Exhibit 10.1
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
COMLINK COMMUNICATIONS COMPANY,
USAS ACQUISITION, INC.,
AND
USA SUPERIOR ENERGY, INC.,
JANUARY 16, 2007
TABLE OF CONTENTS
ARTICLE I DEFINITIONS....................................................................................1
ARTICLE II TRANSACTIONS; TERMS OF MERGER; MANNER OF CONVERTING SHARES.....................................5
2.1 Merger.........................................................................................5
2.2 Time and Place of Closing......................................................................5
2.3 Effective Time.................................................................................5
2.4 Charter........................................................................................5
2.5 Bylaws.........................................................................................5
2.6 Directors and Officers.........................................................................5
2.7 Conversion of Shares...........................................................................5
2.8 Exchange of Shares.............................................................................6
2.9 Rights of Former SUPERIOR Stockholders.........................................................6
2.10 Legending of Shares............................................................................7
2.11 Fractional Shares..............................................................................7
2.12 Lost, Stolen or Destroyed Certificates.........................................................7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF CMCI AND PURCHASER...........................................7
3.1 Organization; Standing and Power...............................................................7
3.2 Authorization; Enforceability..................................................................8
3.3 No Violation or Conflict.......................................................................8
3.4 Consents of Governmental Authorities and Others................................................8
3.5 Conduct of Business............................................................................8
3.6 Litigation.....................................................................................9
3.7 Brokers........................................................................................9
3.8 Compliance.....................................................................................9
3.9 Charter, Bylaws and Corporate Records.........................................................10
3.10 Subsidiaries and Investments..................................................................10
3.11 Capitalization................................................................................10
3.12 Rights, Warrants, Options.....................................................................10
3.13 Commission Filings and Financial Statements...................................................11
3.14 Absence of Undisclosed Liabilities............................................................11
3.15 Real Property.................................................................................11
3.16 List of Accounts and Proxies..................................................................11
3.17 Personnel.....................................................................................11
3.18 Employment Agreements and Employee Benefit Plans..............................................12
3.19 Tax Matters...................................................................................12
3.20 Material Agreements...........................................................................14
3.21 Guaranties....................................................................................15
3.22 Absence of Certain Business Practices.........................................................15
3.23 Disclosure....................................................................................15
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SUPERIOR....................................................15
4.1 Organization..................................................................................15
4.2 Authorization; Enforceability.................................................................16
4.3 No Violation or Conflict......................................................................16
4.4 Consents of Governmental Authorities and Others...............................................16
4.5 Brokers.......................................................................................16
4.6 Charter, Bylaws and Corporate Records.........................................................16
4.7 Subsidiaries and Investments..................................................................16
4.8 Capitalization................................................................................17
4.9 Rights, Warrants, Options.....................................................................17
ARTICLE V ADDITIONAL AGREEMENTS.........................................................................17
5.1 Survival of the Representations and Warranties................................................17
5.2 Investigation.................................................................................17
5.3 Indemnification...............................................................................18
5.4 Indemnity Procedure...........................................................................18
ARTICLE VI CLOSING; DELIVERIES; CONDITIONS PRECEDENT.....................................................19
6.1 Closing; Effective Date.......................................................................19
6.2 Deliveries....................................................................................19
6.3 Conditions Precedent to the Obligations of SUPERIOR...........................................21
6.4 Conditions Precedent to the Obligations of CMCI...............................................22
6.5 Best Efforts..................................................................................22
6.6 Termination...................................................................................22
ARTICLE VII COVENANTS.....................................................................................23
7.1 General Confidentiality.......................................................................23
7.2 Continuing Obligations........................................................................24
7.3 Satisfaction of Certain Outstanding Payables..................................................24
7.4 Tax Matters...................................................................................24
ARTICLE VIII MISCELLANEOUS.................................................................................25
8.1 Notices.......................................................................................25
8.2 Entire Agreement; Incorporation...............................................................25
8.3 Binding Effect................................................................................25
8.4 Assignment....................................................................................26
8.5 Waiver and Amendment..........................................................................26
8.6 No Third Party Beneficiary....................................................................26
8.7 Severability..................................................................................26
8.8 Expenses......................................................................................26
8.9 Headings......................................................................................26
8.10 Other Remedies; Injunctive Relief.............................................................27
8.11 Counterparts..................................................................................27
8.12 Remedies Exclusive............................................................................27
8.13 Jurisdiction and Venue........................................................................27
8.14 Participation of Parties......................................................................27
8.15 Further Assurances............................................................................28
8.16 Publicity.....................................................................................28
8.17 Restricted Share Position.................................................................... 28
8.18 Share Capital................................................................................ 28
8.19 Private Offering..............................................................................28
8.20 Use of Offering Proceeds......................................................................28
8.21 Investor Relations............................................................................29
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of January 16,
2007, by and among USA SUPERIOR ENERGY, INC., an Delaware Corporation ("USA
Superior Energy, Inc."); COMLINK COMMUNICATIONS COMPANY, a Nevada corporation
("CMCI"); CMCI and USAS ACQUISITION, INC., a Colorado corporation (the
"Purchaser").
W I T N E S S E T H:
PREAMBLE
The respective Boards of Directors of CMCI and Purchaser of SUPERIOR
are of the opinion that the transactions described herein are in the best
interests of the parties to this Agreement and their respective shareholders.
This Agreement provides for the acquisition of SUPERIOR by CMCI pursuant to the
merger of Purchaser with SUPERIOR. At the effective time of such merger, the
outstanding shares of the capital stock of SUPERIOR shall be converted into the
right to receive shares of the interest of CMCI. As a result, the shareholders
of SUPERIOR shall become shareholders of CMCI and SUPERIOR shall merge its
business and operations with a wholly owned subsidiary of CMCI (Purchaser). The
transactions described in this Agreement are subject to the satisfaction of
certain other conditions described in this Agreement. It is the intention of the
parties to this Agreement that the Merger for federal income tax purposes shall
qualify as a "reorganization" within the meaning of Section 368(a) of the Code.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
parties agree as follows:
ARTICLE I
DEFINITIONS
In addition to terms defined elsewhere in this Agreement, the following
terms when used in this Agreement shall have the meanings indicated below:
"AFFILIATE" shall mean with respect to a specified Person, any other
Person which, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with such Person, and
without limiting the generality of the foregoing, includes, with respect to a
Person (a) any other Person which beneficially owns or holds ten percent (10%)
or more of any Series of voting securities or other securities convertible into
voting securities of such Person or beneficially owns or holds ten percent (10%)
or more of any other equity interests in such Person, (b) any other Person with
respect to which such Person beneficially owns or holds ten percent (10%) or
more of any Series of voting securities or other securities convertible into
voting securities of such Person, or owns or holds ten percent (10%) or more of
the equity interests of the other Person, and (c) any director or senior officer
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of such Person. For purposes of this definition, the term "control" (including,
with correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities or
by contract or otherwise.
"AGREEMENT" shall mean this Agreement and Plan of Merger together with
all exhibits and schedules referred to herein, which exhibits and schedules are
incorporated herein and made a part hereof.
"CMCI" shall mean Comlink Communications Company, a Nevada corporation.
"CMCI SHARES" shall mean the shares, no par value per share, of CMCI,
as further described in Section 3.11.
"CERTIFICATES" shall have the meaning set forth in Section 2.8.
"CLOSING" shall have the meaning set forth in Section 2.2.
"CLOSING DATE" shall mean the date that the Closing takes place.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMMISSION" shall mean the United States Securities and Exchange
Commission.
"CONSIDERATION SHARES" shall have the meaning set forth in Section
2.7(c).
"EFFECTIVE TIME" shall have the meaning set forth in Section 2.3.
"EMPLOYEE BENEFIT PLANS" shall have the meaning set forth in Section
3.18.
"ENVIRONMENTAL LAWS" shall have the meaning set forth in Section 3.22.
"ERISA" shall have the meaning set forth in Section 3.18.
"FINANCIAL STATEMENTS OF CMCI" shall mean (i) the unaudited balance
sheet and the unaudited statements of income, cash flow and retained earnings of
CMCI for the three (3) month period ended September 30, 2006, and (ii) the
audited balance sheet and the audited statements of income, cash flow and
retained earnings of CMCI for the fiscal year ended December 31, 2005, including
in each such case any related notes, each prepared according to GAAP
consistently applied with prior periods, except as set forth on Schedule 3.13.
"GAAP" shall have the meaning set forth in Section 3.13.
"GUARANTY" shall mean, as to any Person, all liabilities or obligations
of such Person, with respect to any indebtedness or other obligations of any
other Person, which have been guaranteed, directly or indirectly, in any manner
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by such Person, through an agreement, contingent or otherwise, to purchase such
indebtedness or obligation, or to purchase or sell property or services,
primarily for the purpose of enabling the debtor to make payment of such
indebtedness or obligation or to guarantee the payment to the owner of such
indebtedness or obligation against loss, or to supply funds to or in any manner
invest in the debtor.
"INDEMNIFIED PARTY" shall have the meaning set forth in Section 5.4.
"INDEMNIFYING PARTY" shall have the meaning set forth in Section 5.4.
"INTELLECTUAL PROPERTY" shall mean the rights to any patent, trademark,
copyright, service xxxx, invention, software, software code, trade secret,
technology, product, composition, formula, method or process.
"INVESTMENTS" shall mean, with respect to any Person, all advances,
loans or extensions of credit to any other Person (except for extensions of
credit to customers in the ordinary course of business), all purchases or
commitments to purchase any stock, bonds, notes, debentures or other securities
of any other Person, and any other investment in any other Person, including
partnerships or joint ventures (whether by capital contribution or otherwise) or
other similar arrangement (whether written or oral) with any Person, including,
but not limited to, arrangements in which (i) the first Person shares profits
and losses of the other Person, (ii) any such other Person has the right to
obligate or bind the first Person to any third party, or (iii) the first Person
may be wholly or partially liable for the debts or obligations of such
partnership, joint venture or other entity.
"KNOWLEDGE" shall mean, in the case of any Person who is an individual,
knowledge that a reasonable individual under similar circumstances would have
after such investigation and inquiry as such reasonable individual would under
such similar circumstances make, and in the case of a Person other than an
individual, the knowledge that a senior officer or director of such Person, or
any other Person having responsibility for the particular subject matter at
issue of such Person, would have after such investigation and inquiry as such
senior officer, director or responsible Person would under such similar
circumstances make.
"LAW" AND "LAWS" shall have the meaning set forth in Section 3.19.
"LIABILITIES" shall have the meaning set forth in Section 3.14.
"LITIGATION" shall have the meaning set forth in Section 3.6.
"MATERIAL ADVERSE EFFECT" shall mean any event or condition of any
character which has had or could reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), results of operations,
assets, liabilities, properties, business or prospects of CMCI or SUPERIOR, as
applicable.
"MATERIAL CMCI AGREEMENTS" shall have the meaning set forth in Section
3.20.
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"MERGER" shall have the meaning set forth in Section 2.1.
"MERGER CONSIDERATION" shall have the meaning set forth in Section
2.7(c).
"OUTSTANDING CMCI SHARES" shall have the meaning set forth in Section
3.11.
"OUTSTANDING SUPERIOR SHARES" shall have the meaning set forth in
Section 4.8.
"PERIODIC REPORTS" shall have the meaning set forth in Section 3.13.
"PERSON" shall mean any natural person, corporation, unincorporated
organization, partnership, association, limited liability company, joint stock
company, joint venture, trust or government, or any agency or political
subdivision of any government or any other entity.
"PURCHASER" shall mean USAS Acquisition, Inc., a Nevada corporation
"PURCHASER DOCUMENTS" shall have the meaning set forth in Section 3.2.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SUBSIDIARY" of any Person shall mean any Person, whether or not
capitalized, in which such Person owns, directly or indirectly, an equity
interest of more than fifty percent (50%), or which may effectively be
controlled, directly or indirectly, by such Person.
"SUPERIOR" shall mean USA Superior Energy, Inc., a Delaware Corp.
"SURVIVING CORPORATION" shall mean Purchaser as the surviving
corporation resulting from the Merger with Purchaser
"TAX" AND "TAXES" shall have the meaning set forth in Section 3.19.
"TAX RETURNS" shall have the meaning set forth in Section 3.19.
"TRANSACTION" shall have the meaning set forth in Section 2.1.
The words "hereof", "herein" and "hereunder" and the words of similar
import shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. The terms defined in the singular shall have a
comparable meaning when used in the plural and vice versa.
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ARTICLE II
TRANSACTIONS; TERMS OF MERGER; MANNER OF CONVERTING SHARES
2.1 MERGER. Subject to the terms and conditions of this Agreement, at
the Effective Time, Purchaser shall merge with SUPERIOR in accordance with the
provisions of the Laws of the States of Colorado and Delaware and with the
effect provided for therein (the "Merger"). As a result of the Merger, the
separate corporate existence of Purchaser and SUPERIOR shall cease and SUPERIOR
shall be the Surviving Corporation resulting from the Merger and shall and
remain a wholly owned Subsidiary of CMCI and shall continue to be governed by
the laws of the State of Delaware,. The Merger shall be consummated pursuant to
the terms of this Agreement, which has been approved and adopted by the
respective Boards of Directors of Purchaser, SUPERIOR and CMCI and, by CMCI, as
the sole shareholder of Purchaser, and by the shareholders of USA Superior, Inc.
After merger SUPERIOR shall be the sole wholly owned subsidiary of CMCI.
2.2 TIME AND PLACE OF CLOSING. The closing of the transactions
contemplated hereby (the "Closing") will take place at 10:00 A.M. on the date
that the Effective Time occurs or at such other time as the parties, acting
through their authorized officers, may mutually agree. The Closing shall be held
over the telephone, or at the offices of Xxxxxxx X. Xxxxxxx, 0000 Xxxxxxx Xxxx,
Xxxxxx, XX 00000, or at such other location as may be mutually agreed upon by
the parties. Closing will occur through exchange of documents by Federal
Express, disbursement of cash, delivery of certificates and subsequent filing of
a Certificate of Merger in Delaware and Colorado, with Secretary of State.
2.3 MERGER EFFECTIVE TIME. The Merger contemplated by this Agreement
shall become effective on the date and at the time the Certificate of Merger
reflecting the Merger shall become effective with the Secretary of State of the
States of Colorado and Delaware (the "Effective Time"). The other transactions
contemplated herein shall be effective as soon as the consideration required
hereby has been delivered.
2.4 CHARTER. The Certificate of Incorporation of Purchaser in effect
immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation until duly amended or repealed.
2.5 BYLAWS. The Bylaws of Purchaser in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation until duly
amended or repealed.
2.6 DIRECTORS AND OFFICERS. The officers of SUPERIOR in office
immediately prior to the Effective Time, together with such additional Persons
as may thereafter be elected, shall serve as the officers and directors of the
Surviving Corporation from and after the Effective Time in accordance with the
Bylaws of the Surviving Corporation.
2.7 CONVERSION SHARES. Subject to the provisions of this Article II, at
the Effective Time, by virtue of the Merger and without any action on the part
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of CMCI, SUPERIOR or Purchaser or Shareholders of any of the foregoing, the
shares of the constituent entities shall be converted or exchanged as follows:
(a) Each share of capital stock of CMCI issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding from
and after the Effective Time, however 34,000,000 new shares of common stock of
CMCI shall be issued to effectuate the transactions contemplated herein, and
45,000,000 shares shall be surrendered, as provided.
(b) All of SUPERIOR shares issued and outstanding
immediately prior to the Effective Time shall be converted into shares of the
Surviving Corporation by virtue of the merger with USAS Acquisition, Inc.
(Purchaser).
(c) CMCI and Purchaser hereby agree that at the time of the
Merger of SUPERIOR and Purchaser, CMCI shall issue 34,000,000 shares of its
common stock to the shareholders of Superior stock as provided below in
consideration of the delivery of 100% of SUPERIOR shares to Purchaser.
(d) 100% of SUPERIOR's ownership shares issued and
outstanding immediately prior to the Effective Time shall be exchanged for the
right to receive 34,000,000 shares of common stock of CMCI in the aggregate,
(the "Exchange Ratio") (hereinafter such CMCI shares shall be referred to as the
"Consideration Shares" or the "Merger Consideration"). The Consideration Shares
shall, be issued and delivered at closing, ratably based upon the shareholders
proportionate ownership of SUPERIOR prior to the merger, to the shareholders of
SUPERIOR in accordance with the terms hereof, and will be fully paid, validly
issued and non-assessable, but shall NOT be registered securities under the
Securities Act of 1933, as amended, (the "Securities Act") pursuant to a valid
exemption thereunder.
(e) CMCI shall own, after completion of the transactions
contemplated herein, and subject to SUPERIOR causing such corporation to be
created,100% of the issued and outstanding shares of surviving corporation.
(USAS Acquisition, Inc. or Purchaser).
2.8 EXCHANGE OF SHARES. At the Closing, the shareholders of SUPERIOR
shall surrender each certificate or certificates which represented SUPERIOR's
shares immediately prior to the Effective Time (the "Certificates") and shall
promptly upon surrender thereof receive in exchange therefore the number of
whole Consideration Shares issuable in respect of all shares of SUPERIOR's
shares held by such SUPERIOR shareholder (rounded to the nearest share) as set
forth in 2.7 (d) above. CMCI shall not be obligated to deliver the consideration
to which a SUPERIOR shareholder is entitled as a result of the Merger until such
Person surrenders its Certificate or Certificates for exchange as provided in
this Section 2.8. Any other provision of this Agreement notwithstanding, neither
CMCI nor the Surviving Corporation shall be liable to a shareholder of SUPERIOR
for any amounts paid or property delivered in good faith to a public official
pursuant to any applicable abandoned property, escheat or similar law.
2.9 RIGHTS OF FORMER SUPERIOR SHARESHOLDERS. At the Effective Time, the
share transfer books of SUPERIOR shall be closed as to holders of SUPERIOR
Shares immediately prior to the Effective Time and no transfer of SUPERIOR
Shares by any such holder shall thereafter be made or recognized. Until
surrendered for exchange in accordance with the provisions of Section 2.8, each
Certificate theretofore representing shares of SUPERIOR Shares shall from and
6
after the Effective Time represent for all purposes only the right to receive
the consideration provided in Section 2.7 (d) in exchange therefore. Whenever a
dividend or other distribution is declared by CMCI on the CMCI stock, the record
date for which is at or after the Effective Time, the declaration shall include
dividends or other distributions on all shares of CMCI stock issuable pursuant
to this Agreement, but no dividend or other distribution payable to the holders
of record of CMCI shares as of any time subsequent to the Effective Time shall
be delivered to the holder of any Certificate until such holder surrenders such
Certificate for exchange as provided in Section 2.8. However, upon surrender of
such Certificate, both the CMCI stock certificate (together with all such
undelivered dividends or other distributions without interest) and any
undelivered dividends payable in respect thereof (without interest) shall be
delivered and paid with respect to each share represented by such Certificate.
2.10 LEGENDING OF SECURITIES. Each certificate for CMCI shares to be
issued to the SUPERIOR shareholders as part of the Merger Consideration shall
bear substantially the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, OR ANY STATE SECURITIES LAWS. THESE SHARES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED. OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR LAWS, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT, IN THE CIRCUMSTANCES,
REQUIRED UNDER SAID ACT".
2.11 FRACTIONAL SHARES. Notwithstanding any other provision of this
Agreement, if the Sellers would otherwise have been entitled to receive a
fraction of a share of CMCI shares (after taking into account all certificates
delivered by the SUPERIOR shareholders), the number of shares issuable to the
SUPERIOR shareholder shall be rounded up to the next whole number.
2.12 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event that any
Certificates shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by such SUPERIOR shareholder (setting forth the shares of
Superior represented by such lost, stolen or destroyed Certificates), CMCI shall
issue to such SUPERIOR shareholder the Consideration Shares to which such
SUPERIOR shareholder is entitled.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CMCI, AND PURCHASER
In order to induce SUPERIOR to enter into this Agreement and to
consummate the transactions contemplated hereby, CMCI, Purchaser (as defined in
Article I above), jointly and severally, make the representations and warranties
set forth below to SUPERIOR.
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3.1 ORGANIZATION; STANDING AND POWER. CMCI is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada. Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado. CMCI and Purchaser have all
requisite right, power and authority to execute, deliver and perform this
Agreement and to consummate the transactions contemplated hereby. CMCI and
Purchaser have all corporate right, power and authority to own or lease and
operate their assets, and to conduct their business as presently conducted. CMCI
and Purchaser are duly qualified to transact business as a foreign corporation
in all jurisdictions where the ownership or leasing of their properties or the
conduct of its business requires such qualification.
3.2 AUTHORIZATION; ENFORCEABILITY. The execution, delivery and
performance of this Agreement by CMCI and Purchaser and all other agreements to
be executed, delivered and performed by CMCI and Purchaser pursuant to this
Agreement (collectively, the "Purchaser Documents") and the consummation by
CMCI, Purchaser of the transactions contemplated hereby and thereby have been
duly authorized by all requisite corporate or individual action on the part of
CMCI and Purchaser as applicable. This Agreement and the Purchaser Documents
have been duly executed and delivered by CMCI and Purchaser and constitute the
legal, valid and binding obligation of CMCI and Purchaser enforceable in
accordance with their respective terms, except to the extent that their
enforcement is limited by bankruptcy, insolvency, reorganization or other laws
relating to or affecting the enforcement of creditors' rights generally and by
general principles of equity.
3.3 NO VIOLATION OR CONFLICT. The execution, delivery and performance
of this Agreement and the Purchaser Documents by CMCI and Purchaser, and the
consummation by CMCI, and Purchaser of the transactions contemplated hereby and
thereby: (a) do not violate or conflict with any provision of law or regulation
(whether federal, state or local), or any writ, order or decree of any court or
governmental or regulatory authority, or any provision of CMCI or Purchaser's
Articles or Certificate of Incorporation or Bylaws; and (b) do not and will not,
with or without the passage of time or the giving of notice, result in the
breach of, or constitute a default (or an event that with notice or lapse of
time or both would become a default), cause the acceleration of performance,
give to others any right of termination, amendment, acceleration or cancellation
of or require any consent under, or result in the creation of any lien, charge
or encumbrance upon any property or assets of CMCI or Purchaser pursuant to any
instrument or agreement to which CMCI or Purchaser is a party or by which CMCI
or Purchaser or their respective properties may be bound or affected.
3.4 CONSENTS OF GOVERNMENTAL AUTHORITIES AND OTHERS. No consent,
approval, order or authorization of, or registration, declaration, qualification
or filing with any federal, state or local governmental or regulatory authority,
or any other Person, is required to be made by CMCI, and Purchaser in connection
with the execution, delivery or performance of this Agreement by CMCI, and
Purchaser or the consummation by CMCI, and of the transactions contemplated
hereby.
3.5 CONDUCT OF BUSINESS. Except as disclosed on SCHEDULE 3.5 hereto,
since December 31, 2005 CMCI has conducted no active businesses in the ordinary
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and usual course consistent with past practices and there has not occurred any
adverse change in the condition (financial or otherwise), results of operations,
properties, assets, liabilities, business or prospects of CMCI, and no such
change is threatened. Without limiting the generality of the foregoing, since
December 31, 2005 except as provided in this Agreement, CMCI has not: (a)
amended its Articles of Incorporation or Bylaws, except to increase its
authorized share capital to 150,000,000 common shares (b) issued, sold or
authorized for issuance or sale, shares of any Series of its securities
(including, but not limited to, by way of stock split or dividend) or any
subscriptions, options, warrants, rights or convertible securities or entered
into any agreements or commitments of any character obligating it to issue or
sell any such securities; (c) redeemed, purchased or otherwise acquired,
directly or indirectly, any shares of its capital stock or any option, warrant
or other right to purchase or acquire any such capital stock; (d) suffered any
damage, destruction or loss, whether or not covered by insurance, which has had
or could reasonably be expected to have a Material Adverse Effect on any of its
properties, assets, business or prospects; (e) granted or made any mortgage or
pledge or subjected itself or any of its properties or assets to any lien,
charge or encumbrance of any kind; (f) made or committed to make any capital
expenditures in excess of $10,000 (except for the costs required to effectuate
this Agreement); (g) become subject to any Guaranty; (h) granted any increase in
the compensation payable or to become payable to directors, officers or
employees (including, without limitation, any such increase pursuant to any
severance package, bonus, pension, profit-sharing or other plan or commitment);
(i) entered into any agreement which would be a Material Agreement, or amended
or terminated any existing Material Agreement; (j) been named as a party in any
Litigation, or become the focus of any investigation by any government or
regulatory agency or authority; (k) declared or paid any dividend or other
distribution with respect to its capital stock; or (l) experienced any other
event or condition of any character which has had or to CMCI's could reasonably
be expected to have a Material Adverse Effect on CMCI.
3.6 LITIGATION. There are no actions, suits, investigations, claims or
proceedings ("Litigation") pending or, to the Knowledge of CMCI, and Purchaser
threatened before any court or by or before any governmental or regulatory
authority or arbitrator, (a) affecting CMCI or Purchaser (as plaintiff or
defendant) or (b) against CMCI, and Purchaser relating to CMCI's Shares or the
transactions contemplated by this Agreement and there exist no facts or
circumstances to the Knowledge of CMCI, and Purchaser creating any reasonable
basis for the institution of any Litigation against CMCI, and Purchaser.
3.7 BROKERS. Neither CMCI or SUPERIOR, and Purchaser has employed any
broker or finder, and none of them has incurred or will incur, directly or
indirectly, any broker's, finder's, investment banking or similar fees,
commissions or expenses in connection with the transactions contemplated by this
Agreement or the Purchaser Documents.
3.8 COMPLIANCE. CMCI and Purchaser are in compliance with all federal,
state, local and foreign laws, ordinances, regulations, judgments, rulings,
orders and other requirements applicable to CMCI and Purchaser and their
respective assets and properties, including, without limitation, those relating
to (a) the registration and sale of the CMCI Shares, (b) the establishment of a
public trading market for the CMCI Shares, and (c) the public trading of the
CMCI Shares. CMCI and Purchaser are not subject to any judicial, governmental or
administrative inquiry, investigation, order, judgment or decree.
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3.9 CHARTER, BYLAWS AND CORPORATE RECORDS. A true, correct and complete
copy of (a) the Articles of Incorporation of CMCI and Purchaser, as amended and
in effect on the date hereof, (b) the Bylaws of CMCI and Purchaser, as amended
and in effect on the date hereof, and (c) the minute books of CMCI and Purchaser
(containing all corporate proceedings from the date of incorporation) have been
furnished to SUPERIOR. Such minute books contain accurate records of all
meetings and other corporate actions of the board of directors, committees of
the board of directors, incorporators and shareholders of CMCI and Purchaser
from the date of its incorporation to the date hereof which were memorialized in
writing. No actions have been taken since the date of CMCI or Purchaser's
incorporation that are not memorialized in writing.
3.10 SUBSIDIARIES AND INVESTMENTS. CMCI may, at closing, have only one
Subsidiaries or Investments. CMCI owns one hundred percent (100%) of the issued
and outstanding capital stock of a Subsidiary, USAS Acquisition, Inc.
3.11 CAPITALIZATION. The authorized capital stock of CMCI consists of
150,000,000 shares of stock, of which 63,360,000 shares are issued and
outstanding (the "Outstanding CMCI Shares") are authorized, issued and
outstanding which are convertible to units as set forth in the Designation of
Preferences as amended. All shares of Outstanding CMCI common stock have been
duly authorized, are validly issued and outstanding, and are fully paid and
non-assessable. No securities issued by CMCI from the date of its incorporation
to the date hereof were issued in violation of any statutory, contractual or
common law preemptive rights. There are no dividends which have accrued or been
declared but are unpaid on the capital stock of CMCI. All taxes required to be
paid in connection with the issuance and any transfers of CMCI's capital stock
have been paid. All permits or authorizations required to be obtained from or
registrations required to be effected with any Person in connection with any and
all common issuances of securities of CMCI from the date of CMCI's incorporation
to the date hereof have been obtained or effected and all securities of CMCI
have been issued and are held in accordance with the provisions of all
applicable securities or other laws. The Consideration Shares shall, upon
issuance and delivery to the SUPERIOR shareholders in accordance with the terms
hereof, be fully paid, validly issued and non-assessable, but shall not be
registered securities under the Securities Act of 1933. There are no
registration rights outstanding which relate to the Outstanding CMCI shares and,
to the Knowledge of CMCI, there are no voting trusts, proxies or other
agreements or understandings with respect to any equity security of any Series
of CMCI or with respect to any equity security, partnership interest or similar
ownership interest of any Series of any of its Subsidiaries, except as provided
herein or in the Amendment to the Designation of Preferences Rights and
Privileges of Series A Preferred Stock.
3.12 RIGHTS, WARRANTS, OPTIONS. There are no outstanding (a) securities
or instruments convertible into or exercisable for any of the capital stock or
other equity interests of CMCI or Purchaser (b) options, warrants,
subscriptions, puts, calls, or other rights to acquire capital stock or other
equity interests of CMCI or Purchaser; or (c) commitments, agreements or
understandings of any kind, including employee benefit arrangements, relating to
the issuance or repurchase by CMCI or Purchaser of any capital stock or other
equity interests of CMCI or Purchaser, or any instruments convertible or
exercisable for any such securities or any options, warrants or rights to
acquire such securities.
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3.13 COMMISSION FILINGS AND FINANCIAL STATEMENTS. All of the Periodic
Reports of CMCI required to satisfy the information requirements of Section 13
of the Exchange Act have been filed with the Commission, and have been true,
accurate and complete in all material respects and have been filed in compliance
with the requirements of the Exchange Act. The Financial Statements of CMCI: (a)
have been prepared in accordance with the books of account and records of CMCI;
(b) fairly present, and are true, correct and complete statements in all
material respects of CMCI's financial condition and the results of its
operations at the dates and for the periods specified in those statements; and
(c) have been prepared in accordance with United States generally accepted
accounting principles ("GAAP") consistently applied with prior periods.
3.14 ABSENCE OF UNDISCLOSED LIABILITIES. Other than as disclosed by the
Periodic Reports, the Financial Statements of CMCI or as disclosed on SCHEDULE
3.20, CMCI and Purchaser do not have any direct or indirect indebtedness,
liability, claim, loss, damage, deficiency, obligation or responsibility, known
or unknown, fixed or unfixed, xxxxxx or inchoate, liquidated or unliquidated,
secured or unsecured, accrued, absolute, contingent or otherwise, including,
without limitation, liabilities on account of taxes, other governmental charges
or Litigation, whether or not of a kind required by GAAP to be set forth on a
financial statement ("Liabilities CMCI and Purchaser do not have any Liabilities
other than Liabilities fully and adequately reflected in the Periodic Reports or
the Financial Statements of CMCI or as listed on Schedule 3.20 which shall all
be paid at closing. CMCI and Purchaser have no Knowledge of any circumstances,
conditions, events or arrangements which may hereafter give rise to any
Liabilities of CMCI or Purchaser, except as set forth on SCHEDULE 3.20.
3.15 REAL PROPERTY AND MINERAL LEASES. CMCI owns no fee simple interest
in real property but owns assignments of mineral leases shown on Schedule 3.15.
3.16 LIST OF ACCOUNTS. Set forth on SCHEDULE 3.16 is: (a) the name and
address of each bank or other institution in which CMCI or Purchaser maintains
an account (cash, securities or other) or safe deposit box; (b) the name and
phone number of CMCI or Purchaser's contact person at such bank or institution;
(c) the account number of the relevant account and a description of the type of
account; (d) the name of each person authorized by CMCI or Purchaser to effect
transactions therewith or to have access to any safe deposit box or vault;
3.17 PERSONNEL. There is no incurred or accrued compensation of any
officers, directors, consultants and employees of CMCI or Purchaser (including
compensation paid or payable by CMCI under any employee benefit or option
plans). THERE ARE NO employee policies, employee manuals or other written
statements of rules or policies as to working conditions, vacation and sick
leave.
3.18 EMPLOYMENT AGREEMENTS AND EMPLOYEE BENEFIT PLANS. CMCI has not had
any and does not have any defined contribution plan and it is not (and was
never) part of a controlled group contributing to any defined contribution plan
and is not and was never a party to any collective bargaining agreement or other
employment contracts. CMCI has not, nor does it now contribute to any pension,
profit-sharing, option, other incentive plan, or any other type of Employee
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Benefit Plan (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), or any health, dental, vision, long
term disability, short term disability, life insurance or other welfare benefits
plan, or have any obligation to or customary arrangement with employees for
bonuses, incentive compensation, vacations, severance pay, insurance, or other
benefits, and it is not now (and was never) a part of a controlled group with
regard to any of the foregoing.
There are no complaints, charges, claims, allegations,
grievances, or litigations pending or threatened which reflect or pertain to:
(i) any federal, state or local labor, employment, anti-discrimination, workers
compensation, disability or unemployment law, regulation or ordinance; (ii) any
claim for wrongful discharge, harassment, discrimination, breach of employment
contract or employment-related tort; or (iii) any employment agreement,
restrictive covenant, non-competition agreement or employee confidentiality
agreement, which, in any such case, if adversely determined, could reasonably be
expected to have a Material Adverse Effect on CMCI.
3.19 TAXES.
(a) CMCI has properly prepared and timely filed all Tax Returns (as
defined below) relating to any and all Taxes (as defined below) concerning or
attributable to it or its operations for any period ending on or before the
Closing Date and such Tax Returns are true, correct and complete in all material
respects and have been completed in accordance with applicable Laws (as defined
below).
(b) All Taxes (whether or not shown on any Tax Return) payable by CMCI
have been fully and timely paid. The cash reserves or accruals for Taxes
provided in the books and records of CMCI with respect to any period for which
Tax Returns have not yet been filed or for which Taxes are not yet due and owing
have been established in accordance with GAAP and are, or prior to the Closing
Date, will be, sufficient for all unpaid Taxes of CMCI through and including the
Closing Date (including, without limitation, with respect to any Taxes resulting
from the transactions contemplated by this Agreement).
(c) Neither CMCI nor any Person on behalf of or with respect to CMCI
has executed or filed any agreements or waivers extending any statute of
limitations on or extending the period for the assessment or collection of any
Tax. No power of attorney on behalf of CMCI with respect to any Tax matter is
currently in force.
(d) CMCI is not a party to any Tax-sharing agreement or similar
arrangement with any other party (whether or not written), and CMCI has not
assumed any Tax obligations of, or with respect to any transaction relating to,
any other Person or agreed to indemnify any other Person with respect to any
Tax.
(e) No Tax Return concerning or relating to CMCI or its operations has
ever been audited by a government or taxing authority, nor is any such audit in
process or pending, and CMCI has not been notified of any request for such an
audit or other examination. No claim has been made by a taxing authority in a
jurisdiction where Tax Returns concerning or relating to CMCI or its operations
12
have not been filed that it is or may be subject to taxation by that
jurisdiction.
(f) CMCI has never been included in any consolidated, combined, or
unitary Tax Return.
(g) CMCI has complied in all material respects with all applicable Laws
relating to the payment and withholding of Taxes and has duly and timely
withheld from employee salaries, wages and other compensation and has paid over
to the appropriate taxing authorities all amounts required to be so withheld and
paid over for all periods under all applicable laws.
(h) Neither CMCI nor any other Person on behalf of and with respect to
CMCI has (i) agreed to or is required to make any adjustments pursuant to
Section 481(a) of the Internal Revenue Code of 1986 ("Code") or any similar
provision of state, local or foreign law by reason of a change in accounting
method initiated by CMCI and Purchaser have no Knowledge that the Internal
Revenue Service ("IRS") has proposed any such adjustment or change in accounting
method, or has any application pending with any taxing authority requesting
permission for any changes in accounting methods that relate to the business or
operations of CMCI, (ii) executed or entered into a closing agreement pursuant
to Section 7121 of the Code or any predecessor provision thereof or any similar
provision of state, local or foreign law with respect to CMCI or (iii) requested
any extension of time within which to file any Tax Return concerning or relating
to CMCI or its operations, which Tax Return has since not been filed.
(i) No property owned by CMCI is (i) property required to be treated as
being owned by another Person pursuant to the provisions of Section 168(f)(8) of
the Internal Revenue Code of 1954, as amended and in effect immediately prior to
the enactment of the Tax Reform Act of 1986, (ii) constitutes "tax-exempt use
property" within the meaning of Section 168(h)(1) of the Code or (iii) is
"tax-exempt bond financed property" within the meaning of Section 168(g) of the
Code.
(j) CMCI is not subject to any private letter ruling of the IRS or
comparable rulings of other taxing authorities.
(k) CMCI does not own any interest in any entity that is treated as a
partnership for U.S. federal income Tax purposes or would be treated as a
pass-through or disregarded entity for any Tax purpose.
(l) CMCI has not constituted either a "distributing corporation" or a
"controlled corporation" within the meaning of Section 355(a)(1)(A) of the Code
in a distribution qualifying for tax-free treatment under Section 355 of the
Code (i) in the two years prior to the date of this Agreement or (ii) in a
distribution that could otherwise constitute part of a "plan" or "series of
transactions" (within the meaning of Section 355(e) of the Code) in conjunction
with this Agreement.
(m) CMCI has no elections in effect for U.S. federal income Tax
purposes under Sections 108, 168, 441, 472, 1017, 1033 or 4977 of the Code.
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The term "LAW" or "LAWS" as used in this Agreement shall mean
any federal, state, local or foreign statue, law, ordinance, regulation, rule,
code, order or other requirement or rule of law.
The term "TAX" or "TAXES" as used in this Agreement shall mean
(i) all income, excise, gross receipts, ad valorem, sales, use, employment,
franchise, profits, gains, property, transfer, payroll, withholding, severance,
occupation, social security, unemployment compensation, alternative minimum,
value added, intangibles or other taxes, fees, stamp taxes, duties, charges,
levies or assessments of any kind whatsoever (whether payable directly or by
withholding), together with any interest and any penalties, fines, additions to
tax or additional amounts imposed by any Governmental Authority with respect
thereto, (ii) any liability for the payment of any amounts of the type described
in (i) as a result of being a member of a consolidated, combined, unitary or
aggregate group for any Taxable period, and (3) any liability for the payment of
any amounts of the type described in (i) or (ii) as a result of being a
transferee or successor to any person or as a result of any express or implied
obligation to indemnify any other Person.
The term "TAX RETURNS" as used in this Agreement shall mean
returns, declarations, reports, claims for refund, information returns or other
documents (including any related or supporting schedules, statements or
information) filed or required to be filed in connection with the determination,
assessment or collection of any Taxes of any party or the administration of any
laws, regulations or administrative requirements relating to any Taxes.
3.20 MATERIAL AGREEMENTS. SCHEDULE 3.20 sets forth a list of all
material written and oral contracts or agreements relating to CMCI or Purchaser,
including without limitation any: (i) contract resulting in a commitment or
potential commitment for expenditure or other obligation or potential
obligation, or which provides for the receipt or potential receipt, involving in
excess of Ten Thousand Dollars ($10,000.00) in any instance, or series of
related contracts that in the aggregate give rise to rights or obligations
exceeding such amount; (ii) indenture, mortgage, promissory note, loan
agreement, guarantee or other agreement or commitment for the borrowing or
lending of money or encumbrance of assets involving more than Ten Thousand
Dollars ($10,000.00) in each instance; (iii) agreement which restricts CMCI or
Purchaser from engaging in any line of business or from competing with any other
Person; or (iv) any other contract, agreement, instrument, arrangement or
commitment that is material to the condition (financial or otherwise), results
of operation, assets, properties, liabilities, business or prospects of CMCI or
Purchaser (collectively, and together with the CMCI Leases, employment
agreements, Employee Benefit Plans and all other agreements required to be
disclosed on any Schedule to this Agreement, the "Material CMCI Agreements").
Neither CMCI nor Purchaser has received notice of any pending or threatened
Litigation relating to any of the Material CMCI Agreements.
3.21 GUARANTIES. CMCI and Purchaser are not a party to any Guaranty,
and no Person is a party to any Guaranty for the benefit of CMCI or Purchaser.
3.22 ABSENCE OF CERTAIN BUSINESS PRACTICES. None of Purchaser, nor
CMCI, nor any Affiliates thereof nor, to the Knowledge of each, any other Person
acting on behalf of CMCI, has with respect to the business or activities of
14
CMCI: (a) received, directly or indirectly, any rebates, payments, commissions,
promotional allowances or any other economic benefits, regardless of their
nature or type, from any customer, supplier, trading company, shipping company,
governmental employee or other Person with whom CMCI has done business directly
or indirectly; or (b) directly or indirectly, given or agreed to give any gift
or similar benefit to any customer, supplier, trading company, shipping company,
governmental employee or other Person who is or may be in a position to help or
hinder the business of CMCI (or assist CMCI in connection with any actual or
proposed transaction) which (i) may subject CMCI to any material damage or any
penalty in any Litigation, (ii) if not given in the past, may have had a
Material Adverse Effect on the assets, business or operations of CMCI as
reflected in the Periodic Reports or Financial Statements of CMCI or (iii) if
not continued in the future, may materially adversely affect the assets,
business or operations of CMCI or subject CMCI to suit or penalty in any private
or governmental litigation or proceeding.
3.23 DISCLOSURE. No representation or warranty of CMCI and Purchaser
contained in this Agreement, and no statement, report, or certificate furnished
by or on behalf of CMCI, Purchaser to SUPERIOR or its agents pursuant hereto or
in connection with the transactions contemplated hereby, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein not misleading or omits
or will omit to state a material fact necessary in order to provide SUPERIOR
with full and proper information as to the business, financial condition,
assets, liabilities, results of operation or prospects of CMCI or Purchaser and
the value of their properties or the ownership of CMCI or Purchaser.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SUPERIOR
In order to induce CMCI and Purchaser to enter into this Agreement and
to consummate the transactions contemplated hereby, SUPERIOR makes the
representations and warranties set forth below to CMCI and Purchaser.
4.1 ORGANIZATION. SUPERIOR is Corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. SUPERIOR
is duly qualified to transact business as a foreign corporation in all
jurisdictions where the ownership or leasing of its properties or the conduct of
its business requires such qualification, except where the failure to so qualify
would not have a Material Adverse Effect on SUPERIOR. SUPERIOR has the requisite
power and authority to (a) own or lease and operate its properties and (b)
conduct its business as presently conducted.
4.2 AUTHORIZATION; ENFORCEABILITY. SUPERIOR has the capacity to
execute, deliver and perform this Agreement. This Agreement and all other
documents executed and delivered by SUPERIOR pursuant to this Agreement have
been duly executed and delivered and constitute the legal, valid and binding
obligations of SUPERIOR, assuming the due authorization, execution and delivery
of this Agreement by CMCI, and Purchaser enforceable in accordance with their
respective terms, except to the extent that their enforcement is limited by
15
bankruptcy, insolvency, reorganization or other laws relating to or affecting
the enforcement of creditors' rights generally and by general principals of
equity.
4.3 NO VIOLATION OR CONFLICT. The execution, delivery and performance
of this Agreement and the other documents contemplated hereby by SUPERIOR, and
the consummation by SUPERIOR of the transactions contemplated hereby: (a) do not
violate or conflict with any provision of law or regulation (whether federal,
state or local), or any writ, order or decree of any court or governmental or
regulatory authority, or any provision of SUPERIOR's Certificate of Organization
or Bylaws; and (b) do not, with or without the passage of time or the giving of
notice, result in the breach of, or constitute a default, cause the acceleration
of performance or require any consent under, or result in the creation of any
lien, charge or encumbrance upon any property or assets of SUPERIOR pursuant to
any instrument or agreement to which SUPERIOR is a party or by which SUPERIOR or
its properties may be bound or affected.
4.4 CONSENTS OF GOVERNMENTAL AUTHORITIES AND OTHERS. No consent,
approval or authorization of, or registration, qualification or filing with any
federal, state or local governmental or regulatory authority, or any other
Person, is required to be made by SUPERIOR in connection with the execution,
delivery or performance of this Agreement by SUPERIOR or the consummation by
them of the transactions contemplated hereby, excluding the execution, delivery
and performance of this Agreement by the SUPERIOR.
4.5 BROKERS. SUPERIOR has not employed any broker or finder, and has
not incurred and will not incur any broker's, finder's, investment banking or
similar fees, commissions or expenses in connection with the transactions
contemplated by this Agreement.
4.6 CHARTER RECORDS. A true, correct and complete copy of (a) the
Articles of Incorporation of SUPERIOR, as amended and in effect on the date
hereof, and (b) the Bylaws of SUPERIOR, as amended and in effect on the date
hereof, have been furnished.
4.7 SUBSIDIARIES AND INVESTMENTS. SUPERIOR has no Subsidiaries or
Investments, other than in its oil properties.
4.8 CAPITALIZATION. SUPERIOR will have issued and outstanding 1,000
shares (the "Outstanding SUPERIOR Shares"). The Outstanding SUPERIOR Shares
shall constitute one hundred percent (100%) of the issued and outstanding
capital of SUPERIOR. The Outstanding SUPERIOR Shares are owned by its
shareholders will be in the amounts set forth on SCHEDULE A. All of the
Outstanding SUPERIOR Shares will have been duly authorized, are validly issued
and outstanding, and are fully paid and non-assessable. No securities issued by
SUPERIOR from the date of its incorporation to the date hereof were issued in
violation of any statutory or common law preemptive rights. All taxes required
to be paid in connection with the issuance and any transfers of SUPERIOR's
capital have been paid. All permits or authorizations required to be obtained
from or registrations required to be effected with any Person in connection with
any and all issuances of securities of SUPERIOR from the date of its
incorporation to the date hereof have been obtained or effected and all
securities of SUPERIOR have been issued and are held in accordance with the
provisions of all applicable securities or other laws.
16
4.9 RIGHTS, WARRANTS, OPTIONS. There are no outstanding (a) securities
or instruments convertible into or exercisable for any of the capital stock or
other equity interests of SUPERIOR; (b) options, warrants, subscriptions or
other rights to acquire capital stock or other equity interests of SUPERIOR; or
(c) Commitments, agreements or understandings of any kind, including employee
benefit arrangements, relating to the issuance or repurchase by SUPERIOR of any
capital stock or other equity interests of SUPERIOR, or any instruments
convertible or exercisable for any such securities or any options, warrants or
rights to acquire such securities.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 SURVIVAL OF THE REPRESENTATIONS AND WARRANTIES. The representations
and warranties contained in Sections 3.1, 3.2, 3.12, 3.13 and 3.14 and the
covenants in Section 7.1 and 7.3 shall survive the Closing and remain in effect
indefinitely. The representations and warranties contained in Section 3.23
(relating to environmental matters) shall survive the Closing until the
expiration of three (3) years from the Closing Date. The representations and
warranties contained in Section 3.19 (relating to taxes) shall survive the
Closing until the later of the expiration of twenty four months from the Closing
Date or the expiration of the last day of the statute of limitations applicable
to any action against CMCI based upon the non-payment of taxes, or other
violation of the Code, which occurred prior to the Closing Date. Except as set
forth above, the representations and warranties and covenants of CMCI and
Purchaser, contained in this Agreement shall survive the Closing until the
expiration of twenty-four months from the Closing Date. No claim for indemnity
with respect to breaches of representations and warranties may be brought by any
party hereto, other than a claim for fraud or intentional misrepresentation,
after expiration of the applicable survival period therefore as set forth in
this Section 5.1
5.2 INVESTIGATION. The representations, warranties, covenants and
agreements set forth in this Agreement shall not be affected or diminished in
any way by any investigation (or failure to investigate) at any time by or on
behalf of the party for whose benefit such representations, warranties,
covenants and agreements were made. All statements contained herein or in any
schedule, certificate, exhibit, list or other document required to be delivered
pursuant hereto, shall be deemed to be representations and warranties for
purposes of this Agreement; provided, that any knowledge or materiality
qualifications contained herein shall be applicable to such other documents.
5.3 INDEMNIFICATION. CMCI agrees to indemnify and hold harmless
SUPERIOR, and each of SUPERIOR's directors, officers and employees, from and
against any losses, damages, costs or expenses (including reasonable legal fees
and expenses) which are caused by or arise out of (i) any breach or default in
the performance by any of CMCI and Purchaser of any covenant or agreement made
by any of them in this Agreement; (ii) any breach of any Representation or
Warranty made by any of CMCI and Purchaser in this Agreement. SUPERIOR agrees to
indemnify and hold harmless CMCI and each of CMCI's directors and officers on
the same basis.
5.4 INDEMNITY PROCEDURE. A party or parties hereto agreeing to be
17
responsible for or to indemnify against any matter pursuant to this Agreement is
referred to herein as the "INDEMNIFYING PARTY" and the other party or parties
claiming indemnity is referred to as the "INDEMNIFIED PARTY".
(a) An Indemnified Party under this Agreement shall, with respect to
claims asserted against such party by any third party, give written notice to
the Indemnifying Party of any liability which might give rise to a claim for
indemnity under this Agreement within sixty (60) business days of the receipt of
any written claim from any such third party, but not later than twenty (20) days
prior to the date any answer or responsive pleading is due, and with respect to
other matters for which the Indemnified Party may seek indemnification, give
prompt written notice to the Indemnifying Party of any liability which might
give rise to a claim for indemnity; provided, however, that any failure to give
such notice will not waive any rights of the Indemnified Party except to the
extent the rights of the Indemnifying Party are materially prejudiced.
(b) The Indemnifying Party shall have the right, at its election, to
take over the defense or settlement of such claim by giving written notice to
the Indemnified Party at least fifteen (15) days prior to the time when an
answer or other responsive pleading or notice with respect thereto is required.
If the Indemnifying Party makes such election, it may conduct the defense of
such claim through counsel of its choosing (subject to the Indemnified Party's
approval of such counsel, which approval shall not be unreasonably withheld),
shall be solely responsible for the expenses of such defense and shall be bound
by the results of its defense or settlement of the claim. The Indemnifying Party
shall not settle any such claim without prior notice to and consultation with
the Indemnified Party, and no such settlement involving any equitable relief or
which might have an adverse effect on the Indemnified Party may be agreed to
without the written consent of the Indemnified Party (which consent shall not be
unreasonably withheld). So long as the Indemnifying Party is diligently
contesting any such claim in good faith, the Indemnified Party may pay or settle
such claim only at its own expense and the Indemnifying Party will not be
responsible for the fees of separate legal counsel to the Indemnified Party,
unless the named parties to any proceeding include both parties and
representation of both parties by the same counsel would be inappropriate. If
the Indemnifying Party does not make such election, or having made such election
does not, in the reasonable opinion of the Indemnified Party proceed diligently
to defend such claim, then the Indemnified Party may (after written notice to
the Indemnifying Party), at the expense of the Indemnifying Party, elect to take
over the defense of and proceed to handle such claim in its discretion and the
Indemnifying Party shall be bound by any defense or settlement that the
Indemnified Party may make in good faith with respect to such claim. In
connection therewith, the Indemnifying Party will fully cooperate with the
Indemnified Party should the Indemnified Party elect to take over the defense of
any such claim.
(c) The parties agree to cooperate in defending such third party claims
and the Indemnified Party shall provide such cooperation and such access to its
books, records and properties as the Indemnifying Party shall reasonably request
with respect to any matter for which indemnification is sought hereunder; and
the parties hereto agree to cooperate with each other in order to ensure the
proper and adequate defense thereof.
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With regard to claims of third parties for which indemnification is
payable hereunder, such indemnification shall be paid by the Indemnifying Party
upon the earlier to occur of: (i) the entry of a judgment against the
Indemnified Party and the expiration of any applicable appeal period, or if
earlier, five (5) days prior to the date that the judgment creditor has the
right to execute the judgment; (ii) the entry of an unappealable judgment or
final appellate decision against the Indemnified Party; or (iii) a settlement of
the claim. Notwithstanding the foregoing, provided that there is no dispute as
to the applicability of indemnification, the reasonable expenses of counsel to
the Indemnified Party shall be reimbursed on a current basis by the Indemnifying
Party if such expenses are a liability of the Indemnifying Party. With regard to
other claims for which indemnification is payable hereunder, such
indemnification shall be paid promptly by the Indemnifying Party upon demand by
the Indemnified Party.
ARTICLE VI
CLOSING; DELIVERIES; CONDITIONS PRECEDENT
6.1 CLOSING; EFFECTIVE DATE. All proceedings taken and all documents
executed at the Closing shall be deemed to have been taken, delivered and
executed simultaneously, and no proceeding shall be deemed taken nor documents
deemed executed or delivered until all have been taken, delivered and executed.
6.2 DELIVERIES
(a) At Closing, CMCI shall deliver the following documents to SUPERIOR:
(1) the certificates representing the Consideration
Shares;
(2) the written resignation of all CMCI officers and
directors from all of their positions as CMCI
directors and/or officers, officers resignations to
be effective upon Closing, and directors to be
effective ten days after mailing of Notice pursuant
to Section 14f of the Securities Exchange Act of
1934.
(3) the corporate books of CMCI, including its minutes,
Stockholders List, Articles of Incorporation, Bylaws
and corporate minutes approving the terms and
conditions of this Agreement and the other documents
contemplated hereby and the transactions contemplated
hereby and thereby;
(4) certificates issued by the Secretary of State of
Nevada, as of a recent date, as to the good standing
of CMCI in its jurisdiction of incorporation.
(5) certificates issued by the Secretary of State of
Nevada, as of a recent date, as to the good standing
of Purchaser in its jurisdiction of incorporation.
(6) a certificate, dated the Closing Date, of an officer
of CMCI setting forth that authorizing resolutions
were adopted by CMCI and Purchaser's Boards of
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Directors, approving the terms and conditions of this
Agreement and the other documents contemplated hereby
and the transactions contemplated hereby and thereby;
(7) the consents of any third party including, but not
limited to, parties to any of the Material Agreements
whose consent is required under the terms of any such
Material Agreement or otherwise;
(8) the certificates referred to in Section 6.3(d);
(9) such other documents and instruments as SUPERIOR may
reasonably request.
(b) At Closing, SUPERIOR shall deliver the following documents to CMCI:
(1) the Stock Powers and Share Certificates of Superior
to be delivered to CMCI;
(2) a Certificate of Good Standing from the Secretary of
State of the State of Delaware, dated in December
2006;
(3) a certificate, dated the Closing Date, of President
of SUPERIOR setting forth that authorizing
resolutions were adopted by SUPERIOR's shareholders,
approving the terms and conditions of this Agreement
and the other documents contemplated hereby and the
transactions contemplated hereby and thereby;
(4) the certificates referred to in Section 6.4(d); and
(5) such other documents and instruments as CMCI may
reasonably request.
6.3 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SUPERIOR. Each and every
obligation of SUPERIOR to consummate the transactions described in this
Agreement and any and all liability of SUPERIOR to CMCI shall be subject to the
fulfillment on or before the Closing Date of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES TRUE. Each of the representations
and warranties of CMCI and Purchaser contained herein or in any certificate or
other document delivered pursuant to this Agreement or in connection with the
transactions contemplated hereby shall be true and correct in all material
respects as of the Closing Date with the same force and effect as though made on
and as of such date.
(b) PERFORMANCE. CMCI and Purchaser shall have performed and complied
in all material respects with all of the agreements, covenants and obligations
required under this Agreement to be performed or complied with by them on or
prior to the Closing Date.
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(c) NO MATERIAL ADVERSE CHANGE. Except as expressly permitted or
contemplated by this Agreement, no event or condition shall have occurred which
has adversely affected or may adversely affect in any respect the condition
(financial or otherwise) of CMCI or Purchaser.
(d) CMCI'S CERTIFICATE. CMCI shall have delivered to SUPERIOR a
certificate dated the Closing Date, certifying that the conditions specified in
Section 6.3(a), (b) and (c) above have been fulfilled and as to such other
matters as SUPERIOR may reasonably request.
(e) NO LITIGATION. No litigation, arbitration or other legal or
administrative proceeding shall have been commenced or be pending by or before
any court, arbitration panel or governmental authority or official, and no
statute, rule or regulation of any foreign or domestic, national or local
government or agency thereof shall have been enacted after the date of this
Agreement, and no judicial or administrative decision shall have been rendered
which enjoins or prohibits, or seeks to enjoin or prohibit, the consummation of
all or any of the transactions contemplated by this Agreement.
(f) APPOINTMENT. Messrs Xxxxxxx Xxxxx and Xxxxx Xxxxx shall have been
appointed to the Board of Directors of CMCI effective at the Closing. Xxxxxx
Xxxxxxx shall resign as President effective immediately and as director
effective 10 days after Notice under Section 14f of the Securities Exchange Act
of 1934. Xxxxxx Xxxxxxx shall resign as Director effective 10 days after Notice
under 14f. Xxxxxxx Xxxxx shall be appointed as President, and Xxxxx Xxxxx shall
be appointed as Secretary.
(g) CONSENTS. CMCI shall have obtained all authorizations, consents,
waivers and approvals as may be required to consummate the transactions
contemplated by this Agreement including, but not limited to, those with respect
to any Material CMCI Agreement.
(h) DUE DILIGENCE REVIEW. SUPERIOR shall have completed its due
diligence investigation of CMCI and Purchaser to its satisfaction, in its sole
and absolute discretion.
(i) CAPITAL COMMITMENT. As a condition of closing CMCI shall have
delivered to SUPERIOR $1,000,000 in the form of a third party a Subscription
Agreement, due January 30, 2007, also described in 8.19 below.
(j) OPINION OF COUNSEL. CMCI shall have obtained an opinion letter from
counsel to CMCI addressed to SUPERIOR in form and substance reasonably
acceptable to SUPERIOR, and such opinion shall not have been withdrawn.
6.4 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF CMCI. Each and every
obligation of CMCI to consummate the transactions described in this Agreement
and any and all liability of CMCI and Purchaser to SUPERIOR shall be subject to
the fulfillment on or before the Closing Date of the following conditions
precedent:
(a) REPRESENTATIONS AND WARRANTIES TRUE. Each of the representations
and warranties of SUPERIOR contained herein or in any certificate or other
document delivered pursuant to this Agreement or in connection with the
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transactions contemplated hereby shall be true and correct in all material
respects as of the Closing Date with the same force and effect as though made on
and as of such date.
(b) PERFORMANCE. SUPERIOR shall have performed and complied in all
material respects with all of the agreements, covenants and obligations required
under this Agreement to be performed or complied with by it on or prior to the
Closing Date.
(c) SUPERIOR'S CERTIFICATE. SUPERIOR shall have delivered to CMCI, a
certificate addressed to CMCI, dated the Closing Date, certifying that the
conditions specified in Sections 6.4(a), and (b) above have been fulfilled.
(d) NO LITIGATION. No litigation, arbitration or other legal or
administrative proceeding shall have been commenced or be pending by or before
any court, arbitration panel or governmental authority or official, and no
statute, rule or regulation of any foreign or domestic, national or local
government or agency thereof shall have been enacted after the date of this
Agreement, and no judicial or administrative decision shall have been rendered
which enjoins or prohibits, or seeks to enjoin or prohibit, the consummation of
all or any of the transactions contemplated by this Agreement.
(e) CONSENTS. SUPERIOR shall have obtained all authorizations,
consents, waivers and approvals as may be required to consummate the
transactions contemplated by this Agreement, including but not limited to, those
with respect to any Material Agreement of SUPERIOR.
(f) USAS. SUPERIOR shall have caused the subsidiary, USAS, to be
incorporated, as described above.
6.5 BEST EFFORTS. Subject to the terms and conditions provided in this
Agreement, each of the parties shall use their respective best efforts in good
faith to take or cause to be taken as promptly as practicable all reasonable
actions that are within its power to cause to be fulfilled those of the
conditions precedent to its obligations or the obligations of the other parties
to consummate the transactions contemplated by this Agreement that are dependent
upon its actions, including obtaining all necessary consents, authorizations,
orders, approvals and waivers.
6.6 TERMINATION. This Agreement and the transactions contemplated
hereby may be terminated (i) at any time by the mutual consent of the parties
hereto; (ii) by SUPERIOR, or by CMCI, if the Closing has not occurred on or
prior to December 31, 2007 (such date of termination being referred to herein as
the "Termination Date"), provided the failure of the Closing to occur by such
date is not the result of the failure of the party seeking to terminate this
Agreement to perform or fulfill any of its obligations hereunder; (iii) by
SUPERIOR at any time at or prior to Closing in its sole discretion if (1) any of
the representations or warranties of CMCI, and Purchaser in this Agreement are
not in all material respects true, accurate and complete or if CMCI, and
Purchaser breach in any material respect any covenant contained in this
Agreement, provided that such misrepresentation or breach is not cured within
ten (10) business days after notice thereof, but in any event prior to the
Termination Date or (2) any of the conditions precedent to SUPERIOR's
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obligations to conduct the Closing have not been satisfied by the date required
thereof; (iv) by CMCI at any time at or prior to Closing in its sole discretion
if (1) any of the representations or warranties of SUPERIOR in this Agreement
are not in all material respects true, accurate and complete or if SUPERIOR
breaches in any material respect any covenant contained in this Agreement,
provided that such misrepresentation or breach is not cured within ten (10)
business days after notice thereof, but in any event prior to the Termination
Date or (2) any of the conditions precedent to SUPERIOR's obligations to conduct
the Closing have not been satisfied by the date required thereof. If this
Agreement is terminated pursuant to this Section 6.6, written notice thereof
shall promptly be given by the party electing such termination to the other
party and, subject to the expiration of the cure periods provided in clauses
(iii) and (iv) above, if any, this Agreement shall terminate without further
actions by the parties and no party shall have any further obligations under
this Agreement. Notwithstanding the preceding sentence, the respective
obligations of the parties under Sections 7.1 shall survive the termination of
this Agreement. Notwithstanding anything to the contrary contained herein, if
the termination of this Agreement is a result of the willful misrepresentation,
willful inaccuracy or omission in a representation, willful breach of warranty,
fraud or any willful failure to perform or comply with any covenant or agreement
contained herein, the aggrieved party shall be entitled to recover from the
non-performing party all out-of-pocket expenses which such aggrieved party has
incurred and the termination of this Agreement shall not be deemed or construed
as limiting or denying any other legal or equitable right or remedy of such
party.
ARTICLE VII
COVENANTS
7.1 GENERAL CONFIDENTIALITY. CMCI, and Purchaser acknowledge that the
Intellectual Property and all other confidential or proprietary information with
respect to the business and operations of SUPERIOR are valuable, special and
unique assets of SUPERIOR. CMCI, and Purchaser shall not, at any time either
before or after the Closing Date, disclose, directly or indirectly, to any
Person, or use or purport to authorize any Person to use any confidential or
proprietary information with respect to SUPERIOR, whether or not for CMCI, and
Purchaser own benefit, without the prior written consent of SUPERIOR or unless
required by law, including without limitation, (i) any of SUPERIOR's trade
secrets, designs, formulae, drawings, Intellectual Property, diagrams,
techniques, research and development, specifications, data, know-how, formats,
marketing plans, business plans, budgets, strategies, forecasts or client data;
(ii) information relating to the products developed by SUPERIOR, (iii) the names
of SUPERIOR's customers and contacts, (iv) SUPERIOR's marketing strategies, (v)
the names of SUPERIOR's vendors and suppliers, (vi) the cost of materials and
labor, and the prices obtained for products or services sold (including the
methods used in price determination, manufacturing and sales costs), (vii) the
lists or other written records used in SUPERIOR's business, including
compensation paid to employees and consultants and other terms of employment,
production operation techniques or any other confidential information of, about
or pertaining to the business of SUPERIOR, and, (viii) all tangible material
that embodies any such confidential and proprietary information as well as all
records, files, memoranda, reports, price lists, drawings, plans, sketches and
other written and graphic records, documents, equipment, and the like, relating
to the business of SUPERIOR, and (ix) any other confidential information or
23
trade secrets relating to the business or affairs of SUPERIOR which CMCI and
Purchaser may acquire or develop in connection with or as a result of their
performance of the terms and conditions of this Agreement, excepting only such
information as is already known to the public or which may become known to the
public without any fault of CMCI and Purchaser or in violation of any
confidentiality restrictions; provided, however, that the restrictions of this
Section 7.1 shall not be applicable to CMCI and Purchaser in connection with
such Parties' enforcement of its rights under this Agreement. CMCI and Purchaser
acknowledge that SUPERIOR would not enter into this Agreement without the
assurance that all such confidential and proprietary information will be used
for the exclusive benefit of SUPERIOR.
7.2 CONTINUING OBLIGATIONS. The restrictions set forth in Section 7.1
are considered by the parties to be reasonable for the purposes of protecting
the value of the business and goodwill of SUPERIOR. CMCI and Purchaser
acknowledge that SUPERIOR would be irreparably harmed and that monetary damages
would not provide an adequate remedy to SUPERIOR in the event the covenants
contained in Section 7.1 were not complied with in accordance with their terms.
Accordingly, CMCI and Purchaser agree that any breach or threatened breach by
any of them of any provision of Section 7.1 shall entitle SUPERIOR to injunctive
and other equitable relief to secure the enforcement of these provisions, in
addition to any other remedies (including damages) which may be available to
SUPERIOR. It is the desire and intent of the parties that the provisions of
Section 7.1 be enforced to the fullest extent permissible under the laws and
public policies of each jurisdiction in which enforcement is sought. If any
provision of Section 7.1 are adjudicated to be invalid or unenforceable, the
invalid or unenforceable provisions shall be deemed amended (with respect only
to the jurisdiction in which such adjudication is made) in such manner as to
render them enforceable and to effectuate as nearly as possible the original
intentions and agreement of the parties. In addition, if any party brings an
action to enforce Section 7.1 hereof or to obtain damages for a breach thereof,
the prevailing party in such action shall be entitled to recover from the
non-prevailing party all reasonable attorney's fees and expenses incurred by the
prevailing party in such action.
7.3 TAX TREATMENT. Neither CMCI and Purchaser, nor SUPERIOR will
knowingly take any action, written or otherwise, which would result in the
transactions contemplated by this Agreement not being accounted for as a
tax-free exchange pursuant to Section 368(a)(1)(B) of the Code.
ARTICLE VIII
MISCELLANEOUS
8.1 NOTICES. Any notice, demand, claim or other communication under
this Agreement shall be in writing and delivered personally or sent by certified
mail, return receipt requested, postage prepaid, or sent by facsimile or prepaid
overnight courier to the parties at the addresses as follows (or at such other
addresses as shall be specified by the parties by like notice):
If to CMCI, or Purchaser Comlink Communications Company
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With a copy to: Xxxxxxx Xxxxxxx, Esq.
0000 Xxxxxxx Xxxx
Xxxxxx, XX 00000
Phone: (000) 000-0000
If to SUPERIOR:
With a copy to:
Xxxxxxx Xxxxx
000 Xxxxxx Xx.
Xxxxx 000
Xxxxxxx, XX 00000
Phone: (000) 000-0000
and
Xxxxxxx Xxxxxxx, Esq.
0000 Xxxxxxx Xxxx
Xxxxxx, XX 00000
Phone: (000) 000-0000
Such notice shall be deemed delivered upon receipt against
acknowledgment thereof if delivered personally, on the third business day
following mailing if sent by certified mail, upon transmission against
confirmation if sent by facsimile and on the next business day if sent by
overnight courier.
8.2 ENTIRE AGREEMENT; INCORPORATION. This Agreement and the documents
and instruments and other agreements among the parties hereto as contemplated by
or referred to herein contain every obligation and understanding between the
parties relating to the subject matter hereof and merges all prior discussions,
negotiations, agreements and understandings, both written and oral, if any,
between them, and none of the parties shall be bound by any conditions,
definitions, understandings, warranties or representations other than as
expressly provided or referred to herein. All schedules, exhibits and other
documents and agreements executed and delivered pursuant hereto are incorporated
herein as if set forth in their entirety herein.
8.3 BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, heirs,
personal representatives, legal representatives, and permitted assigns.
8.4 ASSIGNMENT. This Agreement may not be assigned by any party without
the written prior consent of the other parties. Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the benefit of
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the parties hereto and their respective successors and permitted assigns.
8.5 WAIVER AND AMENDMENT. Any representation, warranty, covenant, term
or condition of this Agreement which may legally be waived, may be waived, or
the time of performance thereof extended, at any time by the party hereto
entitled to the benefit thereof, and any term, condition or covenant hereof
(including, without limitation, the period during which any condition is to be
satisfied or any obligation performed) may be amended by the parties thereto at
any time. Any such waiver, extension or amendment shall be evidenced by an
instrument in writing executed on behalf of the party against whom such waiver,
extension or amendment is sought to be charged. No waiver by any party hereto,
whether express or implied, of its rights under any provision of this Agreement
shall constitute a waiver of such party's rights under such provisions at any
other time or a waiver of such party's rights under any other provision of this
Agreement. No failure by any party thereof to take any action against any breach
of this Agreement or default by another party shall constitute a waiver of the
former party's right to enforce any provision of this Agreement or to take
action against such breach or default or any subsequent breach or default by
such other party.
8.6 NO THIRD PARTY BENEFICIARY. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any Person
other than the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and permitted assigns, any
rights or remedies under or by reason of this Agreement, except as otherwise
provided herein.
8.7 SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement, or the application thereof, shall be declared
invalid, void or unenforceable by a court of competent jurisdiction, the
remainder of this Agreement shall remain in full force and effect and the
application of such provision to other Persons or circumstances will be
interpreted so as reasonably to effect the intent of the parties hereto. The
parties further agree to replace such invalid, void or unenforceable provision
with a valid and enforceable provision that will achieve, to the extent
possible, the economic, business and other purposes of such invalid, void or
unenforceable provision.
8.8 EXPENSES. Except as otherwise provided herein, each party agrees to
pay, without right of reimbursement from the other party, the costs incurred by
it incident to the performance of its obligations under this Agreement and the
consummation of the transactions contemplated hereby, including, without
limitation, costs incident to the preparation of this Agreement, and the fees
and disbursements of counsel, accountants and consultants employed by such party
in connection herewith.
8.9 HEADINGS. The table of contents and the section and other headings
contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of any provisions of this Agreement.
8.10 OTHER REMEDIES; INJUNCTIVE RELIEF. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
26
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity. In any action at law or suit in equity to enforce this Agreement or the
rights of the parties hereunder, the prevailing party in any such action or suit
shall be entitled to receive a reasonable sum for its attorneys' fees and all
other reasonable costs and expenses incurred in such action or suit.
8.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Facsimile signatures
shall be deemed valid and binding.
8.12 REMEDIES EXCLUSIVE. Except in the case of fraud or equitable
remedies expressly provided for herein, the parties acknowledge and agree that
the indemnification provisions set forth in Article V of this Agreement
constitute the parties' sole and exclusive remedy with respect to any and all
claims relating to the transactions contemplated by this Agreement. Governing
Law. This Agreement has been entered into and shall be construed and enforced in
accordance with the laws of the State of Colorado, without reference to the
choice of law principles thereof.
8.13 JURISDICTION AND VENUE. This Agreement shall be subject to the
exclusive jurisdiction of the courts of Jefferson County Colorado. The parties
to this Agreement agree that any breach of any term or condition of this
Agreement shall be deemed to be a breach occurring in the State of Colorado by
virtue of a failure to perform an act required to be performed in the State of
Colorado and irrevocably and expressly agree to submit to the jurisdiction of
the courts of the State of Colorado for the purpose of resolving any disputes
among the parties relating to this Agreement or the transactions contemplated
hereby. The parties irrevocably waive, to the fullest extent permitted by law,
any objection which they may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement, or any
judgment entered by any court in respect hereof brought in Jefferson County,
Colorado, and further irrevocably waive any claim that any suit, action or
proceeding brought in Jefferson County, Colorado has been brought in an
inconvenient forum.
8.14 PARTICIPATION OF PARTIES. The parties hereby agree that they have
been represented by counsel during the negotiation and execution of this
Agreement and, therefore, waive the application of any law, regulation, holding,
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document.
8.15 FURTHER ASSURANCES. The parties hereto shall deliver any and all
other instruments or documents reasonably required to be delivered pursuant to,
or necessary or proper in order to give effect to, all of the terms and
provisions of this Agreement including, without limitation, all necessary stock
powers and such other instruments of transfer as may be necessary or desirable
27
to transfer ownership of the SUPERIOR Stock.
8.16 PUBLICITY. No public announcement or other publicity concerning
this Agreement or the transactions contemplated hereby shall be made without the
prior written consent of both SUPERIOR and CMCI as to form, content, timing and
manner of distribution. Nothing contained herein shall prevent any party from
making any filing required by federal or state securities laws or stock exchange
rules.
8.17 Restricted Share Position. Concurrently with the closing hereunder
and as condition hereof, Xxxxx Xxxx and Xxxxxx Xxxxxxx, holders of 45,000,000
restricted common shares of CMCI (31,500,000 to Xxxxxxx and 13,500,000 to Xxxx),
will, for the sum of $10.00 sell and surrender such 45,000,000 common shares,
for retirement to treasury of CMCI. Such shares shall be transmitted to Escrow
Agent in certificate form, together with a Guaranteed signed stock power for
such shares, for delivery and retirement to treasury upon payment of $5.00 each
to Xxxxx Xxxx and Xxxxxx Xxxxxxx. Xxxx and Xxxxxxx shall also, at closing, be
entitled to retain and take from CMCI the existing internet business of CMCI,
including the website, domain name, associated intellectual property, customer
lists, etc.
8.18 Share Capital. The current number of shares which Comlink has
outstanding (prior to the cancellation OR RETIREMENT set out in item 3 above)
are 63,360,000 COMMON shares AND NO PREFERRED SHARES. Neither Superior nor
Comlink shall, without the express written consent of the other party, issue or
cancel any common shares, preferred shares, options, calls, puts, warrants, or
other securities (or rights to acquire securities) of any sort whatsoever
pending the closing of the Transaction, except as expressly set out in this term
sheet.
8.19 Private Offering. Within 30 days following the Closing, CMCI will
conduct a private offering in compliance with all applicable securities laws
(the "Offering"), pursuant to which CMCI will issue up to an aggregate of
3,750,000 shares of its Common Stock as follows: (i) Investors will purchase
units consisting of a combination of common shares and warrants, (ii) the Units
will consist of 2 common shares of stock and one purchase warrant, (iii) the
purchase price for such common shares will be $0.40 per share for an aggregate
of $1,000,000 or 2,500,000 common shares of stock; and (iv) the purchase
warrants shall be EXERCISEABLE at a strike price of $0.80 per share for a total
of UP TO $1,000,000, or 1,250,000 shares.
8.20 Use of Offering Proceeds. CMCI shall use the proceeds from the
Offering AS FOLLOWS:
(a) FIRST, for the acquisition of the Xxxxxx lease contiguous to
the Xxxxxx lease; AND
(b) SECOND, FOR an expansion of the drilling program on the Xxxxxx
lease. This program shall include, subject to geological
REPORTS, ASSESSMENTS, OR recommendations, the drilling and
completion of eight (8) xxxxx on the Xxxxxx lease in Xxxxxxx
County and one well for the Del Monte lease in Zavalla County.
Superior shall use any proceeds from the EXERCISE of ANY
Warrants ISSUED PURSUANT TO THE OFFERING, IN TWO PROGRAMS of
up to $500,000 each for the expansion of the drilling program.
The expansion, subject to further geological REPORTS,
ASSESSMENTS, OR recommendations, will consist of UP to ten
(10) xxxxx in the Xxxxxx lease and one (1) well in the Del
Monte lease
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8.21 Investor Relations. In Connection with the Acquisition, Comlink
will enter into a consulting agreement with The Regency Group, LLC. for the
provision of services relating to investor relations, public relations agreement
and public company website maintenance, pursuant to which The Regency Group
shall be compensated by the issuance of 500,000 fully paid and non-assessable
common shares of Comlink under Rule 144, WHICH SHARES WILL BE SUBJECT TO
RESTRICTIONS FROM SALE OR TRANSFER EXCEPT UNDER RULE 144 OR UPON REGISTRATION.
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IN WITNESS WHEREOF, the parties hereto have each executed and
delivered this Agreement as of the day and year first above written.
COMLINK COMMUNICATIONS COMPANY
By:/s/Xxxxxx Xxxxxxx
______________________________________
Name: Xxxxxx Xxxxxxx
Title: President
USA SUPERIOR ENERGY, INC.
By:/s/X. Xxxxxxx Xxxxx
_________________________________________
Name:X. Xxxxxxx Xxxxx
Title: Manager
USAS ACQUISITION, INC.
By:_______________________________________
Name:
Title: President
Xxxxx Xxxx (as to Section 8.17 only)
/s/Xxxxx Xxxx
----------------------------------------
Xxxxxx Xxxxxxx in his personal capacity
/s/Xxxxxx Xxxxxxx
-----------------------------------------
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