Exhibit
2.2
ACQUISITION AGREEMENT AND PLAN OF MERGER
ACQUISITION AND PLAN OF MERGER AGREEMENT ("Agreement") made March
30, 2007 by
and among EATON LABORATORIES, a Nevada corporation ("Parent"),
EATON
LABORATORIES ACQUISITION CORPORATION, a Nevada corporation ("Sub"),
and
Hydrogen Hybrid Technologies Inc., a Canadian corporation (the
"Company").
RECITALS:
A. The respective Boards of Directors of Parent and the Company, as
well as
all of the three shareholders of the Company have determined that a
merger of
Sub with and into the Company (the "Merger"), upon the terms and
subject to
the conditions set forth in this Agreement, would be fair and in
the best
interests of their respective shareholders, and such Boards of
Directors have
approved such Merger, pursuant to which shares of Common Stock of
the Company
("Company Common Stock") issued and outstanding immediately prior
to the
Effective Time of the Merger (as defined in Section 1.03) will be
converted
into the right to receive Common Stock of Parent ("Parent Common
Stock")
other than Dissenting Shares (as defined in Section 2.01(d)).
B. Parent, Sub and the Company desire to make certain
representations,
warranties, covenants and agreements in connection with the Merger
and also to
prescribe various conditions to the Merger.
C. For federal income tax purposes, the parties intend that the
Merger shall
qualify as a reorganization under the provisions of Section 368 of
the Internal
Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the representations,
warranties, covenants
and agreements contained in this Agreement, the parties agree as
follows:
ARTICLE I
THE MERGER
1.01 The Merger. Upon the terms and subject to the conditions set
forth in this
Agreement, and in accordance with Nevada Corporations Code (the
"Nevada
Statutes"), Sub shall be merged with and into the Company at the
Effective
Time of the Merger. At
the Effective Time of the Merger, the separate
existence of Sub shall cease, and the Parent shall continue as the
surviving
corporation (the "Surviving Corporation") and shall change its the
name to
Hydrogen Hybrid Technologies, Inc.
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1.02 Closing. Unless
this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant
to Section
7.01 and subject to the satisfaction or waiver of the conditions
set forth in
Article VI, the closing of the Merger (the "Closing") will take
place at 10:00
a.m. on the business day after satisfaction of the conditions set
forth in
Article VI (or as soon as practicable thereafter following
satisfaction or
waiver of the conditions set forth in Article VI) (the "Closing
Date"), at the
Law Offices of Thomas C. Cook, unless another date, time or place
is
agreed to in writing by the parties hereto.
1.03 Effective Time of Merger. As soon as practicable following the
satisfaction
or waiver of the conditions set forth in Article VI, the parties
shall file
articles of merger (the "Articles of Merger") executed in
accordance with the
relevant provisions of the Nevada Statutes and shall make all other
filings or
recordings required under Nevada Statutes. The Merger shall become
effective
at such time as the Articles of Merger are duly filed with the
Secretary of
State of Nevada, or at such other time as is permissible in
accordance with the
Nevada Statutes and as Parent and the Company shall agree should be
specified
in the Articles of Merger (the time the Merger becomes effective
being the
"Effective Time of the Merger"). Parent shall use reasonable
efforts to have
the Closing Date and the Effective Time of the Merger to be the
same day.
1.04 Effects of the Merger. The Merger shall have the effects set
forth in the
applicable provisions of Nevada Statutes.
1.05
Articles of Incorporation; Bylaws; Purposes.
(a) The Certificate of Incorporation of the Parent in effect
immediately prior to the Effective Time of the Merger shall be the
Certificate
of Incorporation of the Surviving Corporation until thereafter
changed or
amended as provided therein or by applicable law.
(b) The Bylaws of the Parent in effect at the Effective Time of
the
Merger shall be the Bylaws of the Surviving Corporation until
thereafter changed
or amended as provided therein or by applicable law.
(c) The purposes of the Surviving Corporation and the total number
of
its authorized capital stock shall be as set forth in the
Certificate of
Incorporation of the Parent in effect immediately prior to the
Effective Time
of the Merger until such time as such purposes and such number may
be amended as
provided in the Certificate of Incorporation of the Surviving
Corporation and by
applicable law.
1.06 Directors. The directors of the Company at the Effective Time
of the Merger
shall become the directors of the Surviving Corporation, and the
sole director
of the Surviving Company shall resign. The new directors will
remain directors
until the earlier of their resignation or removal or until their
respective
successors are duly elected and qualified, as the case may be.
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1.07 Officers. The officers of the Company at the Effective Time of
the Merger
shall be the officers of the Surviving Corporation, until the
earlier of their
resignation or removal or until their respective successors are
duly elected and
qualified, as the case may be. The officer of the Parent
corporation shall
resign.
ARTICLE II
EFFECT OF THE MERGER
ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS
2.01 Effect on Capital Stock. As of the Effective Time of the
Merger, by virtue
of the Merger and without any action on the part of the holders of
shares of
Company Common Stock or any shares of capital stock of Sub:
(a) Common Stock of Sub. Each share of common stock of Sub issued
and
outstanding immediately prior to the Effective Time of the Merger
shall be
converted into one share of Common Stock of the Surviving
Corporation and shall
be the issued and outstanding capital stock of the Surviving
Corporation.
(b) Cancellation of Sub-Owned Company Common Stock. Each share of
Company Common Stock that is owned by Parent, Sub or any other
subsidiary of
Parent shall automatically be cancelled and retired and shall cease
to exist.
They will be exchanged for newly issued shares by the Parent.
(c) Conversion of Company Common Stock. Except as otherwise
provided
herein, each issued and outstanding share of Company Common Stock
shall be
converted into fully paid and nonassessable shares of Parent Common
Stock in
accordance with the Exchange Ratio described in Section 2.02 (the
"Merger
Consideration").
Forty-nine Million Five Hundred Thousand (49,500,00) shares
of said Merger Consideration shall be the "Initial Deposit" and
deposited by
the Parent with the Exchange Agent (as described below) further to
Section
2.04(a) herein,
(d) Dissenting Shares. Notwithstanding anything in this Agreement
to
the contrary, shares of Company Common Stock issued and outstanding
immediately
prior to the Effective Time of the Merger held by a holder (if any)
who has the
right to demand payment for and an appraisal of such shares in
accordance with
the California Statutes ("Dissenting Shares") shall not be
converted into a
right to receive Merger Consideration unless such holder fails to
perfect or
otherwise loses such holder's right to such payment or appraisal,
if any. If,
after the Effective Time of the Merger, such holder fails to
perfect or loses
any such right to appraisal, each such share of such holder shall
be treated as
a share that had been converted as of the Effective Time of the
Merger into the
right to receive Merger Consideration in accordance with this
Section 2.01.
The Company shall give prompt notice to Parent of any demands
received by the
Company for appraisal of shares of Company Common Stock, and Parent
shall have
the right to participate in all negotiations and proceedings with
respect to
such demands. The
Company shall not, except with the prior written consent of
Parent, make any payment with respect to, or settle or offer to
settle, any
such demands.
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(e) Cancellation and Retirement of Company Common Stock.
As of the
Effective Time of the Merger, all shares of Company Common Stock
issued and
outstanding immediately prior to the Effective Time of the Merger,
shall no
longer be outstanding and shall automatically be cancelled and
retired and shall
cease to exist, and each holder of a certificate representing any
such shares of
Company Common Stock shall cease to have any rights with respect
thereto, except
the right to receive the applicable Merger Consideration to be
issued in
consideration therefor upon surrender of such certificate in
accordance with
Section 2.04.
2.02
Exchange Ratio. The
"Exchange Ratio" is as follows:
Each share of Company Common Stock shall be converted into 1:1.5 of
a share
of Parent Common Stock in the Merger, an Exchange Ratio of 1:1.5.
The Company
has thirty million (30,000,000) shares issued and outstanding owned
by three
shareholders and three million (3,000,000) shares issued in
accordance with its
Employee Stock Option Plan. The Initial Deposit shall be
distributable by the
Exchange Agent effective as of the Effective Time of the Merger in
accordance
with the provisions of Section 2.04(a) herein and the Escrow
Deposit shall be
distributable pursuant to the provisions of Section 2.04(b)(iv)
herein. No
fractional Parent Common Stock shall be issued in the Merger.
If the product
of the number of shares a Company shareholder holds immediately
prior to the
Closing multiplied by the exchange ratio would result in the
issuance of a
fractional share of Parent Common Stock, that product will be
rounded down to
the nearest whole number of shares of Parent Common Stock if it is
equal to
or less than the fraction of one-half (.5) of one Parent Common
Stock or round
up to the nearest whole number of shares of Parent Common Stock if
the said
product is greater than the fraction of one-half (.5) of one Parent
Common
Stock.
2.03
Stock Options; Warrants.
(a) Assumption. At the Effective Time of the Merger, all options
to
purchase Company Common Stock then outstanding under the Company's
Stock Option
Plan (the "Company Option Plan"), and all options to purchase
Company Common
Stock then outstanding which are not under the Company Option Plan,
and all
outstanding warrants to purchase Company Common Stock the
outstanding in each
case whether vested or unvested, and the Company Option Plan
itself, shall be
assumed by Parent in accordance with Section 2.03(b) hereof.
(b) Stock Options and Warrants. At the Effective Time of the
Merger,
each outstanding option to purchase Company Common Stock (each, a
"Company Stock
Option"), whether or not granted under the Company Option Plan, and
all
outstanding warrants to purchase Company Common Stock the
outstanding whether or
not vested, shall by virtue of the Merger be assumed by Parent.
Each Company
Stock Option and Warrant so assumed by Parent under this Agreement
will continue
to have, and be subject to, the same terms and conditions of such
options
immediately prior to the Effective Time of the Merger (including,
without
limitation, any repurchase rights or vesting provisions and
provisions regarding
the acceleration of vesting on certain transactions), except that
(i) each
Company Stock Option and Warrant will be exercisable (or will
become exercisable
in accordance with its terms) for that number of whole shares of
Parent Common
Stock equal to the product of the number of Company Shares that
were issuable
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upon exercise of such Company Stock Option or Warrant immediately
prior to the
Effective Time of the Merger multiplied by the Exchange Ratio,
rounded down to
the nearest whole number of shares of Parent Common Stock if the
said product is
equal to or less than the fraction of one-half (.5) of one Parent
Common Stock
or rounded up to the nearest whole number of shares of Parent
Common Stock if
the said product is greater than the fraction of one-half (.5) of
one Parent
Common Stock, and (ii) the per share exercise price for the shares
of Parent
Common Stock issuable upon exercise of such assumed Company Stock
Option and
Warrant will be equal to the quotient determined by dividing the
exercise price
per Company Share at which such Company Stock Option and Warrant
was exercisable
immediately prior to the Effective Time of the Merger by the
Exchange Ratio,
rounded up to the nearest whole cent. Parent shall comply with the
terms of all
such Company Stock Options and Warrants and use its best efforts to
ensure, to
the extent required by, and subject to the provisions of, the
Company Option
Plan and permitted under the Code or other relevant laws and
regulations that
any Company Stock Option that qualified for tax treatment under
Section 424(b)
of the Code prior to the Effective Time of the Merger continue to
so qualify
after the Effective Time of the Merger. Parent shall take all
corporate actions
necessary to reserve for issuance a sufficient number of shares of
Parent Common
Stock for delivery upon exercise of all Company Stock Options and
Warrants on
the terms set forth in this Section 2.03(b).
2.04
Exchange of Certificates
(a) Exchange Agent. As soon as reasonably practicable as of or
after
the Effective Time of the Merger, Parent shall deposit the Initial
Deposit with
its transfer agent (the "Exchange Agent"), for the benefit of the
holders of
shares of Company Common Stock, for exchange in accordance with
this Article II.
Any shares remaining in the Escrow Deposit (as described below)
after the
Settlement Date (as described below) will be transferred by the
Escrow Agent (as
described below) to the Exchange Agent further to the provisions of
Section
2.04(b)(vi) herein, for the benefit of the holders of shares of
Company Common
Stock, for disbursement pro rata to the holders of shares of
Company Common
Stock as of the Effective Date of the Merger.
(b) Escrow
Deposit.
(i) At the Effective Time of the Merger, Parent will cause to
be delivered to the law offices of Thomas C. Cook, as escrow agent
(the "Escrow
Agent") the Merger Consideration Escrow Deposit and the Parent
Escrow Deposit to
be held pursuant to the Escrow Agreement attached thereto as
Exhibit A (The
"Escrow Agreement").
(ii) The settlement date as set forth herein and in the Escrow
Agreement (the "Settlement Date") shall be such date which is three
months from
the Effective Time of the Merger and the date of the resolution of
any Contests
further to Section 8.03 herein.
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(iii) After the Settlement Date (a) all shares of the Parent
Escrow Deposit pursuant to which Indemnity Claims were paid further
to the
provisions of the Escrow Agreement and (b) all remaining shares, if
any, in the
Merger Consideration Escrow Deposit shall be transferred by the
Escrow Agent to
the Exchange Agent for disbursement further to Section 2.04(a)
herein, said
transfer to take place within ten (10) business days after the
Settlement Date.
Exchange Agent shall deliver stock certificates of Parent Common
Stock to
Company shareholders of record as of the date immediately prior to
the Closing
within twenty (20) business days of receiving the aforementioned
shares from
Escrow Agent. The number of shares of Parent Common Stock
referenced above and
evidenced in the delivered stock certificates to each Company
shareholder will
be in accordance with said shareholder's pro rata holding of
Company Common
Stock as of the date immediately prior to the Closing and the terms
of Section
2.02 hereof.
(c) Exchange Procedures. As soon as practicable after the
Effective
Time of the Merger, each holder of an outstanding certificate or
certificates
which prior thereto represented shares of Company Common Stock
shall, upon
surrender to the Exchange Agent of such certificate or certificates
and
acceptance thereof by the Exchange Agent, be entitled to a
certificate or
certificates representing the number of shares of Parent Common
Stock into which
the aggregate number of shares of Company Common Stock previously
represented by
such certificate or certificates surrendered shall have been
converted pursuant
to this Agreement. The
Exchange Agent shall accept such certificates upon
compliance with such reasonable terms and conditions as the
Exchange Agent may
impose to effect an orderly exchange thereof in accordance with
normal exchange
practices. After the
Effective Time of the Merger, there shall be no further
transfer on the records of the Company or its transfer agent of
certificates
representing shares of Company Common Stock and if such
certificates are
presented to the Company for transfer, they shall be cancelled
against delivery
of certificates for Parent Common Stock as hereinabove provided.
If any
certificate for such Parent Common Stock is to be issued in a name
other than
that in which the certificate for Company Common Stock surrendered
for exchange
is registered, it shall be a condition of such exchange that the
certificate so
surrendered shall be properly endorsed, with signature guaranteed,
or otherwise
in proper form for transfer and that the person requesting such
exchange shall
pay to Parent or its transfer agent any transfer or other taxes or
other costs
required by reason of the issuance of certificates for such Parent
Common Stock
in a name other than that of the registered holder of the
certificate
surrendered, or establish to the satisfaction of Parent or its
transfer agent
that all taxes have been paid. Until surrendered as contemplated by
this Section
2.04(b), each certificate for shares of Company Common Stock shall
be deemed at
any time after the Effective Time of the Merger to represent only
the right to
receive upon such surrender the Merger Consideration as
contemplated by Section
2.01.
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(d) Distributions with Respect to Unexchanged Shares. No dividends or
other distributions with respect to Parent Common Stock with a
record date after
the Effective Time of the Merger shall be paid to the holder of
any
unsurrendered certificate for shares of Company Common Stock with
respect to the
shares of Parent Common Stock represented thereby until the
surrender of such
certificate in accordance with this Article II. In addition, after the
Settlement Date, all remaining shares, if any, in the Parent Escrow
Deposit
shall be transferred by the Escrow Agent to the Parent for
cancellation, said
transfer to take place within ten (10) business days after the
Settlement Date.
(e) No Further Ownership Rights in Company Common Stock.
All shares of
Parent Common Stock issued upon the surrender for exchange of
certificates
representing shares of Company Common Stock in accordance with the
terms of this
Article II shall be deemed to have been issued (and paid) in full
satisfaction
of all rights pertaining to the shares of Company Common Stock
theretofore
represented by such certificates.
(f) No Liability. None
of Parent, Sub, the Company or the Exchange
Agent shall be liable to any person in respect of any shares of
Parent Common
Stock (or dividends or distributions with respect thereto)
delivered to a public
official pursuant to any applicable abandoned property, escheat or
similar law.
If any certificates representing shares of Company Common Stock
shall not have
been surrendered prior to April 30, 2007 any such shares, dividends
or
distributions in respect of such certificate shall, to the extent
permitted by
applicable law, become the property of the Surviving Corporation,
free and clear
of all claims or interests of any person previously entitled
thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations and Warranties of the Company. Except as set forth in the
Company Disclosure Schedule (as defined in subsection 3.01(a)),
attached hereto
as Exhibit B, or a certain schedule comprising the Disclosure
Schedule, the
Company represents and warrants to Parent and Sub as follows:
(a) Organization, Standing and Corporate Power. The Company is duly
organized, validly existing and in good standing under the laws of
the country
of Canada and has the requisite corporate power and authority to
carry on its
business as now being conducted. The Company is duly qualified or
licensed to
do business and is in good standing in each jurisdiction in which
the nature of
its business or the ownership or leasing of its properties makes
such
qualification or licensing necessary, other than in such
jurisdictions where
the failure to be so qualified or licensed (individually or in the
aggregate)
would not have a material adverse effect (as defined in Section
9.02) with
respect to the Company.
(b) Subsidiaries. The Company does not own, directly or indirectly,
any
capital stock or other ownership interest in any corporation,
partnership,
business association, joint venture or other entity.
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(c) Capital Structure.
The authorized capital stock of the Company
is unlimited. There
are Thirty Million (30,000,000) shares of Common Stock
outstanding and three million (3,000,000) shares issued to the
Company's
Employee Stock Option Plan. All outstanding shares of capital
stock of the
Company are duly authorized, validly issued, fully paid and
nonassessable and
not subject to preemptive rights. There are no outstanding bonds,
debentures,
notes or other indebtedness or other securities of the Company
having the right
to vote (or convertible into, or exchangeable for, securities
having the right
to vote) on any matters on which shareholders of the Company may
vote. The
Company Disclosure Schedule sets forth the outstanding
Capitalization of the
Company. Except as set
forth above, there are no outstanding securities,
options, warrants, calls, rights, commitments, agreements,
arrangements or
undertakings of any kind to which the Company is a party or by
which it is bound
obligating the Company to issue, deliver or sell, or cause to be
issued,
delivered or sold, additional shares of capital stock or other
equity or voting
securities of the Company or obligating the Company to issue,
grant, extend or
enter into any such security, option, warrant, call, right,
commitment,
agreement, arrangement or undertaking. Other than the Company Stock
Options and
Company Warrants,there are no outstanding contractual
obligations,commitments,
understandings or arrangements of the Company to repurchase,redeem
or otherwise
acquire or make any payment in respect of any shares of capital
stock of the
Company. There are no
agreements or arrangements pursuant to which the Company
is or could be required to register shares of Company Common Stock
or other
securities under the Securities Act of 1933, as amended (the
"Securities Act")
or other agreements or arrangements with or among any security
holders of the
Company with respect to securities of the Company.
(d) Authority; Noncontravention. The Company has the requisite
corporate and other power and authority to enter into this
Agreement and to
consummate the Merger. The execution and delivery of this Agreement
by the
Company and the consummation by the Company of the transactions
contemplated
hereby have been duly authorized by all necessary corporate action
on the part
of the Company. This
Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding obligation of the
Company,
enforceable against the Company in accordance with its terms. The
execution and
delivery of this Agreement do not, and the consummation of the
transactions
contemplated by this Agreement and compliance with the provisions
hereof will
not, conflict with, or result in any breach or violation of, or
default (with or
without notice or lapse of time, or both) under, or give rise to a
right of
termination, cancellation or acceleration of or "put" right with
respect to any
obligation or to loss of a material benefit under, or result in the
creation of
any lien upon any of the properties or assets of the Company under,
(i) the
Articles of Incorporation or Bylaws of the Company, (ii) any loan
or credit
agreement, note, bond, mortgage, indenture, lease or other
agreement,
instrument, permit, concession, franchise or license applicable to
the Company,
its properties or assets, or (iii) subject to the governmental
filings and other
matters referred to in the following sentence, any judgment, order,
decree,
statute, law, ordinance, rule, regulation or arbitration award
applicable to the
Company, its properties or assets. No consent, approval, order or
authorization
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of, or registration, declaration or filing with, or notice to, any
federal,
state or local government or any court, administrative agency or
commission or
other governmental authority, agency, domestic or foreign (a
"Governmental
Entity"), is required by or with respect to the Company in
connection with the
execution and delivery of this Agreement by the Company or the
consummation by
the Company of the transactions contemplated hereby, except, with
respect to
this Agreement, for the filing of the Articles of Merger with the
Secretary of
State of Nevada.
(e) Absence of Certain Changes or Events. Since January 13, 2005, the
Company has conducted its business only in the ordinary course
consistent with
past practice, and there is not and has not been: (i) any material
adverse
change with respect to the Company; (ii) any condition, event or
occurrence
which individually or in the aggregate could reasonably be expected
to have a
material adverse effect or give rise to a material adverse change
with respect
to the Company; (iii) any event which, if it had taken place
following the
execution of this Agreement, would not have been permitted by
Section 4.01
without prior consent of Parent; or (iv) any condition, event or
occurrence
which could reasonably be expected to prevent, hinder or materially
delay the
ability of the Company to consummate the transactions contemplated
by this
Agreement.
(f) Litigation; Labor Matters; Compliance with Laws.
(i) There is no suit, action or proceeding or investigation
pending or, to the knowledge of the Company, threatened against or
affecting the
Company or any basis for any such suit, action, proceeding or
investigation
that, individually or in the aggregate, could reasonably be
expected to have a
material adverse effect with respect to the Company or prevent,
hinder or
materially delay the ability of the Company to consummate the
transactions
contemplated by this Agreement, nor is there any judgment, decree,
injunction,
rule or order of any Governmental Entity or arbitrator outstanding
against the
Company having, or which, insofar as reasonably could be foreseen
by the
Company, in the future could have, any such effect, with the
exception of
pending litigation with Rosseau Limited Partners as disclosed in
the Company's
audited financial statements.
(ii) The Company is not a party to, or bound by, any
collective bargaining agreement, contract or other agreement or
understanding
with a labor union or labor organization, nor is it the subject of
any
proceeding asserting that it has committed an unfair labor practice
or seeking
to compel it to bargain with any labor organization as to wages or
conditions of
employment nor is there any strike, work stoppage or other labor
dispute
involving it pending or, to its knowledge, threatened, any of which
could have a
material adverse effect with respect to the Company.
(iii) The conduct of the business of the Company complies with
all statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees
or arbitration awards applicable thereto.
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(g) Benefit Plans. The
Company is not a party to any collective
bargaining agreement or any bonus, pension, profit sharing,
deferred
compensation, incentive compensation, stock ownership, stock
purchase, phantom
stock, retirement, vacation, severance, disability, death
benefit,
hospitalization, medical or other plan, arrangement or
understanding (whether or
not legally binding) under which the Company currently has an
obligation to
provide benefits to any current or former employee, officer or
director of the
Company (collectively, "Benefit Plans").
(h) Certain Employee Payments. The Company is not a party to
any
employment agreement which could result in the payment to any
current, former or
future director or employee of the Company of any money or other
property or
rights or accelerate or provide any other rights or benefits to any
such
employee or director as a result of the transactions contemplated
by this
Agreement, whether or not (i) such payment, acceleration or
provision would
constitute a "parachute payment" (within the meaning of Section
280G of the
Code), or (ii) some other subsequent action or event would be
required to cause
such payment, acceleration or provision to be triggered.
(i) Tax Returns and Tax Payments. The Company has timely filed all
Tax
Returns required to be filed by it, has paid all Taxes shown
thereon to be due
and has provided adequate reserves in its financial statements for
any Taxes
that have not been paid, whether or not shown as being due on any
returns. No
material claim for unpaid Taxes has been made or become a lien
against the
property of the Company or is being asserted against the Company,
no audit of
any Tax Return of the Company is being conducted by a tax
authority, and no
extension of the statute of limitations on the assessment of any
Taxes has been
granted by the Company and is currently in effect. As used herein,
"taxes" shall
mean all taxes of any kind, including, without limitation, those on
or measured
by or referred to as income, gross receipts, sales, use, ad
valorem, franchise,
profits, license, withholding, payroll, employment, excise,
severance, stamp,
occupation, premium value added, property or windfall profits
taxes, customs,
duties or similar fees,, assessments or charges of any kind
whatsoever, together
with any interest and any penalties, additions to tax or additional
amounts
imposed by any governmental authority, domestic or foreign. As used
herein, "Tax
Return" shall mean any return, report or statement required to be
filed with any
governmental authority with respect to Taxes.
(j) Environmental Matters. The Company is in compliance with
all
applicable Environmental Laws. "Environmental Laws" means all
applicable
federal, state and local statutes, rules, regulations, ordinances,
orders,
decrees and common law relating in any manner to contamination,
pollution or
protection of human health or the environment, and similar state
laws.
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(k) Material Contract Defaults. The Company is not, or has
not,
received any notice or has any knowledge that any other party is,
in default in
any respect under any Material Contract; and there has not occurred
any event
that with the lapse of time or the giving of notice or both would
constitute
such a material default. For purposes of this Agreement, a
Material Contract
means any contract, agreement or commitment that is effective as of
the Closing
Date to which the Company is a party (i) with expected receipts or
expenditures
in excess of $100,000, (ii) requiring the Company to indemnify any
person, (iii)
granting exclusive rights to any party, (iv) evidencing
indebtedness for
borrowed or loaned money in excess of $100,000 or more, including
guarantees of
such indebtedness, or (v) which, if breached by the Company in such
a manner
would (A) permit any other party to cancel or terminate the same
(with or
without notice of passage of time) or (B) provide a basis for any
other party to
claim money damages (either individually or in the aggregate with
all other such
claims under that contract) from the Company or (C) give rise to a
right of
acceleration of any material obligation or loss of any material
benefit under
any such contract, agreement or commitment.
(l) Properties. The
Company has good, clear and marketable title to
all the tangible properties and tangible assets reflected in the
latest balance
sheet as being owned by the Company or acquired after the date
thereof which
are, individually or in the aggregate, material to the Company's
business
(except properties sold or otherwise disposed of since the date
thereof in the
ordinary course of business), free and clear of all material
liens.
(m) Trademarks and Related Contracts. To the knowledge of the
Company:
(i) As used in this Agreement, the term "Trademarks" means
trademarks, service marks, trade names, Internet domain names,
designs, slogans,
and general intangibles of like nature; the term "Trade Secrets"
means
technology; trade secrets and other confidential information,
know-how,
proprietary processes, formulae, algorithms, models, and
methodologies; the term
"Intellectual Property" means patents, copyrights, Trademarks,
applications for
any of the foregoing, and Trade Secrets; the term "Company License
Agreements"
means any license agreements granting any right to use or practice
any rights
under any Intellectual Property
(ii) To the knowledge of the Company, none of the Company's
Intellectual Property, Software or Company License Agreements
infringe upon the
rights of any third party that may give rise to a cause of action
or claim
against the Company or its successors.
(n) Board Recommendation. The Board of Directors of the Company
has
unanimously determined that the terms of the Merger are fair to and
in the best
interests of the shareholders of the Company and recommended that
the holders of
the shares of Company Common Stock approve the Merger.
11
<PAGE>
(o) Required Company Vote. The affirmative vote of a majority of
the
shares of each of the Company Common Stock is the only vote of the
holders of
any class or series of the Company's securit
