AGREEMENT AND PLAN OF SHARE EXCHANGE by and among Ceelox, Inc., a Florida corporation and the Shareholders of Ceelox, Inc. listed herein, on the one hand; and Nicaragua Rising, Inc., a Nevada corporation, and Sunflower Capital, LLC, a Missouri limited...
Exhibit
2.1
AGREEMENT
AND PLAN OF SHARE EXCHANGE
by
and among
Ceelox,
Inc.,
a Florida
corporation
and
the
Shareholders of
Ceelox,
Inc. listed herein,
on the one hand;
and
Nicaragua
Rising, Inc.,
a Nevada
corporation,
and
Sunflower
Capital, LLC,
a
Missouri limited liability company,
February
12, 2010
AGREEMENT
AND PLAN OF SHARE EXCHANGE
This
Agreement and Plan of Share Exchange, dated as of February 12, 2010 (this “Agreement”), is made
and entered into by and among Ceelox, Inc., a Florida corporation (“Ceelox Sound”), and
the shareholders, warrant and option holders of Ceelox listed on Schedule I
attached hereto (each, a “Ceelox Shareholder”,
collectively, the “Ceelox
Shareholders”), on the one hand; and Nicaragua Rising, Inc., a publicly
traded Nevada corporation (OTCBB: NCRG) (“Nicaragua”), and
Sunflower Capital, LLC, a Missouri limited liability company and the majority
shareholder of Nicaragua (“Sunflower”), on the
other hand.
RECITALS
WHEREAS, the
respective boards of directors of Nicaragua and Ceelox have adopted resolutions
approving and adopting the share exchange described in this Agreement (the
“Exchange”)
upon the terms and conditions set forth herein;
WHEREAS,
the Exchange ratio is 1 share of Nicaragua common stock for every 9 shares of
Ceelox common stock;
WHEREAS,
each Ceelox Shareholder owns the number of shares of common stock of Ceelox set
forth opposite such Ceelox Shareholder’s name in Column I on Schedule I attached
hereto (collectively, the “Ceelox
Shares”);
WHEREAS,
the Ceelox Shareholders own, collectively, an amount of shares of common stock
of Ceelox constituting at least 90% of the issued and outstanding capital stock
of Ceelox, and the Ceelox Shareholders desire to exchange their respective
portions of the Ceelox Shares pursuant to the terms and conditions of this
Agreement;
WHEREAS, Sunflower will
enter into this Agreement for the purpose of making certain representations,
warranties, covenants, indemnifications and agreements;
WHEREAS,
Ceelox will enter into this Agreement for the purpose of evidencing its consent
to the consummation of the Exchange and for the purpose of making certain
representations, warranties, covenants and agreements;
WHEREAS, it is intended
that the terms and conditions of this Agreement comply in all respects with
Section 368(a)(1)(B) of the Internal Revenue Code (the “Code”) and the
regulations corresponding thereto, so that the Exchange shall qualify as a tax
free reorganization under the Code;
NOW,
THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE
1
THE
EXCHANGE
1.1 Exchange of
Shares. Upon the terms and subject to the conditions hereof,
at the Closing the Ceelox Shareholders will sell, convey, assign, transfer and
deliver to Nicaragua stock certificates representing the Ceelox Shares, and
Nicaragua will issue to each Ceelox Shareholder, in exchange for such Ceelox
Shareholder’s pro rata portion of the Ceelox Shares, one or more stock
certificates representing the number of shares of Nicaragua common stock set
forth opposite such Ceelox Shareholder’s name in Column II on Schedule I
attached hereto (collectively, the “Nicaragua
Shares”). The aggregate number of Nicaragua Shares
to be issued to the Ceelox Shareholders will not exceed 11,289,801 shares of
common stock. Immediately
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after the
completion of the Closing, Sunflower shall have returned to Nicaragua for
cancellation 11,091,100 shares of Nicaragua’s common stock and Nicaragua shall
have issued a note to Sunflower in the amount of $350,000 as consideration for
the cancellation of the 11,091,100 shares.
1.2 Closing. The closing
of the Exchange (the “Closing”) shall take
place on the date when all of the closing conditions set forth in Article 7 of
this Agreement are either satisfied or waived, or on such other date as may be
mutually agreed upon by the parties. Such date is referred to herein as the
"Closing
Date".
1.3 Articles of
Exchange. Immediately following the Closing, Nicaragua shall
file Articles of Exchange with the Secretary of State of Nevada. The
transactions contemplated by this Agreement shall become effective at such time
as the Articles of Exchange are duly filed in the State of Nevada pursuant to
Section 92A.240 of the Nevada Revised Statutes.
ARTICLE
2
REPRESENTATIONS
AND WARRANTIES OF CEELOX
Attached
hereto as Schedule 2.
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES
OF
THE CEELOX SHAREHOLDERS
The
Ceelox Shareholders hereby represent and warrant to Nicaragua as
follows:
3.1 Ownership of the Ceelox
Shares. Each Ceelox Shareholder owns, beneficially and of
record, good and marketable title to the Ceelox Shares set forth opposite such
Ceelox Shareholder’s name in Column I on Schedule I attached hereto, free and
clear of all security interests, liens, adverse claims, encumbrances, equities,
proxies, options or stockholders' agreements. Each Ceelox Shareholder represents
that such person has no right or claims whatsoever to any shares of Ceelox
capital stock, other than shares listed opposite such Ceelox Shareholder’s name
in Column I on Schedule I or options (“Options”) or warrants (“Warrants”) to
acquire Ceelox shares of capital stock, other than options and warrants listed
in Column III on Schedule I. At the Closing, the Ceelox
Shareholders will convey to Nicaragua good and marketable title to the Ceelox
Shares and the Options and Warrants, free and clear of any security interests,
liens, adverse claims, encumbrances, equities, proxies, options, stockholders'
agreements or restrictions.
3.2 Authority Relative to this
Agreement. This Agreement has been duly and validly executed
and delivered by each Ceelox Shareholder and constitutes a valid and binding
agreement of each Ceelox Shareholder, enforceable against each Ceelox
Shareholder in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally or by general principles of
equity.
3.3 Restricted
Securities. Each Ceelox Shareholder acknowledges that the Nicaragua
Shares will not be registered pursuant to the Securities Act of 1933, as amended
(the "Securities
Act") or any applicable state securities laws, that the Nicaragua Shares
will be characterized as "restricted securities" under federal securities laws,
and that under such laws and applicable regulations the Nicaragua Shares cannot
be sold or otherwise disposed of without registration under the Securities Act
or an exemption therefrom. In this regard, each Ceelox Shareholder is
familiar with Rule 144 promulgated under the Securities Act, as currently in
effect, and understands the resale limitations imposed thereby and by the
Securities Act.
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3.4 Accredited
Investor. Each Ceelox Shareholder is an “Accredited Investor”
as that term is defined in rule 501 of Regulation D promulgated under the
Securities Act. Each Ceelox Shareholder is able to bear the economic
risk of acquiring the Nicaragua Shares pursuant to the terms of this Agreement,
including a complete loss of such Ceelox Shareholder’s investment in the
Nicaragua Shares. Each Ceelox Shareholder has completed the Accredited Investor
Questionnaire attached hereto as Appendix 1.
3.5 Legend. Each Ceelox
Shareholder acknowledges that the certificate(s) representing such Ceelox
Shareholder’s pro rata portion of the Nicaragua Shares shall each conspicuously
set forth on the face or back thereof a legend in substantially the following
form:
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID
ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF
NICARAGUA
AND SUNFLOWER
Nicaragua
and Sunflower hereby represent and warrant, jointly and severally, to Ceelox and
the Ceelox Shareholders as follows:
4.1 Organization.
Nicaragua is a corporation duly organized, validly existing and in good standing
under the laws of the state of its incorporation, and has the requisite
corporate power to carry on its business as now conducted.
4.2 Capitalization. Nicaragua's
authorized capital stock consists of (i) 100,000,000 shares of common stock, of
which 11,260,000 shares are issued and outstanding, and (ii) 100,000,000 shares
of preferred stock, none of which are issued and outstanding. At the
Closing, and after taking into effect the number of shares of common stock to be
cancelled pursuant to the Cancellation Agreement, Nicaragua shall have no more
than 168,900 issued and outstanding shares of common stock prior to the issuance
of the Nicaragua Shares pursuant to the terms of this Agreement. All
issued and outstanding shares of Nicaragua capital stock are duly authorized,
validly issued, fully paid, non-assessable and free of preemptive rights. When
issued, the Nicaragua Shares will be duly authorized, validly issued, fully
paid, non-assessable and free of preemptive rights. Except for the
exchange of Ceelox Options and Warrants for Nicaragua options and warrants in
connection with this Agreement and CIP’s right to acquire 92,440,826 shares of
Nicaragua upon the termination of CIP’s license agreement with Ceelox, there are
no outstanding or authorized options, rights, warrants, calls, convertible
securities, rights to subscribe, conversion rights or other agreements or
commitments to which Nicaragua is a party or which are binding upon Nicaragua
providing for the issuance by Nicaragua or transfer by Nicaragua of additional
shares of Nicaragua's capital stock and Nicaragua has not reserved any shares of
its capital stock for issuance, nor are there any outstanding stock option
rights, phantom equity or similar rights, contracts, arrangements or commitments
to issue capital stock of Nicaragua. To Nicaragua’s and Sunflower’s
knowledge, there are no voting trusts or any other agreements or understandings
with respect to the voting of Nicaragua's capital stock. Except for
the transactions contemplated by the Cancellation Agreement, there are no
obligations of Nicaragua to repurchase, redeem or otherwise re-acquire any
shares of its capital stock as of the Closing. Nicaragua does not
have any outstanding obligations to register any of its shares of capital stock
with the Securities and Exchange Commission.
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4.3 Certain Corporate
Matters. Nicaragua is duly licensed or qualified to do business and is in
good standing as a foreign corporation in every jurisdiction in which the
character of Nicaragua's properties or nature of Nicaragua's business requires
it to be so licensed or qualified other than such jurisdictions in which the
failure to be so licensed or qualified does not, or insofar as can reasonably be
foreseen, in the future will not, have a material adverse effect on its
financial condition, results of operations or business. Nicaragua has full
corporate power and authority and all authorizations, licenses and permits
necessary to carry on the business in which it is engaged or in which it
proposes presently to engage and to own and use the properties owned and used by
it. Nicaragua has delivered to Ceelox true, accurate and complete copies of its
certificate or articles of incorporation and bylaws, which reflect all
restatements of and amendments made thereto at any time prior to the date of
this Agreement. The records of meetings of the stockholders and board of
directors of Nicaragua are complete and correct in all material respects. The
stock records and stockholder list of Nicaragua that Nicaragua has previously
furnished to Ceelox are complete and correct in all material respects and
accurately reflect the record ownership and the beneficial ownership of all the
outstanding shares of Nicaragua's capital stock and any other outstanding
securities issued by Nicaragua. Nicaragua is not in default under or
in violation of any provision of its certificate or articles of incorporation or
bylaws in any material respect. Nicaragua is not in any material
default or in violation of any restriction, lien, encumbrance, indenture,
contract, lease, sublease, loan agreement, note or other obligation or liability
by which it is bound or to which any of its assets is subject.
4.4 Authority Relative to this
Agreement. Each of Nicaragua and Sunflower have the requisite
power and authority to enter into this Agreement and carry out its respective
obligations hereunder. The execution, delivery and performance of
this Agreement by Nicaragua and the consummation of the transactions
contemplated hereby have been duly authorized by the board of directors of
Nicaragua and no other actions on the part of Nicaragua are necessary to
authorize this Agreement or the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by Nicaragua and Sunflower and
constitutes a valid and binding obligation of Nicaragua and Sunflower,
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally or by general principles of
equity.
4.5 Consents and Approvals; No
Violations. Except for applicable requirements of federal securities laws
and state securities or blue-sky laws, no filing with, and no permit,
authorization, consent or approval of, any third party, public body or authority
is necessary for the consummation by Nicaragua of the transactions contemplated
by this Agreement. Neither the execution and delivery of this Agreement by
Nicaragua nor the consummation by Nicaragua of the transactions contemplated
hereby, nor compliance by Nicaragua with any of the provisions hereof, will (a)
conflict with or result in any breach of any provisions of the charter or bylaws
of Nicaragua, (b) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
contract, agreement or other instrument or obligation to which
Nicaragua (as hereinafter defined) is a party or by which
they or any of their respective properties or assets may be bound or (c) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
Nicaragua, or any of their respective properties or assets, except in the case
of clauses (b) and (c) for violations, breaches or defaults which are not in the
aggregate material to Nicaragua taken as a whole.
4.6 SEC
Documents. Nicaragua hereby makes reference to the following
documents filed with the United States Securities and Exchange Commission (the
“SEC”), as
posted on the SEC’s website, xxx.xxx.xxx: (collectively,
the “SEC
Documents”): (a) Annual Report on Form 10-K for the fiscal years ended
October 31, 2009 and 2008; (b) Form SB-2 filed with the SEC on December 21,
2007, and (c) Quarterly Reports on Form 10-Q for the periods ended January 31,
April 30 and August 31, 2009 and 2008; and any
5
amendments
thereto. To Nicaragua’s and Sunflower’s knowledge the SEC Documents constitute
all of the annual and quarterly reports that Nicaragua was required to file with
the SEC pursuant to the Securities Exchange Act of 1934 (“Exchange Act”) and
the rules and regulations promulgated thereunder by the SEC since December 21,
2007. To Nicaragua’s knowledge, as of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Securities Act and/or the Exchange Act, as the case may require, and the rules
and regulations promulgated thereunder and none of the SEC Documents contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. To
Nicaragua’s knowledge, the financial statements of Nicaragua included in the SEC
Documents comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with generally accepted accounting
principles in the United States (“GAAP”) (except, in
the case of unaudited statements, as permitted by the applicable form under the
Securities Act or the Exchange Act) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
present the financial position of Nicaragua as of the dates thereof and its
consolidated statements of operations, stockholders’ equity and cash flows for
the periods then ended (subject, in the case of unaudited statements, to normal
and recurring year-end audit adjustments which were and are not expected to have
a material adverse effect on Nicaragua, its business, financial condition or
results of operations).
4.7 Financial
Statements.
(a) Included
in the SEC Documents are the audited balance sheets of Nicaragua as at October
31, 2009, 2008 and 2007, and the related statements of operations, stockholders’
equity and cash flows for the years then ended, together with the unqualified
report thereon (except with respect to continuation as a going concern) of each
of Xxxxxxxxx Xxxx & Company, P.C. (“RK”) and Xxxxxx & Xxxxxx, P.C.
(“Xxxxxx”),
independent auditors (collectively, “Nicaragua’s Audited
Financials”).
(b) Included in
the SEC Documents are the unaudited balance sheet of Nicaragua as at July 31,
2009, and the related statements of operations, stockholders’ equity and cash
flows for the three months then ended, as reviewed by Xxxxxx (“Nicaragua’s Interim
Financials”).
(c) To
Nicaragua’s knowledge, Nicaragua’s Audited Financials and Nicaragua’s Interim
Financials (collectively “Nicaragua’s Financial
Statements”) (i) are in accordance with the books and records of
Nicaragua, (ii) are correct and complete in all material respects, (iii) fairly
present the financial position and results of operations of Nicaragua as of the
dates indicated, and (iv) are prepared in accordance with GAAP (except that (x)
unaudited financial statements may not be in accordance with GAAP because of the
absence of footnotes normally contained therein, and (y) interim (unaudited)
financials are subject to normal year-end audit adjustments that in the
aggregate will not have a material adverse effect on Nicaragua , their
respective businesses, financial condition or results of
operations.
4.8 Events Subsequent to
Financial Statements. To Nicaragua’s knowledge, since October 31, 2009,
there has not been:
(a) Any sale,
lease, transfer, license or assignment of any assets, tangible or intangible, of
Nicaragua;
(b) Any damage,
destruction or property loss, whether or not covered by insurance, affecting
adversely the properties or business of Nicaragua;
(c) Any
declaration or setting aside or payment of any dividend or distribution
with
6
respect
to the shares of capital stock of Nicaragua or any redemption,
purchase or other acquisition of any such shares;
(d) Any
subjection to any lien on any of the assets, tangible or intangible, of
Nicaragua;
(e) Any
incurrence of indebtedness or liability or assumption of obligations by
Nicaragua;
(f) Any waiver
or release by Nicaragua of any right of any material value;
(g) Any
compensation or benefits paid to officers or directors of
Nicaragua;
(h) Any change
made or authorized in the articles of incorporation or bylaws of Nicaragua,
except for the change to the articles of incorporation and by-laws made incident
to re-domiciling from Minnesota to Nevada;
(i) Any loan to
or other transaction with any officer, director or stockholder of
Nicaragua giving rise to any claim or right of Nicaragua against any
such person or of such person against Nicaragua; or
(j) Any
material adverse change in the condition (financial or otherwise) of the
respective properties, assets, liabilities or business of
Nicaragua.
4.9 Liabilities. Except
as otherwise disclosed in Nicaragua’s Financial Statements, Nicaragua does not
have any liability or obligation whatsoever, either direct or indirect, matured
or unmatured, accrued, absolute, contingent or otherwise. In
addition, Nicaragua and Sunflower represent that upon Closing, Nicaragua will
not have any liability or obligation whatsoever, either direct or indirect,
matured or unmatured, accrued, absolute, contingent or otherwise.
4.10 Tax
Matters.
(a) Nicaragua
has duly filed all federal, state, local and foreign tax returns required to be
filed by or with respect to it with the Internal Revenue Service or other
applicable taxing authority, and no extensions with respect to such tax returns
have been requested or granted;
(b) Nicaragua
has paid, or adequately reserved against in Nicaragua’s Financial Statements,
all material taxes due, or claimed by any taxing authority to be due, from or
with respect to them;
(c) To the best
knowledge of Nicaragua, there has been no material issue raised or material
adjustment proposed (and none is pending) by the Internal Revenue Service or any
other taxing authority in connection with any of Nicaragua’s tax
returns;
(d) No waiver
or extension of any statute of limitations as to any material federal, state,
local or foreign tax matter has been given by or requested from Nicaragua;
and
For
the purposes of this Section 4.10, a tax
is due (and must therefore either be paid or adequately reserved against in
Nicaragua’s Financial Statements) only on the last date payment of such tax can
be made without interest or penalties, whether such payment is due in respect of
estimated taxes, withholding taxes, required tax credits or any other
tax.
4.11 Real
Property. Nicaragua does not own or lease any real
property.
7
4.12 Books and Records.
The books and records of Nicaragua delivered to Ceelox prior to the Closing
fully and fairly reflect the transactions to which Nicaragua is a party or by
which its properties are bound.
4.13 Questionable
Payments. To Nicaragua’s and Sunflower’s knowledge, neither Nicaragua,
nor any employee, agent or representative of Nicaragua has, directly or
indirectly, made any bribes, kickbacks, illegal payments or illegal political
contributions using Company funds or made any payments from Nicaragua's funds to
governmental officials for improper purposes or made any illegal payments from
Nicaragua's funds to obtain or retain business.
4.14 Intellectual
Property. Nicaragua does not own or use any trademarks, trade names,
service marks, patents, copyrights or any applications with respect thereto.
Nicaragua, and Sunflower have no knowledge of any claim that, or inquiry as to
whether, any product, activity or operation of Nicaragua infringes upon or
involves, or has resulted in the infringement of, any trademarks, trade-names,
service marks, patents, copyrights or other proprietary rights of any other
person, corporation or other entity; and no such proceedings have been
instituted, are pending or are threatened against Nicaragua.
4.15 Insurance. Nicaragua
does not have any insurance policies in effect.
4.16 Contracts. Except for
the agreement entered into by and between Nicaragua and Core Consulting
Group, the agreements
pursuant to the Cancellation Agreement and a convertible promissory note in the
principal amount of $100,000 payable to Xxxxxxx X. Xxxxx, Nicaragua does
not have any material contracts, leases, arrangements or commitments (whether
oral or written). Nicaragua is not a party to or bound by or affected
by any contract, lease, arrangement or commitment (whether oral or written)
relating to: (a) the employment of any person; (b) collective bargaining with,
or any representation of any employees by, any labor union or association; (c)
the acquisition of services, supplies, equipment or other personal property; (d)
the purchase or sale of real property; (e) distribution, agency or construction;
(f) lease of real or personal property as lessor or lessee or sublessor or
sublessee; (g) lending or advancing of funds; (h) borrowing of funds or receipt
of credit; (i) incurring any obligation or liability; or (j) the sale of
personal property.
4.17 Litigation. Nicaragua
is not subject to any judgment or order of any court or quasi judicial or
administrative agency of any jurisdiction, domestic or foreign, nor is there any
charge, complaint, lawsuit or governmental investigation pending against
Nicaragua. Nicaragua is not a plaintiff in any action, domestic or
foreign, judicial or administrative. There are no existing actions, suits,
proceedings against or investigations of Nicaragua, and Nicaragua knows of no
basis for such actions, suits, proceedings or investigations. There are no
unsatisfied judgments, orders, decrees or stipulations affecting Nicaragua or to
which Nicaragua is a party.
4.18 Employees. Nicaragua
does not have any employees. Nicaragua does not owe any compensation
of any kind, deferred or otherwise, to any current or previous
employees. Nicaragua does not have a written or oral employment
agreement with any officer or director of Nicaragua. Nicaragua is not
a party to or bound by any collective bargaining agreement. There are
no loans or other obligations payable or owing by Nicaragua to any stockholder,
officer, director or employee of Nicaragua, nor are there any loans or debts
payable or owing by any of such persons to Nicaragua or any guarantees by
Nicaragua of any loan or obligation of any nature to which any such person is a
party.
4.19 Employee Benefit
Plans. Except for the 2010 Stock Option Plan that Nicaragua intends on
adopting simultaneously with, or prior to, the completion of the transactions,
Nicaragua does not have any (a) non-qualified deferred or incentive compensation
or retirement plans or arrangements, (b) qualified retirement plans or
arrangements, (c) other employee compensation, severance or termination pay or
welfare benefit plans, programs or arrangements or (d) any related trusts,
insurance contracts or other funding arrangements
8
maintained,
established or contributed to by Nicaragua.
4.20 Legal Compliance. To
the best knowledge of Nicaragua, after due investigation, no claim has been
filed against Nicaragua alleging a violation of any applicable laws
or regulations of foreign, federal, state and local governments and all agencies
thereof. Nicaragua holds all of the material permits, licenses, certificates or
other authorizations of foreign, federal, state or local governmental agencies
required for its business as presently conducted.
4.21 Subsidiaries and
Investments. Nicaragua does not own any capital stock or have
any interest of any kind whatsoever in any corporation, partnership, or other
form of business organization.
4.22 Broker's Fees.
Neither Nicaragua, nor anyone on its behalf, has any liability to any broker,
finder, investment banker or agent, or has agreed to pay any brokerage fees,
finder’s fees or commissions, or to reimburse any expenses of any broker,
finder, investment banker or agent in connection with this
Agreement.
4.23 Listing and Maintenance
Requirements. Nicaragua’s common stock is currently quoted on
the OTC Bulletin Board. Nicaragua has not, since the date its common
stock began trading on the OTC Bulletin Board, received any notice from the OTC
Bulletin Board or the FINRA or any trading market on which Nicaragua’s common
stock is or has been listed or quoted to the effect that Nicaragua is not in
compliance with the quoting, listing or maintenance requirements of the OTC
Bulletin Board or such other trading market. Nicaragua is, and has no
reason to believe that it will not, in the foreseeable future continue to be, in
compliance with all such quoting, listing and maintenance
requirements.
4.24 Application of Takeover
Protections. Nicaragua and its board of directors have taken
all necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under Nicaragua's
certificate or articles of incorporation (or similar charter documents) or the
laws of its state of incorporation that is or could become applicable to Ceelox
or the Ceelox Shareholders as a result of the Exchange or the exercise of any
rights by Ceelox or the Ceelox Shareholders pursuant to this
Agreement.
4.25 No SEC or FINRA
Inquiries. To Nicaragua’s and Sunflower’s knowledge, neither
Nicaragua nor any of its past or present officers or directors is, or has ever
been, the subject of any formal or informal inquiry or investigation by the SEC
or FINRA.
4.26 Disclosure. The
representations and warranties and statements of fact made by Nicaragua in this
Agreement are, as applicable, accurate, correct and complete and do not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements and information contained herein not
false or misleading.
ARTICLE
5
INDEMNIFICATION
5.1 Sunflower
Indemnification. For a period of one year after the Closing,
Sunflower agrees, to indemnify Ceelox, the Ceelox Shareholders and each of the
officers, agents and directors of Ceelox or the Ceelox Shareholders against any
loss, liability, claim, damage or expense that occurred on or after November 4,
2009 (including, but not limited to, any and all expenses whatsoever reasonably
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever) (each an “Indemnified Party”)
to which it or they may become subject arising out of or based on either (i) any
breach of or inaccuracy in any of the representations and warranties or
covenants or conditions made by Nicaragua or Sunflower in this Agreement; or
(ii) any and all liabilities arising out of or in connection with any of the
assets,
9
business
or operations of Nicaragua prior to the Closing (collectively, the “Sunflower
Indemnification”).
5.2 Indemnification
Procedures. If any action shall be brought against an
Indemnified Party in respect of which indemnity may be sought pursuant to this
Agreement, such Indemnified Party shall promptly notify Sunflower in writing,
and Sunflower shall each have the right to assume the defense thereof with
counsel of its own choosing. Any Indemnified Party shall have the
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party except to the extent that the employment
thereof has been specifically authorized by Sunflower in writing, Sunflower has
failed after a reasonable period of time to assume such defense and to employ
counsel or in such action there is, in the reasonable opinion of such separate
counsel, a material conflict on any material issue between the position of
Sunflower and the position of such Indemnified Party. Sunflower will
not be liable to any Indemnified Party under this Article 5 for any settlement
by an Indemnified Party effected without Sunflower’s prior written consent,
which shall not be unreasonably withheld or delayed.
ARTICLE
6
COVENANTS
AND AGREEMENTS OF THE PARTIES
EFFECTIVE
PRIOR TO CLOSING
6.1
Corporate
Examinations and Investigations. Prior to the Closing, each
party shall be entitled, through its employees and representatives, to make such
investigations and examinations of the books, records and financial condition of
Ceelox and Nicaragua as each party may request. In order that each
party may have the full opportunity to do so, Ceelox and Nicaragua shall furnish
each party and its representatives during such period with all such information
concerning the affairs of Ceelox or Nicaragua as each party or its
representatives may reasonably request and cause Ceelox or Nicaragua and their
respective officers, employees, consultants, agents, accountants and attorneys
to cooperate fully with each party's representatives in connection with such
review and examination and to make full disclosure of all information and
documents requested by each party or its representatives. Any such
investigations and examinations shall be conducted at reasonable times and under
reasonable circumstances, it being agreed that any examination of original
documents will be at each party's premises, with copies thereof to be provided
to each party or its representatives upon request.
6.2 Cooperation;
Consents. Prior to the Closing, each party shall cooperate
with the other parties to the end that the parties shall (i) in a timely manner
make all necessary filings with, and conduct negotiations with, all authorities
and other persons the consent or approval of which, or the license or permit
from which is required for the consummation of the Exchange and (ii) provide to
each other party such information as the other party may reasonably request in
order to enable it to prepare such filings and to conduct such
negotiations.
6.3 Conduct of
Business. Subject to the provisions hereof, from the date
hereof through the Closing, each party hereto shall (i) conduct its
business in the ordinary course and in such a manner so that the representations
and warranties contained herein shall continue to be true and correct in all
material respects as of the Closing as if made at and as of the Closing and (ii)
not enter into any material transactions or incur any material liability not
required or specifically contemplated hereby, without first obtaining the
written consent of Ceelox and the Ceelox Shareholders on the one hand and
Nicaragua and Sunflower on the other hand. Without the prior written
consent of Ceelox, the Ceelox Shareholders, Nicaragua or Sunflower, except as
required or specifically contemplated hereby, each party shall not undertake or
fail to undertake any action if such action or failure would render any of said
warranties and representations untrue in any material respect as of the
Closing.
10
6.4 Litigation. From
the date hereof through the Closing, each party hereto shall promptly notify the
representative of the other parties of any lawsuits, claims, proceedings or
investigations which after the date hereof are threatened or commenced against
such party or any of its affiliates or any officer, director, employee,
consultant, agent or shareholder thereof, in their capacities as such, which, if
decided adversely, could reasonably be expected to have a material adverse
effect upon the condition (financial or otherwise), assets, liabilities,
business, operations or prospects of such party or any of its
subsidiaries.
6.5 Notice of
Default. From the date hereof through the Closing, each party
hereto shall give to the representative of the other parties prompt written
notice of the occurrence or existence of any event, condition or circumstance
occurring which would constitute a violation or breach of this Agreement by such
party or which would render inaccurate in any material respect any of such
party's representations or warranties herein.
ARTICLE
7
CONDITIONS
TO CLOSING
7.1 Conditions to Obligations of
Ceelox and the Ceelox Shareholders. The obligations of Ceelox
and the Ceelox Shareholders under this Agreement shall be subject to each of the
following conditions:
(a) Closing
Deliveries. At the Closing, Nicaragua shall have delivered or
caused to be delivered to Ceelox the following:
(i) resolutions
duly adopted by the board of directors of Nicaragua authorizing and approving
the Exchange and the execution, delivery and performance of this
Agreement;
(ii) a
certificate of good standing for Nicaragua from its jurisdiction of
incorporation, dated not earlier than five days prior to the Closing
Date;
(iii) written
resignation of Xxxxxxx X. Xxxxx as an officer of Nicaragua immediately prior to
the Closing and board resolutions electing the following individuals to the
positions with Nicaragua listed opposite their names below:
|
Xxxxx
Xxxxxx
|
Chief
Executive Officer and Acting Chief Financial Officer
|
|
Xxxx
Xxxxxxxx
|
Chief
Operating Officer and Secretary
|
(iv) this
Agreement duly executed by Nicaragua and Sunflower;
(v)
all corporate records, agreements, seals and any other information
reasonably requested by Ceelox’s representatives with respect to Nicaragua;
and
(vi) such
other documents as Ceelox or the Ceelox Shareholders may reasonably request in
connection with the transactions contemplated hereby.
(b) Representations and
Warranties to be True. The representations and
warranties of Nicaragua and Sunflower herein contained shall be true in all
material respects at the Closing with the same effect as though made at such
time. Nicaragua and Sunflower shall have performed in all material
respects all obligations and complied in all material respects with all
covenants and conditions required by this Agreement to be performed or complied
with by them at or prior to the Closing.
11
(c) SEC
Filings. At the Closing, Nicaragua will be current in all SEC
filings required by it to be filed.
(d) OTCBB
Trading. Nicaragua’s common stock shall be quoted and eligible
for trading on the OTC Bulletin Board.
(e) Options. At
the Closing, Nicaragua shall issue the following number of Options and
Warrants:
(i)
|
2,315,907
options;
|
(ii)
|
5,482,888
warrants.
|
All of
the foregoing Options will be issued in form and substance reasonably acceptable
to Ceelox and as required by the applicable transaction documents requiring the
issuance of such options.
7.2 Conditions to Obligations of
Nicaragua and Sunflower. The obligations of Nicaragua and Sunflower under
this Agreement shall be subject to each of the following
conditions:
(a) Closing
Deliveries. On the Closing Date, Ceelox or the
Ceelox Shareholders shall have delivered to Nicaragua the
following:
(i) certificates
representing the Ceelox Shares, duly endorsed in blank or each accompanied by a
stock power effecting the transfer thereof to Nicaragua;
(ii) this
Agreement duly executed by Ceelox and the Ceelox Shareholders;
(iii) such
other documents as Nicaragua may reasonably request in connection with the
transactions contemplated hereby.
(b) Representations and
Warranties to be True. The representations and
warranties of Ceelox and the Ceelox Shareholders herein contained shall be true
in all material respects at the Closing with the same effect as though made at
such time. Ceelox and the Ceelox Shareholders shall have performed in
all material respects all obligations and complied in all material respects with
all covenants and conditions required by this Agreement to be performed or
complied with by them at or prior to the Closing.
ARTICLE
8
TERMINATION
8.1 Events of
Termination. This Agreement may, by notice given in the manner
hereinafter provided, be terminated and abandoned at any time prior to
completion of the Closing, as follows:
(a) by Ceelox
if (1) there has been a material Breach by Nicaragua and, in the case of a
covenant or agreement Breach, such Breach shall not have been cured within ten
(10) days after receipt by Nicaragua of notice specifying particularly such
Breach, (2) if Ceelox identifies hereafter any fact, circumstance or event that
could be reasonably determined to have a material adverse effect on Nicaragua
and such fact, circumstance or event is not cured by Nicaragua within ten (10)
days after receipt by Nicaragua of notice specifying particularly such fact,
event or circumstance, or (3) if the closing conditions set forth in Article 7
have not been satisfied by the close of business on February 15,
2010.
12
(b) by
Nicaragua (1) if there has been a material Breach by Ceelox and, in the case of
a covenant or agreement, such Breach shall not have been cured within ten (10)
days after receipt by Ceelox of notice specifying particularly such Breach, or
(2) if Nicaragua identifies hereafter any fact, circumstance or event that could
be reasonably determined to have a material adverse effect on Ceelox, or
Nicaragua following the Merger, and such fact, circumstance or event is not
cured by Ceelox within ten (10) days after receipt by Ceelox of notice
specifying particularly such fact, event or circumstance, or (3) if the closing
conditions set forth in Article 7 have not been satisfied by the close of
business on February 15, 2010; or
(c)
|
at
any time by mutual written agreement of Ceelox and
Nicaragua.
|
This
Agreement may not be terminated after completion of the Closing, except by
mutual agreement of Ceelox and Nicaragua.
For the
purposes of this Article 8, there shall be deemed to be a “Breach” of a
representation, warranty, covenant, obligation, or other provision if there is
or has been (a) any inaccuracy (subject to applicable knowledge and
materiality qualifiers, if any) in, or breach of, or any failure to comply with,
or perform, such representation, warranty, covenant, obligation, or other
provision, or (b) any claim (by any person) or other circumstance that is
inconsistent with such representation, warranty, covenant, obligation, or other
provision; and the term “Breach” shall be deemed to refer to any such
inaccuracy, breach, failure, claim, or circumstance.
ARTICLE
9
GENERAL
PROVISIONS
9.1 Notices. All notices
and other communications hereunder shall be in writing and shall be deemed to
have been duly given if delivered personally, sent by overnight courier or
mailed by registered or certified mail (postage prepaid and return receipt
requested) to the party to whom the same is so delivered, sent or mailed at the
addresses set forth on the signature page hereof (or at such other address for a
party as shall be specified by like notice).
9.2 Interpretation. 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.
References to Sections and Articles refer to sections and articles of this
Agreement unless otherwise stated.
9.3 Severability. If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated and the parties shall negotiate in good faith to modify this
Agreement to preserve each party's anticipated benefits under this
Agreement.
9.4 Miscellaneous. This
Agreement (together with all schedules, documents and instruments referred to
herein): (a) constitutes the entire agreement and supersedes all other prior
agreements and undertakings, both written and oral, among the parties with
respect to the subject matter hereof; (b) except as expressly set forth herein,
is not intended to confer upon any other person any rights or remedies hereunder
and (c) shall not be assigned by operation of law or otherwise, except as may be
mutually agreed upon by the parties hereto.
9.5 Separate Counsel.
Each party hereby expressly acknowledges that it has been advised to seek its
own separate legal counsel for advice with respect to this
Agreement.
13
9.6 Governing Law; Venue.
This Agreement shall be governed by, and construed and enforced in accordance
with, the laws of the State of Kansas. Any and all actions brought
under this Agreement shall be brought in the state courts of Kansas and each
party hereby waives any right to object to the convenience of such
venue.
9.7 Counterparts and Facsimile
Signatures. This Agreement may be executed in two or more counterparts,
which together shall constitute a single agreement. This Agreement
and any documents relating to it may be executed and transmitted to any other
party by facsimile or email as a .pdf copy, which facsimile or email shall be
deemed to be, and utilized in all respects as, an original, wet-inked
document.
9.8 Amendment. This
Agreement may be amended, modified or supplemented only by an instrument in
writing executed by Nicaragua, Ceelox and the holders of at least 50.1% of the
Ceelox Shares.
9.9 Parties In Interest: No
Third Party Beneficiaries. Except as otherwise provided herein, the terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective heirs, legal representatives, successors and assigns of the
parties hereto. This Agreement shall not be deemed to confer upon any person not
a party hereto any rights or remedies hereunder.
9.10 Waiver. No waiver by
any party of any default or breach by another party of any representation,
warranty, covenant or condition contained in this Agreement shall be deemed to
be a waiver of any subsequent default or breach by such party of the same or any
other representation, warranty, covenant or condition. No act, delay, omission
or course of dealing on the part of any party in exercising any right, power or
remedy under this Agreement or at law or in equity shall operate as a waiver
thereof or otherwise prejudice any of such party's rights, powers and remedies.
All remedies, whether at law or in equity, shall be cumulative and the election
of any one or more shall not constitute a waiver of the right to pursue other
available remedies.
9.11 Expenses. At
or prior to the Closing, the parties hereto shall pay all of their own expenses
relating to the transactions contemplated by this Agreement, including, without
limitation, the fees and expenses of their respective counsel and financial
advisers.
9.12 Recitals
Incorporated. The recitals of this Agreement are incorporated
herein and made a part hereof.
[SIGNATURES
FOLLOW]
14
IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first written
above.
Ceelox,
Inc.,
a Florida
corporation
By: XXXXX
XXXXXX
Name: Xxxxx
Xxxxxx
Title: Chief
Executive Officer
Address: 00000
Xxxxxx Xxxx.
Xxxxx, XX
00000
[SIGNATURE
PAGES OF CEELOX SHAREHOLDERS,
NICARAGUA
AND SUNFLOWER FOLLOW]
15
[SIGNATURE
PAGE OF CEELOX SHAREHOLDERS]
SHAREHOLDER:
Signature: ___________________________
Print
Name:__________________________
Address:____________________________
____________________________________
Number of
Ceelox Shares:______________
16
[SIGNATURE
PAGE OF NICARAGUA AND SUNFLOWER]
Nicaragua
Rising, Inc., a Nevada corporation
By: XXXXXXX X. XXXXX
III
Name: Xxxxxxx
X. Xxxxx, III
Title: Chief
Executive Officer and Chairman
Sunflower
Capital, LLC
By: XXXXXXX X. XXXXX
III
Xxxxxxx X. Xxxxx, III
Its: Managing
Member
17
SCHEDULE
I
Column
I
|
Column
II
|
Column
III
|
Column
IV
|
|||||
Number
of
|
Number
of
|
Number
of
|
Number
of
|
|||||
Shares
of
|
Shares
of
|
Ceelox
|
Nicaragua
|
|||||
Name
|
Ceelox
|
Nicaragua
|
Options/Warrants
|
Options/Warrants
|
||||
Total
|
18
SCHEDULE
2
Ceelox
hereby represents and warrants to Nicaragua as follows:
2.1 Organization. Ceelox
has been duly incorporated, is validly existing as a corporation and is in good
standing under the laws of its jurisdiction of incorporation, and has the
requisite power to carry on its business as now conducted.
2.2 Capitalization. The
authorized capital stock of Ceelox consists of 250,000,000 shares of common
stock, $0.0001 par value, of which 97,385,813 shares will be issued and
outstanding at the Closing and 5,000,000 shares of preferred stock, $0.0001 par
value, of which none will be issued and outstanding at the Closing. All of the
issued and outstanding shares of capital stock of Ceelox are duly authorized,
validly issued, fully paid, non-assessable and free of preemptive
rights. There are no voting trusts or any other agreements or
understandings with respect to the voting of Ceelox's capital
stock.
2.3 Certain Corporate
Matters. Ceelox is duly qualified to do business as a corporation and is
in good standing in each jurisdiction in which the ownership of its properties,
the employment of its personnel or the conduct of its business requires it to be
so qualified, except where the failure to be so qualified would not have a
material adverse effect on Ceelox's financial condition, results of operations
or business. Ceelox has full corporate power and authority and all
authorizations, licenses and permits necessary to carry on the business in which
it is engaged and to own and use the properties owned and used by
it.
2.4 Authority Relative to this
Agreement. Ceelox has the requisite power and authority to enter into
this Agreement and to carry out its obligations hereunder. The execution,
delivery and performance of this Agreement by Ceelox and the consummation by
Ceelox of the transactions contemplated hereby have been duly authorized by the
board of directors of Ceelox and no other actions on the part of Ceelox are
necessary to authorize this Agreement or the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by Ceelox and
constitutes a valid and binding agreement of Ceelox, enforceable against Ceelox
in accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity.
2.5 Consents and Approvals; No
Violations. Except for applicable requirements of federal securities laws
and state securities or blue-sky laws, no filing with, and no permit,
authorization, consent or approval of, any third party, public body or authority
is necessary for the consummation by Ceelox of the transactions contemplated by
this Agreement. Neither the execution and delivery of this Agreement by Ceelox
nor the consummation by Ceelox of the transactions contemplated hereby, nor
compliance by Ceelox with any of the provisions hereof, will (a) conflict with
or result in any breach of any provisions of the charter or bylaws of Ceelox,
(b) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, license, contract,
agreement or other instrument or obligation to which Ceelox is a party or by
which it or any of its properties or assets may be bound or (c) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to
Ceelox, or any of its properties or assets, except in the case of clauses (b)
and (c) for violations, breaches or defaults which are not individually or in
the aggregate material to Ceelox.
2.6 Financial
Statements.
(a) Ceelox has
provided Nicaragua with a copy of the audited balance sheet of Ceelox as at
December 31, 2008 and 2007, and the related statement of operations,
stockholders’ equity and cash flows for the two fiscal years then ended,
together with the unqualified report thereon see RK’s edit on this
of
19
Xxxxxxxxx,
Kass & Company, P.C. (“RKC”), independent
auditors (collectively, “Ceelox’s Audited
Financials”).
(b) Included in
Ceelox’s Audited Financials are the unaudited balance sheet of Ceelox as at
September 30, 2009, and the related statement of operations, stockholders’
equity and cash flows for the nine months then ended, as reviewed by RKC (“Ceelox’s Interim
Financials”).
(c) Ceelox’s
Audited Financials and Ceelox’s Interim Financials (collectively “Ceelox’s Financial
Statements”) (i) are in accordance with the books and records of Ceelox,
(ii) are correct and complete in all material respects, (iii) fairly present the
financial position and results of operations of Ceelox as of the dates
indicated, and (iv) are prepared in accordance with U.S. GAAP (except that (x)
unaudited financial statements may not be in accordance with GAAP because of the
absence of footnotes normally contained therein, and (y) interim (unaudited)
financials are subject to normal year-end audit adjustments that in the
aggregate will not have a material adverse effect on Ceelox, its business,
financial condition or results of operations.
(d) Ceelox’s
Financial Statements constitute all of the financial statements of Ceelox
required to be included in the Form 8-K due to be filed with the SEC by
Nicaragua within four business days of the Closing Date.
2.7 Tax
Matters.
(a) Except for
an extension to file its 2008 tax return, Ceelox has duly filed all federal,
state, local and foreign tax returns required to be filed by or with respect to
it with the Internal Revenue Service or other applicable taxing authority, and
no extensions with respect to such tax returns have been requested or
granted.
(b) Ceelox has
paid, or adequately reserved against in Ceelox’s Financial Statements, all
material taxes due, or claimed by any taxing authority to be due, from or with
respect to them.
(c) To the best
knowledge of Ceelox, there has been no material issue raised or material
adjustment proposed (and none is pending) by the Internal Revenue Service or any
other taxing authority in connection with any of Ceelox’s tax
returns.
(d) No waiver
or extension of any statute of limitations as to any material federal, state,
local or foreign tax matter has been given by or requested from
Ceelox.
For the purposes of this
Section 2.7, a
tax is due (and must therefore either be paid or adequately reserved against in
Ceelox’s Financial Statements) only on the last date payment of such tax can be
made without interest or penalties, whether such payment is due in respect of
estimated taxes, withholding taxes, required tax credits or any other
tax.
2.8 Books and Records.
The books and records of Ceelox delivered to Nicaragua prior to the Closing
fully and fairly reflect the transactions to which Ceelox is a party or by which
its properties are bound.
2.9 Questionable
Payments. Neither Ceelox, nor any employee, agent or representative of
Ceelox has, directly or indirectly, made any bribes, kickbacks, illegal payments
or illegal political contributions using Company funds or made any payments from
Ceelox's funds to governmental officials for improper purposes or made any
illegal payments from Ceelox's funds to obtain or retain business.
20
2.
10 Intellectual
Property. Ceelox has no knowledge of any claim that, or
inquiry as to whether, any product, activity or operation of Ceelox infringes
upon or involves, or has resulted in the infringement of, any trademarks,
trade-names, service marks, patents, copyrights or other proprietary rights of
any other person, corporation or other entity; and no such proceedings have been
instituted, are pending or are threatened. Ceelox represents that it has granted
an exclusive, royalty-free, irrevocable, worldwide license to CIP, LLC with
respect to all of its intellectual property.
2.11 Litigation. Ceelox is
not subject to any judgment or order of any court or quasijudicial or
administrative agency of any jurisdiction, domestic or foreign, nor is there any
charge, complaint, lawsuit or governmental investigation pending against Ceelox.
Ceelox is not a plaintiff in any action, domestic or foreign, judicial or
administrative. There are no existing actions, suits, proceedings against or
investigations of Ceelox, and Ceelox knows of no basis for such actions, suits,
proceedings or investigations. There are no unsatisfied judgments, orders,
decrees or stipulations affecting Ceelox or to which Ceelox is a
party.
2.12 Legal Compliance. To
the best knowledge of Ceelox, after due investigation, no claim has been filed
against Ceelox alleging a violation of any applicable laws or regulations of
foreign, federal, state and local governments and all agencies thereof. Ceelox
holds all of the material permits, licenses, certificates or other
authorizations of foreign, federal, state or local governmental agencies
required for the conduct of its business as presently conducted.
2.13 Disclosure. The
representations and warranties and statements of fact made by Ceelox in this
Agreement are, as applicable, accurate, correct and complete and do not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements and information contained herein not
false or misleading.
21
SCHEDULE
4.16
Nicaragua,
Inc. engages services from the following providers: Transferonline (transfer
agent) and Xxxxxxxxx Xxxx & Company, P.C. (accounting
services).
APPENDIX
1
SHAREHOLDER
QUESTIONNAIRE
THIS
QUESTIONNAIRE MUST BE ANSWERED FULLY AND RETURNED ALONG WITH YOUR SIGNATURE PAGE
TO THE SHARE EXCHANGE AGREEMENT BY AND BETWEEN CEELOX, INC. (“CEELOX”), THE
CEELOX SHAREHOLDERS, NICARAGUA RISING, INC. (“NICARAGUA”) AND SUNFLOWER CAPITAL,
LLC.
THE
INFORMATION SUPPLIED IN THIS QUESTIONNAIRE WILL BE HELD IN STRICT
CONFIDENCE. NO INFORMATION WILL BE DISCLOSED EXCEPT TO THE EXTENT
THAT SUCH DISCLOSURE IS REQUIRED BY LAW OR REGULATION, OTHERWISE DEMANDED BY
PROPER LEGAL PROCESS OR IN LITIGATION INVOLVING THE COMPANY AND ITS CONTROLLING
PERSONS.
(1) The
undersigned represents and warrants to each of Ceelox and Nicaragua that he, she
or it comes within at least one category marked below, and that for any category
marked, he, she or it has truthfully set forth, where applicable, the factual
basis or reason the undersigned comes within that category. The
undersigned agrees to furnish any additional information which either Ceelox or
Nicaragua deems necessary in order to verify the answers set forth
below.
|
Category
A _____
|
The
undersigned is an individual (not a partnership, corporation, etc.) whose
individual net worth, or joint net worth with his or her spouse, presently
exceeds $1,000,000.
|
Explanation. In
calculating net worth you may include equity in personal property and real
estate, including your principal residence, cash, short-term investments, stock
and securities. Equity in personal property and real estate should be
based on the fair market value of such property less debt secured by such
property.
|
Category
B _____
|
The
undersigned is an individual (not a partnership, corporation, etc.) who
had an income in excess of $200,000 in each of the two most recent years,
or joint income with his or her spouse in excess of $300,000 in each of
those years (in each case including foreign income, tax exempt income and
full amount of capital gains and losses but excluding any income of other
family members and any unrealized capital appreciation) and has a
reasonable expectation of reaching the same income level in the current
year.
|
Category C _____
|
The
undersigned is a director or executive officer of
Nicaragua.
|
|
Category
D _____
|
The
undersigned is a bank, as defined in Section 3(a)(2) of the Securities Act
of 1933, as amended (the “Act”); a savings and
loan association or other institution as defined in Section 3(a)(5)(A) of
the Act, whether acting in its individual or fiduciary capacity; any
insurance company as
|
22
|
defined
in Section 2(13) of the Act; any investment company registered under the
Investment Company Act of 1940 or a business development company as
defined in Section 2(a)(48) of that Act; any Small Business Investment
Company licensed by the U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of 1958; any plan
established and maintained by a state, its political subdivisions, or any
agency or instrumentality of a state or its political subdivisions, for
the benefit of its employees, if such plan has total assets in excess of
$5,000,000; any employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974 if the investment decision is made
by a plan fiduciary, as defined in Section 3(21) of such act, which is
either a bank, savings and loan association, insurance company, or
registered investment advisor, or if the employee benefit plan has total
assets in excess of $5,000,000 or, if a self-directed plan, with
investment decisions made solely by persons that are accredited investors
(describe entity).
|
_________________________________________________________________
_________________________________________________________________
|
Category
E _____
|
The
undersigned is a private business development company as defined in
section 202(a) (22) of the Investment Advisors Act of 1940. (describe
entity)
|
_________________________________________________________________
_________________________________________________________________
|
Category
F _____
|
The
undersigned is either a corporation, partnership, Massachusetts business
trust, or non-profit organization within the meaning of Section 501(c)(3)
of the Internal Revenue Code, in each case not formed for the specific
purpose of acquiring the Securities and with total assets in excess of
$5,000,000. (describe entity)
|
_________________________________________________________________
_________________________________________________________________
|
Category
G _____
|
The
undersigned is a trust with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Securities, where the
purchase is directed by a “sophisticated investor” as defined in
Regulation 506(b)(2)(ii) under the
Act.
|
|
Category
H _____
|
The
undersigned is an entity (other than a trust) in which all of the equity
owners are “accredited investors” within one or more of the above
categories. If relying upon this Category alone, each equity
owner must complete a separate copy of this Shareholder
Questionnaire. (describe
entity)
|
_________________________________________________________________
_________________________________________________________________
23
The
undersigned agrees that the undersigned will notify Ceelox and Nicaragua at any
time on or prior to the Closing in the event that the representations and
warranties in this Shareholder Questionnaire shall cease to be true, accurate
and complete.
The
undersigned is informed of the significance to Ceelox and Nicaragua of the
foregoing representations and answers contained in this Questionnaire and such
answers have been provided under the assumption that Ceelox and Nicaragua will
rely on them.
Individual
|
|||
Date:
|
________________________
|
______________________________________
|
|
Name
of Individual
|
|||
(Please
type or print)
|
|||
______________________________________
|
|||
Signature
of Individual
|
Partnership,
Corporation or
|
||||
Other
Entity
|
||||
Date:
|
________________________
|
______________________________________
|
||
Print
or Type Entity Name
|
||||
By:
|
_____________________________
|
|||
Name:
|
_____________________________
|
|||
Print
or Type Name
|
||||
Title:
|
_____________________________
|
|||
______________________________________
|
||||
Signature
|
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