is not and has
not
been delinquent in the payment of any Tax. The Parent has not had a Tax
deficiency assessed against it. None of the Parent’s federal income Tax Returns
nor any state or local income or franchise Tax Returns has been audited by
governmental authorities. The reserves for Taxes reflected on the Parent Balance
Sheet are sufficient for the payment of all unpaid Taxes payable by the Parent
with respect to the period ended on the Parent Balance Sheet Date. There are
no
federal, state, local or foreign audits, actions, suits, proceedings,
investigations, claims or administrative proceedings relating to Taxes or any
Tax Returns of the Parent now pending, and the Parent has not received any
notice of any proposed audits, investigations, claims or administrative
proceedings relating to Taxes or any Tax Returns.
Section
5.16 Employee
Benefit Plans; ERISA.
(a) Except
as
disclosed in the Parent SEC Documents, there are no “employee benefit plans”
(within the meaning of Section 3(3) of ERISA) nor any other employee benefit
or
fringe benefit arrangements, practices, contracts, policies or programs other
than programs merely involving the regular payment of wages, commissions, or
bonuses established, maintained or contributed to by the Parent,
whether
written or unwritten and whether or not funded.
Any
plans listed in the Parent SEC Documents are hereinafter referred to as the
“Parent
Employee Benefit Plans.”
(b) Any
current and prior material documents, including all amendments thereto, with
respect to each Parent Employee Benefit Plan have been made available to the
Company.
(c) All
Parent Employee Benefit Plans are in material compliance with the applicable
requirements of ERISA, the Code and any other applicable state, federal or
foreign law.
(d) There
are
no pending, or to the knowledge of the Parent, threatened, claims or lawsuits
that have been asserted or instituted against any Parent Employee Benefit Plan,
the assets of any of the trusts or funds under the Parent Employee Benefit
Plans, the plan sponsor or the plan administrator of any of the Parent Employee
Benefit Plans or against any fiduciary of a Parent Employee Benefit Plan with
respect to the operation of such plan.
(e) There
is
no pending, or to the knowledge of the Parent, threatened, investigation or
pending or possible enforcement action by the Pension Benefit Guaranty
Corporation, the Department of Labor, the Internal Revenue Service or any other
government agency with respect to any Parent Employee Benefit Plan and Parent
has no knowledge of any
21
incident,
transaction, occurrence or circumstance which might reasonably be expected
to
trigger such an investigation or enforcement action.
(f) No
actual
or, to the knowledge of Parent, contingent Liability exists with respect to
the
funding of any Parent Employee Benefit Plan or for any other expense or
obligation of any Parent Employee Benefit Plan, except as disclosed on the
Parent Financial Statements or the Parent SEC Documents, and to the knowledge
of
the Parent, no contingent Liability exists under ERISA with respect to any
“multi-employer plan,” as defined in Section 3(37) or Section 4001(a)(3) of
ERISA.
Section
5.17 Interested
Party Transactions.
Except
as disclosed in the Parent SEC Documents, no officer, director or stockholder
of
the Parent or any Affiliate of any such Person or the Parent has or has had,
either directly or indirectly, (a) an interest in any Person that (i) furnishes
or sells services or products that are furnished or sold or are proposed to
be
furnished or sold by the Parent or (ii) purchases from or sells or furnishes
to
the Parent any goods or services, or (b) a beneficial interest in any Contract
to which the Parent is a party or by which it may be bound or
affected.
Section
5.18 Questionable
Payments.
Neither
the Parent, Acquisition Corp. nor to the knowledge of the Parent, any director,
officer, agent, employee or other Person associated with or acting on behalf
of
the Parent or Acquisition Corp., has used any corporate funds for (a) unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, (b) made any direct or indirect unlawful payments to
government officials or employees from corporate funds, (c) established or
maintained any unlawful or unrecorded fund of corporate monies or other assets,
(d) made any false or fictitious entries on the books of record of any such
corporations, or (e) made any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment.
Section
5.19 Obligations
to or by Stockholders.
Except
as disclosed in the Parent SEC Documents, the Parent has no Liability or
obligation or commitment to any stockholder of Parent or any Affiliate or
“associate” (as such term is defined in Rule 405 under the Securities Act) of
any stockholder of Parent, nor does any stockholder of Parent or any such
Affiliate or associate have any Liability, obligation or commitment to the
Parent.
Section
5.20 Schedule
of Assets and Contracts.
Except
as expressly set forth in this Agreement, the Parent Balance Sheet or the notes
thereto, the Parent is not a party to any Contract not made in the ordinary
course of business that is material to the Parent. Parent does not own any
real
property. Parent is not a party to any Contract (a) with any labor union, (b)
for the purchase of fixed assets or for the purchase of materials, supplies
or
equipment in excess of normal operating requirements, (c) for the employment
of
any officer, individual employee or other Person on a full-time basis or any
contract with any Person for consulting services, (d) with respect to bonus,
pension, profit sharing, retirement, stock purchase, stock option, deferred
compensation, medical, hospitalization or life insurance or similar plan,
contract or understanding with any or all of the employees of Parent or any
other Person, (e) relating to or evidencing Indebtedness for Borrowed Money
or
subjecting any asset or property of Parent to any Lien or evidencing any
Indebtedness, (f) guaranteeing of any Indebtedness, (g) under which Parent
is
lessee of or holds or operates any property, real or personal, owned by any
other Person, (h) under which Parent is lessor or permits any Person to hold
or
operate any property,
22
real
or
personal, owned or controlled by Parent, (i) granting any preemptive right,
right of first refusal or similar right to any Person, (j) with any Affiliate
of
Parent or any present or former officer, director or stockholder of Parent,
(k)
obligating Parent to pay any royalty or similar charge for the use or
exploitation of any tangible or intangible property, (1) containing a covenant
not to compete or other restriction on the parent’s ability to conduct a
business or engage in any other activity, (m) with respect to any distributor,
dealer, manufacturer’s representative, sales agency, franchise or advertising
contract or commitment, (n) regarding the registration of securities under
the
Securities Act, (o) characterized as a collective bargaining agreement, or
(p)
with any Person continuing for a period of more than three months from the
Closing Date that involves an expenditure or receipt by Parent in excess
of
$1,000. The Parent maintains no insurance policies and insurance coverage
of any
kind with respect to Parent, its business, premises, properties, assets,
employees and agents. Parent has furnished to the Company true and complete
copies of all agreements and other documents requested by the
Company.
Section
5.21 Environmental
Matters.
(a) The
Parent has never generated, used, handled, treated, released, stored or disposed
of any Hazardous Materials on any real property on which it now has or
previously had any leasehold or ownership interest, except in compliance with
all applicable Environmental Laws.
(b) The
historical and present operations of the business of the Parent compliance
with
all applicable Environmental Laws, except where any non-compliance has not
had
and would not reasonably be expected to have a Parent Material Adverse
Effect.
(c) (i)
The
Parent has not, sent or disposed of, otherwise had taken or transported,
arranged for the taking or disposal of (on behalf of itself, a customer or
any
other party) or in any other manner participated or been involved in the taking
of or disposal or release of a Hazardous Material to or at a site that is
contaminated by any Hazardous Material or that, pursuant to any Environmental
Law, (A) has been placed on the “National Priorities List”, the “CERCLIS” list,
or any similar state or federal list, or (B) is subject to or the source of
a
claim, an administrative order or other request to take “removal”, “remedial”,
“corrective” or any other “response” action, as defined in any Environmental
Law, or to pay for the costs of any such action at the site; (ii) the Parent
is
not involved in (and has no basis to reasonably expect to be involved in) any
suit or proceeding and has not received (and has no basis to reasonably expect
to receive) any written notice, request for information or other communication
from any governmental authority or other third party with respect to a release
or threatened release of any Hazardous Material or a violation or alleged
violation of any Environmental Law, and has not received (and has no basis
to
reasonably expect to receive) written notice of any claims from any Person
relating to property damage, natural resource damage or to personal injuries
from exposure to any Hazardous Material; and (iii) the Parent has timely filed
every report required to be filed, acquired all necessary certificates,
approvals and permits, and generated and maintained all required data,
documentation and records under all Environmental Laws, in all such instances
except where the failure to do so would not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect.
23
(d) There
are
no material pending or, to the knowledge of Parent, threatened, demands, claims,
information requests or notices of noncompliance or violation against or to
the
Parent relating to any Environmental Law; and, to the knowledge of Parent,
there
are no conditions or occurrences on any of the real property used by Parent
in
connection with its business that would reasonably be expected to lead to any
such demands, claims or notices against or to Parent, except such as have not
had, and would not reasonably be expected to have, a Parent Material Adverse
Effect.
Section
5.22 Employees.
Other
than pursuant to ordinary arrangements of employment compensation, Parent is
not
under any obligation or liability to any officer, director, employee or
Affiliate of Parent.
Section
5.23 Title
to Property and Encumbrances.
Parent
has
good
and valid title to all properties and assets used in the conduct of its business
(except for property held under valid and subsisting leases which are in full
force and effect and which are not in default) free of all Liens except
Permitted Liens and such ordinary and customary imperfections of title,
restrictions and encumbrances as do not, individually or in the aggregate
constitute a Parent
Material
Adverse Effect.
Section
5.24 Condition
of Properties.
All
facilities, machinery, equipment, fixtures and other properties owned, leased
or
used by Parent
are
in
operating condition, subject to ordinary wear and tear, and are adequate and
sufficient for the Parent’s
existing
business.
Section
5.25 Insurance
Coverage.
There
is in full force and effect one or more policies of insurance issued by insurers
of recognized responsibility insuring Parent
and
its
properties, products and business against such losses and risks, and in such
amounts, as are customary for corporations of established reputation engaged
in
the same or similar business and similarly situated. Parent
has
not
been refused any insurance coverage sought or applied for, and Parent
has no
reason to believe that it will be unable to renew its existing insurance
coverage as and when the same shall expire upon terms at least as favorable
to
those currently in effect, other than possible increases in premiums that do
not
result from any act or omission of Parent.
No
suit, proceeding or action or, to the best current actual knowledge of
Parent,
threat
of suit, proceeding or action has been asserted or made against Parent
due to
alleged bodily injury, disease, medical condition, death or property damage
arising out of the function or malfunction of a product, procedure or service
designed, manufactured, sold or distributed by Parent.
Section
5.26 Disclosure.
There
is no fact relating to Parent or Acquisition Corp. that Parent has not disclosed
to the Company in writing that has had, is having or is reasonably likely to
have a Parent Material Adverse Effect. No representation or warranty by Parent
or Acquisition Corp. herein and no information disclosed in the exhibits hereto
by Parent or Acquisition Corp. contains any untrue statement of a material
fact
or omits to state a material fact necessary to make the statements contained
herein or therein not misleading.
Section
5.27 No
Liabilities.
As of
the Closing Date, there are no Liabilities or Indebtedness of the Parent or
Acquisition Corp. in excess of $1,000 of any kind whatsoever, whether recorded
on the Balance Sheet of Parent or Acquisition Corp. or not, whether accrued,
contingent, absolute, determined, determinable or otherwise, and there is no
existing condition, situation or set of circumstances which could reasonably
be
expected to result in such Liability
24
or
Indebtedness. Neither the Parent nor the Acquisition Corp. is a guarantor
of any
Indebtedness of any other person, firm or corporation.
ARTICLE
VI
CONDUCT
OF BUSINESSES PENDING THE MERGER
Section
6.1 Conduct
of Business by the Company Pending the Merger.
Prior
to the
Effective Time, unless Parent or Acquisition Corp. shall otherwise agree in
writing or as otherwise contemplated by this Agreement:
(i) the
business of the Company shall be conducted only in the ordinary course
consistent with the past practice;
(ii) the
Company shall not (A) directly or indirectly redeem, purchase or otherwise
acquire or agree to redeem, purchase or otherwise acquire any shares
of
Company Capital Stock; (B) amend its certificate of incorporation or by-laws
except to effectuate the transactions contemplated in this Agreement; or (C)
split, combine or reclassify the outstanding Company Capital Stock or declare,
set aside or pay any dividend payable in cash, stock or property or make any
distribution with respect to any such stock;
(iii) the
Company shall not (A) issue any additional shares of, or options, warrants
or
rights of any kind to acquire any shares of, Company Capital Stock, except
to
issue shares of Company Capital Stock in connection with the exercise of Common
Stock Options and except as disclosed to Parent with respect to the issuance
and
sale of up to $250,000 of capital shares to be issued at the Closing; (B)
acquire or dispose of any fixed assets or acquire or dispose of any other
substantial assets other than in the ordinary course of business; (C) incur
additional Indebtedness or any other Liabilities or enter into any other
transaction other than in the ordinary course of business; (D) enter into any
Contract, agreement, commitment or arrangement with respect to any of the
foregoing except this Agreement; or (E) except as contemplated by this
Agreement, enter into any Contract, agreement, commitment or arrangement to
dissolve, merge, consolidate or enter into any other material business
combination; and
(iv) the
Company shall use its reasonable best efforts to preserve intact the business
of
the Company, to keep available the service of its present officers and key
employees, and to preserve the good will of those having business relationships
with it.
Section
6.2 Conduct
of Business by Parent and Acquisition Corp. Pending the Merger.
Prior
to the Effective Time, unless the Company shall otherwise agree in writing
or as
otherwise contemplated expressly permitted by this Agreement:
(i) the
business of Parent and Acquisition Corp. shall be conducted only in the ordinary
course consistent with past practice;
(ii) neither
Parent nor Acquisition Corp. shall (A) directly or indirectly redeem, purchase
or otherwise acquire or agree to redeem, purchase or otherwise acquire any
shares of its capital stock; (B) amend its certificate of incorporation or
by-laws; or
25
(C)
split, combine or reclassify its capital stock or declare, set aside or pay
any
dividend payable in cash, stock or property or make any distribution with
respect to such stock; and
(iii) neither
Parent nor Acquisition Corp. shall (A) issue or agree to issue any additional
shares of, or options, warrants or rights of any kind to acquire shares of,
its
capital stock; (B) acquire or dispose of any assets other than in the ordinary
course of business; (C) incur additional Indebtedness or any other Liabilities
or enter into any other transaction except in the ordinary course of business;
(D) enter into any Contract, agreement, commitment or arrangement with respect
to any of the foregoing except this Agreement, or (E) except as contemplated
by
this Agreement, enter into any Contract, agreement, commitment or arrangement
to
dissolve, merge; consolidate or enter into any other material business contract
or enter into any negotiations in connection therewith.
(iv) Parent
shall use its best efforts to preserve intact the business of Parent and
Acquisition Corp., to keep available the service of its present officers and
key
employees, and to preserve the good will of those having business relationships
with Parent and Acquisition Corp. and to file all required SEC Reports under
the
Exchange Act;
(v) neither
Parent nor Acquisition Corp. will, nor will they authorize any director or
authorize or permit any officer or employee or any attorney, accountant or
other
representative retained by them to, make, solicit, encourage any inquiries
with
respect to, or engage in any negotiations concerning, any Acquisition Proposal
(as defined below). Parent will promptly advise the Company in writing of any
such inquiries or Acquisition Proposal (or requests for information) and the
substance thereof. As used in this paragraph, “Acquisition
Proposal”
shall
mean any proposal for a merger or other business combination involving the
Parent or Acquisition Corp. or for the acquisition of a substantial equity
interest in either of them or any material assets of either of them other than
as contemplated by this Agreement. Parent will immediately cease and cause
to be
terminated any existing activities, discussions or negotiations with any Person
conducted heretofore with respect to any of the foregoing; and
(vi) neither
Parent nor Acquisition Corp. will enter into any new employment agreements
with
any of their officers or employees or grant any increases in the compensation
or
benefits of their officers and employees.
ARTICLE
VII
ADDITIONAL
AGREEMENTS
Section
7.1 Access
and Information.
The
Company, Parent and Acquisition Corp. shall each afford to the other and to
the
other’s accountants, counsel and other representatives reasonable access during
normal business hours throughout the period prior to the Effective Time of
all
of its properties, books, contracts, commitments and records (including but
not
limited to Tax Returns) and during such period, each shall furnish promptly
to
the other all information concerning its business, properties and personnel
as
such other party may reasonably request, provided that no investigation pursuant
to this Section
7.1
shall
affect any representations or warranties made herein. Each party shall hold,
and
shall cause its employees
26
and
agents to hold, in confidence all such information (other than such information
that (i) becomes generally available to the public other than as a result
of a
disclosure by such party or its directors, officers, managers, employees,
agents
or advisors, or (ii) becomes available to such party on a non-confidential
basis
from a source other than a party hereto or its advisors, provided that such
source is not known by such party to be bound by a confidentiality agreement
with or other obligation of secrecy to a party hereto or another party until
such time as such information is otherwise publicly available; provided,
however,
that:
(A) any such information may be disclosed to such party’s directors, officers,
employees and representatives of such party’s advisors who need to know such
information for the purpose of evaluating the transactions contemplated hereby
(it being understood that such directors, officers, employees and
representatives shall be informed by such party of the confidential nature
of
such information); (B) any disclosure of such information may be made as
to
which the party hereto furnishing such information has consented in writing;
and
(C) any such information may be disclosed pursuant to a judicial, administrative
or governmental order or request provided,
that
the requested party will promptly so notify the other party so that the other
party may seek a protective order or appropriate remedy and/or waive compliance
with this Agreement and if such protective order or other remedy is not obtained
or the other party waives compliance with this provision, the requested party
will furnish only that portion of such information which is legally required
and
will exercise its best efforts to obtain a protective order or other reliable
assurance that confidential treatment will be accorded the information
furnished. If this Agreement is terminated, each party will deliver to the
other
all documents and other materials (including copies) obtained by such party
or
on its behalf from the other party as a result of this Agreement or in
connection herewith, whether so obtained before or after the execution
hereof.
Section
7.2 Additional
Agreements.
Subject
to the terms and conditions herein provided, each of the parties hereto agrees
to use its commercially reasonable best efforts to take, or cause to be taken,
all action and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement, including using its
commercially reasonable best efforts to satisfy the conditions precedent to
the
obligations of any of the parties hereto to obtain all necessary waivers, and
to
lift any injunction or other legal bar to the Merger (and, in such case, to
proceed with the Merger as expeditiously as possible). In order to obtain any
necessary governmental or regulatory action or non-action, waiver, Consent,
extension or approval, each of Parent, Acquisition Corp. and the Company agrees
to take all reasonable actions and to enter into all reasonable agreements
as
may be necessary to obtain timely governmental or regulatory approvals and
to
take such further action in connection therewith as may be necessary. In case
at
any time after the Effective Time any further action is necessary or desirable
to carry out the purposes of this Agreement, the proper officers and/or
directors of Parent, Acquisition Corp. and the Company shall take all such
necessary action.
Section
7.3 Publicity.
No
party shall issue any press release or public announcement pertaining to the
Merger that has not been agreed upon in advance by Parent and the Company,
except as Parent reasonably determines to be necessary in order to comply with
the rules of the Commission; provided
that in
such case Parent will use its best efforts to allow Company to review and
reasonably approve any of the same prior to its release.
27
Section
7.4 Appointment
of Directors.
Immediately upon the Effective Time, Parent shall, in accordance with
Section
2.3(d),
accept
the resignations and cause the appointments of those officers and directors
of
Parent identified in Exhibit
C
hereto,
subject to any notice and waiting period requirements of federal law. At the
first annual meeting of Parent’s stockholders and thereafter, the election of
members of Parent’s Board of Directors shall be accomplished in accordance with
the by-laws of Parent.
Section
7.5 Name
Change.
As soon
as practicable on or after the Effective Time, Parent shall take all required
legal actions to change Parent’s corporate name to “Shieldzone
Corporation”
(the
“Name
Change”).
Section
7.6 Stockholder
Consent.
(a) So
long
as the Board of Directors of the Company shall not have withdrawn, modified
or
changed its recommendation in accordance with the provisions of Section
7.8(b)
hereof,
the Company, acting through its Board of Directors, shall, in accordance with
Utah law and its certificate of incorporation and by-laws, take all actions
reasonably necessary to establish a record date for, duly call, give notice
of,
convene and hold a stockholders meeting for the purpose of obtaining the
requisite approval and adoption of this Agreement and the transactions
contemplated hereby by the Stockholders. The Company shall notify each
Stockholder, whether or not entitled to vote, of the proposed Company
stockholders’ meeting. Such meeting notice shall state that the purpose, or one
of the purposes, of the meeting is to consider the Merger and shall contain
or
be accompanied by a copy or summary of this Agreement. Notwithstanding the
foregoing, the Board of Directors of the Company shall not be required to take
all actions reasonably necessary to establish a record date for, duly call,
give
notice of, convene and hold a stockholders meeting for the purpose of obtaining
the requisite approval and adoption of this Agreement and the transactions
contemplated hereby by the Stockholders if the Company’s Board of Directors and
the requisite Stockholders otherwise take all actions reasonably necessary
to
approve this Agreement and the transactions contemplated hereby by written
consent in lieu of a meeting of the stockholders of the Company to the extent
permitted by applicable law.
(b) The
Board
of Directors of the Company shall unanimously recommend such approval and shall
use all reasonable efforts to solicit and obtain such approval; provided,
however,
that
the Board of Directors of the Company may at any time prior to approval of
the
Stockholders (i) decline to make, withdraw, modify or change any recommendation
or declaration regarding this Agreement or the Merger or (ii) recommend and
declare advisable any other offer or proposal, to the extent the Board of
Directors of the Company determines in good faith, based upon advice of legal
counsel, that withdrawing, modifying, changing or declining to make its
recommendation regarding this Agreement or the Merger or recommending and
declaring advisable any other offer or proposal is necessary to comply with
its
fiduciary duties under applicable law (which declinations, withdrawal,
modification or change shall not constitute a breach by the Company of this
Agreement). The Company shall provide written notice to Parent promptly upon
the
Company taking any action referred to in the foregoing proviso.
(c) Pursuant
to the NRS, at any time before the certificate of merger is filed with the
Secretary of State of the State of Nevada, including any time after the Merger
is
28
authorized
by the Stockholders, the Merger may be abandoned and this Agreement may be
terminated in accordance with the terms hereof, without further action by
the
Stockholders.
ARTICLE
VIII
CONDITIONS
OF PARTIES’ OBLIGATIONS
Section
8.1 Company
Obligations.
The
obligations of Parent and Acquisition Corp. under this Agreement are subject
to
the fulfillment at or prior to the Closing of the following conditions, any
of
which may be waived in whole or in part by Parent.
(a) No
Errors, etc.
The
representations
and
warranties of the Company under this Agreement shall be deemed to have been
made
again on the Closing Date and shall then be true and correct in all material
respects.
(b) Compliance
with Agreement.
The
Company shall have performed and complied in all material respects with all
agreements and conditions required by this Agreement to be performed or complied
with by it on or before the Closing Date.
(c) No
Company Material Adverse Effect.
Since
the date hereof, there shall not have been any event or circumstance that has
resulted in a Company Material Adverse Effect, and no event has occurred or
circumstance exists that would reasonably be expected to result in a Company
Material Adverse Effect.
(d) Certificate
of Officers.
The
Company shall have delivered to Parent and Acquisition Corp. a certificate
dated
the Closing Date, executed on its behalf by the Chief Executive Officer of
the
Company, certifying the satisfaction of the conditions specified in paragraphs
(a), (b) and (c) of this Section 8.1.
(e) No
Restraining Action.
No
Action or proceeding before any court, governmental body or agency shall have
been threatened, asserted or instituted to restrain or prohibit, or to obtain
substantial damages in respect of, this Agreement or the carrying out of the
transactions contemplated by this Agreement.
(f) Supporting
Documents.
Parent
and Acquisition Corp. shall have received the following:
(1) Copies
of
resolutions of the Board of Directors and the stockholders of the Company,
certified by the President of the Company, authorizing and approving the Merger
and the execution, delivery and performance of this Agreement and all other
documents and instruments to be delivered pursuant hereto and
thereto.
(2) A
certificate of incumbency executed by the Secretary of the Company certifying
the names, titles and signatures of the officers authorized to execute any
documents referred to in this Agreement and further certifying that the
certificate of incorporation and by-laws of the Company delivered to Parent
and
Acquisition Corp. at the time of the execution of this Agreement have been
validly adopted and have not been amended or modified since the date
hereof.
29
(3) Evidence
as of a recent date of the good standing and corporate existence of the Company
issued by the Secretary of State of the State of Utah.
Section
8.2 Parent
and Acquisition Corp. Obligations.
The
obligations of the Company under this Agreement are subject to the fulfillment
at or prior to the Closing of the following conditions any of which may be
waived in whole or in part by the Company:
(a) No
Errors, etc.
The
representations
and
warranties of Parent and Acquisition Corp. under this Agreement shall be deemed
to have been made again on the Closing Date and shall then be true and correct
in all material respects.
(b) Compliance
with Agreement.
Parent
and Acquisition Corp. shall have performed and complied in all material respects
with all agreements and conditions required by this Agreement to be performed
or
complied with by them on or before the Closing Date.
(c) No
Parent Material Adverse Effect.
Since
the date hereof, there shall not have been any event or circumstance that has
resulted in a Parent Material Adverse Effect and no event has occurred or
circumstance exists that would be reasonably expected to result in such a Parent
Material Adverse Effect.
(d) Certificate
of Officers.
Parent
and Acquisition Corp. shall have delivered to the Company a certificate dated
the Closing Date, executed on their behalf by their respective Presidents,
certifying the satisfaction of the conditions specified in paragraphs (a),
(b),
and (c) of this Section
8.2.
(e) Supporting
Documents.
The
Company shall have received the following:
(1) Copies
of
resolutions of Parent’s and Acquisition Corp.’s respective board of directors
and the sole stockholder of Acquisition Corp., certified by their respective
Secretaries, authorizing and approving the Merger and the execution, delivery
and performance of this Agreement and all other documents and instruments to
be
delivered by them pursuant hereto.
(2) A
certificate of incumbency executed by the respective Secretaries of Parent
and
Acquisition Corp. certifying the names, titles and signatures of the officers
authorized to execute the documents referred to in paragraph (1) above and
further certifying that the certificates of incorporation and by-laws of Parent
and Acquisition Corp. appended thereto have not been amended or
modified.
(3) A
certificate, dated the Closing Date, executed by the Secretary of each of the
Parent and Acquisition Corp., certifying that, except for the filing of the
certificate of merger with the Secretary of State of the State of Nevada: (i)
all consents, authorizations, orders and approvals of, and filings and
registrations with, any court, governmental body or instrumentality that are
required to be obtained by Parent or Acquisition Corp. for the execution and
delivery of this Agreement and the consummation of the Merger shall have been
duly made or obtained; and (ii) no action or proceeding before any court,
governmental body or agency has been threatened, asserted or instituted against
Parent or Acquisition Corp. to restrain or prohibit, or to obtain
30
substantial
damages in respect of, this Agreement or the carrying out of the transactions
contemplated by this Agreement.
(4) A
certificate of Parent’s transfer agent and registrar, certifying as of the
business day prior to the Closing Date, a true and complete list of the names
and addresses of the record owners of all of the outstanding shares of Parent
Common Stock, together with the number of shares of Parent Common Stock held
by
each record owner.
(5) The
executed resignations of all directors and officers of Parent, with the director
resignations to take effect following the notice period required by federal
law,
and (ii) executed releases from each such director and officer in the form
and
substance acceptable to the Company in its sole discretion.
(6) Evidence
as of a recent date of the good standing and corporate existence of each of
the
Parent and Acquisition Corp. issued by the Secretary of State of their
respective states of incorporation.
(7) Such
additional supporting documentation and other information with respect to the
transactions contemplated hereby as the Company may reasonably
request.
ARTICLE
IX
INDEMNIFICATION
AND RELATED MATTERS
Section
9.1 Indemnification
by Parent.
Parent
shall indemnify and hold harmless the Company (the “Company
Indemnified Parties”),
and
shall reimburse the Company Indemnified Parties for, any loss, liability, claim,
damage, expense (including, but not limited to, costs of investigation and
defense and reasonable attorneys’ fees) or diminution of value (collectively,
“Damages”)
arising from or in connection with (a) any inaccuracy, in any material respect,
in any of the representations and warranties of Parent and Acquisition Corp.
in
this Agreement or in any certificate delivered by Parent and Acquisition Corp.
to the Company pursuant to this Agreement, or any actions, omissions or
statements of fact inconsistent with any such representation or warranty, (b)
any failure by Parent or Acquisition Corp. to perform or comply in any material
respect with any covenant or agreement in this Agreement, (c) any claim for
brokerage or finder’s fees or commissions or similar payments based upon any
agreement or understanding alleged to have been made by any such party with
Parent or Acquisition Corp. in connection with any of the transactions
contemplated by this Agreement, (d) Taxes attributable to any transaction or
event occurring on or prior to the Closing, (e) any claim relating to or arising
out of any Liabilities of either Parent or Acquisition Corp. on or prior to
Closing or with respect to accounting fees arising thereafter, or (f) any
litigation, action, claim, proceeding or investigation by any third party
relating to or arising out of the business or operations of Parent, or the
actions of Parent or any holder of Parent capital stock prior to the Effective
Time.
Section
9.2 Survival.
All
representations, warranties, covenants and agreements of Parent and Acquisition
Corp. contained in this Agreement or in any instrument delivered pursuant to
this Agreement shall survive until twelve (12) months after the Closing Date.
The representations and warranties of the Company contained in this Agreement
or
in any instrument
31
delivered
pursuant to this Agreement will terminate at, and have no further force and
effect after, the Effective Time.
Section
9.3 Time
Limitations.
Neither
Parent nor Acquisition Corp. shall have any liability (for indemnification
or
otherwise) with respect to any representation or warranty, or covenant or
agreement to be performed and complied with prior to the Effective Time, unless
on or before the six month anniversary of the Effective Time (the “Claims
Deadline”),
Parent is given notice of a claim with respect thereto, in accordance with
Section
9.5,
specifying the factual basis therefore in reasonable detail to the extent then
known by the Company Indemnified Parties.
Section
9.4 Limitation
on Liability.
The
obligations of Parent and Acquisition Corp. to the Company Indemnified Parties
set forth in Section
9.1
shall be
subject to the following limitations:
(a) The
aggregate liability of Parent and Acquisition Corp. to the Company Indemnified
Parties under this Agreement shall not exceed $50,000.00.
(b) Other
than claims based on fraud or for specific performance, injunctive or other
equitable relief, the Company Indemnified Parties’ sole and exclusive remedy for
any and all claims for Damages pursuant to Section
9.1
hereof
shall be the indemnification provided under the terms and subject to the
conditions of this Article
IX.
Section
9.5 Notice
of Claims.
(a) If,
at
any time on or prior to the Claims Deadline, Company Indemnified Parties shall
assert a claim for indemnification pursuant to Section
9.1,
such
Company Indemnified Parties shall submit to Parent a written claim stating:
(i)
that a Company Indemnified Party incurred or reasonably believes it may incur
Damages and the amount or reasonable estimate thereof of any such Damages;
and
(ii) in reasonable detail, the facts alleged as the basis for such claim and
the
section or sections of this Agreement alleged as the basis or bases for the
claim. If the claim is for Damages which the Company Indemnified Parties
reasonably believe may be incurred or are otherwise unliquidated, the written
claim shall be deemed to have been asserted under this Article
IX
in the
amount of such estimated Damages, but no payment for indemnification shall
be
made until such Damages have actually been incurred.
(b) In
the
event that any action, suit or proceeding is brought against any Company
Indemnified Party with respect to which Parent may have liability under this
Article
IX,
the
Parent shall have the right, at its cost and expense, to defend such action,
suit or proceeding in the name and on behalf of the Company Indemnified Party;
provided,
however,
that a
Company Indemnified Party shall have the right to retain its own counsel, with
fees and expenses paid by Parent, if representation of the Company Indemnified
Party by counsel retained by Parent would be inappropriate because of actual
or
potential differing interests between Parent and the Company Indemnified Party.
In connection with any action, suit or proceeding subject to this Article
IX,
Parent
and each Company Indemnified Party agree to render to each other such assistance
as may reasonably be required in order to ensure proper and adequate defense
of
such action, suit or proceeding. Parent shall not, without the prior written
consent of
32
the
applicable Company Indemnified Parties, which consent shall not be unreasonably
withheld or delayed, settle or compromise any claim or demand if such settlement
or compromise does not include an irrevocable and unconditional release of
such
Company Indemnified Parties for any liability arising out of such claim or
demand.
ARTICLE
X
TERMINATION
PRIOR TO CLOSING
Section
10.1 Termination
of Agreement.
This
Agreement may be terminated at any time prior to the Closing:
(a) by
the
mutual written consent of the Company, Acquisition Corp. and
Parent;
(b) by
the
Company, if Parent or Acquisition Corp. (i) fails to perform in any material
respect any of its agreements contained herein required to be performed by
it on
or prior to the Effective Time, (ii) materially breaches any of its
representations, warranties or covenants contained herein, which failure or
breach is not cured within thirty (30) days after the Company has notified
Parent and Acquisition Corp. of its intent to terminate this Agreement pursuant
to this paragraph (b);
(c) by
Parent
and Acquisition Corp., if the Company (i) fails to perform in any material
respect any of its agreements contained herein required to be performed by
it on
or prior to the Closing Date, (ii) materially breaches any of its
representations, warranties or covenants contained herein, which failure or
breach is not cured within thirty (30) days after Parent or Acquisition Corp.
has notified the Company of its intent to terminate this Agreement pursuant
to
this paragraph (c);
(d) by
either
the Company, on the one hand, or Parent and Acquisition Corp., on the other
hand, if there shall be any order, writ, injunction or decree of any court
or
governmental or regulatory agency binding on Parent, Acquisition Corp. or the
Company, which prohibits or materially restrains any of them from consummating
the transactions contemplated hereby; provided
that the
parties hereto shall have used their best efforts to have any such order, writ,
injunction or decree lifted and the same shall not have been lifted within
ninety (90) days after entry, by any such court or governmental or regulatory
agency;
(e) by
either
the Company, on the one hand, or Parent and Acquisition Corp., on the other
hand, if the Closing has not occurred on or prior to February 9, 2007, for
any
reason other than delay or nonperformance of the party seeking such
termination;
(f) by
the
Company if the Board of Directors of the Company determines in good faith,
based
upon advice of legal counsel, that termination pursuant to this Section
10.1(f)
is
necessary to comply with its fiduciary duties under applicable law as provided
in Section
7.8
hereof.
Section
10.2 Termination
of Obligations.
Termination of this Agreement pursuant to Section 10.1 hereof shall terminate
all obligations of the parties hereunder, except for the obligations under
Article
IX,
Article
X,
and
Sections 11.4,
11.7,
11.14, 11.15
and
11.16
hereof;
33
provided,
however,
that
termination pursuant to paragraphs (b) or (c) of Section
10.1
shall
not relieve the defaulting or breaching party or parties from any liability
to
the other parties hereto.
ARTICLE
XI
MISCELLANEOUS
Section
11.1 Amendments.
Subject
to applicable law, this Agreement may be amended or modified by the parties
hereto by written agreement executed by each party to be bound thereby and
delivered by duly authorized officers of the parties hereto at any time prior
to
the Effective Time; provided,
however,
that
after the approval of the Merger by the requisite Stockholders, no amendment
or
modification of this Agreement shall be made that by law requires further
approval from any Stockholders without such further approval.
Section
11.2 Notices.
Any
notice, request, instruction, other document or communications to be given
hereunder by any party hereto to any other party hereto shall be in writing
and
shall be deemed to have been duly given (a) when delivered personally, (b)
upon
confirmation of delivery if by electronic mail, (c) upon receipt of a
transmission confirmation (with a confirming copy delivered personally or sent
by overnight courier) if sent by facsimile or like transmission, or (d) on
the
next business day when sent by Federal Express, United Parcel Service, U.S.
Express Mail or other reputable overnight courier for guaranteed next day
delivery, as follows:
|
If
to Parent or Acquisition Corp., to:
|
Amerasia
Khan Enterprises Ltd
Attention:
Xxxxxx Xxx, CEO
000
Xxxx 0xx
Xxxxxx
Xxxxxxxxx,
XX
X0X
0X0
Telephone:
(000) 000-0000
|
|
with
a copy to:
|
|
|
Cane
Xxxxx, LLP
Attention:
Xxxxxx Xxxx
0000
Xxxx Xxxx Xxxxxxx
Xxx
Xxxxx XX 00000
Telephone:
(000) 000 0000
Facsimile:
(000) 000 0000
Email:
Xxxxx@XxxxXxxxx.xxx
|
34
|
If
to the Company, to:
|
ShieldZone
Corporation
Attention:
Xxxxxx X. Xxxxxxxx XX
0000
Xxxxx 000 Xxxx, Xxxxx X
Xxxx
Xxxx Xxxx, Xxxx 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Email:
xxxxxx@xxxxxxxxxx.xxx
|
|
with
a copy to:
|
|
|
Xxxxxxxxxx
& Xxxxx LLP
Attention:
Xxxxxxxx X. Post, Esq.
00000
Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx
Xxxxxxx Xxxxxxxxxx 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Email:
xxxxx@xxxxxxxxxxxxxxx.xxx
|
or
to
such other persons or addresses as may be designated in writing by the party
to
receive such notice. Nothing in this Section
11.2
shall be
deemed to constitute consent to the manner and address for service of process
in
connection with any legal proceeding (including arbitration arising in
connection with this Agreement), which service shall be effected as required
by
applicable law.
Section
11.3 Entire
Agreement.
This
Agreement and the exhibits attached hereto or referred to herein constitute
the
entire agreement of the parties hereto, and supersede all prior agreements
and
undertakings, both written and oral, among the parties hereto, with respect
to
the subject matter hereof and thereof.
Section
11.4 Expenses.
Except
as otherwise expressly provided herein, whether or not the Merger occurs, all
expenses and fees incurred by Parent and Acquisition Corp. on one hand, and
the
Company on the other, shall be borne solely and entirely by the party that
has
incurred the same; provided,
that if
the Merger occurs, Parent agrees to pay, and shall cause the Surviving
Corporation to pay, any unpaid fees and expenses of the Company (including
fees
and expenses of its counsel and other advisors) in connection with the
consummation of the transactions contemplated by this Agreement.
Section
11.5 Severability.
If any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement will nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon
such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto will negotiate in good faith to amend
or
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that transactions
contemplated hereby are fulfilled to the extent possible.
35
Section
11.6 Successors
and Assigns; Assignment.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Neither this Agreement nor any
of
the rights, interests or obligations hereunder shall be assigned or delegated
by
any of the parties hereto without, in the case of Parent and Acquisition Corp.,
the prior written approval of the Company and, in the case of the Company,
the
prior written approval of Parent.
Section
11.7 No
Third Party Beneficiaries.
Except
as set forth in Section
9.1
and
Section
11.6,
nothing
herein expressed or implied shall be construed to give any person other than
the
parties hereto (and their successors and assigns as permitted herein) any legal
or equitable rights hereunder.
Section
11.8 Counterparts;
Delivery by Facsimile.
This
Agreement may be executed in multiple counterparts, and by the different parties
hereto in separate counterparts, each of which when executed will be deemed
to
be an original but all of which taken together will constitute one and the
same
agreement. This Agreement and each other agreement or instrument entered into
in
connection herewith or therewith or contemplated hereby or thereby, and any
amendments hereto or thereto, to the extent signed and delivered by means of
a
facsimile machine or by electronic mail, shall be treated in all manner and
respects as an original agreement or instrument and shall be considered to
have
the same binding legal effect as if it were the original signed version thereof
delivered in person. At the request of any party hereto or to any such agreement
or instrument, each other party hereto or thereto shall re-execute original
forms thereof and deliver them to all other parties. No party hereto or to
any
such agreement or instrument shall raise the use of a facsimile machine or
electronic mail to deliver a signature or the fact that any signature or
agreement or instrument was transmitted or communicated through the use of
a
facsimile machine or electronic mail as a defense to the formation or
enforceability of a contract and each such party forever waives any such
defense.
Section
11.9 Waiver.
At any
time prior to the Effective Time, any party hereto may (a) extend the time
for
the performance of any of the obligations or other acts of the other party
hereto; (b) waive any inaccuracies in the representations and breaches of the
warranties of the other party contained herein or in any document delivered
pursuant hereto; and (c) waive compliance by the other party with any of the
agreements or conditions contained herein. Any such extension or waiver will
be
valid only if set forth in an instrument in writing signed by the party or
parties to be bound thereby.
Section
11.10 No
Constructive Waivers.
No
failure or delay on the part of any party hereto in the exercise of any right
hereunder will impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty, agreement or
covenant herein, nor will any single or partial exercise of any such right
preclude other or further exercise thereof or of any other right. No waiver
by
any party of any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any prior
or
subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
Section
11.11 Further
Assurances.
The
parties hereto shall use their commercially reasonable efforts to do and perform
or cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments or
36
documents
as any other party hereto may reasonably request in order to carry out fully
the
intent and purposes of this Agreement and the consummation of the transactions
contemplated hereby.
Section
11.12 Recitals.
The
recitals set forth above are incorporated herein and, by this reference, are
made part of this Agreement as if fully set forth herein.
Section
11.13 Headings.
The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this
Agreement.
Section
11.14 Governing
Law.
This
Agreement and the agreements, instruments and documents contemplated hereby
shall be governed by and construed and enforced in accordance with the laws
of
the State of Nevada without regard to its conflicts of law
principles.
Section
11.15 Dispute
Resolution.
The
parties hereto shall initially attempt to resolve all claims, disputes or
controversies arising under, out of or in connection with this Agreement by
conducting good faith negotiations amongst themselves. If the parties hereto
are
unable to resolve the matter following good faith negotiations, the matter
shall
thereafter be resolved by binding arbitration and each party hereto hereby
waives any right it may otherwise have to the resolution of such matter by
any
means other than binding arbitration pursuant to this Section
11.15.
Whenever a party shall decide to institute arbitration proceedings, it shall
provide written notice to that effect to the other parties hereto. The party
giving such notice shall, however, refrain from instituting the arbitration
proceedings for a period of sixty (60) days following such notice. During this
period, the parties shall make good faith efforts to amicably resolve the claim,
dispute or controversy without arbitration. Any arbitration hereunder shall
be
conducted in the English language under the commercial arbitration rules of
the
American Arbitration Association. Any such arbitration shall be conducted in
Las
Vegas, Nevada by a panel of three arbitrators: one arbitrator shall be appointed
by each of Parent and Company; and the third shall be appointed by the American
Arbitration Association. The panel of arbitrators shall have the authority
to
grant specific performance. Judgment upon the award so rendered may be entered
in any court having jurisdiction or application may be made to such court for
judicial acceptance of any award and an order of enforcement, as the case may
be. In no event shall a demand for arbitration be made after the date when
institution of a legal or equitable proceeding based on the claim, dispute
or
controversy in question would be barred under this Agreement or by the
applicable statute of limitations. The prevailing party in any arbitration
in
accordance with this Section
11.15
shall be
entitled to recover from the other party, in addition to any other remedies
specified in the award, all reasonable costs, attorneys’ fees and other expenses
incurred by such prevailing party to arbitrate the claim, dispute or
controversy.
Section
11.16 Interpretation.
(a) When
a
reference is made in this Agreement to a section or article, such reference
shall be to a section or article of this Agreement unless otherwise clearly
indicated to the contrary.
(b) Whenever
the words “include”,
“includes”
or
“including”
are
used in this Agreement, they shall be deemed to be followed by the words
“without limitation.”
37
(c) The
words
“hereof”,
“hereby”,
“herein”
and
“herewith”
and
words of similar import shall, unless otherwise stated, be construed to refer
to
this Agreement as a whole and not to any particular provision of this Agreement,
and article, section, paragraph, exhibit and schedule references are to the
articles, sections, paragraphs, exhibits and schedules of this Agreement unless
otherwise specified.
(d) The
words
“knowledge,”
or
“known
to,”
or
similar terms, when used in this Agreement to qualify any representation or
warranty, refer to the knowledge or awareness of certain specific facts or
circumstances related to such representation or warranty of the persons in
the
Applicable Knowledge Group (as defined herein) which a prudent business person
would have obtained after reasonable investigation or due diligence on the
part
of any such person. For the purposes hereof, the “Applicable
Knowledge Group”
with
respect to the Company shall be Xxxxxx X. Xxxxxxxx XX. For the purposes hereof,
the “Applicable
Knowledge Group”
with
respect to Parent and the Acquisition Corp. shall be Xx.
Xxxxxx Xxx.
(e) The
word
“subsidiary”
shall
mean any entity of which at least a majority of the outstanding shares or other
equity interests having ordinary voting power for the election of directors
or
comparable managers of such entity is owned, directly or indirectly by another
entity or person.
(f) For
purposes of this Agreement, “ordinary
course of business”
means
the ordinary course of business consistent with past custom and practice
(including with respect to quantity and frequency).
(g) The
plural of any defined term shall have a meaning correlative to such defined
term, and words denoting any gender shall include all genders. Where a word
or
phrase is defined herein, each of its other grammatical forms shall have a
corresponding meaning.
(h) A
reference to any legislation or to any provision of any legislation shall
include any modification or re-enactment thereof, any legislative provision
substituted therefor and all regulations and statutory instruments issued
thereunder or pursuant thereto, unless the context requires
otherwise.
(i) The
parties hereto have participated jointly in the negotiation and drafting of
this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties,
and no presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of the authorship of any provisions of this
Agreement.
[The
remainder of this page is intentionally left blank]
38
IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first above written by their respective officers
thereunto duly authorized.
|
COMPANY:
|
||
|
SHIELDZONE
CORPORATION
|
| By: | |
| Name: | Xxxxxx X. Xxxxxxxx XX |
| Title: | Chief Executive Officer |
|
PARENT:
|
||
|
AMERASIA
KHAN ENTERPRISES LTD
|
| By: | |
| Name: | |
| Title: |
|
ACQUISITION
CORP.:
|
||
|
SZC
ACQUISITION, CORP.
|
| By: | |
| Name: | |
| Title: |
39
Exhibit
A
Certificate
of Incorporation of Surviving Corporation
Exhibit
B
By-Laws
of Surviving Corporation
BY-LAWS
OF
SHIELDZONE
CORPORATION
ARTICLE
I
Section
1. The following paragraphs contain provisions for the regulation and management
of SHIELDZONE
CORPORATION,
a Utah
corporation.
Section
2. In the event that there is a conflict between a provision of these By-Laws
and a mandatory provision of the Articles of Incorporation of this corporation,
then said mandatory provision of the Articles of Incorporation of this
corporation shall control.
ARTICLE
II
Place
of Business
Section
1. The principal office of said corporation, shall be 0000 Xxxxx 000 Xxxx,
Xxxxx
"X", Xxxx Xxxx Xxxx, Xxxx 00000. This designation shall be without prejudice
to
the power and right of the corporation to conduct and transact any of its
affairs or business in other cities, states, territories, countries, or
places.
Section
2. The registered agent of tile corporation in the State of Utah shall be
Xxxxxxx X. Chipping, at the registered office address
of 0000
Xxxxx 000 Xxxx, Xxxxx "X", Xxxx Xxxx Xxxx, Xxxx 00000.
Section
3. The registered office and registered agent of the corporation may be changed
from time to time in the manner prescribed by law without amending these
By-Laws.
ARTICLE
III
Officers
Section
I
. Number.
The
officers of this corporation may consist of a President, a Secretary, a
Treasurer, and such other officers, including one or more Vice Presidents,
and,
if desired, a Chief Executive Officer, as may be appointed in accordance
with
the provisions of Section 3 of this Article. One person may hold any two
of said
offices, but no such officer shall execute, acknowledge, or
verify
any instrument in more than one capacity if such instrument is required by
law
or by these By-Laws or by a resolution of the
Board of
Directors to be executed, acknowledged or verified by any two or more
officers.
Section
2. Election,
Term of Office and Qualifications.
The
officers of this corporation shall be chosen by
the
Board of Directors. Each officer, except such officer as may be appointed
in
accordance with the provisions of Section 3 of this Article, shall hold his
office until his successors shall have been removed in the manner hereinafter
provided.
Section
3. Subordinate
Officers.
The
Board of Directors may appoint such other officers to hold office for such
period, have such authority
and perform such duties as the Board of Directors may from time to time
determine. The Board of Directors may delegate to
any
officer the power to appoint any such subordinate officers.
Section
4. Removal.
Any
officer or agent elected or appointed by the Board of Directors may be removed
by the Board of Directors whenever in its judgment the best interests of
the
corporation would be served thereby, but such removal shall be without prejudice
to the contract rights, if any, of the person so removed. Such removal shall
be
by vote of a majority of the Board of Directors at a regular meeting or a
special meeting of the Board of Directors called for this purpose.
Section
5. Resignations. Any officer may resign at any time by giving written notice
to
the Board of Directors or to the President or Secretary of the corporation.
Any
such resignation shall take effect at the time specified therein; and, unless
otherwise specified therein, the acceptance of such resignation shall not
be
necessary to make it effective.
Section
6. Chief
Executive Officer.
The
Chief Executive Officer shall be the principal executive officer of the
corporation and,
subject
to the control of the Board of Directors, shall in general supervise and
control
all of the business and affairs of the corporation.
The
Chief
Executive Officer shall preside at all meetings of the shareholders and all
meetings of the Board of Directors; and shall have
general
supervision over the affairs of the corporation and over the other
officers.
Section
7. President.
The
President shall be the chief operating officer of the corporation. The President
shall perform all duties incident to the office of the President; shall sign
all
stock certificates and written contracts of the corporation; and shall perform
all such other duties as are assigned to the President from time to time
by
resolution of the Board of Directors or the Chief Executive
Officer.
Section
8. Vice
President.
In the
absence of a President or in the event of the President's death, inability
or
refusal to act, the Vice President shall perform the duties of the President,
and when so acting, shall have all the powers of, and be subject to, all
of the
restrictions upon the President. The Vice President shall perform such other
duties as from time to time may be assigned to the Vice President by the
President or by the Board of Directors.
Section
9. Secretary. The Secretary shall be sworn to the faithful discharge of his
or
her duty. The Secretary shall:
a. Keep
the
minutes of the meetings of the shareholders and of the Board of Directors
in
hooks provided for that purpose;
b. See
that
all notices are duly given in accordance with the provisions of these By-Laws
or
as required by law;
c. Be
custodian of the records and of the seal of the corporation and see that
such
seal is affixed to all stock certificates prior to their issue and to all
documents, the execution of which on behalf of the corporation under
its
seal
is
duly authorized in accordance with the provisions of these By-Laws.
d.
Have
charge of the stock books of the corporation and keep or cause to be kept
the
stock and transfer books in such manner as to show
at
any time the amount of the stock of the corporation issued and outstanding,
the
manner in which and the time when such
stock
was paid for, the names, alphabetically arranged, and the addresses of the
holders of record; and exhibit during the usual business hours of the
corporation to any director, upon application, the original or duplicate
stock
ledger;
e. Sign
with
the President, or a Vice President, certificates of stock of the
corporation;
f. See
that
the books, reports, statements, certificates, and all other documents and
records of the corporation required by law are
properly
kept and filed;
g. In
general, perform all duties incident to the office of Secretary and such
other
duties as, front time to time, may be assigned to
the
Secretary by the Board of Directors or by the President.
Section
10. Treasurer.
The
Treasurer shall:
a.
Have
charge and custody of, and be responsible for, all funds and securities of
the
corporation;
b.
From
time
to time render a statement of the condition of the finances of the corporation
at the request of the Board of Directors;
c.
Receive
and give receipt for monies due and payable to the corporation from any source
whatsoever;
d.
In
general, perform all duties incident to the office of Treasurer, and such
other
duties as from time to time may be assigned to
the
Treasurer by the Board of Directors or by the President.
Section
11. Salaries
Salaries
of the officers shall be fixed from time to time by the Board of Directors
and
no officer shall be prevented
from receiving such salary by reason of the fact that he or she is also a
Director of the corporation.
ARTICLE
IV
Directors
Section
1. General
Powers.
The
business and affairs of this corporation and the management thereof shall
be
vested in a Board of Directors consisting of not less than one (1) nor more
than
three (3) members.
Section
2. Number
and
qualification.
The
number of directors of this corporation shall be not less than one (1) and
not
more than three (3). The number of directors may be increased or decreased
front
time to time within the limits stated above by the action of the majority
or the
whole Board of Directors. Directors shall he elected for a term of one (1)
year
and shall serve until the election and qualification of their successors,
unless
they sooner resign. At the first annual meeting of the shareholders and at
each
annual meeting thereafter, the shareholders shall so elect directors to hold
office until the next succeeding annual meeting. The directors need not be
residents of the State of Utah or shareholders of the corporation.
Section
3. Executive
Committee.
The
Board of Directors by resolution passed by a majority of the Board may designate
two or more of their number to constitute one or more a committees, which
shall
have and exercise, subject to limitations, if any, as may be prescribed herein
or by resolution of the Board of Directors, such powers and authority as
the
Board of Directors shall direct.
Section
4. Vacancy.
Any
director may resign at any time by giving written notice to the Chief Executive
Officer, President or to the Secretary of the corporation Such resignation
shall
take effect at the time specified therein; and unless otherwise specified
therein, the
acceptance of such resignation shall not be necessary to make it effective.
Any
vacancy occurring in the Board of Directors may be
filled
by the affirmative majority vote of the Board of Directors, A director elected
to fill a vacancy shall be elected for the unexpired term of his predecessor
in
office. A director chosen to fill a position resulting from a vacancy or
an
increase in the number of directors shall hold office until the next annual
or
special meeting of shareholders.
Section
5. Removal.
Any
director may be removed from office, either with or without cause, at any
time,
and another person may be elected to his place, to serve for the remainder
of
his term, at any annual or special meeting of shareholders called for that
purpose, by a majority of all of the shares of stock outstanding and entitled
to
vote. In case any vacancy so created shall not be filled by the shareholders
at
such meeting, such vacancy may be filled by the affirmative vote of a majority
of the remaining directors though less than a quorum. A director appointed
by
the Board of Directors to fill a vacancy under Section 4 above, may be removed
from office, either with or without cause, at any time, by the vote of a
majority of the Board of Directors under this Section 5 without necessity
of a
shareholders meeting.
Section
6. Meetings.
The
regular meeting of the Board of Directors shall be held immediately following
the annual shareholder's meeting. The Board of Directors shall meet at such
other time or times as they may from time to time determine.
Section
7. Special
Meetings.
Special
meetings of the Board of Directors may be called by or at the request of
the
President or any two directors. The person or persons authorized to call
special
meetings of the Board of Directors may fix the place for holding any special
meeting of the Board of Directors called by them.
Section
8. Place
of Meetings.
The
Board of Directors may hold its meetings at such place or places within or
without the State of Utah as the Board may from time to time determine, or,
with
respect to its meetings, as shall be specified or fixed in respective notices
or
waivers of notice of such meetings.
Section
9. Special
Meetings: Notice.
Special
meetings of the Board of Directors shall be held whenever called by the Chief
Executive Officer or President or by two of the directors. Notice of the
time
and place of holding said special meeting of the Board of Directors shall
be
given to each director by either (i) registered mail, return receipt requested,
deposited in the mail at least five (5) days prior to the date of said special
meeting, or (ii) guaranteed overnight delivery by a nationally-used courier
service at least two (2) days prior to the date of said special meeting,
or
(iii) by telex, email transmission or facsimile copy sent at least twenty-four
(24) hours prior to the time and date of such special meeting. Attendance
of a
director at such special meeting shall constitute a waiver of notice of such
special meeting, except where a director attends the meeting for the express
purpose of objecting to the transacting of any business because the meeting
is
not lawfully called or convened. Neither the business to be transacted at,
nor
the purpose of, any regular meeting or special meeting of the Board of Directors
need be specified in the notice or waiver of notice of such
meeting.
Section
10. Presence
of Meetings.
Members
of the Board, or of any committee thereof, may participate in a meeting of
the
Board
or such
committee by means of conference telephone or similar communications equipment,
by means of which all persons participating in the meeting can hear one another.
Participation in a meeting pursuant to this Section 10 shall constitute presence
in person at such meeting.
Section
11. Quorum
and Manner of Acting.
A
majority of the members of the Board of Directors shall form a quorum for
the
transaction
of business at any regular or special meeting of the Board of Directors.
The act
of the majority of the directors present at a meeting
at which a quorum is present shall be the act of the Board of Directors.
If the
vote of a lesser number is required for a specific act
by
the Articles of Incorporation, or by another provision of these By-Laws,
then
that lesser number shall govern. In the absence of
a
quorum, a majority of the directors present may adjourn the meeting from
time to
time until a quorum be had.
Section
12. Compensation. By resolution of the Board of Directors, the directors
may be
paid their expenses, if any, for attendance at each meeting of the Board
of
Directors and may be paid a fixed sum for attendance at each meeting of the
Board of Directors or a stated salary as director. No such payment shall
preclude any director from serving the corporation in any other capacity
and
receiving compensation therefore.
Section
13.. Election
of Officers.
At the
first meeting of the Board of Directors after the annual election, the Chief
Executive Officer, President, Vice President, and Secretary and Treasurer
shall
be elected to serve for the ensuing year and until the election of their
respective successors, and an executive committee may be elected. Election
shall
be by ballot, and the majority of the votes cast shall be necessary to elect.
Any vacancies that occur may be filled by the Board of Directors for the
unexpired term. An officer may be removed at any time by the majority vote
of
the directors present at any regular or special meeting of said Board of
Directors at which a quorum is present. The Board of Directors shall have
the
power to fill officer vacancies, create new officer positions, and adjust
salaries of officers as said Board from time to time shall deem necessary,
all
in accordance with the Articles of Incorporation.
Section
14. Reporting.
At each
annual shareholder's meeting, the directors shall submit a statement of business
done during the
preceding year, together with a report of the general financial condition
of the
corporation, and of the condition of its tangible property.
ARTICLE
V
Books
and Records
Section
1. The corporation shall keep either within or without the State of Utah,
complete books and records of account and shall keep minutes of the proceedings
of its shareholders and the Board of Directors.
Section
2. The corporation shall keep at its registered office or principal place
of
business,
a record of its shareholders, giving the names and addresses of all of the
shareholders and the number and class of the shares held by each.
Section
3. The books, records of account, financial statements and other documents
of
the corporation shall be available to such persons who have been designated
by
law as having a right thereto, and said books, records of account, financial
statements and documents shall be made available to such persons in the manner
and in accordance with the procedures established by law.
ARTICLE
VI
Stock
Section
1. Authorization.
The
authorized shares of
stock
of
the corporation shall be as provided by the Articles of
Incorporation.
Section
2. Certificate
of Shares.
The
shares of stock of the corporation shall be represented by certificates signed
by the Chief Executive Officer, President or the Vice President and the
Secretary or an assistant Secretary of the corporation, and may be sealed
with
the seal of the corporation or a facsimile thereof The signatures of the
President or Vice President and the Secretary or Assistant Secretary upon
a
certificate may be facsimile if
the
certificate is countersigned by a transfer agent, or registered by a registrar,
other than
the
corporation itself or an employee of the corporation. In case any officer
who
has signed or whose facsimile signature has been
placed
upon such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with
the
same effect as if he were such officer at the date of its issue.
Section
3. Issuance
of, Certificates.
Each certificate representing shares shall state upon the face of same that
the
corporation is organized
under the laws of
the
State
of Utah, the name of the person to whom the certificate is issued, the number
and class of shares,
and the
designation of the series, if any, which such certificate represents. No
certificate shall be issued for any shares until such shares are fully paid
and
when issued shall bear the notation that the certificate is issued as a fully
paid and non-assessable certificate of stock.
Section
4. Transfer
of
Shares. Transfer of shares of the corporation shall be made only on the stock
transfer books of the corporation by the holder of record thereof or by his
legal representative, who shall furnish proper evidence of authority to
transfer, or by his or her attorney thereunto authorized by power of attorney
duty executed and filed with the secretary of the corporation, and on surrender
for cancellation of the certificate for such shares. Upon surrender to the
corporation or to a transfer agent of the corporation of a certificate of
stock
duly endorsed or accompanied by proper evidence of succession, assignment
or
authority to transfer, it shall be the duty of the corporation to issue a
new
certificate to the person entitled thereto, and cancel the old certificate.
Every such transfer of shares shall be entered on the stock book of the
corporation which shall be kept at its principal office, or by its registrar
duly appointed.
Section
5. Transfer
Agent.
The Secretary of the corporation shall act as transfer agent of the certificates
representing the shares of the corporation unless another person or entity
is so
designated by the Board of Directors. The Secretary shall maintain a stock
transfer book, the stubs in which shall set forth, among other things, the
names
and addresses of the holders of all issued shares of the corporation, the
number
of
shares
held by each, the certificate numbers representing such shares, the date
of
issue of the certificates representing such shares, and whether or not such
shares originate from original issue or from transfer. The names and addresses
of
the
shareholders as they appear on the stubs of the stock transfer book shall
be
conclusive evidence as to who are the shareholders of record and as such
entitled to receive notice of the meetings of shareholders; to vote at such
meetings; to examine the list of the shareholders entitled to vote at meetings;
to receive dividends; and to own, enjoy and exercise any
other
property rights deriving from such shares against the corporation. Each
shareholder shall be responsible for notifying the Secretary in writing of
any
change in his name or address and failure so to do will relieve the corporation,
its directors, officers and agents, from liability for failure to direct
notices
or other documents, or to pay over or transfer dividends or other property
or
rights, to a name and address other than the name and address appearing on
the
stub of the stock transfer book.
The
Board
of Directors may at its discretion, appoint instead of the Secretary of the
corporation, one or more transfer agents, registrars
and agents outside the corporation for making payment upon any class of stock,
bond, debenture, or other security of the
corporation. Such agents and registrars may be located either within or outside
the State of Utah. They shall have such rights and duties and shall be entitled
to such compensation as may be agreed.
Section
6. Fractional Shares.
The
corporation may, but shall not be obliged to, issue a certificate for a
fractional share, and by action
by
its Board of Directors, may issue in lieu thereof scrip in register or bearer
form which shall entitle the holder to receive a certificate
for a full share upon the surrender of such scrip aggregated to a full share.
The rights and obligations of persons holding
said
fractional shares or scrip shall be as are contained in any applicable provision
of these By-Laws, Articles of Incorporation, or laws of the State of
Utah.
Section
7. Treasury
Shares.
Treasury
shares of stock shall be held by the corporation as permitted by law, subject
to
the disposal of the Board of Directors and shall neither vote nor participate
in
dividends.
Section
8. Lien.
The
corporation shall have a first lien on all shares of its stock and upon all
dividends declared upon same for any indebtedness of the respective holders
thereof of the corporation.
Section
9. Lost Certificates.
In cases
of loss or destruction of a certificate of stock, no new certificates shall
be
issued in lieu thereof except upon satisfactory proof to the Board of Directors
of such loss or destruction, and, at the election of a majority of the
Board
of
Directors, upon giving satisfactory security by bond or otherwise, against
loss
to the corporation.. Any such new certificate
shall be
plainly marked "Duplicate" on its face.
Section
10. Consideration
and Payment for Shares.
Shares
having a par value shall be issued for such consideration, expressed
in dollars
but not less than the par value thereof, as shall be fixed from time to time
by
the Board of Directors. Shares without par value
shall be
issued for such consideration expressed in dollars as shall be fixed from
time
to time by the Board of Directors. Treasury shares
shall be disposed of for such consideration expressed in dollars as may be
fixed
from time to time by the Board of Directors.
Such
consideration may consist, in whole or in part, of money, other property,
tangible or intangible, or labor or services actually performed for the
corporation, but neither promissory notes nor future services shall constitute
payment or part payment for shares.
ARTICLE
VII
Shareholders
Section
1. Annual
Meeting.
The
regular meeting of
the
shareholders of the corporation shall be held at a time and place to be
designated by the President, Vice President, or the Board of Directors,
provided, however, that whenever such day shall fall upon a Sunday or a legal
holiday, the meeting shall be held on the next succeeding business day. At
the
regular annual meeting of the shareholders,
the directors for the ensuing year shall be elected. The officers of the
corporation shall present their annual reports and the
Secretary shall have on file for inspection and reference, an authentic list
of
the shareholders, giving the amount of stock held by
each as
shown by the stock books of the corporation ten (10) days before the annual
meeting.
Section
2. Special
Meeting
Special
meetings of the shareholders may be called at any time by the President,
any
member of the Board of Directors, or by the holders of not less than twenty
five
percent (25%) of all of the shares entitled to vote at said special meeting.
The
Board of
Directors
may designate any place as the place for any annual meeting or for any special
meeting called by the Board of
Directors.
If a special meeting shall be called otherwise than by the Board of Directors,
the place of meeting shall be the principal office of the
corporation.
Section
3. Notice.of:Meetings.
Written
or printed notice stating the place, day and hour of the meeting, and in
case of
special meeting, the purpose or purposes for which the meeting is called,
shall
be delivered not less than ten (10) nor more than sixty (60) days before
the
date of the meeting, either personally, or by mail, by or at the discretion
of
the President, the Secretary, or the director or the person calling the meeting,
to each shareholder of record entitled to vote at such meeting. If mailed,
such
notice shall be deemed to be delivered when deposited in the U.S. Mails and
addressed to the shareholder at his address as it appears on the stock transfer
books of the corporation, with postage thereon prepaid.
Section
4. Closing
Transfer Books.
For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or shareholders entitled
to
receive payment of any dividend, or in order to make a determination of shares
for any other purpose, the Board of Directors may provide that the stock
transfer books shall be closed for any stated period not exceeding sixty
(60)
days. If the stock transfer books shall be closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders,
shall be closed for at least ten (10) days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors may fix
in
advance a date as the record date for any such determination of such
shareholders, such date in any case to be not more than sixty (60) days and
in
the case of a meeting of shareholders, not less than ten (10) days prior
to the
date on which the particular action, requiring such determination of
shareholders, or shareholders entitled to receive payment of a dividend,
the day
on which notice of the meeting is mailed or the date on which the resolution
of
the Board of Directors declaring such dividend is adopted, as the case may
be,
shall be the record date for such determination of shareholders. When a
determination of shareholders entitled to vote at any meeting of shareholders
has been made as provided in this section, such a determination shall apply
to
any adjournment thereof. The officer or agent having charge of the stock
transfer books for shares of the corporation shall make, at least ten (10)
days
before each meeting of shareholders, a complete list of shareholders entitled
to
vote at any such meeting, or any adjournment thereof, arranged in alphabetical
order, with the address of and the number of shares held by each, which list
for
a period of ten (10) days prior to such meeting, shall be kept on file at
the
principal office of the corporation. The original stock transfer books shall
be
prima facie evidence as to who are the shareholders entitled to examine such
list or transfer books or to vote at any meeting of shareholders.
Section
5. Election
of Directors.
At each
annual meeting of the shareholders of the corporation, the directors shall
be
elected who shall serve until their successors are duly elected and qualified,
unless they sooner resign. Election of directors shall be by such of the
shareholders as attend the annual meeting, either in person or by proxy,
provided that if the majority of stock is not represented, said meeting may
be
adjourned by the shareholders present for a period not exceeding sixty (60)
days
at any one adjournment. At each election of directors, cumulative voting
shall
not be allowed. In the election of directors, that number of candidates equaling
the number of directors to be elected, having the highest number of votes
cast
in favor of their election, are elected to the Board of Directors.
Section
6..Quonmm.
One-third of the outstanding stock exclusive of treasury stock, shall be
necessary to constitute a quorum at meetings
of the shareholders. If a quorum is present at any meeting, a matter other
than
the election of directors shall be approved if the votes cast favoring the
action exceed the votes cast opposing the action, unless a greater number
is
required by the Articles of Incorporation of the Company. In the absence
of a
quorum, those present may adjourn the meeting from day to day but not exceeding
sixty (60) days.
Section
7. Proxies.
Any
shareholder entitled to vote may be represented at any regular or special
meeting of the shareholders by a duly executed proxy.
ARTICLE
VIII
Waiver
of Notice
Section
1. Directors
and Officers.
Unless
otherwise provided by law, whenever any notice is required to be given to
any
director or officer of the corporation under the provisions of these By-Laws
or
under the provisions of the Articles of Incorporation, a waiver thereof in
writing, signed by the person or persons entitled to such notice, whether
before
or after the time stated therein, shall be deemed equivalent to the giving
of
such notice.
Section
2. Shareholders.
No
notice of the time, place or purpose of any annual, regular, or special meeting
of the shareholders need be given if all shareholders of record on the date
said
meeting is held waive such notice in writing either before or after the regular,
or special meeting of the shareholders, such meeting shall be deemed to have
been legally and duly called, noticed, held, and conducted.
ARTICLE
IX
Action
Without a Meeting
Section
1. Any action required by the laws of the State of Utah, the Articles of
Incorporation, or by these By-Laws, to be taken at a meeting of the directors
or
shareholders of this corporation, or any action which may be taken at a meeting
of the directors or shareholders, may be taken without a meeting if a consent
in
writing, setting forth the action so taken, shall be signed by all the directors
or a majority of the shareholders entitled to vote with respect to the subject
matter thereof. Such consent shall have the same force and effect as a vote
of
the directors or shareholders taken at a meeting, and may be stated as such
in
any Articles or documents filed with the Secretary of State under the law
of the
State of Utah.
ARTICLE
X
Contract,
Loans, Checks and Deposits
Section
1. Contracts,
The
Board of Directors may authorize any officer or officers, agent or agents,
to
enter into any contract or execute and deliver any instrument in the name
of and
on behalf of the corporation, and such authority may be general or confined
to
specific instances.
Section
2. Loans. No loans shall be contracted on behalf of the corporation and no
evidences of indebtedness shall be issued in its name unless authorized by
a
resolution of the Board of Directors. Such authority may be general or confined
to specific instances.
Section
3. Checks.
Drafts, Etc.
All
checks, drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the corporation shall be
signed
by such officer or officers, agent or agents of the corporation and in such
manner as shall from time to time be determined by resolution of the Board
of
Directors.
Section
4. Deposits,
All
funds of the corporation not otherwise employed shall be deposited from time
to
time to the credit of the corporation in such banks, trust companies
of
other
depositories as the Board of Directors may select.
ARTICLE
XI
Execution
of Instruments
Section
1. Execution
of Instruments.
The
Chief Executive Officer and the President shall have power to execute on
behalf
and in the name of the corporation any deed, contract, bond, debenture, note
or
other obligations or evidences or indebtedness, or proxy, or other instrument
requiring the signature of an officer of the corporation, except where the
signing and execution thereof shall be expressly delegated by the Board of
Directors to some other officer or agent of the corporation. Unless so
authorized, no officer, agent or employee shall have any power or authority
to
bind the corporation in any way, to pledge its credit or to render it liable
pecuniarily for any purpose or in any amount.
Section
2, Checks
and Endorsements.
All
checks and drafts upon the funds to the credit of the corporation in any
of its
depositories shall be signed by such of its officers or agents as shall from
time to time be determined by resolution of the Board of Directors which
may
provide for the use of facsimile signatures under specified conditions, and
all
notes, hills receivable, trade acceptances, drafts, and
other
evidences of indebtedness payable to the corporation shall, for the purposes
of
deposit, discount or collection, be endorsed by
such
officers or agents of the corporation or in such manner as shall from time
to
time be determined by resolution of the Board of Directors.
ARTICLE
XII
Miscellaneous
Section
I. Corporate
Seal,
The
Board of Directors may provide a corporate seal which shall be circular in
form
and shall have inscribed thereon the name of the corporation, the state of
incorporation, and the words "Corporate Seal".
Section
2. Fiscal
Year,
The fiscal year of the corporation shall be as established by the Board of
Directors.
Section
3. Amendments.
Subject
to repeal or change by action of the shareholders, the Board of Directors
shall
have the power to alter, amend, or repeal the By-Laws of the corporation
and to
make and adopt new By-Laws at any regular meeting of the Board of Directors
or
at any special meeting called for that purpose.
Section
4. Dividends.
The
Board of Directors may, from time to time, declare, and the corporation may
pay,
dividends on its outstanding shares in the manner and upon the terms and
conditions provided by law and its Articles of Incorporation.
ADOPTED
BY THE BOARD OF DIRECTORS as of the date of incorporation of the Corporation.
DIRECTORS:
/s/
Xxxxxxx X. Chipping
Xxxxxxx
X. Chipping
/s/
Xxxxxx X. Xxxxxxxx XX
Xxxxxx
X.
Xxxxxxxx XX
Exhibit
C
Officers
and Directors of Parent
—
Pre-Effective Time and Post-Effective Time—
Pre-Effective
Time:
Xxxxxx
Xxx, CEO and Director ; Xxxxx Xx, CFO and Director
Following
Notice Filings:
The
following persons shall be appointed as Officers of Parent:
|
Name
Xxxxxx
X. Xxxxxxxx XX
|
Office
Chief
Executive Officer, President and
Director
|
Exhibit
D
Convertible
Notes
At
the
Effective Time, the issued and outstanding Convertible Notes set forth below
shall be
converted, in accordance with their terms, into the number of shares of Parent
Common Stock indicated below.
|
Holder
|
Aggregate
Outstanding Principal Amount
|
Expiration
Date
|
Conversion
Price
|
Number
of Shares of Parent Common Stock into which the Convertible Note
shall
become Convertible at the Effective Date
|
|
Core
Fund L.P.
|
$250,000.00
|
March
31, 2007
|
$0.35
|
714,286
|
Exhibit
E
Certificate
of Incorporation of Parent
OF
ARTICLE
I
NAME
The
name
of the corporation is Amerasia Khan Enterprises Ltd. (the "Corporation")
ARTICLE
II
AUTHORIZED
CAPITAL
The
amount of total authorized capital stock which the Corporation shall have
authority to issue is 50.000.000 shares of common stock, each with $0.001
par
value. To the fullest extent permitted by the laws of the State of Nevada
(currently set forth in NRS 78.195), as the same now exists or may hereafter
be
amended or supplemented, the Board of Directors may fix and determine the
designations, rights, preferences or other variations of each class or series
within each class of capital stock of the Corporation.
Common
Stock.
After
the requirements with respect to preferential dividends on the preferred
stock
if any shall have been met and after the Corporation shall have complied
with
all the requirements, if any, with respect to the setting aside of sums as
sinking funds or redemption or purchase accounts. then and not otherwise
the
holders of the common stock shall be entitled to receive such dividends as
may
be declared from time to time by the Board of Directors of the
Corporation.
After
distribution in full of the preferential amount, if any, to be distributed
to
the holders of the preferred stock in the event of voluntary or involuntary
liquidation, distribution, or sale of assets, dissolution, or winding-up
of the
Corporation, the holders of the common stock shall be entitled to receive
all of
the remaining assets of the Corporation, tangible and intangible, of whatever
kind available for distribution to shareholders, ratably in proportion to
the
number of shares of the common stock held by them respectively.
Except
as
may otherwise be required by law, each holder of the common stock shall have
one
vote in respect to each share of the common stock held by such holder on
all
matters voted upon by the shareholders
ARTICLE
III
BOARD
OF DIRECTORS
The
business and affairs of the Corporation shall be managed b. a Board of Directors
which shall exercise all the powers of the Corporation except as otherwise
provided in the Bylaws, these articles of Incorporation or by the law s of
the
State of Nevada. The initial Board of Directors shall consist of two members.
The names and addresses of the persons who shall ser e as the directors until
the first annual meeting of stockholder and until their successors are duly
elected and qualified is as follows.
|
Name
|
Address
|
|
Xxxxxx
Xxx
|
#703
Xxxxx Xxxx Xxxxxxxx
00-00X
Xxxxxxxxx Xxxx Xxxx
Xxxx
Xxxx
|
|
Xxxxx
Xx
|
000
Xxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxxx,
X.X. X0X 0X0
Xxxxxx
|
The
directors shall be elected at each annual meeting of shareholders, provided
that
vacancies may be tilled by election by the remaining directors, though less
than
a quorum or by the shareholders at a special meeting called for that purpose.
Despite the expiration of his or her term, a director continues to serge
until
his or her successor is elected and qualities.
ARTICLE
IV
LIMITATION
ON DIRECTOR LIABILITY
To
the
fullest extent permitted by the laws of the State of Nevada (currently set
forth
in NRS 78.138), as the same now exists or may hereafter be amended or
supplemented, no director or officer of the Corporation shall be liable to
the
Corporation or to its stockholders for damages for breach of fiduciary duty
as a
director or officer.
A
director of the Corporation shall not be personally liable to the Corporation
or
to its shareholders for monetary damages for breach of fiduciary duty as
a
director: except that this provision shall not eliminate or limit the liability
of a director to the Corporation or to its shareholders for monetary damages
otherwise existing for (i) any breach of the director’s duty of loyalty to the
Corporation or to its shareholders; (ii) acts or omissions not in good faith
or
which involve intentional misconduct or a knowing violation of law; (iii)
acts
specified in Section 78.300 of the Nevada General Corporation Law; or (iy)
any
transaction from which the director directly or indirectly derived any improper
personal benefit. If the Nevada General Corporation Law is hereafter amended
to
eliminate or limit further the liability of a director, then, in addition
to the
elimination and limitation of liability provided by the preceding sentence,
the
liability of each director shall be eliminated or limited to the fullest
extent
permitted by the Nevada General
Corporation
Law so amended. Any repeal or modification of this Article 1V shall not
adversely affect any right or protection of a director of the Corporation
under
this Article 1V as in effect immediately prior to such repeal or modification,
with respect to any liability that would have accrued, but for this Article
1V
prior to such repeal or modification.
ARTICLE
V
INDEMNIFICATION
The
Corporation shall indemnify, to the fullest extent permitted by applicable
law
in effect from time to time, any person, and the estate and personal
representative of any such person, against all liability and expense (including
attorneys' fees) incurred by reason of the tact that he is or was a director
or
officer of the Corporation or while serving as a director or officer of the
Corporation, he is or was serving at the request of the Corporation as a
director, officer, partner, trustee, employee, fiduciary or agent of, or
in any
similar managerial or fiduciary position of, another domestic or foreign
corporation or other individual or entity or of an employee benefit plan.
The
Corporation shall also indemnify any person who is serving or has served
the
Corporation as director, officer, employee, fiduciary or agent, and that
person's estate and personal representative, to the extent and in the manner
provided in any bylaw, resolution of the shareholders or directors, contract,
or
otherwise, so long as such provision is legally permissible.
ARTICLE
VI
HOLDER
OF BOND/OTHER OBLIGATION
The
holder of a bond, debenture or other obligation of the Corporation may have
any
of the rights of a stockholder in the Corporation to the extent determined
appropriate by the Board of Directors at the time of issuance of such bond,
debenture or other obligation.
ARTICLE
VII
PREEMPTIVE
RIGHT
The
owners of shares of stock of the Corporation shall not have a preemptive
right
to acquire unissued shares, treasure shares or securities convertible into
such
shares.
ARTICLE
VIII
CUMULATIVE
VOTING
Cumulative
voting shall not be permitted in the election of directors.
ARTICLE
IX
VOTING
RIGHTS
Only
the
shares of capital stock of the Corporation designated at issuance as haying
voting rights shall be entitled to vote at meetings of stockholders of the
Corporation, and only stockholders
4
of
record
of shares hawing voting rights shall be entitled to notice of and to vote
at
meetings of stockholders of the Corporation.ARTICLE
X
The
initial resident agent of the Corporation shall be Pacific Registered Agents,
Inc., whose street address is 000 Xxxxxx Xxxxx. Xxxxxx Xxxx, Xxxxxx 00000,
and
whose mailing address is 0000 X. Xxxxxx Xxxxxx. #000, Xxxxxx Xxxx, Xxxxxx
00000.
ARTICLE
XI
INCORPORATOR
The
name
and address of the incorporator of the Corporation is Xxxx Xxx X. Xxxxxxx,
0000
Xxxxxxx Xxxxxx, Xxxxx 0000. Xxxxxx, Xxxxxxxx 00000.
ARTICLE
XIl
The
provisions of NRS 78.378 to 78.3793 inclusive, shall not apply to the
Corporation.
IN
WITNESS WHEREOF, the undersigned incorporator has executed these Articles
of
Incorporation this 12th day of February. 2004.
By:
/s/
Xxxx Xxx X. Xxxxxxx
Incorporator
CERTIFICATE
OF ACCEPTANCE OF APPOINTMENT OF RESIDENT AGENT
Pacific
Registered Agents, Inc., hereby accepts appointment as Resident Agent for
Amerasia Khan Enterprises Ltd., this 17th day of February, 2004.
By: /s/
Xxxxxxx X. Xxxxxxx
Xxxxxxx
X. Xxxxxxx, President Pacific Registered Agents, Inc.
Exhibit
F
Bylaws
of Parent
BYLAWS
OF
1.
SHAREHOLDER'S MEETING
.01
Annual Meetings.
The
annual meeting of the shareholders of this Corporation, for the purpose of
election of Directors and for such other business as may come before it,
shall
be held at the registered office of the Corporation, or such other places
either
within or without the State of Nevada, as may be designated by the notice
of the
meeting, on the first week in December of each and every year, at 1 00 p.m.,
commencing in 2004, but in case such day shall be a legal holiday, the meeting
shall he held at the same hour and place on the next succeeding day not a
holiday.
.02
Special Meeting.
Special
meetings of the shareholders of this Corporation may be called at any time
by
the holders of ten percent (10%) of the voting shares of the Corporation,
or by
the President, Secretary, or by the Board of Directors or a majority thereof.
No
business shall be transacted at any special meeting of shareholders except
as is
specified in the notice calling for said meeting. The Board of Directors
may
designate any place, either within or without the State of Nevada, as the
place
of any special meeting called by the president or the Board of Directors,
and
special meetings called by the president or the Board of Directors, and special
meetings called at the request of shareholders shall be held at such place
in
the State of Nevada, as may be determined by the Board of Directors and placed
in the notice of such meeting.
.03
Notice of Meeting.
Written
notice of annual or special meetings of shareholders stating the place, day,
and
hour of the meeting and, in the case of a special meeting, the purpose or
purposes for which the meeting is called shall be given by the Secretary
or
persons authorized to call the meeting to each shareholder of record entitled
to
vote at the meeting. Such notice shall be given not less than ten (10) nor
more
than fifty (50) days prior to the date of the meeting, and such notice shall
be
deemed to be delivered when deposited in the United States mail addressed
to the
shareholder at his/her address as it appears on the stock transfer books
of the
Corporation.
.04
Waiver of Notice.
Notice
of
the time, place, and purpose of any meeting may be waived in writing and
will be
waived by any shareholder by his/her attendance thereat in person or by proxy.
Any shareholder so waiving shall be bound by the proceedings of any such
meeting
in all respects as if due notice thereof had been given.
.05
Quorum and Adjourned Meetings.
A
majority of the outstanding shares of the Corporation entitled to vote,
represented in person or by proxy, shall constitute a quorum at a meeting
of
shareholders. A majority of the shares represented at a meeting even if less
than a quorum, may adjourn the meeting from time to time without further
notice
At such adjourned meeting at which a quorum shall be present or represented,
any
business may be transacted which might have been transacted at the meeting
as
originally notified. The shareholders present at a duly organized meeting
may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough shareholders to leave less than a quorum.
.06
Proxies.
At
all
meetings of shareholders, a shareholder may vote by proxy executed in writing
by
the shareholder or by his/her duly authorized attorney in fact. Such proxy
shall
be filed with the Secretary of the Corporation before or at the time of the
meeting. No proxy shall be valid after eleven (11) months from the date of
its
execution, unless otherwise provided in the proxy.
.07
Voting of Shares.
Except
as
otherwise provided in the Restated Articles of Incorporation or in these
Bylaws
every shareholder of record shall have the right at every shareholder's meeting
to one (1) vote for every share standing in his/her name on the books of
the
Corporation, and the affirmative vote of a majority of the shares represented
at
a meeting and entitled to vote thereat shall be necessary for the adoption
of a
motion or for the determination of all questions and business which shall
come
before the meeting.
II.
DIRECTORS
.01
General Powers.
The
business and affairs of the Corporation shall be managed by its Board of
Directors
.02
Number, Tenure and Qualifications.
The
number of Directors of the Corporation shall be not less than one nor more
than
thirteen. Each Director shall hold office until the next annual meeting of
shareholders and until his/her successor shall have been elected and qualified.
Directors need not be residents of the State of Nevada or shareholders of
the
Corporation.
.03
Election.
The
Directors shall be elected by the shareholders at their annual meeting each
year
and if for any cause the Directors shall not have been elected at an annual
meeting, they may be elected at a special meeting of shareholders called
for
that purpose in the manner provided by these Bylaws.
.04
Vacancies.
In
case
of any vacancy in the Board of Directors, the remaining Director, whether
constituting a quorum or not, may elect a successor to hold office for the
unexpired portion of the terms of the Director whose place shall be vacant,
and
until his/her successor shall have been duly elected and qualified.
.05
Resignation.
Any
Director may resign at any time by delivering written notice to the Secretary
or
registered office of the Corporation.
.06
Meetings.
At
any
annual, special or regular meeting of the Board of Directors, any business
may
be transacted, and the Board may exercise all of its powers. Any such annual,
special or regular meeting of the Board of Directors of the Corporation may
be
held outside of the State of Nevada, and any member or members of the Board
of
Directors of the Corporation may participate in any such meeting by means
of a
conference telephone or similar communications equipment by means of which
all
persons participating in the meeting can hear each other at the same time:
the
participation by such means shall constitute presence in person at such meeting.
A.
Annual
Meeting of Directors.
Annual
meetings of the Board of Directors shall be held immediately after the annual
shareholders' meeting or at such time and place as may be determined by the
Directors. No notice of the annual meeting of the Board of Directors shall
be
necessary.
B
Special
Meetings.
Special
meetings of the Directors shall be called at any time and place upon the
call of
the president or any Director. Notice of the time and place of each special
meeting shall be given by the secretary, or the persons calling the meeting,
by
mail, radio, telegram, or by personal communication by telephone or otherwise
at
least one (1) day in advance of the time of the meeting The purpose of the
meeting need not be given in the notice. Notice of any special meeting may
be
waived in writing or by telegram (either before or after such meeting) and
will
be waived by any Director in attendance at such meeting.
C.
Regular Meetings of Directors.
Regular
meetings of the Board of Directors shall be held at such place and on such
day
and hour as shall from time to time be fixed by resolution of the Board of
Directors. No notice of regular meetings of the Board of Directors shall
be
necessary.
.07
Quorum and Voting.
A
majority of the Directors presently in office shall constitute a quorum for
all
purposes, but a lesser number may adjourn any meeting, and the meeting may
be
held as adjourned without further notice. At each meeting of the Board at
which
a quorum is present, the act of a majority of the Directors present at the
meeting shall be the act of the Board of Directors. The Directors present
at a
duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough Directors to leave less than a quorum.
.08
Compensation.
By
resolution of the Board of Directors, the Directors may be paid their expenses,
if any, of attendance at each meeting of the Board of Directors and may be
paid
a fixed sum for attendance at each meeting of the Board of Directors or a
stated
salary as Director. No such payment shall preclude
any Director from serving the Corporation in any other capacity and receiving
compensation therefore.
.09
Presumption of Assent.
A
Director of the Corporation who is present at a meeting of the Board of
Directors at which action on any corporate matter is taken shall be presumed
to
have assented to the action taken unless his/her dissent shall be entered
in the
minutes of the meeting or unless he/she shall file his/her written dissent
to
such action with the person acting as the secretary of the meeting before
the
adjournment thereof or shall forward such dissent by registered mail to the
Secretary of the Corporation immediately after the adjournment of the meeting
Such right to dissent shall not apply to a Director who voted in favor of
such
action.
.10
Executive and Other Committees.
The
Board
of Directors, by resolution adopted by a majority of the full Board of
Directors, may designate from among its members an executive committee and
one
of more other committees, each of which, to the extent provided in such
resolution. shall have and may exercise all the authority of the Board of
Directors, but no such committee shall have the authority of the Board of
Directors, in reference to amending the Restated Articles of Incorporation,
adoption a plan of merger or consolidation, recommending to the shareholders
the
sale, lease, exchange, or other disposition of all of substantially all the
property and assets of the dissolution of the Corporation or a revocation
thereof, designation of any such committee and the delegation thereto of
authority shall not operate to relieve any member of the Board of Directors
of
any responsibility imposed by law.
.11
Chairman of Board of Directors.
The
Board
of Directors may, in its discretion, elect a chairman of the Board of Directors
from its members; and, if a chairman has been elected, he/she shall, when
present, preside at all meetings of the Board of Directors and the shareholders
and shall have such other powers as the Board may prescribe.
.12
Removal.
Directors
may be removed from office with or without cause by a vote of shareholders
holding a majority of the shares entitled to vote at an election of Directors.
III.
ACTIONS BY WRITTEN CONSENT
Any
corporate action required by the Restated Articles of Incorporation. Bylaws,
or
the laws under which this Corporation is formed to he voted upon or approved
at
a duly called meeting of the Directors or shareholders may be accomplished
without a meeting if a written memorandum of the respective Directors or
shareholders, setting forth the action so taken, shall be signed by all the
Directors or shareholders, as the case maybe.
IV.
OFFICERS.
.01
Officers Designated.
The
Officers of the Corporation shall be a president, one or more vice presidents
(the number thereof to be determined by the Board of Directors), a secretary
and
a treasurer, each of whom shall be elected by the Board of Directors. Such
other
Officers and assistant officers as may be deemed necessary may be elected
or
appointed by the Board of Directors. Any Officer may he held by the same
person,
except that in the event that the Corporation shall have more than one director,
the offices of president and secretary shall be held by different persons.
.02
Election, Qualification and Term of Office.
Each
of
the Officers shall be elected by the Board of Directors. None of said Officers
except the president need be a Director, but a vice president who is not
a
Director cannot succeed to or fill the office of president. The Officers
shall
be elected by the Board of Directors. Except as hereinafter provide, each
of
said Officers shall hold office from the date of his/her election until the
next
annual meeting of the Board of Directors and until his/her successor shall
have
been duly elected and qualified.
.03
Powers and Duties.
The
powers and duties of the respective corporate Officers shall be as follows:
A.
President.
The
president shall be the chief executive Officer of the Corporation and, subject
to the direction and control of the Board of Directors, shall have general
charge and supervision over its property business, and affairs. He/she shall,
unless a Chairman of the Board of Directors has been elected and is present,
preside at meetings of the shareholders and the Board of Directors.
B.
Vice
President
In
the
absence of the president or his/her inability to act, the senior vice president
shall act in his place and stead and shall have all the powers and authority
of
the president, except as limited by resolution of the Board of Directors.
C.
Secretary
The
secretary shall:
|
1.
|
Keep
the minutes of the shareholder's and of the Board of Directors
meetings in
one or more books provided for that
purpose;
|
|
2.
|
See
that all notices are duly given in accordance with the provisions
of these
Bylaws or as required by law;
|
| 3. | Be custodian of the corporate records and of the seal of the Corporation and affix the seal of the Corporation to all documents as may be required; |
| 4. | Keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder; |
| 5. | Sign with the president, or a vice president, certificates for shares of the Corporation, the issuance of which shall have been authorized by resolution of the Board of Directors; |
| 6. | Have general charge of the stock transfer books of the corporation, and |
| 7. | In general perform all duties incident to the office of secretary and such other duties as from time to time may be assigned to him/her by the president or by the Board of Directors |
D.
Treasurer.
Subject
to the direction and control of the Board of Directors the treasurer shall
have
the custody, control and disposition of the funds and securities of the
Corporation and shall account for the same, and, at the expiration of his/her
term of office, he/she shall turn over to his/her successor all property
of the
Corporation in his/her possession.
E.
Assistant Secretaries and Assistant Treasurers.
The
assistant secretaries, when authorized by the Board of Directors, may sign
with
the president or a vice-president certificates for shares of the Corporation
the
issuance of which shall have been authorized by a resolution of the Board
of
Directors. The assistant treasurers shall, respectively, if required by the
Board of Directors, give bonds for the faithful discharge of their duties
in
such sums and with such sureties as the Board of Directors shall determine.
The
assistant secretaries and assistant treasurers, in general, shall perform
such
duties as shall be assigned to them by the secretary or the treasurer,
respectively, or by the president or the Board of Directors.
.04
Removal.
The
Board
of Directors shall have the right to remove any Officer whenever in its judgment
the best interest of the Corporation will he served thereby.
.05
Vacancies.
The
Board
of Directors shall fill any office which becomes vacant with a successor
who
shall hold office for the unexpired term and until his/her successor shall
have
been duly elected and qualified
.06
Salaries.
The
salaries of all Officers of the Corporation shall be fixed by the Board of
Directors.
V.
SHARE
CERTIFICATES
.01
Form
and Execution of Certificates.
Certificates
for shares of the Corporation shall be in such form as is consistent with
the
provisions of the Corporation laws of the State of Nevada. They shall be
signed
by the president and by the secretary, and the seal of the Corporation shall
be
affixed thereto Certificates may be issued for fractional shares.
.02
Transfers.
Shares
may be transferred by delivery of the certificates therefore, accompanied
either
by an assignment in writing on the back of the certificates or by a written
power of attorney to assign and transfer the same signed by the record holder
of
the certificate. Except as otherwise specifically
provided in these Bylaw, no shares shall he transferred on the books of the
Corporation until the outstanding certificate therefore has been surrendered
to
the Corporation.
.03
Loss
or Destruction of Certificates.
In
case
of loss or destruction of any certificate of shares, another may be issued
in
its place upon proof of such loss or destruction and upon the giving of a
satisfactory bond of indemnity to the Corporation. A new certificate may
be
issued without requiring any bond, when in the judgment of the Board of
Directors it is proper to do so.
VI.
BOOKS
AND RECORDS
.01
Books
of Accounts, Minutes and Share Register.
The
Corporation shall keep complete books and records of accounts and minutes
of the
proceedings of the Board of Directors and shareholders and shall keep at
its
registered office, principal place of business, or at the off ice of its
transfer agent or registrar a share register giving the names of the
shareholders in alphabetical order and showing their respective addresses
and
the number of shares held by each.
.02
Copies of Resolutions.
Any
person dealing with the Corporation may rely upon a copy of any of the records
of the proceedings, resolutions, or votes of the Board of Directors or
shareholders, when certified by the president or secretary.
VII.
CORPORATE SEAL.
The
following is an impression of the corporate seal of this Corporation:
VIII.
LOANS.
Generally,
the Corporation shall make no loans to its Officers or Directors, unless
first
approved by the holder of two-third of the voting shares, and no loans shall
be
made by the Corporation secured by its shares. Loans shall be permitted to
be
made to Officers, Directors and employees of the Company for moving expenses,
including the cost of procuring housing. Such loans shall be limited to
$25,000.00 per individual upon unanimous consent of the Board of Directors.
IX.
INDEMNIFICATION OF DIRECTORS AND OFFICERS.
.01
Indemnification.
The
Corporation shall indemnify and person who was or is a part or is threatened
to
be made a party to any proceeding, whether civil criminal administrative
or
investigative (other than an action by or in the right of the Corporation)
by
reason of the fact that such person is or was a Director,
Trustee, Officer, employee or agent of the Corporation, or is or was serving
at
the request of the Corporation as a Director, Trustee, Officer, employee
or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgment fines
and
amounts paid in settlement actually and reasonably incurred by such person
in
connection with such action. suit or proceeding if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed
to
the best interests of the Corporation and with respect to any criminal action
or
procedure had no reasonable cause to believe such person’s conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in
good
faith and in a manner which such person reasonably believed to be in or not
opposed to the best interests of the Corporation, and with respect to any
criminal action proceeding, had reasonable cause to believe that such person's
conduct was unlawful.
.02
Derivative Action
The
Corporation shall indemnify any person who was or is a party or is threatened
to
be made a party to any threatened, pending or completed action or suit by
or in
the right of the Corporation to procure a judgment in the Corporation's favor
by
reason of the fact that such person is or was a Director, Trustee, Officer,
employee or agent of the Corporation, or is or was serving at the request
of the
Corporation as a Director, Trustee, Officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorney's fees) and amount paid in settlement actually
and
reasonably incurred by such person in connection with the defense or settlement
of such action or suit if such person acted in good faith and in a manner
such
person reasonable believed to be in or not opposed to the hest interests
of the
Corporation, and, with respect to amounts paid in settlement, the settlement
of
the suit or action was in the best interests of the Corporation, provided,
however, that no indemnification shall be made in respect of any claim, issue
or
matter as to which such person shall have been adjudged to be liable for
gross
negligence or willful misconduct in the performance of such person's duty
to the
Corporation unless and only to the extent that, the court in which such action
or suit was brought shall determine upon application that, despite circumstances
of the case, such person is fairly and reasonably entitled to indemnity for
such
expenses as such court shall deem proper. The termination of any action or
suit
by judgment or settlement shall not, of itself, create a presumption that
the
person did not act in good faith and in a manner which such person reasonably
believed to be in or not opposed to the best interests of the Corporation.
.03
Successful Defense.
To
the
extent that a Director, Trustee, Officer, employee or Agent of the Corporation
has been successful on the merits or otherwise, in whole or in part in defense
of any action, suit or proceeding referred to in Paragraphs .01 and .02 above,
or in defense of any claim, issue or matter therein, such person shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by such person in connection therewith.
.04
Authorization.
Any
indemnification under Paragraphs 01 and 02 above (unless ordered by a court)
shall be made by the Corporation only as authorized in the specific case
upon a
determination that indemnification of the Director, Trustee, Officer, employee
or agent is proper in the circumstances because such person has met the
applicable standard of conduct set forth in Paragraphs 01 and .02 above Such
determination shall be made (a) by the Board of Directors of the
Corporation by a majority vote of a quorum consisting of Directors who were
not
parties to such action, suit or proceeding, or (b) is such a quorum is not
obtainable, by a majority vote of the Directors who were not parties to such
action. suit or proceeding, or (c) by independent legal counsel (selected
by one
or more of the Directors, whether or not a quorum and whether or not
disinterested) in a written opinion, or (d) by the Shareholders. Anyone making
such a determination under this Paragraph 04 may determine that a person
has met
the standards therein set forth as to some claims, issues or matters but
not as
to others, and may reasonably prorate amounts to be paid as indemnification.
.05
Advances.
Expenses
incurred in defending civil or criminal action, suit or proceeding shall
be paid
by the Corporation, at any time or from time to time in advance of the final
disposition of such action, suit or proceeding as authorized in the manner
provided in Paragraph .04 above upon receipt of an undertaking by or on behalf
of the Director, Trustee, Officer, employee or agent to repay such amount
unless
it shall intimately be by the Corporation is authorized in this Section.
.06
Nonexeclusivity
The
indemnification provided m this Section shall not be deemed exclusive of
any
other rights to which those indemnified may be entitled under any law, bylaw,
agreement, vote of shareholders or disinterested Directors or otherwise,
both as
to action in such person's official capacity and as to action in another
capacity while holding such office, and shall continue as to a person who
has
ceased to be a Director, Trustee, Officer, employee or agent and shall inure
to
the benefit of the heirs, executors, and administrators of such a person
.07
Insurance.
The
Corporation shall have the power to purchase and maintain insurance on behalf
of
any person who is or was a Director, Trustee. Officer, employee or agent
of the
Corporation, or is or was serving at the request of the Corporation as a
Director, Trustee, Officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against any liability
assessed against such person in any such capacity or arising out of such
person's status as such whether or not the corporation would have the power
to
indemnify such person against such liability.
.08
"Corporation" Defined
For
purposes of' this Section, references to the "Corporation" shall include,
in
addition to the Corporation, an constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger which,
if
its separate existence had continued, would have had the power and authority
to
indemnify its Directors, Trustees, Officers, employees or agents. so that
any
person who is or was a Director, Trustee, Officer, employee or agent of such
constituent corporation or of any entity a majority of the voting stock of
which
is owned by such constituent corporation or is or was serving at the request
of
such constituent corporation as a Director. Trustee, Officer, employee or
agent
of the corporation. partnership. joint venture trust or other enterprise,
shall
stand in the same position under the provisions of this Section with respect
to
the resulting or surviving Corporation as such person would have with respect
to
such constituent corporation if its separate existence had continued.
X.
AMENDMENT OF BYLAWS
.01
By
the Shareholders
These
Bylaws may be amended, altered, or repealed at any regular or special meeting
of
the shareholders if notice of the proposed alteration or amendment is contained
in the notice of the meeting.
.02
By
the Board of Directors.
These
Bylaws may be amended, altered, or repealed by the affirmative vote of a
majority of the entire Board of Directors at any regular or special meeting
of
the Board.
XI.
FISCAL YEAR.
The
fiscal year of the Corporation shall be set by resolution of the Board of
Directors
XII.
RULES OF ORDER.
The
rules
contained in the most recent edition of Robert's Rules of Order, Newly Revised,
shall govern all meetings of shareholders and Directors where those rules
are
not inconsistent with the Restated Articles of Incorporation, Bylaws, or
special
rules or order of the Corporation
XIII.
REIMBURSEMENT OF DISALLOWED EXPENSES.
If
any
salary, payment, reimbursement, employee fringe benefit, expense allowance
payment, or other expense incurred by the Corporation for the benefit of
an
employee is disallowed in whole or in part as a deductible expense of the
Corporation for Federal Income Tax purposes. the employee shall reimburse
the
Corporation, upon notice and demand, to the full extent of the disallowance.
This legally enforceable obligation is in accordance with the provisions
of
Revenue Ruling 69-115, 1969-1 C.B. 50, and is for the purpose of entitling
such
employee to a business expense deduction for the taxable year in which the
repayment is made to the Corporation. In this manner, the Corporation shall
be
protected from having to bear the entire burden of disallowed expense items.
I
HEREBY
CERTIFY that the foregoing is a full, true and correct copy of the Bylaws
of
AMERASIA KHAN ENTERPRISES LTD., a Nevada corporation, as in effect on the
date
hereof.
WITNESS
my hand this 2nd day of April, 2004.
/s/
Xxxxxx Xxx
Xxxxxx
Xxx - President & CEO
/s/
Xxxxx Xx
Xxxxx
Xx
- Secretary
