MERGER AGREEMENT
This merger agreement (this "Agreement") is dated as of January 25,
2002, and is between CONSIL CORP, an Idaho corporation ("ConSil"), CONSIL MERGER
CORP., a Nevada corporation and a wholly-owned subsidiary of ConSil ("Sub"),
LUMALITE, INC., a California corporation ("Lumalite"), and certain stockholders
of Lumalite, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ of ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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("Rorabaugh") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("▇▇▇▇▇▇▇▇"), such stockholders each referred to as "Stockholder" or
collectively known as the "Stockholders".
The parties wish to effect the acquisition of Lumalite by ConSil
through a merger of Sub into Lumalite, and intend that this merger be treated as
a "plan of reorganization" within the meaning of Section 368 of the Code.
Capitalized terms not defined herein shall have the meaning set for
on Exhibit A attached hereto and incorporated herein by this reference.
The parties therefore agree as follows:
ARTICLE 1
THE MERGER, SCHEDULE AND CONSIDERATION
1.1 The Merger. Subject to the terms of this Agreement and in accordance
with the applicable state and federal law, the parties shall cause Sub to merge
with and into Lumalite (that merger, the "Merger"). At the Effective Time, the
separate corporate existence of Sub will cease, and Lumalite will continue as
the surviving corporation of the Merger (in that capacity, the "Surviving
Corporation").
1.2 Filing of Certificates of Merger; Effective Time. As promptly as
practicable, the parties shall cause a certificate of merger to be filed with
the Secretary of State of California in accordance with the CGCL (the "Merger
Certificates") and shall take all further actions required by law to make the
Merger effective. The Merger will be effective once both Merger Certificates
have been duly filed (the time of effectiveness of the Merger, the "Effective
Time").
1.3 Effects of the Merger. The Merger will have the effects specified in
this Agreement and in the CGCL.
1.4 Articles of Incorporation and Bylaws. The certificate of incorporation
and bylaws of Lumalite immediately prior to the Effective Time will be the
certificate of incorporation and bylaws of the Surviving Corporation immediately
after the Effective Time.
1.5 Directors and Officers. The directors and officers of Lumalite
immediately prior to the Effective Time will be the directors and officers of
the Surviving Corporation immediately after the Effective Time, and they will
each hold office in accordance with the articles of incorporation, the by-laws
of the Surviving Corporation and the provisions of the CGCL.
1.6 Conversion of Stock and Consideration.
(a) At the Effective Time, by virtue of the Merger and without any
action on the part of the parties, the following will occur:
(i) all shares of common stock of Lumalite outstanding immediately
prior to the Effective Time (other than shares held by Lumalite as treasury
stock) will be cancelled and converted into and become the right to receive, in
the aggregate, 17,800,000 shares of ConSil Common Stock, after giving effect to
the reverse stock split contemplated by Section 8.7, to be distributed to the
stockholders of Lumalite in the amounts set forth on Schedule 1.6 (a)(i). No
cash will be paid in lieu of fractional shares, which are rounded down pursuant
to this Section.
(ii) all shares of stock held at the Effective Time by Lumalite as
treasury stock will be canceled and no payment will be made with respect to
those shares; and
(iii) each share of capital stock of Sub outstanding immediately
prior to the Effective Time will be converted into and become one validly
issued, fully-paid, and non-assessable share of common stock of the Surviving
Corporation.
1.7 Assumptions of Options. Effective at the Effective Time, ConSil will
assume all the outstanding options (whether vested or unvested) to purchase
Lumalite common stock listed on Schedule 1.7 (collectively, the "Lumalite
Options"). Each Lumalite Option shall be converted into an option (a "ConSil
Option"), to purchase that number of shares of ConSil Common Stock as set forth
on Schedule 1.7. The exercise price per share of ConSil Common Stock purchasable
under each such ConSil Option shall be equal to the exercise price per share set
forth on Schedule 1.7. All of the other terms and conditions of each ConSil
Option will be the same in all material respects to the corresponding Lumalite
Option. There will be no acceleration of options as a result of the Merger and
all options will continue to vest on the current schedule. ConSil may grant
Lumalite employees additional options to purchase ConSil stock options under
standard terms of any ConSil stock option and equity incentive plans then in
effect.
1.8 Closing of Lumalite Transfer Books. After the Effective Time, the
Surviving Corporation shall close the stock transfer books of Lumalite and shall
not make any transfers of Lumalite common stock. If, after the Effective Time,
certificates representing shares of Lumalite common stock are presented to the
Surviving Corporation, the Surviving Corporation shall cancel those certificates
and issue in exchange, certificates representing ConSil Common Stock.
1.9 Further Assurances. Lumalite and Stockholders agree that if, at any
time after the Effective Time, ConSil considers or is advised that any further
deeds, assignments or assurances are reasonably necessary or desirable to vest,
perfect or confirm in ConSil or the Surviving Corporation title to any property
or rights of Lumalite as provided herein, ConSil and any of its officers are
hereby authorized by Lumalite to execute and deliver all such proper deeds,
assignments and assurances and do all other things necessary or desirable to
vest, perfect or confirm title to such property or rights in ConSil or the
Surviving Corporation and otherwise to carry out the purposes of this Agreement,
in the name of Lumalite, the Stockholders or otherwise.
1.10 Tax-Free Reorganization. The parties intend that (i) the Merger be a
reorganization within the meaning of Section 368 of the Code and (ii) this
Agreement be a "plan of reorganization" within the meaning of the regulations
promulgated under Section 368 of the Code.
1.11 Purchase Accounting. The parties intend that the Merger be treated as
a purchase for accounting purposes.
1.12 Dissenting Shares. Holders of shares of Lumalite capital stock who
have complied with all requirements for perfecting stockholders' dissenters'
rights, as set forth in Section 1300 et seq. of the CGCL, shall be entitled to
their rights under the California Law with respect to such shares ("Dissenting
Shares").
ARTICLE 2
REPRESENTATIONS CONCERNING STOCKHOLDERS
Each Stockholder represents to ConSil as to himself as follows:
2.1 Authority.
(a) Stockholder has full legal capacity to execute and deliver this
Agreement and the other Transaction Documents to which he or she is a party and
to perform his or her obligations hereunder and thereunder.
(b) Assuming that ConSil has duly authorized execution and delivery of
this Agreement, this Agreement constitutes the valid and binding obligation of
Stockholder, enforceable in accordance with its terms, except as enforceability
is limited by (i) any applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors' rights generally, or (ii) general
principles of equity, whether considered in a proceeding in equity or at law.
2.2 Consents. Except as set forth on Schedule 2.2, Stockholder is not
required to obtain the Consent of any Person, including the Consent of any party
to any Contract to which Lumalite is a party, in connection with execution and
delivery of this Agreement and the other Transaction Documents and performance
of his obligations hereunder and thereunder.
2.3 No Violations. Stockholder's execution and delivery of this Agreement
and the other Transaction Documents to which he is party and performance of his
obligations hereunder and thereunder do not and will not (i) conflict with,
result in a breach of, constitute a default under (or an event which, with
notice or lapse of time or both, would constitute a default under), accelerate
the performance required by, result in the creation of any Lien upon any of the
properties or assets of Stockholder under, or create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under, any
Contract to which Stockholder is a party or by which any properties or assets of
Stockholder are bound, or (ii) violate any Law or Order to which Stockholder is
subject.
2.4 Title to Shares. Stockholder owns beneficially and of record, free and
clear of any Liens, the number of shares of Lumalite common stock set forth in
Schedule 2.4 opposite his name, and there exist no stockholder agreements,
voting trusts, proxies, or other Contracts with respect to the sale, transfer,
registration or voting of shares of Lumalite common stock held by Stockholder.
2.5 Proceedings. There are no Proceedings pending or, to Stockholder's
knowledge, threatened in writing against Stockholder that challenge, or may have
the effect of preventing, delaying or making illegal, or otherwise interfering
with, any of the transactions contemplated by this Agreement or the Transaction
Documents, and to Stockholder's knowledge no event or circumstance exists that
may give rise to or serve as a basis for the commencement of any such
Proceeding.
2.6 Investment Representations of Stockholders. Stockholder has read this
Agreement and all other documents provided by ConSil in connection with this
Agreement, including the ConSil SEC Documents, and fully understands the terms
under which shares of ConSil Common Stock are being issued to him pursuant to
this Agreement. ConSil has given Stockholder the opportunity to ask questions of
and receive answers from ConSil concerning ConSil and the terms and conditions
under which shares of ConSil Common Stock will be issued to him and to obtain
any additional information that ConSil possesses or can acquire without
unreasonable effort or expense that is necessary to verify the accuracy of
information furnished in connection with this Agreement or in response to any
request for information. Stockholder is satisfied with the answers and
information ConSil has provided. Each Stockholder understands and agrees that
the stock being issued to him is restricted and shall be held for investment
purposes only. Each Stockholder confirms that he is an accredited investor, as
defined in SEC rules.
2.7 Purchaser Representative. Stockholder has retained ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to
act as Stockholder's purchaser representative (as that term is defined in SEC
Regulation D) in connection with the Merger.
2.8 Disclosure. No representation made by Stockholder in this Agreement is
inaccurate in any material respect or omits to state a material fact necessary
to make the statements made in this Agreement, in light of the circumstances
under which they were made, not misleading.
2.9 Involvement in Certain Proceedings. During the past five years, none of
the events enumerated in Item 401(d) of Regulation S-B have occurred with regard
to Stockholder.
ARTICLE 3
REPRESENTATIONS CONCERNING LUMALITE
Lumalite and Stockholders (to the best of Stockholders' knowledge), jointly
and severally, represent to ConSil and Sub as follows:
3.1 Organization and Good Standing.
(a) Lumalite is a corporation duly organized, validly existing and in
good standing under the laws of the State of California, with all necessary
corporate power and authority to own or use its assets and conduct its business
as it is now being conducted. Lumalite is duly qualified to do business as a
foreign corporation in, and is in good standing under the laws of each state or
other jurisdiction in which either the ownership or use of its assets or the
nature of the business conducted by it requires that it be so qualified, except
where a failure to be so qualified is not reasonably likely to have a Material
Adverse Effect on Lumalite.
(b) Lumalite has delivered to ConSil a copy of the articles of
incorporation and by-laws of Lumalite as currently in effect.
3.2 Authority.
(a) Lumalite has full power and authority to execute and deliver this
Agreement and the other Transaction Documents to which it is party and to
perform its obligations hereunder and thereunder. Execution and delivery of this
Agreement and the other Transaction Documents to which it is party and
performance by Lumalite of its obligations hereunder and thereunder have been
duly authorized by the board of directors of Lumalite and no other corporate
proceedings on the part of Lumalite are necessary with respect thereto other
than authorization by the stockholders of Lumalite.
(b) This Agreement constitutes the valid and binding obligation of
Lumalite, enforceable in accordance with its terms, except as enforceability is
limited by (i) any applicable bankruptcy, insolvency, reorganization, moratorium
or similar law affecting creditors' rights generally, or (ii) general principles
of equity, whether considered in a proceeding in equity or at law.
3.3 Consents. Except as set forth in Schedule 3.3, Lumalite is not required
to obtain the Consent of any Person, including the Consent of any party to any
Contract to which Lumalite is a party, in connection with execution and delivery
of this Agreement and the other Transaction Documents and performance of its
obligations hereunder and thereunder.
3.4 No Violations. Except as set forth in Schedule 3.4, Lumalite's
execution and delivery of this Agreement and the other Transaction Documents to
which it is party and performance of its obligations hereunder and thereunder do
not (a) violate any provision of the articles of incorporation or by-laws of
Lumalite as currently in effect, (b) conflict with, result in a breach of,
constitute a default under (or an event that, with notice or lapse of time or
both, would constitute a default under), accelerate the performance required by,
result in the creation of any Lien upon any of the properties or assets of
Lumalite under, or create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under, any Contract to which Lumalite
is a party or by which any properties or assets of Lumalite are bound, or (c)
violate any Law or Order to which Lumalite is subject.
3.5 Capitalization.
(a) The authorized capital stock of Lumalite consists of Ten Million
(10,000,000) shares of Common Stock.
(b) As of the date of this Agreement, there were (i) 2,070,924shares of
Lumalite common stock issued and outstanding, and (ii) no shares of Lumalite
capital stock held in the treasury of Lumalite.
(c) All of the issued and outstanding shares of Lumalite common stock
have been duly authorized and are validly issued, fully paid, and
non-assessable, and all shares of Lumalite common stock that have been reserved
for issuance will, upon issuance in compliance with the terms of the instruments
pursuant to which they are to be issued, be duly authorized, validly issued,
fully paid, and non-assessable.
(d) Each stockholder of Lumalite is listed on Schedule 2.4 and are the
registered holders of the number of shares of Lumalite common stock as set forth
opposite their name.
(e) Except as set forth in Schedule 3.5(e), there are no options,
warrants, or other Contracts to which Lumalite is a party relating to the
issuance, sale, or transfer of any equity securities or other securities of
Lumalite. To Lumalite's Knowledge, there exist no stockholder agreements, voting
trusts, proxies, or other Contracts with respect the sale, transfer,
registration or voting of shares of Lumalite common stock.
3.6 Ownership Interests. Except as set forth in Schedule 3.6, Lumalite does
not own, or have any Contract to acquire, any equity securities or other direct
or indirect ownership interest in any other entity that are not reflected on its
Balance Sheet.
3.7 Financial Statements. Lumalite has previously delivered to ConSil (i)
the audited balance sheet of Lumalite as of December 31, 2000 (the "Balance
Sheet"), and the related audited statements of income and cash flow for Lumalite
for the year then ended, and (ii) the audited balance sheet of Lumalite as of
August 31, 2001 (the "Interim Balance Sheet"), and the related audited
statements of income and cash flow for Lumalite for the eight months then ended.
These financial statements have been prepared in accordance with GAAP
consistently applied with past practice (except in each case as described in the
notes thereto) and on that basis present fairly, in all material respects, the
financial position and the results of operations and cash flow of Lumalite as of
the respective dates of and for the periods referred to in these financial
statements, subject, in the case of the Interim Financial Statements, to
year-end adjustments.
3.8 Books and Records. The books of account, minute books, stock record
books, and other records of Lumalite, all of which have been made available to
ConSil, have been properly kept and contain no inaccuracies except for those
inaccuracies that are not reasonably likely to have a Material Adverse Effect on
Lumalite. At the Closing, all of Lumalite's records will be in the possession of
Lumalite.
3.9 Real Property. Lumalite does not own any real property. Schedule 3.9
contains an accurate list of all leaseholds or other interests of Lumalite in
any real property.
3.10 Title to Properties; Liens. Except as set forth on Schedule 3.10,
Lumalite has good and marketable title to the properties and assets (whether
real, personal, or mixed, and whether tangible or intangible) that it owns or
purports to own, including all the properties and assets reflected in the
Balance Sheet (except for personal property disposed of in the Ordinary Course
of Business since the date of the Balance Sheet), free and clear of all Liens
except Permitted Liens. Lumalite has a valid leasehold, license or other
interest in all of the other assets, real or personal, tangible or intangible,
that it uses in the operation of its business, free and clear of all Liens
except Permitted Liens.
3.11 Condition and Sufficiency of Assets. The building, plant, structures,
and equipment of Lumalite are structurally sound, are in good operating
condition and repair, reasonable wear and tear excepted, and are adequate for
the uses to which they are being put, and, to Lumalite's Knowledge, the
building, plant, structures, and equipment of Lumalite is not in need of
maintenance or repairs except for ordinary, routine maintenance and repairs that
are not material in nature or cost.
3.12 Customers and Suppliers.
(a) Schedule 3.12(a) contains an accurate list of the name and address
of each customer that purchased in excess of 5% of Lumalite's sales of goods or
services during the 18 months ended on the date of the Interim Balance Sheet.
Lumalite has good commercial working relationships with its customers and, since
the date of the Interim Balance Sheet, none of these customers has either
terminated its relationship with or significantly reduced its purchases from
Lumalite or indicated its intention to do so for any reason.
(b) Schedule 3.12(b) contains an accurate list of the name and address
of each supplier from which Lumalite purchased in excess of 5% of Lumalite's
purchases of goods or services during the 18 months ended on the date of the
Interim Balance Sheet. Lumalite has good commercial working relationships with
its suppliers and, since the date of the Interim Balance Sheet, none of these
suppliers has terminated its relationship with or altered in a manner
detrimental to Lumalite its accommodations, sales, or services to Lumalite or
indicated its intention to do so for any reason.
3.13 Accounts Receivable. Except as set forth on Schedule 3.13, the
accounts receivable shown on the Interim Balance Sheet arose in the Ordinary
Course of Business and have been collected or are collectible in the book
amounts thereof, less the allowance for doubtful accounts and returns provided
for in such balance sheet. Allowances for doubtful accounts and returns are
adequate and have been prepared in accordance with the past practices of
Lumalite. The accounts receivable of Lumalite arising after the date of the
Interim Balance Sheet and prior to the date hereof arose, and the accounts
receivable arising prior to the Closing Date will arise, in the Ordinary Course
of Business and have been collected or are collectible in the book amounts
thereof, less allowances for doubtful accounts and returns determined in
accordance with the past practices of Lumalite. None of the accounts receivable
are subject to any contest, claim, or right of set-off, other than returns in
the Ordinary Course of Business, and Lumalite has no knowledge of any specific
facts that would be reasonably likely to give rise to any such claim. No
material amount of accounts receivable are contingent upon the performance by
Lumalite of any obligation. No agreement for deduction or discount has been made
with respect to any accounts receivable.
3.14 Inventory. All inventory of Lumalite, whether or not reflected in the
Balance Sheet or the Interim Balance Sheet, consists of product salable in the
Ordinary Course of Business. The gross sales price of the inventory received by
Lumalite upon sale will be no less than the retail prices received in the
ordinary course of business.
3.15 No Undisclosed Liabilities. Except as set forth on the Balance Sheets,
Lumalite has no liabilities of the type required to be reflected as liabilities
on a balance sheet prepared in accordance with GAAP except for liabilities or
obligations reflected or reserved against in the Balance Sheet or the Interim
Balance Sheet and current liabilities incurred in the Ordinary Course of
Business since the respective dates thereof, and to Lumalite's Knowledge has no
other liabilities or obligations of any nature (whether known or unknown and
whether absolute, accrued, contingent, or otherwise), other than any such
liabilities or obligations that would not reasonably be expected to have a
Material Adverse Effect on Lumalite.
3.16 Taxes.
(a) Lumalite has filed on a timely basis (including any extensions)
with the appropriate Governmental Bodies in the applicable jurisdictions either
each Tax Return of Lumalite that is due or a valid request for extension with
respect to that Tax Return. All Tax Returns filed by Lumalite are true, correct
and complete. Lumalite has paid fully on a timely basis all Taxes due except
those Taxes that Lumalite is contesting in good faith by appropriate proceedings
or as to which Lumalite has set aside adequate reserves determined in accordance
with GAAP and stated in the Balance Sheet or the Interim Balance Sheet.
(b) There are no material claims or assessments pending against
Lumalite for any alleged deficiency in any Tax, there are no pending or to
Lumalite's Knowledge threatened audits or investigations for or relating to any
liability in respect of any Tax, and Lumalite has not been notified in writing
of any proposed Tax claims or assessments against Lumalite (other than in each
case, claims or assessments for which Lumalite has provided adequate reserves in
the Balance Sheet or the Interim Balance Sheet or which Lumalite is contesting
in good faith or which, when taken together, have not had and are not reasonable
likely to have a Material Adverse Effect on Lumalite). There are no Liens for
material amounts of Taxes on the properties or assets of Lumalite except for
statutory Liens for current Taxes not yet due and payable. Lumalite has not
given or been requested to give waivers or extensions (or is or would be subject
to a waiver or extension given by any other Person) of any statute of
limitations relating to the payment of Taxes of Lumalite or for which Lumalite
may be liable. Lumalite has no liability for the Taxes of any Person or entity
other than Lumalite. Lumalite has not made any change in accounting methods, and
has not received a ruling from or signed an agreement with any Governmental
Body, that is likely to have a Material Adverse Effect on Lumalite. Lumalite has
not, with regard to any assets or property held, acquired or to be acquired by
it, filed a consent to the application of Section 341(f) of the Code, or agreed
to have Section 341(f)(2) of the Code apply to any disposition of a "subsection
(f) asset" (as that term is defined in Section 341(f)(4) of the Code) owned by
Lumalite.
(c) Lumalite is not a party to any agreement, arrangement or contract
providing for the allocation, indemnification or sharing of Taxes. Lumalite is
not a party to any agreement, contract or arrangement that could result,
separately or in the aggregate, in the payment of any "excess parachute
payments" within the meaning of Section 280G of the Code.
(d) Lumalite is not, nor has it been for the five-year period preceding
the Closing, a U.S. real property holding corporation as defined in Section
897(c)(2) of the Code.
3.17 Environmental Matters.
(a) To Lumalite's Knowledge, the operations of Lumalite are and have
always been in compliance with all applicable Environmental Laws.
(b) To Lumalite's Knowledge, neither Lumalite nor any of its operations
are subject to any Order or Contract respecting (i) Environmental Laws, (ii)
Remedial Action, (iii) any Environmental Claim, or (iv) the Release or
threatened Release of any Hazardous Material.
(c) To Lumalite's Knowledge, none of the operations of Lumalite
involves the generation, transportation, treatment, storage or disposal of
Hazardous Material.
3.18 Compliance With Laws; Permits.
(a) Lumalite is, and at all times since its organization, has been, in
compliance with each Law that is or was applicable to it or to the conduct or
operation of its business or the ownership or use of any of its properties or
assets, except for noncompliance that individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect on Lumalite.
(b) Lumalite has not received, at any time since its organization, any
written notice from any Governmental Body or any other Person regarding (i) any
alleged violation of any Law, or (ii) any alleged obligation on the part of
Lumalite to undertake, or to bear all or any portion of the cost of, any
remedial action of any nature under any Law.
(c) Schedule 3.18(c) contains an accurate list of each material Permit
held by Lumalite that relates to the business of, or to any of the properties or
assets owned or used by, Lumalite. Each Permit listed in Schedule 3.18(c) is
valid and in full force and effect.
3.19 Proceedings; Orders. There are no Proceedings pending or, to
Lumalite's Knowledge, threatened in writing against Lumalite or any properties
or assets of Lumalite, and there is no Order to which Lumalite, or any of the
properties or assets of Lumalite, is subject.
3.20 Absence of Certain Changes and Events. Except as set forth in this
Agreement, including Exhibits and Schedules attached hereto, since the date of
the Interim Balance Sheet, Lumalite has conducted its business only in the
Ordinary Course of Business and there has not occurred any of the following:
(a) any acceleration, amendment, or change in Lumalite's authorized or
issued capital stock; grant of any stock option or right to purchase shares of
capital stock of Lumalite; issuance of any security convertible into shares of
capital stock of Lumalite; grant of any registration rights; purchase,
redemption, retirement, or other acquisition by Lumalite of any shares of
capital stock of Lumalite; or declaration or payment of any dividend or other
distribution (whether in cash, stock, or property) in respect of shares of
capital stock of Lumalite;
(b) any amendment of the articles of incorporation or by-laws of
Lumalite;
(c) any increase in the salary, bonus, or other compensation payable by
Lumalite to, or any increase in benefits payable under any Lumalite Plan to, any
director, officer, employee, consultant or independent contractor, except for
increases in the Ordinary Course of Business consistent with Lumalite's past
practice, or any entry into any employment, consulting, incentive compensation,
severance, or similar Contract with any director, officer, employee, consultant
or independent contractor that is not terminable without liability on notice of
30 days or less;
(d) any change in the period of exercisability of options granted under
any Lumalite Plan or authorization of cash payments in exchange for options
granted under any Lumalite Plan;
(e) any incurrence of indebtedness for borrowed money, except for
borrowings and re-borrowings under Lumalite's existing credit facilities, any
assumption or guarantee of the debt of any other Person, or any loan or advance
to any Person other than in the Ordinary Course of Business;
(f) any damage to or destruction or loss of any asset or property of
Lumalite not fully covered by insurance that is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Lumalite;
(g) any sale (other than sales of inventory in the Ordinary Course of
Business), lease, or other disposition of, or any mortgage, pledge, or
imposition of any Lien except Permitted Liens on, any property or asset that is
material, individually or in the aggregate, to the business of Lumalite;
(h) any cancellation or waiver of any material claims or rights without
adequate consideration or a reasonable business purpose;
(i) any merger or consolidation with, or purchase of a substantial
equity interest in or all or a substantial portion of the assets of, any Person;
(j) any material revaluation by Lumalite of any of its assets,
including any writing-down of the value of inventory, or writing-off of notes or
accounts receivable other than in the Ordinary Course of Business consistent
with past practice;
(k) any material change in the accounting methods used by Lumalite;
(l) any change, event or other circumstance that taken individually or
in the aggregate has had or could reasonably be expected to have a Material
Adverse Effect on Lumalite, except for general changes in the industry in which
Lumalite operates or in the economy; or
(m) entry by Lumalite into any Contract to do any of the foregoing.
3.21 Contracts.
(a) Schedule 3.21 contains a list of the following Contracts to which
Lumalite is party:
(i) each Contract relating to indebtedness of Lumalite for
borrowed money (whether incurred, assumed, guaranteed or secured by any asset);
(ii) each Contract relating to the lending of more than $5,000 in
any one instance or $10,000 in the aggregate by Lumalite to any Person,
including any Affiliate of Lumalite;
(iii) each Contract (or group of related Contracts) for the lease
of personal property to or from any Person providing for lease payments in
excess of $5,000 in any one instance or $10,000 in the aggregate per annum;
(iv) each Contract concerning a partnership or joint venture;
(v) each Contract (other than a Contract listed elsewhere in
Schedule 3.21) requiring that Lumalite maintain confidential any given
information;
(vi) each Contract in which Lumalite agrees not to compete in any
line of business, in any geographic area, or with any Person;
(vii) each collective bargaining agreement or other Contract with
a labor union or other representative of a group of employees;
(viii) each Contract for the employment by Lumalite of any
individual on a full-time, part-time, consulting, independent contracting,
leased employee or other basis;
(ix) each Contract providing for indemnification of or by Lumalite
(other than a Contract listed elsewhere in Schedule 3.21);
(x) each Contract in which Lumalite agrees to provide products or
services to any Person, or receive products or services from any Person, for
consideration other than cash;
(xi) each other Contract with a Lumalite customer;
(xii) each Contract granting Lumalite the right to use any
Intellectual Property Assets of another Person (excluding Contracts granting
Lumalite rights to off-the-shelf commercial software), or granting another
Person the right to use, or restricting Lumalite's right to use, Lumalite
Intellectual Property Assets of Lumalite; and
(xiii) any other Contract (or group of related Contracts) that
involve consideration in excess of $20,000.
(b) Except as noted in Schedule 3.21(b), Lumalite has provided to
ConSil a copy of each Contract listed in Schedule 3.21.
(c) Each Contract to which Lumalite is a party identified or required
to be identified in Schedule 3.21 is in full force and effect and is valid and
enforceable in accordance with its terms, except as enforceability is limited by
(i) any applicable bankruptcy, insolvency, reorganization, moratorium or similar
law affecting creditors' rights generally, or (ii) general principles of equity,
whether considered in a proceeding in equity or at law.
(d) Lumalite is not in default under any Contract to which it is party,
and to Lumalite's Knowledge no event or circumstance has occurred that would,
with notice or lapse of time or both, constitute an event of default under any
material Contract to which Lumalite is a party.
(e) Except as set forth in Schedule 3.21(e), Lumalite is not party to
any unwritten contract.
3.22 ERISA and Employee Benefit Matters.
(a) Schedule 3.22(a) lists all material (i) "employee benefit plans,"
within the meaning of Section 3(3) of ERISA, of Lumalite, (ii) bonus, stock
option, stock purchase, stock appreciation right, incentive, deferred
compensation, supplemental retirement, severance, and fringe benefit plans,
programs, policies or arrangements, and (iii) employment or consulting
agreements, for the benefit of, or relating to, any current or former employee
(or any beneficiary thereof) of Lumalite, in the case of a plan described in (i)
or (ii) above, that is currently maintained by Lumalite or with respect to which
Lumalite has an obligation to contribute, and in the case of an agreement
described in (iii) above, that is currently in effect (the "Lumalite Plans").
Lumalite has heretofore made available to ConSil true and complete copies of the
Lumalite Plans and any amendments thereto, any related trust, insurance
contract, summary plan description, and, to the extent required under ERISA or
the Code, the most recent annual report on Form 5500 and summaries of material
modifications.
(b) No Lumalite Plan is (i) a "multi-employer plan" within the meaning
of Sections 3(37) or 4001(a)(3) of ERISA, (ii) a "multiple employer plan" within
the meaning of Section 3(40) of ERISA or Section 413(c) of the Code, or (iii) is
subject to Title IV of ERISA or Section 412 of the Code.
(c) There is no Proceeding pending or, to Lumalite's Knowledge,
threatened against the assets of any Lumalite Plan or, with respect to any
Lumalite Plan, against Lumalite other than Proceedings that would not reasonably
be expected to result in a material liability, and to Lumalite's Knowledge there
is no Proceeding pending or threatened in writing against any fiduciary of any
Lumalite Plan other than Proceedings that would not reasonably be expected to
result in a material liability.
(d) Each of the Lumalite Plans has been operated and administered in
all material respects in accordance with its terms and applicable law,
including, but not limited to, ERISA and the Code.
(e) Except as provided on Schedule 3.22(e), each of the Lumalite Plans
that is intended to be "qualified" within the meaning of Section 401(a) of the
Code has received a favorable determination, notification, or opinion letter
from the IRS.
(f) No director, officer, or employee of Lumalite will become entitled
to retirement, severance or similar benefits or to enhanced or accelerated
benefits (including any acceleration of vesting or lapsing of restrictions with
respect to equity-based awards) under any Lumalite Plan solely as a result of
consummation of the transactions contemplated by this Agreement and the other
Transaction Documents.
(g) No Lumalite Plan provides benefits or payments contingent upon,
triggered by, or increased as a result of a change in the ownership or effective
control of Lumalite.
3.23 Employees.
(a) Schedule 3.23 lists the following information for each employee of
Lumalite as of the date of this Agreement: (i) name; (ii) job title; (iii)
current annual base salary or annualized wages; (iv) bonus compensation earned
during 2000 and 2001. Lumalite does not pay compensation to the members of its
board of directors for acting as such.
(b) To Lumalite's Knowledge, there exists no condition or state of
facts or circumstances relating to consummation of the transactions contemplated
by this Agreement or the other Transaction Documents that could have a Material
Adverse Effect on Lumalite's relations with its employees.
(c) Lumalite does not have any obligation to reinstate any former
officer or employee of Lumalite. Lumalite is not required to make payments of
any kind (including severance payments) to any former director, officer,
employee, agent or independent contractor of Lumalite. No officer or employee of
Lumalite has indicated his or her intention to resign.
(d) All of the officers and employees of Lumalite are in good standing
under the terms and conditions of their employment, and to Lumalite's Knowledge
there exists no problem or difficulty with the employment of such officer or
employee.
(e) Lumalite has paid all wages, bonuses, commissions or other
compensation due and payable to each of its employees in accordance with its
customary practice, except that Lumalite has not paid management bonuses for the
four month period beginning September 1, 2001 and ending December 31, 2001.
(f) Lumalite is not and has not been a party to any collective
bargaining agreement.
3.24 Intellectual Property Assets. Schedule 3.24 contains an accurate list
of all material Intellectual Property Assets used by Lumalite in the operation
of its business as it is currently conducted (the "Applicable Intellectual
Property Assets"). Lumalite owns or has the right to use all the Applicable
Intellectual Property Assets, free and clear of all Liens other than Permitted
Liens. As of the date of this Agreement, no Person has alleged in a written
notice to Lumalite that any activity in which Lumalite is engaged infringes upon
or misappropriates any Intellectual Property Assets of any other Person.
3.25 Conduct of Business; Use of Name. The business carried on by Lumalite
has been conducted directly by Lumalite, and not through any Affiliate or
through any other Person. Lumalite owns and has the exclusive right, title and
interest in and to the name "Lumalite, Inc." for corporate law purposes in the
State of California, and except as set forth in Schedule 3.26, to Lumalite's
Knowledge no other Person has the right to use that name or any confusing
variation on that name in the U.S. in connection with the operation of any
business similar or related to the business conducted by Lumalite.
3.26 Insurance. Schedule 3.26 lists all insurance policies held by or on
behalf of Lumalite, and the premiums under and expiration dates of those
policies. Each of those policies is in full force and effect and is valid and
enforceable in accordance with its terms. Lumalite is not in default under any
such policy nor has Lumalite failed to give any notice or present any claim
under any such policy in due and timely fashion, and to Lumalite's Knowledge
there exist no grounds for the insurer's canceling or avoiding any of those
policies or increasing the premiums of those policies, or for reducing the
coverage provided by those policies. Lumalite has previously provided ConSil
with a copy of each of those policies.
3.27 Brokers or Finders. Except as provided in Schedule 3.27, Lumalite and
its agents have incurred no obligation or liability, contingent or otherwise,
for brokerage or finders' fees or agents' commissions or other similar payment
in connection with this Agreement.
3.28 Affiliated Transactions. Schedule 3.28 lists any Contract between
Lumalite and any of the Stockholders or any director, officer, employee or any
other Affiliate of Lumalite or any of the Stockholders.
3.29 Warranties, Guarantees and Indemnities. Except as disclosed in
Schedule 3.29 or in the agreements or contract listed herein, Lumalite has not
provided to its customers or any third parties (i) any warranties or guarantees
regarding the Lumalite products or services; (ii) any rights to obtain refunds
with respect to Lumalite's products or services or (iii) any indemnities with
respect to intellectual property infringement.
3.30 Product and Service Quality. All products and services provided by
Lumalite to customers on or prior to the Closing Date conform to applicable
contractual commitments, implied warranties not disclaimed, express warranties,
product specifications and quality standards published by Lumalite in all
material respects, and Lumalite does not have any material liability (and
Lumalite is not aware of any basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand against
Lumalite giving rise to any liability outside of acceptable industry standards)
for replacement or repair thereof, or for the taking of any remedial action with
respect thereto or other damages in connection therewith. All material
complaints outside of acceptable industry standards received since Lumalite's
incorporation from customers regarding Lumalite's products and services are set
out in Schedule 3.30 in detail reasonably sufficient to understand the nature of
the complaint and the resolution or lack of resolution thereof.
3.31 No Stockholder Claims. No stockholder of Lumalite has claimed in
writing any interest in any additional shares of Lumalite capital stock, or any
options, warrants or other securities of Lumalite, except for the number of
shares of Lumalite capital stock which such person is shown to be the owner of
on Schedule 2.4, and no third party who is not disclosed on Schedule 2.4 has
made in writing, any claim of entitlement to receive any shares of the capital
stock of Lumalite, any warrants or other rights to acquire any capital stock of
Lumalite or any other securities of Lumalite, and to Lumalite's Knowledge no
such claim has been made orally.
3.32 Corporate Documents. Lumalite has made available to ConSil for
examination all documents and information disclosed in Sections 3.1 through 3.31
or other exhibits called for by this Agreement which have been reasonably
requested by ConSil's legal counsel, including, without limitation, the
following: (a) copies of Lumalite's articles of incorporation and bylaws as
currently in effect; (b) Lumalite's minute book containing all records of all
proceedings, consents, actions and meetings of Lumalite's directors and
shareholders; (c) Lumalite's stock ledger, journal and other records reflecting
all stock issuances and transfers; and (d) all permits, orders and consents
issued by any regulatory agency with respect to Lumalite, or any securities of
Lumalite, and all applications for such permits, orders and consents.
3.33 Purchaser Representative. Each stockholder of Lumalite has retained
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to act as such stockholder's purchaser representative (as that
term is defined in SEC Regulation D) in connection with the Merger.
3.34 Disclosure. No representation made by Lumalite in this Agreement is
inaccurate in any material respect or omits to state a material fact necessary
to make the statements made in this Agreement, in light of the circumstances
under which they were made, not misleading. Stockholders and Lumalite have
provided to ConSil all information that they reasonably believe is necessary for
ConSil to make an informed investment decision.
ARTICLE 4
REPRESENTATIONS CONCERNING CONSIL AND SUB
ConSil and Sub represent to Lumalite as follows:
4.1 Organization and Good Standing. Each of ConSil and Sub is a corporation
duly organized, validly existing, and in good standing under the laws of the
state of its incorporation, with all necessary corporate power and authority to
own or use its properties and assets and conduct its business as it is now being
conducted. Each of ConSil and Sub is duly qualified to do business as a foreign
corporation in, and is in good standing under the laws of, each state or other
jurisdiction in which either the ownership or use of its properties and assets
or the nature of the business conducted by it requires that it be so qualified,
except where the failure to be so qualified would not reasonably be expected to
have a Material Adverse Effect on ConSil.
4.2 Authority.
(a) ConSil and Sub have all requisite corporate power and
authority to execute and deliver this Agreement and the other Transaction
Documents to which it is party and to perform its obligations hereunder and
thereunder. Execution and delivery of this Agreement and the other Transaction
Documents to which it is party and performance by each of ConSil and Sub of its
obligations hereunder and thereunder have been duly authorized, with respect to
ConSil, by the board of directors of ConSil and, with respect to Sub, by the
Board of Directors of Sub and by ConSil in its capacity as sole stockholder of
Sub, and no other corporate proceedings on the part of ConSil and Sub are
necessary with respect thereto other than, with respect to ConSil, approval by a
the stockholders of ConSil.
(b) This Agreement constitutes the valid and binding obligation of
each of ConSil and Sub, enforceable in accordance with its terms, except as
enforceability is limited by (i) any applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer, or similar law affecting
creditors' rights generally, or (ii) general principles of equity, whether
considered in a proceeding in equity or at law.
4.3 Consents. Neither ConSil nor Sub is required to obtain the Consent of
any Person, including the Consent of any party to any Contract to which ConSil
or Sub is a party, in connection with execution and delivery of this Agreement
and performance of its obligations under this Agreement.
4.4 No Violations. Execution and delivery by each of ConSil and Sub of this
Agreement and the other Transaction Documents to which it is party and
performance of its obligations hereunder and thereunder do not (i) violate any
provision of its articles of incorporation or by-laws as currently in effect,
(ii) conflict with, result in a breach of, constitute a default under (or an
event that, with notice or lapse of time or both, would constitute a default
under), accelerate the performance required by, result in the creation of any
Lien upon any of its properties or assets under, or create in any party the
right to accelerate, terminate, modify, or cancel, or require any notice under,
any Contract to which it is a party or by which any of its properties or assets
are bound, or (iii) violate any Law or Order currently in effect to which it is
subject.
4.5 Capitalization.
(a) The authorized capital stock of ConSil consists of One Hundred
Million (100,000,000) shares of ConSil Common Stock, no par value and Ten
Million (10,000,000) Shares of Preferred Stock, par value $0.25 per share.
(b) As of the date of this Agreement, (i) there were approximately
21,949,707 shares of ConSil Common Stock issued and outstanding, (ii) no shares
of Preferred Stock were issued and outstanding, and (iii) no shares of ConSil
capital stock were held in the treasury of ConSil. ConSil has provided a current
shareholder list to Lumalite.
(c) All of the issued and outstanding shares of ConSil Common Stock
have been duly authorized and are validly issued, fully paid, and
non-assessable, and all shares of ConSil Common Stock that have been reserved
for issuance will, upon issuance in compliance with the terms of the instruments
pursuant to which they are to be issued, be duly authorized, validly issued,
fully paid, and non-assessable.
(d) When issued in accordance with the terms of this Agreement, the
shares of ConSil Common Stock Stock to be issued pursuant to the Merger will be
duly authorized, validly issued, fully paid, and non-assessable.
(e) Except as set forth on Schedule 4.5(e), there are no options,
warrants, or other Contracts to which ConSil is a party relating to the
issuance, sale, or transfer of any equity securities or other securities of
ConSil.
(f) The authorized capital stock of Sub consists of 1,000,000 shares of
common stock, par value $0.001 per share. All of the issued and outstanding
shares of common stock of Sub have been duly authorized and are validly issued,
fully paid, and non-assessable, and are owned by ConSil.
4.6 Filings With the SEC.
(a) Except as set forth on Schedule 4.6, during the past twelve months
ConSil has filed with the SEC all reports, proxy statements, forms, and other
documents that has been required by law to file with the SEC (those documents,
the "ConSil SEC Documents"). As of the date they were each filed, giving effect
to any amendments, (i) the ConSil SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as
applicable, in effect on the date of filing and (ii) the ConSil SEC Documents do
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading.
(b) Each of the ConSil financial statements (including the related
notes) included in the ConSil SEC Documents have been prepared in accordance
with GAAP consistently applied with past practice and on that basis present
fairly, in all material respects, the financial position and the results of
operations, changes in stockholders' equity, and cash flows of ConSil as of the
respective dates of and for the periods referred to in these financial
statements.
4.7 Proceedings. There are no Proceedings pending or, to ConSil's
Knowledge, threatened in writing against ConSil that question the validity of
this Agreement or any of the other Transaction Documents or any action taken or
to be taken in connection with the transactions contemplated by this Agreement
or any of the other Transaction Documents.
4.8 No Material Adverse Effect. Other than as disclosed Schedule 4.8, there
is no event, circumstance or occurrence that, taken individually or in the
aggregate could reasonably be expected to have, a Material Adverse Effect on
ConSil, except for general changes in the industry in which ConSil operates or
in the economy.
4.9 Brokers or Finders. ConSil and its officers and agents have incurred no
obligation or liability, contingent or otherwise, for brokerage or finders' fees
or agents' commissions or other similar payment in connection with this
Agreement.
ARTICLE 5
CERTAIN OBLIGATIONS OF CONSIL
5.1 Board Representation. From the Effective Time, ConSil shall cause the
director of ConSil ("ConSil Director") to have four nominees of Lumalite as set
forth on Schedule 5.1 ("Lumalite Nominees"), reasonably acceptable to ConSil,
appointed to the board of directors of ConSil. Following the appointment of the
Lumalite Nominees, ConSil will cause the ConSil Director to resign and the four
nominees of Lumalite shall constitute the entire board of directors of ConSil.
5.2 No Other Negotiations. Except as otherwise provided in this Agreement,
ConSil and its directors and officers shall not, and ConSil shall direct and use
its best efforts to cause the employees, representatives and agents of ConSil
not to, directly or indirectly, solicit or encourage the initiation of
(including by way of furnishing information) any inquiries or proposals
regarding any merger, sale of assets, sale of shares of capital stock (including
without limitation by way of a tender offer) or similar transaction.
5.3 Public Relations Firm. ConSil shall retain a public relations firm
within ninety days of the Closing Date.
5.4 Continued Information Requirements. ConSil shall be obligated to
continue to comply with SEC disclosure information and Standard and Poor's
and/or ▇▇▇▇▇'▇ listing requirements for a period of at least three years after
the Closing Date so as to permit eligible unrestricted stock to be traded on a
public exchange or on the OTC NASDAQ electronic bulletin board.
5.5 Reverse Split. Except as provided in Section 8.7, for a period of two
years after the Closing Date, ConSil shall not effect a reverse stock split of
its outstanding capital stock unless such a reverse stock split is required by
the underwriters in a registered public offering of ConSil's capital stock; or
such reverse stock split is necessary to obtain approval for quotation ConSil
Common Stock on NASDAQ.
5.6 Post-Closing Capitalization. It is the intent of the parties that (i)
all of the transactions contemplated by this Agreement are effected, including
the Merger, the reverse stock split contemplated in Section 8.7, the conversion
of debt contemplated in Section 8.9 and the sale of ConSil Common Stock
contemplated in Section 8.6, and (ii) following the completion of the
transactions contemplated by this Agreement, the capitalization of ConSil shall
be as set forth on Schedule 5.6.
ARTICLE 6
CERTAIN OBLIGATIONS OF LUMALITE AND STOCKHOLDERS
6.1 Financial Statements. As soon as practicable after the Effective Time,
but no later than 60 days after such date, Lumalite agrees to deliver to ConSil,
Lumalite's certified financial statements in form and substance required to be
filed with the Securities and Exchange Commission.
6.2 No Other Negotiations. Stockholders, Lumalite and its directors and
officers shall not, and Lumalite shall direct and use its best efforts to cause
the employees, representatives and agents of Lumalite not to, directly or
indirectly, solicit or encourage the initiation of (including by way of
furnishing information) any inquiries or proposals regarding any merger, sale of
assets, sale of shares of capital stock (including without limitation by way of
a tender offer) or similar transaction.
6.3 Certain Agreements. Lumalite will cause all present employees and
consultants of Lumalite engaged in development activity who have not previously
executed Lumalite's forms of assignments of copyright and other intellectual
property rights to Lumalite to execute such forms.
6.4 Regulatory Approvals. Lumalite will execute and file, or join in the
execution and filing, of any application or other document that may be necessary
in order to obtain the authorization, approval or consent of any governmental
body, federal, state, local or foreign, which may be reasonably required, or
which ConSil may reasonably request, in connection with the consummation of the
transactions provided for in this Agreement. Lumalite will use its reasonable
best efforts to obtain or assist ConSil in obtaining all such authorizations,
approvals and consents.
6.5 Necessary Consents. Lumalite will use its reasonable best efforts to
obtain such written consents and waivers (including waivers of any applicable
refusal or co-sale rights that may apply to the transactions hereby
contemplated) and take such other actions as may be necessary or appropriate for
Lumalite to facilitate and allow the consummation of the transactions provided
for herein and to facilitate and allow ConSil to carry on Lumalite's business
after the Closing Date.
6.6 Stockholder Approval. Lumalite will hold a special meeting of its
stockholders (the "Stockholders' Meeting") at the earliest practicable date (and
in any event prior to 30 days from the date of this Agreement and in any event
prior to the holding of any special meeting or circulation of any consent with
respect to any alternative proposal) to submit this Agreement, the Merger and
related matters for the consideration and approval of the Lumalite's
stockholders, which approval will be recommended by Lumalite's board of
directors. Such meeting will be called, held and conducted, and any proxies or
consent will be solicited, in compliance with applicable law. Lumalite shall
ensure that the Stockholders' Meeting is called, noticed, convened, held and
conducted, and that all proxies and consents solicited in connection with the
Stockholders' Meeting are solicited, in compliance with all applicable legal
requirements. Lumalite's obligation to call, give notice of, convene and hold
the Stockholders' Meeting in accordance with this Section 6.6 shall not be
limited or otherwise affected by the commencement, disclosure, announcement or
submission to Lumalite of any alternative proposal. Nothing contained in this
Section 6.6 shall limit Lumalite's obligation to hold and convene the
Stockholders' Meeting (regardless of whether the unanimous recommendation of the
board of directors of Lumalite shall have been withdrawn, amended or modified
and regardless of whether the board of directors of Lumalite shall have
recommended acceptance of a tender offer or exchange offer commenced by a third
party), it being understood that Lumalite shall be required to hold and convene
the Stockholders' Meeting in accordance with this Section 6.6 unless the holding
of such meeting would constitute a violation of any applicable court order or
statute. Lumalite shall use all reasonable efforts to ensure that the holding of
the Stockholders' Meeting will not constitute a violation of any applicable
court order or statute.
6.7 Stockholder Vote. Stockholders shall vote in favor of the Merger at the
Stockholders' Meeting.
ARTICLE 7
CLOSING MATTERS
7.1 The Closing. Subject to termination of this Agreement as provided in
Section 8 below, the closing of the transactions provided for herein (the
"Closing") will take place at a place mutually agreed to by ConSil and Lumalite
at 10:00 a.m., Mountain Standard Time on the second business day following the
last to be satisfied of the conditions to closing set forth in Article 8 and
Article 9 or such other date as the parties agree (the "Closing Date"). Prior to
or concurrently with the Closing, the Articles of Merger, and such officers'
certificates or other documents as may be required to effectuate the Merger will
be filed with the California Secretary of State and such other jurisdictions as
may be required. Accordingly, the Merger will become effective at the Effective
Time.
7.2 Exchange of Certificates.
7.2.1 As of the Effective Time, all shares of Lumalite Stock that are
outstanding immediately prior thereto will, by virtue of the Merger and without
further action, cease to exist, and all such shares will be converted into the
right to receive from ConSil the number of shares of ConSil Common Stock as set
forth in Section 1.6.
7.2.2 At and after the Effective Time, each certificate representing
outstanding shares of Lumalite common stock will represent the number of shares
of ConSil Common Stock into which such shares of Lumalite common stock have been
converted, and such shares of ConSil Common Stock will be deemed registered in
the name of the holder of such certificate. As soon as practicable after the
Effective Time, each holder of shares of Lumalite common stock will surrender
(a) the certificates for such shares (the "Lumalite Certificates") to ConSil for
cancellation or (b) an affidavit of lost certificate (or non-issued certificate)
with appropriate indemnification (the "Affidavit") in form reasonably
satisfactory to ConSil. Promptly following the Effective Time and receipt of the
Lumalite Certificates and/or the Affidavit (or any lost certificate bond
required by the transfer agent if the transfer agent will not accept the
indemnification in the Affidavit in lieu of the bond), ConSil will cause its
transfer agent to issue to such surrendering holder certificate(s) for the
number of shares of ConSil Common Stock to which such holder is entitled
pursuant to Section 1.6.
7.2.3 All shares of ConSil Common Stock delivered upon the surrender of
Lumalite Certificates in accordance with the terms hereof will be delivered to
the registered holder. After the Effective Time, there will be no further
registration of transfers of the shares of Lumalite Stock on the stock transfer
books of Lumalite. If, after the Effective Time, Lumalite Certificates are
presented for transfer or for any other reason, they will be canceled and
exchanged and certificates therefor will be delivered.
7.2.4 Until Lumalite Certificates representing Lumalite common stock
outstanding prior to the Merger are surrendered pursuant to Section 7.2.2 above,
such certificates will be deemed, for all purposes, to evidence ownership of (a)
the number of shares of ConSil Common Stock into which the shares of Lumalite
common stock will have been converted as set forth in Section 1.1.
7.3 Assumption of Options and Warrants. Promptly after the Effective Time,
ConSil will notify in writing each holder of a Lumalite Option of: (i) the
assumption of such Lumalite Option by ConSil, (ii) the conversion of such
Lumalite Options into ConSil Options, (iii) the number of shares of ConSil
Common Stock that are then subject to such ConSil Option and (iv) the exercise
price of such ConSil Option, all as determined pursuant to Section 1.7 hereof.
ARTICLE 8
CONDITIONS TO OBLIGATIONS OF LUMALITE
Lumalite's obligations hereunder are subject to the fulfillment or
satisfaction, on and as of the Closing, of each of the following conditions (any
one or more of which may be waived by Lumalite):
8.1 Accuracy of Representations and Warranties. The representations and
warranties of ConSil set forth in Section 4 (excluding any representation or
warranty that refers specifically to "the date of this Agreement," "the date
hereof" or any other date other than the Closing Date) shall be accurate in all
material respects on and as of the Closing Date as if made on and as of the
Closing Date, and the representations and warranties of ConSil set forth in
Section 4 that refer specifically to "the date of this Agreement," "the date
hereof" or any other date other than the Closing Date shall have been accurate
in all material respects as of the date of this Agreement or such other
specified date and Lumalite shall have received a certificate to such effect
executed on behalf of ConSil by its President.
8.2 Compliance with Law. There shall be no order, decree, or ruling by any
court or governmental agency or threat thereof, or any other fact or
circumstance, which would prohibit or render illegal the transactions
contemplated by this Agreement.
8.3 Government Consents. There shall have been obtained at or prior to the
Closing Date such permits or authorizations, and there shall have been taken
such other actions, as may be required to consummate the Merger by any
regulatory authority having jurisdiction over the parties and the actions herein
proposed to be taken, including but not limited to satisfaction of all
requirements under applicable federal and state securities laws.
8.4 No Litigation. No litigation or proceeding shall be pending which will
have the probable effect of enjoining or preventing the consummation of any of
the transactions provided for in this Agreement.
8.5 Requisite Approvals. The principal terms of this Agreement shall have
been approved and adopted by ConSil and Sub, as required by applicable law and
by their respective Boards of Directors.
8.6 Sale of ConSil Common Stock. ConSil shall have sold 12,500,000 shares
of ConSil Common Stock for an aggregate purchase price of $500,000.
8.7 ConSil Reverse Split. ConSil shall have effected a 1:25 reverse stock
split of ConSil's capital stock.
8.8 Completion of Schedules. ConSil shall have completed, to Lumalite's
reasonable satisfaction, the disclosure schedules referenced in Article 4 of
this Agreement, which may be revised or supplemented after execution of this
Agreement, but prior to Closing.
8.9 Debt Conversion. The Persons set forth on Schedule 8.9 ("Debt Holders")
shall have entered into an agreement with ConSil to convert the outstanding
principal and accrued interest under that certain Loan Agreement between ConSil
and Hecla Mining Company ("Hecla") dated June 28, 1996 and amended on each of
February 2, 1997, April 16, 1997, August 1, 1997, October 1, 1997, March 30,
1998, December 31, 1998, February 9, 2000 and February 28, 2001 (the "Loan
Agreement") into no more than 10,118,744 shares of ConSil Common Stock after
giving effect to the stock split contemplated in Section 8.7. Hecla assigned the
Loan Agreement to REA LLC ("REA") in its entirety pursuant to the terms of an
Irrevocable Assignment of Debt Agreement dated July 15, 2001. REA has sold
portions of the debt under the Loan Agreement to the Debt Holders. The
percentage of the debt under the Loan Agreement held by each of the Debt Holders
is set forth opposite each Debt Holders' name on Schedule 8.9.
8.10 ConSil Liabilities. Excluding amounts outstanding under the Loan
Agreement, ConSil shall have $340,000 in cash or immediately available funds and
no more than $5,000 in liabilities.
ARTICLE 9
CONDITIONS TO OBLIGATIONS OF CONSIL
The obligations of ConSil hereunder are subject to the fulfillment or
satisfaction on, and as of the Closing, of each of the following conditions (any
one or more of which may be waived by ConSil):
9.1 Accuracy of Representations and Warranties. The representations and
warranties of the Stockholders and Lumalite set forth in Sections 2 and 3
(excluding any representation or warranty that refers specifically to "the date
of this Agreement," "the date hereof" or any other date other than the Closing
Date) shall be accurate in all material respects on and as of the Closing Date
as if made on and as of the Closing Date, and the representations and warranties
of Stockholders and Lumalite set forth in Sections 2 and 3 that refer
specifically to "the date of this Agreement," "the date hereof" or any other
date other than the Closing Date shall have been accurate in all material
respects as of the date of this Agreement or such other specified date, and
ConSil shall have received a certificate to such effect executed on behalf of
Lumalite by its Chief Executive Officer and its Chief Financial Officer.
9.2 Covenants. Lumalite shall have performed and complied in all material
respects with all of its covenants contained in Section 6 on or before the
Closing and ConSil shall have received a certificate to such effect signed on
behalf of Lumalite by its President and its Executive Vice President.
9.3 Compliance with Law. There shall be no order, decree, or ruling by any
court or governmental agency in effect that would prohibit or render illegal the
transactions provided for in this Agreement.
9.4 Government Consents. There shall have been obtained at or prior to the
Closing Date such permits or authorizations, and there shall have been taken
such other action, as may be required to consummate the Merger by any regulatory
authority having jurisdiction over the parties and the actions herein proposed
to be taken, including but not limited to satisfaction of all requirements under
applicable federal and state securities laws.
9.5 Consents. ConSil shall have received all written consents, assignments,
waivers, authorizations or other certificates necessary to provide for the
continuation in full force and effect of any and all contracts and leases of
Lumalite which if not continued would have a Material Adverse Effect on
Lumalite.
9.6 Absence of Material Adverse Change. Since the Interim Balance Sheet
date, there shall not have been any Material Adverse Change with respect to
Lumalite.
9.7 Requisite Approvals. The principal terms of this Agreement shall have
been approved and adopted by the stockholders of Lumalite, as required by
applicable law and Lumalite's articles of incorporation and bylaws, and by
Lumalite's board of directors.
9.8 No Litigation. No litigation or proceeding shall be threatened or
pending which will have the probable effect of enjoining or preventing the
consummation of any of the transactions provided for in this Agreement or which
have had or could reasonably be expected to have Material Adverse Effect on
Lumalite.
9.9 Dissenting Shares. None of Lumalite's stockholders shall have exercised
their dissenters rights in connection with the Merger.
9.10 Opinion of Counsel. ConSil shall have received an opinion of
Lumalite's legal counsel in customary form.
9.11 Compliance with Securities Laws. ConSil shall be reasonably satisfied
that the issuance of ConSil Common Stock pursuant to this Agreement is exempt
from the registration requirements of the Securities Act of 1933, as amended.
9.12 Consulting Agreement. ConSil shall have entered into a Consulting
Agreement with Century whereby Century will be paid a $10,000 retainer per month
for a period of twelve (12) months.
9.13 Completion of Schedules. Lumalite shall have completed, to ConSil's
reasonable satisfaction, the disclosure schedules referenced in Article 3 of
this Agreement, which may be supplemented after execution of this Agreement, but
prior to Closing.
9.14 Lumalite Stockholder Representations. Each of the Lumalite
stockholders shall have executed an investment affidavit or letter in a form
satisfactory to ConSil representing such stockholder's investment intent,
financial or business experience and the stockholder is the owner of such
stockholder's shares free and clear of any Liens.
ARTICLE 10
TERMINATION OF AGREEMENT
10.1 Termination. This Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval of the Merger by the
stockholders of Lumalite:
(a) by the mutual written consent of ConSil and Lumalite;
(b) Upon notice by either party, if the Merger shall not have been
consummated by March 15, 2002, other than as the result of a breach of this
Agreement by the terminating party;
(c) by ConSil, if Lumalite has not obtained the required stockholder
approval or if the Stockholders' Meeting is not for any reason held within 30
days of the Agreement Date or if Lumalite breaches its obligations under Section
6.2; or
(d) by either party, if a permanent injunction or other order by any
federal or state court which would make illegal or otherwise restrain or
prohibit the consummation of the Merger will have been issued and will have
become final and nonappealable.
Any termination of this Agreement under this Section 10.1 will be effective
by the delivery of written notice of the terminating party to the other party
hereto.
10.2 Certain Continuing Obligations. Subject to Section 10.3, following any
termination of this Agreement pursuant to this Section 10, the parties hereto
will continue to perform their respective obligations under Section 11 but will
not be required to continue to perform their other covenants under this
Agreement, except as provided in Section 10.1(c) and (d).
ARTICLE 11
SURVIVAL OF REPRESENTATIONS, INDEMNIFICATION
AND REMEDIES, CONTINUING COVENANTS
11.1 Survival of Representations.
11.1.1 Representations of Lumalite. All representations, warranties and
covenants of Lumalite contained in this Agreement will remain operative and in
full force and effect after the Closing regardless of any investigation made by
or on behalf of the parties to this Agreement and shall expire on the first
anniversary of the Closing. No claim for breach of representations, warranties
or covenants shall be made unless ConSil Representative gives written notice to
the Representative in reasonable detail specifying the Claim (as hereinafter
defined) on or prior to the first anniversary of the Closing Date. Except for
its obligations under Section 10, the representations, warranties and covenants
of Lumalite contained in this Agreement will terminate as of the termination of
this Agreement in accordance with its terms.
11.1.2 Representations of ConSil. All representations, warranties and
covenants of ConSil contained in this Agreement will remain operative and in
full force and effect after the Closing regardless of any investigation made by
or on behalf of the parties to this Agreement and shall expire on the first
anniversary of the Closing. No claim for breach of representations, warranties
or covenants shall be made unless Lumalite gives written notice to the
Representative in reasonable detail specifying the Claim (as hereinafter
defined) on or prior to the first anniversary of the Closing Date. Except for
its under Section 10, the representations, warranties and covenants of ConSil
contained in this Agreement will terminate as of the termination of this
Agreement in accordance with its terms.
11.2 Agreement to Indemnify.
11.2.1 Indemnification. Subject to the limitations set forth in this
Section 10.2, from and after the Effective Time, ConSil and its respective
officers, directors, agents and employees, and each person, if any, who controls
or may control ConSil within the meaning of the Securities Act (hereinafter in
this Section 11.2 referred to individually as an "Indemnified Person" and
collectively as "Indemnified Persons") shall be indemnified and held harmless by
Lumalite and Stockholders, jointly and severally, from and against any and all
claims, demands, actions, causes of action, losses, costs, damages, liabilities
and expenses including, without limitation, reasonable legal fees (individually
a "Claim" and, collectively, "Claims"):
(a) Arising out of any breach by Lumalite or Stockholders of the
representations, warranties or covenants given or made by Lumalite or
Stockholders in this Agreement;
(b) Resulting from any failure of any Stockholders to have good,
valid and marketable title to the issued and outstanding capital stock of
Lumalite held by such stockholders free and clear of all liens, claims, pledges,
options, adverse claims, assessments or charges of any nature whatsoever, or to
have full right, capacity and authority to vote such Lumalite capital stock in
favor of the Merger and the other transactions contemplated hereby;
(c) Any and all actions, suits, claims or legal, administrative,
arbitrative, governmental or other proceedings or investigations against any
Indemnified Person arising out of such breach.
11.2.3 Survival of Claims. Notwithstanding anything to the contrary,
if, prior to the expiration of a particular representation or warranty, an
Indemnified Person makes a claim for indemnification under either this Agreement
with respect to a misrepresentation or breach of such representation or
warranty, then the Indemnified Person's rights to indemnification under this
Section 11.2 for such claim shall survive any expiration of such representation
or warranty.
ARTICLE 12
MISCELLANEOUS
12.1 Governing Law. This Agreement is governed by the laws of the State of
Nevada, without giving effect to principles of conflict of laws.
12.2 Jurisdiction; Service of Process. Any action or proceeding seeking to
enforce any provision of, or based on any right arising out of, this Agreement
must be brought against any of the parties in the courts of the State of Nevada,
County of ▇▇▇▇▇, or, if it has or can acquire jurisdiction, in the United States
District Court for the appropriate District of Nevada, and each of the parties
consents to the jurisdiction of those courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection to venue laid
therein. Process in any such action or proceeding may be served by sending or
delivering a copy of the process to the party to be served at the address and in
the manner provided for the giving of notices in Section 7.4. Nothing in this
Section, however, affects the right of any party to serve legal process in any
other manner permitted by law.
12.3 Resolution of Conflicts; Arbitration.
(a) If any claims arise under this Agreement, the parties to this
Agreement shall attempt in good faith for thirty (30) days to agree upon the
rights of the respective parties with respect to each of such claims. If the
parties should so agree, a memorandum setting forth such agreement shall be
prepared and signed by all parties.
(b) If no such agreement can be reached after good faith negotiation
any party may request arbitration of the matter. If arbitration is requested,
the parties shall submit the dispute to arbitration and the arbitration shall be
governed by the procedures set forth below in Section 12.3(c).
(c) The parties shall jointly select an arbitrator. If the parties fail
to agree upon a single arbitrator within thirty (30) days, an arbitrator shall
be selected for them by the American Arbitration Association ("AAA"). The
decision of the arbitrator so selected shall be binding and conclusive upon the
parties to the Agreement. Judgment upon any award rendered by the arbitrator may
be entered in any court having jurisdiction. Any such arbitration shall be held
in San Diego County, California under the commercial rules then in effect of the
American Arbitration Association (the "AAA"). There shall be limited discovery
prior to the arbitration hearing as follows: (a) exchange of witness lists and
copies of documentary evidence and documents related to or arising out of the
issues to be arbitrated, (b) depositions of all party witnesses, and (c) such
other depositions as may be allowed by the arbitrator upon a showing of good
cause. Depositions shall be conducted in accordance with the California Code of
Civil Procedure, the arbitrator shall be required to provide in writing to the
parties the basis for the award or order of such arbitrator, and a court
reporter shall record all hearings, with such record constituting the official
transcript of such proceedings. Any order or award of the arbitrator in
accordance with the foregoing shall be final, binding and conclusive. Each party
to an arbitration shall pay its own expenses, and the parties to an arbitration
shall evenly split the fees of the arbitrator, the administrative fee of the
American Arbitration Association.
(d) If the parties do not agree to resolve their disputes pursuant to
Section 12.3(a) hereof and do not submit the dispute to binding arbitration
pursuant to Section 12.3(b) hereof, then the parties may pursue any legal
remedies available to it, including without limitation injunctive relief.
12.4 Notices. Every notice or other communication required or contemplated
by this Agreement must be in writing and sent by one of the following methods:
(i) personal delivery, in which case delivery is deemed to occur the day of
delivery; (ii) certified or registered mail, postage prepaid, return receipt
requested, in which case delivery is deemed to occur the day it is officially
recorded by the U.S. Postal Service as delivered to the intended recipient; or
(iii) next-day delivery to a U.S. address by recognized overnight delivery
service such as Federal Express, in which case delivery is deemed to occur upon
receipt. In each case, a notice or other communication sent to a party must be
directed to the address for that party set forth below, or to another address
designated by that party by written notice:
If to ConSil to: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
with a copy to: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
If to Lumalite, to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Lumalite, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Notice not given in writing is effective only if acknowledged in writing by
a duly authorized Representative of the party to which it was given.
12.5 Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
12.6 Public Announcements.
(a) The parties shall cooperate with respect to any public statement
regarding the transactions contemplated by this Agreement or any of the other
Transaction Documents.
(b) Lumalite may not make any public statement regarding the
transactions contemplated by this Agreement or any of the other Transaction
Documents without the prior written consent of ConSil, which ConSil may not
unreasonably withhold, unless Lumalite (i) believes, based upon advice of
counsel, that they are required by law to make that public statement, (ii) makes
commercially reasonable efforts to limit or avoid making that public statement,
(iii) provides ConSil with prior written notice of that public statement, and
(iv) makes any changes to that public statement that ConSil reasonably requests.
(c) ConSil may not make any public statement regarding the transactions
contemplated by this Agreement or any of the other Transaction Documents without
the prior written consent of Lumalite, which Lumalite may not unreasonably
withhold, unless ConSil (i) believes, based upon advice of counsel, that it is
required by law to make that public statement, (ii) makes commercially
reasonable efforts to limit or avoid making that public statement, (iii)
provides Lumalite with prior written notice of that public statement, and (iv)
makes any changes to that public statement that Lumalite reasonably request.
12.7 Amendment. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties.
12.8 Expenses. Except as provided herein, if the Merger is not consummated,
each party shall bear its own transaction expenses (including fees and
disbursements of counsel, investment bankers and accountants). In the event the
Merger is consummated, ConSil and the Surviving Corporation shall be jointly
responsible for the Surviving Corporation's costs and expenses.
12.9 Entire Agreement. This Agreement and the other agreement provided for
in this Agreement, together with all exhibits and schedules hereto and thereto,
constitute the entire agreement among the parties pertaining to the subject
matter hereof and supersede all prior agreements, understandings, negotiations
and discussions, whether oral or written, of the parties.
12.10 Counterparts. This Agreement may be executed in several counterparts,
each of which is an original and all of which together constitute one and the
same instrument.
12.11 No Third-Party Rights. Nothing expressed or referred to in this
Agreement gives any Person other than the parties to this Agreement any legal or
equitable right, remedy, or claim under or with respect to this Agreement or any
provision of this Agreement, and this Agreement and all of its provisions are
for the sole and exclusive benefit of the parties to this Agreement and their
successors and assigns.
12.12 Diligent Efforts. Upon the terms and subject to the conditions of
this Agreement, each of the parties hereto agrees to use its diligent efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement or
any of the other Transaction Documents as promptly as practicable including, but
not limited to, (i) the preparation and filing of all forms, registrations and
notices required to be filed to consummate the transactions contemplated by this
Agreement or any of the other Transaction Documents and the taking of such
actions as are necessary to obtain any requisite approvals, consents, orders,
exemptions or waivers by any third party or Governmental Body and (ii) the
satisfaction of all conditions to Closing at the earliest possible time. Each
party shall promptly consult with the other with respect to, provide any
necessary information not subject to legal privilege with respect to, and
provide the other (or its counsel) copies of, all filings made by such party
with any Governmental Body or any other information supplied by that party to a
Governmental Body in connection with this Agreement or any of the other
Transaction Documents and the transactions contemplated hereby and thereby.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as of the
date first written above.
CONSIL CORP.
By: _____________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
CONSIL MERGER CORP.
By: _____________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
LUMALITE, INC.
By: _____________________
Name:
Title:
STOCKHOLDER:
--------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
STOCKHOLDER:
-------------------------
▇▇▇ ▇▇▇▇▇▇▇▇
STOCKHOLDER:
--------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
EXHIBITS AND SCHEDULES
Exhibit A Definitions
Schedule 1.6(a)(i) Distribution of ConSil Common Stock to Lumalite
Shareholders
Schedule 1.7 Lumalite Options
Schedule 2.2 Required Stockholder Consents
Schedule 2.4 Lumalite Capitalization Table
Schedule 3.3 Required Lumalite Consents
Schedule 3.4 Violations
Schedule 3.5(e) Outstanding Rights to Acquire Lumalite Securities
Schedule 3.6 Ownership Interests
Schedule 3.9 Real Property Interests
Schedule 3.10 Liens
Schedule 3.12(a) Customer List
Schedule 3.12(b) Supplier List
Schedule 3.13 Accounts Receivable
Schedule 3.18(c) Permits
Schedule 3.21 Contracts
Schedule 3.21(b) Contracts Not Provided to ConSil
Schedule 2.21(e) Oral Contracts
Schedule 3.22(a) Employee Benefit Plans
Schedule 3.22(e) Plan Favorable Determination Letter
Schedule 3.23 Employee Information
Schedule 3.24 Intellectual Property Assets
Schedule 3.26 Insurance
Schedule 3.27 Broker or Finder's Fees
Schedule 3.28 Affiliate Contracts
Schedule 3.29 Warranties, Guaranties and Indemnities
Schedule 3.30 Material Complaints
Schedule 4.5(e) Outstanding Rights to Acquire ConSil Securities
Schedule 4.6 SEC Filings
Schedule 4.8 ConSil Material Adverse Effect
Schedule 5.1 Director Nominees
Schedule 5.6 Capitalization
Schedule 8.9 Debt Holders
EXHIBIT A
DEFINITIONS
When used in this Agreement, the following terms have the following
meanings:
"Affiliate" means, with respect to any given Person, (i) any other
Person at the time directly or indirectly controlling, controlled by or under
common control with that Person, (ii) any other Person of which that Person at
the time owns or has the right to acquire, directly or indirectly, 10% or more
on a consolidated basis of any class of the capital stock or other ownership
interest, (iii) any other Person which at the time owns or has the right to
acquire, directly or indirectly, 10% or more of any class of the capital stock
or other ownership interest of that Person, or (iv) any director, officer or
employee of that Person. For purposes of this Agreement, "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
"CGCL" means the General Corporation Law of the State of California.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor law, and regulations issued by the IRS pursuant thereto.
"Consent" means any approval, consent, ratification, filing,
declaration, registration, waiver, or other authorization (including any
Permit).
"ConSil's Knowledge" means the actual knowledge of ConSil's
President.
"ConSil Representive" shall mean ▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
"Contract" means any written agreement, contract, obligation,
promise, arrangement, or undertaking that is legally binding.
"Environmental Claim" means any notice of violation, action, claim,
demand, abatement or other order by any Governmental Body or any other Person
for personal injury (including sickness, disease or death), tangible or
intangible property damage, damage to the environment, nuisance, pollution,
contamination or other adverse effects an the environment, or for fines,
penalties or restrictions resulting from or based upon (i) the existence, or the
continuation of the existence, of a Release (including, without limitation,
sudden or non-sudden accidental or non-accidental Releases) of, or exposure to,
any Hazardous Material in, into or onto the environment (including, without
limitation, the air, soil, surface water or groundwater) at, in, by, from or
related to any property owned, operated or leased by Lumalite or any activities
or operations thereof; (ii) the transportation, storage, treatment or disposal
of Hazardous Materials in connection with any property owned, operated or leased
by the seller or its operations or facilities; or (iii) the violation, or
alleged violation, of any Environmental Law or Order of any Governmental Body
relating to environmental matters connected with any property owned, leased or
operated by Lumalite.
"Environmental Law" means any Law relating to the environment,
natural resources, or public or employee health and safety, and includes the
Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C.ss.9601 et seq., the Hazardous Materials Transportation Act, 49
U.S.C.ss.1801 et seq., the Resource Conservation and Recovery Act, 42
U.S.C.ss.6901 et seq., the Clean Water Act, 33 U.S.C.ss.1251 et seq., the Clean
Air Act, 33 U.S.C.ss.2601 et seq., the Toxic Substances Control Act, 15
U.S.C.ss.2601 et seq., the Oil Pollution Act of 1990, 33 U.S.C.ss.2701 et seq.,
and the Occupational Safety and Health Act, 29 U.S.C.ss.651 et seq.
"ERISA" means the Employee Retirement Income Security Act of 1974 or
any successor law, and regulations and rules issued pursuant thereto.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor law, and any rules or regulations issued pursuant
thereto.
"GAAP" means generally accepted United States accounting principles.
"Governmental Body" means any (i) nation, state, county, city, town,
village, district, or other jurisdiction of any nature, (ii) federal, state,
local, municipal, foreign, or other government, (iii) governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, department, official, or entity and any court or other tribunal,
including an arbitral tribunal), (iv) multi-national organization or body, or
(v) body exercising, or entitled to exercise, any administrative, executive,
judicial, legislative, police, regulatory, or taxing authority or power of any
nature.
"Hazardous Material" means any substance, material or waste which is
regulated under Environmental Law, including, without limitation, any material,
substance or waste that is defined as a "hazardous waste," "hazardous material,"
or "hazardous substance" under any provision of Environmental Law.
"Intellectual Property Assets" means, with respect to any Person,
all trademarks, patents, copyrights, and any applications for registration
thereof, and trade secrets of that Person, whether owned, used, or licensed by
that Person as licensee or licensor.
"IRS" means the United States Internal Revenue Service or any
successor agency, and, to the extent relevant, the United States Department of
the Treasury.
"Law" means any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, constitution, law,
ordinance, principle of common law, regulation, statute, or treaty.
"Lien" means any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right of
first refusal, or restriction of any kind, including any restriction on use,
voting, transfer, receipt of income, or exercise of any other attribute of
ownership.
"Lumalite's Knowledge" means the actual knowledge after due inquiry
of the Stockholders.
"Material Adverse Effect" means, with respect to any Person, a
material adverse effect on the business, assets, properties, results of
operations, or condition (financial or otherwise) of that Person.
"Order" means any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any court,
arbitral tribunal, administrative agency, or other Governmental Body.
"Ordinary Course of Business" means, with respect to an action taken
by a Person, that that action is (i) consistent with the past practices of that
Person and taken in the ordinary course of the normal day-to-day operations of
that Person, and (ii) is not required to be authorized by the board of directors
of that Person (or by any Person or group of Persons exercising similar
authority).
"Permit" means any approval, consent, license, permit, waiver, or
other authorization issued, granted, given, or otherwise made available by or
under the authority of any Governmental Body or pursuant to any Law.
"Permitted Lien" means (i) any Lien for taxes that are not yet due,
or (ii) any carrier's, warehouseman's, mechanic's, materialman's, repairman's,
landlord's, lessor's or similar statutory Lien incidental to the ordinary course
of business.
"Person" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, Governmental
Body or other entity.
"Proceeding" means any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Body.
"Release" means any release, spill, emission, leaking, pumping,
pouring, dumping, emptying, injection, deposit, disposal, discharge, dispersal,
leaching, or migration on or into the indoor or outdoor environment or into or
out of any property.
"Remedial Action" means all actions, including, without limitation,
any capital expenditures, required by any Governmental Body to (i) clean up,
remove, treat, or in any other way address any Hazardous Material or other
substance, (ii) prevent the Release or threat of Release, or minimize the
further Release of any Hazardous Material or other substance so it does not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment, (iii) perform pre-remedial studies and
investigations or post-remedial monitoring, or (iv) bring facilities on any
property owned, operated or leased by Lumalite and the facilities located and
operations conducted thereon into compliance with all Environmental Laws.
"Representative" means with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor, or other representative
of that Person, including legal counsel, accountants, and financial advisors.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, or
any successor law, and rules or regulations issued pursuant thereto.
"Taxes" means all taxes, duties, assessments or governmental
charges, including income, gross receipts, windfall profits, value added,
severance, property, production, sales, use, license, excise, franchise,
employment, withholding or similar taxes, together with any interest, additions
or penalties with respect thereto and any interest in respect of such additions
or penalties, imposed by any Governmental Body having the power to tax.
"Tax Return" means any return (including any information return),
report, statement, schedule, notice, form, or other document or information
filed with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection,
or payment of any Tax or in connection with the administration, implementation,
or enforcement of or compliance with any Law relating to any Tax.
"Transaction Documents" means this Agreement and the other documents
to be executed and delivered by the parties as contemplated under this
Agreement.