Exhibit 2.1
STOCK PURCHASE AGREEMENT AND PLAN OF REORGANIZATION
THIS STOCK PURHCASE AGREEMENT AND PLAN OF REORGANIZATION (the
"Agreement") is made this 27th day of January 2004, by and among Autocarbon,
Inc., a Delaware corporation ("ATCB"); New Concepts Nutraceuticals, Inc., a
Delaware corporation ("NCN"); and the persons listed in Exhibit A-1 hereof who
are the owners of record of all the issued and outstanding stock of NCN who
execute and deliver the Agreement ("NCN Stockholders"), based on the following:
RECITALS
ATCB wishes to acquire all the issued and outstanding stock of NCN in
exchange for stock of ATCB in a transaction intended to qualify as a tax-free
exchange pursuant to section 368(a)(1)(B) of the Internal Revenue Code of 1986,
as amended. The parties intend for this Agreement to represent the terms and
conditions of such tax-free reorganization, which Agreement the parties hereby
adopt.
AGREEMENT
Based on the stated premises, which are incorporated herein by
reference, and for and in consideration of the mutual covenants and agreements
hereinafter set forth, the mutual benefits to the parties to be derived
herefrom, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, it is hereby agreed as follows:
ARTICLE I
EXCHANGE OF STOCK
1.01 Exchange of Shares. On the terms and subject to the conditions
set forth in this Agreement, on the Closing Date (as defined in Section 1.05
hereof), the NCN Stockholders shall assign, transfer, and deliver to ATCB, free
and clear of all liens, pledges, encumbrances, charges, restrictions, or claims
of any kind, nature, or description, all issued and outstanding shares of common
stock of NCN (the "NCN Shares") held by NCN Stockholders which shares shall
represent all issued and outstanding shares of NCN common stock, and ATCB agrees
to acquire such shares on such date by issuing and delivering in exchange
therefore an aggregate of 31,295,000 restricted shares of ATCB common stock, par
value $0.0001 per share, (the "ATCB Common Stock. The shares are to be exchanged
on the basis of ten (10) shares of NCN for each one (1) share of ATCB.
1.02 Delivery of Certificates by NCN Stockholders. The transfer of
NCN Shares by the NCN Stockholders shall be effected by the delivery to ATCB at
the Closing (as set forth in Section 1.05 hereof) of certificates representing
the transferred shares endorsed in blank or accompanied by stock powers executed
in blank, with all signatures guaranteed and if applicable all necessary
transfer taxes and other revenue stamps affixed and acquired at the NCN
Stockholders' expense.
1.03 Operation as Wholly-Owned Subsidiary. After giving effect to the
transaction contemplated hereby, ATCB will own all the issued and outstanding
shares of NCN and NCN will be a wholly-owned subsidiary of ATCB operation under
the name NCN Nutraceuticals, Inc., or such other name as may be acceptable to
the NCN board of directors.
1.04 Further Assurances. At the Closing and from time to time
thereafter, the NCN Stockholders shall execute such additional instruments and
take such other action as ATCB may reasonably request, without undue cost to the
NCN Stockholders in order to more effectively sell, transfer, and assign clear
title and ownership in the NCN Shares to ATCB.
1.05 Closing and Parties. The Closing contemplated hereby shall be
held at a mutually agreed upon time and place on or before Januaray 27, 2004, or
on another date to be agreed to in writing by the parties (the "Closing Date").
The Agreement may be closed at any time following approval by a majority of the
shareholders of ATCB Common Stock as set forth in Section 4.02 hereof and the
NCN Stockholders as set forth in Section 5.02. The Closing may be accomplished
by wire, express mail, overnight courier, conference telephone call or as
otherwise agreed to by the respective parties or their duly authorized
representatives.
1.06 Closing Events
(a) ATCB Deliveries. Subject to fulfillment or waiver of the
conditions set forth in Article IV, ATCB shall deliver to NCN at Closing
all the following:
(i) A certificate of good standing from the secretary of State
of Delaware, issued as of a date within sixty days prior to
the Closing Date, certifying that ATCB is in good standing as
a corporation in the State of Delaware;
(ii) Incumbency and specimen signature certificates dated the
Closing Date with respect to the officers of ATCB executing
this Agreement and any other document delivered pursuant
hereto on behalf of ATCB;
(iii) Copies of the resolution of ATCB board of directors and
shareholder minutes or consents authorizing the execution and
performance of this Agreement and the contemplated
transactions, certified by the secretary or an assistant
secretary of ATCB as of the Closing Date;
(iv) The certificate contemplated by Section 4.02, duly
executed by the chief executive officer of ATCB;
(v) The certificate contemplated by Section 4.03, dated the
Closing Date, signed by the chief executive officer of ATCB;
and
(vii) (vi) Certificates for 31,295,000 shares of ATCB Common
Stock in the names of the NCN Stockholders and in the amounts
set forth in Exhibit "A"
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In addition to the above deliveries, ATCB shall take all steps and
actions as NCN and NCN Stockholders may reasonably request or as may otherwise
be reasonably necessary to consummate the transactions contemplated hereby.
(b) NCN Deliveries. Subject to fulfillment or waiver of the
conditions set forth in Article V, NCN and/or NCN Stockholder's shall
deliver to ATCB at Closing all the following:
(i) A certificate of good standing from Secretary of State of
Delaware, issued as of a date within sixty days prior to the
Closing Date, certifying that NCN is in good standing as a
corporation in the State of Delaware;
(ii) Incumbency and specimen signature certificates dated the
Closing Date with respect to the officers of NCN executing
this Agreement and any other document delivered pursuant
hereto on behalf of NCN:
(iii) Copies of resolutions of the board of directors and of
the stockholders of NCN authorizing the execution and
performance of this Agreement and the contemplated
transactions, certified by the secretary or an assistant
secretary of NCN as of the Closing Dates;
(iv) The certificate contemplated by Section 5.03, executed by
the chief operating officer of NCN;
(v) The certificate contemplated by Section 5.04, dated the
Closing Date, and signed by the chief operating officer of
NCN;
(vi) The shareholder certificates contemplated by section.
In addition to the above deliveries, NCN shall take all steps and
actions as ATCB may reasonably request or as may otherwise be reasonably
necessary to consummate the transactions contemplated hereby.
1.07 Termination
(a) This Agreement may be terminated by the board of directors of
either ATCB or NCN at any time prior to the Closing Date if:
(i) There shall be any actual or threatened action of
proceeding before any court or any governmental body which
shall seek to restrain, prohibit, or invalidate the
transaction contemplated by this Agreement and which, in the
reasonable judgment of such board of directors, made in good
faith and based upon the advice of its legal counsel, makes it
inadvisable to proceed with the transactions contemplated by
this Agreement;
(ii) Any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval is
required to consummate such transactions or in the reasonable
judgment of such board of directors, made in good faith and
based on the advice of counsel, there is substantial
likelihood that any such approval will not be obtained or will
be obtained only on a condition or conditions which would be
unduly burdensome, making it inadvisable to proceed with the
exchange;
In the event of termination pursuant to this paragraph (a) of Section
1.07, no obligation, right, or liability shall arise hereunder, and each party
shall bear all of the expenses incurred by it in contemplated hereby.
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(b) This Agreement may be terminated at any time prior to the Closing
Date by action of the board of directors of ATCB if (i) shareholders of ATCB
owning more than five percent (5%) of the issued and outstanding shares of ATCB
Common Stock perfect their dissenter's rights with respect to the approval of
this Agreement and the transactions contemplated hereby, (ii) NCN shall fail to
comply in any material respect with any of its covenants or agreements contained
in this Agreement or if any of the representations or warranties of NCN
contained herein shall be inaccurate in any material respect or (iii) ATCB
determines that there has been or is likely to be any material adverse change in
the financial or legal condition of NCN . In the event of termination pursuant
to this paragraph (b) of this Section 1.07, no obligation, right, remedy, or
liability shall arise hereunder. All parties shall bear their own costs incurred
in connection with the negotiation, preparation, and execution of this Agreement
and the transactions contemplated hereby.
(c) This Agreement may be terminated at any time prior to the Closing
Date by action of the board of directors of NCN if (i) shareholders of NCN
owning more than five percent (5%) of the issued and outstanding shares of NCN
Shares perfect their dissenter's rights with respect to the approval of this
Agreement and the transactions contemplated herby, (ii) ATCB shall fail to
comply in any material respect with any of its covenants or agreements contained
in this Agreement or if any of the representations or warranties of ATCB
contained herein shall be inaccurate in any material respect, or (iii) NCN
determines that there has been or is likely to be any adverse change in the
financial or legal condition of ATCB. In the event of termination pursuant to
this paragraph (c) of this Section 1.07, no obligation, right, remedy, or
liability shall arise hereunder. All parties shall each bear their own costs
incurred in connection with the negotiation, preparation, and execution of this
Agreement and the transactions contemplated hereby.
ARTICLE II
REPRESENTATION, COVENANTS, AND WARRANTIES OF ATCB
As an inducement to, and to obtain the reliance of NCN and/or NCN
shareholders, ATCB represents and warrants as follows:
2.01 Organization. ATCB is, and will be on the Closing Date, a
corporation duly organized, validly existing, and in good standing under the
laws of the state of Delaware and has the corporate power and is and will be
duly authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, and there are no other jurisdictions in which it is
not so qualified in which the character and location of the assets owned by it
or the nature of the material business transacted by it requires qualification,
except where failure to do so would not have a material adverse effect on its
business, operation, properties, assets or condition. The execution and delivery
of this Agreement does not, and the consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof will not,
violate any provision of ATCB articles of incorporation or bylaws, or other
agreement to which it is a party or by which it is bound.
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2.02 Approval of Agreement. ATCB has full power, authority, and legal
right and has taken, or will take, all action required by law, its articles of
incorporation, bylaws, and otherwise to execute and deliver this Agreement and
to consummate the transaction herein contemplated. The board of directors of
ATCB has authorized and approved the execution, delivery, and performance of
this Agreement and the transactions contemplated hereby; subject to the approval
of the ATCB shareholders and compliance with state and federal corporate and
securities laws.
2.03 Capitalization. The authorized capitalization of ATCB consists
of 100,000,000 shares, of common stock, $0.001 par value, of which approximately
3,000,000 shares are issued and outstanding. All issued and outstanding shares
of ATCB are legally issued, fully paid, and nonassessable and not issued in
violation of the preemptive or other right of any person. There are no dividends
or other amounts due or payable with respect to any of the shares of capital
stock of ATCB.
2.04 Financial Statements.
(a) Included in the Schedules are the audited balance sheets of ATCB
as of March 31, 2003 and 2002, and the related statement of operations,
stockholder's equity (deficit), and cash flows for the fiscal year ended March
31, 2002 and 2003, including the notes thereto, and the accompanying report of
XXXXXXX XXXXXX; independent certified public accountants. At or prior to the
Closing Date, ATCB shall deliver the un-audited balance sheet of ATCB as of June
30, 2003, and the related statements of operations, stockholders' equity
(deficit), and cash flows for the three months ended June 30, 2003, together
with the notes thereto and representations by the principal accounting and
financial officer of ATCB to the effect that such financial statements contain
all adjustments (all of which are normal recurring adjustments) necessary to
present fairly the results of operations and financial position for the periods
and as of the dates indicated and such financial statements shall not reflect
any material changes since the March 31, 2003, financial statements. All
documents referred to herein are available as public disclosure document
pursuant to the Periodic Filing Requirements and as listed on the XXXXX system
of the SEC.
(b) The financial statements of ATCB delivered pursuant to Section
2.04(a) have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved as explained in
the notes to such financial statements. The ATCB financial statements present
fairly, in all material respects, as of their respective dates, the financial
position of ATCB. ATCB did not have, as of the date of any such financial
statements, except as and to the extent reflected or reserved against therein,
any liabilities or obligations (absolute or contingent) which should be
reflected therein in accordance with generally accepted accounting principles,
and all assets reflected therein presently fairly the assets of ATCB in
accordance with generally accepted accounting principles
(c) ATCB has filed or will file as the Closing Date all tax returns
required to be filed by it from inception to the Closing Date. All such returns
and reports are accurate and correct in all material respect. ATCB has no
material liabilities with respect to the payment of any federal, state, county,
local, or other taxes (including any deficiencies, interest, or penalties)
accrued for or applicable to the period ended on the date of the most recent
balance sheet of ATCB, except to the extent reflected on such balance sheet and
all such dates and years and periods prior thereto and for which ATCB may at
said date have been liable in its own right or as transferee of the assets of,
or as successor to, any other corporation or entity, except for taxes accrued
but not yet due and payable, and to the best knowledge of ATCB, no deficiency
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assessment or proposed adjustment of any such tax return is pending, proposed or
contemplated. To the best knowledge of ATCB, none of such income tax returns has
been examined or is currently being examined by the Internal Revenue Service and
no deficiency assessment or proposed adjustment of any such return is pending,
proposed or contemplated. ATCB has not made any election pursuant to the
provisions of any applicable tax laws (other than elections that relate solely
to methods of accounting, depreciation, or amortization) that would have a
material adverse affect on ATCB, its financial condition, its business as
presently conducted or proposed to be conducted, or any of its respective
properties or material assets. There are no outstanding agreements or waivers
extending the statutory period of limitation applicable to any tax return of
ATCB.
2.05 Outstanding Warrants and Options. ATCB has no existing Warrants,
options, calls, or commitments of any nature relating to the authorized and
un-issued ATCB Common Stock.
2.06 Information. The information concerning ATCB set forth in this
Agreement is complete and accurate in all material respects and does not contain
any untrue statement of a material fact or omit to state a material fact
required to make the statements made, in light of the circumstances under which
they were made, not misleading. ATCB shall cause the schedules delivered by it
pursuant hereto and the instruments delivered to NCN hereunder to be updated
after the date hereof up to and including the Closing Date.
2.07 Absence of Certain Changes or Events. Except as set forth in
this Agreement or the schedules hereto, since the date of the most recent ATCB
balance sheet described in Section 2.04 and included in the information referred
to in Section 2.06.
(a) There has not been (i) any material adverse change in the
business, operations, properties, level of inventory, assets, or condition of
ATCB or (ii) any damage, destruction, or loss to ATCB (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets, or conditions of ATCB;
(b) ATCB has not (i) amended its articles of incorporation or bylaws;
(ii) declared or made, or agreed to declare or make, any payment of dividends or
distributions of any assets of any kind whatsoever to stockholders or purchased
or redeemed, or agreed to purchase or redeem, any of its capital stock; (iii)
waived any rights of value which in the aggregate are extraordinary or material
considering the business of ATCB; (iv) made any material change in its method of
management, operation, or accounting; (v) entered into any other material
transactions; (vi) made any accrual or arrangement for or payment of bonuses or
special compensation of any kind or any severance or termination pay to any
present or former officer or employee; (vii) increased the rate of compensation
payable or to become payable by it to any of its officers or directors or any of
its employees whose monthly compensation exceeds $1,000; or (viii) made any
increase in any profit-sharing, bonus, deferred compensation, insurance,
pension, retirement, or other employee benefit plan, payment, or arrangement
made to, for, or with its officers, directors, or employees;
(c) ATCB has not (i) granted or agreed to grant any options,
warrants, or other rights for its stocks, bonds, or other corporate securities
calling for the issuance thereof; (ii) borrowed or agreed to borrow any funds or
incurred, or become subject to, any material obligation or liability (absolute
or contingent) except liabilities incurred in the ordinary course of business;
(iii) paid any material obligation or liability (absolute or contingent) other
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than current liabilities reflected in or shown on the most recent ATCB balance
sheet and current liabilities incurred since that date in the ordinary course of
business; (iv) sold or transferred, or agreed to sell or transfer, any of its
material assets, properties, or rights (except assets, properties, or rights not
unused or un-useful in its business which, in the aggregate have a value of less
than $5,000 or canceled, or agreed to cancel, any debts or claims (except debts
and claims which in the aggregate are of a value of less than $5,000; (v) made
or permitted any amendment or termination of any contract, agreement, or license
to which it is a party if such amendment or termination is material, considering
the business of ATCB; or (vi) issued, delivered, or agreed to issue or deliver
any stock, bonds, or other corporate securities including debentures (whether
authorized and un-issued or held as treasury stock); and
(d) To the best knowledge of ATCB, it has not become subject to any
law or regulation which materially and adversely affects, or in the future would
be reasonably expected to adversely affect, the business, operations,
properties, assets, or condition of ATCB.
2.08 Litigation and Proceeding. There are no material actions, suits,
or administrative or other proceedings pending or, to the knowledge of ATCB,
threatened by or against ATCB or adversely affecting ATCB or its properties, at
law or in equity, before any court or other governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind. ATCB
does not have any knowledge of any default on its part with respect to any
default on its part with respect to any judgment, order, writ, injunction,
decree, award, rule, or regulation of any court, arbitrator, or governmental
agency or instrumentality.
2.09 Compliance With Laws and Regulations. ATCB has complied with all
applicable statutes and regulations of any federal, state, or other governmental
entity or agency thereof, except to the extent that noncompliance (i) could not
materially and adversely affect the business, operations, properties, assets, or
conditions of ATCB or (ii) could not result in the occurrence of any material
liability for ATCB. To the best knowledge of ATCB, the consummation of this
transaction will comply with all applicable statures and regulations, subject to
the preparation and filing of any forms required by state and federal securities
laws.
2.10 Material Contract Defaults. ATCB is not in default in any
material respect under the terms of any outstanding contract, agreement, lease,
or other commitment which is material to the business, operations, properties,
assets, or condition of ATCB, and there is no event of default in any material
respect under any such contract, agreement, lease, or other commitment in
respect of which ATCB has not taken adequate steps to prevent such a default
from occurring, except for the amounts due and owing Xxxxxx X. Xxxxx, III and
Xxxxx Xxxxx.
2.11 No Conflict With Other Instrument. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust, or other material contract, agreement, or instrument to which ATCB is a
party or to which any of its properties or operations are subject.
2.12 Subsidiary. ATCB does not own, beneficially or of record, any
equity securities in any other entity, other than Tri-State Acquisition Corp.
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2.13 ATCB Schedules. ATCB has delivered to NCN the following
schedules, which are collectively referred to as the "ATCB Schedules" and which
consist of the following separate schedules dated as of the date of execution of
this Agreement, all certified by a duly authorized officer of ATCB as complete,
true and accurate:
(a) A schedule including copies of the articles of incorporation and
bylaws of ATCB in effect as of the date of this Agreement;
(b) A schedule containing copies of resolutions adopted by the board
of directors of ATCB approving this Agreement and the transactions herein
contemplated;
(c) A schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or condition of
ATCB since the most recent ATCB balance sheet, required to be provided pursuant
to Section 2.04 hereof,
(d) A schedule setting forth the financial statements required
pursuant to Section 2.04(a) hereof; and
(e) A schedule setting forth any other information, together with any
required copies of documents, required to be disclosed in the ATCB Schedules by
Sections 2.01 through 2.12.
ATCB shall cause the ATCB Schedules and the instruments delivered to
NCN hereunder to be updated after the date hereof up to and including a
specified date not more than three business days prior to the Closing Date. Such
updated ATCB Schedules, certified in the same manner as the original ATCB
Schedules, shall be delivered prior to and as a condition precedent to the
obligation of the NCN to close.
ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF NCN
As an inducement to, and to obtain the reliance of, ATCB, NCN
represents and warrants as follows:
3.01 Organization. NCN is, and will be on the Closing Date, a
corporation duly organized, validly existing, and in good standing under the
laws of the state of Illinois and has the corporate power and is and will be
duly authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, and there are no other jurisdictions in which it is
not so qualified in which the character and location of the assets owned by it
or the nature of the material business transacted by its requires qualification,
except where failure to do so would not have a material adverse effect on its
business, operations, properties, assets or conditions of NCN . The execution
and delivery of this Agreement does not, and the consummation of the transaction
contemplated by this Agreement in accordance with the terms hereof will not,
violate any provision of NCN's memorandum or articles of incorporation, or other
material agreement to which it is a party or by which it is bound.
3.02 Approval of Agreement. NCN has full power, authority, and legal
right and has taken, or will take, all action required by law, its articles of
incorporation, memorandum, or otherwise to execute and deliver this Agreement
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and to consummate the transactions herein contemplated. The board of directors
of NCN have authorized and approved the execution, delivery, and performance of
this Agreement and the transactions contemplated hereby; subject to the approval
of the NCN Stockholders and compliance with provincial and federal corporate and
securities laws.
3.03 Capitalization. The authorized capitalization of NCN consists of
10,000,000 shares, no par value, of which as of the date hereof 3,129,500 shares
are issued and outstanding. All issued and outstanding shares of NCN are legally
issued, fully paid, and non-assessable and not issued in violation of the
preemptive or other right of any person. There are no dividends or other amounts
due or payable with respect to any of the shares of capital stock of NCN.
3.04 Financial Statements.
(a) Included in Schedule 3.04 are the un-audited balance sheet of NCN
as of December 31, 2002 and 2001 and the related statements of operations, cash
flows, and stockholders' equity, for the past five years, and the accompanying
reports of Xxxxx Xxxxx, independent certified general accountant. At or prior to
the Closing Date, NCN shall deliver the un-audited balance sheet of NCN as of
June 30, 2002, and the related statements of operations, stockholders' equity
(deficit), as cash flows for the six months ended June 30, 2002, together with
the notes thereto and representations by the chief operation officer of NCN to
the effect that such financial statements contain all adjustments (all of which
are normal recurring adjustments) necessary to present fairly the results of
operations and financial position for the periods and as the dates indicated.
(b) The audited financial statements delivered pursuant to Section
3.04(a) have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved. The financial
statements of NCN present fairly, as of their respective dates, the financial
position of NCN. NCN did not have, as of the date of any such balance sheets,
except as and to the extent reflected or reserved against therein, any
liabilities or obligations (absolute or contingent) which should be reflected in
any financial statements or the notes thereto prepared in accordance with
generally accepted accounting principles, and all assets reflected therein
present fairly the assets of NCN, in accordance with generally accepted
accounting principles. The statements of revenue and expenses and cash flows
present fairly the financial position and result of operations of NCN as of
their respective dates and for the respective periods covered thereby.
(c) NCN has filed or will file as the Closing Date all tax returns
required to be filed by it from inception to the Closing Date. All such returns
and reports are accurate and correct in all material respect. NCN has no
material liabilities with respect to the payment of any federal, provincial,
county, local, or other taxes (including and deficiencies, interest, or
penalties) accrued for or applicable to the period ended on the date of the most
recent balance sheet of NCN, except to the extent reflected on such balance
sheet and all such dates and years and periods prior thereto and for which NCN
may at said date have been liable in its own right or as transferee of the
assets of, or as successor to, any other corporation or entity, except for taxes
accrued but not yet due and payable, and to the best knowledge of NCN , no
deficiency assessment or proposed adjustment of any such tax return is pending,
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proposed or contemplated. To the best knowledge of NCN, none of such income tax
returns has been examined or is currently being examined by the Internal Revenue
Service and no deficiency assessment or proposed adjustment of any such return
is pending, proposed or contemplated. NCN has not made any election pursuant to
the provisions of any applicable tax laws (other than elections that relate
solely to methods of accounting, depreciation, or amortization) that would have
a material adverse affect on NCN, its financial condition, its business as
presently conducted or proposed to be conducted, or any of its respective
properties or material assets. There are no outstanding agreements or waivers
extending the statutory period of limitation applicable to any tax return of
NCN.
3.05 Outstanding Warrants and Options. NCN has no existing warrants,
options, calls, or commitments relating to the authorized and un-issued NCN
Common Stock.
3.06 Information. The information concerning NCN set forth in this
Agreement and in the schedules delivered by NCN pursuant hereto is complete and
accurate in all material respects and does not contain any untrue statement of a
material fact of omit to state a material fact required to make the statements
made, in light of the circumstances under which they were made, not misleading.
NCN shall cause the schedules delivered by NCN pursuant hereto to ATCB hereunder
to be updated after the date hereof up to and including the Closing Date.
3.07 Absence of Certain Changes or Events. Except as set forth in
this Agreement or The schedules hereto, since the date of the most recent NCN
balance sheet described in Section 3.04 and included in the information referred
to in Section 3.06.
(a) There have not been (i) any material adverse change in the
business, operations, properties, level of inventory, assets, or condition of
NCN or (ii) any damage, destruction, or loss to NCN materially and adversely
affecting the business, operations, properties, assets, or conditions of NCN;
(b) NCN has not (i) amended its articles of incorporation or
memorandum; (ii) declared or made, or agreed to declare or make, any payment of
dividends or distributions of any assets of any kind whatsoever to stockholders
or purchased or redeemed, or agreed to purchase or redeem, any of its capital
stock; (iii) waived any rights of value which in the aggregate are extraordinary
and material considering the business of NCN; (iv) made any material change in
its method of accounting; (v) entered into any other material transactions other
than those contemplated by this Agreement; (vi) made any material accrual or
material arrangement for or payment of bonuses to an officer or employee; or
(vii) made any material increase in any profit-xxxxxx, bonus, deferred
compensation, insurance, pension, retirement, or other employee benefit plan,
payment, or arrangement made to, for, or with their officers, directors, or
employees;
(c) NCN has not (i) granted or agreed to grant any option, warrants,
or other rights for its stocks, bonds, or other corporate securities calling for
the issuance thereof; (ii) borrowed or agreed to borrow any funds or incurred,
or become subject to, any material obligation or liability (absolute or
contingent) except liabilities incurred in the ordinary course of business;
(iii) paid any material obligation or liability (absolute or contingent) other
than current liabilities reflected in or shown on the most recent NCN balance
sheet and current liabilities incurred since that date in the ordinary course of
business; (iv) sold or transferred, or agreed to sell or transfer, any of its
material assets, properties, or rights, or agreed to cancel, any material debts
or claims; (v) made or permitted any amendment or termination of any contract,
agreement, or license to which it is a party if such amendment or termination is
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material, considering the business of NCN ; or (vi) issued, delivered, or agreed
to issue or deliver any stock, bonds, or other corporate securities including
debentures (whether authorized and un-issued or held as treasury stock): and
(d) To the best knowledge of NCN, it has not become subject to any
law or regulation, which materially and adversely affects, or in the future
would be reasonably expected to adversely affect, the business, operation,
properties, assets, or conditions of NCN.
3.08 Title and Related Matters. Except as provided herein or
disclosed in the most recent NCN balance sheet and the notes therein, NCN has
good and marketable title to all of its properties, inventory, interests in
properties, technology, whether patented or un-patented, and assets, which are
reflected in the most recent NCN balance sheet or acquired after that date
(except properties, interests in properties, and assets sold or otherwise
disposed of since such date in the ordinary course of business), free and clear
of all mortgages, liens, pledges, charges, or encumbrances, except (i) statutory
liens or claims not yet delinquent; and (ii) such imperfections of title and
casements as do not, and will not, materially detract from, or interfere with,
the present or proposed use of the properties subject thereto or affected
thereby or otherwise materially impair present business operations on such
properties. To the best knowledge of NCN, its technology does not infringe on
the copyright, patent, trade, secret, know-how, or other proprietary right of
any other person or entity and comprises all such rights necessary to permit the
operation of the business of NCN as now being conducted or as contemplated.
3.09 Litigation and Proceedings. Except as otherwise disclosed in
Schedule 3.09, there are no material actions, suits, or proceedings pending or,
to the knowledge of NCN, threatened by or against NCN or adversely affecting
NCN, at law or in equity, before any court or other governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind. NCN
does not have any knowledge of any default on its part with respect to any
judgment, order, writ, injunction, decree, award, rule, or regulation of any
court, arbitrator, or governmental agency or instrumentality.
3.10 Material Contract Defaults. NCN is not in default in any
material respect under the terms of any outstanding contract, agreement, lease,
or other commitment which is material to the business, operations, properties,
assets, or condition of NCN, and there is no event of default or other event
which, with notice or lapse of time or both, would constitute a default in any
material respect under any such contract, agreement, lease, or other commitment
in respect of which NCN has not taken adequate steps to prevent such a default
from occurring.
3.11 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust, or other material contract, agreement, or instrument to which NCN is a
party or to which any of its properties or operations are subject.
3.12 Governmental Authorization. NCN has all licenses, franchises,
permits, and other governmental authorizations that are legally required to
enable it to conduct its business in all material respects as conducted on the
date of this Agreement. Except for compliance with federal and state securities
and corporation laws, as hereinafter provided, no authorization, approval,
11
consent, or order of, or registration, declaration, or filing with, any court or
other governmental body is required in connection with the execution and
delivery by NCN of this Agreement and the consummation by NCN of the
transactions contemplated hereby.
3.13 Compliance With Laws and Regulations. NCN has complied with all
applicable statutes and regulations of any federal, provincial, or other
governmental entity or agency thereof, except to the extent that noncompliance
would not materially and adversely affect the business, operations, properties,
assets, or conditions of NCN or except to the extent that noncompliance would
not result in the occurrence of any material liability for NCN. To the best of
knowledge of NCN, the consummation of this transaction will comply with all
applicable statutes and regulations, subject to the preparation and filing of
any forms required by state and federal security laws.
3.14 Subsidiary. NCN does not own, beneficially or of record, any
equity Securities in any other entity.
3.15 NCN Schedules. NCN has delivered to ATCB the following
schedules, which are collectively referred to as the "NCN Schedules" and which
consist of the following separate schedules dated as of the date of execution of
this Agreement, all certified by the chief executive officer of NCN as complete,
true, and accurate:
(a) A schedule including copies of the memorandum and articles of
Incorporation of NCN and all amendments thereto effect as of the date of this
Agreement;
(b) A schedule containing copies of resolution adopted by the board
of directors of NCN approving this Agreement and the transactions herein
contemplated as referred to in Section 3.02;
(c) A schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or condition of
NCN since the most recent NCN balance sheet, required to be provided pursuant to
Section 3.04 hereof;
(d) A schedule setting forth the financial statements required
pursuant to Section 3.04 (a) hereof; and
(e) A schedule setting forth any other information, together with any
required copies of documents, required to be disclosed in the NCN Schedules by
Sections 3.01 through 3.14. NCN shall cause the NCN Schedules and the
instruments delivered to ATCB hereunder to be updated after the date hereof up
to end including a specified date not more than three business days prior to the
Closing Date. Such updated NCN Schedules, certified in the same manner as the
original NCN Schedules, shall be delivered prior to and as a condition precedent
to the obligation of ATCB to close.
ARTICLE IV
CONDITIONS PRECEDENT TO OBLIGATIONS OF NCN
The obligations of NCN under this Agreement are subject to the
satisfaction of NCN, at or before the Closing Date, of the following conditions;
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4.01 Shareholder Approval. ATCB shall call and hold a meeting of its
shareholders, or obtain the written consent of a majority of its shareholders,
to approve the transactions contemplated by this agreement including the
acquisition of NCN through the issuance of ATCB Common Stock of all of the
issued and outstanding NCN Shares.
4.02 Accuracy of Representation. The representations and warranties
made by ATCB in this Agreement were true when made and shall be true at the
closing Date with the same force and affect as if such representations and
warranties were made at and as of the Closing Date (except for changes therein
permitted by this Agreement), and ATCB shall have performed or complied with all
covenants and conditions required by this Agreement to be performed or complied
with by ATCB prior to or at the Closing. NCN shall be furnished with
certificates, signed by duly authorized officers of ATCB and dated the Closing
Date, to the foregoing effect.
4.03 Officer's Certificates. NCN shall have been furnished with
certificates dated the Closing Date and signed by the duly authorized chief
executive officer of ATCB to the effect that to such officers best knowledge no
litigation, proceeding, investigation, or inquiry is pending or, to the best
knowledge of ATCB threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this Agreement.
Furthermore, based on certificates of good standing, representations of
government agencies, and ATCB own documents and information, the certificate
shall represent, to the best knowledge of the officer, that:
(a) This Agreement has been duly approved by ATCB board of directors
and shareholders and has been duly executed and delivered in the name and on
behalf of ATCB by its duly authorized officers pursuant to, and in compliance
with, authority granted by the board of directors of ATCB pursuant to a
unanimous consent;
(b) There has been no material adverse changes in ATCB up to and
including the date of the certificate;
(c) All conditions required by this Agreement has been met,
satisfied, or performed by ATCB;
(d) All authorizations, consents, approvals, registrations, and/or
filings with any governmental body, agency, or court required in connection with
the execution and delivery of the documents by ATCB have been obtained and are
in full force and effect or, if not required to have been obtained, will be in
full force and effect by such time as may be required; and
(e) There is no material action, suit, proceeding, inquiry, or
investigation at law or in equity by any public board or body pending or
threatened against ATCB, wherein an unfavorable decision, ruling, or finding
could have an adverse effect on the financial condition of ATCB, the operation
of ATCB, or the acquisition and reorganization contemplated herein, or any
agreement or instrument by which ATCB is bound or in any way contests the
existence of ATCB.
4.04 No Material Adverse Change. Prior to the Closing Date, there
shall not have occurred any material adverse change in the financial condition,
business, or operations of ATCB, nor shall any event have occurred which, with
the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business, or operations of ATCB.
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4.05 Good Standings. NCN shall have received a certificate of good
standing from the secretary of state of Delaware, dated as of the date within
five days prior to the Closing Date, certifying that ATCB is in good standing as
a corporation in the State of Delaware.
4.06 Other Items. NCN shall have received such further documents,
certificates, or instruments relating to the transactions contemplated hereby as
NCN may reasonably request.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF ATCB
The obligations of ATCB under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions;
5.01 Shareholder Approval. ATCB shall call and hold a meeting of its
shareholders, or obtain through a majority written consent of its shareholders,
whereby the shareholders of ATCB authorize and approve this Agreement and the
transactions contemplated hereby.
5.02 NCN Shareholders. Holders of all of the issued and outstanding
NCN Shares shall agree to this Agreement and the exchange of shares contemplated
by this Agreement.
5.03 Accuracy of Representations. The representations and warranties
made by NCN and the NCN Stockholders in this Agreement were true when made and
shall be true at the Closing Date with the same force and affect as if such
representations and warranties were made at and as of the Closing Date (except
for changes therein permitted by this Agreement), and NCN shall have performed
or complied with all covenants and conditions required by this Agreement to be
performed or complied with by NCN prior to or at the Closing. ATCB shall be
furnished with a certificate, signed by a duly authorized officer of NCN and
dated the Closing Date, to the foregoing effect.
5.04 Officer's Certificates. ATCB shall have been furnished with
certificates dated the Closing Date and signed by the duly authorized chief
operating officer of NCN to the effect that no litigation, proceeding,
investigation, or inquiry is pending or, to the best knowledge of NCN,
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement. Furthermore,
these certificates shall represent, to the best knowledge of the officer, that:
(a) This Agreement has been duly approved by NCN's board of directors
and shareholders and has been duly executed and delivered in the name and on
behalf of NCN by its duly authorized officers pursuant to, and in compliance
with, authority granted by the board of directors of NCN pursuant to a unanimous
consent of its board of directors and a majority vote of its stockholders:
(b) Except as provided or permitted herein, there have been no
material adverse changes in NCN up to and including the date of the certificate;
(c) All authorizations, consents, approvals, registrations, and/or
filing with any governmental body agency, or court required in connection with
the execution and delivery of the documents by NCN have been obtained and are in
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full force and effect or, if not required to have been obtained will be in full
force and effect by such time as may be required: and
(d) Except as otherwise disclosed in Schedule 3.08, there is no
material action, suit, proceeding, inquiry, or investigation at law or in equity
by any public board or body pending or threatened against NCN, wherein an
unfavorable decision, ruling, or finding would have an adverse affect on the
financial condition of NCN, the operation of NCN, or the acquisition and
reorganization contemplated herein, or any material agreement or instrument by
which NCN is bound or would in any way contest the existence of NCN .
5.05 No Material Adverse Change. Prior to the Closing Date, there
shall not have occurred any material adverse change in the financial condition,
business or operations of NCN, nor shall any event have occurred which, with the
lapse of time or the giving of notice, may cause or create any material adverse
change in the financial condition, business, or operations of NCN.
5.06 Good Standings. ATCB shall have received a certificate of good
standing from the appropriate authority, dated as of a date within five days
prior to the Closing Date, certifying that NCN is in good standing as a
corporation in the state of Delaware.
5.07 Other Items. ATCB shall have received such further documents,
certificates, or instruments relating to the transactions contemplated hereby as
ATCB may reasonably request.
ARTICLE VI
SPECIAL COVENANTS
6.01 Activities of ATCB and NCN
(a) From and after the date of this Agreement until the Closing Date
and except as set forth in the respective schedules to be delivered by ATCB and
NCN pursuant hereto or as permitted or contemplated by this Agreement, ATCB and
NCN will each:
(i) Carry on its business in substantially the same manner as
it has heretofore;
(ii) Maintain in full force and effect insurance comparable in
amount and in scope of coverage to that now maintained by it;
(iii) Perform in all material respects all of its obligations
under material contracts, leases, and instruments relating to
or affecting its assets, properties, and business;
(iv) Use its best efforts to maintain and preserve its
business organization intact, to retain its key employees, and
to maintain its relationships with its material suppliers and
customers;
(v) Duly and timely file for all taxable periods ending on or
prior to the Closing Date all federal, state, county, and
local tax returns required to be filed by or on behalf of such
entity or for which such entity may be held responsible and
shall pay, or cause to pay, all taxes required to be shown as
15
due and payable on such returns, as well as all installments
of tax due and payable during the period commencing on the
date of this Agreement and ending on the Closing Date; and
(vi) Fully comply with and perform in all material respects
all obligations and duties imposed on it by all federal and
state laws and all rules, regulations, and orders imposed by
federal or state governmental authorities.
(b) From and after the date of this Agreement and except as
provided herein until the Closing Date, ATCB and NCN will not:
(i) Make any change in its articles of incorporation or
bylaws;
(ii) Enter into or amend any material contract, agreement, or
other instrument of any of the types described in such party's
schedules, except that a party may enter into or amend any
contract, agreement, or other instrument in the ordinary
course of business; and Enter into any agreement for the sale
of NCN or ATCB securities without the prior approval of the
other party.
6.02 Access to Properties and Records. Until the Closing Date, NCN
and ATCB will afford to the other party's officers and authorized
representatives full access to the properties, books, and records of the other
party in order that each party may have full opportunity to make such reasonable
investigation as it shall desire to make of the affairs of NCN or ATCB and will
furnish the other party with such additional financial and other information as
to the business and properties of NCN or ATCB as each party shall from time to
time reasonably request.
6.03 Indemnification by NCN. NCN will indemnify and hold harmless
ATCB and its directors and officers, and each person, if any, who controls ATCB
within the meaning of the Securities Act, from and against any and all losses,
claims, damages, expenses, liabilities, or actions to which any of them may
become subject under applicable law (including the Securities Act and the
Securities Exchange Act) and will reimburse them for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
claims or actions, whether or not resulting in liability, insofar as such
losses, claims, damages, expenses, liabilities, or actions arise out of or are
based upon any untrue statement or alleged untrue statement of material fact
contained in any application or statement filed with a governmental body or
arising out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary in order to
make the statements therein not misleading, but only insofar as any such
statement or omission was made in reliance upon and in conformity with
information furnished in writing by NCN expressly for use therein. The indemnity
agreement contained in this Section 6.03 shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of ATCB
and shall survive the consummation of the transactions contemplated by this
Agreement for a period of six months.
6.04 Indemnification by ATCB. ATCB will indemnify and hold harmless
NCN, the NCN Stockholders, NCN's directors and officers, and each person, if
any, who controls NCN within the meaning of the Securities Act, from and against
any and all losses, claims, damages, expenses, liabilities, or actions to which
any of them may become subject under applicable law (including the Securities
Act and the Securities Exchange Act) and will reimburse them for any legal or
16
other expenses reasonably incurred by them in connection with investigating or
defending any claims or actions, whether or not resulting in liability, insofar
as such losses, claims, damages, expenses, liabilities, or actions arise out of
or are based upon any untrue statement or alleged untrue statement of a material
fact contained in any application or statement filed with a governmental body or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein, or necessary in order to make the
statements therein not misleading, but only insofar as any such statement or
omission was made in reliance upon and in conformity with information furnished
in writing by ATCB expressly for use therein. The indemnity agreement contained
in this Section 6.04 shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of NCN and shall survive
the consummation of the transactions contemplated by this Agreement for a period
of six months.
6.05 The Acquisition of ATCB Common Stock. ATCB and NCN understand
and agree that the consummation of this Agreement including the issuance of the
ATCB Common Stock to NCN in exchange for the NCN shares as contemplated hereby,
constitutes the offer and sale of securities under the Securities Act and
applicable state statutes. ATCB and NCN agree that such transactions shall be
consummated in reliance on exemptions from the registration and prospectus
delivery requirements of such statutes that depend, among other items, on the
circumstances under which such securities are acquired.
(a) In order to provide documentation for reliance upon exemption
from the registration and prospectus delivery requirements for such
transactions, the signing of this Agreement and the delivery of appropriate
separate representations shall constitute the parties acceptance of, and
concurrence in, the following representations and warranties:
(i) The NCN Stockholders acknowledge that neither the SEC nor
the securities commission of any state or other federal agency
has made any determination as to the merits of acquiring ATCB
Common Stock, and that this transaction involves certain
risks.
(ii) The NCN Stockholders have received and read the Agreement
and understand the risks related to the consummation of the
transactions herein contemplated.
(iii) NCN Stockholders have such knowledge and experience in
business and financial matters that they are capable of
evaluating each business.
(iv) NCN Stockholders have been provided with copies of all
materials and information requested by them or their
representatives, including any information requested to verify
any information furnished (to the extent such information is
available or can be obtained without unreasonable effort or
expense), and the parties have been provided the opportunity
for direct communication regarding the transactions
contemplated hereby.
(v) All information which the NCN Stockholders have provided
to ATCB or their representatives concerning their suitability
and intent to hold shares in ATCB following the transactions
contemplated hereby is complete, accurate, and correct.
(vi) The NCN Stockholders have not offered or sold any
securities of ATCB or interest in this Agreement and have no
present intention of dividing the ATCB Common Stock or NCN
17
Shares to be received or the rights under this Agreement with
others or of reselling or otherwise disposing of any portion
of such stock or rights, either currently or after the passage
of a fixed or determinable period of time or on the occurrence
or nonoccurrence of any predetermined event or circumstance.
(vii) The NCN Stockholders understand that the ATCB Common
Stock has not been registered, but is being acquired by reason
of a specific exemption under the Securities Act as well as
under certain state statutes for transactions not involving
any public offering and that any disposition of the subject
ATCB Common Stock may, under certain circumstances, be
inconsistent with this exemption and may make NCN or ATCB an
"underwriter", within the meaning of the Securities Act. It is
understood that the definition of "underwriter" focuses upon
the concept of "distribution" and that any subsequent
disposition of the subject ATCB Common Stock can only be
effected in transactions, which are not considered
distributions. Generally, the term "distribution" is
considered synonymous with "public offering" or any other
offer or sale involving general solicitation or general
advertising. Under present law, in determining whether a
distribution occurs when securities are sold into the public
market, under certain circumstances one must consider the
availability of public information regarding the issuer, a
holding period for the securities sufficient to assure that
the persons desiring to sell the securities without
registration first bear the economic risk of their investment,
and a limitation on the number of securities which the stock
holder is permitted to sell and on the manner of sale, thereby
reducing the potential impact of the sale on the trading
markets. These criteria are set forth specifically in Rule 144
promulgated under the Securities Act, and, after two years
after the date the ATCB Common Stock or NCN Shares are fully
paid for, as calculated in accordance with Rule 144(d), sales
of securities in reliance upon Rule 144 can only be made in
limited amounts in accordance with the terms and conditions of
that rule. After two years from the date the securities are
fully paid for, as calculated in accordance with Rule 144(d),
they can generally be sold without meeting those conditions,
provided the holder is not (and has not been for the preceding
three months) an affiliate of the issuer.
(viii) The NCN Stockholders acknowledge that the shares of
ATCB Common Stock, must be held and may not be sold,
transferred, or otherwise disposed of for value unless they
are subsequently registered under the Securities Act or an
Exemption from such registration is available. ATCB is not
under any obligation to register the ATCB Common Stock under
the Securities Act. If Rule 144 is available after two years
and prior to three years following the date the shares are
fully paid for, only routine sales of such ATCB Common Stock
in limited amounts can be made in reliance upon Rule 144 in
accordance with the terms and conditions of that rule. ATCB is
not under any obligation to make Rule 144 available except as
set forth in this Agreement and in the event Rule 144 is not
18
available, compliance with Regulation A or some other
disclosure exemption may be required before NCN Stockholders
can sell, transfer, or otherwise dispose of such ATCB Common
Stock without registration under the Securities Act. Subject
to compliance with federal and state securities laws, ATCB
registrar and transfer agent will maintain a stop transfer
order against the registration and transfer of the ATCB Common
Stock held by NCN Stockholders and the certificates
representing the ATCB Common Stock will bear a legend in
substantially the following form so restricting the sale of
such securities:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED ("ACT"), AND MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO (I) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT,
(II) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE
ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (III) AN
OPINION OF COUNSEL, IF SUCH OPINION SHALL BE
REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER,
THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH
ACT IS AVAILABLE."
(ix) Subject to compliance with federal and state securities
laws, ATCB may refuse to register further transfers or
resale's of the ATCB Common Stock in the absence of compliance
with Rule 144 unless the NCN Stockholders furnish ATCB with an
opinion of counsel reasonably acceptable to ATCB stating that
the transfer is proper. Further, unless such opinion states
that the shares of ATCB Common Stock are free of any
restrictions under the Securities Act, ATCB may refuse to
transfer the securities to any transferee who does not furnish
in writing to ATCB the same representations and agree to the
same conditions with respect to such ATCB Common Stock as set
forth herein. ATCB may also refuse to transfer the ATCB Common
Stock if any circumstances are present reasonably indicating
that the transferee's representations are not accurate.
(b) In connection with the transaction contemplated by this
Agreement, NCN and ATCB shall each file with the assistance of the other and
their respective legal counsel, such notices, applications, reports, or other
instruments as may be deemed by them to be necessary or appropriate in an effort
to document reliance on such exemptions, and the appropriate regulatory
authority in the states where the NCN Stockholders reside unless an exemption
requiring no filing is available in such jurisdictions, all to the extent and in
the manner as may be deemed by such parties to be appropriate.
19
(c) In order to more fully document reliance on the exemptions as
provided herein, NCN, the NCN Stockholders, and ATCB shall execute and deliver
to the other, at or prior to the Closing, such further letters of
representation, acknowledgment, suitability, or the like as ATCB or NCN and
their respective counsel may reasonably request in connection with reliance on
exemptions from registration under such securities laws.
(d) The NCN Stockholders acknowledge that the basis for relying on
exemptions from registration or qualification are factual, depending on the
conduct of the various parties, and that no legal opinion or other assurance
will be required or given to the effect that the transactions contemplated
hereby are in fact exempt from registration or qualification.
6.06 ATCB Liabilities. Immediately prior to the Closing Date, ATCB
shall have no material assets and no liabilities in excess of $1,000 and all
expenses related to this Agreement or otherwise shall have been paid.
6.07 Sales of Securities Under Rule 144, If Applicable.
(a) ATCB will use its best efforts to at all times satisfy the
current public information requirements of Rule 144 promulgated under the
Securities Act so that its shareholders can sell restricted securities that have
been held for two years or more or such other restricted period as required by
Rule 144 as it is from time to time amended.
(b) Upon being informed in writing by any person holding restricted
stock of ATCB as of the date of this Agreement that such person intends to sell
any shares under rule 144 promulgated under the Securities Act (including any
rule adopted in substitution or replacement thereof), ATCB will certify in
writing to such person that it is compliance with rule 144 current public
information requirement to enable such person to sell such person's restricted
stock under rule 144, as may be applicable under the circumstances.
(c) If any certificate representing any such restricted stock is
presented to ATCB transfer agent for registration or transfer in connection with
any sales theretofore made under Rule 144, provided such certificate is duly
endorsed for transfer by the appropriate person(s) or accompanied by a separate
stock power duly executed by the appropriate person(s) in each case with
reasonable assurances that such endorsements are genuine and effective, and is
accompanied by an opinion of counsel satisfactory to ATCB and its counsel that
such transfer has complied with the requirements of Rule 144, as the case may
be, ATCB will promptly instruct its transfer agent to register such transfer and
to issue one or more new certificates representing such shares to the transferee
and, if appropriate under the provisions of rule 144, as the case may be, free
of any stop transfer order or restrictive legend. The provisions of this Section
6.07 shall survive the Closing and the consummation of the transactions
contemplated by this Agreement for a period of two years.
(d) The shareholders of ATCB as of the date of this Agreement, as
well as those receiving ATCB Common Stock pursuant to this Agreement, are
intended third-party beneficiaries of this Section 6.07.
6.08 New Board of Directors and Officers. Upon closing of the
transactions contemplated by this Agreement and the simultaneous Agreement with
Tri-State Stores, Inc., GMG Partners LLC, and SASCO Springfield Auto Supply
Company ("TSG"), the current board of directors and officers of ATCB shall
resign and in their place nominees of TSG and NCN shall be appointed, subject to
the approval of the suitability and qualifications of such nominees.
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6.09 ATCB Capitalization. For a period of eighteen months from the
Closing Date, ATCB will not engage in any reverse split of its issued and
outstanding Common Stock without the prior written approval of the holders of a
majority in interest of the issued and outstanding ATCB Common Stock on the date
of this Agreement, other than a secondary offering of common stock in order to
raise working capital.
ARTICLE VII
MISCELLANEOUS
7.01 Brokers. Except as provided herein, ATCB and NCN agree that
there were no finders or brokers involved in bringing the parties together or
who were instrumental in the negotiation, execution, or consummation of this
Agreement. Further, ATCB and NCN each agree to indemnify the other against any
claim by any third person for any commission, brokerage, or finder's fee or
other payment with respect to this Agreement or the transactions contemplated
hereby based on any alleged agreement or understanding between such party and
such third person, whether express or implied, from the actions of such party.
The covenants set forth in this section shall survive the Closing
Date and the consummation of the transactions herein contemplated.
7.02 No Representation Regarding Tax Treatment. No representation or
warranty is being made by any party to any other regarding the treatment of this
transaction for federal or state income taxation. Each party has relied
exclusively on its own legal, accounting, and other tax adviser regarding the
treatment of this transaction for federal and state income taxes and on
representation, warranty, or assurance from any other party or such other
party's legal, accounting, or other adviser.
7.03 Governing Law. This Agreement shall be governed by, enforced and
constructed under and in accordance with the laws of the State of Delaware.
7.04 Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered, if sent
by facsimile or telecopy transmission or other electronic communication
confirmed by registered or certified mail, postage prepaid, or if sent by
prepaid overnight courier addressed as follows:
If to ATCB:
Last address prior to Closing on SEC filed document
If to NCN:
000 Xxxx 00xx Xxxxxx, Xxxxx 0X, Xxx Xxxx, XX 00000
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or such other addresses as shall be furnished in writing by any party in the
manner for giving notices, hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered or sent by facsimile or
telecopy transmission or other electronic communication, or one day after the
date so sent by overnight courier.
7.05 Attorney's Fees. In the event that any party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parties shall reimburse the
non-breaching party or parties from all costs, including reasonable attorneys
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
7.06 Schedules / Knowledge. Whenever in any section of this Agreement
reference is made to information set forth in the schedules provided by ATCB or
NCN such reference is to information specifically set forth in such schedules
and clearly marked to identify the section of this Agreement to which the
information relates. Whenever any representation is made to the "knowledge" of
any party, it shall be deemed to be a representation that no officer or director
of such party, after reasonable investigation, has any knowledge of such
matters.
7.07 Entire Agreement. This Agreement represents the entire agreement
between the parties relating to the subject matter hereof. All previous
agreements between the parties, whether written or oral, have been merged into
this Agreement. The Agreement alone fully and completely expresses the agreement
of the parties relating to the subject matter hereof. There are no other courses
of dealing, understandings, agreements, representations, or warranties, written
or oral, except as set forth herein.
7.08 Survival Termination. The representations, warranties, and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of six months
from the Closing Date, unless otherwise provided herein.
7.09 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
7.10 Amendment or Waiver. Every right and remedy provided herein
shall be cumulative with every other right and remedy, whether conferred herein,
at law, or in equity, and such remedies may be enforced concurrently, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may be amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance thereof may be extended by a
writing signed by the party or parties for whose benefit the provision is
intended.
[Signature Page to Agreement Follows]
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IN WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly authorized,
as of the date first above written.
AUTOCARBON, INC.
A Delaware Corporation
By: s/ Xxxx Xxxxxx
--------------
Xxxx Xxxxxx
President
NEW CONCEPTS NUTRECEUTICLAS, INC.
An Corporation
By: s/ Simon Xxxxx Xxxxxxx
------------------------
Simon Xxxxx Xxxxxxx
President
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