AGREEMENT AND PLAN OF MERGER
by and among
CDI ACQUISITION, INC.
and
CHROMADEX, INC.
May 21, 2008|
ARTICLE
I DEFINITIONS
|
1
|
|
ARTICLE
II THE MERGER
|
6
|
| Section 2.1 Merger |
6
|
| Section 2.2 Effective Time |
6
|
| Section 2.3 Articles of Incorporation; By-laws; Directors and Officers |
7
|
| Section 2.4 Effects of the Merger |
7
|
| Section 2.5 Closing |
7
|
|
ARTICLE
III MERGER CONSIDERATION; CONVERSION OF SECURITIES
|
7
|
| Section 3.1 Manner and Basis of Converting Capital Stock |
7
|
| Section 3.2 Surrender and Exchange of Certificates |
8
|
| Section 3.3 Options, Warrants |
9
|
| Section 3.4 Parent Common Stock |
10
|
|
ARTICLE
IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY
|
10
|
| Section 4.1 Organization |
10
|
| Section 4.2 Authorization; Validity of Agreement |
10
|
| Section 4.3 Capitalization |
11
|
| Section 4.4 Consents and Approvals; No Violations |
11
|
| Section 4.5 Financial Statements |
11
|
| Section 4.6 No Undisclosed Liabilities |
12
|
| Section 4.7 Litigation |
12
|
| Section 4.8 No Default; Compliance with Applicable Laws |
12
|
| Section 4.9 Broker’s and Finder’s Fees |
12
|
| Section 4.10 Assets and Contracts |
12
|
| Section 4.11 Tax Returns and Audits |
13
|
| Section 4.12 Patents and Other Intangible Assets |
14
|
| Section 4.13 Employee Benefit Plans; ERISA |
14
|
| Section 4.14 Title to Property and Encumbrances |
15
|
| Section 4.15 Condition of Properties |
15
|
| Section 4.16 Insurance Coverage |
15
|
| Section 4.17 Interested Party Transactions |
15
|
| Section 4.18 Environmental Matters |
16
|
| ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION CORP. |
17
|
| Section 5.1 Organization |
17
|
| Section 5.2 Authorization; Validity of Agreement |
17
|
| Section 5.3 Capitalization of Parent and Acquisition Corp. |
17
|
| Section 5.4 Consents and Approvals; No Violations |
18
|
| Section 5.5 Financial Statement and Other Information |
19
|
| Section 5.6 Absence of Undisclosed Liabilities |
20
|
| Section 5.7 Litigation |
20
|
| Section 5.8 No Default; Compliance with Applicable Laws |
20
|
| Section 5.9 Broker’s and Finder’s Fees; Broker/Dealer Ownership |
21
|
| Section 5.10 Assets and Contracts |
21
|
| Section 5.11 Tax Returns and Audits |
21
|
| Section 5.12 Employee Benefit Plans; ERISA |
21
|
| Section 5.13 Title to Property and Encumbrances |
22
|
| Section 5.14 Insurance Coverage |
22
|
| Section 5.15 Interested Party Transactions |
23
|
| Section 5.16 Environmental Matters |
23
|
| Section 5.17 Changes |
24
|
| Section 5.18 Questionable Payments |
24
|
| Section 5.19 Employees |
25
|
| Section 5.20 Validity of Shares |
25
|
| Section 5.21 No General Solicitation |
25
|
| Section 5.22 Disclosure |
25
|
|
ARTICLE
VI CONDUCT OF BUSINESSES PENDING THE MERGER
|
25
|
| Section 6.1 Conduct of Business by the Company Pending the Merger |
25
|
| Section 6.2 Conduct of Business by Parent and Acquisition Corp. Pending the Merger |
25
|
|
ARTICLE
VII ADDITIONAL AGREEMENTS
|
27
|
| Section 7.1 Access and Information |
27
|
| Section 7.2 Additional Agreements |
28
|
| Section 7.3 Publicity |
28
|
| Section 7.4 Appointment of Directors |
28
|
| Section 7.5 Parent Name Change and Exchange Listing |
28
|
| Section 7.6 Shareholder Consent |
28
|
| Section 7.7 Parent Exchange Requirements |
29
|
| Section 7.8 Notifications of Certain Matters |
29
|
|
ARTICLE
VIII CONDITIONS OF PARTIES’ OBLIGATIONS
|
29
|
| Section 8.1 Company Obligations |
29
|
| Section 8.2 Parent and Acquisition Corp. Obligations |
31
|
|
ARTICLE
IX TERMINATION PRIOR TO CLOSING
|
33
|
| Section 9.1 Termination of Agreement |
33
|
| Section 9.2 Termination of Obligations |
34
|
|
ARTICLE
X MISCELLANEOUS
|
34
|
| Section 10.1 Amendments. |
34
|
| Section 10.2 Notices |
34
|
| Section 10.3 Entire Agreement |
36
|
| Section 10.4 Expenses |
36
|
| Section 10.5 Severability |
36
|
| Section 10.6 Successors and Assigns; Assignment |
36
|
| Section 10.7 No Third Party Beneficiaries |
36
|
| Section 10.8 Counterparts; Delivery by Facsimile |
36
|
| Section 10.9 Waiver |
37
|
| Section 10.10 No Constructive Waivers |
37
|
| Section 10.11 Further Assurances |
37
|
| Section 10.12 Recitals |
37
|
| Section 10.13 Headings |
37
|
| Section 10.14 Governing Law |
37
|
| Section 10.15 Dispute Resolution |
37
|
| Section 10.16 Interpretation |
38
|
LIST
OF EXHIBITS
|
Exhibits
|
|
|
Exhibit
A
|
Articles
of Incorporation of Surviving Corporation
|
|
Exhibit
B
|
By-laws
of Surviving Corporation
|
|
Exhibit
C
|
Directors
and Officers of Surviving Corporation
|
|
Exhibit
D
|
Letter
of Transmittal
|
|
Exhibit
E
|
Written
Consent
|
|
Exhibit
F
|
Post-Closing
Directors of Parent
|
THIS
AGREEMENT AND PLAN OF MERGER is entered into as of May 21, 2008 by and among
CODY RESOURCES, INC., a Nevada corporation (“Parent”), CDI ACQUISITION, INC., a
California corporation and a wholly-owned subsidiary of Parent (“Acquisition Corp.”), and CHROMADEX,
INC., a California corporation (the “Company”).
R E C I T A L S
A.
The Company is primarily engaged in the business of creating and supplying
botanical reference standards along with related phytochemical products and
services (the “ Business ”).
B.
The Board of Directors of each of Parent, Acquisition Corp. and the Company has
approved, and deems it advisable and in the best interests of its 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 in Article I).
C.
The parties 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.
AGREEMENT
In consideration
of the mutual agreements and covenants hereinafter set forth, the parties,
intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
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.
“ Action ” shall mean any claim, action, suit, litigation,
proceeding, investigation, arbitration, mediation or other
dispute.
“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 Company Disclosure Schedule, the Parent Disclosure
Schedule and 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 of
this Agreement.
“ Ancillary
Agreements ” means each agreement, document, instrument or certificate
contemplated by this Agreement or to be executed by the Company, Parent or
Acquisition Corp. in connection with the consummation of the transactions
contemplated by this Agreement, in each case, only as applicable to the relevant
party or parties to such Ancillary Agreement, as indicated by the context in
which such term is used.
“Articles of Incorporation” shall have
the meaning given to such term in Section 2.3(a) hereof.
“ Business ” shall have the meaning given to such term in
Recital A.
“By-laws” shall have the meaning given
to such term in Section
2.3(b) hereof.
“ CGCL ” shall mean the General Corporation Law of the
State of <?xml:namespace prefix = st1 ns =
"urn:schemas-microsoft-com:office:smarttags" />California, as
amended.
“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
Recital C.
“ Commission ” shall mean the United States Securities and
Exchange Commission.
“Common Stock Options” shall have the
meaning given to such term in Section
3.3(a) hereof.
“ Company ” shall have the meaning given to such term in
the preamble to this Agreement.
“Company Balance Sheet” shall have the
meaning given to such term in Section
4.5 hereof.
“Company Balance Sheet Date” shall have
the meaning given to such term in Section 4.5 hereof.
“Company Common Stock” shall have the
meaning given to such term in Section
4.3 hereof.
“ Company
Disclosure Schedule ” shall mean the Company’s Disclosure Schedules to
this Agreement.
“ Consents ” shall mean any permits, filings, notices,
licenses, consents, authorizations, certificates, franchises, qualifications,
accreditation, waivers, approvals and other rights from, and filings with, any
governmental authority, used in or relating to a Person’s
business.
“ Contract ” shall mean all contracts, agreements, leases,
licenses, commitments, instruments, guarantees, bids, orders, proposals and all
oral understandings.
“Dissenting Shares” shall have the
meaning given to such term in Section
3.2(d) hereof.
“Effective Time” shall have the meaning
given to such term in Section 2.2
hereof.
“Employee Benefit Plans” shall have the
meaning given to such term 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.
“Evaluation Date” shall have the
meaning given to such term in Section
5.5(d) hereof.
“ 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 applied on a
consistent basis during the respective periods.
“ 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.
“ Indebtedness ” shall mean any obligation of a Person
that under GAAP is required to be shown on the balance sheet of such Person as a
Liability. Any obligation secured by a Lien on, or payable out of the
proceeds of production from, property of a Person 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 accounts payable or expense accrual incurred or assumed in the
ordinary course of business of the Person; (b) all Indebtedness evidenced by 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.
“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 given to such term in Section
3.2(a) 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.
“ Material
Adverse Effect ” shall mean any change, effect or circumstance that by
itself, or together with other changes, effects and circumstances is materially
adverse or is reasonably likely to be materially adverse to the business,
assets, liabilities, condition (financial or otherwise), operations or prospects
of a Person and its subsidiaries, taken as a whole, or to the ability of such
Person to perform its obligations under this Agreement or any of the Ancillary
Agreements to which such Person is a party
“ Merger ” shall have the meaning given to such term in
Recital B.
“Merger Consideration” shall have the
meaning given to such term in Section
3.1(b) hereof.
“Most Recent Parent SEC Documents”
shall have the meaning given to such term in Section 5.5(b)
hereof.
“Parent” shall have the meaning given
to such term in the preamble to this Agreement. In addition, “Parent” shall mean the Delaware
corporation for which Parent shall merge with and into on or before the Closing
Date for the sole purpose of changing the domicile of Parent from the State of
Nevada to the State of Delaware.
“Parent Balance Sheet” shall have the
meaning given to such term in Section
5.6 hereof.
“Parent Balance Sheet Date” shall have
the meaning assigned to it in Section
5.11 hereof.
“ Parent
Common Stock ” shall mean the common stock, par value $0.001 per
share, of Parent.
“ Parent
Disclosure Schedule ” shall mean Parent’s and Acquisition Corp.’s
Disclosure Schedules to this Agreement.
“Parent Financial Statements” shall
have the meaning given to such term in Section 5.5(b)
hereof.
“Parent SEC Documents” shall have the
meaning given to such term in Section
5.5(b) hereof.
“Parent SEC Reports” shall have the
meaning given to such term in Section
5.5(a) 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
materialmen’s 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
Person 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.
“ 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.
“ Selling Expenses ” shall mean all costs, fees and
expenses of outside professionals incurred by Parent, Acquisition Corp. or any
of the stockholders of Parent relating to the Merger or otherwise incurred in
connection with the process of marketing Parent to potential buyers, whether
incurred in connection with this Agreement or otherwise, including, without
limitation, all legal fees, accounting, tax, investment banking fees and
expenses and title policy and survey fees.
“ Shareholder ” shall mean any record holder of Company
Common Stock.
“Subsidiary” shall have the meaning
given to such term in Section
4.1 hereof.
“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 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
4.11 hereof.
“Written Consent” shall have the
meaning given to such term in Section
3.2(a) hereof.
ARTICLE II
THE MERGER
THE MERGER
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 CGCL. 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 ”).
2.2
Effective Time.
The Company and
Acquisition Corp. shall cause to be filed on the Closing Date (or on such other
date as the Company and Parent may agree in writing) a properly executed
agreement of merger, together with the appropriate officers’ certificates
attached thereto, conforming to the requirements of the CGCL, with the office of
the Secretary of State of the State of California, and shall make all other
filings or recordings required by the CGCL in connection with the Merger.
The Merger shall become effective at the later of such
time as the agreement of
merger is duly filed in accordance with the CGCL with the office of the
Secretary of State of the State of California or such later time as specified in
the agreement of merger, and such time is hereinafter referred to as the
“ Effective Time .”
2.3
Articles of Incorporation; By-laws; Directors and
Officers .
(a)
The articles of incorporation of the Company as in effect immediately prior to
the Effective Time, a copy of which is attached as Exhibit A hereto, shall be the
articles of incorporation of the Surviving Corporation (the “Articles of Incorporation”)
until thereafter changed or amended as provide therein or in accordance with
applicable law.
(b)
The by-laws of the Company 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”) until thereafter
changed or amended as provided therein or in accordance with applicable
law.
(c)
The individuals identified on Exhibit C hereto under the heading
“Directors” shall, from and after the Effective Time, be the directors of the
Surviving Corporation until their successors shall have been duly elected or
appointed and qualified or until their earlier death, resignation or removal in
accordance with the Articles of Incorporation and By-laws. The individuals
identified on Exhibit C hereto under the heading “Officers” shall, from
and after the Effective Time, be the officers of the Surviving Corporation until
their successors shall have been duly elected or appointed and qualified or
until their earlier death, resignation or removal in accordance with the
Articles of Incorporation and By-laws.
2.4
Effects of the Merger. The Merger shall have the
effects set forth in Section 1107 of the CGCL. 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.
2.5
Closing.
The consummation of the
transactions contemplated by this Agreement, including the Merger (the “Closing”), shall take place: (i) at
the offices of Xxxxxx X. Xxxxxxxx, Attorney at Law, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 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 have been 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
(ii) at such other place, time and date as the Company and Parent may agree in
writing (the “Closing
Date”).
ARTICLE III
MERGER CONSIDERATION; CONVERSION OF SECURITIES
MERGER CONSIDERATION; CONVERSION OF SECURITIES
3.1
Manner and Basis of Converting 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.:
(a)
Acquisition Corp. Stock. Each share of
common stock of Acquisition Corp. issued and outstanding immediately prior to
the Effective Time shall be converted into and become one fully paid and
nonassessable share of common stock of the Surviving Corporation, such that,
after giving effect to Section
3.1(b) hereof, Parent shall be the holder of all of the issued and
outstanding shares of common stock of the Surviving Corporation immediately
following the Merger.
(b) Company Common Stock. Except as
provided in Section 3.1(c)
hereof, each share of Company Common Stock issued and outstanding immediately
prior to the Effective Time shall be converted into the right to receive one (1)
share of Parent Common Stock (the “Merger
Consideration”).
(c)
No
Fractional Shares . No fractional shares of Parent Common Stock
shall be issued in, or as a result of, the Merger. Any fractional share of
Parent Common Stock that a record holder of Company Common 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.
3.2 Surrender
and Exchange of Certificates .
(a)
Letter of Transmittal. Promptly
after the execution of this Agreement, the Company shall deliver, or cause to be
delivered, to each record holder of Company Common Stock (i) a letter of
transmittal in the form attached hereto as Exhibit D (“Letter of Transmittal”), together with
instructions for use in effecting the surrender of certificate(s) representing
ownership of Company Common Stock, and (ii) an execution copy of the written
consent of shareholders of the Company in the form attached hereto as Exhibit E (the “Written
Consent”).
(b) Exchange Procedures. Parent
shall issue to each former record holder of Company Common Stock, upon delivery
to Parent (or a duly authorized agent of Parent) of (i) certificate(s) formerly
representing ownership of Company Common 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 its, his or her
certificate(s) or that such certificate(s) have been destroyed) and (ii) a
properly completed and duly executed Letter of Transmittal, 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 Common 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 its, his or her Company Common Stock.
(c)
Termination of Exchange Process . Any Parent
Common Stock that remains unclaimed by a former record holder of Company Common
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 Common Stock issued and outstanding immediately prior to the Effective
Time and held by a Shareholder who has not voted in favor of the Merger or
consented thereto in writing and who has demanded appraisal for such shares of
Company Common Stock in accordance with Chapter 13 of the CGCL (“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 any
such applicable law; provided,
however, that if, after the
Effective Time, such Shareholder fails to perfect or withdraws or loses its, his
or her right to appraisal or otherwise fails to establish the right to be paid
the value of such Shareholder’s shares of Company Common Stock under such
applicable law, such shares of Company Common 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 Common 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.
(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 Common Stock
thereafter on the records of the Company. If, after the Effective Time,
certificates formerly representing Company Common 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.
3.3 Options,
Warrants .
(a)
Common Stock Options. The
Company has issued and outstanding warrants and options to purchase shares of
Company Common Stock (collectively, the “Common Stock Options”).
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 Common Stock Options, Parent shall assume all of the Company’s
liabilities, obligations and commitments under each Common Stock Option,
including any equity incentive plans of the Company pertaining thereto, and, as
a result thereof, each Common
Stock Option shall be
converted into the right to acquire one (1) share of Parent Common Stock at an
exercise price equal to the exercise price stated in the Common Stock Option,
subject in all respects to all other terms and conditions of the Common Stock
Option. Except for the change in security underlying the Common Stock
Options from Company Common Stock to Parent Common Stock, it is the intent of
the parties hereto that the Common Stock Options shall continue after the
Effective Time, and that the terms and conditions of the Common Stock Options
shall otherwise remain unchanged.
(b) No Fractional Shares.
Notwithstanding anything to the contrary in this Section 3.3, no fractional shares of
Parent Common Stock shall be issued in, or as a result of, the Merger. Any
fractional share of Parent Common Stock that a Person would otherwise be
entitled to receive as a result of the transactions referenced in this Section 3.3 shall be rounded up
to the nearest whole number of shares of Parent Common
Stock.
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 Common Stock into Parent Common Stock
contemplated by Sections 3.1 and
3.2 hereof and the issuance of
any Parent Common Stock in accordance with Section 3.3 hereof. Parent covenants
and agrees that immediately prior to the Effective Time there will be no more
than 4,500,000 shares of Parent Common Stock issued and outstanding, and that no
other common or preferred stock or equity securities of Parent, or any options,
warrants, rights or other agreements or instruments convertible, exchangeable or
exercisable into common or preferred stock or equity securities of Parent, shall
be issued or outstanding at the Effective Time.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as
otherwise set forth in Company Disclosure Schedule to be delivered by the
Company to Parent and Acquisition Corp. concurrently with the execution of this
Agreement, the Company represents and warrants as follows:
4.1
Organization . The Company (i) is
duly organized, validly existing and in good standing under the laws of the
State of California, (ii) has all 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 power and corporate authority to
own, lease and operate its properties and assets and to carry on its business as
it is now being conducted, except with respect to the foregoing clauses (i) and
(ii) where such failure could not reasonably be expected to have a 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 could not reasonably be expected to have a Material Adverse
Effect. The Company has no subsidiaries other than ChromaDex Analytics,
Inc., a Nevada corporation (“ Subsidiary ”).
4.2
Authorization; Validity of Agreement . The
Company has the requisite corporate power and corporate authority to execute and
deliver this Agreement and each of the Ancillary
Agreements and to
consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance by the Company of this Agreement and the
Ancillary Agreements and the consummation by the Company of the transactions
contemplated hereby and thereby, have been duly authorized by the Board of
Directors of the Company and no other corporate action (except the approval of
the Shareholders with respect to the approval of the principal terms of the
Merger) on the part of the Company or any of its Shareholders is necessary to
authorize the execution and delivery of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby and
thereby. This Agreement has been, and at Closing each of the Ancillary
Agreements will have been, duly executed and delivered by the Company (and
assuming due and valid authorization, execution and delivery hereof by Parent
and Acquisition Corp.) is, or at Closing shall be, 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.
4.3
Capitalization . As of the
date hereof, the authorized capital stock of the Company consists of 110,000,000
shares, of which (i) 100,000,000 shares have been designated “Common Stock”
(“ Company Common Stock ”), of which 24,744,917 shares are
issued and outstanding, and (ii) 10,000,000 shares have been designated
“Preferred Stock,” of which no shares are issued or outstanding. All of
the outstanding shares of Company Common Stock are duly authorized, validly
issued, fully paid and non-assessable. As of the date hereof, there are
issued and outstanding Company Stock Options to purchase up to 4,616,240 shares
of Company Common Stock.
4.4
Consents and Approvals; No
Violations . Except for (i)
approval of the principal terms of the Merger by the Shareholders and (ii)
filing of an agreement of merger, together with the appropriate officers’
certificates thereto, with the office of the Secretary of State of the State of
California, neither the execution, delivery or performance of this Agreement or
any of the Ancillary Agreements by the Company, nor the consummation of the
transactions contemplated hereby and thereby will, (a) violate any provision of
the Articles of Incorporation or By-laws; (b) 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 Subsidiary under, Contract to which the Company or
Subsidiary or any of their respective properties may be bound; (c) require the
Consent of any governmental entity by or with respect to the Company or
Subsidiary; or (d) violate any order, writ, judgment, injunction, decree, law,
statute, rule or regulation applicable to the Company or Subsidiary or any of
their respective properties or assets.
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, (i) the Company’s audited
consolidated balance sheet for the fiscal year ended December 29, 2007, and the
related consolidated and consolidating statements of income, shareholders’
equity and cash flows for the fiscal year ended December 29, 2007, and (ii) the
Company’s internally prepared balance sheet (the “Company Balance Sheet”) for the fiscal
quarter ended March 29, 2008, and the related consolidated and consolidating
statements of income, shareholders’ equity and cash
flows for
the fiscal quarter ended March 29, 2008 (the “Company Balance Sheet
Date”). The foregoing financial statements (including any
notes thereto) (i) have been prepared based upon the books and records of the
Company, (ii) except in the case of the Company’s March 29, 2008 financial
statements for the absence of footnote disclosure and the customary year-end
accruals and adjustments, 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.
4.6
No
Undisclosed Liabilities . Except for (i)
Liabilities reflected on the Company Balance Sheet or the notes thereto, (ii)
trade payables and accrued or accruable expenses incurred since the Company
Balance Sheet Date in the ordinary course of the Business, consistent with past
practices, (iii) contract obligations under the Contracts listed in the Company
Disclosure Schedule, and (iv) the additional Liabilities set forth in the
Company Disclosure Schedule, the Company does not have any material Liabilities
(whether accrued, absolute, or contingent, and whether or not of a nature
required to be reflected or reserved against in a balance sheet in accordance
with GAAP).
4.7
Litigation . There is no
Action pending or, to the knowledge of the Company, threatened, involving the
Company or Subsidiary or affecting any of
the officers, directors or employees of the Company or Subsidiary with respect
to the Company’s or any Subsidiary’s business by or before any governmental
entity or by any third party. Neither the Company nor Subsidiary is in
default under any judgment, order or decree of any governmental entity
applicable to its business which could reasonably be expected to result in a
Material Adverse Effect.
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) the Articles of Incorporation or By-laws or (ii) to the
knowledge of the Company, any law applicable to the Company or its property and
assets, and the Company has not received notice of any violation of or Liability
under any of the foregoing (whether material or not).
4.9
Broker’s and Finder’s Fees .
Except as set forth in the Company Disclosure Schedule, no Person has, or as a
result of the transactions contemplated or described herein will have, any right
or valid claim against the Company, Parent, Acquisition Corp. or any Shareholder
for any commission, fee or other compensation as a finder or broker, or in any
similar capacity in connection with the negotiations relating to, and the
consummation of, the transactions contemplated by this Agreement or any of the
Ancillary Agreements.
4.10
Assets and Contracts . Except for this
Agreement and except as described in the Company Disclosure Schedule, the
Company is not a party to any Contract not made in the ordinary course of
business that is material to the Company. Without limiting the generality
of the foregoing, the Company is not a party to any contract (i) with a labor
union, (ii) for the purchase of fixed assets or for the purchase of materials,
supplies or equipment in excess of normal operating requirements, (iii) for the
employment of any officer, individual employee or other Person on a full-time
basis, (iv) with respect to bonus, pension, profit sharing, retirement, stock
purchase, deferred compensation, medical, hospitalization or life insurance or
similar plan,
contract or understanding
any or all of the employees of the Company or any other Person, (v) relating to
or evidencing Indebtedness for Borrowed Money or subjecting any asset or
property of the Company to any Lien or evidencing any Indebtedness, (vi)
guaranteeing any Indebtedness, (vii) under which the Company is lessee of or
holds or operates any property, real or personal, owned by any other Person
under which payments to such Person exceed $100,000 per year and with an
unexpired term (including any period covered by an option to renew exercisable
by any other party) of more than 60 days, (viii) under which the Company is
lessor or permits any Person to hold or operate any property, real or personal,
owned or controlled by the Company, (ix) granting any preemptive right, right of
first refusal or similar right to any Person, (x) with any Affiliate of the
Company or any present or former officer, director or shareholder of the
Company, (xi) obligating the Company to pay any royalty or similar charge for
the use or exploitation of any tangible or intangible property, (xii) containing
a covenant not to compete or other restriction on the Company’s ability to
conduct a business or engage in any other activity, (xiii) with respect to any
distributor, dealer, manufacturer’s representative, sales agency, franchise or
advertising contract or commitment, (xiv) regarding registration of securities
under the Securities Act, (xv) characterized as a collective bargaining
agreement, or (xvi) with any Person continuing for a period of more than three
months from the Closing Date which involves an expenditure or receipt by the
Company in excess of $100,000. 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.
4.11
Tax
Returns and Audits . All required
federal, state and local Tax Returns of the Company have been 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 Actions relating to Taxes or any Tax Returns of
the Company now pending, and the Company has not received any notice of any
proposed Actions 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.
4.12
Patents and Other Intangible Assets .
(a)
Except as set forth in the Company Disclosure Schedule, the Company (i) owns or
has the right to use, 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 the Business as now 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 and (ii) is
not obligated or under any obligation to make any payments by way of royalties,
fees or otherwise to any owner or licensor of, or other claimant to, any patent,
trademark, service xxxx, trade name, copyright or other intangible asset, with
respect to the use thereof or in connection with the conduct of its business or
otherwise.
(b)
To the knowledge of the Company, the Company owns and has the unrestricted 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.
4.13 Employee
Benefit Plans; ERISA .
(a)
All “employee benefit plans” (within the meaning of Section 3(3) of 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 (collectively, “ Employee
Benefit Plans ”), 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 of the Company, the assets of any of the
trusts or funds under the Employee Benefit Plans of the Company, the plan
sponsor or the plan administrator of any of the Employee Benefit Plans of the
Company or against any fiduciary of an Employee Benefit Plan of the Company 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, contemplated
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 Company
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.
4.14
Title to Property and Encumbrances . The
Company has good and marketable title to all properties and assets used in the
conduct of the Business (except for property held under valid and subsisting
leases or licenses 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 that would not
reasonably be expected to result in a Material Adverse
Effect.
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.
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 reasonable
under the circumstances. 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 Action or, to the knowledge of the Company,
threat of 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.
4.17
Interested Party Transactions .
Except as disclosed in the Company Disclosure Schedule, no officer, director or
shareholder of the Company or any Affiliate of any such Person or the Company
has or has had, either directly or indirectly, (i) an interest in any Person
that (a) furnishes or sells services or products that are furnished or sold or
are proposed to be furnished or sold by the Company or (b) purchases from or
sells or furnishes to the Company any goods or
services, or (ii) a
beneficial interest in any Contract to which the Company is a party or by which
it may be bound or affected.
4.18
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 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
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 the 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 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
“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 Action and has not received
(and has no basis to reasonably expect to receive) any 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) 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 Material Adverse
Effect.
ARTICLE
V
REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION CORP.
REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION CORP.
Except as
otherwise set forth in the Parent SEC Documents or in the Parent Disclosure
Schedule to be delivered by Parent and Acquisition Corp. to the Company
concurrently with the execution of the Agreement, Parent and Acquisition Corp.,
jointly and severally, represent and warrant to the Company as
follows:
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
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 power and corporate authority to own, lease and operate its properties
and assets and to carry on its business as it is now being conducted, except
with respect to the foregoing clauses (i) and (ii) where such failure could not
reasonably be expected to have a Material Adverse Effect. Each of Parent
and Acquisition Corp. is duly qualified or authorized to conduct business and is
in good standing as a foreign corporation 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 could not reasonably expected to
result in a Material Adverse Effect.
5.2
Authorization; Validity of Agreement . Each
of Parent and Acquisition Corp. has the requisite corporate power and corporate
authority to execute and deliver this Agreement and the Ancillary Agreements and
to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance by each of Parent and Acquisition Corp. of
this Agreement and the Ancillary Agreements and the consummation of the
transactions contemplated hereby and thereby, have been duly authorized by the
Board of Directors of each of Parent and Acquisition Corp. and the sole
shareholder of Acquisition Corp., and no other action on the part of either of
Parent and Acquisition Corp. is necessary to authorize the execution and
delivery of this Agreement and the Ancillary Agreements and the consummation by
either of Parent or Acquisition Corp. of the transactions contemplated hereby or
thereby. This Agreement has been, and at Closing each of the Ancillary
Agreements shall have been, duly executed and delivered by Parent and
Acquisition Corp. (and assuming due and valid authorization, execution and
delivery hereof by the Company) is, or at Closing shall be, 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.
5.3
Capitalization of Parent and Acquisition
Corp .
(a)
The authorized capital stock of Parent consists of 50,000,000 shares of Parent
Common Stock, of which 16,038,473 shares are issued and outstanding. All
of the issued and outstanding shares of Parent Common Stock have been duly
authorized and validly issued, are fully paid and non-assessable and, were
issued in compliance with all applicable federal and state securities Laws and
any preemptive rights or rights of first refusal of any Person. Except as
set forth in the Parent Disclosure Schedule, there are no
outstanding options,
warrants, rights, calls, subscriptions, claims of any character, agreements,
obligations, convertible or exchangeable securities or other commitments,
contingent or otherwise, of any kind obligating Parent to issue, directly or
indirectly, any additional shares of its capital stock or other equity
securities. Except as set forth in the Parent Disclosure Schedule, (i)
there are no contracts relating to the issuance, sale, transfer or voting of any
equity securities or securities convertible into equity securities of the
Company and (ii) there is no obligation, contingent or otherwise, of the Company
to repurchase, redeem or otherwise acquire any share of the capital stock or
other equity interests of the Company or provide funds to, or make any
investment in (in the form of a loan, capital contribution or otherwise), or
provide any guarantee with respect to the obligations of any other Person.
Except for Acquisition Corp., the Company has no direct or indirect
subsidiaries.
(b)
The authorized capital stock of Acquisition Corp. consists of 1,000,000 shares
of “Common Stock,” of which 100 shares are issued and outstanding. All of
the issued and outstanding shares of capital stock of Acquisition Corp. are
owned by Parent and have been duly authorized and validly issued, are fully paid
and non-assessable and were issued in compliance with all applicable federal and
state securities laws and any preemptive rights or rights of first refusal of
any Person. There are no outstanding options, warrants, rights, calls,
subscriptions, claims of any character, agreements, obligations, convertible or
exchangeable securities or other commitments, contingent or otherwise, of any
kind obligating Acquisition Corp. to issue, directly or indirectly, any
additional shares of its capital stock or other equity securities of Acquisition
Corp.. There are no contracts relating to the issuance, sale, transfer or
voting of any equity securities or securities convertible into equity securities
of Acquisition Corp. and (ii) there is no obligation, contingent or otherwise,
of Acquisition Corp. to repurchase, redeem or otherwise acquire any share of the
capital stock or other equity interests of Acquisition Corp. or provide funds
to, or make any investment in (in the form of a loan, capital contribution or
otherwise), or provide any guarantee with respect to the obligations of any
other Person. Acquisition Corp. has no direct or indirect
subsidiaries.
(c)
Acquisition Corp. is a California corporation and a wholly-owned subsidiary of
Parent that was formed specifically for the purpose of merging with and into the
Company in connection with the Merger and 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 as may otherwise be
necessary in connection with the transactions contemplated by this Agreement and
the Ancillary Agreements.
5.4
Consents and Approvals; No
Violations . Except for (a)
approval of the Merger by Parent (in its capacity as the sole shareholder of
Acquisition Corp.) and (b) filing of the agreement of merger, together with the
appropriate officers’ certificates attached thereto, with the office of the
Secretary of State of the State of California, neither the execution, delivery
or performance of this Agreement or any of the Ancillary Agreements by Parent or
Acquisition Corp. nor the consummation of the transactions contemplated hereby
and thereby will (i) violate any provision of its charter 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 Parent or Acquisition
Corp. or any subsidiary of Parent or Acquisition Corp under, any Contract to
which Parent or Acquisition Corp or any subsidiary of Parent or Acquisition Corp
or any of their respective properties may be bound; (iii) require any Consent
with any governmental entity by or with respect to Parent or Acquisition Corp or
any subsidiary of Parent or Acquisition Corp; or (iv) violate any order, writ,
judgment, injunction, decree, law, statute, rule or regulation applicable to
Parent or Acquisition Corp or any subsidiary of Parent or Acquisition Corp or
any of their respective properties or assets.
5.5
Financial Statements and Other
Information .
(a)
Parent is an “issuer” under the Exchange Act, that is required to file reports
with the Commission under Section 13 of the Exchange Act (the “ Parent SEC
Reports ”). Parent has filed all Parent SEC Reports required to
be filed by it during the 12 months immediately preceding the date of this
Agreement with the SEC. The Parent SEC Reports (i) were prepared in all
material respects in accordance with all applicable requirements of the
Securities Act or the Exchange Act, as applicable; (ii) except as disclosed on
the Parent Disclosure Schedule, were timely filed within the requirements of the
Securities Act or the Exchange Act, as applicable; (iii) included all necessary
certifications of the principal executive officer, principal accounting officer
and principal financial officer as required to be filed pursuant to Sections 302
and 906 of the Xxxxxxxx-Xxxxx Act of 2002; and (iv) did not, at the time they
were filed, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; the representation in clause (iv) of the preceding sentence does
not apply to any misstatement or omission in any Parent SEC Report that has
since been superseded by subsequent Parent SEC Reports.
(b)
Parent has furnished or made available to the Company copies of its annual
report and Form 10-K for the fiscal year ended November 30, 2007, as well as its
Form 10-Q for the quarter ended February 29, 2008 (collectively, the "Parent SEC Documents"). The
financial statements (the “Parent
Financial Statements”) set forth in the Parent SEC Documents dated April
14, 2008 (the "Most Recent Parent SEC
Documents") have been prepared in accordance with GAAP and fairly
present the financial condition and results of operations of Parent as of, and
for the periods ended on, the dates set forth in such Parent SEC
Documents.
(c)
Parent has complied in all material respects with all applicable securities laws
pertaining to the issuance of all of its currently outstanding capital stock and
has fully and timely filed all material reports and filings required by
applicable securities laws. Parent is not an “investment company” within
the meaning of Section 3 of the Investment Company Act.
(d)
Parent maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations; (ii) transactions are recorded
as
necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability; (iii) access to assets is permitted only in accordance
with management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
Parent has established disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for Parent and designed such
disclosure controls and procedures to ensure that material information relating
to Parent, including Acquisition Corp, is made known to the certifying officers
by others within those entities, particularly during the period in which
Parent’s Form 10-KSB or 10-QSB, as the case may be, is being prepared.
Parent’s certifying officers have evaluated the effectiveness of Parent’s
controls and procedures in accordance with Item 307 of Regulation S-B under the
Exchange Act for Parent’s most recently ended fiscal quarter or fiscal year-end
(such date, the “ Evaluation Date ”). Parent presented in the Most
Recent Parent SEC Documents the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, there
have been no significant changes in Parent’s internal controls (as such term is
defined in Item 308(c) of Regulation S-B under the Exchange Act) or in other
factors that could significantly affect Parent’s internal
controls.
(e) As of the date hereof, shares of
Parent Common Stock are eligible for quotation on the Over-the-Counter (OTC)
Bulletin Board under the symbol CDYE.OB and, as of the date hereof and the
Closing Date, Parent is and will be in compliance in all material respects with
all rules and regulations of the OTC Bulletin Board applicable to it and Parent
Common Stock.
5.6
Absence of Undisclosed Liabilities .
Neither Parent nor Acquisition Corp. has any Liability arising out of any
transaction entered into at or prior to the Closing, except (i) as disclosed in
the Parent SEC Documents; (ii) to the extent set forth on or reserved against in
the balance sheet of Parent set forth in the Most Recent Parent SEC Documents
(the “ Parent Balance Sheet ”) or the notes thereto; and (iii)
by the specific terms of any written agreement, document or arrangement attached
as an exhibit to the Parent SEC Documents.
5.7
Litigation . There is no Action
pending or, to the knowledge of Parent and Acquisition Corp., threatened,
involving Parent or Acquisition Corp., any subsidiary of Parent or Acquisition
Corp., or affecting the officers, directors or employees of Parent or
Acquisition Corp. or any subsidiary of Parent or Acquisition Corp., with respect
to Parent’s and Acquisition Corp.’s, or any of Parent’s or Acquisition Corp.’s
subsidiaries, business by or before any governmental entity or by any third
party and neither Parent or Acquisition Corp. nor any subsidiary of Parent or
Acquisition Corp. has received notice that any such Action is threatened.
Neither Parent or Acquisition Corp. nor any subsidiary of Parent or Acquisition
Corp. is in default under any judgment, order or decree of any governmental
entity applicable to its business.
5.8
No
Default; Compliance with Applicable Laws .
Neither Parent, Acquisition Corp. nor any subsidiary of Parent or Acquisition
Corp. is in default or violation of any material
term, condition or
provision of (i) their respective charter, by-laws or similar organizational
documents or (ii) any law applicable to Parent, Acquisition Corp. or any
subsidiary of Parent or Acquisition Corp. or any of their respective property
and assets and neither Parent, Acquisition Corp. nor any subsidiary of Parent or
Acquisition Corp. has received notice of any violation of or Liability under any
of the foregoing (whether material or not).
5.9
Broker’s and Finder’s Fees; Broker/Dealer
Ownership . No person, 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 with respect to the execution and delivery of this
Agreement and the Ancillary Agreements or with respect to the consummation of
the transactions contemplated hereby and thereby.
5.10
Assets and Contracts . Except for this
Agreement and except as attached as exhibits to the Parent SEC Documents,
neither Parent nor Acquisition Corp. is a party to any Contract not made in the
ordinary course of business that is material to Parent or Acquisition
Corp.. Without limiting the generality of the foregoing, neither Parent
nor Acquisition Corp. is a party to any Contract (i) with a labor union, (ii)
for the purchase of fixed assets or for the purchase of materials, supplies or
equipment in excess of normal operating requirements, (iii) for the employment
of any officer, individual employee or other Person on a full-time basis, (iv)
with respect to bonus, pension, profit sharing, retirement, stock purchase,
deferred compensation, medical, hospitalization or life insurance or similar
plan, contract or understanding any or all of the employees of Parent or
Acquisition Corp. or any other Person, (v) relating to or evidencing
Indebtedness for Borrowed Money or subjecting any asset or property of Parent or
Acquisition Corp. to any Lien or evidencing any Indebtedness, (vi) guaranteeing
any Indebtedness, (vii) under which Parent or Acquisition Corp. is lessee of or
holds or operates any property, real or personal, owned by any other Person
under which payments to such Person exceed $100,000 per year and with an
unexpired term (including any period covered by an option to renew exercisable
by any other party) of more than 60 days, (viii) under which Parent or
Acquisition Corp. is lessor or permits any Person to hold or operate any
property, real or personal, owned or controlled by Parent or Acquisition Corp.,
(ix) granting any preemptive right, right of first refusal or similar right to
any Person, (x) with any Affiliate of Parent or Acquisition Corp. or any present
or former officer, director or stockholder of Parent or Acquisition Corp., (xi)
obligating Parent or Acquisition Corp. to pay any royalty or similar charge for
the use or exploitation of any tangible or intangible property, (xii) containing
a covenant not to compete or other restriction on Parent’s or Acquisition
Corp.’s ability to conduct a business or engage in any other activity, (xiii)
with respect to any distributor, dealer, manufacturer’s representative, sales
agency, franchise or advertising contract or commitment, (xiv) regarding
registration of securities under the Securities Act, (xv) characterized as a
collective bargaining agreement, or (xvi) with any Person continuing for a
period of more than three months from the Closing Date which involves an
expenditure or receipt by Parent or Acquisition Corp. in excess of
$100,000. Parent has made available to the Company true and complete
copies of all Contracts and other documents requested by the Company.
5.11
Tax
Returns and Audits . All required
federal, state and local Tax Returns of Parent and Acquisition Corp. have been
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.
Neither Parent nor
Acquisition Corp. is or has been delinquent in the payment of any Tax.
Neither Parent nor Acquisition Corp. has 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 Parent’s or
Acquisition Corp.’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 and will be
sufficient for the payment of all unpaid Taxes payable by Parent and Acquisition
Corp. as of February 29, 2008 (the “ Parent
Balance Sheet Date ”). Since the Parent Balance Sheet Date, each
of Parent and Acquisition Corp. have made adequate provisions on its books of
account for all Taxes with respect to its business, properties and operations
for such period. Each of Parent and Acquisition Corp. have 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 Actions relating to Taxes or any Tax Returns of
Parent or Acquisition Corp. now pending, and neither Parent nor Acquisition
Corp. has received any notice of any proposed Actions relating to Taxes or any
Tax Returns. Neither Parent nor Acquisition Corp. is 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. Neither Parent nor Acquisition Corp. has agreed nor is
it 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. Neither Parent nor Acquisition
Corp. is a party to, is bound by or has any obligation under, any Tax Sharing
Agreement, nor does it have any potential liability or obligation to any Person
as a result of, or pursuant to, any Tax Sharing Agreements.
5.12
Employee Benefit Plans; ERISA .
Neither Parent nor Acquisition Corp. has any Employee Benefit
Plans.
5.13
Title to Property and Encumbrances . Each
of Parent and Acquisition Corp. has good and marketable title to all properties
and assets used by it 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 that would
not reasonably be expected to result in a Material Adverse
Effect.
5.14
Insurance Coverage . There is in full
force and effect one or more policies of insurance issued by insurers of
recognized responsibility insuring Parent, Acquisition Corp. and their
respective properties, products and business against such losses and risks, and
in such amounts, as are reasonable under the circumstances. Neither Parent
nor Acquisition Corp. has been refused any insurance coverage sought or applied
for, and neither Parent nor Acquisition Corp. has 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 or Acquisition Corp. No Action or, to the knowledge of Parent and
Acquisition Corp., threat of
Action has been asserted
or made against Parent or Acquisition Corp. 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 or Acquisition Corp..
5.15
Interested Party Transactions .
Except as disclosed in the Parent SEC Documents, no officer, director or
stockholder of Parent or Acquisition Corp. or any Affiliate of any such Person
has or has had, either directly or indirectly, (i) an interest in any Person
that (a) furnishes or sells services or products that are furnished or sold or
are proposed to be furnished or sold by Parent or Acquisition Corp. or (v)
purchases from or sells or furnishes to Parent or Acquisition Corp. any goods or
services, or (ii) a beneficial interest in any Contract to which Parent or
Acquisition Corp. is a party or by which it may be bound or
affected.
5.16
Environmental Matters .
(a)
Neither Parent nor Acquisition Corp. has ever 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 license, leasehold or ownership interest,
except in compliance with all applicable Environmental Laws.
(b)
The historical and present operations of Parent’s and Acquisition Corp.’s
business 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
Material Adverse Effect.
(c)
There are no material pending or, to the knowledge of Parent and Acquisition
Corp., threatened, demands, claims, information requests or notices of
noncompliance or violation against or to Parent or Acquisition Corp. relating to
any Environmental Law; and, to the knowledge of Parent and Acquisition Corp.,
there are no conditions or occurrences on any of the real property used by
Parent or Acquisition Corp. in connection with its business that would
reasonably be expected to lead to any such demands, claims or notices against or
to Parent or Acquisition Corp., except such as have not had, and would not
reasonably be expected to have, a Material Adverse Effect.
(d)
(i) Neither Parent nor Acquisition Corp. has 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) neither Parent nor Acquisition Corp. is involved in (and has no basis
to reasonably expect to be involved in) any Action and has not received (and has
no basis to reasonably expect to receive) any 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) 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) each of Parent and
Acquisition Corp. 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 Material Adverse
Effect.
5.17
Changes . Since Parent
Balance Sheet Date, except as disclosed in the Parent SEC Documents, neither
Parent nor Acquisition Corp. has (i) incurred any debts, obligations or
Liabilities, absolute, accrued or, to Parent’s and Acquisition Corp.’s
knowledge, contingent, whether due or to become due; (ii) discharged or
satisfied any Liens; (iii) mortgaged, pledged or subjected to Lien any of its
assets, tangible or intangible; (iv) sold, transferred or leased any of its
assets; (v) cancelled or compromised any debt or claim, or waived or released
any right of material value; (vi) suffered any physical damage, destruction or
loss (whether or not covered by insurance) that could reasonably be expected to
have a Material Adverse Effect; (vii) encountered any labor union difficulties;
(viii) 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, or entered into any employment agreement; (ix) 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; (x) declared or paid any dividends on or
made any other distributions with respect to, or purchased or redeemed, any of
its outstanding capital stock; (xi) suffered or experienced any change in, or
condition affecting, the financial condition of Parent or Acquisition Corp.;
(xii) made any change in the accounting principles, methods or practices
followed by it or depreciation or amortization policies or rates theretofore
adopted; (xiii) made or permitted any amendment or termination of any material
Contract, agreement or license to which it is a party; (xiv) 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; (xv) 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; (xvi) made or agreed to make any
charitable contributions or incurred any non-business expenses in excess of
$1,000 in the aggregate; or (xvii) entered into any Contract, agreement or
license, or otherwise obligated itself, to do any of the
foregoing.
5.18
Questionable Payments . Neither Parent,
Acquisition Corp. nor to the knowledge of Parent or Acquisition Corp., any
director, officer, agent, employee or other Person associated with or acting on
behalf of Parent or Acquisition Corp., has used any corporate funds for (i)
unlawful contributions, gifts, entertainment or other unlawful expenses relating
to political activity, (ii) made any direct or indirect unlawful payments to
government officials or employees from corporate funds, (iii) established or
maintained any unlawful or unrecorded fund of corporate monies or other assets,
(iv) made any false or fictitious entries on the books of record
of
any such corporations, or (iv) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
5.19
Employees . Except as set
forth in the Parent SEC Documents, there are no employment or consulting
contracts or arrangements, including pensions, bonus or profit sharing plans, or
other severance or termination contracts or arrangements which constitute
contractual obligations of Parent or Acquisition Corp. Neither Parent nor
Acquisition Corp. is a party to or bound by any collective bargaining agreement,
nor has Parent or Acquisition Corp. experienced any strike or material
grievance, claim of unfair labor practices, or other collective bargaining
dispute. Neither Parent nor Acquisition Corp. has committed any material
unfair labor practice.
5.20
Validity of Shares . The shares of
Parent Common Stock to be issued to the Shareholders in accordance with Article
III hereof, when issued and delivered in accordance with the terms
hereof, shall be duly and validly issued, fully paid and
nonassessable.
5.21
No
General Solicitation .
In issuing Parent
Common Stock in the Merger hereunder, neither Parent nor
Acquisition Corp. nor anyone acting on their behalf has offered to sell Parent
Common Stock by any form of general solicitation or
advertising.
5.22
Disclosure . There is no fact relating
to Parent or Acquisition Corp. that Parent and Acquisition Corp. has not
disclosed to the Company in writing that has had or is having a Material Adverse
Effect. No representation or warranty by Parent or Acquisition Corp.
herein or 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
misleading.
ARTICLE VI
CONDUCT OF BUSINESSES PENDING THE MERGER
CONDUCT OF BUSINESSES PENDING THE MERGER
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:
(a)
the business of the Company shall be conducted only in the ordinary course
consistent with the past practice; and
(b)
the Company shall use its reasonable best efforts to preserve intact the
Business, 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.
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:
(a)
the business of Parent and Acquisition Corp. shall be conducted only in the
ordinary course consistent with past practice;
(b)
neither Parent nor Acquisition Corp. shall (i) directly or indirectly redeem,
purchase or otherwise acquire or agree to redeem, purchase or otherwise acquire
any shares of its capital stock; (ii) amend its articles of incorporation or
by-laws; or (iii) 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;
(c)
neither Parent nor Acquisition Corp. shall (i) issue or agree to issue any
additional shares of, or options, warrants or rights of any kind to acquire
shares of, its capital stock; (ii) acquire or dispose of any assets; (iii) incur
additional Indebtedness or any other Liabilities; (iv) enter into any Contract,
agreement, commitment or arrangement with respect to any of the foregoing except
this Agreement; or (v) 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;
(d)
Each of Parent and Acquisition Corp. 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.;
(e)
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, directly or indirectly, solicit,
initiate or encourage any inquiries, offers or proposals from, discuss, assist
or negotiate with, provide any information to, or consider the merits of any
inquiries, offers or proposals from, any Person (other than the Company)
relating to (i) the liquidation, dissolution, sale of assets of Parent or
Acquisition Corp.; (ii) a merger or recapitalization involving Parent or
Acquisition Corp.; (iii) a sale of capital stock of Parent or Acquisition Corp.,
or (iv) any similar transaction or business combination involving Parent or
Acquisition Corp. Parent and Acquisition Corp. agree to immediately notify
the Company of the substance of any transaction inquiry, proposal or offer
concerning Parent or Acquisition Corp. that either Parent or Acquisition Corp.
may receive.
(f)
neither Parent nor Acquisition Corp. will enter into any new employment
agreements with any of its officers or employees or grant any increases in the
compensation or benefits of their officers and employees;
(g)
except as otherwise expressly contemplated by this Agreement, neither Parent nor
Acquisition Corp. shall undertake or permit any action that would (i) require
any additional disclosure under Section 5.10 hereof; (ii) result in a
breach of the representations and warranties contained in Article V; or
(iii) likely result in a Material Adverse Effect on Parent or Acquisition
Corp;
(h)
Parent shall have merged with and into a Delaware corporation, in form and
substance reasonably satisfactory to the Company, and in accordance with
applicable laws of the State of Nevada and the State of Delaware, for the sole
purpose of changing the domicile of Parent from the State of Nevada to the State
of Delaware, and Parent shall have taken any and all action reasonably necessary
in connection therewith such that Parent’s Common Stock shall continue to be
quoted on the OTC Bulletin Board;
(i)
Parent shall have filed a registration statement under the Exchange Act such
that Parent’s Common Stock will be registered under the Exchange Act;
and
(j)
Subject to Section 10.4 hereof, Parent shall have paid, or caused
to be paid, to the Persons entitled thereto, all of the Selling
Expenses.
ARTICLE VII
ADDITIONAL AGREEMENTS
ADDITIONAL AGREEMENTS
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 Closing Date 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 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 have a
reasonable opportunity to 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.
7.2
Additional Agreements . Subject to the
terms and conditions herein provided, each of the parties 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 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.
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 same prior to its
release.
7.4
Appointment of Directors .
Immediately upon the Effective Time, Parent shall accept the resignations of the
current officers and directors of Parent as provided by Section 8.2(f)(v) hereof, and shall
cause the persons listed as directors in Exhibit F hereto to be elected
to the Board of Directors of Parent.
7.5
Parent Name Change and Exchange
Listing . At the Effective
Time, Parent shall take all required legal actions to change its corporate name
from “Cody Resources, Inc.” to “ChromaDex Corporation.”
7.6
Shareholder Consent .
(a)
The Board of Directors of the Company may at any time prior to approval of the
Shareholders (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.
(b)
Pursuant to the CGCL, at any time before the agreement of merger, together with
the appropriate officers’ certificates, is filed with the office of the
Secretary of State of the State of California, including any time after the
Merger is authorized by the Shareholders, the Merger may be abandoned and this
Agreement may be terminated in accordance with the terms hereof, without further
action by the Shareholders.
7.7
Parent Exchange Requirements .
Between the date hereof and the Closing Date, (i) Parent shall continue to
satisfy the filing requirements of the Exchange Act and all other requirements
of applicable securities laws and the OTC Bulletin Board, and (ii) Parent will
provide to the Company copies of any and all amendments or supplements to Parent
SEC Documents filed with the Commission since the date of this Agreement and all
subsequent registration statements and reports filed by Parent subsequent to the
filing of Parent SEC Documents with the Commission and any and all subsequent
information statements, proxy statements, reports or notices filed by Parent
with the Commission or delivered to the stockholders of
Parent.
7.8
Notification of Certain Matters . The
Company, on the one hand, and Parent and Acquisition Corp., on the other hand,
agree to give prompt notice to the other of (i) the occurrence, or failure to
occur, of any event the occurrence or failure to occur of which would be likely
to cause any of its representations or warranties contained in this Agreement to
be untrue or inaccurate at any time in any material respect from the date of
this Agreement to the Closing Date; (ii) any failure on its part to comply in
any material respect with or satisfy any covenant or agreement to be complied
with or satisfied by it hereunder; and (iii) the occurrence of any event that
may make the satisfaction of the conditions in Article VIII impossible or
unlikely. The Company, on the one hand, and Parent and Acquisition Corp,
on the other hand, shall have the continuing obligation until the Closing
promptly to supplement or amend the Company Disclosure Schedule and the Parent
Disclosure Schedule, respectively, with respect to any matter hereafter arising
or discovered that, if existing or known at the date of this Agreement, would
have been required to be set forth or described in the Company Disclosure
Schedule and the Parent Disclosure Schedule, respectively; provided, however, that for the purpose of the
rights and obligations of the parties under this Agreement, except to the extent
waived in writing by the affected party, no such supplement or amendment to the
Company Disclosure Schedule and the Parent Disclosure Schedule shall have any
effect for the purpose of determining the satisfaction of the conditions set
forth in Article
VIII.
ARTICLE VIII
CONDITIONS OF PARTIES’ OBLIGATIONS
CONDITIONS OF PARTIES’ OBLIGATIONS
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. Each of the representations and warranties made by
the Company contained in this Agreement that are qualified by materiality will
be true and
correct in all respects
and all of the representations and warranties made by the Company contained in
this Agreement that are not so qualified will be true and correct in all
material respects, in each case, as if such representations or warranties were
made on and as of the date of this Agreement and as of the Closing Date (except
to the extent such representations and warranties speak as of a specific date or
as of the date of this Agreement, in which case such representations and
warranties will be so true and correct or so true and correct in all material
respects, as the case may be, as of such specific date or as of the date of this
Agreement, respectively).
(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 of this
Agreement, there shall not have been any event or circumstance that has resulted
in a Material Adverse Effect on the Company, and no event has occurred or
circumstance exists that would reasonably be expected to result in a Material
Adverse Effect on the Company.
(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:
(i)
Copies of resolutions of the Board of Directors and the shareholders of the
Company, certified by the Secretary of the Company, authorizing and approving
the Merger and the execution, delivery and performance of this Agreement, the
Ancillary Agreements and all other documents and instruments to be delivered
pursuant hereto and thereto.
(ii)
A certificate of incumbency executed by the Secretary of the Company certifying
the names, titles and signatures of the officers of the Company authorized to
execute any documents referred to in this Agreement and further certifying that
the Articles 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.
(iii)
Evidence as of a recent date of the good standing and corporate existence of the
Company issued by the office of the Secretary of State of the State of
California.
(iv)
An agreement of merger, together with an appropriate officer’s certificate of
the Company attached thereto, duly executed by the Company.
(g)
Capitalization of the Company . The number of
issued and outstanding shares of Company Common Stock at Closing shall not
exceed 26,500,000.
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. Each of the representations and warranties made by
Parent and Acquisition Corp. contained in this Agreement that are qualified by
materiality will be true and correct in all respects and all of the
representations and warranties made by Parent and Acquisition Corp. contained in
this Agreement that are not so qualified will be true and correct in all
material respects, in each case, as if such representations or warranties were
made on and as of the date of this Agreement and as of the Closing Date (except
to the extent such representations and warranties speak as of a specific date or
as of the date of this Agreement, in which case such representations and
warranties will be so true and correct or so true and correct in all material
respects, as the case may be, as of such specific date or as of the date of this
Agreement, respectively).
(b)
Compliance with Agreement . Each of 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 it on or before the Closing Date.
(c)
No
Company Material Adverse Effect . Since the date of this
Agreement, there shall not have been any event or circumstance that has resulted
in a Material Adverse Effect on Parent or Acquisition Corp., and no event has
occurred or circumstance exists that would reasonably be expected to result in a
Material Adverse Effect on Parent or Acquisition Corp.
(d)
Certificate of Officers. Each of
Parent and Acquisition Corp. shall have delivered to the Company a certificate
dated the Closing Date, executed on its behalf by its Chief Executive Officer,
certifying the satisfaction of the conditions specified in paragraphs (a), (b)
and (c) of this Section
8.2.
(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 . The Company shall have
received the following:
(i)
Copies of resolutions of Parent’s and Acquisition Corp.’s respective board of
directors, the sole shareholder of Acquisition Corp. and the stockholders of
Parent, certified by their respective Secretaries, authorizing and approving the
Merger and the execution, delivery and performance of this Agreement, the
Ancillary Agreements and all other documents and instruments to be delivered by
them pursuant hereto and thereto.
(ii)
A copy of each of Parent’s and Acquisition Corp.’s charter, certified by the
office of the Secretary of State of the State of
incorporation.
(iii)
A certificate of incumbency executed by the respective Secretaries of Parent and
Acquisition Corp. certifying the names, titles and signatures of the officers of
Parent and Acquisition Corp. authorized to execute the documents referred to in
subparagraph (i) above and further certifying that the charter and by-laws of
Parent and Acquisition Corp. appended thereto have not been amended or
modified.
(iv)
A certificate, dated the Closing Date, executed by the Secretary of each of
Parent and Acquisition Corp., certifying that, except for the filing of the
agreement of merger, together with the appropriate officer’s certificates, with
the office of the Secretary of State of the State of California: (i) all
Consents 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 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 substantial damages in respect of, this
Agreement or the carrying out of the transactions contemplated by this
Agreement.
(v)
The executed resignations of all directors and officers of Parent, with such
resignations to take effect at the Effective Time.
(vi)
Evidence as of a recent date of the good standing and corporate existence of
each of Parent and Acquisition Corp. issued by the Secretary of State of their
respective states of incorporation.
(vii)
The original corporate record books and stock record books of Parent and
Acquisition Corp.
(viii) A agreement of merger, together with an
appropriate officer’s certificate of Acquisition Corp. attached thereto, duly
executed by Acquisition Corp.
(ix) Evidence
that Xxxxxx Xxxxxxx shall have irrevocably committed to contribute to the
capital of Parent immediately after the Effective Date all of his shares of
Parent Common Stock without consideration therefor.
(x)
Certificates of merger, as filed in the States of Delaware and Nevada,
certifying as to the merger of Parent with and into a Delaware corporation
solely for purposes of changing the domicile of Parent from the State of Nevada
to the State of Delaware.
(xi)
Evidence that Parent shall have obtained a new CUSIP number and applied for a
new trading symbol after changing its domicile from the State of Nevada to the
State of Delaware.
(xii)
The registration statement filed by Parent under the Exchange Act covering
Parent’s Common Stock shall have been declared effective (or shall automatically
be deemed effective) by the Securities and Exchange
Commission.
(xiii)
Letters of Transmittal and the Written Consent, duly executed by Shareholders of
the Company who hold not less than 99% of the outstanding Company Common
Stock.
(xiv)
Such additional supporting documentation and other information with respect to
the transactions contemplated hereby as the Company may reasonably
request.
(g)
Due
Diligence . The Company shall have been and shall continue to be
satisfied in its sole discretion (regardless of (i) the satisfaction of any or
all of the other closing conditions, (ii) any knowledge of such matters on or
prior to the Closing Date or (iii) any indication previously given by, or on
behalf of, the Company with respect to the satisfaction of any such matter) with
the results of its and its representatives’ due diligence investigation and
evaluation of Parent and Acquisition Corp. and each of the transactions
contemplated hereby.
ARTICLE IX
TERMINATION PRIOR TO CLOSING
TERMINATION PRIOR TO CLOSING
9.1
Termination of Agreement . This
Agreement may be terminated at any time prior to the
Closing:
(a)
by the mutual written consent of the Company, Parent and Acquisition
Corp.;
(b)
by the Company, if Parent or Acquisition Corp. materially breaches any of its
representations, warranties or covenants contained herein, which failure or
breach is not cured within five (5) 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 materially breaches any of its
representations, warranties or covenants contained herein, which failure or
breach is not cured within five (5) 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;
(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 June 10, 2008, for
any reason other than delay or nonperformance of the party seeking such
termination; or
(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 9.1(f) is necessary to comply
with its fiduciary duties under applicable law as provided in Section 7.6(a) hereof.
9.2
Termination of Obligations .
Termination of this Agreement pursuant to Section 9.1 hereof shall terminate all
obligations of the parties hereunder, except for the obligations under Article IX and Sections 10.4, 10.7, 10.14 and 10.15 hereof; provided, however, that termination pursuant to
paragraphs (b) or (c) of Section
9.1 shall not relieve the defaulting or breaching party or parties
from any liability to the other parties hereto.
ARTICLE X
MISCELLANEOUS
MISCELLANEOUS
10.1
Amendments.
Subject to applicable law, this Agreement may be amended or modified only by the
parties by written agreement executed by each party to be bound thereby and
delivered by duly authorized officers of the parties at any time prior to the
Effective Time; provided, however, that after the
approval of the Merger by the Shareholders, no amendment or modification of this
Agreement shall be made that by law requires further approval from the
Shareholders without such further approval.
10.2
Notices . Any notice,
request, instruction, other document or communications to be given hereunder by
any party to any other party shall be in writing and shall be deemed to have
been duly given (i) when delivered personally, (ii) 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 (iii) 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:
|
Attention:
Xxxxxx Xxxxxxx
0000 X.
Xxxxxxxxxx Xxxx., Xxxxx 0
Xxx Xxxxx,
XX 00000
Telephone:
(000) 000-0000
Facsimile:
|
|
|
|
|
|
with a copy
to:
|
|
|
Xxxxxx X.
Xxxxxxxx
0000 Xxxxxxxx,
00xx
Xxxxx
Xxx Xxxx, XX
00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
|
|
|
|
|
If to the Company,
to:
|
ChromaDex,
Inc.
Attention:
Xxxxx Xxxxxx, President
00000
Xxxxxxxxx Xxxx., Xxxxx X
Xxxxxx, XX
00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
|
|
|
|
|
|
with a copy
to:
|
|
|
|
|
|
Manatt, Xxxxxx &
Xxxxxxxx, LLP
Attention:
Xxxx Xxxxxxxxx
000 Xxxx
Xxxxxx Xxxxx
Xxxxxxxxxx
Xxxxx
Xxxxx Xxxx,
XX 00000
Telephone: (000)
000-0000
Facsimile:
(000) 000-0000
|
or to such
other persons or addresses as may be designated in writing by the party to
receive such notice. Nothing in this Section
10.2 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.
10.3
Entire Agreement . This Agreement,
the Company Disclosure Schedule, the Parent Disclosure Schedule and the exhibits
attached hereto or referred to herein and the Ancillary Agreements constitute
the entire agreement of the parties, and supersede all prior agreements and
undertakings, both written and oral, among the parties, with respect to the
subject matter hereof and thereof.
10.4
Expenses . Except as
otherwise expressly provided herein, whether or not the Merger occurs, (i) all
expenses and fees incurred by the Company or any shareholder thereof shall be
borne solely and entirely by the party that has incurred the same, and (ii) all
expenses and fees incurred by Parent and Acquisition Corp., or any shareholder
thereof, shall be borne solely and entirely by the party that has incurred the
same; provided , that if the Merger occurs, the Surviving
Corporation agrees to pay to Xxxxxx X. Xxxxxxxx, legal counsel to Parent, on
behalf of and for the benefit of Parent, $20,000 in consideration and in full
and final payment of all legal fees and expenses incurred by Parent and
Acquisition Corp., or any shareholder thereof, in connection with the
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements, which payment shall be made no later than the first
business day after the Effective Time.
10.5
Severability . If any term or
other provision of this Agreement or any of the Ancillary Agreements is invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other conditions and provisions of this Agreement and the Ancillary Agreements
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 will negotiate in good faith to amend or modify this Agreement or the
Ancillary Agreement, as the case may be, 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.
10.6
Successors and Assigns; Assignment . This
Agreement and the Ancillary Agreements shall be binding upon and inure to the
benefit of the parties and their respective permitted successors and
assigns. Neither this Agreement, the Ancillary Agreements nor any of the
rights, interests or obligations hereunder or thereunder shall be assigned or
delegated by any of the parties prior the Effective Time without, in the case of
Parent, the prior written approval of the Company and, in the case of the
Company, the prior written approval of Parent.
10.7
No
Third Party Beneficiaries . Except as set
forth in Section 10.6 , nothing herein expressed or implied shall
be construed to give any person other than the parties (and their successors and
assigns as permitted herein) any legal or equitable rights
hereunder.
10.8
Counterparts; Delivery by
Facsimile/E-Mail . This Agreement may
be executed in multiple counterparts, and by the different parties 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 the Ancillary Agreements, and any amendments hereto or
thereto, to the extent signed and delivered by means of a facsimile machine or
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 of the Ancillary
Agreements, 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.
10.9
Waiver . At any time prior
to the Effective Time, any party hereto may (i) extend the time for the
performance of any of the obligations or other acts of any other party; (ii)
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 (iii) 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.
10.10 No
Constructive Waivers . No failure or
delay on the part of any party 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.
10.11 Further
Assurances . The parties 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 documents as any other party
may reasonably request in order to carry out fully the intent and purposes of
this Agreement, the Ancillary Agreements and the consummation of the
transactions contemplated hereby and thereby.
10.12 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.
10.13 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.
10.14 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
California without regard to its conflicts of law
principles.
10.15 Dispute
Resolution . The parties 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 are unable to resolve the
matter following good faith negotiations, the matter shall thereafter be
resolved by binding arbitration and each party 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 10.15. Whenever a party
shall decide to institute arbitration proceedings, it shall provide written
notice to that effect to the other parties. 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 Orange County, California 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 10.15 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.
10.16 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.”
(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, refers 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 Xxxxx Xxxxxx and Xxx Xxxxxxx. For the
purposes hereof, the “Applicable
Knowledge Group” with respect to Parent and the Acquisition Corp.
shall be Xxxxxx Xxxxxxx and Xxxxxxx Xxxxx.
(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 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.
IN WITNESS
WHEREOF, each of the parties has caused this Agreement to be executed as of the
date first above written by their respective officers thereunto duly
authorized.
| COMPANY | |
| CHROMADEX, INC. | |
| BY: | |
| Name: | |
| Title: | |
| PARENT | |
| CODY RESOURCES, INC. | |
| BY: | |
| Name: | |
| Title: | |
| ACQUISITION CORP. | |
| CDI ACQUISITION, INC. | |
| BY: | |
| Name: | |
| Title: |
