AGREEMENT AND PLAN OF MERGER AMONGST APO HEALTH, INC. APO HEALTH ACQUISITION CORP. AND JUPITER GLOBAL HOLDINGS, CORP. DATED AS OF APRIL 21, 2006
Exhibit
10.1
AGREEMENT
AND PLAN OF MERGER
AMONGST
APO
HEALTH, INC.
APO
HEALTH ACQUISITION CORP.
AND
JUPITER
GLOBAL HOLDINGS, CORP.
DATED
AS OF APRIL 21, 2006
TABLE
OF CONTENTS
ARTICLE
I
- THE MERGER
| Section 1.01 |
The
Merger
|
| Section 1.02 |
Closing
|
| Section 1.03 |
Effective
Time
|
| Section 1.04 |
Effect
of the Merger
|
| Section 1.05 |
Certificate
of Incorporation and Bylaws; Directors and
Officers
|
| Section 1.06 |
Further
Actions
|
| Section 1.07 |
Conversion
|
| Section 1.08 |
Restrictions
on Resale
|
| Section 1.09 |
Exchange
of Certificates
|
ARTICLE
II - REPRESENTATIONS AND WARRANTIES OF PARENT
| Section |
2.01 Organization,
Standing and Power
|
| Section |
2.02 Capitalization
|
| Section |
2.03 Authority
for Agreement
|
| Section |
2.04 Issuance
of Common Stock
|
| Section |
2.05 Status
of SUB and PARENT; Financial
Statements
|
| Section |
2.06 Governmental
Consent
|
| Section |
2.07 Litigation
|
| Section |
2.08 Interested
Party Transactions
|
| Section |
2.09 Compliance
with Applicable Laws
|
| Section |
2.10 No
Undisclosed Liabilities
|
| Section |
2.11 Tax-Free
Reorganization
|
| Section |
2.12 Tax
Returns and Payment
|
| Section |
2.13 Board
Approval
|
| Section |
2.14 Full
Disclosure
|
| Section |
2.15 Brokers
and Finders Fees
|
| Section |
2.16 PARENT
SEC Reports
|
ARTICLE
III - REPRESENTATIONS AND WARRANTIES OF TARGET
| Section 3.01 |
Organization,
Standing and Power
|
| Section 3.02 |
Capitalization
|
| Section 3.03 |
Authority
for Agreement
|
| Section 3.04 |
Subsidiaries
|
| Section 3.05 |
Stockholders
|
| Section 3.06 |
Governmental
Consent
|
| Section 3.07 |
Status
of TARGET, Financial Statements
|
| Section 3.08 |
Litigation
|
| Section 3.09 |
Restrictions
on Business Activities
|
| Section 3.10 |
Interested
Party Transactions
|
| Section 3.11 |
Compliance
with Applicable Laws
|
| Section 3.12 |
Governmental
Authorization
|
| Section 3.13 |
Absence
of Changes
|
| Section 3.14 |
Operations
Since Financial Statements Date
|
| Section 3.15 |
No
Undisclosed Liabilities
|
| Section 3.16 |
Accounts
Receivable
|
| Section 3.17 |
Insurance
|
| Section 3.18 |
Title
to Properties; Liens
|
| Section 3.19 |
Material
Contracts
|
| Section 3.20 |
Non-Contravention
|
| Section 3.21 |
Labor
relations
|
| Section 3.22 |
Tax
Returns and Payment
|
| Section 3.23 |
Intellectual
Property
|
| Section 3.24 |
Environmental
Matters
|
| Section 3.25 |
Employment
Agreements
|
| Section 3.26 |
Warranty
claims
|
| Section 3.27 |
Brokers’
and Finders’ Fees
|
| Section 3.28 |
Board
Approval
|
| Section 3.29 |
Full
Disclosure
|
| Section 3.30 |
TARGET
SEC Reports
|
ARTICLE
IV - CERTAIN COVENANTS AND AGREEMENTS
| Section 4.01 |
Covenants
of TARGET
|
| Section 4.02 |
Covenants
of SUB and PARENT
|
| Section 4.03 |
Covenants
of the Parties
|
ARTICLE
V
- CONDITIONS PRECEDENT
| Section 5.01 |
Conditions
Precedent to the Parties'
Obligations
|
| Section 5.02 |
Conditions
Precedent to the Obligations of SUB and
PARENT
|
| Section 5.03 |
Conditions
Precedent to the Obligations of
TARGET
|
ARTICLE
VI - TERMINATION, AMENDMENT AND WAIVER
| Section 6.01 |
Termination
|
| Section 6.02 |
Effect
of Termination
|
ARTICLE
VII - CONFIDENTIALITY; NON-SOLICITATION; EXCLUSIVITY
| Section 7.01 |
Confidentiality
|
| Section 7.02 |
Non-Solicitation
|
| Section 7.03 |
Exclusivity
|
ARTICLE
VIII - INDEMNIFICATION
| Section 8.01 |
Indemnification
by SUB and PARENT
|
| Section 8.02 |
Indemnification
by TARGET
|
| Section 8.03 |
Survival
of Indemnification
|
ARTICLE
IX - MISCELLANEOUS
| Section 9.01 |
Non-survival
of Representations and Warranties
|
| Section 9.02 |
Expenses
|
| Section 9.03 |
Applicable
Law
|
| Section 9.04 |
Notices
|
| Section 9.05 |
Entire
Agreement
|
| Section 9.06 |
Assignment
|
| Section 9.07 |
Headings;
References
|
| Section 9.08 |
Counterparts
|
| Section 9.09 |
No
Third Party Beneficiaries
|
| Section 9.10 |
Severability;
Enforcement
|
List
of
Schedules
PARENT
Disclosure Schedule
SUB
Disclosure Schedule
EXHIBITS
Merger
Certificate A
AGREEMENT
AND PLAN OF MERGER
AGREEMENT
AND PLAN OF MERGER
dated as
of April 21, 2006 (the “Agreement”) by and amongst APO Health, Inc., a Nevada
corporation (“PARENT”),
APO
Health Acquisition Corp., a Nevada corporation (“SUB”)
and
Jupiter Global Holdings, Corp., a Nevada corporation (“TARGET”).
PARENT, SUB and TARGET are each referred to herein individually as a
“Party”
and
collectively as the “Parties.”
PREAMBLE
WHEREAS,
the
respective Boards of Directors of each of PARENT, SUB and TARGET deem it
advisable and in the best interests of each corporation and its respective
shareholders, that SUB and TARGET combine in order to advance the long-term
business strategies of PARENT and TARGET;
WHEREAS,
the
Board of Directors of TARGET has unanimously determined that the merger of
SUB
with and into TARGET (the “Merger”) and this Agreement are fair to, and in the
best interests of, TARGET and the holders of all the common stock of TARGET,
par
value $0.0001 per share (the “TARGET Common Stock”);
WHEREAS,
the
Board of Directors of PARENT has unanimously determined that the Merger and
this
Agreement are fair to, and in the best interests of, PARENT and the holders
of
the common stock of Parent, par value $0.0002 per share (the “PARENT Common
Stock”);
WHEREAS,
the
respective Boards of Directors of each of PARENT, SUB and TARGET have approved
this Agreement and the merger on the terms and conditions contained in this
Agreement;
WHEREAS,
PARENT,
as the sole Stockholder of SUB, has approved this Agreement, the Merger and
the
transactions contemplated by this Agreement pursuant to action taken by
unanimous written consent in accordance with the requirements of the Nevada
Revised Statutes;
WHEREAS,
for
federal income tax purposes, it is intended by the parties hereto that the
Merger shall qualify as a tax-free “reorganization” within the meaning of
Section 368 of the Internal Revenue Code of 1986, as amended (the
“Code”).
NOW,
THEREFORE,
in
consideration of the foregoing and the respective representations, warranties,
covenants and agreements contained in this Agreement and intending to be legally
bound hereby, the parties hereto agree as follows:
CERTAIN
DEFINITIONS
As
used
in this Agreement, the following terms shall have the meanings set forth below:
“Applicable
Law” means any domestic or foreign law, statute, regulation, rule, policy,
guideline or ordinance applicable to the businesses of the Parties, the Merger
and/or the Parties.
“Common
Stock” means the common stock of PARENT, par value $0.0002 per share.
“Commission”
means the United States Securities and Exchange Commission.
“Dollar”
and “$” means lawful money of the United States of America.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“GAAP”
means generally accepted accounting principles in the United States of America
as promulgated by the American Institute of Certified Public Accountants and
the
Financial Accounting Standards Board or any successor Institutes concerning
the
treatment of any accounting matter, and applied in a consistent manner.
“Knowledge”
means the knowledge, which either is obtained after reasonable inquiry, or
which
would have been obtained if one made a reasonable inquiry.
“Lien”
means, with respect to any property or asset, any mortgage, lien, pledge,
charge, security interest, encumbrance or other adverse claim of any kind in
respect of such property or asset.
“Material
Adverse Effect” with respect to any entity or group of entities means any event,
change or effect that has or would have a materially adverse effect on the
financial condition, business or results of operations of such entity or group
of entities, taken as a whole.
“Parent”
means APO Heath, Inc., a Nevada corporation.
“Parent
Disclosure Schedule” means the disclosure schedule delivered by Parent to Target
concurrently with the execution and delivery of this Agreement, as the same
may
be amended or supplemented by Parent.
“Parent
SEC Reports” means all filings required to be made by Parent with, or submitted
by Parent to, the Commission under the Securities Act and the Exchange
Act.
“Person”
means any individual, corporation, partnership, limited liability company,
trust
or unincorporated organization or a government or any agency or political
subdivision thereof.
“Securities
Act” means the Securities Act of 1933, as amended.
“Target
SEC Reports” means all filings required to be made by Target with, or submitted
by Target to, the Commission under the Securities Act and the Exchange
Act.
“Tax”
(and, with correlative meaning, “Taxes” and “Taxable”) means:
(i)
any
net income, alternative or add-on minimum tax, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license, withholding,
payroll employment, excise, severance, stamp, occupation, property,
environmental or windfall profit tax, custom, duty or other tax, governmental
fee or other like assessment or charge of any kind whatsoever together with
any
interest or any penalty, addition to tax or additional amount imposed by any
governmental entity (a “Tax Authority”) responsible for the imposition of any
such tax (domestic or foreign), and
(ii)
any
liability for the payment of any amounts of the type described in clause (i)
above as a result of being a member of an affiliated, consolidated, combined
or
unitary group for any Taxable period, and
(iii)
any
liability for the payment of any amounts of the type described in clauses (i)
or
(ii) above as a result of any express or implied obligation to indemnify any
other person.
“Tax
Return” means any return, statement, report or form, including, without
limitation, estimated Tax Returns and reports, withholding Tax Returns and
reports and information reports and returns required to be filed with respect
to
Taxes.
ARTICLE
I
THE
MERGER
SECTION
1.01 THE MERGER
Upon
the
terms and subject to the conditions set forth in this Agreement and in
accordance with the statutes of the State of Nevada, at the Effective Time
(as
defined herein), SUB shall be merged with and into TARGET, the separate
existence of SUB shall cease and TARGET shall continue as the surviving entity
of the Merger (where appropriate, the “Surviving Entity”).
SECTION
1.02 CLOSING
The
closing of the Merger (the “Closing”) will take place at the offices of ▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, Esq., counsel to the PARENT AND SUB (“VKS”), at The Galleria, ▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, on the day immediately following the
satisfaction or waiver of the conditions precedent set forth in Article V or
at
such other date as SUB and TARGET shall agree; provided,
however,
that
(a) the Parties shall use their best efforts to effect the Closing by May 10,
2006, or as soon thereafter as is practicable, and (b) the Closing may take
place by facsimile or other means as may be mutually agreed upon in advance
by
the Parties. The date on which the Closing is held is referred to in this
Agreement as the “Closing
Date.”
Unless
extended in writing by each of the PARENT and TARGET in the event the Closing
shall not occur by May 30, 2006 (the “Outside
Closing Date”)
then
either PARENT or TARGET may terminate this Agreement without any further
liability to the other.
SECTION
1.03 EFFECTIVE TIME
On
the
Closing Date, the Parties shall cause the Merger to be consummated by filing,
and the Merger shall become effective immediately upon the filing, of a
certificate of merger (the “Merger
Certificate”)
with
the Secretary of State of the State of Nevada in substantially the form attached
hereto as Exhibit
A
executed
in accordance with the relevant provisions of the statutes of the State of
Nevada. The Merger shall become effective at the time such Merger Certificate
is
filed with the Secretary of State of the State of Nevada (the “Effective
Time”).
The
date on which the Effective Time occurs is referred to as the “Effective
Date.”
SECTION
1.04 EFFECT OF THE MERGER
At
and
after the Effective Time, the Merger shall be effective as provided in the
applicable provisions of the statutes of the State of Nevada. The existence
of
TARGET, as the Surviving Entity, with all of its purposes and powers, shall
continue unaffected and unimpaired by the Merger, and, as the Surviving Entity,
it shall be governed by the laws of the State of Nevada and succeed to all
rights, assets, liabilities and obligations of SUB in accordance with the
statutes of the State of Nevada. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, except as otherwise
provided herein, all the property, rights, privileges, powers and franchises
of
SUB shall vest in the Surviving Entity, and all debts, liabilities and duties
of
SUB shall become the debts, liabilities and duties of the Surviving Entity.
The
separate existence and corporate organization of SUB shall cease at the
Effective Time and thereafter SUB and TARGET shall be a single entity, to wit,
the Surviving Entity.
SECTION
1.05 CERTIFICATE OF INCORPORATION AND BYLAWS; DIRECTORS AND
OFFICERS
Pursuant
to the Merger:
(i) The
Certificate of Incorporation and Bylaws of TARGET as in effect immediately
prior
to the Effective Time shall be the Certificate of Incorporation and Bylaws
of
the Surviving Entity following the Merger, until thereafter changed or amended
as provided therein or by applicable law.
(ii) The
officers and directors of the Parent following the Merger shall be those persons
listed on Schedule
1.05(a),
until
the earlier of their death, resignation or removal or until their respective
successors are duly appointed and qualified.
SECTION
1.06 FURTHER ACTIONS
If
at any
time after the Effective Time, SUB and TARGET shall consider or be advised
that
any further assignment or assurances or any other things that are necessary
or
desirable to vest, perfect or confirm, of record or otherwise, in the Surviving
Entity, the title to any property or right of SUB acquired or to be acquired
by
reason of or as a result of the Merger, then SUB and TARGET and their respective
officers and directors in office shall use all reasonable efforts to execute
and
deliver, or cause to be executed and delivered, all such proper deeds,
assignments and assurances and do all things reasonably necessary and proper
to
vest, perfect or confirm title to such property or rights in the Surviving
Entity and otherwise carry out the purpose of this Agreement, and the officers
of SUB and the Surviving Entity are fully authorized in the name of TARGET
or
otherwise to take any and all such action with the same effect as if such
persons were officers of TARGET.
SECTION
1.07 CONVERSION
As
of the
Effective Time, by virtue of the Merger and without any action on the part
of
SUB or TARGET:
CONVERSION
OF THE TARGET COMMON STOCK OF TARGET.
Each
share of Common Stock of TARGET issued and outstanding immediately prior to
the
Effective Time shall be converted into and become a right to receive one-quarter
(0.25) of a Share of Common Stock (“Conversion Price”), subject to adjustment as
provided herein, of the PARENT (the “Issuable Shares”) and shall automatically
be canceled and retired and shall cease to exist. The Conversion Price is
premised on the market price of the PARENT’s common stock at the time of
execution of this Agreement, being $0.02 per share (“Market Price”). The
Conversion Price shall be adjusted proportionately should the average closing
sale price of the PARENT’s common stock for the 20 consecutive trading days
prior to the Closing Date be greater or less than the Market Price. Each holder
of a certificate representing any such TARGET Common Stock shall, to the extent
such certificate represents such TARGET Common Stock , cease to have any rights
with respect to such TARGET Common Stock , except the right to receive the
Issuable Shares allocable to the shares represented by such certificate upon
surrender of such certificate in accordance with Section 1.09. In calculating
the number of Issuable Shares to issue to each TARGET shareholder, general
rounding principles should control the actual calculation, which shall result
in
no issuance of any fractional shares to the TARGET shareholders.
SECTION
1.08 RESTRICTIONS ON RESALE
The
Issuable Shares will not be registered under the Securities Act, or the
securities laws of any state, and absent an exemption from registration
contained in such laws, cannot be transferred, hypothecated, sold or otherwise
disposed of until; (i) a registration statement with respect to such securities
is declared effective under the Securities Act, or (ii) PARENT receives an
opinion of counsel for PARENT that an exemption from the registration
requirements of the Securities Act is available.
The
certificates representing the number of Issuable Shares into which the TARGET
Common Stock shall have been converted pursuant to this Agreement shall contain
legends substantially as follows:
“THE
SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH
RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR THE COMPANY RECEIVES
AN
OPINION OF COUNSEL FOR THE COMPANY THAT AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT IS AVAILABLE.”
SECTION
1.09 EXCHANGE OF CERTIFICATES
(i) EXCHANGE
OF CERTIFICATES. After the Effective Time and pursuant to a customary letter
of
transmittal or other instructional form provided by the Exchange Agent
(hereafter defined) to each of the Shareholders (as appropriate, the
“Stockholders”) of the TARGET Common Stock, the Stockholders shall be required
to surrender all the TARGET Common Stock to Executive Registrar & Transfer,
Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ upon such
surrender to receive in exchange therefor certificates representing the number
of Issuable Shares into which the TARGET Common Stock theretofore represented
by
the certificate or certificates so surrendered shall have been converted
pursuant to this Agreement. Until so surrendered, each such outstanding
certificate which, prior to the Effective Time, represented TARGET Common Stock
shall be deemed for all corporate purpose, subject to the further provisions
of
this Article I to evidence the ownership of the number of whole Issuable Shares
into which such TARGET Common Stock have been so converted. No dividend payable
to holders of Issuable Shares of record as of any date subsequent to the
Effective Time shall be paid to the Stockholders as the owner of any certificate
which, prior to the Effective Time, represented TARGET Common Stock, until
such
certificate or certificates are surrendered as provided in this Article I or
pursuant to letters of transmittal or other instructions with respect to lost
certificates provided by the Exchange Agent.
(ii) SUB
shares of Common Stock. Each share of Common Stock of SUB issued and outstanding
immediately prior to the Effective Time shall be converted into one fully paid
and nonassessable share of common stock of the Surviving
Corporation.
(iii) FRACTIONAL
SHARES. No certificate or scrip representing fractional Issuable Shares shall
be
issued upon the surrender of certificates representing TARGET Common Stock
pursuant to this Agreement, and no dividend declaration by the Board of
Directors of PARENT shall relate to any such fractional share. Fractional shares
shall be rounded up to the nearest whole share.
(iv) FULL
SATISFACTION OF RIGHTS. All Issuable Shares into which the TARGET Common Stock
shall have been converted pursuant to this Article 1 shall be deemed to have
been issued in full satisfaction of all rights pertaining to the TARGET Common
Stock.
(v) CANCELLATION
OF CERTIFICATES. All certificates representing TARGET Common Stock converted
into Issuable Shares pursuant to this Article I shall be canceled upon delivery
thereof to the Exchange Agent pursuant to this Agreement.
(vi) CLOSING
OF TRANSFER BOOKS. On the Effective Date, the stock transfer book of TARGET
shall be deemed to be closed and no transfer of Private Shares shall thereafter
be recorded thereon.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF SUB AND PARENT
Except
as
set forth in the PARENT SEC Reports or the PARENT Disclosure Schedule or the
SUB
Disclosure Schedule, disclosure in any one of which shall apply to any and
all
representations and warranties made in this Agreement, and except as otherwise
disclosed in writing by PARENT and/or SUB to TARGET, PARENT and SUB hereby
represent and warrant to TARGET, as of the date of this Agreement and as of
the
Effective Time, as follows:
SECTION
2.01 ORGANIZATION, STANDING AND POWER
SUB
is a
Nevada company and PARENT is a Nevada corporation. Both SUB and PARENT are
duly
incorporated, validly existing and in good standing under the laws of the State
of Nevada, and have corporate power and authority to conduct their business
as
presently conducted by it and to enter into and perform this Agreement and
to
carry out the transactions contemplated by this Agreement. SUB and PARENT are
duly qualified to do business as a foreign limited liability company and
corporation, respectively, doing business in each state in which they own or
lease real property and where the failure to be so qualified and in good
standing would have a Material Adverse Effect on SUB and PARENT or their
business. Except as disclosed on Schedule
2.01
hereto,
neither SUB nor PARENT have any material ownership interest in any corporation,
partnership (general or limited), limited liability company or other entity,
whether foreign or domestic (collectively such ownership interests including
capital stock).
SECTION
2.02 CAPITALIZATION
Subject
to modification by the PARENT prior to the Closing for purposes of effectuating
the terms of this Agreement, the authorized capital stock of PARENT consists
of
125,000,000 shares of common stock, $0.0002 par value per share, and no shares
of preferred stock. As of the date of this Agreement, there were 56,575,212
shares of common stock issued and outstanding. Except as disclosed on
Schedule
2.02(a)
hereto,
no shares have been reserved for issuance to any person, and there are no other
outstanding rights, warrants, options or agreements for the purchase of capital
stock from PARENT except as provided in this Agreement. Except as disclosed
on
Schedule
2.02(b)
hereto,
no Person is entitled to any rights with respect to the issuance or transfer
of
the Issuable Shares. The outstanding shares are validly issued, fully paid,
non-assessable, and have been issued in compliance with all state and federal
securities laws or other Applicable Law.
The
authorized capital stock of SUB consists of 1,000 shares of common stock,
$0.0001 par value per share, and no authorized shares of preferred stock. As
of
the date of this Agreement, there were 10 shares of common stock issued and
outstanding. Except as disclosed on Schedule
2.02(b)
hereto,
no shares have been reserved for issuance to any person, and there are no other
outstanding rights, warrants, options or agreements for the purchase of capital
stock from SUB except as provided in this Agreement. Except as disclosed on
Schedule
2.02(b)
hereto,
no Person is entitled to any rights with respect to the issuance or transfer
of
the Issuable Shares. The outstanding shares are validly issued, fully paid,
non-assessable, and have been issued in compliance with all state and federal
securities laws or other Applicable Law. As of the Effective Time, SUB shall
not
have filed a registration statement as to any of its shares.
SECTION
2.03 AUTHORITY FOR AGREEMENT
The
execution, delivery, and performance of this Agreement by SUB and PARENT have
been duly authorized by all necessary corporate action, except for the approval
of SUB's Stockholders (the “SUB Stockholders”), and this Agreement, upon its
execution by the Parties, will constitute the valid and binding obligation
of
SUB and PARENT enforceable against it in accordance with and subject to its
terms, except as enforceability may be affected by bankruptcy, insolvency or
other laws of general application affecting the enforcement of creditors'
rights, provided, that no such obligation shall arise or be binding unless
the
SUB Stockholders approve this Agreement. Except as set forth above or in
Schedule
2.03
attached
hereto, the execution and consummation of the transactions contemplated by
this
Agreement and compliance with its provisions by SUB and PARENT will not violate
any provision of Applicable Law and will not conflict with or result in any
breach of any of the terms, conditions, or provisions of, or constitute a
default under, SUB's Certificate of Incorporation or Bylaws or PARENT’s
Certificate of Incorporation or Bylaws, as the case may be and in each case
as
amended, or, in any material respect, any indenture, lease, loan agreement
or
other agreement or instrument to which SUB and PARENT are a party or by which
they or any of their properties are bound, or any decree, judgment, order,
statute, rule or regulation applicable to SUB and PARENT except to the extent
that any breach or violation of any of the foregoing would not constitute or
result in a Material Adverse Effect on SUB or PARENT taken as a whole.
SECTION
2.04 ISSUANCE OF PARENT COMMON STOCK
The
Issuable Shares issuable to the Stockholders as the holders of the TARGET Common
Stock will when issued pursuant to this Agreement be duly and validly authorized
and issued, fully paid and non-assessable.
SECTION
2.05 STATUS OF PARENT AND SUB; FINANCIAL STATEMENTS
| (i) |
Currently
the shares of common stock of PARENT are traded on the Electronic
Bulletin
Board in the over-the-counter market (“OTCBB”). Currently the shares of
common stock of SUB are not traded.
|
| (ii) |
SUB
is a non-reporting
company.
|
| (iii) |
PARENT
is a reporting company.
|
| (iv) |
SUB
does not have any material liabilities, except as provided in Schedule
2.05.
|
| (v) |
PARENT
has made available to TARGET copies of its audited financial
statements at
December 31, 2003, 2004 and 2005 for the three fiscal years then
ended
(collectively, “PARENT
Financial Statements”).
|
| (vi) |
The
PARENT
Financial
Statements (i) are consistent in all material respects with
the books and
records of PARENT;
(ii) have been or will be prepared in accordance with GAAP
consistently
applied; (iii) reflect and provide adequate reserves and disclosures
in
respect of all liabilities of PARENT,
including all contingent liabilities, as of the respective
dates of the
Financial Statements, and (iv) present fairly in all material
respects the
financial position of PARENT
at
such dates and the results of operations and cash flows of
PARENT
for
the periods then ended.
|
| (vii) |
Except
as otherwise disclosed in the PARENT Disclosure Schedule
or in the PARENT
Financial Statements, PARENT does not have any liabilities
or obligations
that would be required to be set forth in PARENT Financial
Statements in
accordance with GAAP.
|
SECTION
2.06 GOVERNMENTAL CONSENT
No
consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission
or
other federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission or any third party (other than the
approval of the SUB Stockholders), including a party to any agreement with
SUB
or PARENT, is required by or with respect to SUB or PARENT in connection with
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, except for (i) such consents, waivers,
approvals, orders, authorizations, registrations, declarations and filings
as
may be required under applicable securities laws thereby, and (ii) the filing
of
the Certificate of Merger with the Secretary of State of the State of
Nevada.
SECTION
2.07 LITIGATION
Except
as
disclosed on Schedule
2.07
hereof,
there is no action, suit, investigation, audit or proceeding pending against,
or
to the best knowledge of SUB and PARENT threatened against or affecting, SUB
and
PARENT or any of their assets or properties before any court or arbitrator
or
any governmental body, agency or official.
SECTION
2.08 INTERESTED PARTY TRANSACTIONS
Intentionally
omitted.
SECTION
2.09 COMPLIANCE WITH APPLICABLE LAWS
To
the
Knowledge of SUB and PARENT, the business of SUB and PARENT has not been, and
is
not being, conducted in violation of any Applicable Law, except for possible
violations which individually or in the aggregate have not had and are not
reasonably likely to have a Material Adverse Effect. No investigation or review
by any governmental entity with respect to SUB and PARENT is pending or, to
the
Knowledge of SUB and PARENT, threatened, nor has any governmental entity
indicated an intention to conduct the same, except for investigations or reviews
which individually or in the aggregate would not have, nor be reasonably likely
to have, a Material Adverse Effect.
SECTION
2.10 NO UNDISCLOSED LIABILITIES
Except
as
set forth on Schedule
2.10
hereto,
there are no liabilities, debts or other obligations of SUB and PARENT of any
kind whatsoever, whether accrued, contingent, absolute, determined, determinable
or otherwise, and there is no existing condition, situation or set of
circumstances which could reasonably be expected to result in such a liability
or debt.
SECTION
2.11 TAX FREE REORGANIZATION
Neither
SUB nor PARENT (i) has undertaken the obligation to investigate as to whether
SUB or any entity affiliated therewith has taken or agreed to take any action
that would prevent the Merger from qualifying as a reorganization within the
meaning of Section 368 of the Code; or (ii) made any representation or warranty
as to the qualification of the Merger as a reorganization within the meaning
of
Section 368 of the Code. Based on the foregoing, to the knowledge of SUB and
PARENT, nether SUB nor PARENT nor any entity affiliated therewith has taken
or
agreed to take any action or is aware of any fact or circumstance that would
prevent the Merger from qualifying as a reorganization within the meaning of
Section 368 of the Code.
SECTION
2.12 TAX RETURNS AND PAYMENT
SUB
and
PARENT have filed all material Tax Returns required by it and have paid all
Taxes shown thereon to be due, except for Taxes being contested in good faith.
There is no material claim for Taxes that is a lien against the property of
SUB
and PARENT other than liens for taxes not yet due and payable. Neither SUB
nor
PARENT have received notification of any audit of any Tax Return of SUB and
PARENT being conducted or pending by a Tax Authority where an adverse
determination could have a Material Adverse Effect, no extension or waiver
of
the statute of limitations on the assessment of any taxes has been granted
by
SUB and PARENT which is currently in effect, and SUB and PARENT are not a party
to any agreement, contract or arrangement with any Tax Authority, which may
result in the payment of any material amount. Neither SUB nor PARENT are a
party
to
any tax-sharing or allocation agreement, nor does they owe any amount under
any
tax-sharing or allocation agreement. Neither SUB nor PARENT have been (nor
does
it have any liability for unpaid Taxes because it once was) a member of an
“affiliated group” within the meaning of Code Section 1502.
SECTION
2.13 BOARD APPROVAL.
The
Board
of Directors of SUB and PARENT have approved this Agreement and the transactions
contemplated hereby and SUB will submit it to the sole Stockholder for its
approval.
SECTION
2.14 FULL DISCLOSURE
The
representations and warranties of SUB and PARENT contained in Article II of
this
Agreement or to be furnished in or in connection with documents mailed or
delivered to the SUB Stockholders in connection with soliciting their consent
to
this Agreement, do not contain or will not contain, any untrue statement of
a
material fact, or omit to state a material fact required to be stated herein
or
therein or necessary to make the statements herein or therein, in the light
of
the circumstances under which they were made, not misleading.
SECTION
2.15 BROKERS’ AND FINDERS’ FEES
Neither
SUB nor PARENT has incurred, nor will they incur, directly or indirectly, any
liability for brokers’ or finders’ fees or agents’ commissions or investment
bankers’ fees or any similar charges in connection with this Agreement or any
transaction contemplated hereby.
SECTION
2.16 PARENT SEC REPORTS
PARENT
has filed all forms, statements, reports and documents required to be filed
or,
if permissible, furnished by it with the Commission since such reports were
required. The PARENT SEC Reports (i) were prepared in accordance with the
requirements of the Securities Act or the Exchange Act, as the case may be,
and
the rules and regulations promulgated thereunder, and (ii) did not, at the
time
they were filed, or, if amended, as of the date of such amendment, contain
any
untrue statement of a material fact or omit to state a material fact required
to
be stated therein or necessary in order to make the statements made therein,
in
the light of the circumstances under which they were made, not misleading.
As of
its filing date, each PARENT SEC Report complied as to form in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act, as the case may be. There has not occurred any material adverse change,
or
any development constituting a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or operations
of
PARENT since its latest report on Form 10-QSB. Neither the offer or sale of
the
PARENT Stock pursuant hereto nor the consummation of the transactions as
contemplated by this Agreement give rise to any rights for or relating to the
registration of shares of PARENT Common Stock or other securities of PARENT
except as set forth on the PARENT Disclosure Schedule. PARENT is not required
to
prepare and deliver to its shareholders and file with the Commission any proxy,
information statement or similar report in advance of the consummation of the
transactions contemplated hereby, except for such reports as may need be filed
in accordance with Form 8-K and Schedule 14F-1.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF TARGET
Except
as
set forth in the TARGET SEC Reports or the TARGET Disclosure Schedule,
disclosure in any one of which shall apply to any and all representations and
warranties made in this Agreement, and except as otherwise disclosed in writing
by TARGET to PARENT, TARGET hereby represents and warrants to PARENT, as of
the
date of this Agreement and as of the Effective Time, as follows:
SECTION
3.01 ORGANIZATION, STANDING AND POWER
(i) TARGET
is
a Nevada corporation duly formed, validly existing and in good standing under
the laws of the State of Nevada and has full corporate power and authority
to
conduct its business as presently conducted by it and to enter into and perform
this Agreement and to carry out the transactions contemplated by this Agreement.
TARGET is duly qualified to do business in each state or other jurisdiction
it
owns or leases real property and where the failure to be so qualified and in
good standing would have a Material Adverse Effect. A schedule of TARGET’S
subsidiaries is attached hereto as Schedule 3.04, which discloses TARGET’S
interests in any corporation, partnership (general or limited), limited
liability company or other entity, whether foreign or domestic (collectively
such ownership interests including capital stock).
SECTION
3.02 CAPITALIZATION
The
authorized capital stock of TARGET consists of 10,000,000,000 shares of common
stock, $0.0001 par value per share, and 500,000,000 shares of preferred stock,
$.0001 par value per share. As of the date of this Agreement, there were
approximately 9,907,123,955 shares of common stock issued and outstanding,
and
there were 200,000,002 shares of preferred stock issued and outstanding. Except
as disclosed on Schedule
3.02(a)
hereto,
no shares have been reserved for issuance to any person, and there are no other
outstanding rights, warrants, options or agreements for the purchase of capital
stock from TARGET except as provided in this Agreement. Except as disclosed
on
Schedule
3.02(b)
hereto,
no Person is entitled to any rights with respect to the issuance or transfer
of
the Issuable Shares. The outstanding shares are validly issued, fully paid,
non-assessable, and have been issued in compliance with all state and federal
securities laws or other Applicable Law.
SECTION
3.03 AUTHORITY FOR AGREEMENT
The
execution, delivery and performance of this Agreement by TARGET has been duly
authorized by all necessary corporate or company action, as the case may be,
and
this Agreement constitutes the valid and binding obligation of TARGET,
enforceable against it in accordance with its terms, except as enforceability
may be affected by bankruptcy, insolvency or other laws of general application
affecting the enforcement of creditors' rights. The execution and consummation
of the transactions contemplated by this Agreement and compliance with its
provisions by TARGET will not violate any provision of Applicable Law and will
not conflict with or result in any breach of any of the terms, conditions,
or
provisions of, or constitute a default under, its certificate of incorporation
or bylaws, or, in any material respect, any indenture, lease, loan agreement
or
other agreement instrument to which TARGET is a party or by which it or any
of
its properties are bound, or any decree, judgment, order, statute, rule or
regulation applicable to TARGET except to the extent that any breach or
violation of any of the foregoing would not constitute or result in a Material
Adverse Effect.
SECTION
3.04 SUBSIDIARIES
Except
as
disclosed on Schedule
3.04
hereof,
TARGET has no other subsidiaries.
SECTION
3.05 STOCKHOLDERS
Except
as
disclosed on Schedule
3.05,
there
are no other holders of the TARGET Common Stock.
SECTION
3.06 GOVERNMENTAL CONSENT
No
consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission
or
other federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission or any third party, including a party
to
any agreement with TARGET, is required by or with respect to TARGET in
connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby, except for (i) such consents, waivers,
approvals, orders, authorizations, registrations, declarations and filings
as
may be required under applicable securities laws thereby, and (ii) the filing
of
the Certificate of Merger with the Secretary of State of the State of
Nevada.
SECTION
3.07 STATUS OF TARGET; FINANCIAL STATEMENTS
(i) Currently
the shares of common stock of TARGET are quoted on the PINK SHEETS.
(ii) As
of the
date hereof, TARGET is no longer a reporting company. Immediately prior to
the
execution of this Agreement, TARGET shall file a Form 15 to de-register the
stock and it shall as a result, become a non-reporting company.
(iii) TARGET
has made available to PARENT copies of its audited financial statements as
of
December 31, 2003, 2004 and 2005 for the three fiscal years then ended
(collectively, “TARGET
Financial Statements”).
(iv) The
TARGET
Financial
Statements (i) are consistent in all material respects with the books and
records of TARGET;
(ii)
have been or will be prepared in accordance with GAAP consistently applied;
(iii) reflect and provide adequate reserves and disclosures in respect of all
liabilities of TARGET,
including all contingent liabilities, as of the respective dates of the
Financial Statements, and (iv) present fairly in all material respects the
financial position of TARGET
at
such
dates and the results of operations and cash flows of TARGET
for
the
periods then ended.
(v) Except
as
otherwise disclosed in the TARGET Disclosure Schedule or in the TARGET Financial
Statements, TARGET does not have any liabilities or obligations that would
be
required to be set forth in TARGET Financial Statements in accordance with
GAAP.
SECTION
3.08 LITIGATION
There
is
no action, suit, investigation, audit or proceeding pending against, or to
the
best knowledge of TARGET, threatened against or affecting, TARGET or any of
its
assets or properties before any court or arbitrator or any governmental body,
agency or official.
SECTION
3.09 RESTRICTIONS ON BUSINESS ACTIVITIES
There
is
no agreement (non-compete or otherwise), commitment, judgment, injunction,
order
or decree to which TARGET is a party or otherwise binding upon TARGET which
has
or may have the effect of prohibiting or impairing any business practice of
TARGET, any acquisition of property (tangible or intangible) by TARGET or the
conduct of business by TARGET. Without limiting the foregoing, TARGET has not
entered into any agreement under which TARGET is restricted from selling,
licensing or otherwise distributing any of its technology or products to or
providing services to, customers or potential customers or any class of
customers, in any geographic area, during any period of time or in any segment
of the market.
SECTION
3.10 INTERESTED PARTY TRANSACTIONS
Intentionally
omitted.
SECTION
3.11 COMPLIANCE WITH APPLICABLE LAWS
To
the
Knowledge of TARGET, the business of TARGET has not been, and is not being,
conducted in violation of any Applicable Law, except for possible violations
which individually or in the aggregate have not had and are not reasonably
likely to have a Material Adverse Effect. No investigation or review by any
governmental entity with respect to TARGET is pending or, to the Knowledge
of
TARGET, threatened, nor has any governmental entity indicated an intention
to
conduct the same, except for investigations or reviews which individually or
in
the aggregate would not have, nor be reasonably likely to have, a Material
Adverse Effect.
SECTION
3.12 GOVERNMENTAL AUTHORIZATION
Schedule
3.12
accurately lists each consent, license, permit, grant or other authorization
issued to TARGET by a governmental entity (i) pursuant to which TARGET currently
operates or holds any interest in any of their properties or (ii) which is
required for the operation of the business of TARGET or the holding of any
such
interest (collectively, the “TARGET
Authorizations”).
The
TARGET Authorizations are in full force and effect and constitute all TARGET
Authorizations required to permit TARGET to operate or conduct its business
or
hold any interest in its properties or assets.
SECTION
3.13 ABSENCE OF CHANGES
Since
the
TARGET Financial Statements Date there has not been:
(i) any
event, occurrence, development or state of circumstances or facts which would,
individually or in the aggregate, have a Material Adverse Effect on
TARGET;
(ii) any
amendment of any material term of any outstanding security of
TARGET;
(iii) any
incurrence, assumption or guarantee by TARGET of any indebtedness for borrowed
money;
(iv) any
creation or other incurrence by TARGET of any Lien on any material
asset;
(v) the
making of any loan, advance or capital contributions to or investment in any
Person;
(vi) any
damage, destruction or other casualty loss (whether or not covered by insurance)
affecting the business or any asset(s) of TARGET which would, individually
or in
the aggregate, have a Material Adverse Effect on TARGET;
(vii) any
transaction or commitment made, or any contract or agreement entered into,
by
TARGET or any relinquishment by TARGET of any contract or other
right;
(viii) any
change in any method of accounting, method of tax accounting, or accounting
practice by TARGET;
(ix) any
(a)
grant of any severance or termination pay to any current or former director,
officer or employee of TARGET, (b) increase in benefits payable under any
existing severance or termination pay policies or employment agreements, (c)
entering into any employment, deferred compensation or other similar agreement
(or any amendment to any such existing agreement) with any current or former
director, officer or employee of TARGET, (d) establishment, adoption or
amendment (except as required by applicable law) of any collective bargaining,
bonus, profit sharing, thrift, pension, retirement, deferred compensation,
compensation, stock option, restricted stock or other benefit plan or
arrangement covering any current or former director, officer or employee of
TARGET, or (e) increase in compensation, bonus or other benefits payable or
otherwise made available to any current or former director, officer or employee
of TARGET;
(x) any
labor
dispute, other than routine individual grievances; or
(xi) any
tax
election or any settlement or compromise of any tax liability, in either case
that is material to TARGET.
SECTION
3.14 OPERATIONS SINCE FINANCIAL STATEMENTS DATE
Since
the
TARGET Financial Statements Date, except for as contemplated by this Agreement
or in the TARGET Financial Statements, TARGET:
(i) has
operated its businesses substantially as it was operated prior to that date
and
only in the ordinary course;
(ii) has
not
declared or otherwise become liable with respect to any dividend or distribution
of cash, assets or capital stock;
(iii) has
maintained or kept current its books, accounts, records, payroll, and filings
in
the usual and ordinary course of business, consistent in all material respects
with past practice; and
(iv) has
not
made any capital expenditure, commitment or investment other than in the
ordinary course of business.
SECTION
3.15 NO UNDISCLOSED LIABILITIES
Except
as
set forth on Schedule
3.15
hereto,
there are no liabilities or debts of TARGET of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, and there
is no existing condition, situation or set of circumstances which could
reasonably be expected to result in such a liability or debt.
SECTION
3.16 ACCOUNTS RECEIVABLE
(i) TARGET
has made available to SUB a list of all consolidated accounts receivable of
TARGET (“Accounts
Receivable”)
as of
March 31, 2006 along with a range of days elapsed since the date of each
invoice.
(ii)
Except
as
set forth on Schedule
3.16(a),
all
Accounts Receivable of TARGET arose in the ordinary course of business and
are
collectible except to the extent of reserves therefore set forth in the TARGET
Financial Statements Date. Except as set forth on
Schedule 3.16(b),
no
person has any Lien on any of such Accounts Receivable and no request or
agreement for deduction or discount has been made with respect to any of such
Accounts Receivable.
SECTION
3.17 INSURANCE
TARGET
has obtained and maintained in full force and effect insurance with responsible
and reputable insurance companies or associations in such amounts, on such
terms
and covering such risks, including fire and other risks insured against by
extended coverage, as is reasonably prudent. With respect to the insurance
policies and fidelity bonds covering the assets, business, equipment,
properties, operations, employees, officers and directors of TARGET, there
is no
claim by TARGET pending under any of such policies or bonds as to which coverage
has been questioned, denied or disputed by the underwriters of such policies
or
bonds. All premiums due and payable under all such policies and bonds have
been
paid. TARGET is otherwise in material compliance with the terms of such policies
and bonds (or other policies and bonds providing substantially similar insurance
coverage). TARGET has no Knowledge of any threatened termination of, or material
premium increase with respect to, any of such policies.
SECTION
3.18 TITLE TO PROPERTIES; LIENS
TARGET
does not own any real property. All of the assets of TARGET, except those
disposed of in the ordinary course of business, are free and clear of all Liens,
security interests, charges and encumbrances, except (i) as disclosed on the
TARGET Financial Statements, (ii) Liens for current taxes not yet due and
payable, (iii) Liens in favor of any lessor with respect to capital lease
obligations disclosed in Schedule
3.18
attached
hereto, (iv) such imperfections of title or zoning restrictions, easements
or
encumbrances, if any, as do not materially interfere with the present use of
such property or assets, and (vi) Liens which arise by operation of
law.
SECTION
3.19 MATERIAL CONTRACTS
Except
for: (i) contracts with clients and other contracts executed by TARGET in the
ordinary course of business; (ii) employment agreements with officers; and
(iii)
other material contracts which are listed on Schedule
3.19(a)
hereof, TARGET is not a party to or bound by any material indenture, lease,
license, loan agreement, other agreement or other instrument (collectively,
the
“Material
Contracts”).
Except as disclosed on Schedule
3.19(b)
hereof,
TARGET’s Material Contracts are enforceable in accordance with their respective
terms, and to the knowledge of TARGET, TARGET is not in violation of, and has
received no notice of being in violation of such Material
Contracts.
SECTION
3.20 NON-CONTRAVENTION
The
execution and delivery by TARGET of this Agreement and the consummation by
TARGET of the transactions contemplated hereby and performance of their
obligations hereunder do not and will not (i) violate the Certificate of
Incorporation or Bylaws of TARGET, (ii) violate any applicable law, rule,
regulation, judgment, injunction, order or decree, (iii) require any consent
or
other action by any Person under, constitute a default under, result in a
violation of, conflict with, or give rise to any right of termination,
cancellation or acceleration of any right or obligation of TARGET, or to a
loss
of any benefit to which TARGET is entitled under any provision of any agreement
or other instrument binding upon TARGET, or any license, franchise, permit,
certificate, approval or other similar authorization affecting, or relating
in
any way to, the assets or business of TARGET, or (iv) result in the creation
or
imposition of any Lien (as defined herein) on any asset of TARGET.
SECTION
3.21 LABOR RELATIONS
TARGET
is
not a party to any collective bargaining agreement and, to the Knowledge of
TARGET, no organizational efforts are presently being made with respect to
any
employees of TARGET. TARGET has complied in all material respects with all
applicable laws (including, but not limited to, the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”)),
and
regulations relating to employment matters including, but not limited to, those
relating to wages, hours, discrimination and payment of social security and
similar taxes.
SECTION
3.22 TAX RETURNS AND PAYMENT
TARGET
has filed all material Tax Returns required from it and has paid all Taxes
shown
thereon to be due, except as reflected in the TARGET Financial Statements and
except for Taxes being contested in good faith and except for such delinquent
tax returns that TARGET is required to file within 90 days after the Effective
Time of the Merger. Except
as
disclosed in the TARGET Financial Statements, there is no material claim for
Taxes that is a lien against the property of TARGET other than liens for taxes
not yet due and payable. TARGET has not received notification of any audit
of
any Tax Return of TARGET being conducted or pending by a Tax Authority where
an
adverse determination could have a Material Adverse Effect, no extension or
waiver of the statute of limitations on the assessment of any taxes has been
granted by TARGET which is currently in effect, and TARGET is not a party to
any
agreement, contract or arrangement with any Tax Authority, which may result
in
the payment of any material amount in excess of the amount reflected on the
TARGET Financial Statements. . TARGET is not a party
to
any tax-sharing or allocation agreement, nor does it owe any amount under any
tax-sharing or allocation agreement. TARGET has never been (nor does it have
any
liability for unpaid Taxes because it once was) a member of an “affiliated
group” within the meaning of Code Section 1502.
SECTION
3.23 INTELLECTUAL PROPERTY
Except
as
disclosed on Schedule
3.23
hereof,
TARGET has title to all material patents, trademarks or trade secrets, or
adequate licenses and rights to use the patents, trademarks, copyrights, trade
names and trade secrets of others, necessary to the conduct of its business.
The
business of TARGET is being carried on without known conflicts with patents,
licenses, trademarks, copyrights, trade names and trade secrets of others and,
to the Knowledge of TARGET, no other persons are conducting their businesses
in
conflict with patents, licenses, trademarks, copyrights, trade names and trade
secrets used by TARGET.
SECTION
3.24 ENVIRONMENTAL MATTERS
To
the
Knowledge of TARGET: (i) TARGET has obtained all material permits and licenses
which are required in connection with its business under all applicable laws
and
regulations relating to pollution or protection of the environment (the
“Environmental
Laws”)
and is
in material compliance therewith; (ii) TARGET has at all times conducted its
business in material compliance with all Environmental Laws and TARGET has
not
received any written notice of any past, present or future events, conditions
or
circumstances, which would interfere with or prevent material compliance or
continued material compliance with any Environmental Laws or which form the
basis of any material claim, demand or investigation, based on or related to
TARGET’s business or other activities; (iii) there is no civil, criminal or
administrative action or proceeding pending or threatened against TARGET,
arising under any Environmental Laws; and (iv) there does not exist, and at
no
time since TARGET acquired any premises leased or used by it, has there existed
any conditions that TARGET believes would require remediation by TARGET under
any Environmental Laws
SECTION
3.25 EMPLOYMENT AGREEMENTS
Schedule
3.25
hereof
lists each employment agreement between TARGET and any director, officer or
employee of TARGET and copies of all such agreements have been provided to
SUB
prior to the date hereof. Except as provided in such employment agreements,
all
other employees of TARGET are terminable at will without expense or liability
to
TARGET other than as may be set forth in said Schedule
3.25
attached
hereto or as may be required by law.
SECTION
3.26 WARRANTY CLAIMS
To
the
Knowledge of TARGET and except as set forth in Schedule
3.26
attached
hereto, there are no pending or threatened material claims against TARGET for
any work performed by TARGET for any client, including but not limited to,
any
services rendered under any warranties.
SECTION
3.27 BROKERS’ AND FINDERS’ FEES
TARGET
has not incurred, nor will it incur, directly or indirectly, any liability
for
brokers’ or finders’ fees or agents’ commissions or investment bankers’ fees or
any similar charges in connection with this Agreement or any transaction
contemplated hereby.
SECTION
3.28 BOARD APPROVAL
The
Board
of Directors of TARGET has approved this Agreement and the transactions
contemplated hereby and will submit it to the Stockholders for their
approval.
SECTION
3.29 FULL DISCLOSURE
The
representations and warranties of TARGET contained in this Article III of this
Agreement or to be furnished in or in connection with documents mailed or
delivered to the Stockholders of TARGET in connection with soliciting their
consent to this Agreement, do not contain or will not contain, any untrue
statement of a material fact, or omit to state a material fact required to
be
stated herein or therein or necessary to make the statements herein or therein,
in the light of the circumstances under which they were made, not
misleading.
SECTION
3.30 TARGET SEC REPORTS
Prior
to
filing the TARGET’S Form 15 with the Commission, TARGET filed all forms,
statements, reports and documents required to be filed or, if permissible,
furnished by it with the Commission since such forms have been required., except
that TARGET did not timely file its quarterly report on Form 10QSB for the
period ending September 30, 2005 and its annual report on Form 10-KSB for the
period ended December 31, 2005. The TARGET SEC Reports (i) were prepared in
accordance with the requirements of the Securities Act or the Exchange Act,
as
the case may be, and the rules and regulations promulgated thereunder, and
(ii)
did not, at the time they were filed, or, if amended, as of the date of such
amendment, contain any untrue statement of a material fact or omit to state
a
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they
were
made, not misleading. As of its filing date, each TARGET SEC Report complied
as
to form in all material respects with the applicable requirements of the
Securities Act and the Exchange Act, as the case may be.
ARTICLE
IV
CERTAIN
COVENANTS AND AGREEMENTS
SECTION
4.01 COVENANTS OF TARGET
TARGET
covenants and agrees that, during the period from the date of this Agreement
until the Closing Date, TARGET shall conduct its business as presently operated
and solely in the ordinary course, and consistent with such operation, and,
in
connection therewith, without the written consent of SUB and
PARENT:
(i) shall
not
amend its Certificate of Incorporation or Bylaws;
(ii) shall
not
pay or agree to pay to any employee, officer or director compensation that
is in
excess of the current compensation level of such employee, officer or director
other than salary increases or payments made in the ordinary course of business
or as otherwise provided in any contracts or agreements with any such
employees;
(iii) shall
not
merge or consolidate with any other entity or acquire or agree to acquire any
other entity;
(iv) shall
not
sell, transfer, or otherwise dispose of any assets required for the operations
of TARGET’s business except in the ordinary course of business consistent with
past practices;
(v) shall
not
create, incur, assume, or guarantee any indebtedness for money borrowed except
in the ordinary course of business, or create or suffer to exist any mortgage,
lien or other encumbrance on any of its assets, except those in existence on
the
date hereof or those granted pursuant to agreements in effect on the date of
this Agreement or provided by SUB and PARENT and/or any of their
affiliates;
(vi) shall
not
make any capital expenditure or series of capital expenditures except in the
ordinary course of business, with the exception of the acquisition referred
to
in Section 4.01(iii) hereof;
(vii) shall
not
declare or pay any dividends on or make any distribution of any kind with
respect to the TARGET Common Stock;
(viii) shall
maintain its facilities, assets and properties in reasonable repair, order
and
condition, reasonable wear and tear excepted, and to notify SUB and PARENT
immediately in the event of any material loss or damage to any of TARGET’s
material assets;
(ix) shall
maintain in full force and effect all present insurance coverage of the types
and in the amounts as are in effect as of the date of this
Agreement;
(x) shall
seek to preserve the present employees, reputation and business organization
of
TARGET and TARGET’s relationship with its clients and others having business
dealings with it;
(xi) shall
not
issue any additional TARGET Common Stock or take any action affecting the
capitalization of TARGET;
(xii) shall
use
commercially reasonable efforts to comply with and not be in default or
violation under any law, regulation, decree or order applicable to TARGET’s
business, operations or assets where such violation would have a Material
Adverse Effect;
(xiii) shall
not
grant any severance or termination pay to any director, officer or any other
employees of TARGET, other than pursuant to agreements in effect on the date
of
this Agreement or as otherwise disclosed in the documents delivered pursuant
to
this Agreement;
(xiv) shall
not
change any of the accounting principles or practices used by it, except as
may
be required as a result of a change in law or in GAAP, whether in respect of
Taxes or otherwise;
(xv) shall
not
terminate or waive any right of substantial value other than in the ordinary
course of business; and
(xvi) shall
not
enter into any material contract or commitment other than in the ordinary course
of business.
SECTION
4.02 COVENANTS OF PARENT
PARENT
covenants and agrees that, during the period from the date of this Agreement
until the Closing Date, PARENT shall conduct its business as presently operated
and solely in the ordinary course, and consistent with such operation, and,
in
connection therewith, without the written consent of TARGET:
(i) Employment
Additionally, PARENT shall employ such employees of TARGET as determined by
PARENT, upon such terms and conditions as shall be acceptable to PARENT and
such
individuals.
(ii) Resignation
of Directors, Nomination of Directors and Officers.
PARENT
shall, prior to the Closing, cause none of its directors to resign subsequent
to
the Effective Time. In addition, PARENT agrees and accepts the officers and
directors of the PARENT following the Merger of persons listed on Schedule
1.05(a),
until
the earlier of their death, resignation or removal or until their respective
successors are duly appointed and qualified.
(iii) shall
not
amend its Certificate of Incorporation or Bylaws;
(iv) shall
not
pay or agree to pay to any employee, officer or director compensation that
is in
excess of the current compensation level of such employee, officer or director
other than salary increases or payments made in the ordinary course of business
or as otherwise provided in any contracts or agreements with any such
employees;
(v) shall
not
merge or consolidate with any other entity or acquire or agree to acquire any
other entity;
(vi) shall
not
sell, transfer, or otherwise dispose of any assets required for the operations
of PARENT’s business except in the ordinary course of business consistent with
past practices;
(vii) shall
not
create, incur, assume, or guarantee any indebtedness for money borrowed except
in the ordinary course of business, or create or suffer to exist any mortgage,
lien or other encumbrance on any of its assets, except those in existence on
the
date hereof or those granted pursuant to agreements in effect on the date of
this Agreement or provided by TARGET and/or any of its affiliates;
(viii) shall
not
make any capital expenditure or series of capital expenditures except in the
ordinary course of business;
(ix) shall
not
declare or pay any dividends on or make any distribution of any kind with
respect to its securities;
(x) shall
maintain its facilities, assets and properties in reasonable repair, order
and
condition, reasonable wear and tear excepted, and to notify TARGET immediately
in the event of any material loss or damage to any of PARENT’s material
assets;
(xi) shall
maintain in full force and effect all present insurance coverage of the types
and in the amounts as are in effect as of the date of this
Agreement;
(xii) shall
seek to preserve the present employees, reputation and business organization
of
SUB and PARENT and SUB’s and PARENT’s relationship with its clients and others
having business dealings with it;
(xiii) shall
not
issue any securities other than as contemplated hereby.
(xiv) shall
use
commercially reasonable efforts to comply with and not be in default or
violation under any law, regulation, decree or order applicable to SUB’s and
PARENT’s business, operations or assets where such violation would have a
Material Adverse Effect;
(xv) shall
not
grant any severance or termination pay to any director, officer or any other
employees of SUB and PARENT except as otherwise disclosed in the documents
delivered pursuant to this Agreement;
(xvi) shall
not
change any of the accounting principles or practices used by it, except as
may
be required as a result of a change in law or in GAAP, whether in respect of
Taxes or otherwise;
(xvii) shall
not
terminate or waive any right of substantial value other than in the ordinary
course of business;
(xviii) shall
not
enter into any material contract or commitment other than in the ordinary course
of business; and
(xix) during
the period from the date of this Agreement until the Closing Date, SUB and
PARENT shall conduct its business as presently operated and solely in the
ordinary course, and consistent with such operation, and, in connection
therewith, without the written consent of TARGET.
SECTION
4.03 COVENANTS OF THE PARTIES
(i) Tax-free
Reorganization.
The
Parties intend that the transactions contemplated hereby qualify as a tax free
reorganization under Code Section 368(a)(1)(A) and the parties will take the
position for all purposes that the transactions contemplated hereby qualify
as a
reorganization under such Section. In addition, the Parties covenant and agree
that they will not engage in any action, or fail to take any action, which
action or failure to act would reasonably be expected to cause the Merger to
fail to qualify as a “reorganization” under Code Section 368(a), whether or not
otherwise permitted by the provisions of this Agreement;
(ii) Announcement.
Neither
TARGET, on the one hand, nor SUB and PARENT on the other hand, shall issue
any
press release or otherwise make any public statement with respect to this
Agreement or the transactions contemplated hereby without the prior consent
of
the other Parties (which consent shall not be unreasonably withheld), except
as
may be required by applicable law or securities regulation. Notwithstanding
anything in this Section 4.03 to the contrary, the Parties will, to the extent
practicable, consult with each other before issuing, and provide each other
the
opportunity to review and comment upon, any such press release or other public
statements with respect to this Agreement and the transactions contemplated
hereby whether or not required by Applicable Law.
(iii) Notification
of Certain Matters.
TARGET
shall give prompt notice to SUB and PARENT, and SUB and PARENT shall give prompt
notice to TARGET, of:
(a) The
occurrence, or nonoccurrence, of any event the occurrence, or nonoccurrence,
of
which would be reasonably likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect
at or prior to the Effective Time; and
(b) Any
material failure of TARGET on the one hand, or SUB and PARENT, on the other
hand, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder.
(iv) Reasonable
Best Efforts.
Before
Closing, upon the terms and subject to the conditions of this Agreement, the
Parties agree to use their respective reasonable best efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, all things necessary,
proper or advisable (subject to applicable laws) to consummate and make
effective the Merger and other transactions contemplated by this Agreement
as
promptly as practicable including, but not limited to:
(a) The
preparation and filing of all forms, registrations and notices required to
be
filed to consummate the Merger, including without limitation, the corporate
resolutions to be sent to the SUB Stockholders (including the definitive and
any
amendments thereto, the “Shareholder Resolution”), and the other approvals,
consents, orders, exemptions or waivers by any third party or governmental
entity; and
(b) The
satisfaction of the other Parties' conditions precedent to Closing.
(v) Representation
of Counsel.
Each of
the Parties has engaged separate counsel and have relied upon the advice
provided by their counsel. .
(vi) Shareholder
Resolution.
SUB
will use its reasonable best efforts to seek the approval of the SUB
Stockholders for the Merger. As promptly as is reasonably practicable after
the
date of this Agreement, SUB shall deliver to its sole Stockholder a corporate
resolution and copy of this Agreement for the purpose of approving and
authorizing this Agreement.
(vii) Access
to Information
(a) Inspection
by TARGET.
SUB and
PARENT will make available for inspection by TARGET, during normal business
hours and in a manner so as not to interfere with normal business operations,
all of SUB’s and PARENT’s records (including tax records), books of account,
premises, contracts and all other documents in SUB’s and PARENT’s possession or
control that are reasonably requested by TARGET to inspect and examine the
business and affairs of SUB and PARENT. SUB and PARENT will cause its managerial
employees and regular independent accountants to be available upon reasonable
advance notice to answer questions of TARGET concerning the business and affairs
of SUB and PARENT. TARGET will treat and hold as confidential any information
they receive from SUB and PARENT in the course of the reviews contemplated
by
this Section 4.03(vii). No examination by TARGET will, however, constitute
a
waiver or relinquishment by TARGET of its rights to rely on SUB’s and PARENT’s
covenants, representations and warranties made herein or pursuant
hereto.
(b) Inspection
by SUB.
TARGET
will make available for inspection by SUB and PARENT, during normal business
hours and in a manner so as not to interfere with normal business operations,
all of TARGET’s records (including tax records), books of account, premises,
contracts and all other documents in TARGET’s possession or control that are
reasonably requested by SUB and PARENT to inspect and examine the business
and
affairs of TARGET. TARGET will cause its managerial employees and regular
independent accountants to be available upon reasonable advance notice to answer
questions of SUB and PARENT concerning the business and affairs of TARGET.
SUB
and PARENT will treat and hold as confidential any information they receive
from
TARGET in the course of the reviews contemplated by this Section 4.03 (vii).
No
examination by SUB and PARENT will, however, constitute a waiver or
relinquishment by SUB and PARENT of its rights to rely on TARGET’s covenants,
representations and warranties made herein or pursuant hereto.
ARTICLE
V
CONDITIONS
PRECEDENT
SECTION
5.01 CONDITIONS PRECEDENT TO THE PARTIES' OBLIGATIONS
The
obligations of the Parties as provided herein shall be subject to each of the
following conditions precedent, unless waived by the parties:
(i) Consents,
Approvals.
The
Parties shall have obtained all consents and approvals of their respective
boards of directors and stockholders, and all material consents, including
any
material consents and waivers by the Parties’ respective lenders and other
third-parties, if necessary, to the consummation of the transactions
contemplated by this Agreement.
(ii) Absence
of Certain Litigation.
No
action or proceeding shall be threatened or pending before any governmental
entity or authority which, in the reasonable opinion of counsel for the Parties,
is likely to result in a restraint, prohibition or the obtaining of damages
or
other relief in connection with this Agreement or the consummation of the
Merger.
SECTION
5.02 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SUB AND
PARENT
The
obligations of SUB and PARENT as provided herein shall be subject to each of
the
following conditions precedent, unless waived by SUB and PARENT:
(i) Consents
And Approvals.
TARGET
shall have obtained all material consents, including any material consents
and
waivers by TARGET's lenders and other third-parties, if necessary, to the
consummation of the transactions contemplated by this Agreement.
(ii)
Representations
and Warranties.
The
representations and warranties by TARGET in Article III herein shall be true
and
accurate in all material respects on and as of the Closing Date with the same
force and effect as though such representations and warranties had been made
at
and as of the Closing Date, except to the extent that any changes therein are
specifically contemplated by this Agreement.
(iii) Performance.
TARGET
shall have performed and complied in all material respects with all agreements
to be performed or complied with by them pursuant to this Agreement prior at
or
prior to the Closing.
(iv) Proceedings
and Documents.
All
corporate and other proceedings in connection with the transactions contemplated
by this Agreement and all documents and instruments incident to such
transactions shall be reasonably satisfactory in substance and form to SUB
and
PARENT and its counsel, and SUB and its counsel shall have received all such
counterpart originals (or certified or other copies) of such documents as they
may reasonably request.
(vi) Certificate
of Good Standing.
TARGET
shall have delivered to SUB and PARENT a certificate as to the good standing
of
TARGET in the State of Nevada certified by the Secretary of State of the State
of Nevada on or within 20 calendar days of the Closing Date.
(vii) Material
Changes.
Except
as contemplated by this Agreement, since the date hereof, TARGET shall not
have
suffered a Material Adverse Effect.
(viii) Certified
List of Shareholders.
TARGET
shall have delivered to PARENT a certified list of shareholders and their
shareholdings from the Transfer Agent, as well as a schedule showing any
options, warrants, scrip or any other rights to purchase stock, plus the terms
of any such purchase rights.
SECTION
5.03 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF TARGET
The
obligation of TARGET on the Closing Date as provided herein shall be subject
to
the satisfaction, on or prior to the Closing Date, of the following conditions
precedent, unless waived by TARGET:
(i) Consents
And Approvals.
SUB and
PARENT shall have obtained the consent and approval of their respective lenders
and other third-parties, if necessary, to the consummation of the transactions
contemplated by this Agreement.
(ii) Representations
And Warranties.
The
representations and warranties by SUB and PARENT in Article II herein shall
be
true and accurate in all material respects on and as of the Closing Date with
the same force and effect as though such representations and warranties had
been
made at and as of the Closing Date, except to the extent that any changes
therein are specifically contemplated by this Agreement.
(iii) Performance.
SUB and
PARENT shall have performed and complied in all material respects with all
agreements to be performed or complied with by them pursuant to this Agreement
prior to or at the Closing.
(iv) Proceedings
And Documents.
All
corporate, company and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be reasonably satisfactory in substance and form to
TARGET and its counsel, and TARGET and its counsel shall have received all
such
counterpart originals (or certified or other copies) of such documents as they
may reasonably request.
(v) Certificate
of Good Standing.
SUB and
PARENT shall have delivered to TARGET a certificate as to the good standing
of
SUB certified by the Secretary of State of the State of Nevada, on or within
2
business days of the Closing Date.
(vi) Material
Changes.
Except
as contemplated by this Agreement, since the date hereof, SUB shall not have
suffered a Material Adverse Effect.
(vii) Certified
List of Shareholders.
PARENT
shall have delivered to TARGET a certified list of shareholders and their
shareholdings from the Transfer Agent, as well as a schedule showing any
options, warrants, scrip or any other rights to purchase stock, plus the terms
of any such purchase rights.
ARTICLE
VI
TERMINATION,
AMENDMENT AND WAIVER
SECTION
6.01 TERMINATION
This
Agreement may be terminated and the Merger may be abandoned at any time prior
to
the Effective Time by:
(i) The
mutual written consent of the Boards of Directors of the Parties;
(ii) Either
SUB and PARENT, on the one hand, or TARGET, on the other hand, if any
governmental entity or court of competent jurisdiction shall have issued an
order, decree or ruling or taken any other action (which order, decree, ruling
or other action the parties to this Agreement shall use their reasonable efforts
to lift), which restrains, enjoins or otherwise prohibits the Merger or the
acceptance for payment of, or payment for, Issuable Shares pursuant to the
Merger and such order, decree, ruling or other action shall have become final
and non-appealable;
(iii) SUB
and
PARENT, if TARGET shall have breached in any material respect any of their
respective representations, warranties, covenants or other agreements contained
in this Agreement, and the breach cannot be or has not been cured within 15
calendar days after the giving of written notice by SUB and PARENT to TARGET;
(iv) TARGET,
if SUB and PARENT shall have breached in any material respect any of their
representations, warranties, covenants or other agreements contained in this
Agreement, and the breach cannot be or has not been cured within 15 calendar
days after the giving of written notice by TARGET to SUB and PARENT; or
(viii)
Without any action on the part of the Parties if required by Applicable
Law.
(ix) On
May
30, 2006 if the Merger is not completed prior thereto, unless this date is
extended by the mutual agreement in writing of the Parties prior
thereto.
(x) TARGET
and/or PARENT if the provisions of Section 4.02(iii) have not been
satisfied.
SECTION
6.02 EFFECT OF TERMINATION
If
this
Agreement is terminated as provided in Section 6.01, written notice of such
termination shall be given by the terminating Party to the other Party
specifying the provision of this Agreement pursuant to which such termination
is
made, this Agreement shall become null and void and there shall be no liability
on the part of SUB and PARENT or TARGET; provided that nothing in this Agreement
shall relieve any Party from any liability or obligation with respect to any
willful breach of this Agreement.
ARTICLE
VII
CONFIDENTIALITY;
NON-SOLICITATION; EXCLUSIVITY
SECTION
7.01 CONFIDENTIALITY
SUB
and
PARENT, on the one hand, and TARGET, on the other hand, will keep confidential
all information and documents obtained from the other, including but not limited
to any information or documents provided pursuant to Section 4.03(vii) hereof,
which are designated by such Party as confidential (except for any information
disclosed to the public pursuant to a press release authorized by the Parties)
and in the event the Closing does not occur or this Agreement is terminated
for
any reason, will promptly return such documents and all copies of such documents
and all notes and other evidence thereof, including material stored on a
computer, and will not use such information for its own advantage, except to
the
extent that (i) the information must be disclosed by law, (ii) the information
becomes publicly available by reason other than disclosure by the Party subject
to the confidentiality obligation, (iii) the information is independently
developed without use of or reference to the other Party’s confidential
information, (iv) the information is obtained from another source not obligated
to keep such information confidential, or (v) the information is already
publicly known or known to the receiving Party when disclosed as demonstrated
by
written documentation in the possession of such Party at such time.
SECTION
7.02 NON-SOLICITATION
During
the period from the date of this Agreement until the consummation or termination
of this Agreement or the Merger and, in the event of the termination of this
Agreement or the Merger for any reason, during the one (1) year period following
the date of such termination, neither Party shall, without the consent of the
other Party, directly or indirectly solicit the employment or engagement, as
an
employee or consultant, any “restricted employee” or encourage any “restricted
employee” to leave the employment of the other Party or any subsidiary of the
other Party. A “restricted employee” shall mean any person who is employed by a
Party or any of its subsidiaries on the date of this Agreement or at any time
during the six (6) months prior thereto.
SECTION
7.03 EXCLUSIVITY
Except
for the transactions contemplated by this Agreement, none of the Parties shall
(i) solicit, initiate, or encourage the submission of any proposal or offer
relating to the acquisition of any capital stock or other voting securities
or
any substantial portion of the assets of such or any other Party hereto
(including any acquisition structured as a merger, consolidation, or share
exchange) or (ii) participate in any discussions or negotiations regarding,
furnish any information with respect to, assist or participate in, or facilitate
in any other manner any effort or attempt by any Person to do or seek any of
the
foregoing. The Parties shall notify each other Party immediately if any Person
makes any proposal, offer, inquiry, or contact with respect to any of the
foregoing.
ARTICLE
VIII
INDEMNIFICATION
SECTION
8.01 INDEMNIFICATION BY SUB AND PARENT
SUB
and
PARENT shall indemnify, defend and hold harmless, TARGET, and each person who
is
now, or has been at any time prior to the date hereof or who becomes prior
to
the Closing, an officer, director or partner of, TARGET or an employee of,
TARGET and their respective heirs, legal representatives, successors and assigns
(the “TARGET Indemnified Parties”) against all losses, claims, damages, costs,
expenses (including attorneys’ fees), liabilities or judgments or amounts that
are paid in settlement of or in connection with any threatened or actual claim,
action, suit, proceeding or investigation based in whole or in part on or
arising in whole or in part out of (i) any breach of this Agreement by SUB
and
PARENT, including but not limited to failure of any representation or warranty
to be true and correct at or before the Closing, or (ii) any act, omission
or
conduct of any officer, director or agent of SUB and PARENT prior to the
Closing, whether asserted or claimed prior to, or at or after, the Closing,
or
(iii) relating to the consummation of the transactions contemplated herein,
and
any action taken in connection therewith (“TARGET Indemnified Liabilities”). Any
TARGET Indemnified Party wishing to claim indemnification under this Section
8.01, upon learning of any such claim, action, suit, proceeding or
investigation, shall notify SUB and PARENT, but the failure so to notify shall
not relieve SUB and PARENT from any liability that it may have under this
Section 8.01, except to the extent that such failure would materially prejudice
SUB and PARENT.
SECTION
8.02 INDEMNIFICATION BY TARGET
TARGET
shall indemnify, defend and hold harmless SUB and PARENT and each person who
is
now, or has been at any time prior to the date hereof or who becomes prior
to
the Closing, an officer, director or partner of SUB and PARENT, or an employee
of SUB and PARENT and their respective heirs, legal representatives, successors
and assigns (collectively the “SUB Indemnified Parties”) against all losses,
claims, damages, costs, expenses (including attorneys’ fees), liabilities or
judgments or amounts that are paid in settlement of or in connection with any
threatened or actual claim, action, suit, proceeding or investigation based
in
whole or in part on or arising in whole or in part out of (i) any breach of
this
Agreement by TARGET, including but not limited to failure of any representation
or warranty to be true and correct at or before the Closing, or (ii) any act,
omission or conduct of any officer, director or agent of TARGET prior to the
Closing, whether asserted or claimed prior to, or at or after, the Closing,
or
(iii) relating to the consummation of the transactions contemplated herein,
and
any action taken in connection therewith (collectively “SUB Indemnified
Liabilities”). Any SUB Indemnified Party wishing to claim indemnification under
this Section 8.02, upon learning of any such claim, action, suit, proceeding
or
investigation, shall notify TARGET, but the failure so to notify shall not
relieve TARGET from any liability that it may have under this Section 8.02,
except to the extent that such failure would materially prejudice
TARGET.
SECTION
8.03 SURVIVAL OF INDEMNIFICATION
All
rights to indemnification under this Article 8 shall survive the consummation
of
the Merger and the termination of this Agreement. The provisions of this Article
8 are intended to be for the benefit of, and shall be enforceable by, each
TARGET Indemnified Party and each SUB Indemnified Party, and his or her heirs
and representatives. No Party shall enter into any settlement regarding the
foregoing without prior approval of the TARGET Indemnified Party or SUB
Indemnified Party, as the case may be.
ARTICLE
IX
MISCELLANEOUS
SECTION
9.01 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES
None
of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time, except
as
set forth in Article VIII. All such representations and warranties will be
extinguished on consummation of the Merger and none of the Parties nor any
of
their officers, directors, employees or stockholders shall be under any
liability whatsoever with respect to any such representation or warranty after
such time. This Section 9.01 shall not limit any covenant or agreement of the
Parties which by its terms contemplates performance after the Effective Time.
SECTION
9.02 EXPENSES
Except
as
contemplated by this Agreement, all costs and expenses incurred in connection
with this Agreement and the consummation of the transactions contemplated by
this Agreement shall be paid by the Party incurring such expenses.
SECTION
9.03 APPLICABLE LAW AND CONSENT TO JURISDICTION
This
Agreement shall be governed by the laws of the State of Nevada as applied to
agreements entered into and to be performed in such state. The parties hereto
also consent to the exclusive jurisdiction of any state court within the state
of Nevada having jurisdiction over the parties hereto in the event that any
dispute among the parties arises from this Agreement or any other dispute among
the parties hereto.
SECTION
9.04 NOTICES
All
notices and other communications under this Agreement shall be in writing and
shall be deemed to have been duly given or made as follows:
(i) If
sent
by registered or certified mail in the United States, return receipt requested,
upon receipt;
(ii) If
sent
by reputable overnight air courier (such as Federal Express), 2 business days
after being sent;
(iii) If
sent
by facsimile transmission, with a copy mailed on the same day in the manner
provided in clauses (i) or (ii) above, when transmitted and receipt is confirmed
by telephone; or
(iv)
If
otherwise actually personally delivered, when delivered.
All
notices and other communications under this Agreement shall be sent or delivered
as follows:
If
to
TARGET (a Nevada corporation), to:
Jupiter
Global Holdings, Inc.
#▇▇▇
▇▇▇▇
▇▇▇▇
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▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
▇▇▇ ▇▇▇▇▇▇▇, CEO
with
a
copy to (which shall not constitute notice):
▇▇▇▇▇▇▇
▇▇▇▇▇▇, Esq.
Law
Office of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇
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Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:
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Email:
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
If
to SUB
and PARENT (Nevada corporation), to:
APO
Health, Inc.
▇▇▇▇
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▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇. ▇▇▇ ▇▇▇▇▇, CEO
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
with
a
copy to (which shall not constitute notice):
▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, Esq.
The
Galleria
▇
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Telephone: (▇▇▇)
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Facsimile: (▇▇▇)
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Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
Each
Party may change its address by written notice in accordance with this Section.
SECTION
9.05 ENTIRE AGREEMENT
This
Agreement (including the documents and instruments referred to in this
Agreement) contains the entire understanding of the Parties with respect to
the
subject matter contained in this Agreement, and supersedes and cancels all
prior
agreements, negotiations, correspondence, undertakings and communications of
the
Parties, oral or written, respecting such subject matter.
SECTION
9.06 ASSIGNMENT
Neither
this Agreement nor any of the rights, interests or obligations under this
Agreement shall be assigned by any of the Parties (whether by operation of
law
or otherwise) without the prior written consent of the other Parties. Subject
to
the immediately foregoing sentence of this Section 9.06, this Agreement will
be
binding upon, inure to the benefit of and be enforceable by, the Parties and
their respective successors and assigns.
SECTION
9.07 HEADINGS; REFERENCES
The
article, section and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. All references herein to “Articles” or
“Sections” shall be deemed to be references to Articles or Sections of this
Agreement unless otherwise indicated.
SECTION
9.08 COUNTERPARTS
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original but all of which shall be considered one and the same
agreement.
SECTION
9.09 NO THIRD PARTY BENEFICIARIES
Except
as
otherwise contemplated by this Agreement, nothing herein is intended to confer
upon any person or entity not a Party to this Agreement any rights or remedies
under or by reason of this Agreement.
SECTION
9.10 SEVERABILITY; ENFORCEMENT
Any
term
or provision of this Agreement that is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provisions shall be interpreted to be only so broad as is
enforceable.
[THE
BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK – SIGNATURE
PAGES
FOLLOW]
IN
WITNESS WHEREOF,
the
parties have duly executed this Agreement as of the date first above written.
| SUB | PARENT | |
| APO Health Acquisition Corp. | APO Health, Inc. | |
| A Nevada corporation | A Nevada corporation | |
| By: /s/ ▇▇. ▇▇▇ ▇▇▇▇▇ | By: /s/ ▇▇. ▇▇▇ ▇▇▇▇▇ | |
| ▇▇. ▇▇▇ ▇▇▇▇▇ | ▇▇. ▇▇▇ ▇▇▇▇▇ | |
| President | CEO | |
| TARGET | ||
| Jupiter Global Holdings, Inc. | ||
| A Nevada corporation | ||
| By: /s/ ▇▇▇ ▇▇▇▇▇▇▇ | ||
|
▇▇▇
▇▇▇▇▇▇▇
|
||
|
President
and
CEO
|