AGREEMENT AND PLAN OF MERGER by and among: Kushi Resources, Inc., a Nevada Corporation; and TheraBiogen, Inc., a Nevada Corporation; Dated as of November 13, 2009
by and
among:
TheraBiogen,
Inc.,
a Nevada
Corporation;
Dated as
of November 13, 2009
TABLE
OF CONTENTS
SIGNATURES
46
Agreement
and Plan of Merger (“Agreement”), dated as of
November 13, 2009, by and among Kushi Resources, Inc., a
Nevada corporation (“Company”), and TheraBiogen, Inc., a Nevada
corporation (“TheraBiogen”). Certain capitalized terms have the meanings
indicated for such terms in Section 1.1.
RECITALS
Whereas, the Board of
Directors of Company has (i) declared that it is advisable and in the best
interests of Company and its stockholders that, upon the terms and subject to
the conditions set forth in this Agreement and in accordance with Nevada law,
TheraBiogen merge with and into Company, with Company being the surviving
corporation (the “Merger”) as provided in
Section 2.2, (ii) approved this Agreement, the Merger and the other
transactions contemplated hereby and (iii) resolved to recommend that
Company’s stockholders adopt this Agreement and approve the Merger.
Whereas, the Board of
Directors of TheraBiogen has (i) declared that it is advisable and in the
best interests of TheraBiogen and its stockholders that, upon the terms and
subject to the conditions set forth in this Agreement and in accordance with
Nevada law, TheraBiogen merge with and into Company, with Company being the
surviving corporation as provided in Section 2.2, (ii) approved this
Agreement, the Merger and the other transactions contemplated hereby and
(iii) resolved to recommend that TheraBiogen’s stockholders adopt this
Agreement and approve the Merger
Whereas, pursuant to the
Merger, among other things, the outstanding shares of TheraBiogen Common Stock
will be converted into the right to receive the Merger Consideration as set
forth herein.
Whereas, for Federal income
tax purposes, (i) it is intended that the exchange of Company Common Stock
for the Merger Consideration, pursuant to the Merger shall qualify as a
reorganization within the meaning of Section 368(a)(2)(A) of the Code; and
(ii) the parties intend, by executing this Agreement, to adopt of plan of
reorganization within the meaning of Treasury Regulations
Section 1.368-2(g).
Now, Therefore, in
consideration of the foregoing and the representations, warranties, covenants
and agreements set forth herein, and for other good and valuable consideration,
and intending to be legally bound, the parties hereto agree as
follows:
ARTICLE I.
DEFINITIONS
1.1 Certain
Defined Terms. Unless the context
otherwise requires, the following terms, when used in this Agreement, have the
respective meanings specified below (such meanings to be equally applicable to
the singular and plural forms of the terms defined):
“Affiliate” of a Person means
any person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such
Person.
“Agreement” has the meaning
stated in the preamble to this Agreement.
“Authorizations” has the
meaning stated in Section 3.12(b).
“Business Day” means any day
except a Saturday, a Sunday or any other day on which commercial banks are
required or authorized to close in Nevada.
“By-Laws” means the Amended and
Restated By-Laws of Company in effect as of the date hereof.
“Certificate” has the meaning
stated in Section 2.8(b).
“Certificate of Incorporation”
means the Certificate of Incorporation of Company, as filed with the Secretary
of State of the State of Nevada as amended.
“Certificate of Merger” has the
meaning stated in Section 2.4.
“Closing” means the
consummation of the Merger.
“Closing Date” has the meaning
stated in Section 2.3.
“Code” means the Internal
Revenue Code of 1986, as amended, and the Treasury Regulations promulgated
thereunder.
“Company” means Kushi
Resources, Inc. a Nevada corporation.
“Company Board Recommendation”
means the recommendation of Company’s Board of Directors that the stockholders
of Company adopt this Agreement and approve the Merger.
“Company Common Stock” means
the common stock, no par value, of Company.
“Company Disclosure Schedule”
means the document dated the date of this Agreement delivered by Company to
TheraBiogen prior to the execution and delivery of this Agreement and referring
to the representations and warranties of Company in this
Agreement.
“Company Employee Benefit
Plans” has the meaning stated in Section 3.10(a).
“Company Financial Statements”
has the meaning stated in Section 3.5(b).
“Company Intellectual Property”
has the meaning stated in Section 3.18(a).
“Company Material Adverse
Effect” means any effect that is (i) material and adverse to the
business, operations, financial condition or results of operations of Company
and its Subsidiaries taken as a whole or (ii) likely to prevent Company
from consummating the transactions contemplated hereby, other than (A) any
such effect resulting solely from changes in the economy in general, or the
digital media industry in general (but only if, in either case, Company is not
disproportionately affected thereby), (B) any change in Company’s stock
price, (C) any effect resulting from actions taken pursuant to the terms of
this Agreement or at the request of or with the written consent of TheraBiogen,
or (D) any effect that results from the announcement of this Agreement or
the completion of the transactions provided for herein.
“Company Options” means all
rights, obligations, warrants, commitments or agreements of any character,
whether fixed or contingent, calling for the purchase or issuance of any shares
of Company Common Stock or any other equity securities of Company or any
securities representing the right to purchase or otherwise receive any shares of
Company Common Stock, in each case limited to those granted to employees,
consultants and independent contractors for compensatory
purpose.
“Company Registered Intellectual
Property” has the meaning stated in
Section 3.18(a).
“Company Representatives” has
the meaning stated in Section 5.4(a).
“Company Stockholder Approval”
means the affirmative vote or written consent of a majority of the outstanding
shares of Company Common Stock entitled to vote thereon to adopt this Agreement
and to approve the Merger.
“Company Stockholders’ Meeting”
has the meaning stated in Section 6.2(a).
“Contribution” has the meaning
stated in the Recitals hereto.
“Nevada Law” means the General
Corporation Law of the State of Nevada.
“Dissenting Shares” has the
meaning stated in Section 2.7(d).
“Effective Time” has the
meaning stated in Section 2.4.
“Environmental Laws” has the
meaning states in Section 3.15.
“ERISA” has the meaning stated
in Section 3.10(a).
“Exchange Act” means the
Securities Exchange Act of 1934, as amended.
“GAAP” means United States
generally accepted accounting principles.
“Governmental Entity” means any
multinational, national, federal, state or other court, administrative agency
department, office or commission or other governmental, prosecutorial or
regulatory authority or instrumentality and any self regulatory organization, or
“SRO”.
“Governmental Order” means any
order, writ, judgment, injunction, decree, stipulation, determination or award
entered by or with any Governmental Entity.
“Intellectual Property” means
any or all of the following (whether or not registered with Governmental
Entities, and including all national and multinational applications for any of
the following) and all rights in, arising out of or associated with the same:
patents, trademarks, trade names, trade dress, service marks, copyrights, domain
names and uniform resource locators or “URLs” (together with all associated
contract rights and goodwill), database rights, mask works, net lists,
technology, web sites, know-how, trade secrets, inventory, ideas, algorithms,
processes, computer software programs or applications (in both source code and
object code form), and tangible or intangible proprietary information or
material of a Person.
“IRS” means the Internal
Revenue Service.
“Knowledge” means, with respect
to either (i) Company or (ii) TheraBiogen, the actual awareness of
those persons set forth in Section 1.1 of the Company Disclosure Schedule
and Section 1.1 of the TheraBiogen Disclosure Schedule, respectively, in
each case after reasonable inquiry by such persons of the individuals within
their respective entities having responsibility for the matters in respect of
which such awareness or lack thereof is represented and warranted herein,
without any implication of other verification or investigation concerning such
knowledge.
“Laws and Regulations” means
all federal, state, local and foreign laws, rules, regulations and
ordinances.
“Lien” means any lien, claim,
charge, option, encumbrance, mortgage, pledge or security interest or other
restrictions of any kind.
“Material Contracts” has the
meaning stated in Section 3.13(a).
“Merger” has the meaning stated
in the Recitals hereto.
“Merger Consideration” means
one share of Company common stock to be exchanged for each share of TheraBiogen
common stock issued and outstanding on the Effective Date.
“TheraBiogen” means
TheraBiogen, Inc., a Nevada corporation.
“Multiemployer Plan” has the
meaning stated in Section 3.10(c).
“Multiple-Employer Plan” has
the meaning stated in Section 3.10(c).
“Parties” means, collectively,
Company and TheraBiogen.
“Permitted Lien” means any Lien
consisting of (i) carriers’, warehousemen’s, mechanics’, landlords’,
materialmen’s, repairmen’s or similar common law or statutory liens or
encumbrances arising in the ordinary course of business which are not delinquent
or remain payable without penalty, (ii) encumbrances for Taxes and other
assessments or governmental charges or levies due and payable but not yet
delinquent, (iii) defects in title, easements, restrictive covenants and
similar encumbrances, and (iv) any other Liens that individually or in the
aggregate do not result in a Material Adverse Effect.
“Person” means any individual,
legal entity (including general and limited partnerships, unincorporated
associations and trusts) or Governmental Entity.
“Regulation S-X” means
17 CFR § 210.1-01, et seq.
“SEC” means the Securities and
Exchange Commission.
“Securities Act” means the
Securities Act of 1933, as amended.
“Subsidiary” of any Person
means any corporation or other Person in which such Person (a) owns,
directly or indirectly, 50% or more of the outstanding voting securities or
equity interests or (b) is a general partner, managing member, or
trustee.
“Surviving Corporation” means
the entity into which TheraBiogen has merged, following the Effective Time,
which shall be the merged entity of TheraBiogen and the Company.
“Tax” or “Taxes” means all federal,
state, local, and foreign income, excise, gross receipts, gross income, ad
valorem, profits, gains, property, capital, sales, transfer, use, value-added,
stamp, documentation, payroll, employment, severance, withholding, duties,
intangibles, franchise, backup withholding, and other taxes (including estimated
taxes), charges, levies or like assessments together with all penalties and
additions to tax and interest thereon.
“Tax Authority” means any
Governmental Entity responsible for the imposition of any Tax (domestic or
foreign).
“Tax Return” means any report,
return, document, declaration or other information or filing required to be
supplied to any Tax Authority with respect to Taxes, including information
Returns, any documents with respect to or accompanying payments of estimated
Taxes, or with respect to or accompanying requests for the extension of time in
which to file any such report, return, document, declaration or other
information.
“TheraBiogen Common Stock”
means the common stock, par value $0.001 per share, of
TheraBiogen.
“TheraBiogen Disclosure
Schedule” means the document delivered by the TheraBiogen to Company
prior to the execution and delivery of this Agreement and referring to the
representations and warranties of TheraBiogen in this Agreement.
“TheraBiogen Financial
Statements” has the meaning stated in
Section 4.6.
“TheraBiogen Intellectual
Property” has the meaning stated in
Section 4.17(a).
“TheraBiogen Material Adverse
Effect” means any effect that is (i) material and adverse to the
business, operations, financial condition or results of operations of
TheraBiogen or TheraBiogen taken as a whole or (ii) likely to prevent
TheraBiogen and TheraBiogen from consummating the transactions contemplated
hereby, other than any such effect resulting solely from (A) changes in the
economy in general, or the TheraBiogen and TheraBiogen respective industries in
general (but only if TheraBiogen and TheraBiogen are not disproportionately
affected thereby), (B) actions taken pursuant to this Agreement or at the
request of or with the written consent of Company, or (C) the announcement
of this Agreement or the completion of the transactions provided for
herein.
“TheraBiogen Registered Intellectual
Property” means all (i) TheraBiogen Intellectual Property as of the
date of this Agreement that is registered in the name of TheraBiogen with any
Governmental Entity or for which application for such registration has been made
and (ii) domain names and uniform resource locaters (URLs) owned by
TheraBiogen or registered in the name of TheraBiogen.
“Third Party” means any Person
or group other than a Party hereto.
ARTICLE II.
THE
MERGER
2.1 The Merger. At
the Effective Time, and subject to the terms and conditions of this Agreement
and the applicable provisions of Nevada Law, TheraBiogen shall merge with and
into Company. Company shall be the Surviving Corporation in the Merger and shall
continue its corporate existence under the laws of the State of Nevada, but
shall change its corporate name in the Merger to TheraBiogen, Inc. Upon
consummation of the Merger, the separate corporate existence of TheraBiogen
shall terminate.
2.2 Closing. The
Closing shall take place as soon as practicable, and in any event not later than
two Business Days after the satisfaction or waiver of each of the conditions set
forth in ARTICLE VI hereof, other than conditions that by their nature are
to be satisfied at the Closing and will in fact be satisfied or waived at the
Closing. The Closing shall take place at the offices of the Company, or at such
other location and at such time as the parties hereto may agree in writing. The
date on which the Closing occurs is referred to herein as the “Closing Date”.
2.3 Effective
Time. Prior to the Closing, TheraBiogen and Company shall prepare,
and on the Closing Date the parties shall file, a certificate of merger (the
“Certificate of Merger”)
with the Secretary of State of the State of Nevada in accordance with the
relevant provisions of Nevada Law. The Merger shall become effective at such
time as the Certificate of Merger is filed with the Secretary of State, or at
such later time as TheraBiogen and Company shall agree and specify in the
Certificate of Merger. The time the Merger becomes effective is referred to
herein as the “Effective
Time”.
2.4 Effects of the
Merger. At and after the Effective Time, the Merger shall have the
effects set forth in the applicable provisions of Nevada Law. Without limiting
the generality of the foregoing, at the Effective Time, all the property,
rights, privileges, powers and franchises of Company and TheraBiogen shall vest
in the Surviving Corporation, and all debts, liabilities and duties of Company
and TheraBiogen shall become the debts, liabilities and duties of the Surviving
Corporation.
2.5 Certificate of
Incorporation; By-Laws; Directors and Officers. Unless otherwise
determined by the Parties before the Effective Time, at the Effective
Time:
(a) The
certificate of incorporation of Company shall be the certificate of
incorporation of the Surviving Corporation except that the corporate name of the
Company shall be changed to TheraBiogen, Inc..
(b) The
by-laws of the Company shall be the by-laws of the Company as in effect
immediately before the Effective Time.
(c) The
Board of Directors of the Surviving Corporation shall be made up of five
members, all of whom shall be identified in the Certificate of Merger, and the
officers of TheraBiogen immediately before the Effective Time shall be the
initial officers of the Surviving Corporation.
2.6 Conversion of Capital
Stock. At the Effective Time, by virtue of the Merger and without
any action on the part of TheraBiogen, Company or the stockholders of any of the
foregoing, the shares of stock of the constituent corporations shall be
converted as follows:
(a) Common Stock of
TheraBiogen. Each share of common stock, $0.001 par
value per share, of TheraBiogen issued and outstanding immediately
prior to the Effective Time shall be converted into one validly issued, fully
paid and non-assessable share of common stock, $0.001 par value of the Surviving
Corporation.
(b) Dissenting TheraBiogen
Shares. Notwithstanding anything in this Agreement to the contrary,
shares of TheraBiogen Common Stock that are issued and outstanding immediately
prior to the Effective Time and that are held by a holder who has validly
demanded payment of the fair value of such holder’s shares as determined in
accordance with Nevada Law (“TheraBiogen Dissenting Shares”) shall not
be converted into or be exchangeable for the right to receive the Merger
Consideration provided in Section 2.6(a) and instead shall be converted into the
right to receive payment from the Surviving Corporation with respect to such
TheraBiogen Dissenting Shares in accordance with Nevada Law, unless and until
such holder shall have failed to perfect or shall have validly withdrawn such
holder’s demand or lost such holder’s rights under Nevada Law. If any such
holder of TheraBiogen Common Stock shall have failed to perfect or shall have
validly withdrawn such demand or lost such right, each share of TheraBiogen
Common Stock of such holder shall be treated, at the Surviving Corporation’s
sole discretion, as a share of the Surviving Corporation Common Stock that had
been converted as of the Effective Time into the right to receive the Merger
Consideration in accordance with Section 2.6(a). TheraBiogen shall give
prompt notice to Company of any demands received by TheraBiogen for appraisal of
shares of TheraBiogen Common Stock, and Company shall have the right to
participate in all negotiations and proceedings with respect to such demands.
TheraBiogen shall not, except with the prior written consent of Company, make
any payment with respect to, or settle or offer to settle, any such
demands.
(c) Conversion of Company Common
Stock. Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than Dissenting Shares) shall be
converted into 2.6 shares of Common Stock of the Surviving Corporation upon
surrender of the Certificate representing such share of Company Common Stock
following the Merger in the manner set forth in Section 2.8. Each share of
Company Common Stock converted into 2.6 shares of Common Stock of the Surviving
Corporation pursuant to this Section 2.6(c) shall no longer be outstanding,
shall automatically be cancelled and shall cease to exist as of the Effective
Time, and each Certificate previously representing shares of Company Common
Stock shall thereafter represent only the right to receive 2.6 shares of Common
Stock of the Surviving Corporation with respect to each share of Company Common
Stock formerly represented by such Certificate. If, prior to the Effective Time,
the outstanding shares of Company Common Stock shall have been increased,
decreased, changed into or exchanged for a different number or kind of shares or
securities as a result of a reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split, or other similar change in
capitalization, then an appropriate and proportionate adjustment shall be made
to the share exchange formula provided herein.
(d) Dissenting Company
Shares. Notwithstanding anything in this Agreement to the contrary,
each share of Company Common Stock that is issued and outstanding immediately
prior to the Effective Time and that is held by a holder who has validly
demanded payment of the fair value of such holder’s Company shares as determined
in accordance with the Nevada Law (“Company Dissenting Shares”)
shall not be converted into or be exchangeable for the right to receive the 2.6
shares of Common Stock of the Surviving Corporation and instead shall be
converted into the right to receive payment from the Surviving Corporation with
respect to such Company Dissenting Shares in accordance with Nevada Law, unless
and until such holder shall have failed to perfect or shall have validly
withdrawn such holder’s demand or lost such holder’s rights under Nevada Law. If
any such holder of Company Common Stock shall have failed to perfect or shall
have validly withdrawn such demand or lost such right, each share of Company
Common Stock of such holder shall be treated, at the Surviving Corporation’s
sole discretion, as a share of Company Common Stock that had been converted as
of the Effective Time into the right to receive the 2.6 shares of Common Stock
of the Surviving Corporation in accordance with Section 2.6(c). Company
shall give prompt notice to TheraBiogen of any demands received by Company for
appraisal of shares of Company Common Stock, and TheraBiogen shall have the
right to participate in all negotiations and proceedings with respect to such
demands. Company shall not, except with the prior written consent of
TheraBiogen, make any payment with respect to, or settle or offer to settle, any
such demands.
(e) No
Liability. None of the Parties, the Surviving Corporation, or any
employee, officer, director, agent or affiliate of any thereof, shall be liable
to any Person or Third Party in respect of any Merger Consideration or the 2.6
shares of Common Stock of the Surviving Corporation to be received for Company
Stock delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.
(f) Lost
Certificates. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and, if required by the
Surviving Corporation, the posting by such Person of a bond in such reasonable
amount as the Surviving Corporation may require as indemnity against any claim
that may be made against it with respect to such Certificate, the Exchange Agent
will issue in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration payable in respect thereof, pursuant to this
Agreement.
ARTICLE III.
REPRESENTATIONS
AND WARRANTIES OF COMPANY
Except as
disclosed in the Company Disclosure Schedule, Company represents and warrants to
TheraBiogen that each of the following statements set forth in this
ARTICLE III is true and correct. The Company Disclosure Schedule shall be
organized to correspond to the Sections in this ARTICLE III. Each exception
set forth in the Company Disclosure Schedule shall be deemed to qualify
(i) the corresponding representation and warranty set forth in this
Agreement that is specifically identified (by cross-reference or otherwise) in
the Company Disclosure Schedule and (ii) any other representation and
warranty to which the relevance of such exception is reasonably
apparent.
3.1 Corporate Organization,
Standing and Power. Company is a corporation, validly existing and
in good standing under the laws of its jurisdiction of organization. Company has
the corporate power to own its properties and to carry on its business as now
being conducted and is duly qualified to do business and is in good standing in
each jurisdiction in which the failure to be so qualified and in good standing
would be material. Company has furnished or made available to TheraBiogen a true
and correct copy of the Certificate of Incorporation, as amended, and By-Laws,
as amended, of Company. Company is not in violation of any of the provisions of
its certificate or articles of incorporation or by-laws or other charter or
organizational documents, each as amended.
3.2 Capitalization.
(a) The
authorized capital stock of Company consists of 75,000,000 shares of
Company Common Stock $0.001 par value. At October 7, 2009, (i)
5,230,000 shares of Company Common Stock were issued and outstanding, all
of which are duly authorized, validly issued, fully paid and non-assessable and
none of which were issued in violation of any preemptive rights,
(ii) no shares of Company Common Stock were reserved for issuance upon
the exercise of outstanding Company Options, and (iii) no shares of
Company Common Stock were held in the treasury of Company. Except as set forth
above, as of the date hereof, no shares of capital stock or other voting
securities of Company are issued, reserved for issuance or outstanding and no
shares of capital stock or other voting securities of Company shall be issued or
become outstanding after the date hereof other than upon exercise of Company
Options outstanding as of the date hereof or the Excepted Warrants.
Section 3.2(a) of the Company Disclosure Schedule sets forth a true and
correct list, as of the date hereof, of all rights of any character relating to
the issued or unissued capital stock of Company, or obligating Company to issue,
grant or sell any shares of capital stock of, or other equity interests in, or
securities convertible into equity interests in, Company. There are no bonds,
debentures, notes or other indebtedness or securities of Company that have the
right to vote (or that are convertible into, or exchangeable for, securities
having the right to vote) on any matters on which stockholders of Company may
vote. All shares of Company Common Stock subject to issuance as described above
shall, upon issuance on the terms and conditions specified in the instruments
pursuant to which they are issuable, be duly authorized, validly issued, fully
paid, non-assessable and free of preemptive rights.
(b)
Company has no contract or other obligation to repurchase, redeem or otherwise
acquire any shares of Company Common Stock, or make any investment (in the form
of a loan, capital contribution or otherwise) in any other Person. There are no
outstanding subscriptions, options, warrants, puts, calls, rights, exchangeable
or convertible securities or other commitments or agreements of any character
relating to the issued or unissued capital stock or other securities of the
Company, or otherwise obligating Company to issue, transfer, sell, purchase,
redeem or otherwise acquire any such securities. None of the outstanding equity
securities or other securities of Company was issued in violation of the
Securities Act or any other legal requirement.
3.3 Authority; No
Violation.
(a) Company
has full corporate power and authority to execute and deliver this Agreement
and, subject to receipt of the Company’s stockholder approval, to comply with
the terms hereof and consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly approved by the
Board of Directors of Company. The Company’s stockholder approval is the only
vote or consent of the holders of any class or series of Company’s capital stock
necessary to approve this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Company. Assuming due authorization, execution and delivery by the
other Parties, this Agreement constitutes the valid and binding obligation of
Company, enforceable against Company in accordance with its terms, except as
such enforcement may be limited by (i) the effect of bankruptcy,
insolvency, reorganization, receivership, conservatorship, arrangement,
moratorium or other similar laws affecting or relating to the rights of
creditors generally, or (ii) the rules governing the availability of
specific performance, injunctive relief or other equitable remedies and general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
(b) Neither
the execution and delivery of this Agreement by Company nor the consummation by
Company of the transactions contemplated hereby, nor compliance by Company with
any of the terms or provisions hereof, will (i) violate any provision of
the Certificate of Incorporation or By-Laws or the certificates or articles of
incorporation or by-laws, or other charter or organizational documents, of
Company or (ii) assuming that the consents and approvals referred to in
Section 3.4 are duly obtained, (x) violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to Company or any of its properties or assets or (y) violate,
conflict with, result in a breach of any provision of or the loss of any benefit
under, constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, result in the termination of any or all
rights or benefits or a right of termination or cancellation under, accelerate
the performance required by or rights or obligations under, increase any rate of
interest payable or result in the creation of any Lien upon any of the
respective properties or assets of Company under, any authorization or of the
terms, conditions or provisions of any note, bond, mortgage, indenture, deed of
trust, license, lease, agreement, contract, or other instrument or obligation to
which Company is a party, or by which it or any of its properties, assets or
business activities may be bound or affected.
3.4 Consents and
Approvals. Except for (i) the Company’s stockholder approval
and (ii) the consents, notices and approvals set forth in Section 3.4
of the Company Disclosure Schedule, no filings with or consents or approvals of
any Governmental Entity or any Third Party are necessary in connection with
(A) the execution and delivery by Company of this Agreement and
(B) the consummation by Company of the Merger and the other transactions
contemplated hereby.
3.5 Financial
Statements.
(a) Company
has furnished or made available to TheraBiogen true and complete copies of the
consolidated audited financial statements of Company for the fiscal years ended
February 28, 2008 and February 28, 2009 (the “Company Financial
Statements”), and Company shall furnish or make available to TheraBiogen
true and complete copies of Company financial statements on a reviewed basis for
all periods up to and including the Closing Date.
(b) The
Company Financial Statements were prepared in accordance with GAAP applied on a
basis consistent throughout the periods indicated (except as otherwise stated in
such financial statements, including the related notes, and except that, in the
case of unaudited statements for subsequent quarterly periods and periods up
the of the Closing Date, such unaudited statements were prepared in
accordance with the requirements for financial statements to be included in
quarterly or other reports filed with the SEC) and fairly present in all
material respects the consolidated financial condition and the results of
operations of Company and its Subsidiaries as at the respective dates thereof
and for the periods indicated therein (subject, in the case of unaudited
statements, to year-end audit adjustments).
(c) Company
has implemented and maintains disclosure controls and procedures to ensure that
all material information relating to Company, including its consolidated
Subsidiaries, (both financial and non-financial) required to be disclosed by
Company in the reports that will be filed by TheraBiogen with the SEC under the
Exchange Act will be recorded, processed, summarized and reported to the
individuals responsible for preparing such reports within the time periods
specified in the appropriate rules and forms and all such information is
accumulated and communicated to Company’s management, including its principal
executive and principal financial officers, and to other individuals responsible
for preparing such reports as appropriate to allow timely decisions regarding
required disclosure and to make the certifications of the principal executive
officer and principal financial officer of TheraBiogen required under the
Exchange Act with respect to such reports. Company has disclosed, based on its
most recent evaluation prior to the date hereof, to Company’s outside auditors
and the audit committee of Company’s Board of Directors (i) any significant
deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect
Company’s ability to record, process, summarize and report financial information
and (ii) any fraud, whether or not material, that involves management or
other employees who have a significant role in Company’s internal control over
financial reporting.
(d) Company’s
system of internal controls over financial reporting are reasonably sufficient
in all material respects to provide reasonable assurance regarding the
reliability of Company’s financial reporting and financial statements, and
include policies and procedures (i) providing reasonable assurance that
(A) transactions are recorded as necessary to permit preparation of
financial statements in accordance with GAAP and (B) receipts and
expenditures are in accordance with the authorization of Company’s management
and directors and (ii) regarding prevention or timely detection of
unauthorized acquisition, use or disposition of Company’s assets that could have
a material effect on Company’s financial statements. No significant deficiency
or material weakness was identified in management’s assessment of internal
controls as of February 28, 2009, nor has any such deficiency or weakness been
identified between that date and the date of this Agreement.
3.6 Absence of Certain Changes
or Events. Since February 28, 2009, (i) the Company and has, in
all material respects, conducted its business in the ordinary course consistent
with past practice; (ii) there has not occurred any change, event or
condition that is a Company Material Adverse Effect or would reasonably be
expected to result in a Company Material Adverse Effect; and (iii) the
Company has not taken any of the actions that Company has agreed not to take
from the date hereof through the Closing Date pursuant to Section 5.2 of
this Agreement.
3.7 Undisclosed
Liabilities. Company has no material obligations or liabilities of
any nature (whether accrued, matured or unmatured, fixed or contingent or
otherwise) other than (i) those set forth or adequately provided for in the
consolidated balance sheet (and the related notes thereto) of Company and its
Subsidiaries as of February 28, 2009 included in the Company Financial
Statements, (ii) those incurred in the ordinary course of business
consistent with past practice since January 31, 2009 and (iii) those
incurred in connection with the execution of this Agreement.
3.8 Legal
Proceedings. Except as previously disclosed and as listed on
Schedule 3.8, Company is a party to any, and there is no pending or, to the
knowledge of Company, threatened, legal, administrative, arbitral or other
proceeding, claim, action or governmental or regulatory investigation of any
nature against Company, or any of its officers or directors which, if decided
adversely to Company, would, individually or in the aggregate, be material to
Company. There is no injunction, order, judgment or decree imposed upon Company,
or any of its officers or directors, or the assets of
Company.
3.9 Taxes and Tax
Returns.
(a) (i) Company
has filed or caused to be filed all federal, state, foreign and local Tax
Returns required to be filed with any Tax Authority; (ii) all such Tax
Returns are true, accurate, and complete in all material respects;
(iii) Company has paid or caused to be paid all Taxes that are due and
payable by any of such companies, other than Taxes which are being contested in
good faith and are adequately reserved against or provided for (in accordance
with GAAP) in Company Financial Statements, and (iv) Company do not have
any material liability for Taxes for any current or prior Tax periods in excess
of the amount reserved or provided for in Company Financial Statements (but
excluding, for this Clause (iv) only, any liability reflected thereon for
deferred taxes to reflect timing differences between tax and financial
accounting methods).
(b) No
federal, state, local or foreign audits, examinations, investigations, or other
formal proceedings are pending or, to Company’s Knowledge, threatened with
regard to any Taxes or Tax Returns of Company. No issue has arisen in any
examination of the Company by any Tax Authority that if raised with respect to
any other period not so examined would result in a material deficiency for any
other period not so examined, if upheld. Any adjustment of income Taxes of the
Company made by the IRS in any examination that is required to be reported to
the appropriate state, local or foreign Tax Authorities has been so
reported.
(c) There
are no disputes pending with respect to, or claims or assessments asserted in
writing for, any material amount of Taxes upon Company, nor has Company given or
been requested in writing to give any currently effective waiver extending the
statutory period of limitation applicable to any Tax return for any
period.
(d) The
Company is required to include in income any adjustment pursuant to
Section 481(a) of the Code by reason of a voluntary change in accounting
method initiated by the Company and the Company has no knowledge that the IRS
has proposed any such adjustment or change in accounting
method.
(e) Company
(i) is not a party to a Tax allocation or Tax sharing agreement (other than
an agreement solely among members of a group the common parent of which is
Company) or (ii) has any liability for the Taxes of any Person (other than
Company) under Treasury Regulations Section 1.1502-6 (or any similar provision
of state, local or foreign law), as a transferee or successor, by contract, or
otherwise.
(f) Company
has withheld (or caused its third party payroll processor to withhold) from
their employees, customers and any other applicable payees (and timely paid to
the appropriate Governmental Entity) proper amounts for all periods through the
date hereof in compliance with all tax withholding provisions of applicable Laws
and Regulations (including, without limitation, income, social security and
employment tax withholding for all types of compensation, back-up withholding
and withholding on payments to non-United States Persons), except for such
amounts, individually or in the aggregate, as are not
material.
(g) In
the past five years, Company has not been a party to a transaction that has been
reported as a reorganization within the meaning of Code Section 368, or
distributed a corporation (or been distributed) in a transaction that is
reported to qualify under Code Section 355.
(h) Company
has not been a party to or otherwise participated in any “reportable
transaction” within the meaning of Treasury
Regulation Section 1.6011-4(b).
(i) Company
is not a party to any plan, program, agreement, arrangement, practice, policy or
understanding that would result, separately or in the aggregate, in the payment
or provision (whether in connection with any termination of employment or
otherwise) of any “excess parachute payment” within the meaning of
Section 280G of the Code with respect to a current or former employee or
current or former consultant or contractor of Company or any of its
Subsidiaries.
(j)
Company is not a party to any contract, agreement, plan or arrangement covering
any person that could give rise to the payment of any amount that would not be
deductible by reason of Section 162(m) of the Code.
3.10 Employee Benefit
Plans. The Company has no employee benefit plans.
3.11 Employee Matters.
Company is in compliance with all applicable Laws and
Regulations respecting the employment of employees and the engagement of leased
employees, consultants and independent contractors, including all Laws and
Regulations regarding discrimination and/or harassment, affirmative action,
terms and conditions of employment, wage and hour requirements (including the
proper classification, compensation and related withholding with respect to
employees, leased employees, consultants and independent contractors), leaves of
absence, reasonable accommodation of disabilities, occupational safety and
health, workers’ compensation and employment practices. Company has not engaged
in any unfair labor practice.
3.12 Compliance with Applicable
Law and Regulatory Matters.
(a) Company
has complied with all applicable Laws and Regulations, and is not in violation
of, and has not received any notices of violation with respect to, any Laws and
Regulations in connection with the conduct of its businesses or the ownership or
operation of its businesses, assets and properties, except for such
noncompliance and violations as would not, individually or in the aggregate, be
material.
(b) Company
has all licenses, permits, certificates, franchises and other authorizations
(collectively, the “Authorizations”) necessary for
the ownership or use of its assets and properties and the conduct of its
business, as currently conducted, and have complied with, and are not in
violation of, any Authorization, except where such noncompliance or violation
would not, individually or in the aggregate, be material. Except as would not be
material to Company, all such Authorizations are in full force and effect and
there are no proceedings pending or, to the knowledge of Company, threatened
that seek the revocation, cancellation, suspension or adverse modification
thereof.
(c) There
are no Governmental Orders applicable to Company which have had a Company
Material Adverse Effect.
3.13 Material Contracts.
There are no material contracts in existence.
3.14 State Takeover Laws.
The Board of Directors of Company has taken or will take all
actions so that any restrictions contained in Nevada Law applicable to a
“business combination” or merger will not apply to prevent or preclude the
execution, delivery or performance of this Agreement or the consummation of the
Merger or the other transactions contemplated by this Agreement. No other state
takeover statute is applicable to the Merger, this Agreement, or the
transactions contemplated hereby.
3.15 Insurance. Company
has in full force and effect the insurance coverage with respect to its business
and there is no claim pending under any of such policies as to which coverage
has been questioned, denied or disputed by the underwriters of such policies.
All premiums due and payable under all such policies have been paid, and Company
is otherwise in compliance in all material respects with the terms of such
policies. Company has no Knowledge of any threatened termination of, or material
premium increase with respect to, any of such policies.
3.16 Intellectual
Property. The Company has no intellectual property.
3.17 Interests of Officers and
Directors. None of the officers or directors of Company has any
interest in any property, real or personal, tangible or intangible, used in the
business of Company, or in any supplier, distributor or customer of Company, or
any other relationship, contract, agreement, arrangement or understanding with
Company.
3.18 Broker’s Fees.
Company has not employed any broker or finder or incurred any liability for any
broker’s fees, commissions or finder’s fees in connection with the Merger or
other transactions contemplated by this Agreement.
3.19 Certain Business
Practices. Company and no director, officer, agent or employee of
Company has (i) used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity on
behalf of, or purportedly on behalf of, or for the business of Company, or
(ii) made any unlawful payments to officials or employees of Governmental
Entities or to directors, officers or employees of foreign or domestic business
enterprises, or violated any provision of the Foreign Corrupt Practices Act of
1977.
ARTICLE IV.
REPRESENTATIONS
AND WARRANTIES
OF
THERABIOGEN
Except as
disclosed in the TheraBiogen Disclosure Schedule, TheraBiogen represents and
warrants to Company that each of the following statements set forth in this
ARTICLE IV is true and correct. The TheraBiogen Disclosure Schedule shall
be organized to correspond to the sections in this ARTICLE IV. Each
exception set forth in the TheraBiogen Disclosure Schedule shall be deemed to
qualify (i) the corresponding representation and warranty set forth in this
Agreement that is specifically identified(by cross-reference or otherwise) in
the TheraBiogen Disclosure Schedule and (ii) any other representation and
warranty to which the relevance of such exception is reasonably
apparent.
4.1 Corporate Organization,
Standing and Power. TheraBiogen is duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization.
TheraBiogen has the corporate power to own its properties and to carry on its
business as now being conducted and is duly qualified to do business and is in
good standing in each jurisdiction in which the failure to be so qualified and
in good standing would be material. TheraBiogen is not in violation of any of
the provisions of its certificate or articles of incorporation or by-laws or
other organizational documents, each as amended.
4.2 TheraBiogen;
Capitalization.
(a) The
authorized capital stock of TheraBiogen consists of 100,000,000 shares of
Common Stock $0.001 par value and 5,000,000 shares of Preferred Stock $0.0001
par value.. At October 7, 2009, (i) 18,791,000 shares of Common Stock were
issued and outstanding, all of which are duly authorized, validly issued, fully
paid and non-assessable and none of which were issued in violation of any
preemptive rights, (ii) no shares of Preferred Stock were issued and
outstanding, and (iii) no shares of Common Stock were held in the
treasury of TheraBiogen.
(b)
TheraBiogen has no contract or other obligation to repurchase, redeem or
otherwise acquire any shares of TheraBiogen, or make any investment (in the form
of a loan, capital contribution or otherwise) in any other entity. Except as set
forth in Section 4.2(b) of the TheraBiogen Disclosure Schedule, all of the
outstanding shares of capital stock and voting securities of TheraBiogen are
duly authorized, validly issued, fully paid and non-assessable. There are no
outstanding subscriptions, options, warrants, puts, calls, rights, exchangeable
or convertible securities or other commitments or agreements of any character
relating to the issued or unissued capital stock or other securities of
TheraBiogen or undertaking to issue, transfer, sell, purchase, redeem or
otherwise acquire any such securities except as listed on Schedule 4.2(b). None
of the outstanding equity securities or other securities of TheraBiogen was
issued in violation of the Securities Act or any other legal
requirement.
4.3 Authority; No
Violation.
(a) TheraBiogen
has full corporate power and authority or power and authority under applicable
laws and its organizational documents, as applicable, to execute and deliver
this Agreement and to comply with the terms hereof and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement,
and the consummation of the transactions contemplated hereby have been duly and
validly approved and adopted by the board of directors of TheraBiogen. No other
corporate proceedings (except for the approval of TheraBiogen
stockholders) on the part of TheraBiogen is necessary to approve this Agreement
and to consummate the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by TheraBiogen and constitutes its valid
and binding obligation, enforceable against it in accordance with its terms,
except as such enforcement may be limited by (i) the effect of bankruptcy,
insolvency, reorganization, receivership, conservatorship, arrangement,
moratorium or other similar laws affecting or relating to the rights of
creditors generally, or (ii) the rules governing the availability of
specific performance, injunctive relief or other equitable remedies and general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
(b) Neither
the execution and delivery of this Agreement by TheraBiogen, nor the
consummation by it of the transactions contemplated hereby, nor compliance by it
with any of the terms or provisions hereof, will (i) violate any provision
of the certificate of incorporation, by-laws or other organizational documents
of TheraBiogen or (ii) assuming that the consents and approvals referred to
in Section 4.4 are duly obtained, (x) violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to TheraBiogen or any of its properties or assets or
(y) violate, conflict with, result in a breach of any provision of or the
loss of any benefit under, constitute a default (or an event which, with notice
or lapse of time, or both, would constitute a default) under, result in the
termination of any or all rights or benefits or a right of termination or
cancellation under, accelerate the performance required by or rights or
obligations under, increase any rate of interest payable under, or result in the
creation of any Lien upon any of the respective properties or assets of
TheraBiogen under, any Authorization or of the terms, conditions or provisions
of any note, bond, mortgage, indenture, deed of trust, license, lease,
agreement, contract, or other instrument or obligation to which TheraBiogen is a
party, or by which they or any of their respective properties, assets or
business activities may be bound or affected.
4.4 Consents and
Approvals. Except for the consents, notices and approvals set forth
in Section 4.4 of the TheraBiogen Disclosure Schedules and the approval by
TheraBiogen’s shareholders, no consents or approvals of any Governmental Entity
or any Third Party are necessary in connection with (a) the execution and
delivery by TheraBiogen of this Agreement and (b) the consummation of the
transactions contemplated hereby.
4.5 Financial
Statements. (a) TheraBiogen has furnished or
made available to Company true and complete copies of the consolidated audited
financial statements of TheraBiogen for the fiscal years ended December 31, 2007
and December 31, 2008 (the “TheraBiogen Financial
Statements”), and TheraBiogen shall furnish or make available to Company
true and complete copies of TheraBiogen financial statements on a reviewed basis
for all periods up to and including the Closing Date.
(b) The
TheraBiogen Financial Statements were prepared in accordance with GAAP applied
on a basis consistent throughout the periods indicated (except as otherwise
stated in such financial statements, including the related notes, and except
that, in the case of unaudited statements for subsequent quarterly periods and
periods up to the Closing Date, such unaudited statements were prepared in
accordance with the requirements for financial statements to be included in
quarterly or other reports filed with the SEC) and fairly present in all
material respects the consolidated financial condition and the results of
operations of TheraBiogen as at the respective dates thereof and for the periods
indicated therein (subject, in the case of unaudited statements, to year-end
audit adjustments).
(c) TheraBiogen
has implemented and maintains disclosure controls and procedures to ensure that
all material information relating to TheraBiogen, (both financial and
non-financial) required to be disclosed by TheraBiogen in the reports that will
be filed by TheraBiogen with the SEC under the Exchange Act will be recorded,
processed, summarized and reported to the individuals responsible for preparing
such reports within the time periods specified in the appropriate rules and
forms and all such information is accumulated and communicated to TheraBiogen’s
management, including its principal executive and principal financial officers,
and to other individuals responsible for preparing such reports as appropriate
to allow timely decisions regarding required disclosure and to make the
certifications of the principal executive officer and principal financial
officer of TheraBiogen required under the Exchange Act with respect to such
reports. TheraBiogen has disclosed, based on its most recent evaluation prior to
the date hereof, to TheraBiogen’s outside auditors and the audit committee of
TheraBiogen’s Board of Directors (i) any significant deficiencies and
material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect
TheraBiogen’s ability to record, process, summarize and report financial
information and (ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in TheraBiogen’s
internal control over financial reporting.
(d) TheraBiogen’s
system of internal controls over financial reporting are reasonably sufficient
in all material respects to provide reasonable assurance regarding the
reliability of TheraBiogen’s financial reporting and financial statements, and
include policies and procedures (i) providing reasonable assurance that
(A) transactions are recorded as necessary to permit preparation of
financial statements in accordance with GAAP and (B) receipts and
expenditures are in accordance with the authorization of TheraBiogen’s
management and directors and (ii) regarding prevention or timely detection
of unauthorized acquisition, use or disposition of TheraBiogen’s assets that
could have a material effect on TheraBiogen’s financial statements. No
significant deficiency or material weakness was identified in management’s
assessment of internal controls as of October 7, 2009, nor has any such
deficiency or weakness been identified between that date and the date of this
Agreement.
4.6 Absence of Certain Changes
or Events. Since October 7, 2009, (i) each of the TheraBiogen
and TheraBiogen has, in all material respects, conducted its business in the
ordinary course consistent with past practice; (ii) there has not occurred
any change, event or condition that is a TheraBiogen Material Adverse Effect or
would reasonably be expected to result in a TheraBiogen Material Adverse Effect;
and (iii) neither TheraBiogen nor TheraBiogen has taken any of the actions
that TheraBiogen and TheraBiogen has agreed not to take from the date hereof
through the Closing Date pursuant to Section 5.3.
4.7 Undisclosed
Liabilities. TheraBiogen has no material obligations or liabilities
of any nature (whether accrued, matured or unmatured, fixed or contingent or
otherwise) other than (i) those set forth or adequately provided for in the
balance sheets (and the related notes thereto) as of October 7, 2009 included in
the TheraBiogen Financial Statements, (ii) those incurred in the ordinary
course of business consistent with past practice since October 7, 2009 and
(iii) those incurred in connection with the execution of this
Agreement.
4.8 Legal
Proceedings. TheraBiogen is not a party to any, and there is no
pending or, to the Knowledge of TheraBiogen, threatened, legal, administrative,
arbitral or other proceeding, claim, action or governmental or regulatory
investigation of any nature against TheraBiogen or any of its officers or
directors. There is no injunction, order, judgment or decree imposed upon
TheraBiogen or any of its officers or directors, or the assets of
TheraBiogen.
4.9 Taxes and Tax
Returns.
(a) (i)
TheraBiogen has filed or caused to be filed all federal, state, foreign and
local Tax Returns required to be filed with any Tax Authority; (ii) all
such Tax Returns are true, accurate, and complete in all material respects;
(iii) TheraBiogen has paid or caused to be paid all Taxes that are due and
payable by any of such companies, other than Taxes which are being contested in
good faith and are adequately reserved against or provided for, in accordance
with GAAP in the TheraBiogen Financial Statements.
(b) No
federal, state, local or foreign audits, examinations, or other formal
proceedings are pending or, to TheraBiogen’s Knowledge, threatened with regard
to any Taxes or Tax Returns of TheraBiogen. No issue has arisen in any
examination of the TheraBiogen by any Tax Authority that if raised with respect
to any other period not so examined would result in a material deficiency for
any other period not so examined, if upheld.
(c) There
are no disputes pending with respect to, or claims or assessments asserted in
writing for, any material amount of Taxes payable by TheraBiogen nor has
TheraBiogen given or been requested in writing to give any currently effective
waiver extending the statutory period of limitation applicable to any Tax return
for any period.
4.10 Employee
Matters. TheraBiogen is in compliance with all applicable Laws
and Regulations respecting the employment of employees and the engagement of
leased employees, consultants and independent contractors, including all Laws
and Regulations regarding discrimination and/or harassment, affirmative action,
terms and conditions of employment, wage and hour requirements (including the
proper classification, compensation and related withholding with respect to
employees, leased employees, consultants and independent contractors), leaves of
absence, reasonable accommodation of disabilities, occupational safety and
health, workers’ compensation and employment practices. TheraBiogen is not
engaged in any unfair labor practice. TheraBiogen is not and has not been a
party to any collective bargaining agreement or other labor union contract; nor
does TheraBiogen have any Knowledge of any activities or proceedings of any
labor union or other collective bargaining representative to organize any such
employees.
4.11 Compliance with Applicable
Law and Regulatory Matters. TheraBiogen has complied with all
applicable Laws and Regulations, and is not in violation of, and has not
received any notices of violation with respect to, any Laws and Regulations in
connection with the conduct of their respective businesses or the ownership or
operation of their respective businesses, assets and properties. There are no
Governmental Orders applicable to TheraBiogen which have had a TheraBiogen
Material Adverse Effect.
4.12 Material
Contracts. Except for the contracts set forth in Section 4.13
of the TheraBiogen Disclosure Schedule, TheraBiogen is not a party to or is
bound by any material contract.
4.13 Assets.
TheraBiogen owns, leases or has the right to use all the properties and assets
necessary or currently used for the conduct of its respective businesses free
and clear of all Liens of any kind or character, except Permitted Liens. All
items of equipment and other tangible assets owned by or leased to TheraBiogen
are in good condition and repair (ordinary wear and tear excepted). In the case
of leased equipment and other tangible assets, TheraBiogen holds valid leasehold
interests in such leased equipment and other tangible assets, free and clear of
all Liens of any kind or character, except Permitted Liens.
4.14 Environmental
Liability. TheraBiogen is and has been in compliance with all
Environmental laws, except where such noncompliance would not, individually or
in the aggregate, be material. To the Knowledge of TheraBiogen, there are no
liabilities of TheraBiogen of any kind, whether accrued, contingent, absolute,
determined, determinable or otherwise arising under or relating to any
Environmental Law and, to the Knowledge of TheraBiogen, there are no facts,
conditions, situations or set of circumstances that could reasonably be expected
to result in or be the basis for any such liability. There are no legal,
administrative, arbitral or other proceedings, claims or actions or any private
environmental investigations or remediation activities or governmental
investigations of any nature that would be reasonably likely to result in the
imposition on TheraBiogen, of any liability or obligation arising under any
Environmental Laws, pending or, to the Knowledge of TheraBiogen, threatened
against TheraBiogen. TheraBiogen is not subject to any agreement, order,
judgment or decree by or with any court, governmental authority, regulatory
agency or Third Party imposing any liability or obligation with respect to the
foregoing.
4.15 Insurance. There
is no claim pending under any insurance policy held by TheraBiogen with respect
to its business as to which coverage has been questioned, denied or disputed by
the underwriters of such policies. All premiums due and payable under all such
policies have been paid, and TheraBiogen is otherwise in compliance in all
material respects with the terms of its policies. TheraBiogen has no Knowledge
of any threatened termination of, or material premium increase with respect to,
any of such policies.
4.16 Intellectual
Property.
(a)
TheraBiogen owns, or is licensed or otherwise possess rights to use all of the
Intellectual Property used by it as of the date hereof (collectively, the “TheraBiogen Intellectual
Property”) in the manner that it is currently used by TheraBiogen and
TheraBiogen with, and such ownership, licenses and rights will not be affected
by the consummation of the transactions contemplated by this Agreement.
TheraBiogen has taken all actions necessary to maintain and protect the
TheraBiogen Registered Intellectual Property, including payment of applicable
maintenance fees, filing of applicable statements of use, timely response to
office actions, and disclosure of any required information. TheraBiogen has
complied with all necessary notice and marking requirements for the TheraBiogen
Registered Intellectual Property. None of the TheraBiogen Registered
Intellectual Property has been adjudged invalid or unenforceable in whole or in
part and, to the Knowledge of TheraBiogen, all TheraBiogen Registered
Intellectual Property is valid and enforceable.
(b)
TheraBiogen has not received written notice from any Third Party alleging any
interference, infringement, misappropriation or violation by TheraBiogen of any
rights of any Third Party to any Intellectual Property and, to the Knowledge of
TheraBiogen has interfered with, infringed upon, misappropriated or violated any
rights of any Third Party to any Intellectual Property. To the Knowledge of
TheraBiogen, no Third Party has interfered with, infringed upon, misappropriated
or violated any TheraBiogen Intellectual Property. TheraBiogen has not entered
into any exclusive license or agreement relating to any TheraBiogen Intellectual
Property with, Third Parties. TheraBiogen does not owe any royalties or payments
to any Third Party for using or licensing to others any TheraBiogen Intellectual
Property.
(c)
TheraBiogen is not a party to any agreement, or has any other obligation to
indemnify, any Person against a claim of infringement of or misappropriation by
any TheraBiogen Intellectual Property.
4.17 Interests of Officers and
Directors. None of the officers or directors of TheraBiogen has any
interest in any property, real or personal, tangible or intangible, used in the
business of TheraBiogen, or in any supplier, distributor or customer of
TheraBiogen, or any other relationship, contract, agreement, arrangement or
understanding with TheraBiogen, except for the normal ownership interests of a
stockholder.
4.18 Broker’s Fees.
TheraBiogen has not employed any broker or finder or incurred any liability for
any broker’s fees, commissions or finder’s fees in connection with the Merger or
related transactions contemplated by this Agreement.
4.19 Certain Business
Practices. Neither TheraBiogen and no director, officer, agent or
employee of TheraBiogen and TheraBiogen has (i) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity on behalf of, or purportedly on behalf of, or for the
business of TheraBiogen, or (ii) made any unlawful payments to officials or
employees of Governmental Entities or to directors, officers or employees of
foreign or domestic business enterprises, or violated any provision of the
Foreign Corrupt Practices Act of 1977.
ARTICLE V.
CERTAIN
COVENANTS OF THE PARTIES
5.1 Conduct of Business Prior to
the Effective Time. During the period from the date of this
Agreement to the Effective Time, except as expressly contemplated or permitted
by this Agreement, Company and TheraBiogen each shall (a) conduct its
business in the ordinary course consistent with past practice and (b) use
commercially reasonable efforts to preserve intact its present business
organizations, keep available the services of its present executive officers and
key employees and preserve its relationships with customers, suppliers,
distributors, licensors, licensees, and others having business dealings
with it.
5.2 Actions Requiring
Consent. During the period from the date of this Agreement and
continuing until the earlier of the termination of this Agreement or the
Effective Time, except as expressly provided in this Agreement, Company and
TheraBiogen each shall not do, cause or permit any of the following, without the
prior written consent of TheraBiogen:
(a) Cause
or permit any amendment, modification, alteration or rescission of the
Certificate of Incorporation, the By-Laws, or the certificate of incorporation,
by-laws or other charter or organizational documents of any of the
Company;
(b) Declare
or pay any dividends on or make any other distributions (whether in cash, stock
or property) in respect of any of its capital stock or split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock, or repurchase or otherwise acquire, directly or indirectly, any
shares of its capital stock except from former employees, directors and
consultants in accordance with agreements providing for the repurchase of shares
in connection with any termination of service to it or any of its
Subsidiaries;
(c) Issue,
deliver, sell or authorize or propose the issuance, delivery or sale of, or
purchase or propose the purchase of, any shares of its capital stock or
securities convertible into, or subscriptions, rights, warrants or options to
acquire, or other agreements or commitments of any character obligating it to
issue any such shares or other convertible securities;
(d) Sell,
transfer, lease, license or otherwise dispose of or encumber any of its
properties or assets which are material, individually or in the aggregate, to
the business of Company and its Subsidiaries (taken as a whole), except in the
ordinary course of business consistent with past practice;
(e) (i) Incur
any indebtedness for borrowed money, (ii) assume, guarantee, endorse or
otherwise as an accommodation become responsible for the obligations of any
other Person or (iii) cancel, release, assign or modify any material amount
of indebtedness of any other Person;
(f) Enter
into any lease for real property or personal property lease;
(g) Reduce
the amount of any insurance coverage provided by existing insurance
policies;
(h) Acquire
or agree to acquire, by merging or consolidating with, or by purchasing a
substantial portion of the assets of, or by any other means, any business or any
corporation, partnership, limited liability company, association or other
business organization or division thereof, or otherwise acquire or agree to
acquire any assets which are material, individually or in the aggregate, to
Company or acquire or agree to acquire any equity securities of any corporation,
partnership, limited liability company, association or business
organization;
(i) Other
than as required by applicable Laws and Regulations, make, change or revoke any
election in respect of Taxes, adopt or change any accounting method in respect
of Taxes, change any method of Tax accounting or Tax procedure or practice,
enter into any closing agreement, settle any claim or assessment in respect of
Taxes, or consent to any extension or waiver of the limitation period applicable
to any claim or assessment in respect of Taxes;
(j) Revalue
any of its assets other than as required by applicable law, rule or
regulation;
(k) Make
any change to its accounting methods or practices, except as may be required by
GAAP, Regulation S-X or other rule or regulation promulgated by the
SEC;
(l) Sell,
transfer, abandon or change any domain names or URLs or fail to renew any
existing domain name or URL registrations on a timely basis;
(m) Adopt
a plan or agreement of, or resolutions providing for or authorizing, any
complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization or business
combination; or
(n) Take
or agree in writing to take, any of the actions described in
Sections 5.2(a) through (n) above.
ARTICLE VI.
ADDITIONAL
AGREEMENTS
6.1 Stockholder
Approval.
(a) As
promptly as practicable following the execution of this Agreement, Company shall
take all action necessary under applicable legal requirements to call, give
notice of and hold a meeting of the holders of Company’s capital stock to vote
on a proposal to adopt this Agreement (the “Company Stockholders’
Meeting”) or to obtain written consents of its shareholders in lieu of a
meeting.
6.2 Access to
Information.
(a) Company
agrees to provide TheraBiogen and TheraBiogen and their respective officers,
directors, employees, accountants, counsel, financial advisors, agents and other
representatives (collectively, the “TheraBiogen Entities
Representatives”), from time to time prior to the earlier of the
Effective Time or the termination of this Agreement, such information as
TheraBiogen shall reasonably request with respect to Company and their
respective businesses, financial conditions, employees and operations.
TheraBiogen shall hold, and shall cause their respective Affiliates and the
TheraBiogen Representatives to hold, any non-public information received from
Company, directly or indirectly, in accordance with the Confidentiality
Agreement.
(b) TheraBiogen
agrees to provide Company and the Company Representatives, from time to time
prior to the earlier of the Effective Time or the termination of this Agreement,
such information as Company shall reasonably request with respect to TheraBiogen
and TheraBiogen and their respective businesses, financial conditions, employees
and operations. Company shall hold, and shall cause its Affiliates and the
TheraBiogen, directly or indirectly, in accordance with the Confidentiality
Agreement.
6.3 Public
Disclosure. Unless otherwise permitted by this Agreement, the
Parties shall consult with each other before issuing any press release or
otherwise making any public statement or making any other public (or
non-confidential) disclosure (whether or not in response to an inquiry)
regarding the terms of this Agreement or any of the transactions contemplated
hereby, and neither shall issue any such press release or make any such
statement or disclosure without the prior approval of the other (which approval
shall not be unreasonably withheld or delayed), except as may be required by
law.
6.4 Cooperation; Further
Assurances. Each of the Parties shall use its commercially
reasonable efforts to effect the transactions contemplated hereby and to fulfill
and cause to be fulfilled the conditions to Closing under this Agreement. Each
Party hereto shall cooperate with the other and promptly prepare and file all
necessary documentation, and effect all applications, notices, petitions and
filings, to obtain as promptly as practicable all permits, consents, approvals
and authorizations of all third parties and Governmental Entities which are
necessary or advisable to consummate the transactions contemplated by this
Agreement. Each of the Parties hereto, at the reasonable request of another
Party hereto, shall execute and deliver such other instruments and do and
perform such other acts and things as may be necessary or desirable for
effecting the consummation of this Agreement and the transactions contemplated
hereby.
6.6 Director and Officer
Indemnification.
(a) The
provisions of the certificate of incorporation and by-laws of the Surviving
Corporation relating to indemnification of officers, directors, employees and
agents, shall not be amended, repealed or otherwise modified after the Effective
Time in any manner that would adversely affect the rights thereunder of the
persons who at any time prior to the Effective Time were identified as
prospective indemnitees under the Certificate of Incorporation or By-Laws of
Company in respect of actions or omissions occurring at or prior to the
Effective Time (including the transactions contemplated hereby), unless such
modification is required by law.
(b) Company
shall cause, to the full extent Company has power to do so, the Surviving
Corporation to comply with the provisions of the certificate of incorporation
and the by-laws of the Surviving Corporation, and with agreements of TheraBiogen
in effect at the date of this Agreement, relating to indemnification of the
present and former officers, directors and employees of
TheraBiogen.
ARTICLE VII.
CONDITIONS
PRECEDENT
7.1 Conditions to Each Party’s
Obligation To Effect the Merger. The respective obligations of
TheraBiogen and the Company to effect the Merger shall be subject to the
satisfaction at or prior to the Effective Time of the following
conditions:
(a) Stockholder
Approval. All stockholder approvals shall have been obtained as
required by Nevada Law and in accordance with applicable securities
laws
(b) No Injunctions or
Restraints; Illegality. No temporary restraining order, preliminary
or permanent injunction or other order issued by any court of competent
jurisdiction or other legal or regulatory restraint or prohibition preventing
the consummation of the Merger or the Contribution shall be in effect; nor shall
there be any statute, rule, regulation or order enacted, entered or enforced
which prevents or prohibits the consummation of the Merger or the Contribution.
In the event an injunction or other order shall have been issued, each Party
agrees to use its commercially reasonable efforts to have such injunction or
other order lifted.
(c) Governmental Consents and
Approval. The Parties shall have timely obtained from any applicable
Governmental Entity all approvals, waivers, consents or indications of
non-objection, if any, necessary for consummation of or in connection with the
transactions contemplated hereby.
7.2 Additional Conditions to the
Obligations of TheraBiogen. The obligations of TheraBiogen to
consummate the Merger shall be subject to the satisfaction or waiver by
TheraBiogen at or prior to the Closing Date of each of the following
conditions:
(a) Representations and
Warranties. The representations and warranties of Company set forth
in this Agreement shall be true and correct in all material respects, in each
case as of the date of this Agreement and as of the Closing Date as though made
on the Closing Date, except to the extent such representations and warranties
are expressly made only as of an earlier date, in which case as of such earlier
date.
(b) Performance of
Obligations. Company shall have performed in all material respects
all obligations required to be performed by it under this Agreement at or prior
to the Closing Date.
(c) Certificate of
Company. TheraBiogen shall have received a certificate executed on
behalf of Company by its Chief Executive Officer or Chief Financial Officer, in
their capacities as such, that the conditions set forth in Sections 7.2(a)
and (b) have been satisfied.
(d) Material Adverse
Effect. Since the date of this Agreement, there shall not have
occurred any event, development, circumstance or set of circumstances, which,
individually or in the aggregate, has had or would reasonably be expected to
have a Company Material Adverse Effect.
(e) Appraisal
Demands. Holders of not more than 5% of the outstanding shares of
Company Common Stock shall have made a demand for appraisal and payment for
their shares pursuant to Nevada Law.
7.3 Additional Conditions to
Obligations of Company. The obligations of Company to consummate the
Merger shall be subject to the satisfaction or waiver by Company at or prior to
the Closing Date of each of the following conditions:
(a) Representations and
Warranties. The representations and warranties of TheraBiogen set
forth in this Agreement shall be true and correct in all material respects, in
each case as of the date of this Agreement and as of the Closing Date as though
made on the Closing Date, except to the extent such representations and
warranties are expressly made only as of an earlier date, in which case as of
such earlier date; provided that, if any of such representations and warranties
shall not be true and correct (for this purpose disregarding any qualification
or limitation as to materiality or a TheraBiogen Material Adverse Effect), then
the condition stated in this Section 7.3(a) shall be deemed satisfied if
and only if the cumulative effect of all inaccuracies of such representations
and warranties (for this purpose disregarding any qualification or limitation as
to materiality or TheraBiogen Material Adverse Effect) shall not be or have a
TheraBiogen Material Adverse Effect.
(b) Performance of
Obligations. TheraBiogen shall have performed in all material
respects all obligations required to be performed by them under this Agreement
at or prior to the Closing Date.
(c) Certificate of
TheraBiogen. Company shall have been provided with a certificate
executed on behalf of TheraBiogen by an authorized officer of each, in his or
her capacity as such, that the conditions set forth in Sections 7.3(a) and
(b) have been satisfied.
(d) TheraBiogen Material Adverse
Effect. Since the date of this Agreement, there shall not have
occurred any event, development, circumstance or set of circumstances, which,
individually or in the aggregate, has had or would reasonably be expected to
have a TheraBiogen Material Adverse Effect.
ARTICLE VIII.
TERMINATION
AND AMENDMENT
8.1 Termination. This
Agreement may be terminated:
(a) by
mutual consent of TheraBiogen and Company at any time prior to the Effective
Time;
(b) by
either TheraBiogen or Company if the Closing shall not have occurred on or
before December 31, 2009; provided, that the right to terminate this Agreement
under this Section 8.1(b) shall not be available to any party whose action
or failure to act has been the cause of or resulted in the failure of the Merger
to occur on or before such date and such action or failure to act constitutes a
breach of this Agreement;
(c) by
TheraBiogen at any time prior to the Effective Time, if: (i) Company shall
have breached any of its representations, warranties or obligations hereunder to
an extent that would cause the conditions set forth in Section 7.2(a) or
(b) not to be satisfied and such breach shall not have been cured within 20
Business Days of receipt by Company of written notice of such breach (provided
that the right to terminate this Agreement by TheraBiogen shall not be available
to TheraBiogen if TheraBiogen is at that time in material breach of this
Agreement); or (ii) the Board of Directors of Company shall have withdrawn
or modified the Company Board Recommendation in any manner adverse to
TheraBiogen, or shall have resolved to do so;
(d) by
Company at any time prior to the Effective Time, if TheraBiogen shall have
breached any of its representations, warranties or obligations hereunder to an
extent that would cause the conditions set forth in Section 7.3(a) or
(b) not to be satisfied and such breach shall not have been cured within 20
Business Days of receipt by TheraBiogen of written notice of such breach
(provided that the right to terminate this Agreement by Company shall not be
available to Company if Company is at that time in material breach of this
Agreement);
(e) by
either TheraBiogen or Company if at any time prior to the Effective Time any
permanent injunction or other order of a court or other competent authority
preventing the consummation of the Merger shall have become final and
nonappealable; or
(g) by
either TheraBiogen or Company if the required stockholder approvals shall not
have been obtained.
8.2 Effect of
Termination. If this Agreement is terminated as provided in
Section 8.1, there shall be no liability or obligation on the part of any
of the Parties or their respective officers, directors, stockholders or
Affiliates; provided, that nothing herein shall relieve any party from
liability for intentional breach of this Agreement or for fraud in connection
with this Agreement or the transactions contemplated hereby.
8.3 Expenses and Termination
Fee. Whether or not the Merger is
consummated, all costs and expenses incurred by Company and
TheraBiogen in connection with this Agreement and the transactions
contemplated hereby (including, without limitation, the fees and expenses of
their advisers, agents, accountants and legal counsel) shall be paid by the
Party incurring such expense.
8.4 Amendment. The
Parties may cause this Agreement to be amended at any time by execution of an
instrument in writing signed on behalf of each of the Parties; provided,
however, that after any approval of the transactions contemplated by this
Agreement by the stockholders of Company, there may not be, without further
approval of such stockholders, any amendment of this Agreement that requires
further approval under applicable law.
8.5 Extension;
Waiver. At any time prior to the Effective Time any Party may, to
the extent legally allowed, (i) extend the time for the performance of any
of the obligations or other acts of the other Parties hereto intended for such
Party’s benefit, (ii) waive any inaccuracies in the representations and
warranties made to such Party contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any of the agreements or
conditions for the benefit of such Party contained herein. Any agreement on the
part of a Party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such
Party.
ARTICLE IX.
GENERAL
PROVISIONS
9.1 Nonsurvival of
Representations, Warranties and Agreements. The representations,
warranties and agreements set forth in this Agreement shall terminate at the
Effective Time.
9.2 Notices. All
notices and other communications required or permitted to be given hereunder
shall be sent in writing to the party to whom it is to be given with copies to
all other parties as follows (as elected by the party giving such notice) and be
either personally delivered against receipt, by facsimile or other wire
transmission, by registered or certified mail (postage prepaid, return receipt
requested) or deposited with a nationally recognized express courier (with
confirmation) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if
to TheraBiogen, to:
TheraBiogen,
Inc..
0000 X.
Xxxxxxxxx Xxxxxxx, Xxxxx X
Xxxxxxx
Xxxxxx, XX 00000
Attention:
Xxxxx Xxx, Chairman of the Board
Facsimile:
(000) 000-0000
(b) if
to Company, to:
Kushi
Resources, Inc..
000 Xxxx
Xxxxxx, Xxxxx 0000
Xxx Xxxx,
XX 00000
Facsimile:
(???) ???-????
All
notices and other communications shall be deemed to have been given
(i) when received if given in person, (ii) on the date of electronic
confirmation of receipt if sent by facsimile or other wire transmission,
(iii) three Business Days after being deposited in the U.S. mail,
certified or registered mail, postage prepaid, or (iv) one Business Day
after being deposited with a reputable overnight courier.
9.3 Interpretation. When
a reference is made in this Agreement to Exhibits or Schedules, such reference
shall be to an Exhibit or Schedule to this Agreement unless otherwise indicated.
The words “include,” “includes” and “including” when used herein shall be deemed
in each case to be followed by the words “without limitation.” The phrase “made
available” in this Agreement shall mean that the information referred to has
been made available if requested by the party to whom such information is to be
made available. The phrases “the date of this Agreement”, “the date hereof” and
terms of similar import, unless the context otherwise requires, shall be deemed
to refer to the date set forth in the first paragraph of this Agreement. The
table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Time is of the essence in determining the rights of, and
compliance with the terms of this Agreement by, the Parties.
9.4 Counterparts. This
Agreement may be executed in two or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other parties, including delivery by facsimile or other electronic means, it
being understood that all parties need not sign the same
counterpart.
9.5 Entire
Agreement. This Agreement and the documents and instruments and
other agreements specifically referred to herein or delivered pursuant hereto,
including the Exhibits, and Schedules, constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof.
9.6 Remedies. Nothing
in this Agreement is intended either to preclude any Party from seeking or to
authorize any Party to seek specific performance of this Agreement as a remedy
in the event of a breach of this Agreement.
9.7 Assignment. Neither
this Agreement nor any of the rights, interests or obligations shall be assigned
by any of the Parties (whether by operation of law or otherwise) without the
prior written consent of the other Parties. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the Parties and their respective successors and assigns.
9.8 Third Party
Beneficiaries. The parties signatory hereto hereby agree that their
respective representations, warranties and covenants set forth herein are solely
for the benefit of the other such parties hereto, in accordance with and subject
to the terms of this Agreement, and that this Agreement is not intended to,
and does not, confer upon any Person other than the parties hereto any rights or
remedies hereunder, including the right to rely upon the representations and
warranties set forth herein.
9.9 Governing
Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Nevada without reference to such state’s
principles of conflicts of law.
9.10 Consent to
Jurisdiction. Each of the parties to this Agreement hereby
irrevocably and unconditionally submits, for itself and its assets and
properties, to the exclusive jurisdiction of any Nevada state court or Federal
court of the United States of America sitting within the State of Nevada, and
any respective appellate court, in any action or proceeding arising out of or
relating to this Agreement, the agreements delivered in connection with this
Agreement, or the transactions contemplated hereby or thereby, or for
recognition or enforcement of any judgment relating thereto, and each of the
parties to this Agreement hereby irrevocably and unconditionally:
(i) agrees not to commence any such action or proceeding except in such
courts; (ii) agrees that any claim in respect of any such action or
proceeding may be heard and determined in such Nevada State court or, to the
extent permitted by law, in such Federal court; (iii) waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any such action or proceeding in
any such Nevada State or Federal court; and (iv) waives, to the fullest
extent permitted by law, the defense of lack of personal jurisdiction or an
inconvenient forum to the maintenance of such action or proceeding in any such
Nevada State or Federal court. Each of the parties to this Agreement hereby
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Each of the parties to this Agreement
hereby irrevocably consents to service of process in the manner provided for
notices in Section 9.2. Nothing in this Agreement shall affect the right of
any party to this Agreement to serve process in any other manner permitted by
applicable law.
9.11 Rules of
Construction. The parties hereto agree that they have been
represented by counsel during the negotiation, preparation 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 shall be construed against the party drafting such agreement or
document.
9.12 Severability. In
the event that any provision of this Agreement, or the application thereof,
becomes or is declared by a court of competent jurisdiction to be illegal, void,
invalid or unenforceable, the remainder of this Agreement shall continue in full
force and effect and the application of such provision to other persons or
circumstances shall be interpreted so as reasonably to effect the intent of the
parties hereto.
9.13 Attorneys’
Fees. In any action at law or suit in equity to enforce this
Agreement or the rights of any of the parties hereunder, the prevailing party in
such action or suit shall be entitled to receive its reasonable attorneys’ fees
and costs and expenses incurred in such action or suit.
In Witness Whereof, the
Parties have caused this Agreement to be executed by their respective officers
thereunto duly authorized as of the date first above written.
SIGNATURES
THERABIOGEN,
INC.
By:
________________________
KUSHI
RESOURCES, INC.
By:
________________________
