Exhibit 99.1
AGREEMENT AND PLAN OF MERGER
AMONG
HUNAPU INC.
(A Nevada Corporation)
CRITICAL HOME CARE, INC.
(a Delaware Corporation)
AND
Classic HealthCare Solutions, INC.
(a New York Corporation)
DATED AS OF MAY 10, 2002
TABLE OF CONTENTS
Article 1. THE MERGER..........................................................1
SECTION 1.1. The Merger.....................................................1
SECTION 1.2. Closing........................................................2
SECTION 1.3. Effective Time.................................................2
SECTION 1.4. Effects of the Merger..........................................2
SECTION 1.5. Certificate of Incorporation and By-laws of the Surviving
Corporation....................................................2
SECTION 1.6. Boards, Committees and Officers................................2
SECTION 1.7. Name of SHELL CORP.............................................2
SECTION 1.8. Reservation of Right to Revise Transaction.....................2
Article 2. EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES.........................................3
SECTION 2.1. Effect on Capital Stock........................................3
SECTION 2.2. HUNAPU INC. to Deliver Certificates............................4
SECTION 2.3. No Fractional Securities.......................................4
SECTION 2.4. Closing of Transfer Books......................................4
SECTION 2.5. Tax Treatment..................................................5
SECTION 2.6. Restricted Securities..........................................5
Article 3. REPRESENTATIONS AND WARRANTIES......................................5
SECTION 3.1. Representations and Warranties of CHSI.........................5
SECTION 3.2. Representations and Warranties of HUNAPU INC..................11
SECTION 3.3. Representations and Warranties of CHCI........................17
Article 4. COVENANTS RELATING TO CONDUCT OF BUSINESS..........................18
SECTION 4.1. Conduct of Business...........................................18
SECTION 4.2. No Solicitation by HUNAPU INC.................................20
Article 5. ADDITIONAL AGREEMENTS..............................................21
SECTION 5.1. Access to Information; Confidentiality........................21
SECTION 5.2. Best Efforts..................................................21
SECTION 5.3. Post-Effective Amendment......................................22
SECTION 5.4. Fees and Expenses.............................................22
SECTION 5.5. Public Announcements..........................................22
SECTION 5.6. Bulletin Board Listing........................................22
SECTION 5.7. HUNAPU INC. Liabilities.......................................23
SECTION 5.8. Tax Treatment.................................................23
SECTION 5.9. Company Officers; Employment Contracts........................23
SECTION 5.10. Post-Merger Operations.......................................23
SECTION 5.11. Conveyance Taxes.............................................23
Article 6. CONDITIONS PRECEDENT...............................................23
SECTION 6.1. Conditions to Each Party's Obligation to Effect the Merger....23
SECTION 6.2. Conditions to Obligations of HUNAPU INC.......................24
SECTION 6.3. Conditions to Obligations of CHSI.............................25
SECTION 6.4. Frustration of Closing Conditions.............................28
Article 7. TERMINATION, AMENDMENT AND WAIVER..................................28
SECTION 7.1. TERMINATION...................................................28
SECTION 7.2. Effect of Termination.........................................29
SECTION 7.3. Amendment.....................................................29
SECTION 7.4. Extension; Waiver.............................................29
SECTION 7.5. Procedure for Termination, Amendment, Extension or Waiver.....29
Article 8. INDEMNIFICATION....................................................29
SECTION 8.1. Survival of Representations and Warranties....................29
SECTION 8.2. Method of Asserting Claims....................................30
Article 9.....................................................................31
SECTION 9.1. STATUS OF SCHEDULES AND EXHIBITS AS OF SIGNATURE DATE.........31
SECTION 9.2. NO OTHER REPRESENTATIONS AND WARRANTIES.......................31
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ARTICLE 10 GENERAL PROVISIONS................................................32
SECTION 10. Survival of Representations and Warranties.....................32
SECTION 10.2. Notices......................................................32
SECTION 10.3. Definitions..................................................33
SECTION 10.4. Interpretation...............................................33
SECTION 10.5. Counterparts.................................................34
SECTION 10.6. Entire Agreement; No Third-Party Beneficiaries...............34
SECTION 10.7. Governing Law................................................34
SECTION 10.8. Jurisdiction.................................................34
SECTION 10.9. Assignment...................................................34
SECTION 10.10. Headings....................................................35
SECTION 10.11. Severability................................................35
SECTION 10.12. Brokers and Finders.........................................36
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AGREEMENT AND PLAN OF MERGER dated as of May 10, 2002, among HUNAPU INC.,
a Nevada corporation ("HUNAPU INC." or "Shell Corp."), CLASSIC HEALTHCARE
SOLUTIONS, INC, a New York corporation ("CHSI"), and CRITICAL HOME CARE INC, a
Delaware corporation ("CHCI"). Shell Corp, CHCI and CHSI are hereinafter
collectively referred to as the "Merger Parties".
WHEREAS, the respective Boards of Directors of HUNAPU INC. and CHCI have
each approved the acquisition (the "Critical Acquisition") of all of the issued
and outstanding capital stock of CHCI by HUNAPU INC. following the execution of
a Plan and Agreement or Reorganization by and between CHCI and CHSI and its
shareholders;
WHEREAS, the respective Boards of Directors of HUNAPU INC., CHCI and CHSI
have each approved the merger of CHCI as a wholly-owned subsidiary of Shell
Corp. with and into CHSI (the "Merger"), with CHSI continuing as the surviving
corporation and a wholly-owned subsidiary of Shell Corp. Upon the terms and
subject to the conditions set forth in this Agreement, each issued and
outstanding share of common stock, par value $.0001 per share, of CHSI ("CHSI
Common Stock"), will be converted into the right to receive 18,000 shares of
Shell Corp. common stock, par value $.001 per share ("HUNAPU INC. Common
Stock"), and each issued and outstanding share of common stock, par value $.001
per share of CHCI, will be converted into the right to receive one share of CHSI
common stock. At the closing, Hunapu will change its name to Critical Home Care
Inc and apply to trade under the OTCBB symbol "CCHI";
WHEREAS, the respective Boards of Directors of HUNAPU INC., CHCI and CHSI
have each determined that the Mergers and the other transactions contemplated
hereby are consistent with, and in furtherance of, their respective business
strategies and goals and are in the best interests of their respective
stockholders;
WHEREAS, the Merger Parties intend that the merger of CHCI with and into
CHSI will quality as a tax-free reorganization pursuant to Section 368(a) of the
Internal Revenue Code of 1986, as amended and the rules and regulations
promulgated thereunder (the "Code"); and
WHEREAS, the Merger Parties desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also to
prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
ARTICLE 1.
THE MERGER
SECTION 1.1. THE MERGER.
Upon the terms and subject to the conditions set forth in an Option to
Effect a Plan and Agreement or Reorganization, HUNAPU INC. shall complete the
Critical Acquisition, as described in Section 2.2. CHCI shall then be a
wholly-owned subsidiary of HUNAPU INC. In accordance with the Delaware General
Corporation Law (the "DGCL") and the New York Business Corporation Law
("NYBCL"), CHCI shall then be merged with and into CHSI (the "Merger") and CHSI
shall be the surviving corporation (the "Surviving Corporation"). At the
Effective Time (as defined in Section 1.3), the separate corporate existence of
CHCI shall cease, and CHSI shall continue as the Surviving Corporation and shall
succeed to and assume all of the rights, properties, franchises, liabilities and
obligations of CHCI in accordance with DGCL, the NYBCL and this Agreement.
SECTION 1.2. CLOSING.
The closing of the Merger (the "Closing") will take place at 10:00 a.m. on
a date to be specified by the parties (the "Closing Date"), which shall be no
later than the second business day after satisfaction or waiver of the
conditions set forth in Article 6, unless another time or date is agreed to by
the parties hereto or this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned, pursuant to Article
7 herein. The Closing will be held at such location as is agreed by the Merger
Parties.
SECTION 1.3. EFFECTIVE TIME.
Subject to the provisions of this Agreement, as soon as practicable on the
Closing Date, the parties shall cause the Merger to be consummated by filing a
certificate of merger or other appropriate documents (in any such case, the
"Certificate of Merger") executed in accordance with the relevant provisions of
the DGCL and the NYBCL and shall make all other filings or recordings required
under their respective statutes. The Merger shall become effective at such time
as the Certificate of Merger is duly filed with the Secretary of State of New
York, or at such subsequent date or time as Shell Corp, CHCI and CHSI shall
agree and specify in the Certificate of Merger (the time the Merger becomes
effective being hereinafter referred to as the "Effective Time").
SECTION 1.4. EFFECTS OF THE MERGER.
The Merger shall have the effects set forth in Section 906 of the NYBCL
and Section 259 of the DGCL.
SECTION 1.5. CERTIFICATE OF INCORPORATION AND BY-LAWS OF THE SURVIVING
CORPORATION.
The Certificate of Incorporation of CHSI, as amended and in effect prior
to the Effective Time, shall be the Certificate of Incorporation of the
Surviving Corporation (the "Surviving Certificate of Incorporation"). The
By-laws of CHSI, in effect prior to the Effective Time, shall be the By-laws of
the Surviving Corporation (the "Surviving By-laws").
SECTION 1.6. BOARDS, COMMITTEES AND OFFICERS.
Prior to the Effective Time, HUNAPU INC. shall adopt resolutions in form
and substance reasonably acceptable to CHSI, establishing, among other things
that, the Board of Directors and Officers of HUNAPU INC. from and after the
Effective Time shall be comprised solely of the nominees of CHSI.
SECTION 1.7. NAME OF SHELL CORP.
The name of HUNAPU INC., shall be changed to "CRITICAL HOME CARE INC".
SECTION 1.8. RESERVATION OF RIGHT TO REVISE TRANSACTION.
If each of CHSI, CHCI and HUNAPU INC. agree, the parties hereto may change
the method of effecting the business combination between CHCI and CHSI, and each
party and Shell Corp shall cooperate in such efforts; provided, however, that no
such change shall alter or change the amount or kind of consideration to be
issued to holders of CHCI and CHSI Capital Stock as provided for in this
Agreement (the "Merger Consideration") and no such change shall alter or change
the tax free nature of the Merger of CHSI and CCHI.
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ARTICLE 2.
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES
SECTION 2.1. EFFECT ON CAPITAL STOCK.
As of the Effective Time, by virtue of the Merger and without any action
on the part of the holder of any shares of CHSI Common Stock or the holder of
any shares of capital stock of CHCI:
(a) Conversion of CHCI Stock. Each issued and outstanding share of
(i) CHCI Common Stock shall be converted into the right to receive one (1)
validly issued, fully paid and nonassessable share of CHSI Common Stock.
As of the Effective Time, any and all shares of CHCI common stock
outstanding shall no longer be outstanding and shall automatically be
cancelled and retired and shall cease to exist (collectively, the "CHCI
Capital Stock") shall cease to have any rights with respect thereto. and
shall be surrendered at the Closing.
(b) Conversion of CHSI Stock. Each of the 200 issued and outstanding
shares of (i) CHSI Common Stock shall be converted into the right to
receive 18,000 (the "Exchange Ratio") validly issued, fully paid and
nonassessable shares of HUNAPU INC. Common Stock. As of the Effective
Time, all shares of CHSI common stock outstanding shall no longer be
outstanding and shall automatically be cancelled and retired and shall
cease to exist (collectively, the "CHSI Capital Stock") and shall cease to
have any rights with respect thereto, except the right to receive the
aggregate 3,600,000 shares of HUNAPU INC. Common Stock (the "Merger
Consideration") and shall be surrendered at the Closing.
(c) HUNAPU INC. Warrants. Each outstanding option and warrant to
purchase an aggregate of 1,200,000 shares (subject to any adjustment) of
HUNAPU INC. Common Stock shall remain outstanding, unchanged by reason of
the Merger.
(d) Adjustment of Exchange Ratio. If between the date of this
Agreement and the Effective Time the outstanding shares of HUNAPU INC.
Common Stock shall have been changed into a different number of shares or
a different class by reason of any stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of
shares or any similar event, the Exchange Ratio shall be correspondingly
adjusted to reflect such stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares or such similar
event.
(e) Cancellation of CHSI Common Stock. As a result of the Merger and
without any action on the part of any holder of CHSI Common Stock, at the
Effective Time all shares of CHSI Common Stock shall cease to be
outstanding and shall be cancelled and retired and shall cease to exist,
and each holder of shares of CHSI Common Stock shall thereafter cease to
have any rights with respect to such shares of CHSI Common Stock, except
the right to receive, without interest, the Merger Consideration
applicable to such CHSI Common Stock pursuant to Section 2.1(b) upon the
surrender of certificates representing such shares of CHSI Common Stock.
The HUNAPU INC. Common Stock comprising the Merger Consideration, when
issued pursuant to this Agreement, will be duly authorized, validly
issued, fully paid, non-assessable and not subject to preemptive rights
created by statute, Shell Corp.'s certificate of incorporation or bylaws,
or any agreement to which Shell Corp. is a party or by which Shell Corp.
is bound.
(f) Dissenting Shares. Notwithstanding anything in this Agreement to
the contrary, shares of CHSI Common Stock which are issued and outstanding
immediately prior to the Effective Time and which are held by stockholders
who have complied with the procedures for appraisal set forth in the NYBCL
(the "Dissenting Shares") (i) shall only be entitled to such rights as are
granted under Section 910 of the NYBCL, and (ii) shall not be converted
into or be exchangeable for the right to receive the consideration
provided in Section 2.1(b), unless and until such holder shall have failed
to perfect or shall have effectively withdrawn or lost such holder's right
to appraisal and payment under the NYBCL. If such
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holder shall have so failed to perfect or shall have effectively withdrawn
or lost such right, such shares shall thereupon be deemed to have been
converted into and to have become exchangeable for, as of the Effective
Time, the right to receive the consideration provided for in Section
2.1(b), without any interest thereon. CHSI shall give HUNAPU INC. (i)
prompt notice of any written demands for appraisal of any shares of CHSI
Common Stock, attempted withdrawals of such demands, and any other
instruments served pursuant to the NYBCL received by CHSI relating to
stockholders' rights of appraisal and (ii) the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal under
the NYBCL. CHSI shall not, except with the prior written consent of Shell
Corp., voluntarily make any payment with respect to any demands for
appraisals of shares of CHSI Common Stock, offer to settle or settle any
such demands or approve any withdrawal of any such demands.
SECTION 2.2. HUNAPU INC. TO DELIVER CERTIFICATES.
Immediately prior to the Merger, as part of the Classic Acquisition,
HUNAPU INC. shall deliver to the CHCI stockholders, an aggregate of 3,959,200
restricted shares of HUNAPU INC. Common Stock in exchange for all of the issued
and outstanding CHCI Capital Stock.
At the Closing, HUNAPU INC. shall deliver to the CHSI stockholders, stock
certificates representing an aggregate of 3,600,000 shares of HUNAPU INC. Common
Stock as the Merger Consideration. HUNAPU INC. Common Stock for which CHSI
Common Stock shall be exchanged in the Merger shall be deemed to have been
issued at the Effective Time. In the event that any CHSI Stockholder's
certificates have been lost, stolen or destroyed, such CHSI Stockholder will be
entitled to receive the Merger Consideration only after providing an affidavit
of loss and suitable indemnity bond, in form reasonably satisfactory to HUNAPU
INC.
Certificates surrendered for exchange by any person constituting an
"affiliate" of CHSI for purposes of Rule 145(c) under the Securities Act shall
not be exchanged until HUNAPU INC. has received a written agreement from such
person as provided in Section 6.2(g). All shares of HUNAPU INC. Common Stock
issued upon the surrender for exchange of shares of CHSI Common Stock in
accordance with the terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to such CHSI Common Stock, and there shall
be no further registration of transfers on the stock transfer books of the
Surviving Corporation of the shares of CHSI Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
certificates are presented to HUNAPU INC. or the Surviving Corporation for any
reason, they shall be canceled and exchanged as provided in this Section 2.2.
SECTION 2.3. NO FRACTIONAL SECURITIES.
Notwithstanding any other provision of this Agreement, no certificates or
scrip for shares of capital stock representing less than one share of HUNAPU
INC. Common Stock shall be issued upon the surrender for exchange of CHSI
certificates. In lieu thereof each holder of shares of CHSI Common Stock
otherwise entitled to a fraction of a share of HUNAPU INC. Common Stock shall,
upon surrender of its, his or her Certificate or Certificates, be entitled to
receive one whole additional share of HUNAPU INC. Common Stock. The parties
acknowledge that the issuance of such additional share in lieu of issuing
fractional shares was not separately bargained for consideration, but merely
represents a mechanical rounding off for purposes of simplifying the corporate
and accounting problems which would otherwise be caused by the issuance of
fractional shares.
SECTION 2.4. CLOSING OF TRANSFER BOOKS.
Immediately prior to the Effective Time, CHSI, and HUNAPU INC. transfer
books shall be closed and no transfer of Capital Stock shall thereafter be made
by either corporation.
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SECTION 2.5. TAX TREATMENT.
The Merger is intended to constitute a reorganization under Sections
368(a)(1)(A) and 368(a)(2)(E) of the Code, and HUNAPU INC. and the CHSI shall
report the transaction in a manner consistent therewith.
SECTION 2.6. RESTRICTED SECURITIES.
The shares of the HUNAPU INC. Common Stock, to be issued as the Merger
Consideration in connection with the Merger and as part of the Critical
Acquisition shall be deemed "restricted securities" as defined by Rule 144(a)(3)
under the Securities Act of 1933, as amended (the "Securities Act"). The
certificates evidencing such shares shall bear the following restrictive legend:
"The shares evidenced by this certificate have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"),and may not be
sold or otherwise transferred unless registered under the Securities Act or
there is an opinion from counsel to the Company that such sale or other transfer
may be made pursuant to an exemption from the registration requirement of the
Securities Act."
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF CHSI.
Except as set forth on the Disclosure Schedule delivered by CHSI to HUNAPU
INC. following the execution of this Agreement (the "CHSI Disclosure Schedule")
and making reference to the particular subsection of this Agreement to which
exception is being taken, CHSI represents and warrants to HUNAPU INC. and CHCI
that the statements contained in this Article 3 are correct and complete as the
date hereof, as follows:
(a) Organization, Standing and Corporate Power. (i) CHSI is a
corporation duly organized, validly existing and in good standing (with
respect to jurisdictions which recognize such concept) under the laws of
the jurisdiction in which it is organized and has the requisite corporate
or other power and authority to enable it to own, lease and operate its
assets and properties to carry on its business as now being conducted,
except, for those jurisdictions where the failure to be so organized,
existing or in good standing individually or in the aggregate would not
have a material adverse effect (as defined in Section 9.3) on CHSI. CHSI
is duly qualified or licensed to do business and is in good standing (with
respect to jurisdictions which recognize such concept) in each
jurisdiction in which the nature of its business or the ownership, leasing
or operation of its properties makes such qualification or licensing
necessary, except for those jurisdictions where the failure to be so
qualified or licensed or to be in good standing would not have a material
adverse effect on CHSI; and (ii) CHSI has delivered to HUNAPU INC. prior
to the execution of this Agreement complete and correct copies of its
Certificate of Incorporation and By-Laws, as amended to date.
(b) Subsidiaries. Except as set forth in Section 3.1(b) of the CHSI
Disclosure Schedule, CHSI does not beneficially own any subsidiaries nor
does it own any capital stock or other proprietary interest, directly,
indirectly in any corporation, trust, partnership, joint venture or other
entity.
(c) Capital Structure. The authorized and issued capital stock of
CHSI consists of 200 shares of CHSI Common Stock and no shares of
preferred stock, par value $.0001 per share ("CHSI Preferred Stock"). At
the close of business on the date hereof: (i) 200 shares of CHSI Common
Stock were issued and outstanding; (ii) no shares of CHSI Common Stock
were held by CHSI in its treasury; (ii) no shares of CHSI Common Stock
were reserved for issuance upon exercise of stock options; and (iii) no
shares of Common Stock were reserved for issuance upon the exercise of a
Common Stock Purchase Warrant. All outstanding shares of capital stock of
CHSI are, and all shares which may be issued will be,
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when issued, duly authorized, validly issued, fully paid and nonassessable
and not subject to preemptive rights. Except as set forth in this Section
3.1(c) or Section 3.1(c) of the CHSI Disclosure Schedule, (x) there are
not issued, reserved for issuance or outstanding (A) any shares of capital
stock or other voting securities of CHSI, (B) any securities of CHSI or
any CHSI subsidiary convertible into or exchangeable or exercisable for
shares of capital stock or voting securities of CHSI, (C) any warrants,
calls, options or other rights to acquire from CHSI or any CHSI
subsidiary, and any obligation of CHSI or any CHSI subsidiary to issue,
any capital stock, voting securities or securities convertible into or
exchangeable or exercisable for capital stock or voting securities of
CHSI, and (y) there are no outstanding obligations of CHSI or any CHSI
subsidiary to repurchase, redeem or otherwise acquire any such securities
or to issue, deliver or sell, or cause to be issued, delivered or sold,
any such securities. There are no outstanding (A) securities of CHSI or
any CHSI subsidiary convertible into or exchangeable or exercisable for
shares of capital stock or other voting securities or ownership interests
in any CHSI subsidiary, (B) warrants, calls, options or other rights to
acquire from CHSI or any CHSI subsidiary, and any obligation of CHSI or
any CHSI subsidiary to issue, any capital stock, voting securities or
other ownership interests in, or any securities convertible into or
exchangeable or exercisable for any capital stock, voting securities or
ownership interests in, any CHSI subsidiary or (C) obligations of CHSI or
any CHSI subsidiary to repurchase, redeem or otherwise acquire any such
outstanding securities of CHSI subsidiaries or to issue, deliver or sell,
or cause to be issued, delivered or sold, any such securities.
(d) Authority; Noncontravention. CHSI has all requisite corporate
power and authority to enter into this Agreement to perform its
obligations hereunder and to consummate the transactions contemplated by
this Agreement. The execution and delivery of this Agreement by CHSI and
the consummation by CHSI of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on
the part of CHSI, subject, in the case of the Merger, to CHSI Stockholder
Approval. This Agreement has been duly executed and delivered by CHSI and,
assuming the due authorization, execution and delivery by HUNAPU INC. and
CHCI constitutes the legal, valid and binding obligation of CHSI,
enforceable against CHSI in accordance with its terms. The execution and
delivery of this Agreement do not, and the consummation of the
transactions contemplated by this Agreement and compliance with the
provisions of this Agreement will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a benefit under, or result in
the creation of any Lien upon any of the properties or assets of CHSI or
any of its subsidiaries under, (i) the certificate of incorporation or
By-Laws of CHSI or the comparable organizational documents of any of its
subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession,
license or similar authorization applicable to CHSI or any of its
subsidiaries or their respective properties or assets or (iii) subject to
the governmental filings and other matters referred to in the following
sentence, any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to CHSI or any of its subsidiaries or their
respective properties or assets, other than, in the CHCI of clauses (ii)
and (iii), any such conflicts, violations, defaults, rights, losses or
Liens that individually or in the aggregate would not (x) have a material
adverse effect on CHSI or(y) reasonably be expected to impair the ability
of CHSI to perform its obligations under this Agreement. No consent,
approval, order or authorization of, action by or in respect of, or
registration, declaration or filing with, any federal, state, local or
foreign government, any court, administrative, regulatory or other
governmental agency, commission or authority or any nongovernmental
self-regulatory agency, commission or authority (a "governmental entity")
is required by or with respect to CHSI or any of its subsidiaries in
connection with the execution and delivery of this Agreement by CHSI or
the consummation by CHSI of the transactions contemplated by this
Agreement, except for (1) the filing of the Certificate of Merger with the
Secretary of States of Delaware and New York and appropriate documents
with the relevant authorities of other states in which CHSI is qualified
to do business and such filings with governmental entities to satisfy the
applicable requirements of state securities or "blue sky" laws; and (2)
such consents, approvals, orders or authorizations the failure of which to
be made or obtained individually or in the aggregate would not (x) have a
material adverse effect on CHSI or (y) reasonably be expected to impair
the ability of CHSI to perform its obligations under this Agreement.
Except as set forth in Section 3.1(d) of the CHSI Disclosure Schedule, to
the knowledge of CHSI neither CHSI, nor any of its Subsidiaries, are in
material violation of, or in material default under, (i) any term or
provision of its Certificate of Incorporation or By-Laws; or (ii) any
existing applicable law, rule, regulation, judgment, order or decree of
any governmental
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agency or court, domestic or foreign, having jurisdiction over it or any
of its properties or business. CHSI owns, possesses or has obtained all
material governmental and other licenses, permits, certifications,
registration, approvals or consents and other authorizations necessary to
own or lease, as the case may be, and to operate its properties and to
conduct its business or operations as presently conducted and all such
governmental and other licenses, permits, certifications, registrations,
approvals, consents and other authorizations are outstanding and in good
standing and there are no existing actions, seeking to cancel, terminate
or limit such licenses, permits, certifications, registrations, approvals
or consents or authorizations.
(e) Undisclosed Liabilities. To CHSI's knowledge, except (i) as
reflected in the CHSI Financial Statements (as defined in Section 3.1(h))
or in the notes thereto, (ii) for liabilities incurred in connection with
this Agreement or the transactions contemplated hereby, or (iii)
liabilities incurred in the ordinary cause of CHSI's business since
December 31, 2001, neither CHSI nor any of its subsidiaries has any
liabilities or obligations of any nature which, individually or in the
aggregate, would have a material adverse effect on CHSI. CHSI does not,
and will not at the Closing, directly or indirectly, own any capital stock
of or other equity interests in any corporation, partnership or other
person and CHSI is not a member of or participant in a partnership, joint
venture or similar person, except as set forth in Section 3.1(e) of the
CHSI Disclosure Schedule.
(f) Information Supplied. None of the information supplied or to be
supplied by CHSI specifically for inclusion or incorporation by reference
in any reports, notices, schedules or filings to be filed with the SEC by
HUNAPU INC. in connection with the transactions contemplated hereby will
to CHSI' knowledge contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they are made, not misleading.
(g) Taxes. (i)Except as set forth on Section 3.1(g) of the CHSI
Disclosure Schedule, each of CHSI and its subsidiaries has filed all tax
returns and reports required to be filed by it and all such returns and
reports are complete and correct in all material respects, or requests for
extensions to file such returns or reports have been timely filed, granted
and have not expired, except to the extent that such failures to file, to
be complete or correct or to have extensions granted that remain in effect
individually or in the aggregate would not have a material adverse effect
on CHSI. CHSI and each of its subsidiaries has paid (or CHSI has paid on
its behalf) all taxes (as defined herein) shown as due on such
returns.(ii) As used in this Agreement, "taxes" shall include all (x)
federal, state, local or foreign income, property, sales, excise and other
taxes or similar governmental charges, including any interest, penalties
or additions with respect thereto, (y) liability for the payment of any
amounts of the type described in (x) as a result of being a member of an
affiliated, consolidated, combined or unitary group, and (z) liability for
the payment of any amounts as a result of being party to any tax sharing
agreement or as a result of any express or implied obligation to indemnify
any other person with respect to the payment of any amounts of the type
described in clause (x) or (y).
(h) Financial Statements. CHSI has heretofore delivered to HUNAPU
INC. and CHCI financial statements, which are accountants' review
statements relating to the period ended December 31, 2001 and will deliver
prior to the Closing Date accountants' review statements, relating to the
period ending March 31, 2002 (collectively, the "Financial Statements").
CHSI is not aware of any material modifications that should be made to the
Financial Statements in order for them to be in conformity with generally
accepted accounting principles.
(i) Each of the Financial Statements is complete and correct
in all material respects, has been prepared in accordance with GAAP
consistently applied throughout the periods presented, no material
modifications should be made to the CHCI financial position, results
of operations, cash flows and stockholders' equity of CHSI as at the
dates and for the periods indicated.
(ii) Except (i) as disclosed in the Financial Statements, (ii)
incurred in the Ordinary Course of Business since December 31, 2001
or (iii) disclosed in Section 3.1(h) of the CHSI Disclosure
Schedule, as of the date hereof, CHSI does not have any material
Indebtedness, obligations
7
or liabilities of any kind (whether accrued, absolute, contingent or
otherwise, and whether due or to become due, asserted or unasserted)
(i) Absence of Certain Changes or Events. Except for liabilities
incurred in connection with this Agreement or the transactions
contemplated hereby, and except as set forth on Schedule 3.1, since
December 31, 2001, CHSI and its subsidiaries have conducted their business
only in the ordinary course and there, to CHSI's knowledge, has not been
any material adverse change in CHSI.
(j) Intellectual Property. CHSI and its subsidiaries own or have a
valid license to use all trademarks, service marks, trade names, patents
and copyrights (including any registrations or applications for
registration of any of the foregoing) (collectively, the "CHSI
Intellectual Property") necessary to carry on its business substantially
as currently conducted, except for such CHSI Intellectual Property the
failure of which to own or validly license individually or in the
aggregate would not have a material adverse effect on CHSI. Neither CHSI
nor any such subsidiary has received any notice of infringement of or
conflict with, and, to CHSI's knowledge, there are no infringements of or
conflicts (i) with the rights of others with respect to the use of, or
(ii) by others with respect to, any CHSI Intellectual Property that
individually or in the aggregate, in either such CHCI, would have a
material adverse effect on CHSI.
(k) No Conflicts. Except as set forth in Section 3.1(k) of the CHSI
Disclosure Schedule, and subject to obtaining CHSI Consents, CHSI's
execution and delivery of this Agreement does not, and the consummation of
the transactions contemplated hereby and compliance with the terms hereof
will not, conflict with, or result in any violation of or default (with or
without notice or lapse of time, or both) under, or give rise to a right
of termination, cancellation or acceleration of any obligation or to loss
of a material benefit under, or result in the creation of any encumbrances
upon any of the properties or assets of CHSI under any provision of (i)
the certificate of incorporation, bylaws or other organizational document
of CHSI; (ii) any material contract or permit to which CHSI is a party or
by which CHSI or its properties or assets are bound; (iii) any order of
any court, governmental authority or arbitrator applicable to CHSI or its
properties or assets as of the date hereof; or (iv) any applicable laws,
except in the case of clauses (ii), (iii) and (iv), such conflicts,
violations and defaults, termination, cancellation and acceleration rights
and encumbrances that in the aggregate would not materially hinder or
impair the consummation of the transactions contemplated hereby and would
not have a material adverse effect on the business or financial condition
of CHSI.
(l) Consents. Section 3.1(l) of the CHSI Disclosure Schedule lists
each material permit and contract (true and complete copies of which will
be made available to Shell Corp.) as to which notice to, or the consent
of, a governmental authority or third party is required in connection with
the consummation of the transactions contemplated hereby. Except for (i)
the aforementioned notices and consents, and (ii) the filing of the
Certificate of Merger with the Secretary of State of the States of New
York and Delaware and appropriate documents with the relevant authorities
of other states in which CHSI is qualified to do business (the items in
clauses (i) and (ii) being collectively referred to herein as "Company
Consents"), no consents, approvals, licenses, permits, orders or
authorizations of, or registrations, declarations, notices or filings
with, any governmental authority or any third party are required to be
obtained or made by or with respect to CHSI on or prior to the Closing
Date in connection with (A) the execution, delivery and performance of
this Agreement, the consummation of the transactions contemplated hereby
or the taking by CHSI of any other action contemplated hereby, (B) the
continuing validity and effectiveness immediately following the Effective
Time of any material contract or permit of CHSI, or (C) the conduct by
CHSI of its business or operations immediately following the Closing as
conducted on the date hereof.
(m) Compliance; No Defaults. Except as set forth in Section 3.1(m)
of CHSI Disclosure Schedule or ,to the extent that non-compliance would
not individually, or in the aggregate, have a Material Adverse Effect with
respect to CHSI, CHSI is in compliance in all material respects with all
statutes, laws, ordinances, rules, orders or regulations of any
governmental authority applicable to its business or operations
("applicable laws"), and has not received any notice or been charged with
any violation of or, to its knowledge, is under investigation with respect
to compliance with, any applicable laws, and there
8
are no facts or circumstances which could form the basis for any such
violation. Except as set forth in Section 3.1(m) of the CHSI Disclosure
Schedule, CHSI has all permits which are material to the operation of the
businesses of CHSI as conducted on the date hereof. CHSI is not in default
or violation (and no event has occurred which, with notice or the lapse of
time or both, would constitute a default or violation) of any term,
condition or provision of (i) its certificate of incorporation or bylaws
or other comparable organizational document, or (ii) any contract or
material permit to which it is a party, to which its business is subject
or by which its properties or assets are bound, except in the case of
clause (ii), for defaults or violations which in the aggregate would not
have a Material Adverse Effect (as defined in Section 1.3) with respect to
CHSI.
(n) Litigation. Except as set forth in Section 3.1(n) of the CHSI
Disclosure Schedule, there are no legal proceedings against or affecting
CHSI or its properties or assets pending or, to the knowledge of CHSI,
threatened against CHSI, and to CHSI's knowledge there are no facts or
circumstances which could form the basis for any such legal proceeding.
None of the legal proceedings disclosed in Section 3.1(n) of the CHSI
Disclosure Schedule could reasonably be expected to have a Material
Adverse Effect with respect to CHSI. Except as set forth in Section 3.1(n)
of the CHSI Disclosure Schedule, CHSI is not a party or subject to or in
default under any order of any governmental authority applicable to it or
to its properties or assets.
(o) Employee Benefits.
a) Section 3.1(0) of the CHSI Disclosure Schedule sets
forth a complete and correct list of all "employee
benefit plans," as defined in Section 3(3) of ERISA, and
all other employee benefit plans or other benefit
arrangements, including but not limited to all
employment and consulting agreements and all disability,
severance, retention, vacation, company awards, salary
continuation, sick leave, retirement, deferred
compensation, bonus or other incentive compensation,
stock and stock-related award, stock purchase, stock
option or other equity-based compensation,
hospitalization, medical insurance, life insurance,
workers' compensation and educational assistance
agreements, plans, policies and arrangements to which
CHSI has any obligation to or liability for (contingent
or otherwise) in respect of current or former employees
or directors ("benefit plans"). None of CHSI's benefit
plans is subject to Title IV of ERISA. CHSI will deliver
to Shell Corp. a true, correct and complete copy of each
of its benefit plans.
b) All contributions and premiums required to be made by
law or by the terms of any Benefit Plan or any agreement
relating thereto have been timely made (without regard
to any waivers granted with respect thereto). No Benefit
Plan has any "accumulated funding deficiency" within the
meaning of Section 302 of ERISA or Section 412 of the
Code, nor has any waiver of the minimum funding
standards of such Sections been required or granted by
the IRS with respect to any Benefit Plan, nor has any
lien in favor of any such plan arisen under Section
412(n) of the Code or Section 302(f) of ERISA.
c) There are no legal proceedings pending or, to the
knowledge of CHSI, threatened in respect of or relating
to any Benefit Plan (other than routine, uncontested
benefit claims), and there are no facts or circumstances
which could form the basis for any such legal
proceeding.
d) Each Benefit Plan complies in all material respects, and
CHSI has administered and operated each Benefit Plan in
material compliance with, its terms and all provisions
of applicable law. All amendments and actions required
to bring each of the benefit plans into conformity in
all material respects with all of the applicable
provisions of ERISA, the Code and other applicable laws
have been made or taken except to the extent that such
amendments or actions are not
9
required by law to be made or taken until a date after
the Closing Date and are disclosed on Section 3.1(o) of
the CHSI Disclosure Schedule.
e) Except as set forth in Section 3.1(o) of the CHSI
Disclosure Schedule, neither the execution and delivery
of this Agreement nor the consummation of the
transactions contemplated hereby will, either alone or
in combination with another event, (i) result in any
payment becoming due, or increase the amount of any
compensation due, to any current or former director,
officer or employee of CHSI (other than receipt of the
Merger Consideration), (ii) increase any benefits
otherwise payable under any Benefit Plan, or (iii)
result in the acceleration of the time of payment or
vesting of any such compensation or benefits.
(p) Real Property. CHSI does not own any real property. Section
3.1(p) of the CHSI Disclosure Schedule lists and describes briefly all
real property leased or subleased by or to CHSI. CHSI has delivered to
Shell Corp. correct and complete copies of the leases and subleases listed
in Section 3.1(p) of the CHSI Disclosure Schedule. With respect to each
lease and sublease listed in Sections 3.1(p) of the CHSI Disclosure
Schedule:
a) such lease or sublease is legal, valid, binding,
enforceable, and in full force and effect;
b) no consent is required with respect to such lease or
sublease as a result of this Agreement, and the actions
contemplated by this Agreement will not result in the
change of any terms of any lease or sublease or
otherwise affect the ongoing validity of any lease or
sublease;
c) neither CHSI nor, to the knowledge of CHSI, any other
party to the lease or sublease is in breach or default,
and no event has occurred which, with notice or lapse of
time, would constitute a breach or default by, or permit
termination, modification, or acceleration thereunder,
or could form the basis for any of the foregoing;
d) CHSI has not, and has not received notice that any other
party has repudiated any provision of such lease or
sublease;
e) there are no disputes, oral agreements, or forbearance
programs in effect as to such lease or sublease;
f) with respect to each such sublease, the representations
and warranties set forth in subsections (a) through (e)
above are true and correct with respect to the
underlying lease;
g) CHSI has not assigned, transferred, conveyed, mortgaged,
deeded in trust, or encumbered any interest in the
leasehold or subleasehold;
h) all facilities leased or subleased thereunder have
received all permits required by CHSI in connection with
the operation thereof and have been operated and
maintained by CHSI in accordance with applicable laws,
rules, and regulations; and
i) all premises leased or subleased thereunder are supplied
with utilities and other services necessary for the
operation of the business of CHSI on such premises.
(q) Insurance. Section 3.1(q) of the CHSI Disclosure Schedule
identifies each insurance policy (including policies providing property,
casualty, liability, and workers' compensation coverage and
10
bond and surety arrangements) currently in effect to which CHSI is a
party, a named insured, or otherwise the beneficiary of coverage. With
respect to each such insurance policy: (A) the policy is legal, valid,
binding, enforceable and in full force and effect; (B) neither CHSI nor,
to the knowledge of CHSI, any other party to the policy is in breach or
default (including with respect to the payment of premiums or the giving
of notices), and no event has occurred which, with notice or the lapse of
time, would constitute or form the basis for such a breach or default by,
or permit termination, modification, or acceleration, under the policy;
and (C) no party to the policy has repudiated any provision thereof.
Copies of such policies have been provided to Shell Corp. Section 3.1(q)
of the CHSI Disclosure Schedule describes any self-insurance arrangements
affecting CHSI.
(r) Related Party Transactions. Except as set forth on Section
3.1(r) of the CHSI Disclosure Schedule, no director or officer of CHSI,
nor any stockholder or other affiliate of CHSI or of any such director or
officer (i) has borrowed any money from or has outstanding, directly or
indirectly, any Indebtedness or other similar obligations to CHSI; (ii)
owns any direct or indirect interest in, or controls or is a director,
officer or partner of, or consultant or lender to, or borrower from, or
has the right to participate in the profits of, any person which is a
competitor, supplier, customer, landlord, tenant, lessor, lessee, creditor
or debtor of CHSI; or (iii) is a party to any contract with CHSI. All
contracts listed on Section 3.1(r) of the CHSI Disclosure Schedule are
terminable at CHSI's option without premium or penalty and are on terms no
less favorable to CHSI than would be available in a similar contract with
an unaffiliated third party.
(s) Brokers and Finders. Except as set forth in Section 3.1(s) of
the CHSI Disclosure Schedule, neither CHSI, any of its officers, directors
or employees, nor any stockholder of CHSI has any liability or obligation
to pay any fees or commissions to any broker, finder or agent with respect
to the transactions contemplated by this Agreement.
(t) Disclosure. The representations and warranties contained in this
Section 3.1 together with the CHSI Disclosure Schedule do not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements and information contained in
this Section 3.1 not misleading.
SECTION 3.2. REPRESENTATIONS AND WARRANTIES OF HUNAPU INC.
Except as set forth on the Disclosure Schedule delivered by HUNAPU INC. to
CHSI and CHCI prior to the Closing Date (the "HUNAPU INC. Disclosure Schedule")
and making reference to the particular subsection of this Agreement to which
exception is being taken, HUNAPU INC. represents and warrants to CHSI as
follows:
(a) Organization, Standing and Corporate Power. (i) HUNAPU INC. is a
corporation or other legal entity duly organized, validly existing and in
good standing (with respect to jurisdictions which recognize such concept)
under the laws of the jurisdiction in which it is organized and has the
requisite corporate or other power, as the case may be, and authority to
carry on its business as now being conducted, except, as to subsidiaries,
for those jurisdictions where the failure to be so organized, existing or
in good standing individually or in the aggregate would not have a
material adverse effect on HUNAPU INC.. Each of HUNAPU INC. and its
subsidiaries is duly qualified or licensed to do business and is in good
standing (with respect to jurisdictions which recognize such concept) in
each jurisdiction in which the nature of its business or the ownership,
leasing or operation of its properties makes such qualification or
licensing necessary, except for those jurisdictions where the failure to
be so qualified or licensed or to be in good standing individually or in
the aggregate would not have a material adverse effect on HUNAPU INC. (ii)
HUNAPU INC. has delivered to CHSI prior to the execution of this Agreement
complete and correct copies of its Certificate of Incorporation and
By-Laws, as amended to date.
(b) Hunapu has and will have no subsidiaries other than CHCI at the
Closing Date.
(c) Capital Structure. The authorized capital stock of HUNAPU INC.
consists of 40,000,000 shares of HUNAPU INC. Common Stock, $.001 par value
per share, and 8,000,000 shares of
11
HUNAPU INC. Preferred Stock, par value $.001 per share. At the close of
business on the date hereof (i) 3,410,000 shares of HUNAPU INC. Common
Stock were issued and outstanding (excluding 3,959,200 shares of
restricted HUNAPU INC. Common Stock to be issued to the CHCI shareholders
in the Critical Acquisition; (ii) no shares of HUNAPU INC. Common Stock
were held by HUNAPU INC. in its treasury; and (iii) no shares of preferred
stock (of any Class) were issued and outstanding. All outstanding shares
of capital stock of HUNAPU INC. are, and all shares which may be issued
pursuant to this Agreement or otherwise will be, when issued, duly
authorized, validly issued, fully paid and nonassessable and not subject
to preemptive rights. Except as set forth in Section 3.2(c) of the HUNAPU
INC. Disclosure Schedule there are not issued, reserved for issuance or
outstanding (A) any shares of capital stock or other voting securities of
HUNAPU INC., (B) any securities of HUNAPU INC. or any HUNAPU INC.
subsidiary convertible into or exchangeable or exercisable for shares of
capital stock or voting securities of HUNAPU INC., (C) any warrants,
calls, options or other rights to acquire from HUNAPU INC. or any HUNAPU
INC. subsidiary, and any obligation of HUNAPU INC. or any HUNAPU INC.
subsidiary to issue, any capital stock, voting securities or securities
convertible into or exchangeable or exercisable for capital stock or
voting securities of HUNAPU INC., and (D) there are no outstanding
obligations of HUNAPU INC. or any HUNAPU INC. subsidiary to repurchase,
redeem or otherwise acquire any such securities or to issue, deliver or
sell, or cause to be issued, delivered or sold, any such securities. There
are no outstanding (X) securities of HUNAPU INC. or any HUNAPU INC.
subsidiary convertible into or exchangeable or exercisable for shares of
capital stock or other voting securities or ownership interests in any
HUNAPU INC. subsidiary, (Y) warrants, calls, options or other rights to
acquire from HUNAPU INC. or any HUNAPU INC. subsidiary, and any obligation
of HUNAPU INC. or any HUNAPU INC. subsidiary to issue, any capital stock,
voting securities or other ownership interests in, or any securities
convertible into or exchangeable or exercisable for any capital stock,
voting securities or ownership interests in, any HUNAPU INC. subsidiary or
(Z) obligations of HUNAPU INC. or any HUNAPU INC. subsidiary to
repurchase, redeem or otherwise acquire any such outstanding securities of
HUNAPU INC. subsidiaries or to issue, deliver or sell, or cause to be
issued, delivered or sold, any such securities. Neither HUNAPU INC. nor
any HUNAPU INC. subsidiary is a party to any agreement restricting the
transfer of, relating to the voting of, requiring registration of, or
granting any preemptive or, antidilutive rights with respect to, any
securities of the type referred to in the two preceding sentences. Other
than the HUNAPU INC. subsidiaries, HUNAPU INC. does not directly or
indirectly beneficially own any securities or other beneficial ownership
interests in any other entity except for non-controlling investments made
in the ordinary course of business in entities, which are not individually
or in the aggregate material to HUNAPU INC. and its subsidiaries as a
whole.
(d) Authority; Noncontravention. HUNAPU INC. has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The execution
and delivery of this Agreement by HUNAPU INC. and the consummation by
HUNAPU INC. of the transactions contemplated by this Agreement have been
duly authorized by all necessary corporate action on the part of HUNAPU
INC.. This Agreement has been duly executed and delivered by HUNAPU INC.
and, assuming the due authorization, execution and delivery by CHSI and
CHCI, constitutes the legal, valid and binding obligations of HUNAPU INC.,
enforceable against HUNAPU INC. in accordance with its terms. The
execution and delivery of this Agreement do not, and the consummation of
the transactions contemplated by this Agreement and compliance with the
provisions of this Agreement will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a benefit under, or result in
the creation of any Lien upon any of the properties or assets of HUNAPU
INC. or any of its subsidiaries under, (i) the certificate of
incorporation or By-Laws of HUNAPU INC. or the comparable organizational
documents of any of its subsidiaries, (ii) any loan or credit agreement,
note, bond, mortgage, indenture, lease or other agreement, instrument,
permit, concession, franchise, license or similar authorization applicable
to HUNAPU INC. or any of its subsidiaries or their respective properties
or assets or (iii) subject to the governmental filings and other matters
referred to in the following sentence, any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to HUNAPU INC. or
any of its subsidiaries or their respective properties or assets, other
than, in the case of clauses (ii) and (iii), any such conflicts,
violations, defaults, rights, losses or Liens that individually or in the
aggregate would not (x) have a material adverse effect on HUNAPU INC. or
(y) reasonably be expected to impair the ability of HUNAPU INC. to perform
its obligations under this Agreement. No
12
consent, approval, order or authorization of, action by, or in respect of,
or registration, declaration or filing with, any governmental entity is
required by or with respect to HUNAPU INC. or any of its subsidiaries in
connection with the execution and delivery of this Agreement by HUNAPU
INC. or the consummation by HUNAPU INC. of the transactions contemplated
by this Agreement, except for (1) the filing with the SEC of such reports
under Section 13(a), 13(d), 15(d) or 16(a) of the Exchange Act as may be
required in connection with this Agreement and the transactions
contemplated by this Agreement; (2) the filing of the Certificate of
Merger with the Secretary of States of New York and Delaware and
appropriate documents with the relevant authorities of other states in
which HUNAPU INC. is qualified to do business and such filings with
governmental entities to satisfy the applicable requirements of state
securities or "blue sky" laws; and (3) such consents, approvals, orders or
authorizations the failure of which to be made or obtained individually or
in the aggregate would not (x) have a material adverse effect on HUNAPU
INC. or (y) reasonably be expected to impair the ability of HUNAPU INC. to
perform its obligations under this Agreement. Except as set forth in
Section 3.2(d) of the HUNAPU INC. Disclosure Schedule , neither HUNAPU
INC., nor any of its Subsidiaries, are in material violation of, or in
default under, (i) any term or provision of its Certificate of
Incorporation or By-Laws; or (ii) any existing applicable law, rule,
regulation, judgment, order or decree of any governmental agency or court,
domestic or foreign, having jurisdiction over it or any of its properties
or business. HUNAPU INC. owns, possesses or has obtained all material
governmental and other licenses, permits, certifications, registration,
approvals or consents and other authorizations necessary to own or lease,
as the case may be, and to operate its properties and to conduct its
business or operations as presently conducted and all such governmental
and other licenses, permits, certifications, registrations, approvals,
consents and other authorizations are outstanding and in good standing and
there are no existing actions, seeking to cancel, terminate or limit such
licenses, permits, certifications, registrations, approvals or consents or
authorizations.
(e) SEC Documents; Undisclosed Liabilities; Financial Statements.
i. HUNAPU INC. has filed all required registration statements,
prospectuses, reports (including, but not limited to, its Annual
Report on Form 10-KSB for December 31, 2001), schedules, forms,
statements and other documents (including exhibits and all other
information incorporated therein) with the SEC since November 9,
2001, (the "HUNAPU INC. SEC Documents"). As of their respective
dates, the HUNAPU INC. SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such HUNAPU INC. SEC Documents,
and none of the HUNAPU INC. SEC Documents when filed contained any
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading. The financial statements of HUNAPU INC.
included in the HUNAPU INC. SEC Documents comply as to form, as of
their respective dates of filing with the SEC, in all material
respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been
prepared in accordance with GAAP applied on a consistent basis
during the periods involved (except as may be indicated in the notes
thereto) and fairly present the financial position of HUNAPU INC. as
of the dates thereof and the results of its operations and cash
flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments.
ii. The unaudited financial statements of HUNAPU INC. for the
three months ended March 31, 2002 (the "HUNAPU INC. Financial
Statements"), which will be included in the HUNAPU INC. SEC
Documents as of May l5, 2002, have previously been made available to
CHSI and CHCI. The Financial Statements comply as to form in all
material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto; and
fairly present, in all material respects, the financial position of
HUNAPU INC. at, and the results of its operations for, each of the
periods then ended and were prepared in conformity with GAAP applied
on a consistent basis, except as otherwise disclosed therein and,
subject to normal year-end adjustments, the absence of footnote
disclosures, and any other adjustments described therein.
13
iii. Except as reflected in the HUNAPU INC. Financial
Statements, or incurred in the ordinary course of business to the
knowledge of HUNAPU INC., HUNAPU INC. has no Liabilities (as
hereinafter defined) or obligations of any nature.
(f) Information Supplied. None of the information supplied or to be
supplied by HUNAPU INC. specifically for inclusion or incorporation by
reference in any registration statements, prospectuses, reports, schedules
or other documents to be filed with the SEC or any other governmental
entity, shall contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they are made, not misleading. All SEC Filings will comply as to
form and substance in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations
thereunder, except that no representation or warranty is made by HUNAPU
INC. with respect to statements made or incorporated by reference therein
based on information supplied by CHSI specifically for inclusion or
incorporation by reference in any subsequent SEC Filing.
(g) Absence of Certain Changes or Events. Except for liabilities
incurred in connection with this Agreement or the transactions
contemplated hereby since December 31, 2001, HUNAPU INC. and its
subsidiaries have conducted their business only in the ordinary course
since such date and prior to the date hereof, and there has not been (i)
any material adverse change in HUNAPU INC., (ii) any declaration, setting
aside or payment of any dividend or other distribution (whether in cash,
stock or property) with respect to any of HUNAPU INC.'s capital stock,
(iii) any split, combination or reclassification of any of HUNAPU INC.'s
capital stock or any issuance or the authorization of any issuance of any
other securities in respect of, in lieu of or in substitution for shares
of HUNAPU INC.'s capital stock, (iv)(A) any granting by HUNAPU INC. or any
of its subsidiaries to any current or former director, executive officer
or other key employee of HUNAPU INC. or its subsidiaries of any increase
in compensation, bonus or other benefit, (B) any granting by HUNAPU INC.
or any of its subsidiaries to any such current or former director,
executive officer or key employee of any increase in severance or
termination pay, or (C) any entry by HUNAPU INC. or any of its
subsidiaries into, or any amendment of, any employment, deferred
compensation consulting, severance, termination or indemnification
agreement with any such current or former director, executive officer or
key employee, (v) except insofar as may have been disclosed in HUNAPU INC.
SEC Documents filed and publicly available prior to the date of this
Agreement or required by a change in GAAP, any change in accounting
methods, principles or practices by HUNAPU INC. materially affecting its
assets, liabilities or business, (vi) except insofar as may have been
disclosed in the HUNAPU INC. SEC Documents, any tax election that
individually or in the aggregate would have a material adverse effect on
HUNAPU INC. or any of its tax attributes or any settlement or compromise
of any material income tax liability or (vii) any action taken by HUNAPU
INC. or any of the HUNAPU INC. subsidiaries during the period from
December 31, 2001 through the date of this Agreement that, if taken during
the period from the date of this Agreement through the Effective Time
would constitute a breach of Section 4.1(g).
(h) Compliance with Applicable Laws; Litigation. (i) To the
knowledge of HUNAPU INC., HUNAPU INC., its subsidiaries and employees hold
all permits, licenses, variances, exemptions, orders, registrations and
approvals of all governmental entities which are required for the
operation of the businesses of HUNAPU INC. and its subsidiaries (the
"HUNAPU INC. Permits") except where the failure to have any such HUNAPU
INC. Permits individually or in the aggregate would not have a material
adverse effect on HUNAPU INC.. HUNAPU INC. and its subsidiaries are in
compliance with the terms of the HUNAPU INC. Permits and all applicable
statutes, laws, ordinances, rules and regulations, except where the
failure so to comply individually or in the aggregate would not have a
material adverse effect on HUNAPU INC.. As of the date of this Agreement,
no action, demand, requirement or investigation by any governmental entity
and no suit, action or proceeding by any person, in each CHCI with respect
to HUNAPU INC. or any of its subsidiaries or any of their respective
properties, is pending or, to the knowledge of HUNAPU INC., threatened.
(ii) Neither HUNAPU INC. nor any HUNAPU INC. subsidiary is subject to any
outstanding order, injunction or decree which has had or, insofar as can
be reasonably foreseen, individually or in the aggregate will have a
material adverse effect on HUNAPU INC..
14
(i) Absence of Benefit Plans. HUNAPU INC. has no severance, or
employment agreements or policies, bonus, pension, profit sharing,
deferred compensation, incentive compensation, stock ownership, stock
purchase, stock option, phantom stock, retirement, vacation, severance,
disability, death benefit, hospitalization, medical or other plan,
arrangement or understanding providing benefits to any current or former
employee, officer or director of HUNAPU INC. or any of its wholly owned
subsidiaries.
(j) ERISA Compliance. HUNAPU INC. and its affiliates have never had
any employee, medical or pension benefit plans.
(k) Taxes. (i) Each of HUNAPU INC. and its subsidiaries has filed
all tax returns and reports required to be filed by it and all such
returns and reports are complete and correct in all material respects, or
requests for extensions to file such returns or reports have been timely
filed, granted and have not expired, except to the extent that such
failures to file, to be complete or correct or to have extensions granted
that remain in effect individually or in the aggregate would not have a
material adverse effect on HUNAPU INC.. HUNAPU INC. and each of its
subsidiaries has paid (or HUNAPU INC. has paid on its behalf) all taxes
shown as due on such returns, and the most recent financial statements
contained in the HUNAPU INC. SEC Documents reflect an adequate reserve in
accordance with GAAP for all taxes payable by HUNAPU INC. and its
subsidiaries for all taxable periods and portions thereof accrued through
the date of such financial statements.
(l) Voting Requirements. The affirmative vote of the holders of a
majority of all outstanding voting shares of HUNAPU INC. is the only vote
of the holders of any class or series of capital stock necessary to
approve and adopt this Agreement and the transactions contemplated hereby,
including the Merger, and the issuance of the Merger Consideration
pursuant to the Merger.
(m) State Takeover Statutes; Certificate of Incorporation. The Board
of Directors of HUNAPU INC. (including the disinterested Directors
thereof) has unanimously approved this Agreement and the transactions
contemplated hereby and such approval constitutes approval of the Merger
and the other transactions contemplated hereby by the HUNAPU INC. Board of
Directors under the applicable provisions of the Nevada General Corporate
Law ("NGCL") and constitutes approval of the Merger the issuance of HUNAPU
INC. Common Stock in connection therewith and the other transactions
contemplated hereby.
(n) Intellectual Property. To the knowledge of HUNAPU INC., HUNAPU
INC. and its subsidiaries own or have a valid license to use all
trademarks, service marks, trade names, patents and copyrights (including
any registrations or applications for registration of any of the
foregoing) (collectively, the "HUNAPU INC. Intellectual Property")
necessary to carry on its business substantially as currently conducted,
except for such HUNAPU INC. Intellectual Property the failure of which to
own or validly license individually or in the aggregate would not have a
material adverse effect on HUNAPU INC.. Neither HUNAPU INC. nor any such
subsidiary has received any notice of infringement of or conflict with,
and, to HUNAPU INC.'s knowledge, there are no infringements of or
conflicts (i) with the rights of others with respect to the use of, or
(ii) by others with respect to, any HUNAPU INC. Intellectual Property that
individually or in the aggregate, in either such case, would have a
material adverse effect on HUNAPU INC..
(o) Certain Contracts. Except as set forth in the HUNAPU INC. SEC
Documents, neither HUNAPU INC. nor any of its subsidiaries is a party to
or bound by (i) any "material contract" (as such term is defined in item
601(b)(10) of Regulation S-B of the SEC), (ii) any non-competition
agreement or any other agreement or obligation which purports to limit in
any material respect the manner in which, or the localities in which, all
or any material portion of the business of HUNAPU INC. and its
subsidiaries (including CHSI and its subsidiaries, assuming the Merger had
taken place), taken as a whole, is or would be conducted, or (iii) any
contract or other agreement which would prohibit or materially delay the
consummation of the Merger or any of the transactions contemplated by this
Agreement (all contracts of the type described in clauses (i) and (ii)
being referred to herein as "HUNAPU INC. Material Contracts"). Each HUNAPU
INC. Material Contract is valid and binding on HUNAPU INC. (or, to the
extent a HUNAPU
15
INC. subsidiary is a party, such subsidiary) and is in full force and
effect, and HUNAPU INC. and each HUNAPU INC. subsidiary have in all
material respects performed all obligations required to be performed by
them to date under each HUNAPU INC. Material Contract, except where such
noncompliance, individually or in the aggregate, would not have a material
adverse effect on HUNAPU INC.. HUNAPU INC. does not know of, or has not
received notice of, any violation or default under (nor, to the knowledge
of HUNAPU INC., does there exist any condition which with the passage of
time or the giving of notice or both would result in such a violation or
default under) any HUNAPU INC. Material Contract.
(p) No Conflict. Subject to obtaining the HUNAPU INC. Consents, the
execution and delivery of this Agreement by HUNAPU INC. and CHSI do not,
and the execution and delivery of the Closing Agreements at the Closing
will not, and the consummation by HUNAPU INC. and CHSI of the transactions
contemplated hereby and compliance with the terms hereof will not,
conflict with, or result in any violation of or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to loss of
a material benefit under, or to the increased, additional, accelerated or
guaranteed rights or entitlements of any person under, or result in the
creation of any encumbrances upon any of the properties or assets of
HUNAPU INC. and CHSI under, any provision of (i) the certificate of
incorporation and bylaws of HUNAPU INC. and CHSI, (ii) any contract or
permit to which HUNAPU INC. and CHSI are a party or by which any of their
properties or assets may be bound or subject, (iii) any order of any
court, governmental authority or arbitrator applicable to HUNAPU INC. and
CHSI or their properties or assets, or (iv) any law, statute, rule,
regulation or judicial or administrative decision applicable to HUNAPU
INC. and CHSI; except in the case of clauses (ii), (iii) and (iv), such
conflicts, violations and defaults, termination, cancellation and
acceleration rights and entitlements and encumbrances that in the
aggregate would not hinder or impair the consummation of the transactions
contemplated hereby or have a Material Adverse Effect with respect to
HUNAPU INC.
(q) Consents. Except for (i) as set forth in Section 3.2(q) of the
HUNAPU INC. Disclosure Schedule, (ii) the filing of such reports required
under the Exchange Act and (iii) the filing of the Certificate of Merger
with the Secretary of States of the States of New York and Delaware and
appropriate documents with the relevant authorities of other states in
which CHSI is qualified to do business (the items in clauses (i) through
(iii) being collectively referred to herein as "Hunapu Consents"), no
consents, approvals, licenses, permits, orders or authorizations of, or
registrations, declarations, notices or filings with, any governmental
authority or any third party are required to be obtained or made by or
with respect to HUNAPU INC. and CHSI in connection with the execution,
delivery and performance of this Agreement, or the consummation of the
transactions contemplated hereby or thereby or the taking by HUNAPU INC.
and CHSI of any other action contemplated hereby or thereby, which, if not
obtained or made, would have a Material Adverse Effect with respect to
HUNAPU INC. The execution, delivery and performance of this Agreement, and
the Closing Agreements will not violate, conflict with, result in a breach
of, or constitute an event of default (with or without due notice or lapse
of time or both) under, any of the terms, conditions or provisions of any
contract material to the business of HUNAPU INC. and CHSI to which HUNAPU
INC. and CHSI is a party or by which HUNAPU INC. and CHSI or any of their
respective properties or assets may be bound or otherwise subject.
(r) Compliance; No Defaults. Except as set forth in Section 3.2(r)
of the HUNAPU INC. Disclosure Schedule, HUNAPU INC. is not in violation
of, or is, to the knowledge of HUNAPU INC., under investigation with
respect to any violation of, or has been given notice or been charged with
violation of, or failed to comply with any applicable laws, except for
violations and failures to comply that would not have a material adverse
effect with respect to HUNAPU INC. Except as set forth in Section 3.2(r)
of the HUNAPU INC. Disclosure Schedule, HUNAPU INC. has all permits which
are material to the operation of the businesses of HUNAPU INC.
(s) Absence of Changes or Events. Except as disclosed in the HUNAPU
INC. SEC Documents, since the date of the most recent audited financial
statements included in the HUNAPU INC. SEC Documents, there have not
occurred any changes, occurrences or other events or conditions of any
character that, in the aggregate, have or would reasonably be expected to
have, a material adverse effect
16
(as defined in Section 10.3) with respect to HUNAPU INC. or on the ability
of HUNAPU INC. to perform its material obligations under this Agreement.
(t) Disclosure. The representations and warranties contained in this
Section 3.2 together with the HUNAPU INC. Disclosure Schedule do not
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements and information
contained in this Section 3.2 not misleading.
SECTION 3.3. REPRESENTATIONS AND WARRANTIES OF CHCI.
Except as set forth on the Disclosure Schedule delivered by CHCI to HUNAPU
INC. prior to the execution of this Agreement (the "CHCI Disclosure Schedule")
and making reference to the particular subsection of this Agreement to which
exception is being taken, and CHCI represents and warrants to CHSI and HUNAPU
INC. as follows:
(a) Organization, Standing and Corporate Power.
i. CHCI is a corporation or other legal entity duly organized,
validly existing and in good standing (with respect to jurisdictions
which recognize such concept) under the laws of the jurisdiction in
which it is organized and has the requisite corporate or other power
and authority to carry on its business as now being conducted,
except, for those jurisdictions where the failure to be so
organized, existing or in good standing individually or in the
aggregate would not have a material adverse effect (as defined in
Section 10.3) on CHCI.
ii. CHCI has delivered to HUNAPU INC. prior to the execution
of this Agreement complete and correct copies of its Certificate of
Incorporation and By-Laws, as amended to date.
(b) Subsidiaries. CHCI does not beneficially own any shares of
capital stock.
(c) Capital Structure. The authorized capital stock of CHCI consists
of 5,000,000 shares of CHCI Common Stock, $.001 par value, and no shares
of preferred stock. At the close of business on the date hereof: (i)
3,959,200 shares of CHCI Common Stock were issued and outstanding; and
(ii) no shares of CHCI Common Stock were held by CHCI in its treasury. All
outstanding shares of capital stock of CHCI are, and all shares which may
be issued will be, when issued, duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights. There are no
issued, reserved for issuance or outstanding securities of CHCI or any
CHCI subsidiary convertible into or exchangeable or exercisable for shares
of capital stock or voting securities of CHCI, or any warrants, calls,
options or other rights to acquire from CHCI or any CHCI subsidiary.
(d) Authority; Noncontravention. CHCI has all requisite corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement. The execution and delivery of
this Agreement by CHCI and the consummation by CHCI of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate action on the part of CHCI, subject, in the CHCI of the Merger,
to the CHCI Stockholder Approval. This Agreement has been duly executed
and delivered by CHCI and, assuming the due authorization, execution and
delivery by HUNAPU INC. and CHCI constitutes the legal, valid and binding
obligation of CHCI, enforceable against CHCI in accordance with its terms.
The execution and delivery of this Agreement do not, and the consummation
of the transactions contemplated by this Agreement and compliance with the
provisions of this Agreement will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a benefit under, or result in
the creation of any Lien upon any of the properties or assets of CHCI or
any of its subsidiaries under, (i) the certificate of incorporation or
By-Laws of CHCI or the comparable organizational documents of any of its
subsidiaries, (ii)any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession,
license or similar
17
authorization applicable to CHCI or any of its subsidiaries or their
respective properties or assets or (iii) subject to the governmental
filings and other matters referred to in the following sentence, any
judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to CHCI or any of its subsidiaries or their respective
properties or assets, other than, in the CHCI of clauses (ii) and (iii),
any such conflicts, violations, defaults, rights, losses or Liens that
individually or in the aggregate would not (x) have a material adverse
effect on CHCI or (y) reasonably be expected to impair the ability of CHCI
to perform its obligations under this Agreement. No consent, approval,
order or authorization of, action by or in respect of, or registration,
declaration or filing with, any federal, state, local or foreign
government, any court, administrative, regulatory or other governmental
agency, commission or authority or any nongovernmental self-regulatory
agency, commission or authority (a "governmental entity") is required by
or with respect to CHCI or any of its subsidiaries in connection with the
execution and delivery of this Agreement by CHCI or the consummation by
CHCI of the transactions contemplated by this Agreement, except for (1)
the filing of the Certificate of Merger with the Secretary of State of
Delaware and appropriate documents with the relevant authorities of other
states in which CHCI is qualified to do business and such filings with
governmental entities to satisfy the applicable requirements of state
securities or "blue sky" laws; and (2) such consents, approvals, orders or
authorizations the failure of which to be made or obtained individually or
in the aggregate would not (x) have a material adverse effect on CHCI or
(y) reasonably be expected to impair the ability of CHCI to perform its
obligations under this Agreement.
(e) Undisclosed Liabilities. Except for liabilities incurred in
connection with this Agreement or the transactions contemplated hereby,
neither CHCI nor any of its subsidiaries has any liabilities or
obligations of any nature, which, individually or in the aggregate, would
have a material adverse effect on CHCI.
(f) No Prior Activities of CHCI. Except for obligations incurred in
connection with its incorporation or organization or the negotiation and
consummation of this Agreement, the Critical Acquisition, and the
transactions contemplated hereby, CHCI has neither incurred any obligation
or liability nor engaged in any business or activity of any type or kind
or entered into any agreement or arrangement with any person.
ARTICLE 4.
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.1. CONDUCT OF BUSINESS.
(a) Conduct of Business by CHSI. Except as set forth in Section
4.1(a) of the CHSI Disclosure Schedule, and as otherwise expressly
contemplated by this Agreement or as consented to by HUNAPU INC. and CHCI
in writing, such consent not to be unreasonably withheld or delayed,
during the period from the date of this Agreement to the Effective Time,
CHSI shall carry on its business in the ordinary course consistent with
past practice and in compliance in all material respects with all
applicable laws and regulations and, to the extent consistent therewith,
use all reasonable efforts to preserve intact their current business
organizations, use reasonable efforts to keep available the services of
their current officers and other key employees and preserve their
relationships with those persons having business dealings with them to the
end that their goodwill and ongoing businesses shall be unimpaired at the
Effective Time. Without limiting the generality of the foregoing (but
subject to the above exceptions), except as otherwise contemplated by this
Agreement and Merger, during the period from the date of this Agreement to
the Effective Time, CHSI shall not, and shall not permit any of its
subsidiaries to: issue, deliver, sell, pledge or otherwise encumber or
subject to any Lien any shares of its capital stock, any other voting
securities or any securities convertible into, or any rights, warrants or
options to acquire, any such shares, voting securities or convertible
securities.
18
(b) Conduct of Business by HUNAPU INC.. Except as set forth in
Section 4.1(b) of the HUNAPU INC. Disclosure Schedule, as otherwise
expressly contemplated by this Agreement or as consented to by CHSI in
writing, such consent not to be unreasonably withheld or delayed, during
the period from the date of this Agreement to the Effective Time, HUNAPU
INC. shall carry on its respective business in the ordinary course
consistent with past practice and in compliance in all material respects
with all applicable laws and regulations and, to the extent consistent
therewith, use all reasonable efforts to preserve intact its current
business organizations, use reasonable efforts to keep available the
services of its current officers and other key employees and preserve its
relationships with those persons having business dealings with them to the
end that its goodwill and ongoing businesses shall be unimpaired at the
Effective Time. However, except for obligations incurred in connection
with its incorporation, the preparation and filing of the SEC Documents,
the initial public offering and the negotiations and consummation of this
Agreement and the transactions contemplated hereby, HUNAPU INC. has
neither incurred any obligation or liability nor engaged in any business
or activity of any type or kind or entered into any agreement or
arrangement with any person. Without limiting the generality of the
foregoing (but subject to the above exceptions), except as otherwise
contemplated by this Agreement and the Merger, during the period from the
date of this Agreement to the Effective Time, HUNAPU INC. shall not, and
shall not permit any of its subsidiaries to:
i. (x) declare, set aside or pay any dividends on, make any
other distributions in respect of, or enter into any agreement with
respect to the voting of, any of its capital stock, (y) 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;
ii. issue, deliver, sell, pledge or otherwise encumber or
subject to any Lien any shares of its capital stock, any other
voting securities or any securities convertible into, or any rights,
warrants or options to acquire, any such shares, voting securities
or convertible securities;
iii. except as contemplated hereby, amend its certificate of
incorporation, By-Laws or other comparable organizational documents;
iv. acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the assets of, or by
any other manner, any business or any person;
v. sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of its properties or
assets (including securitization );
vi. take any action that would cause the representations and
warranties set forth in Section 3.2(g) to no longer be true and
correct;
vii. incur any indebtedness for borrowed money or issue any
debt securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for the obligations of any person
for borrowed money; or
viii. authorize, or commit or agree to take, any of the
foregoing actions.
(c) Other Actions. Except as required by law, CHSI and HUNAPU INC.
shall not, and shall not permit any of their respective subsidiaries to,
voluntarily take any action that would, or that could reasonably be
expected to, result in any of the representations and warranties of such
party set forth in this Agreement that are qualified as to materiality
becoming untrue at the Effective Time.
(d) Advice of Changes. CHSI, CHCI and HUNAPU INC. shall promptly
advise the other party orally and in writing to the extent it has
knowledge of (i) any representation or warranty made by it contained in
this Agreement that is qualified as to materiality becoming untrue or
inaccurate in any respect or any such representation or warranty that is
not so qualified becoming untrue or inaccurate in any material respect,
(ii) the failure by it to comply in any material respect with or satisfy
in any material
19
respect any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement and (iii) any change or event having,
or which, insofar as can reasonably be foreseen, could reasonably be
expected to have a material adverse effect on such party or on the truth
of their respective representations and warranties or the ability of the
conditions set forth in Article 6 to be satisfied; provided, however, that
no such notification shall affect the representations, warranties,
covenants or agreements of the parties (or remedies with respect thereto)
or the conditions to the obligations of the parties under this Agreement.
SECTION 4.2. NO SOLICITATION BY HUNAPU INC..
(a) HUNAPU INC. shall not, nor shall it permit any of its
subsidiaries to, nor shall it authorize or permit any of its directors,
officers or employees or any investment banker, financial advisor,
attorney, accountant or other representative retained by it or any of its
subsidiaries to, directly or indirectly through another person, (i)
solicit, initiate or encourage (including by way of furnishing
information), or take any other action designed to facilitate, any
inquiries or the making of any proposal which constitutes any HUNAPU INC.
Takeover Proposal (as defined below) or (ii) participate in any
discussions or negotiations regarding any HUNAPU INC. Takeover Proposal;
provided, however, that if the Board of Directors of HUNAPU INC.
determines in good faith, based on the advice of outside counsel, that it
is necessary to do so in order to act in a manner consistent with its
fiduciary duties to HUNAPU INC.'s stockholders under applicable law,
HUNAPU INC. may, in response to a HUNAPU INC. Superior Proposal (as
defined in Section 4.2(b)) which was not solicited by it, which did not
otherwise result from a breach of this Section 4.2(a) and subject to
providing prior written notice of its decision to take such action to CHSI
and compliance with Section 4.2(c) (x) furnish information with respect to
HUNAPU INC. and its subsidiaries to any person making a HUNAPU INC.
Superior Proposal pursuant to a customary confidentiality agreement (as
determined by HUNAPU INC. based on the advice of its outside counsel, the
terms of which are no more favorable to such person than the
Confidentiality Agreement) and (y) participate in discussions or
negotiations regarding such HUNAPU INC. Superior Proposal. For purposes of
this Agreement, "HUNAPU INC. Takeover Proposal" means any inquiry,
proposal or offer from any person relating to any direct or indirect
acquisition or purchase of a business that constitutes 50% or more of the
net revenues, net income or the assets of HUNAPU INC. and its
subsidiaries, taken as a whole, or 10% or more of any class of equity
securities of HUNAPU INC., any tender offer, exchange offer or other
transactions that if consummated would result in any person beneficially
owning 10% or more of any class of equity securities of HUNAPU INC., or
any merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving HUNAPU INC. or
the HUNAPU INC. Capital Stock (or any HUNAPU INC. subsidiary whose
business constitutes 50% or more of the net revenues, net income or the
assets of HUNAPU INC. and its subsidiaries, taken as a whole), other than
the transactions contemplated by this Agreement.
(b) Except as expressly permitted by this Section 4.2, neither the
Board of Directors of HUNAPU INC. nor any committee thereof shall (i)
withdraw or modify, or propose publicly to withdraw or modify, in a manner
adverse to CHSI, the approval or recommendation by such Board of Directors
or such committee of the Merger, this Agreement or the issuance of HUNAPU
INC. Capital Stock in connection with the Merger, (ii) approve or
recommend, or propose publicly to approve or recommend, any HUNAPU INC.
Takeover Proposal, or (iii) cause HUNAPU INC. to enter into any letter of
intent, agreement in principle, acquisition agreement or other similar
agreement (each, a "HUNAPU INC. Acquisition Agreement") related to any
HUNAPU INC. Takeover Proposal. Notwithstanding the foregoing, at any time
prior to the obtaining of the HUNAPU INC. Stockholder Approval, the Board
of Directors of HUNAPU INC., to the extent that it determines in good
faith, based upon the advice of outside counsel, that it is necessary to
do so in order to act in a manner consistent with its fiduciary duties to
HUNAPU INC.'s stockholders under applicable law, may (subject to this and
the following sentences) terminate this Agreement solely in order to
concurrently enter into any HUNAPU INC. Acquisition Agreement with respect
to any HUNAPU INC. Superior Proposal, but only at a time that is after the
fifth business day following HUNAPU INC.'s receipt of written notice
advising CHSI that the Board of Directors of HUNAPU INC. is prepared to
accept a HUNAPU INC. Superior Proposal, specifying the material terms and
conditions of such HUNAPU INC. Superior Proposal and identifying the
person making such HUNAPU INC. Superior Proposal. For purposes of this
Agreement, a "HUNAPU INC. Superior Proposal" means
20
any proposal made by a third party to acquire, directly or indirectly,
including pursuant to a tender offer, exchange offer, merger,
consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction, for consideration consisting of CHCI
and/or securities, more than 50% of the combined voting power of the
shares of HUNAPU INC. Common Stock then outstanding or all or
substantially all the assets of HUNAPU INC. and otherwise on terms which
the Board of Directors of HUNAPU INC. determines in its good faith
judgment (based on the advice of a financial advisor of nationally
recognized reputation) to be more favorable to HUNAPU INC.'s stockholders
than the Merger and for which financing, to the extent required, is then
committed or which, in the good faith judgment of the Board of Directors
of HUNAPU INC. based on the advice of its financial advisor, is reasonably
capable of being obtained by such third party.
(c) In addition to the obligations of HUNAPU INC. set forth in
paragraphs(a) and (b) of this Section 4.2, HUNAPU INC. shall immediately
advise CHSI orally and in writing of any request for information or of any
HUNAPU INC. Takeover Proposal, the material terms and conditions of such
request or HUNAPU INC. Takeover Proposal and the identity of the person
making such request or HUNAPU INC. Takeover Proposal. HUNAPU INC. will
keep CHSI reasonably informed of the status and details (including
amendments or proposed amendments) of any such request or HUNAPU INC.
Takeover Proposal. CHSI shall treat any information it receives from
HUNAPU INC. pursuant to this section as confidential information.
(d) Nothing contained in this Section 4.2 shall prohibit HUNAPU INC.
from taking and disclosing to its stockholders a position contemplated by
Rule 14e-2(a) promulgated under the Exchange Act or from making any
disclosure to HUNAPU INC.'s stockholders if, in the good faith judgment of
the Board of Directors of HUNAPU INC., after consultation with outside
counsel, failure so to disclose would be inconsistent with its obligations
under applicable law; provided, however, that neither HUNAPU INC. nor its
Board of Directors nor any committee thereof shall withdraw or modify, or
propose publicly to withdraw or modify, its position with respect to this
Agreement, the Merger, the issuance of HUNAPU INC. Common Stock in
connection with the Merger, or approve or recommend, or propose publicly
to approve or recommend, a HUNAPU INC. Takeover Proposal.
ARTICLE 5.
ADDITIONAL AGREEMENTS
SECTION 5.1. ACCESS TO INFORMATION; CONFIDENTIALITY.
Each of CHSI, CHCI and HUNAPU INC. shall, and shall cause each of its
respective subsidiaries to, afford to the other party and to the officers,
employees, accountants, counsel, financial advisors and other representatives of
such other party, reasonable access during normal business hours during the
period prior to the Effective Time to all their respective properties, books,
contracts, commitments, personnel and records and, during such period, each of
CHSI, CHCI and HUNAPU INC. shall, and shall cause each of its respective
subsidiaries to, furnish promptly to the other party (a) a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of federal or state securities laws and (b)
all other information concerning its business, properties and personnel as such
other party may reasonably request. No review pursuant to this Section 5.1 shall
affect any representation or warranty given by the other party hereto. Each of
CHSI, CHCI and HUNAPU INC. will hold, and will cause its respective officers,
employees, accountants, counsel, financial advisors and other representatives
and affiliates to hold, any nonpublic information in accordance with the terms
of the Confidentiality Agreement.
SECTION 5.2. BEST EFFORTS.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use best efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective, in the
most expeditious manner practicable, the Merger
21
and the other transactions contemplated by this Agreement, including (i)
the obtaining of all necessary actions or nonactions, waivers, consents
and approvals from governmental entities and the making of all necessary
registrations and filings and the taking of all steps as may be necessary
to obtain an approval or waiver from, or to avoid an action or proceeding
by, any governmental entity, (ii) the obtaining of all necessary consents,
approvals or waivers from third parties, (iii) the defending of any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions
contemplated by this Agreement, including seeking to have any stay or
temporary restraining order entered by any court or other governmental
entity vacated or reversed, and (iv) the execution and delivery of any
additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement.
Nothing set forth in this Section 5.2(a) will limit or affect actions
permitted to be taken pursuant to Sections 4.1 and 4.2.
(b) In connection with and without limiting the foregoing, CHSI and
HUNAPU INC. shall (i) take all action necessary to ensure that no state
takeover statute or similar statute or regulation is or becomes applicable
to the Merger, this Agreement, or any of the other transactions
contemplated by this Agreement and (ii) if any state takeover statute or
similar statute or regulation becomes applicable to the Merger, this
Agreement, or any other transaction contemplated by this Agreement, take
all action necessary to ensure that the Merger and the other transactions
contemplated by this Agreement may be consummated as promptly as
practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on the Merger and the
other transactions contemplated by this Agreement.
SECTION 5.3. POST-EFFECTIVE AMENDMENT.
Promptly following the execution and delivery of this Agreement, HUNAPU
INC. shall prepare and file with the Commission a Post Effective Amendment to
its Registration Statement on Form SB-2 (No. 333-45774) declared effective on
November 9, 2001 with respect to the transactions contemplated by this Agreement
in accordance with all applicable rules and regulations of the Securities Act of
1933, as amended. Not less than five (5) days prior to the filing with the
Securities and Exchange Commission ("Commission"), HUNAPU INC. shall permit CHSI
and its legal counsel to review the filing and make suggested revisions thereto.
HUNAPU INC. shall mail the Post Effective Amendment when effective to each
HUNAPU INC. shareholder in accordance with all applicable rules and regulations
of the Rule 419 under the Securities Act and the NGCL.
SECTION 5.4. FEES AND EXPENSES.
All fees and expenses incurred in connection with the Merger, this
Agreement, and the transactions contemplated by this Agreement shall be paid by
the party incurring such fees or expenses, whether or not the Merger is
consummated.
SECTION 5.5. PUBLIC ANNOUNCEMENTS.
HUNAPU INC. and CHSI will consult with each other before issuing, and
provide each other the opportunity to review, comment upon and concur with and
use reasonable efforts to agree on, any press release or other public statements
with respect to the transactions contemplated by this Agreement, including the
Merger, and shall not issue any such press release or make any such public
statement prior to such consultation, except as either party may determine is
required by applicable law, court process or by obligations pursuant to any
listing agreement with any national securities exchange. The parties agree that
the initial press release to be issued with respect to the transactions
contemplated by this Agreement shall be in the form heretofore agreed to by the
parties.
SECTION 5.6. BULLETIN BOARD LISTING.
HUNAPU INC. shall use its best efforts to obtain the listing of its shares
of Common Stock on the NASD OTC Bulletin Board under the symbol "CHCI."
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SECTION 5.7. HUNAPU INC. LIABILITIES.
HUNAPU INC. shall terminate and extinguish all direct, indirect, short
term, long term, ▇▇▇▇▇▇, unchoate, contingent, unmatured, matured, known and
unknown liabilities (collectively, "Liabilities") and all other obligations of
HUNAPU INC. in form and substance satisfactory to CHSI.
SECTION 5.8. TAX TREATMENT.
No representation or warranty is being made by any party or to the
shareholders of any party to any other regarding the treatment of this
transaction for federal or state income taxation. Each party has relied
exclusively on its own legal, accounting and other tax adviser regarding the
treatment of the transaction for federal and state income taxes and on no
representation, warranty, or assurance from any other party or such other
party's legal, accounting, or other adviser.
SECTION 5.9. COMPANY OFFICERS; EMPLOYMENT CONTRACTS.
At or prior to the Effective Time, HUNAPU INC. agrees to enter into
employment agreements with ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ in form and
substance reasonably acceptable to CHSI and Messrs. Bensol and ▇▇▇▇▇.
SECTION 5.10. POST-MERGER OPERATIONS.
Following the Effective Time, the combined company shall maintain its
principal corporate office in Mineola, NY and all bank accounts of HUNAPU INC.
shall be amended so that two nominees of CHSI shall be only signatories with
authority to engage in transactions for such accounts.
SECTION 5.11. CONVEYANCE TAXES.
HUNAPU INC. and CHSI shall cooperate in the preparation, execution and
filing of all returns, questionnaires, applications or other documents regarding
any real property transfer or gains, sales, use, transfer, value added, stock
transfer and stamp taxes, any transfer, recording, registration and other fees
or any similar taxes which become payable in connection with the transactions
contemplated by this Agreement that are required or permitted to be filed on or
before the Effective Time. HUNAPU INC. shall pay, and CHSI shall pay, without
deduction or withholding from any amount payable to the holders of CHSI Common
Stock, any such taxes or fees imposed by any governmental entity (and any
penalties and interest with respect to such taxes and fees), which become
payable in connection with the transactions contemplated by this Agreement, on
behalf of their respective stockholders.
ARTICLE 6.
CONDITIONS PRECEDENT
SECTION 6.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligation of each party to effect the Merger is subject to
the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Stockholder Approvals. The stockholders of CHSI and CHCI shall
have approved the Merger. The stockholders of HUNAPU INC. shall have
reaffirmed their investment pursuant to Rule 419 under the Securities Act
and approved this Agreement.
(b) Governmental and Regulatory Approvals. Other than the filing
provided for under Section 1.3, all consents, approvals and actions of,
filings with and notices to any governmental entity required of CHCI,
CHSI, HUNAPU INC. or any of their subsidiaries to consummate the Merger
and the other transactions contemplated hereby, the failure of which to be
obtained or taken (i) is reasonably
23
expected to have a material adverse effect on the Surviving Corporation
and its prospective subsidiaries, taken as a whole, or (ii) will result in
a violation of any laws, shall have been obtained, all in form and
substance reasonably satisfactory to CHSI, CHCI and HUNAPU INC..
(c) No Injunctions or Restraints. No judgment, order, decree,
statute, law, ordinance, rule or regulation, entered, enacted,
promulgated, enforced or issued by any court or other governmental entity
of competent jurisdiction or other legal restraint or prohibition
(collectively, "Restraints") shall be in effect (i) preventing the
consummation of the Merger, or (ii) which otherwise is reasonably likely
to have a material adverse effect on CHSI, CHCI or HUNAPU INC., as
applicable; provided, however, that each of the parties shall have used
its best efforts to prevent the entry of any such Restraints and to appeal
as promptly as possible any such Restraints that may be entered.
(d) Due Diligence. CHSI, CHCI and HUNAPU INC. shall each have been
afforded the opportunity to complete their due diligence and conduct a
review of the business and prospects of the other and shall be reasonably
satisfied as to such business and prospects.
SECTION 6.2. CONDITIONS TO OBLIGATIONS OF HUNAPU INC..
The obligation of HUNAPU INC. to effect the Merger is further subject to
satisfaction or waiver of the following conditions:
(a) Representations and Warranties. The representations and
warranties of CHSI and CHCI set forth herein shall be true and correct
both when made and at and as of the Closing Date, as if made at and as of
such time (except to the extent expressly made as of an earlier date, in
which case, as of such date), except where the failure of such
representations and warranties to be so true and correct (without giving
effect to any limitation as to "materiality" or "material adverse effect"
set forth therein) does not have, and is not likely to have, individually
or in the aggregate, a material adverse effect on CHSI.
(b) Performance of Obligations of CHSI and CHCI. CHSI and CHCI shall
have each performed and complied in all material respects with all
obligations required to be performed by it under this Agreement at or
prior to the Closing Date.
(c) No Material Adverse Change. At any time after the date of this
Agreement there shall not have occurred any material adverse change
relating to CHSI.
(d) Legal Opinion. HUNAPU INC. shall receive a legal opinion from
CHSI's counsel in form and substance reasonably satisfactory to HUNAPU
INC..
(e) No Adverse Proceedings. There shall not be in effect any action,
suit or legal proceedings pending, or to HUNAPU INC.'s knowledge
threatened, or any known basis for the commencement of any such legal
proceedings, before any court or governmental authority or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge that would, in the reasonable judgment of HUNAPU INC.
(A) prevent consummation of any of the transactions contemplated by this
Agreement, (B) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation, (C) affect adversely the
right of HUNAPU , INC. to own the capital stock of the Surviving
Corporation, or (D) affect adversely the right of the Surviving
Corporation to own all of the assets of the Company and to operate the
entire business of CHSI (and no such injunction, judgment, order, decree,
ruling, or charge is in effect).
(f) Appraisal Rights. No stockholder of CHSI shall have made any
demand to exercise, or taken any other step to effect, such stockholder's
appraisal rights pursuant to Section 10.9 of the NYBCL.
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(g) Letters from Affiliates. HUNAPU, INC. shall have received from
each CHSI Affiliate an executed copy of the letter referred to in Section
2.2.
(h) Consents. All CHSI Consents shall have been obtained, except
(subject to the following proviso) where the failure to obtain any such
consent would not have a Material Adverse Effect with respect to CHSI.
(i) Financial Statements. CHSI will deliver to HUNAPU INC. audited
financial statements for the year ended December 31, 2001 (the "Audited
Financial Statements"). The Audited Financial Statements will be prepared
in accordance with the books and records of CHSI and will present fairly
in all material respects the financial position and results of operations
of CHSI as of the times and for the periods referred to therein, in
accordance with generally accepted accounting principles under current
United States accounting rules and regulations, consistently applied. CHSI
will deliver to HUNAPU, INC. unaudited reviewed financial statements for
the three months ending March 31, 2002 (the "Unaudited Financial
Statements") prepared in accordance with SAS 171.
(j) Rule 419 Requirement. The fair market value of CHSI's business
and/or the assets of CHSI is demonstrated to be at least $815,000.
(k) Registration Rights Agreement. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall have
entered into the Registration Rights Agreement with ▇▇▇▇▇ ▇▇▇▇▇▇ and
HUNAPU INC. in the form attached hereto as Exhibit 6.2(K).
(l) Closing Conditions. Documentation or other information shall
have been received in a form reasonably satisfactory to HUNAPU INC. which
evidences that the conditions set forth in this Section 6.2 have been
satisfied.
SECTION 6.3. CONDITIONS TO OBLIGATIONS OF CHSI.
The obligation of CHSI to effect the Merger is further subject to
satisfaction or waiver of the following conditions:
(a) Representations and Warranties. The representations and
warranties of HUNAPU INC. and CHCI set forth herein shall be true and
correct both when made and at and as of the Closing Date, as if made at
and as of such time (except to the extent expressly made as of an earlier
date, in which CHCI as of such date), except where the failure of such
representations and warranties to be so true and correct (without giving
effect to any limitation as to "materiality," or "material adverse effect"
set forth therein) does not have, and is not likely to have, individually
or in the aggregate, a material adverse effect on HUNAPU INC..
(b) Performance of Obligations of HUNAPU INC. and CHCI. HUNAPU INC.
and CHCI shall have each performed and complied in all material respects
with all obligations required to be performed by them, under this
Agreement at or prior to the Closing Date.
(c) No Material Adverse Change. At any time after the date of this
Agreement there shall not have occurred any material adverse change
relating to HUNAPU INC.
(d) Quotation on Bulletin Board. The shares of the HUNAPU INC.
common stock shall be quoted for trading on the NASD OTC Bulletin Board
without restriction or qualification.
(e) HUNAPU INC. Liabilities. All HUNAPU INC. Liabilities shall have
been terminated and extinguished in form and substance satisfactory to
CHSI.
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(f) Amendment of HUNAPU INC. Articles of Incorporation; Stock Option
Plan. HUNAPU INC. shall have amended its Articles of Incorporation and
adopted a Stock Option Plan in form and substance reasonably satisfactory
to CHSI.
(g) Shares Outstanding. HUNAPU INC. shall have no more than
10,969,200 shares of its common stock outstanding on a fully diluted basis
including the 3,959,200 shares issued to the shareholders of CHCI
immediately prior to the Effective Time.
(h) Books and Records. HUNAPU INC. shall have delivered to CHSI all
corporate books and records of HUNAPU INC.
(i) Officers and Directors. HUNAPU INC. shall have (i) accepted the
resignations of all existing officers of HUNAPU INC.; (ii) expanded the
HUNAPU INC. Board of Directors to five (5) members; (iii) appointed ▇▇▇▇▇
▇▇▇▇▇▇ and his nominees to fill the vacancies on the Board of Directors of
HUNAPU INC. to fill the newly created Board seat, and (iv) appointed ▇▇▇▇▇
▇▇▇▇▇▇ as the President and Chief Executive Officer of HUNAPU INC..
(j) Employment Agreements. HUNAPU INC. shall have entered into an
employment agreement with ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ in form and substance
satisfactory to CHSI and ▇▇. ▇▇▇▇▇▇. HUNAPU INC. shall have entered into
an employment agreement with ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ in form and substance
satisfactory to CHSI and ▇▇. ▇▇▇▇▇.
(k) Legal Opinion. CHSI shall receive a legal opinion from HUNAPU
INC.'s counsel in form and substance satisfactory to CHSI.
(l) SEC Reports. All SEC Filings shall have been submitted to the
SEC in accordance with the requirements of the Securities Act and the
Exchange Act (and the rules, regulations and guidance promulgated
thereunder), in form and substance satisfactory to CHSI, and all
applicable waiting periods shall have been expired or waived by CHSI.
(m) Delivery of the Merger Consideration. The stockholders of CHSI
shall receive the Merger Consideration at the Closing. Each certificate
issued to the stockholders of CHSI, as well as to the stockholders of CHCI
in the Critical Acquisition, representing shares of HUNAPU INC. Common
Stock will be imprinted with a legend substantially in the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON THE EXEMPTION
FROM REGISTRATION AND IN RELIANCE UPON THE REPRESENTATION BY THE HOLDER
THAT THEY HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT WITH A
VIEW TO RESALE OR FURTHER DISTRIBUTION IN VIOLATION OF APPLICABLE LAW.
SUCH SHARES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE,
HYPOTHECATED, NOR WILL ANY ASSIGNEE OR ENDORSEE HEREOF BE RECOGNIZED AS AN
OWNER HEREOF BY THE ISSUER FOR ANY PURPOSE, UNLESS A REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WITH RESPECT
TO SUCH SHARES SHALL THEN BE IN EFFECT OR UNLESS THE AVAILABILITY OF AN
EXEMPTION FROM REGISTRATION SHALL BE ESTABLISHED TO THE REASONABLE
SATISFACTION OF COUNSEL OF THE ISSUER.
26
If any stockholder of CHSI desires to transfer any shares of HUNAPU INC. Common
Stock received in connection with the Merger, other than in an offering
registered under the Securities Act, such stockholder must first furnish HUNAPU
INC. with (i) a written opinion satisfactory to HUNAPU INC. in form and
substance from counsel reasonably satisfactory to HUNAPU INC. to the effect that
such stockholder may transfer the HUNAPU INC. Common Stock as desired without
registration under the Securities Act and (ii) a written undertaking executed by
the desired transferee reasonably satisfactory to HUNAPU INC. in form and
substance agreeing to be bound by the restrictions on transfer contained herein.
(n) HUNAPU INC. Warrants. HUNAPU INC. shall take all actions
reasonably necessary, upon consummation of the Merger, to continue the
obligations of HUNAPU INC. under its outstanding common stock purchase
warrants (the "HUNAPU INC. Warrants") issued to the holders listed on
Schedule 6.3(m) of the HUNAPU INC. Disclosure Schedule (the "Warrant
Holders") in accordance with the provisions of HUNAPU INC. Warrants. The
number of shares of Company Common Stock, exercise price and expiration
dates of HUNAPU INC. Warrants are listed on Schedule 6.3(m) of the HUNAPU
INC. Disclosure Schedule. Upon the exercise of HUNAPU INC. Warrants by the
holder thereof in accordance with their respective terms and conditions
after the Effective Time, HUNAPU INC. shall deliver to the Warrant Holder
such number of shares of HUNAPU INC. Common Stock that are deliverable
thereunder by HUNAPU INC. at the time of such exercise. HUNAPU INC. shall
take all corporate actions necessary to have reserved from its authorized
capital stock at the Effective Time such number of shares of HUNAPU INC.
Common Stock issuable pursuant to HUNAPU INC. Warrants, and HUNAPU INC.
shall maintain such adequate reserves until the expiration of HUNAPU INC.
Warrants. HUNAPU INC. shall give the written notice required to be given
under HUNAPU INC. Warrants to the Warrant Holder with respect to any
changes in the obligations of HUNAPU INC. under HUNAPU INC. Warrants, and
HUNAPU INC. shall use its reasonable best efforts to secure from the
Warrant Holder a waiver of the requirement of HUNAPU INC. to give 10-days'
notice to the Warrant Holder with respect to the transactions contemplated
under this Agreement.
(o) Amendment to HUNAPU INC.'s Certificate of Incorporation to
Increase Authorized HUNAPU INC. Common Stock. Prior to the Closing Date,
HUNAPU INC. shall effect an amendment to its certificate of incorporation
increasing the number of authorized shares of HUNAPU INC. Common Stock and
filing a Certificate of Designation and Preferences of Preferred Stock.
(p) No Adverse Proceedings. There shall not be in effect any action,
suit or legal proceedings pending, or to CHSI's knowledge threatened, or
any known basis for the commencement of any such legal proceedings, before
any court or governmental authority or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge that
would, in the reasonable judgment of CHSI. (A) prevent consummation of any
of the transactions contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, (C) affect adversely the right of HUNAPU , INC. shareholders
to own the capital stock of HUNAPU INC., or (D) affect adversely the right
of the Surviving Corporation to own all of the assets and to operate the
entire business of CHSI (and no such injunction, judgment, order, decree,
ruling, or charge is in effect).
(q) Consents. All HUNAPU INC. Consents shall have been obtained,
except (subject to the following proviso) where the failure to obtain any
such consent would not have a Material Adverse Effect with respect to
HUNAPU INC.
(r) Closing Conditions. Documentation or other information shall
have been received in a form reasonably satisfactory to CHSI which
evidences that the conditions set forth in this Section 6.3 have been
satisfied.
(s) Retirement of Shares. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall retire to the
treasury of HUNAPU INC. all but 750,000 shares of HUNAPU INC. Common Stock
and 250,000 HUNAPU INC. Warrants held by Putun LLC.
27
SECTION 6.4. FRUSTRATION OF CLOSING CONDITIONS.
Neither HUNAPU INC. nor CHSI may rely on the failure of any condition set
forth in Section 6.1, 6.2 or 6.3, as the case may be, to be satisfied if such
failure was caused by such party's failure to use best efforts to consummate the
Merger and the other transactions contemplated by this Agreement, as required by
and subject to Section 5.5.
ARTICLE 7.
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1. TERMINATION.
This Agreement may be terminated at any time prior to the Effective Time,
and (except in the CHCI of 7.1(d) or 7.1(f)) whether before or after the CHSI
Stockholder Approval or the HUNAPU INC. Stockholder Approval:
(a) by mutual written consent of HUNAPU INC., CHCI and CHSI;
(b) by either HUNAPU INC. or CHSI:
i. if the Merger shall not have been consummated by June 15,
2002, for any reason other than the Post Effective Amendment not yet
being declared effective by the Securities and Exchange Commission;
provided, however, that the right to terminate this Agreement
pursuant to this Section 7.1(b)(i) shall not be available to any
party whose failure to perform any of its obligations under this
Agreement results in the failure of the Merger to be consummated by
such time; provided, however, that this Agreement may be extended
not more than 30 days by either party by written notice to the other
party if the Merger shall not have been consummated as a direct
result of HUNAPU INC. or CHSI having failed to receive all
regulatory approvals required to be obtained with respect to the
Merger.
ii. if any restraint having any of the effects set forth in
Section 6.1(c) shall be in effect and shall have become final and
nonappealable; provided, that the party seeking to terminate this
Agreement pursuant to this Section 7.1(b)(iv) shall have used best
efforts to prevent the entry of and to remove such Restraint;
(c) by HUNAPU INC., if CHSI shall have breached or failed to perform
in any material respect any of its representations, warranties, covenants
or other agreements contained in this Agreement, which breach or failure
to perform (A) would give rise to the failure of a condition set forth in
Section 6.2(a) or (b), and (B) is incapable of being cured by CHSI or is
not cured within 60 days of written notice thereof;
(d) by HUNAPU INC. in accordance with Section 4.2; provided that, in
order for the termination of this Agreement pursuant to this paragraph (d)
to be deemed effective, HUNAPU INC. shall have complied with all
provisions contained in Section 4.2, including the notice provisions
therein, and with applicable requirements, including the payment of the
Termination Fee (as defined in Section 10.3(f)); or
(e) by CHSI, if HUNAPU INC. shall have breached or failed to perform
in any material respect any of its representations, warranties, covenants
or other agreements contained in this Agreement, which breach or failure
to perform (A) would give rise to the failure of a condition set forth in
Section 6.3(a) or (b), and (B) is incapable of being cured by HUNAPU INC.
or is not cured within 60 days of written notice thereof.
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SECTION 7.2. EFFECT OF TERMINATION.
In the event of termination of this Agreement by either CHSI or HUNAPU
INC. as provided in Section 7.1, this Agreement shall forthwith become void and
have no effect, without any liability or obligation on the part of HUNAPU INC.
or CHSI, other than the provisions of this Section 7.2 and Article VIII, which
provisions survive such termination, and except to the extent that such
termination results from the willful and material breach by a party of any of
its representations, warranties, covenants or agreements set forth in this
Agreement.
SECTION 7.3. AMENDMENT.
This Agreement may be amended by the parties at any time before or after
the CHSI Stockholder Approval. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties.
SECTION 7.4. EXTENSION; WAIVER.
At any time prior to the Effective Time, a party may (a) extend the time
for the performance of any of the obligations or other acts of the other
parties, or (b) waive any inaccuracies in the representations and warranties of
the other parties contained in this Agreement or in any document delivered
pursuant to this Agreement. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party
to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of such rights.
SECTION 7.5. PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR WAIVER.
A termination of this Agreement pursuant to Section 7.1, an amendment of
this Agreement pursuant to Section 7.3 or an extension or waiver pursuant to
Section 7.4 shall, in order to be effective, require, in the case of HUNAPU INC.
or CHSI, action by its Board of Directors or, with respect to any amendment to
this Agreement, the duly authorized committee of its Board of Directors to the
extent permitted by law.
ARTICLE 8.
INDEMNIFICATION
SECTION 8.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties of HUNAPU INC. and CHSI shall survive
the execution and delivery hereof and the Closing hereunder. SECTION 8.2.
Indemnification.
(a) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇ ▇. ▇▇▇▇▇▇▇") agrees to indemnify, defend
and hold harmless CHSI, CHCI and HUNAPU INC. and their respective
directors, officers, employees, shareholders and any Affiliates of the
foregoing, and their successors and assigns (collectively, the "CHSI
Group") from and against any and all losses, liabilities (including
punitive or exemplary damages and fines or penalties and any interest
thereon), expenses (including reasonable fees and disbursements of counsel
and expenses of investigation and defense), claims, Liens or other
obligations of any nature whatsoever (hereinafter individually, a "Loss"
and collectively, "Losses") suffered or incurred by the CHSI Group which,
directly or indirectly, arise out of, result from or relate to, (i) any
inaccuracy in or any breach of any representation or warranty of HUNAPU
INC. or (ii) any breach of any covenant or agreement of HUNAPU INC.
contained in this Agreement or in any Company Document.
29
(b) ▇▇▇▇▇ ▇▇▇▇▇▇ and CHSI agree to indemnify, defend and hold
harmless ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, HUNAPU INC. and CHCI and their successors and
assigns (the "Stockholder Group") from and against any and all Losses
suffered or incurred by the Stockholder Group which, directly or
indirectly, arise out of, result from or relate to (i) any inaccuracy in
or any breach of any representation or warranty of CHSI contained in this
Agreement, or (ii) any breach of any covenant or agreement of CHSI
contained in this Agreement.
SECTION 8.2. METHOD OF ASSERTING CLAIMS.
The party making a claim under this Article VIII is referred to as the
"Indemnified Party" and the party against whom such claims are asserted under
Section 8.2 is referred to as the "Indemnifying Party". All claims by any
Indemnified Party under Section 8.2 shall be asserted and resolved as follows:
(a) In the event that any claim or demand for which an Indemnifying
Party would be liable to an Indemnified Party hereunder is asserted
against or sought to be collected from such Indemnified Party by a third
party, said Indemnified Party shall within fifteen (15) days notify in
writing the Indemnifying Party of such claim or demand, specifying the
nature of the specific basis for such claim or demand, and the amount or
the estimated amount thereof to the extent then feasible (which estimate
shall not be conclusive of the final amount of such claim and demand; any
such notice, being the "Claim Notice"); provided, however, that any
failure to give such Claim Notice will not be deemed a waiver of any
rights of the Indemnified Party except to the extent the rights of the
Indemnifying Party are actually prejudiced or harmed. The Indemnifying
Party may elect to assume the defense of any such claim or demand by
delivering written notice to the Indemnified Party of such election;
provided that any Indemnified Party is hereby authorized prior to the date
on which it receives written notice from the Indemnifying Party assuming
such defense, to retain counsel, whose reasonable fees and expenses shall
be at the expense of the Indemnifying Party, to file any motion, answer or
other pleading and take such other action which it reasonably shall deem
necessary to protect its interests or those of the Indemnifying Party
until the date on which the Indemnified Party receives such notice from
the Indemnifying Party. After the Indemnifying Party shall assume such
defense, the Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party unless the named parties of any such proceeding
(including any impleaded parties) include both the Indemnifying Party and
the Indemnified Party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing
interests between them. The Indemnifying Party shall not, in connection
with any proceedings or related proceedings in the same jurisdiction, be
liable for the reasonable fees and expenses of more than one such firm for
the Indemnified Party (except to the extent the Indemnified Party retained
counsel to protect its (or the Indemnifying Party's) rights prior to the
selection of counsel by the Indemnifying Party. The Indemnified Party
agrees to cooperate reasonably with the Indemnifying Party and its counsel
in contesting any claim or demand, which the Indemnifying Party defends.
No claim or demand may be settled by an Indemnifying Party or, where
permitted pursuant to this Agreement, by an Indemnified Party without the
consent of the Indemnified Party in the first CHCI or the consent of the
Indemnifying Party in the second CHCI, which consent shall not be
unreasonably withheld, unless such settlement shall be accompanied by a
complete release of the Indemnified Party in the first CHCI or the
Indemnifying Party in the second CHCI.
(b) In the event any Indemnified Party shall have a claim against
any Indemnifying Party hereunder which does not involve a claim or demand
being asserted against or sought to be collected from it by a third party,
the Indemnified Party shall send a Claim Notice with respect to such claim
to the Indemnifying Party. If the Indemnifying Party does not dispute such
claim within thirty (30) days of receipt of the Claim Notice the amount of
such claim shall be paid to the Indemnified Party within forty-five (45)
days of receipt of the Claim Notice.
(c) So long as any right to indemnification exists pursuant to this
Article 8, the affected parties each agree to retain all books, records,
accounts, instruments and documents reasonably related to the Claim
Notice. In each instance, the Indemnified Party shall have the right to be
kept informed by the Indemnifying Party and its legal counsel with respect
to all significant matters relating to any legal proceedings. Any
information or documents made available to any party hereunder, which
information is
30
designated as confidential by the party providing such information and
which is not otherwise generally available to the public, or which
information is not otherwise lawfully obtained from third parties or not
already within the knowledge of the party to whom the information is
provided (unless otherwise covered by the confidentiality provisions of
any other agreement among the parties hereto, or any of them), and except
as may be required by applicable law or requested by third party lenders
to such party, shall not be disclosed to any third Person (except for the
representatives of the party being provided with the information, in which
event the party being provided with the information shall request its
representatives not to disclose any such information which it otherwise
required hereunder to be kept confidential).
To the extent a Loss occurs under Section 8.2(a), ▇▇▇▇ ▇▇▇▇▇▇▇ may elect
to meet such obligation by delivery for cancellation of a number of shares
of HUNAPU INC. Common Stock. Any stock delivered pursuant to this Section
8.3(d) shall be valued at the lower of (i) a price equal to the fair
market value on the date of delivery and (ii) and a price equal to the
fair market value on the Closing Date (the "Fair Market Value"). To the
extent a Loss occurs under Section 8.2(b), CHSI may elect to make such
payment (i) in CHCI, or (ii) in a number of shares of HUNAPU INC. Common
Stock having a Fair Market Value equal to such payment amount.
ARTICLE 9.
SECTION 9.1. STATUS OF SCHEDULES AND EXHIBITS AS OF SIGNATURE DATE.
The parties each acknowledge and agree that as of the date this Agreement
is executed and delivered, none of the Schedules or Exhibits to this Agreement
have been prepared, delivered, reviewed, or approved by the parties or their
respective counsel. In addition to and without in any way limiting, any other
express and implied condition precedent to the obligations of any of the parties
under this Agreement, the obligations of each of the parties under this
Agreement are hereby made subject to and contingent upon the following:
(i) The preparation, delivery, and approval by the parties of
all of the Schedules described in this Agreement;
(ii) The preparation, delivery, and approval by the parties of
all of the Exhibits to this Agreement; and
(iii) All other express and implied conditions precedent to
the obligations of the parties under this Agreement shall have been
satisfied or waived at or prior to the Closing Date.
SECTION 9.2. NO OTHER REPRESENTATIONS AND WARRANTIES.
In addition, notwithstanding any other term, condition, covenant, or
provision of this Agreement or of any Other Agreement, the parties have not
made, and shall not be deemed to have made by their execution and delivery of
this Agreement, any representation or warranty with respect to any:
(i) Schedule described in this Agreement;
(ii) Exhibit to this Agreement;
(iii) Document or state of facts pertaining to any Schedule or
Exhibit to this Agreement; or
(iv) The intended contents to any document or state of facts
pertaining to any Schedule or Exhibit to this Agreement.
31
Any representations or warranties with respect to those matters or items
shall be made (unless waived or amended) only as of the Closing Date, and only
with respect to the Schedules and Exhibits attached to this Agreement as of the
Closing Date.
ARTICLE 10
GENERAL PROVISIONS
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties in this Agreement shall survive the
Effective Time for a period of [one] year.
SECTION 10.2. NOTICES.
All notices, requests, claims, demands and other communications under this
Agreement shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by overnight courier (providing proof of
delivery) 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 HUNAPU INC., to
HUNAPU INC.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Via facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Snow ▇▇▇▇▇▇ ▇▇▇▇▇▇ P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Via facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to CHSI, to
CLASSIC HEALTHCARE SOLUTIONS, INC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Via facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Spizz & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Via facsimile: (5l6) 747-8741
(b) if to CHCI, to
32
Critical Home Care, Incorporated
▇/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
Via Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Frankfurt, Garbus, Kurnet, ▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
Via Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 10.3. DEFINITIONS.
For purposes of this Agreement:
(a) except for purposes of Section 2.2, an "affiliate" of any person
means another person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control
with, such first person, where "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management policies of a person, whether through the ownership of voting
securities, by contract, as trustee or executor, or otherwise;
(b) "material adverse change" or "material adverse effect" means,
when used in connection with CHSI or HUNAPU INC., any change, effect,
event, occurrence or state of facts that is, or would reasonably be
expected to be, materially adverse to the business, financial condition or
results of operations of such party and its subsidiaries taken as a whole;
and the terms "material" and "materially" have correlative meanings;
(c) "person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity;
(d) a "subsidiary" of any person means another person, an amount of
the voting securities, other voting ownership or voting partnership
interests of which is sufficient to elect at least a majority of its Board
of Directors or other governing body (or, if there are no such voting
interests, 50% or more of the equity interests of which) is owned directly
or indirectly by such first person; provided however, that with respect to
HUNAPU INC., such term shall not include CHCI; and
(e) "knowledge" of any person which is not an individual means the
knowledge of such person's executive officers or senior management of such
person's operating divisions and segments, in each CHCI after reasonable
inquiry.
(f) "termination fee" shall mean the payment by HUNAPU INC. to CHSI
of an amount equal to (i) CHSI out-of-pocket expenditures plus (ii)
$5,000.
SECTION 10.4. INTERPRETATION.
When a reference is made in this Agreement to an Article, Section or
Exhibit, such reference shall be to an Article or Section of, or an Exhibit to,
this Agreement unless otherwise indicated. 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. Whenever the words
"include", "includes" or
33
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation". The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. All
terms defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein. The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such term. Any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including (in
the CHCI of agreements or instruments) by waiver or consent and (in the CHCI of
statutes) by succession of comparable successor statutes and references to all
attachments thereto and instruments incorporated therein. References to a person
are also to its permitted successors and assigns.
SECTION 10.5. COUNTERPARTS.
This Agreement may be executed in one 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.
SECTION 10.6. ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES.
This Agreement (including the documents and instruments referred to
herein):
(a) constitute the entire agreement, and supersede all prior
agreements and understandings, both written and oral, between the parties
with respect to the subject matter of this Agreement and
(b) except for the provisions of Article 2, Section 5.6 and Section
5.8, are not intended to confer upon any person other than the parties any
rights or remedies.
SECTION 10.7. GOVERNING LAW.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York, regardless of the laws that might otherwise
govern under applicable principles of conflict of laws thereof.
SECTION 10.8. JURISDICTION.
Each party to this Agreement hereby irrevocably agrees that any legal
action, suit or proceeding arising out of or relating to this Agreement, shall
be brought in the United States District Court for the Eastern District of New
York or the Supreme Court of the State of New York, County of Nassau, and each
party hereto agrees not to assert, by way of motion, as a defense or otherwise,
in any such action, suit or proceeding any claim that it is not subject
personally to the jurisdiction of such court, that the action, suit or
proceeding is brought in an inconvenient forum, that the venue of the action,
suit or proceeding is improper or that this Agreement, or the subject matter
hereof or thereof may not be enforced in or by such court. Each party hereto
further and irrevocably submits to the jurisdiction of such court in any action,
suit or proceeding.
SECTION 10.9. ASSIGNMENT.
Neither this Agreement nor any of the rights, interests or obligations
under this Agreement shall be assigned, in whole or in part, by operation of law
or otherwise by either of the parties hereto without the prior written consent
of the other party. Any assignment in violation of the preceding sentence shall
be
34
void. Subject to the preceding two sentences, this Agreement will be binding
upon, inure to the benefit of, and be enforceable by, the parties and their
respective successors and assigns.
SECTION 10.10. HEADINGS.
The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.
SECTION 10.11. SEVERABILITY.
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless
35
remain in full force and effect. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible to the fullest extent
permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
SECTION 10.12. BROKERS AND FINDERS.
The parties have not employed any broker, financial advisor or finder or
incurred any liability for any broker, financial advisory or finder's fee in
connection with the Agreement and Merger.
IN WITNESS WHEREOF, HUNAPU INC., CHCI and CHSI have caused this Agreement
to be signed by their respective officers thereunto duly authorized, all as of
the date first written above.
HUNAPU INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
CRITICAL HOME CARE INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
CLASSIC HEALTHCARE SOLUTIONS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary
With respect to the obligations
under Article 8 only:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
36
