Exhibit 2.1
AGREEMENT AND PLAN OF
MERGER
AGREEMENT AND PLAN OF MERGER
(“ Merger Agreement ”) made this 18th day
of May, 2006 by and among Cirracor, Inc., a Nevada corporation
(“ Cirracor ”), and Panda Ethanol, Inc.,
a Delaware corporation (the “ Company ”),
and Grove Panda Investments, LLC (“ Cirracor
Stockholder ”)
Recitals:
A. The respective Boards of Directors of Cirracor
and the Company have determined that a merger of the Company with
and into Cirracor (the “ Merger ”), with
Cirracor being the surviving corporation, upon the terms and
subject to the conditions set forth in this Merger 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 the shares of Common Stock of the Company (“
Company Stock ”) and the shares of Common Stock
of Cirracor (“ Cirracor Stock ”) issued
and outstanding immediately prior to the Effective Time of the
Merger (as defined in Section 1.03), other than Dissenting
Shares (as defined in Section 2.01(c)), will be converted into
the number of shares of Common Stock of Public Company determined
by application of the applicable Exchange Ratios (defined
below).
B. Cirracor, the Cirracor Stockholder 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 Merger 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 Merger Agreement, and in accordance
with the Delaware General Corporation Law and the Nevada General
Corporation Law (each, a “ Merger Statute
” and, collectively, the “ Merger
Statutes ”) which shall govern the merger
contemplated hereby, the Company shall be merged with and into
Cirracor at the Effective Time of the Merger. At the Effective Time
of the Merger, the separate existence of the Company shall cease,
and Cirracor shall continue as the surviving corporation
(hereinafter sometimes referred to as the “ Public
Company ”) under the name Panda Ethanol, Inc. and
assume all liabilities of the Company.
1.02 Closing
. Unless this Merger Agreement shall
have been terminated and the transactions herein contemplated shall
have been abandoned pursuant to Section 7.01 and
subject
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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.
central time 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 offices of Haynes and Boone, LLP, 901 Main St.,
Suite 3100, Dallas, Texas 75202, 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 ”) in the form
attached hereto as Exhibit A , to which shall be attached
the Amended and Restated Articles of Incorporation of Public
Company, reflecting the name change to Panda Ethanol, Inc., in
substantially the form included as the second page of
Exhibit A , executed in accordance with the relevant
provisions of the Nevada Merger Statute, and shall make all other
filings or recordings required under the Merger Statutes. The
Merger shall become effective at such time as the Articles of
Merger are duly filed with the Secretary of State of Nevada and the
certificate of merger (the “ Certificate of
Merger ”) is duly filed with the Secretary of State
of Delaware, or at such other time as Cirracor and the Company
shall agree should be specified in the Articles of Merger and the
Certificate of Merger (the time the Merger becomes effective being
the “ Effective Time of the Merger ”).
Cirracor and the Company 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
the Delaware General Corporation Law and Nevada General Corporation
Law.
1.05 Articles of
Incorporation; Bylaws; Purposes .
(a) The Articles of Incorporation of
the Public Company shall be the Amended and Restated Articles of
Incorporation attached to the Articles of Merger until thereafter
changed or amended as provided therein or by applicable
law.
(b) The Bylaws of the Public Company
shall be the Bylaws attached hereto as Exhibit B until
thereafter changed or amended as provided therein or by applicable
law.
(c) The purposes of the Public
Company and the total number of its authorized capital stock shall
be as set forth in its Articles of Incorporation until such time as
such purposes and such number may be amended as provided in the
Articles of Incorporation of the Public Company and by applicable
law.
1.06 Directors
. The directors of the Company at
the Effective Time of the Merger shall be the directors of the
Public Company, 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
Public Company, until the earlier of their resignation or removal
or until their respective successors are duly elected and
qualified, as the case may be.
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 Stock or
of Cirracor Stock:
(a) Stock of Cirracor .
Provided that, immediately prior to the Effective Time of the
Merger, Cirracor shall have effected a reverse stock split whereby
each share of Cirracor Stock outstanding shall be converted into
0.340885 of a share of Cirracor Stock (the “ Reverse
Stock Split ”), each share of Cirracor Stock issued
and outstanding immediately prior to the Effective Time of the
Merger shall remain one share of Public Company Stock (“
Cirracor Exchange Ratio ”) amounting in the
aggregate to 1,200,000 shares, and all such shares taken together
shall represent four percent (4%) of the issued and
outstanding Public Company Stock. Certificates representing shares
of Public Company Stock shall be issued in exchange for
certificates representing that number of shares of Cirracor Stock
as is determined by multiplying a share of Cirracor Stock by the
Cirracor Exchange Ratio.
(b) Conversion of Company
Stock . Except as otherwise provided herein, each issued and
outstanding share of Company Stock shall be converted into one
share of Public Company Stock (“ Company Exchange
Ratio ”). Certificates representing shares of Public
Company Stock shall be issued in exchange for certificates
representing the number of shares of Company Stock, on a
one-for-one basis.
(c) Dissenting Shares .
Notwithstanding anything in this Merger Agreement to the contrary,
shares of Company Stock or Cirracor 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 Merger 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 parties shall give prompt notice
to Cirracor and the Company of any demands received by either party
for appraisal of shares of Common Stock, and Cirracor and the
Company shall have the right to participate in all negotiations and
proceedings with respect to such demands. The parties shall not,
except with the prior written consent of each other, make any
payment with respect to, or settle or offer to settle, any such
demands.
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(d) Cancellation and Retirement
of Company . As of the Effective Time of the Merger, all shares
of Company 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 Stock shall cease to have any rights with respect
thereto, except the right to receive certificates representing the
applicable merger consideration to be issued in consideration
therefore upon surrender of such certificates and the right of
holders of Dissenting Shares to receive payment for their
Dissenting Shares.
2.02 Exchange Ratio
. The “Exchange
Ratio” is defined as follows: The Exchange Ratio with respect
to the Cirracor Stock is set forth in Section 2.01(a) and is
referred to as the Cirracor Exchange Ratio. The Exchange Ratio with
respect to the Company Stock is set forth in Section 2.01(b)
and is referred to as the Company Exchange Ratio.
2.03 Pre-Merger Increase in
Issued and Outstanding Shares of Company Capital
Stock . Prior to the
Closing, Cirracor agrees that the Company may issue and sell to
institutional or accredited investors up to approximately
$110,815,000 of Common Stock at a price of $8.83 per share. The
parties also agree that, effective as of immediately after the
Effective Time of the Merger and for a period of twenty-four
(24) months thereafter, no more than fifteen percent
(15%) of the shares outstanding as of the Effective Time of
the Merger shall be reserved for grant or issuance under any stock
option plans.
2.04 Surrender of
Certificates .
(a) Exchange Agent . As of
the Effective Time of the Merger, the Public Company shall deposit
with such bank or trust company as may be designated by the Company
and reasonably acceptable to Cirracor (the “ Exchange
Agent ”), for the benefit of the holders of shares of
Cirracor Stock and Company Stock, for exchange in accordance with
this Section 2.04, through the Exchange Agent, Public Company
Stock issuable pursuant to Section 2.01(a) and (b) in
exchange for outstanding shares of Cirracor Stock and Company
Stock. At the time of such deposit, the Public Company shall
irrevocably instruct the Exchange Agent to deliver the Public
Company Stock to Cirracor’s stockholders and Company’s
stockholders after the Effective Time of the Merger in accordance
with the procedures set forth in this Section 2.04, subject to
Sections 2.04 (f) and (g).
(b) Exchange Procedures . As
soon as reasonably practicable after the Effective Time of the
Merger, the Exchange Agent shall mail to each holder of record of
Cirracor Stock and Company Stock, a letter of transmittal, with
instructions for use in surrendering the Cirracor Stock for Public
Company Stock pursuant to the Cirracor Exchange Ratio and
surrendering the Company Stock for Public Company Stock pursuant to
the Company Exchange Ratio. Upon surrender of a certificate
representing Cirracor Stock or Company Stock for cancellation to
the Exchange Agent, together with such letter of transmittal, duly
completed and validly executed, and such other documents as may
reasonably be required by the Exchange Agent, the holder of such
certificate of Cirracor Stock or Company Stock shall be entitled to
receive in exchange therefor that number of whole shares of Public
Company Stock in accordance with the Cirracor Exchange Ratio or the
Company Exchange Ratio, as applicable,
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and the certificate of Cirracor Stock or Company
Stock so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Cirracor Stock or Company Stock that is
not registered in the transfer records of Cirracor or the Company,
a certificate evidencing the proper number of shares of Public
Company may be issued in exchange therefor to a person other than
the person in whose name the certificate so surrendered is
registered if such certificate shall be properly endorsed or
otherwise be in proper form for transfer and the person requesting
such issuance shall pay any transfer or other taxes required by
reason of the issuance of shares of Public Company Stock to a
person other than the registered holder of such certificate or
establish to the satisfaction of Public Company that such tax has
been paid or is not applicable. Until surrendered as contemplated
by this Section 2.04(b), each certificate of Cirracor Stock
and Company Stock shall be deemed at any time after the Effective
Time of the Merger to represent only the right to receive upon such
surrender Public Company Stock pursuant to the Cirracor Exchange
Ratio or the Company Exchange Ratio, plus certain dividends or
other distributions in accordance with
Section 2.04(c).
(c) Distributions with Respect to
Unexchanged Shares . No dividends or other distributions
declared or made with respect to shares of Public Company Stock
with a record date after the Effective Time of the Merger shall be
paid to the holder of any unsurrendered certificate with respect to
Cirracor Stock or Company Stock represented thereby, if any, and
all such dividends and other distributions shall be paid by the
Public Company to the Exchange Agent, until the surrender of such
certificate in accordance herewith. Subject to the effect of
applicable escheat or similar laws, following surrender of any such
certificate there shall be paid to the holder of whole Public
Company Shares issued in exchange therefor, without interest,
(i) at the time of such surrender, the amount of dividends or
other distributions with a record date after the Effective Time of
the Merger theretofore paid with respect to such whole Public
Company Shares and (ii) at the appropriate payment date, the
amount of dividends or other distributions with a record date after
the Effective Time of the Merger but prior to such surrender and
with a payment date subsequent to such surrender payable with
respect to such whole Public Company Shares.
(d) No Further Ownership
Rights . All certificates evidencing Public Company Stock
issued (including any dividends or other distributions paid
pursuant to Section 2.04(c)) shall be deemed to have been
issued and paid in full satisfaction of all rights pertaining to
the shares of Cirracor Stock or Company Stock, as applicable,
formerly represented by such certificates. At the close of business
on the day on which the Effective Time of the Merger occurs, the
stock transfer books of Cirracor and the Company shall be closed,
and there shall be no further registration of transfers on the
stock transfer books of the Cirracor or the Company of the shares
of Cirracor Stock or Company Stock, as applicable, that were
outstanding immediately prior to the Effective Time of the Merger.
If, after the Effective Time of the Merger, certificates of
Cirracor Stock or Company Stock are presented to the Public Company
or the Exchange Agent for transfer or any other reason, they shall
be canceled and exchanged as provided herewith.
(e) Fractional Shares . No
fractional shares of Public Company Stock shall be issued in the
Merger. The aggregate merger consideration to be issued to the
holder of a certificate previously evidencing Cirracor Stock or
Company Stock shall be rounded up to the nearest whole share of
Public Company Stock.
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(f) Termination of Exchange of
Shares . Any portion of the Cirracor Stock or Company Stock
(and any dividends or distributions thereon) that remain
undistributed to the holders of the certificates for six months
after the Effective Time of the Merger shall be delivered to the
Public Company, upon demand, and any holders of the certificates
who have not theretofore complied with this Article II shall
thereafter look only to the Public Company for, and, subject to
Section 2.04(g), the Public Company shall remain liable for
payment of their claim for Public Company Stock pursuant to the
Cirracor Exchange Ratio or the Company Exchange Ratio, as
applicable, certain dividends and other distributions in accordance
with Section 2.05(c).
(g) No Liability .
Notwithstanding anything to the contrary in this Section 2.04, none
of the Exchange Agent, the Public Company or any party to this
Merger Agreement shall be liable to a holder of Cirracor Stock or
Company Stock for any amount properly paid to a public official
pursuant to any applicable abandoned property, escheat or similar
law.
(h) Lost, Stolen or Destroyed
Company Certificate . In the event any certificates of Cirracor
Stock or Company Stock shall have been lost, stolen or destroyed,
the Exchange Agent shall issue in exchange for such lost, stolen or
destroyed certificate, upon the making of an affidavit and
indemnity of that fact by the holder thereof in a form that is
reasonably acceptable to the Exchange Agent, the number of Public
Company Stock as required pursuant to the Cirracor Exchange Ratio
or the Company Exchange Ratio, as applicable; provided, however,
that the Public Company may, in its reasonably commercial
discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, stolen or destroyed certificates to
deliver a bond in such sum as it may reasonably direct against any
claim that may be made against the Public Company or the Exchange
Agent with respect to the certificates alleged to have been lost,
stolen or destroyed.
ARTICLE III
Representations and
Warranties
3.01 Representations and
Warranties of the Company . Except as set forth in the disclosure schedule
delivered to Cirracor and the Cirracor Stockholder by the Company
at the time of the execution of this Merger Agreement (the “
Company Disclosure Schedule ”), or a certain
schedule included in the Company Disclosure Schedule, as of the
date of this Merger Agreement and as of the Closing Date, the
Company represents and warrants to Cirracor and the Cirracor
Stockholder as follows:
(a) Organization, Standing and
Corporate Power . The Company is duly organized, validly
existing and in good standing under the laws of the State of
Delaware 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
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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. Panda Hereford Ethanol L.P. (“
Panda Hereford ”) is a Company Subsidiary and
is duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the requisite partnership
power and authority to carry on its business as now being
conducted. Panda Hereford 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. Attached as Schedule 3.01(a) of the
Company Disclosure Schedule are complete and correct copies of the
Certificate of Incorporation and Bylaws of the Company.
(b) Subsidiaries . The only
direct or indirect subsidiaries of the Company (each, a “
Company Subsidiary ” and, collectively, the
“ Company Subsidiaries ”) are listed in
Schedule 3.01(b) of the Company Disclosure Schedule. All the
outstanding shares of capital stock of each such Company Subsidiary
which is a corporation have been validly issued and are fully paid
and nonassessable and, except as set forth in
Schedule 3.01(b) of the Company Disclosure Schedule,
all ownership interests in Company Subsidiaries are owned (of
record and beneficially) by the Company, free and clear of all
Liens. Except for the capital stock, limited liability company
interests or partnership interests of the Company 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.
(c) Capital Structure . The
authorized capital stock of the Company is as set forth in the Cap
Table attached hereto as Exhibit C . Except as set forth in
Exhibit C , as of the date hereof no shares of capital stock
or other equity securities of the Company are issued, reserved for
issuance or outstanding. 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. Except
as set forth in Exhibit C , 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.
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. Except as set forth on Schedule
3.01(c) of the Company Disclosure Schedule, there are no
agreements or arrangements pursuant to which the Company is or
could be required to register shares of Company 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.
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(d) Authority;
Noncontravention . The Company has the requisite corporate and
other power and authority to enter into this Merger Agreement and
to consummate the Merger. Subject to obtaining Company Stockholder
Approval (as defined in Section 3.01(m)), the execution and
delivery of this Merger 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 Merger 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, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles
of equity, regardless of whether considered in a proceeding in
equity or at law. The execution and delivery of this Merger
Agreement do not, and the consummation of the transactions
contemplated by this Merger 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 Certificate 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 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 Merger Agreement by the Company or the
consummation by the Company of the transactions contemplated
hereby, except, with respect to this Merger Agreement, for the
filing of the Certificate of Merger with the Secretary of State of
Delaware by the Company and the filing of the Articles of Merger
with the Secretary of State of Nevada by Cirracor, and except where
the failure to have such consent, approval, order or authorization
of, or registration, declaration or filing with, or notice to, any
Governmental Entity would not have a material adverse effect on the
Company.
(e) Absence of Certain Changes or
Events . Except as set forth on Schedule 3.01(e) of the
Company Disclosure Schedule, since December 31, 2005 with
respect to Panda Hereford, there is not and has not been:
(i) any material adverse change with respect to Panda
Hereford; (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 Panda Hereford; (iii) any event which,
if it had taken place following the execution of this Merger
Agreement, would not have been permitted by Section 4.01
without prior consent of Cirracor; 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 Merger Agreement. The Company
was formed on May 1, 2006.
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(f) Litigation; Labor Matters;
Compliance with Laws .
(i) There is no suit, action or
proceeding or investigation pending or, to the best of the
Company’s knowledge, threatened against or affecting the
Company or Panda Hereford that, individually or in the aggregate,
could reasonably be expected to have a material adverse effect with
respect to the Company or Panda Hereford or prevent, hinder or
materially delay the ability of the Company to consummate the
transactions contemplated by this Merger Agreement, nor is there
any judgment, decree, injunction, rule or order of any Governmental
Entity or arbitrator outstanding against the Company or Panda
Hereford having, or which, insofar as reasonably could be foreseen
by the Company, in the future could have, any such
effect.
(ii) Neither the Company nor Panda
Hereford is 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 the
best of its knowledge, threatened, any of which could have a
material adverse effect with respect to the Company or Panda
Hereford.
(iii) The conduct of the business of
the Company and Panda Hereford complies in all material respects
with all statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees or arbitration awards applicable thereto that,
individually or in the aggregate, are material to the conduct of
the Company’s or Panda Hereford’s business, as
applicable.
(g) Tax Returns and Tax
Payments . Each of the Company and Panda Hereford have timely
filed or timely filed an extension for all Tax Returns required to
be filed by it, has paid all Taxes shown thereon to be due and, to
the best of the Company’s knowledge, 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 Panda Hereford or is being
asserted against the Company or Panda Hereford, no audit of any Tax
Return of the Company or Panda Hereford 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 or Panda
Hereford 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.
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(h) Environmental Matters .
To its knowledge, except for noncompliance that would not
reasonably be expected to have a material adverse effect on the
Company or Panda Hereford, the Company and Panda Hereford are in
compliance with all applicable Environmental Laws.
“Environmental Laws” means all applicable federal,
state and local statutes, rules, regulations, ordinances, orders,
and decrees relating to the protection of the public health,
welfare, and environment including, without limitation, those
relating to the storage, handling, and use of chemicals and other
hazardous materials (including without limitation petroleum or any
fraction thereof) or other materials regulated because of their
effect or potential effect on human health and the environment,
those relating to the Release, generation, processing, treatment,
storage, transportation, investigation, removal, remediation or
other management of waste materials of any kind, and those relating
to the protection of environmentally sensitive areas. “
Release ” shall mean release, disposal,
spilling, leaking, migration, pouring, emission, emptying,
discharge, injection, escape, transmission, leaching, or
dumping.
(i) Material Contracts . The
Company has provided or made available to Cirracor copies of all
material contracts, agreements, commitments, arrangements, leases,
policies or other instruments to which it or Panda Hereford is a
party or by which it or Panda Hereford is bound (“
Material Contracts ”) all of which are listed
on Schedule 3.01(i) of the Company Disclosure Schedule.
Neither the Company nor Panda Hereford is , nor have either of them
received any notice or has any knowledge that any other party is,
in default in any respect under any Material Contract; and, to the
best of the Company’s knowledge, 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
Merger Agreement, a Material Contract means any contract, agreement
or commitment 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, or
(iv) evidencing indebtedness for borrowed or loaned money in
excess of $100,000 or more, including guarantees of such
indebtedness.
(j) Properties . Each of the
Company and Panda Hereford has good title to all the tangible
properties and tangible assets reflected in the latest balance
sheet of the Company or Panda Hereford as being owned by the
Company or Panda Hereford or acquired after the date thereof which
are, individually or in the aggregate, material to the
Company’s business or Panda Hereford’s business (except
properties sold or otherwise disposed of since the date thereof in
the ordinary course of business), free and clear of all
liens.
(k) Patents and Trademarks .
The Company and Panda Hereford have, or have rights to use, all
patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights
necessary or material for use in connection with their respective
businesses and which the failure to so have could have a material
adverse effect (collectively, the “ Intellectual
Property Rights ”). Neither the Company nor Panda
Hereford has received notice (written or otherwise) that the
Intellectual Property Rights used by the Company or Panda Hereford
violates or infringes upon the rights of any person. To the
knowledge of the Company, all such Intellectual Property Rights are
enforceable and there is no existing infringement by another person
of any of the Intellectual Property Rights. The Company and Panda
Hereford have taken reasonable security measures to protect the
secrecy, confidentiality and value of all of the Intellectual
Property Rights, except where failure to do so could not,
individually or in the aggregate, reasonably be expected to have a
material adverse effect.
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(l) 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 stockholders of the Company and has recommended that the
holders of the shares of Company Stock approve the
Merger.
(m) Required Company Stockholder
Approval. The affirmative vote or consent of a majority of the
issued and outstanding shares of the Company Stock is the only vote
or consent of the holders of any class of the Company’s
securities necessary to approve the Merger (the “
Company Stockholder Approval ”).
3.02 Representations and
Warranties of Cirracor and the Cirracor Stockholder
. Cirracor and the Cirracor
Stockholder solely as to its status as set forth in
Section 3.02(a), its authority as set forth in
Section 3.02(d) and its acquisition of Cirracor Stock as set
forth in Section 3.02(u) but not as to any matter pertaining
to Cirracor represent and warrant as of the date of this Merger
Agreement and as of the Closing Date to the Company as
follows:
(a) Organization, Standing and
Corporate Power . Cirracor is duly organized, validly existing
and in good standing under the laws of the State of Nevada, and has
the requisite corporate power and authority to carry on its
business as now being conducted. Cirracor 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 with respect to Cirracor.
Cirracor has delivered to the Company complete and correct copies
of its Articles of Incorporation and Bylaws and such Articles of
Incorporation (or other organization documents) and Bylaws of
Cirracor are included in Schedule 3.02(a) of the
disclosure statement delivered to the Company by Cirracor at the
time of the execution of this Merger Agreement (the “Cirracor
Disclosure Schedule”). The Cirracor Stockholder is duly
organized, validly existing and in good standing under the laws of
the State of Delaware as is applicable, and has the requisite
corporate power and authority to carry on its business as now being
conducted.
(b) Subsidiaries . The only
direct or indirect subsidiaries of Cirracor (each, a “
Cirracor Subsidiary ” and, collectively, the
“ Cirracor Subsidiaries ”) are listed in
Schedule 3.02(b) of the Cirracor Disclosure Schedule. All
the outstanding shares of capital stock of each such Cirracor
Subsidiary which is a corporation have been validly issued and are
fully paid and nonassessable and, except as set forth in
Schedule 3.02(b) of the Cirracor Disclosure Schedule,
are owned (of record and beneficially) by Cirracor, free and clear
of all Liens. Except for the capital stock of its subsidiaries, all
of which are corporations, Cirracor does not own, directly or
indirectly, any capital stock or other ownership interest in any
corporation, partnership, business association, joint venture or
other entity.
(c) Capital Structure . As of
the date hereof, the authorized capital stock of Cirracor consists
of 50,000,000 shares of Cirracor Stock, $0.001 par value, of which
3,520,250
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shares of Cirracor Stock are issued and
outstanding. As of the date of this Merger Agreement, the Cirracor
Stockholder owns (and at Closing will own at least) 2,500,000
shares of Cirracor Stock which are and, after giving effect to the
Reverse Stock Split, at the Effective Time of the Merger will be
free and clear of all liens, claims and encumbrances. As of the
Effective Time of the Merger, the authorized capital stock of
Cirracor Common Stock shall consist of 50,000,000 shares of
Cirracor Stock, $0.001 par value, of which 1,200,000 shares of
Cirracor Stock shall be issued and outstanding. No shares of
Cirracor Stock are or shall be issuable upon the exercise of
outstanding warrants, convertible notes and options, and no shares
of Cirracor Stock are or shall be reserved for issuance pursuant to
Cirracor stock plans or any other plan, contract or obligation.
5,000,000 shares of Cirracor Preferred Stock, $0.001 par value, are
authorized, none of which is or shall be issued and outstanding.
Except as set forth above, no shares of capital stock or other
equity securities of Cirracor or shall be issued, reserved for
issuance or outstanding. All outstanding shares of capital stock of
Cirracor are, and all shares which may be issued pursuant to this
Merger Agreement shall be, when issued, duly authorized, validly
issued, fully paid and nonassessable and, not subject to preemptive
rights, and issued in compliance with all applicable state and
federal laws concerning the issuance of securities. Except as set
forth in Schedule 3.02(c) of the Cirracor Disclosure
Schedule, there are no outstanding bonds, debentures, notes or
other indebtedness or other securities of Cirracor having the right
to vote (or convertible into, or exchangeable for, securities
having the right to vote) on any matters on which stockholders of
Cirracor may vote. Except as set forth above, there are no
outstanding securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind
to which Cirracor or any of its subsidiaries is a party or by which
any of them is bound obligating Cirracor or any its subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or other equity securities of
Cirracor or any of its subsidiaries or obligating Cirracor or any
of its subsidiaries to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or
other equity securities of Cirracor or any of its subsidiaries or
obligating Cirracor or any of its subsidiaries to issue, grant,
extend or enter into any such security, option, warrant, call,
right, commitment, agreement, arrangement or undertaking. There are
no outstanding contractual obligations, commitments, understandings
or arrangements of Cirracor or any of its subsidiaries to
repurchase, redeem or otherwise acquire or make any payment in
respect of any shares of capital stock of Cirracor or any of its
subsidiaries.
(d) Authority;
Noncontravention . Cirracor and the Cirracor Stockholder have
all requisite corporate authority to enter into this Merger
Agreement and to consummate the transactions contemplated by this
Merger Agreement. Subject to obtaining the Cirracor Stockholder
Approval (as defined in Section 3.02(y) with regard to
Cirracor, the execution and delivery of this Merger Agreement by
Cirracor and the Cirracor Stockholder and the consummation by
Cirracor and the Cirracor Stockholder of the transactions
contemplated by this Merger Agreement have been (or at Closing will
have been) duly authorized by all necessary corporate action on the
part of Cirracor or the Cirracor Stockholder. This Merger Agreement
has been duly executed and delivered by and constitutes a valid and
binding obligation of Cirracor and Cirracor Stockholder,
enforceable against Cirracor and Cirracor Stockholder, as
applicable, in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a
proceeding in equity or at law. The execution and
12
delivery of this Merger Agreement do not, and
the consummation of the transactions contemplated by this Merger
Agreement and compliance with the provisions of this Merger
Agreement 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 Cirracor or any of its subsidiaries or the Cirracor
Stockholder under, (i) the Articles of Incorporation or bylaws
of Cirracor or the comparable charter or organizational documents
of any Cirracor Subsidiary or the Cirracor Stockholder,
(ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit,
concession, franchise or license applicable to Cirracor, any
Cirracor Subsidiary, the Cirracor Stockholder or their respective
properties or assets, or (iii) subject to the governmental
filings and other matters referred to in the following sentence,
any judgment, order, decree, statute, law, ordinance, rule,
regulation or arbitration award applicable to Cirracor, any
Cirracor Subsidiary, Cirracor Stockholder or their respective
properties or assets, other than, in the case of clauses
(ii) and (iii), any such conflicts, breaches, violations,
defaults, rights, losses or liens that individually or in the
aggregate could not have a material adverse effect with respect to
Cirracor or the Cirracor Stockholder or could not prevent, hinder
or materially delay the ability of Cirracor or the Cirracor
Stockholder to consummate the transactions contemplated by this
Merger Agreement. No consent, approval, order or authorization of,
or registration, declaration or filing with, or notice to, any
Governmental Entity is required by or with respect to Cirracor, any
other Cirracor Subsidiary or the Cirracor Stockholder in connection
with the execution and delivery of this Merger Agreement by
Cirracor or the Cirracor Stockholder or the consummation by
Cirracor or the Cirracor Stockholder of any of the transactions
contemplated by this Merger Agreement, except for the filing of the
Articles of Merger with the Secretary of State of Nevada by
Cirracor and the filing of the Certificate of Merger with the
Secretary of State of Delaware by the Company and such other
consents, approvals, orders, authorizations, registrations,
declarations, filings or notices as may be required under the
“blue sky” laws of various states and except where the
failure to have such consent, approval, order or authorization of,
or registration, declaration or filing with, or notice to, any
Governmental Entity would not have a material adverse effect on
Cirracor or the Cirracor Stockholder.
(e) S.E.C. Documents; Undisclosed
Liabilities . Except as set forth on Schedule 3.02(e) of
the Cirracor Disclosure Schedule, Cirracor has timely filed all
reports, schedules, forms, statements and other documents as
required by the Securities and Exchange Commission (the “
S.E.C. ”) and Cirracor has delivered or made
available to the Company all reports, schedules, forms, statements
and other documents filed with the S.E.C. (collectively, and in
each case including all exhibits and schedules thereto and
documents incorporated by reference therein, the “
Cirracor S.E.C. Documents ”). As of their
respective dates, the Cirracor S.E.C. Documents complied in all
material respects with the requirements of the Securities Act or
the Securities Exchange Act of 1934 (the “Exchange
Act”), as the case may be, and the rules and regulations of
the S.E.C. promulgated thereunder applicable to such Cirracor
S.E.C. Documents, and none of the Cirracor S.E.C. Documents
(including any and all consolidated financial statements included
therein) as of such date contained any untrue statement of a
material fact or
