EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
BIOMEDICAL TECHNOLOGY SOLUTIONS, INC.
AND
CET SERVICES, INC.
AND
CET ACQUISITION CORP.
DATED AS OF May 8, 2008
AGREEMENT AND PLAN OF MERGER
THIS
AGREEMENT AND PLAN OF MERGER (the "Agreement") is made and
entered
into this 8th day of May, 2008, by and among BIOMEDICAL TECHNOLOGY
SOLUTIONS,
INC., a Colorado corporation ("BMTS"); CET SERVICES, INC., a
California
corporation ("CET"); and CET ACQUISITION CORP., a Colorado
subsidiary of CET
("CETAC"). BMTS, CET
and CETAC are hereinafter sometimes individually
referred to as a "party" and collectively as the "parties".
WITNESETH:
WHEREAS, BMTS is engaged in the business of developing, marketing
and
distributing infectious waste mitigation systems; and
WHEREAS, CET will be on the Effective Date, as hereinafter defined,
the
owner of 100% (the "Shares") of the issued and outstanding Common
Stock of
CETAC, $.0001 par value per share, representing all the issued
and
outstanding shares of the capital stock of CETAC;
WHEREAS, for federal income tax purposes, the merger of CETAC with
and
into BMTS is intended to qualify as a tax-free reorganization
pursuant to
Section 368(a)(2)(E) of the Internal Revenue Code of 1986,a as
amended (the
"Code"); and
WHEREAS, the parties hereto desire to set forth certain
representations,
warranties and covenants under which a merger of CETAC and BMTS
will occur.
NOW,
THEREFORE, for and in consideration of the premises, the mutual
representations, warranties and covenants herein contained and
other good and
valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged, the parties hereby covenant and agree as follows:
SECTION 1: GENERAL DEFINITIONS
For
purposes of this Agreement, the following terms shall have the
respective meanings set forth below:
1.1
Affiliate.
"Affiliate" of any
Person shall mean any Person
Controlling, Controlled by or under common Control with such
Person.
1.2
Agreement.
"Agreement"
shall include this Agreement and any and
all documents and instruments executed in connection with the
Merger (as
hereinafter defined).
1.3
Best Knowledge.
"Best Knowledge" shall
mean both what a Person
knew as well as what the Person should have known had the Person
exercised
reasonable diligence. When used with respect to a Person other than
a natural
person, the term "Best Knowledge" shall include matters that are
known to the
directors and officers of the Person.
1.4
Control. "Control" and all derivations
thereof shall mean the
ability to either (i) vote (or direct the vote of) 50% or more of
the voting
interests in any Person or (ii) direct the affairs of another,
whether
through voting power, contract or otherwise.
1.5
Exchange Act.
"Exchange Act" shall
mean the Securities Exchange
Act of 1934, as amended.
1.6
Fiscal Year.
"Fiscal Year" shall
mean a twelve-month period
beginning January 1;
1.7
Governmental
Authority. "Governmental Authority "shall mean any and
all applicable foreign, federal, state or local governments,
governmental
institutions, public authorities and governmental entities of any
nature
whatsoever, and any subdivisions or instrumentalities thereof,
including, but
not limited to, departments, boards, bureaus, commissions,
agencies, courts,
administrations and panels, and any division or instrumentalities
thereof,
whether permanent or ad hoc and whether now or hereafter
constituted or
existing.
1.8
Governmental
Requirement.
"Governmental Requirement" shall mean
any and all applicable laws (including, but not limited to,
applicable common
law principles), statutes, ordinances, codes, rules
regulations,
interpretations, guidelines, directions, orders, judgments,
writs,
injunctions, decrees, decisions or similar items or
pronouncements,
promulgated, issued, passed or set forth by any Governmental
Authority.
1.9
Legal Requirements.
"Legal Requirements"
means applicable common
law and any applicable statute, ordinance, code or other laws, rule,
regulation, order,
technical or other standard, requirement,
judgment,
or procedure enacted, adopted, promulgated, applied or followed by
any
Governmental Authority, including, without limitation, any order,
decree,
award, verdict, findings of fact, conclusions of law, decision or
judgment,
whether or not final or appealable, of any court, arbitrator,
arbitration
board or administrative agency.
1.10
Net Worth.
"Net Worth" shall mean
the assets of a Person minus
the liabilities of the Person, as of a given date as determined in
accordance
with generally accepted accounting principles, consistently applied
with
prior periods.
1.11
Person. "Person" shall mean any natural
person, any Governmental
Authority and any entity the separate existence of which is
recognized by any
Governmental Authority or Governmental Requirement, including, but
not
limited to, corporations, partnerships, joint ventures, joint
stock
companies, trusts, estates, companies and associations, whether
organized for
profit or otherwise.
1.12
Exhibit. Unless otherwise stated
herein, the term "Exhibit" when
used in this Agreement shall refer to the Exhibits to this
Agreement. The
Exhibits to this Agreement may be attached to this Agreement or may
be set
forth in a separate document denoted as the Exhibits to this
Agreement, or
both, and such Exhibits are incorporated herein by reference for
all
purposes.
1.13
Unless otherwise
stated herein, the term "Disclosure Schedule"
means the Disclosure Schedule attached hereto, dated as of the date
hereof,
and forming a part of this Agreement.
1.14
Section. Unless otherwise stated
herein, the term "Section" when
used in this Agreement shall refer to the Sections of this
Agreement.
1.15
Securities Act.
"Securities Act" shall
mean the Securities Act of
1933, as amended.
1.16
Taxes. "Tax" and
"Taxes" shall mean any and all income, excise,
franchise or other taxes and all other charges or fees imposed or
collected
by any Governmental Authority or pursuant to any Governmental
Requirement,
and shall also include any and all penalties, interest,
deficiencies,
assessments and other charges with respect thereto.
SECTION 2: THE MERGER
2.1
The Merger.
Subject to the terms
and conditions of this Agreement,
at the Effective Time (as defined in Section 2.3 herein). CETAC
shall be
merged (the "Merger") with and into BMTS upon the terms and
conditions set
forth herein as permitted by and in accordance with the Colorado
Business
Corporation Act (the "CBCA"). Thereupon, the separate existence of
CETAC
shall cease, and BMTS, as the surviving corporation in the Merger
(the
"Surviving Corporation"), shall continue to exist under and be
governed by
the CBCA, with all its purposes, objects, rights, privileges,
immunities,
powers and franchises continuing unaffected and unimpaired by the
Merger. The
name of the Surviving Corporation shall be "BioMedical Technology
Solutions,
Inc."
2.2
Filing. As soon as practicable following
fulfillment or waiver of
the conditions specified in Sections 8.2 and 8.3 hereof, and
provided that
this Agreement has not been terminated pursuant to Section 12
hereof, CETAC
and BMTS will cause a short form Agreement and Plan of Merger, in
the form
attached hereto as Exhibit 2.2, to be executed, acknowledged and
filed with
the Secretary of State of Colorado as provided in applicable
provisions of
the CBCA and obtain a copy of the Articles of Merger, certified by
the
Secretary of State of the State of Colorado.
2.3
Effective Time of the
Merger. The Merger shall become effective
immediately upon the filing of the Articles of Merger with the
Secretary of
State of the State of Colorado in accordance with the CBCA..
The date and
time of the completion of such filings is herein sometimes referred
to as the
"Effective Time".
2.4
Closing: Closing Date.
Subject to the terms
and conditions set
forth in the Agreement, the consummation of the transactions
referenced above
shall take place (the "Closing") on June 30, 2008, at 10:00 a.m.
Mountain
Daylight Savings Time at the offices of Clifford L. Neuman, PC;
1507 Pine
Street, Boulder, CO
80302, or within five business days following the
satisfaction or waiver of all conditions precedent to such Closing,
if
earlier, or at such other time, date and place as BMTS and CETAC
shall
designate (the "Closing Date").
SECTION 3: APPROVALS AND REGULATORY MATTERS
3.1
CET Board of Directors
Approvals. Subject to
the provisions
hereof, the Board of Directors of CET shall, by written unanimous
consent,
approve the Merger and the transactions provided for or
contemplated by this
Agreement; provided, however, that such approvals shall be subject
to their
satisfaction that the consummation of the Merger shall be and is
exempt from
the registration requirements of the Securities Act, is undertaken
without
violation of the anti-fraud provisions of the Securities Act and
has been
consummated in conformity with all other applicable Legal
Requirements.
3.2
CET Shareholder
Approval. Subject to
the provisions hereof, CET
shall, as promptly as practicable and in accordance with its
charter
documents and applicable Legal Requirements, call and hold a
special meeting
of the Shareholders of CET for the purpose of voting upon the
approval of the
Merger and the following ancillary transactions ("Ancillary
Transactions")
provided for or contemplated by this Agreement:
a. The Reverse Stock
Split (Section 4.4);
b. The increase in
authorized capital of CET (Section 4.5);
c. The Equity
Incentive Plan (Section 4.4);
d. The Redomestication
of CET to the State of Colorado (Section
4.6); and,
e. CET's change of
corporate name to "BioMedical Technology
Solutions, Inc." (Section 4.5).
CET
shall use its best efforts to obtain from its shareholders
sufficient proxies in favor of the approval of the Merger and the
Ancillary
Transactions. Subject
to the applicable fiduciary duties of CET's directors,
as determined by such directors in good faith after consultation
with and
based upon the advice of legal counsel, CET shall take all other
action
necessary or advisable to secure the vote or consent of
stockholders required
by the applicable Law to obtain such approvals, including,
without
limitation, if required, the inclusion of the recommendation of its
Board of
Directors that its shareholders vote in favor of the approval and
adoption of
this Agreement and the transactions related hereto.
CET
shall exercise reasonable efforts to take all action necessary
or
appropriate to prepare a Proxy Statement and other documents
necessary to
effect the Merger and the Ancillary Transactions under applicable provisions
of the California Corporation Code ("CCC") and shall file a Proxy
Statement
on Schedule 14A with the Securities and Exchange Commission
(the
"Commission") and shall cause same to be mailed same to the CET
shareholders
of record in conformity with rules and regulations governing the
solicitation
of proxies under Section 14 of the Exchange Act and other
applicable legal
requirements.
3.3
BMTS Board of
Directors Approval.
Subject to the provisions
hereof, the Board of Directors of BMTS shall, by written unanimous
consent,
approve the Merger and the transactions provided for or
contemplated by this
Agreement; provided, however, that such approvals shall be subject
to their
satisfaction that the consummation of the Merger shall be and is
exempt from
the registration requirements of the Securities Act, is undertaken
without
violation of the anti-fraud provisions of the Securities Act and
has been
consummated in conformity with all other applicable Legal
Requirements.
3.4
BMTS Shareholder
Approval. As promptly
as practicable after the
date hereof, BMTS shall exercise reasonable efforts to take all
action
necessary or appropriate to prepare an Information Statement and
other
documents necessary to solicit and obtain the approval of the
Merger and the
other transactions provided for or contemplated by this Agreement
of all BMTS
shareholders (the "BMTS Shareholders").
3.5
Income Tax
Considerations. It is
the intention of the parties
hereto that the Merger provided for in this Agreement will qualify
for
treatment as a tax-free reorganization under Section 368(a)(2)(E)
of the Code
and the parties will agree to undertake all appropriate actions
necessary
both before and after the Effective Date of the Merger to effect
such
treatment.
Notwithstanding the foregoing, neither CET nor any of its
affiliates shall have any liability whatsoever to BMTS or the
BMTS
shareholders for the treatment ultimately accorded the Merger by
federal or
state taxing and regulatory authorities; and BMTS shall bear
all
responsibility for any tax or other assessment levied, imposed or
assessed by
any regulatory or governmental authority on BMTS by virtue of
the
consummation of the Merger and the other transactions provided for
in this
Agreement. The BMTS
shareholders shall bear all responsibility for any tax
or other assessment levied, imposed or assessed by any regulatory
or
governmental authority on the BMTS Shareholders by virtue of the
consummation
of the Merger or other transactions provided for in this
Agreement.
3.6
Compliance with
Securities Laws. The
Merger provided for in this
Agreement shall be undertaken in reliance upon an exemption from
the
registration requirements contained in Section 5 of the Securities
Act and
set forth in Section 4(2) of the Securities Act and Regulation D
thereunder.
All shares issued to the BMTS shareholders in connection with the
Merger
shall be "restricted securities" within the meaning of Rule 144
under the
Securities Act.
3.7
Restrictive Legend.
Certificates
representing the shares of CET
common stock issued in connection with the Merger shall be
"restricted
securities" under the Securities Act and shall bear the following
restrictive
legend:
The
shares represented by this certificate have not been registered
under the Securities Act of 1933 ("the Act") and are "restricted
securities"
as that term is defined in Rule 144 under the Act. The shares may not be
offered for sale, sold or otherwise transferred except pursuant to
an
effective registration statement under the Act, or pursuant to an
exemption
from registration under the Act, the availability of which is to
be
established to the satisfaction of the Company.
3.8
Dissenter Rights. At
all times, and as applicable, CET and BMTS
shall comply with applicable Legal Requirements including,
without
limitation, the payment of cash for dissenting shares related to
the Merger.
SECTION 4. ADDITIONAL AGREEMENTS
4.1
BMTS Financial
Statements. As
promptly as practicable after the
date hereof, BMTS
shall use best efforts
to cause to be prepared audited
balance sheets, income statements, statements of cash flows and
stockholders'
equity as of and for the two year period ended December 31, 2007
(the "BMTS
Financial Statements"). The BMTS Financial Statements
(including any related
schedules and/or notes), will show all liabilities, direct or
contingent,
required at the time of preparation to be shown in accordance with
U.S.
generally accepted accounting principles ("GAAP") and fairly
present the
financial position and results of operations of BMTS as of the date
thereof
and for the periods indicated in accordance with GAAP, consistently
applied
with all prior periods. Except as otherwise disclosed in
the Agreement,
including, without limitation, Section 4.1 the Disclosure Schedule
hereof,
BMTS will have no material liability or obligation of any nature
(whether
liquidated, unliquidated, accrued, absolute, contingent or
otherwise, whether
due or to become due) except those set forth on the BMTS Financial
Statements
except liabilities incurred and current liabilities (determined in
accordance
with GAAP) incurred since the date of the BMTS Financial Statements
in the
ordinary course of business consistent with past practice.
The BMTS
Financial Statements shall conform in all respects to the
requirements of
Regulation S-X under the Securities Act and shall include, at a
minimum,
audited balance sheets as of December 31, 2007 and 2006, audited
statements
of operation and statements of cash flow for the two year period
ended
December 31, 2007 and audited statements of stockholders' equity at
December
31, 2007. The
Financial Statements to be prepared under this Section 4.1
shall also include pro forma financial information ("Pro Forma
Financial
Information") in accordance with the requirements of Regulation
S-X. All
costs and expenses incurred in connection with the preparation of
the BMTS
Financial Statements and the Pro Forma Financial Information,
including fees
and disbursements of the Auditor, shall be borne exclusively by
BMTS.
4.2
Pre-Closing
Capitalization. At or
prior to Closing, the parties
shall undertake any and all actions necessary to assure that
immediately
prior to Closing, the pre-Merger capitalization of each party
(giving effect
to the exercise of all outstanding options and warrants and the
conversion of
all outstanding convertible securities), on a fully-diluted basis,
shall be
the following:
CET:
5,626,989 shares
BMTS:
10,200,000 shares
4.3
2008 Equity Incentive
Plan. Subject to and
prior to or
concurrently with the Closing, CET shall take, or cause to be
taken, all
actions necessary to approve and adopt an Equity Incentive Plan
substantially
in the form of Exhibit 4.3 hereto, and to authorize the issuance of
not less
than 2.0 million shares of common stock (pre-split) to be issued
pursuant to
options and other rights granted under the Plan.
4.4
Reverse Stock Split.
Subject to and
concurrently with the Closing,
CET shall effect a reverse split of all of its issued and
outstanding shares
of common stock as well as all options, warrants, and other
outstanding
securities exercisable to purchase or convertible into shares of
CET common
stock in a ratio determined and approved by BMTS (the "Reverse
Split").
4.5
Increase in Authorized
Stock and Name Change.
Subject to and at or
prior to the Closing, CET shall take, or cause to be taken, all
actions
necessary to further amend and/or restate its Amended and Restated
Articles
of Incorporation to (i) increase the number of shares of common
stock and
preferred stock it is authorized to issue from 20,000,000 shares
to
100,000,000 shares and from 5,000,000 shares to 10,000,000
shares,
respectively, and to effect such other amendments to such Articles
of
Incorporation as BMTS deems to be desirable and as permitted by
applicable
law and (ii) change the corporate name of CET to "BioMedical
Technology
Solutions, Inc." (with BMTS to change its name in a manner to
distinguish
the two entities).
4.6
Redomestication.
At or prior to the
Closing, or as soon as
practicable thereafter, CET shall take, or cause to be taken, all
actions
necessary to redomesticate from the State of California to the
State of
Colorado.
4.7
CET Assets and
Liabilities.
(a) As of the
execution of this Agreement, CET's principal assets
consisted of five (5) separate parcels of real property which shall
be
designated as Parcel Nos. 1, 2, 3, 4 and 5 which can be described
as follows:
Parcel No. 1: 1550 S.
Idalia Court, Aurora, CO
Parcel No. 2: Arizona
Ave., LLC
Parcel No. 3: 7335
Lowell Blvd., Westminster, CO
Parcel No. 4: 7215
Meade Street, Westminster, CO
Parcel No. 5: 7305
Lowell Blvd., Westminster, CO
All
of the foregoing properties are currently owned of record by
Community Builders, Inc., a wholly-owned subsidiary of CET.
Prior to the
Effective Date of the Merger, CET shall form and organize a new
subsidiary,
CET Sub, and all ownership of Community Builders, Inc. shall be
transferred
and assigned by CET to Steve Davis, or his designee, so as to
divest CET of
all right, title and interest in Community Builders. Community Builders
shall execute and deliver at Closing an Indemnity Agreement
substantially in
the form of Exhibit 4.7(a) hereto whereby it will agree (i) to
maintain its
corporate existence for a period of three years, (the "Indemnity
Period")
(ii) to indemnify, defend and hold harmless CET, CET Sub and the
officers and
directors of BMTS from any claims, debts or liabilities of
Community Builders
or arising from the transfer of ownership of Community Builders as
provided
for herein, save and except for secured obligations expressly
assumed by CET
Sub as part of the Merger and (iii) for the duration of the
Indemnity Period,
maintain not less than $250,000 in net assets to cover any warranty
or third
party claims, should they arise. Without in any way limiting the
generality
of the foregoing, Community Builders shall be solely and
separately
responsible for all existing and future debts and obligations
incurred in
connection with the ownership, maintenance and disposition of
Parcel Nos. 3,
4 and 5, which shall include without limitation all secured debt
constituting
liens or encumbrances against those properties, general contractor
hold-
backs, general contractor final draws, accrued and accumulated
interest and
accrued and accumulated real property taxes
(b) At the Effective
Date of the Merger, the following covenants
shall apply with respect to each of the foregoing parcels:
A. Community Builders
shall convey to CET Sub all of its interest
in Parcel No. 1 which shall have secured debt of not more than
$472,000;
B. Community Builders
shall convey to CET Sub all of its interest
in Parcel No. 2;
C.
Community Builders
shall pay to CET the sum of $250,000 for
Parcel No. 3;
D. Community Builders
shall pay to CET the sum of $260,000 for
Parcel No. 4; and,
E. Community Builders
shall pay to CET the sum of $400,000 for
Parcel No. 5.
Further, as of the Effective Date of the Merger, CET shall have
cash not less
than $875,000 and shall have no accounts payable or other
liabilities except
for the secured debt against Parcel No. 1.
4.8
Notification of
Certain Matters. BMTS
shall give prompt notice to
CET and CET shall give prompt notice to BMTS of (i) the occurrence
or non-
occurrence of any event which would cause any representation or
warranty made
by the respective parties in this Agreement to be materially untrue
or
inaccurate when made and (ii) any failure of CET or BMTS, as the
case may be,
to materially comply with or satisfy any covenant, condition or
agreement to
be complied with or satisfied by it hereunder; provided, however,
that the
delivery of any notice pursuant to this section shall not limit or
otherwise
affect the remedies available hereunder to the party receiving such
notice
and, provided further, that the failure to give such notice shall
not be
treated as a breach of covenant for the purposes of this Agreement
unless the
failure to give such notice results in material prejudice to the
other party.
4.9
Further Action.
Upon the terms and
subject to the conditions
hereof, each of the parties hereto shall use all commercially
reasonable
efforts to take, or cause to be taken, all actions and to do, or
cause to be
done, all other things necessary, proper or advisable to consummate
and make
effective as promptly as practicable the transactions contemplated
by this
Agreement, to obtain in a timely manner all necessary waivers,
consents and
approvals and to effect all necessary registrations and filings,
and to
otherwise satisfy or cause to be satisfied all conditions precedent
to its
obligations under this Agreement.
4.10
Public Announcements.
BMTS and CET shall
consult with each other
before issuing any press release or other public statement with
respect to
the Merger or this Agreement and shall not issue any such press
release or
make any such public statement without the prior consent of the
other party,
which consent shall not be unreasonably withheld, delayed or
conditioned;
provided, however, that a party may, without the prior consent of
the other
party, issue such press release or make such public statement as
may, upon
the advice of counsel, be required by law if it has used reasonable
efforts
to first consult with the other party.
4.11
Cooperation in
Securities Filings.
BMTS shall provide such
information regarding BMTS, its business, its officers, directors
and
affiliates, as is reasonably required by CET for purposes of
preparing any
notices, reports and other filings with the SEC. Moreover, following the
Closing, the current officers and directors of BMTS shall provide
such
information as the post-closing management of CET shall reasonably
request
for the purpose of preparing any notices, reports and other filings
by CET
with the SEC, including but not limited to, in connection with
the
preparation of any financial statements required to be filed under
the
Exchange Act or Securities Act by CET.
4.12
Additional Documents.
The parties shall
deliver or cause to be
delivered such documents or certificates as may be necessary, in
the
reasonable BMTSnion of counsel for either of the parties, to
effectuate the
transactions provided for in this Agreement. If at any time the parties or
any of their respective successors or assigns shall determine that
any
further conveyance, assignment or other document or any further
action is
necessary desirable to further effectuate the transactions set
forth herein
or contemplated hereby, the parties and their officers, directors
and agents
shall execute and deliver, or cause to be executed and delivered,
all such
documents as may be reasonably required to effectuate such
transactions.
SECTION 5: CONVERSION OR CANCELLATION OF SHARES
5.1
Securities to be
issued on Effective Date of Merger. On the
Effective Date of the Merger:
(a) all issued and
outstanding shares of common stock of BMTS (the
"BMTS Common Stock") shall be converted into 78,994,826 shares of
CET Common
Stock (the "CET Common Stock"). The Merger Exchange Ratio at which
the BMTS
Common Stock will be converted into the CET Common Stock shall be
8.64276 for
one. The calculation of the Merger Exchange Ratio assumes that
there are
5,626,989 shares of CET common stock and stock options and warrants
to
purchase shares of CET common stock outstanding and 10,200,000
shares of BMTS
common stock and stock options and warrants to purchase shares of
common
stock outstanding as of the Effective Date. Any changes in the number of
issued and outstanding shares, on a fully diluted basis, of CET
common stock
or BMTS common stock will change the Merger Exchange Ratio and the
number of
shares of CET Common Stock to be issued hereunder in accordance
with Section
5.1(b) below.
(b) The parties
acknowledge that the Reverse Split will result in
a proportional adjustment of the CET shares outstanding immediately
following
the consummation of the Merger; however, it is the intent and
agreement of
the parties that upon consummation of the Merger, the pre-Merger
CET Common
Stock outstanding will represent 6% and the shares issuable to the
BMTS
shareholders and underlying BMTS Warrants and Options will
represent 94% of
the post-Merger CET Common Stock outstanding and CET Common Stock
underlying
the BMTS Warrants and Options, on a fully-diluted basis.
The parties agree
that all numbers will be adjusted proportionately to ensure that
the pre-
Merger CET shareholders will own 6% and the BMTS shareholders and
Warrant and
Option holders will own 94% of the post-Merger fully-diluted CET
Common Stock
outstanding.
(c) At the Effective
Time of the Merger, all issued and
outstanding options and warrants exercisable to purchase shares of
BMTS
common stock will, by virtue of their terms, become exercisable to
purchase
shares of CET common stock on the same terms and conditions except
that the
number of shares issuable upon exercise of such option or warrant
will be
multiplied by the Merger Exchange Ratio, and the exercise price
shall be
reduced proportionately. CET shall assume all liability to
maintain in full
force and effect all of such options and warrants in accordance
with their
terms and reserve from its authorized but unissued shares of common
stock a
sufficient number of shares to issue upon the due and timely
exercise of such
options and warrants.
(d) Each share of CET
Common Stock, issued under this section
shall be restricted securities pursuant to Rule 144 promulgated
under the
Securities Act.
(e) Each share of BMTS
Common Stock, if any, held in BMTS's
treasury immediately prior to the Effective Time shall be canceled
and
retired and no payment shall be made in respect thereof.
(f) At the Effective
Time, all outstanding shares of CETAC shall
be converted into an aggregate of 100 shares of Common Stock of
BMTS. Each
share of CETAC Common Stock, if any, held in CETAC's treasury
immediately
prior to the Effective Time shall be canceled and retired and no
payment
shall be made in respect thereof.
5.2
Surrender and Payment.
Subject to the
provisions of Sections 5.5
and 5.6 below, after the Effective Time, each holder of a
certificate
representing an issued and outstanding share of BMTS Common Stock
shall be
entitled upon surrender of such certificate along with a fully
executed
Subscription Agreement in the form of Exhibit 5.3, to CET, to
receive the CET
Common Stock as set forth in Section 5.1 above. Until so
surrendered, each
certificate which immediately prior to the Effective Time
represented an
issued and outstanding share of BMTS Common Stock shall, upon and
after the
Effective Time, be deemed for all purposes to represent and
evidence only the
right to receive CET Common Stock as set forth in Section 5.1. If
any
exchange for shares of BMTS Common Stock is to be made in a name
other than
that in which the certificate therefor surrendered for exchange
is
registered, it shall be a condition of such payment that the
certificate so
surrendered be properly endorsed or otherwise in proper form for
transfer and
that the person requesting such payment either pay to CET any
transfer or
other similar taxes required by reason of the payment to a person
other than
the registered holder of the certificate surrendered or establish
to the
satisfaction of CET that such tax has been paid or is not
payable.
5.3
Subscription
Agreements. Each of
the BMTS Shareholders receiving
CET Common Stock pursuant to the terms hereof shall have delivered
a fully
executed Subscription Agreement substantially in the form of
Exhibit 5.3
5.4
No Further Transfers.
On and after the Effective Time, no transfer
of the shares of BMTS Common Stock issued and outstanding
immediately prior
to the Effective Time shall be made on the stock transfer books of
BMTS.
SECTION 6: CERTAIN
EFFECTS OF MERGER
6.1
Effect of Merger. On
and after the Effective Time, the separate
existence of CETAC shall cease and CETAC shall be merged with and
into BMTS,
which as the Surviving Corporation (herein sometimes so called)
shall,
consistently with its Articles of Incorporation succeed to, and
without other
transfer, possess all the rights, privileges, immunities, powers
and
franchises of public as well as private nature, and be subject to
all
restrictions, disabilities and duties of CETAC; and all rights,
privileges,
immunities, powers and franchises of CETAC, and all property, real,
personal
and mixed, causes of action and every other asset of, and all debts
due to
CETAC on whatever account as well as stock subscriptions and all
other things
in action or belonging to CETAC shall vest in the Surviving
Corporation; and
all property, rights, privileges, immunities, powers and
franchises, and all
and every other interest shall be thereafter as effectually the
property of
the Surviving Corporation as they were of CETAC, and the title to
any real
estate vested by deed or otherwise in CETAC, and the title to any
real estate
vested by deed or otherwise in CETAC shall not revert or be in any
way
impaired but all rights of creditors and all liens upon any
property of CETAC
shall be preserved unimpaired, and all debts, liabilities and
duties of CETAC
shall thenceforth attach to the Surviving Corporation, and may be
enforced
against it to the same extent as if such debts, liabilities and
duties had
been incurred or contracted by it. Any action or proceeding pending
by or
against CETAC may be prosecuted to judgment, which shall bind the
Surviving
Corporation, or the Surviving Corporation may be proceeded against
or
substituted in its place.
6.2
Further Assurances. If
at any time after the Effective Time the
Surviving Corporation shall consider any further deeds, assignments
or
assurances in law or any other action necessary, desirable or
proper (a) to
vest, perfect or confirm, of record or otherwise, in the
Surviving
Corporation the title to any property or rights of CETAC acquired
or to be
acquired by reason of, or as a result of, the Merger, or (b)
otherwise to
carry out the intents and purposes of this Agreement, CETAC and CET
agree
that it and its proper officers and directors shall and will
execute and
deliver, or cause to be executed and delivered, all such property,
deeds,
assignments and assurances in law and take all other action
necessary,
desirable or proper to vest, perfect or confirm title to such
property or
right in the Surviving Corporation and otherwise to carry out the
purposes of
this Agreement.
SECTION 7: POST-MERGER
GOVERNANCE
7.1
Articles of
Incorporation and Bylaws. At the Effective Time,
the
Articles of Incorporation and By-Laws of BMTS as in effect
immediately prior
to the Effective Time, shall be and continue to be the Articles
of
Incorporation and By-Laws of BMTS, as the Surviving Corporation,
until duly
amended in accordance with applicable law.
7.2
Directors. Officers
and Employees.
(a) Directors of CET.
Concurrently with the
Closing, the Board of
Directors of CET shall, in accordance with the CBCA and the
Articles of
Incorporation and By-Laws of CET shall be reconstituted to consist
of:
Donald G. Cox
Gex F. Richardson
Bill Sparks
(b) Executive Officers
of CET. Concurrently with the Closing, the
Board of Directors of CET shall elect the following persons to
serve as
Executive Officers of CET in the capacities set forth below until
the next
regular Annual Meeting of the CET Board of Directors (as
hereinafter defined)
or until their successors have been duly elected and qualified in
accordance
with the CBCA, the Articles of Incorporation and Bylaws of CET, or
until they
have resigned:
Donald G. Cox
CEO and President
Jim Scheifley
Chief Financial Officer
Gex F. Richardson
Secretary
Any persons serving as Executive Officers of CET immediately prior
to the
Effective Time who will not continue in such capacity immediately
after the
Effective Time shall tender their resignations in accordance with
applicable
Legal Requirements.
SECTION 8: COVENANTS
AND CONDITIONS OF CLOSING
8.1
Covenants Regarding
the Closing. The
parties hereto hereby
covenant and agree that they shall (i) use all commercially
reasonable
efforts to cause all of their respective representations and
warranties set
forth in this Agreement to be true on and as of the Closing Date,
(ii) use
all commercially reasonable efforts to cause all of their
respective
obligations that are to be fulfilled on or prior to the Closing
Date to be so
fulfilled, (iii) use all commercially reasonable efforts to cause
all
conditions to the Closing set forth in this Agreement to be
satisfied on or
prior to the Closing Date, and (iv) deliver to each other at the
Closing the
certificates, updated lists, opinion of counsel, notices,
consents,
authorizations, approvals, agreements, transfer documents, receipts
and
amendments contemplated by Sections 8, 9 and 11 (with such
additions or
exceptions to such items as are necessary to make the statements
set forth in
such items accurate, provided that if any such additions or
exceptions cause
any of the conditions to the parties' obligations hereunder as set
forth in
Sections 8, 9 and 11 below not to be fulfilled, such additions and
exceptions
shall in no way limit the rights of the parties to terminate this
Agreement
or refuse to consummate the transactions contemplated hereby.)
All
indemnifications, guarantees, covenants, agreements,
representations and
warranties made by the parties hereunder or pursuant hereto or in
connection
with the transactions contemplated hereby shall survive the
Closing
regardless of any investigation at any time made by or on behalf of
the
parties.
8.2
Conditions to
Obligation of CET and CETAC. The obligation of CET
and CETAC to complete the Merger on the Closing date on the terms
set forth
in this Agreement is, at the option of CET and CETAC, subject to
the
satisfaction or waiver by CET and CETAC of each of the following
conditions:
(a) Accuracy of
Representations and Warranties. The
representations and warranties made by BMTS in this Agreement shall
be
correct in all material respects on and as of the Closing Date with
the same
force and effect as though such representations and warranties had
been made
on the Closing Date.
(b) Compliance with
Covenants. All
covenants which BMTS is
required to perform or comply with on or before the Closing date
shall have
been fully complied with or performed in all material respects.
(c) Corporate
Approvals. The Board
of Directors and shareholders
of BMTS shall have approved and ratified this Agreement and shall
have
authorized the appropriate officers of BMTS to execute same and
fully perform
its terms.
(d) Consents and
Approvals. To the
extent that any material
lease, mortgage, deed of trust, contract or agreement to which BMTS
is a
party shall require the consent of any person to the exchange of
BMTS's
shares of common stock or any other transaction provided for
herein, such
consent shall have been obtained; provided, however, that BMTS
shall not
make, as a condition for the obtaining of any such consent, any
agreements or
undertakings not approved in writing by CET and CETAC to the extent
that such
condition otherwise has an adverse effect on CET and CETAC.
(e)
Review and Due
Diligence. CET
and CETAC, its investment
bankers, legal counsel and/or auditors shall have had the
opportunity to
complete, and shall have completed, a satisfactory due
diligence
investigation of BMTS together with a satisfactory review of BMTS's
corporate
status and the title to BMTS's property.
(f) No Governmental
Actions. No action or
proceeding before any
governmental authority shall have been instituted or threatened to
restrain
or prohibit the transactions contemplated by this Agreement, and
the parties
shall have delivered to each other certificates dated as of the
Closing Date
and executed by such parties, stating that to their Best Knowledge,
no such
items exist. No
governmental authority shall have taken any other action as
a result of which the management of CET or CETAC, in its sole
discretion,
reasonably deems it inadvisable to proceed with the transactions
contemplated
by this Agreement.
(g) No Material
Adverse Change. No
material adverse change in the
business, property or assets of any party hereto shall have
occurred, and no
loss or damage to any of the assets, whether or not covered by
insurance,
with respect to any party hereto has occurred, and the parties
hereto shall
have delivered to each other certificates dated as of the Closing
Date and
executed by each of the parties to all such effects.
(h) Update of
Contracts. The parties
hereto shall have delivered
to each other an accurate list, as of the Closing Date, showing (i)
all
agreements, contracts and commitments of the type listed
in Section 11.14
of
the Disclosure Schedule entered into since the date of this
Agreement; and
(ii) all other agreements, contracts and commitments related to
the
businesses or the assets of the respective parties entered into
since the
date of this Agreement, together with true, complete and accurate
copies of
all such documents (the "New Contracts"). Each party shall have had the
opportunity to review and approve the New Contracts of the other,
and any of
the parties shall have the right to delay the Closing for up to ten
(10) days
if it in its sole discretion deems such delay necessary to enable
it to
adequately review the New Contracts.
(i) Approval of
Counsel. All actions,
proceedings, instruments
and documents required or incidental to carry out this Agreement,
including
all schedules and exhibits thereto, and all other related legal
matters shall
have been approved by Clifford L. Neuman, P.C., counsel to BMTS,
and Krys
Boyle, P.C., counsel to CET and CETAC.
(j) No Adverse
Information. The
investigations with respect to
the parties, the assets and the respective businesses performed by
each
party's respective professional advisors and other representatives
shall not
have revealed any information concerning the other parties, their
assets or
their business that has not been made known to the discovering
party, in
writing prior to the date of this Agreement and that, in the
opinion of such
party and its advisors, materially and adversely affects the
business or
assets of the other party or the viability of the transaction
contemplated by
this Agreement.
(k) Ordinary Course of
Business. During the
period from the date
of this Agreement until the Closing Date, BMTS shall have carried
on its
business in the ordinary and usual course, and shall have delivered
to CET
and CETAC a certificate to that effect.
(l) Liens.
BMTS shall have
delivered to CET a reasonably current
lien and judgment search (both state and county levels in each
jurisdiction
where the party is qualified to or is doing business or owns
material assets)
confirming the absence of any judicial liens, security interests,
tax liens
and similar such liens affecting any of its business or assets.
Each and
every lien or encumbrance of any nature, if any, relating to the
assets,
business, or the shares of common stock of BMTS shall have been
terminated
and released, and proof thereof delivered to CET.
(m) Other Documents.
The parties shall have
delivered or caused
to be delivered all other documents, agreements, resolutions,
certificates or
declarations as each respective party or its attorneys may have
reasonably
requested.
(n) Governmental and
Regulatory Approvals.
The parties shall have
obtained evidence, in form and substance satisfactory to each of
them, that
there have been obtained all consents, approvals and authorizations
required
by this Agreement, including, without limitation, the
following:
(i) CET and BMTS Board
of Directors and CET and BMTS Common
Stockholder approval of all the transactions contemplated pursuant
to this
Agreement; and
(ii) All regulatory
approvals necessary for BMTS to conduct
business in the ordinary course in each jurisdiction where such
approval may
be required and the failure to obtain such approval would cause a
material
adverse affect to the financial condition, business or operations
of BMTS.
(o) Compliance with
Securities Laws. CET
shall have undertaken
all actions necessary or advisable to consummate the Merger in
conformity
with all Governmental and Legal Requirements including, without
limitation,
applicable federal and state securities laws.
(p) Appraisal Rights
and/or Dissenters' Rights. At or prior to
Closing, no beneficial or record owner of any outstanding shares of
BMTS
Common Stock shall have exercised or shall have given notice to CET
or BMTS
of their intent to exercise any rights under applicable state law,
if any, to
dissent from the Merger or obtain the payment of the fair market
value of
such shares of BMTS Common Stock in lieu of participating in the
Merger in
accordance with the terms and subject to the conditions set forth
herein.
(q) Financial Advisory
Fees. At or prior to
Closing, all
obligations or commitments of CET and BMTS to their respective
financial
advisors and investment bankers shall have been paid or otherwise
satisfied
upon terms satisfactory to the parties, and CET and BMTS shall each
have been
delivered and received such written consents, approvals,
estoppel
certificates or other instruments or undertakings from its advisors
or other
third parties as each may deem reasonable, necessary or
advisable.
(r) Compliance with
Sections 5 and 17 of the Securities Act. The
Board of Directors of CET shall be satisfied that consummation of
the Merger
and the issuance of CET Common Stock to the BMTS securityholders is
in
compliance with the provisions of Sections 5 and 17 of the
Securities Act.
8.3
Conditions to
Obligation of BMTS.
The obligations of BMTS to
complete the Merger on the Closing date on the terms set forth in
this
Agreement is, at the option of BMTS, subject to the satisfaction or
waiver by
BMTS of each of the following conditions:
(a) Accuracy of
Representations and Warranties. The
representations and warranties made by CET and CETAC in this
Agreement shall
be correct in all material respects on and as of the Closing date
with the
same force and effect as though such representations and warranties
had been
made on the Closing date.
(b) Compliance with
Covenants. All
covenants which CET and CETAC
is required to perform or comply with on or before the Closing date
shall
have been fully complied with or performed in all material
respects.
(c) Corporate
Approvals. The Board
of Directors and shareholders
of CET and CETAC shall have approved and ratified this Agreement
and shall
have authorized the appropriate officers to execute same and fully
perform
its terms.
(d) Consents and
Approvals. To the
extent that any material
lease, mortgage, deed of trust, contract or agreement to which CET
and CETAC
is a party shall require the consent of any person to the exchange
of CET and
CETAC's shares of common stock or any other transaction provided
for herein,
such consent shall have been obtained; provided, however, that CET
and CETAC
shall not make, as a condition for the obtaining of any such
consent, any
agreements or undertakings not approved in writing by BMTS to the
extent that
such condition otherwise has an effect on BMTS or CET and
CETAC.
(e) Review and Due
Diligence. BMTS and
its legal counsel and/or
auditors shall have had the opportunity to complete, and shall
have
completed, a satisfactory due diligence investigation of CET and
CETAC,
together with a satisfactory review of CET and CETAC's corporate
status, the
marketability of title to CET and CETAC's property, and compliance
with all
reporting requirements imposed by or on account of any federal or
state
securities laws or regulations.
(f) No Governmental
Actions. No action or
proceeding before any
governmental authority shall have been instituted or threatened to
restrain
or prohibit the transactions contemplated by this Agreement, and
the parties
hereto shall have delivered to each other certificates dated as of
the
Closing Date and executed by such parties, staling that to their
Best
Knowledge, no such items exist. No governmental authority shall
have taken
any other action as a result of which the management of any of the
parties,
in its sole discretion, reasonably deems it inadvisable to proceed
with the
transactions contemplated by this Agreement.
(g) No Material
Adverse Change. No
material adverse change in the
business, property or assets of any party hereto shall have
occurred, and no
loss or damage to any of the assets, whether or not covered by
insurance,
with respect to any party hereto has occurred, and the parties
shall have
delivered to each other certificates dated as of the Closing Date
and
executed by each of the parties to all such effects.
(h) Update of
Contracts. The parties
shall have delivered to each
other an accurate list, as of the Closing Date, showing (i) all
agreements,
contracts and commitments of the type listed in Section 11.14 of
the
Disclosure Schedule entered into since the date of this Agreement;
and (ii)
all other agreements, contracts and commitments related to the
businesses or
the assets of the respective parties entered into since the date of
this
Agreement, together with true, complete and accurate copies of all
such
documents (the "New Contracts"). Each party shall have had the
opportunity to
review the New Contracts of the other, and any of the parties shall
have the
right to delay the Closing for up to ten (10) days if it in its
sole
discretion deems such delay necessary to enable it to adequately
review the
New Contracts.
(i) Approval of
Counsel. All actions,
proceedings, instruments
and documents required or incidental to carry out this Agreement,
including
all schedules and exhibits thereto, and all other related legal
matters shall
have been approved as to substance and form by Clifford L. Neuman,
P.C.,
counsel to BMTS, and Krys Boyle, P.C., counsel to CET and
CETAC.
(j) No Adverse
Information. The
investigations with respect to
the parties, the assets and their respective businesses performed
by each
party's respective professional advisors and other representatives
shall not
have revealed any information concerning the other panes, their
assets or
their business that has not been made known to the discovering
party, in
writing prior to the date of this Agreement and that, in the
opinion of such
party and its advisors, materially and adversely affects the
business or
assets of the other party or the viability of the transaction
contemplated by
this Agreement.
(k) Ordinary Course of
Business. During the
period from the date
of this Agreement until the Closing Date, CET shall have carried on
its
business in the ordinary and usual course, and shall have delivered
to BMTS a
certificate to that effect.
(1) Other Documents.
The parties shall have
delivered or caused
to be delivered all other documents, agreements, resolutions,
certificates or
declarations as each respective party or its attorneys may have
reasonably
requested.
(m) Governmental and
Regulatory Approvals.
The parties shall have
obtained evidence, in form and substance satisfactory to each of
them, that
there have been obtained all consents, approvals and authorizations
required
by this Agreement, including, without limitation, the
following:
(i) CET and BMTS Board
of Directors and CET and BMTS Common
Stockholder approval of all the transactions contemplated pursuant
to this
Agreement; and
(ii) All regulatory
approvals necessary for CET and BMTS to
conduct business in the ordinary course in each jurisdiction where
such
approval may be required.
(n) Compliance with
Securities Laws. BMTS
shall have undertaken
all actions necessary or advisable to consummate the Merger in
conformity
with all Governmental and Legal Requirements including, without
limitation,
applicable federal and state securities laws.
(o) Appraisal Rights
and/or Dissenters' Rights. At or prior to
Closing, no beneficial or record owner of any outstanding shares of
BMTS
Common Stock shall have exercised or shall have given notice to CET
or BMTS
of their intent to exercise any rights under applicable state law,
if any, to
dissent from the Merger or obtain the payment of the fair market
value of
such shares of BMTS Common Stock in lieu of participating in the
Merger in
accordance with the terms and subject to the conditions set forth
herein.
(p) Financial Advisory
Fees. At or prior to
Closing, all
obligations or commitments of CET and BMTS to their respective
financial
advisors and investment bankers shall have been paid or otherwise
satisfied
upon terms satisfactory to the parties, and CET and BMTS shall each
have been
delivered and received such written consents, approvals,
estoppel
certificates or other instruments or undertakings from its advisors
or other
third parties as each may deem reasonable, necessary or
advisable.
(q) Compliance with
Sections 5 and 17 of the Securities Act. The
Board of Directors of BMTS shall be satisfied that consummation of
the Merger
and the issuance of CET Common Stock to the BMTS securityholders is
in
compliance with the provisions of Sections 5 and 17 of the
Securities Act.
(r) Reverse Stock
Split. The reserve
stock split shall have been
consummated in accordance with Section 4.4 hereof.
(s) CET Corporate
Documents. The CET
Amended and Restated
Articles of Incorporation shall have been amended to change the
Company's
name to "BioMedical Technology Solutions, Inc" and to increase the
authorized
common stock from 20,000,000 shares to 100,000,000 shares and to
increase the
authorized preferred stock from 5,000,000 shares to 10,000,000 shares.
(t) CET Equity
Incentive Plan. CET
Board of Directors and
Shareholders shall have adopted and approved a new 2008 Equity
Incentive Plan
in accordance with Section 4.3 hereof.
(u) CET
Redomestication. The
Board of Directors and Shareholders
of CET shall have ratified and approved the redomestication of CET
from the
State of California to the State of Colorado.
(v) CET Financial
Condition. CET assets
and liabilities shall be
in accordance with the covenants set forth in Section 4.7
hereof.
(w) Idemnity
Agreement. Community
Builders shall have executed
and delivered an Indemnity Agreement substantially in the form of
Exhibit
4.7(a) hereto.
8.4
Specific Items to be
Delivered at the Closing. The parties shall
deliver the following items to the appropriate party at the Closing
of the
transactions contemplated by this Agreement.
(a) To be delivered by
BMTS :
(i) Copy of corporate
resolutions authorizing the execution
of this Agreement, and the consummation by BMTS of the
transactions
contemplated by this Agreement.
(ii) A certificate of
the President of BMTS stating that the
representations and warranties of BMTS set forth in this Agreement
are true
and correct. Said
certificate shall further verify and affirm that all
consents or waivers, if any, which may be necessary to execute and
deliver
this Agreement have been obtained and are in full force and
effect.
(iii)
A certificate dated
the Closing Date, signed by the
Chief Executive Officer and the Chief Financial Officer of BMTS, in
form and
substance reasonably satisfactory to the other party and its legal
counsel,
certifying that all conditions precedent set forth in this
Agreement to the
obligations of BMTS to close, have been fulfilled, and that no
event of
default hereunder and no event which, with the giving of notice or
passage of
time, or both, would be an event of default, has occurred as of
such date.
(iv) Certificates
dated the Closing Date, signed by the
Secretary of BMTS, (i) certifying resolutions duly adopted by the
Board of
Directors and Shareholders of BMTS, authorizing the execution of
this
Agreement and all of the other transactions to be consummated
pursuant
thereto; (ii) certifying the names and incumbency of the officers
of BMTS who
are empowered to execute the foregoing documents for and on behalf
of such
company; (iii) certifying the authenticity of copies of the
Articles of
Incorporation and Bylaws of BMTS; and (iv) certifying the
authenticity of a
reasonably current Certificate of Good Standing, from all
jurisdictions in
which the company is qualified to conduct business.
(v) Articles of Merger
and Certificate of Merger in proper
form to be filed with the Secretary of State of Colorado in such
form as may
be required to consummate the Merger as of the Effective Time.
(b) To be delivered by
Shareholders of BMTS :
(i) Certificate or
certificates representing 100% of the
issued and outstanding common shares of BMTS, which stock
certificates shall
be endorsed in favor of CET.
(ii) Fully executed
Subscription Agreements substantially in
the form of Exhibit 5.3.
(c) To be delivered by
CET and CETAC:
(i) Certificate or
certificates representing 78,994,826
shares of CET Common Stock, subject to adjustment provided for
herein, which
certificates shall be issued in the names of each Shareholder in
the numbers
set forth in Section 5.1 hereof;
(ii) Copy of corporate
resolution authorizing the execution
of this Agreement and the consummation by CET and CETAC of the
transactions
contemplated by this Agreement, including, but not limited to, the
issuance
of CET Common Stock in the amounts and manner set forth in Section
5.1 above;
(iii) A certificate
dated the Closing Date, signed by the
Chief Executive Officer and the Chief Financial Officer of CET and
CETAC, in
form and substance reasonably satisfactory to the other party and
its legal
counsel, certifying that all conditions precedent set forth in this
Agreement
to the obligations of CET and CETAC to close, have been fulfilled,
and that
no event of default hereunder and no event which, with the giving
of notice
or passage of time, or both, would be an event of default, has
occurred as of
such date.
(iv) Certificates
dated the Closing Date, signed by the
Secretary of CET and CETAC, (i) certifying resolutions duly adopted
by the
Board of Directors of CET and CETAC, authorizing the execution of
this
Agreement and all of the other transactions to be consummated
pursuant
thereto; (ii) certifying the names and incumbency of the officers
of CET and
CETAC who are empowered to execute the foregoing documents for and
on behalf
of such company; (iii) certifying the authenticity of copies of the
Articles
of Incorporation and Bylaws of CET and CETAC; and (iv) certifying
the
authenticity of a
reasonably current Certificate of Good Standing, from
all jurisdictions in
which CET and CETAC
are qualified to conduct business.
(v) Articles of Merger
and Certificate of Merger in proper
form to be filed with the Secretary of State of Colorado in such
form as may
be required to consummate the Merger as of the Effective Time.
(vi) Indemnity
Agreement of Community Builders.
SECTION 9:
REPRESENTATIONS AND WARRANTIES OF BMTS
As a
material inducement to CET to enter into this Agreement and
with
the understanding and expectations that CET will be relying thereon
in
consummating the Merger contemplated hereunder, BMTS (hereinafter
BMTS shall
be referred to as the "Corporation" unless the context otherwise
requires for
the purposes of this Section 9 only) hereby represents and warrants
as
follows:
9.1
Organization and
Standing. The
Corporation is a corporation duly
organized, validly existing and in good standing under the laws of
the state
of its incorporation, and has all requisite corporate power and
authority to
own its assets and properties and to carry on its business as it is
now being
conducted.
9.2
Subsidiaries, Etc.
The Corporation does
not have any direct or
indirect Ownership Interest in any corporation, partnership, joint
venture,
association or other business enterprise.
9.3
Qualification.
The Corporation is not
qualified to engage in
business as a foreign corporation in any state, and there is no
other
jurisdiction wherein the character of the properties presently
owned by the
Corporation or the nature of the activities presently conducted by
the
Corporation makes necessary the qualification, licensing or
domestication of
the Corporation as a foreign corporation.
9.4
Corporate Authority.
Except as set forth on
Section 9.4 of the
Disclosure Schedule, neither the execution and delivery of this
Agreement nor
the consummation of the transactions contemplated hereby nor
compliance by
the Corporation with any on the provisions hereof will:
(a) Conflict with or
result in a breach of any provision of its
Articles of Incorporation or By-Laws or similar documents of any
Subsidiary;
(b) Result in a
default (or give rise to any right of termination,
cancellation, or acceleration) under any of the terms, conditions
or
provisions of any note, bond, mortgage, indenture, license,
agreement or
other instrument or obligation to which the Corporation is a party,
or by
which any of its properties or assets may be bound except for such
default
(or right of termination, cancellation, or acceleration) as to
which
requisite waivers or consents shall either have been obtained by
the
Corporation prior to the Closing Date or the obtaining of which
shall have
been waived by CET; or
(c) Violate any order,
writ, injunction, decree or, to the
Corporation's Best Knowledge, any statute, rule or regulation
applicable to
the Corporation or any of its properties or assets. No consent or approval
by any Governmental Authority is required in connection with the
execution
and delivery by the Corporation of this Agreement or the
consummation by the
Corporation of the transactions contemplated hereby, except for
possible
notice under plant closing laws.
9.5
Capitalization of the
Corporation. The
authorized capital stock of
BMTS consists of 40,000,000 shares of Common Stock, no par value
per share,
of which no more than 10,200,000 shares will issued and outstanding
as of the
Effective Date, and
10,000,000 shares of preferred, no par value, of which
no shares are issued and outstanding. The names of one hundred
percent
(100%) of the record owners of the issued and outstanding Common
Stock are
set forth in Section 9.5 of the Disclosure Schedule. All issued and
outstanding shares of BMTS Common Stock have been duly authorized
and validly
issued and are fully paid and non-assessable, free and clear of any
liens,
encumbrances, claims of any kind and nature except restrictions
against
transferability without compliance with applicable federal and
state
securities laws. As of
the Effective Time of the Merger, BMTS will have
issued and outstanding options and warrants exercisable to
purchase, in the
aggregate, not more than 1.6 million shares of common stock.
The
