Exhibit
2.1
ACQUISITION AGREEMENT AND PLAN OF MERGER
DATED AS OF APRIL 14, 2006
BETWEEN
EATON LABORATORIES, INC.
AND
PINOAK, INC.
TABLE OF CONTENTS
ARTICLE 1. The Merger
Section 1.1.
The Merger
Section 1.2.
The Acquisition
Section 1.3.
Effective Time
Section 1.4.
Closing of the Merger
Section 1.5.
Effects of the Merger
Section 1.6.
Board of Directors and Officers of ETLB
Section 1.7.
Taking of Necessary Action; Further Action
ARTICLE 2. Representations and Warranties of Eaton Laboratories,
Inc.
Section 2.1.
Organization and Qualification
Section 2.2.
Capitalization of ETLB
Section 2.3.
Authority
Relative to this Agreement; Recommendation
Section 2.4.
SEC Reports; Financial Statements
Section 2.5.
Information Supplied
Section 2.6.
Consents and Approvals; No Violations
Section 2.7.
No Default
Section 2.8.
No Undisclosed Liabilities; Absence of Changes
Section 2.9.
Litigation
Section 2.10.
Compliance with Applicable Law
Section 2.11.
Employee Benefit Plans; Labor Matters
Section 2.12.
Environmental Laws and Regulations
Section 2.13.
Tax Matters
Section 2.14.
Title To Property
Section 2.15.
Intellectual Property
Section 2.16.
Insurance
Section 2.17.
Vote Required
Section 2.18.
Tax Treatment
Section 2.19.
Affiliates
Section 2.20.
Certain Business Practices
Section 2.21.
Insider Interests
Section 2.22.
Opinion of Financial Adviser
Section 2.23.
Brokers
Section 2.24.
Disclosure
Section 2.25.
No Existing Discussion
<PAGE>
ARTICLE 3. Representations and Warranties of PINOAK.
Section 3.1.
Organization and Qualification
Section 3.2.
Capitalization of PINOAK
Section 3.3.
Authority
Relative to this Agreement; Recommendation
Section 3.4.
SEC Reports; Financial Statements
Section 3.5.
Information Supplied
Section 3.6.
Consents and Approvals; No Violations
Section 3.7.
No Default
Section 3.8
No Undisclosed Liabilities; Absence of Changes
Section 3.9.
Litigation
Section 3.10.
Compliance with Applicable Law
Section 3.11.
Employee Benefit Plans; Labor Matters
Section 3.12.
Environmental Laws and Regulations
Section 3.13.
Tax Matters
Section 3.14.
Title to Property
Section 3.15.
Intellectual Property
Section 3.16.
Insurance
Section 3.17.
Vote Required
Section 3.18.
Tax Treatment
Section 3.19.
Affiliates
Section 3.20.
Certain Business Practices
Section 3.21.
Insider Interests
Section 3.22.
Opinion of Financial Adviser
Section 3.23.
Brokers
Section 3.24.
Disclosure
Section 3.25.
No Existing Discussions
ARTICLE 4. Covenants
Section 4.1.
Conduct of Business of ETLB
Section 4.2.
Conduct of Business of PINOAK
Section 4.3.
Preparation of 8-K
Section 4.4.
Other Potential Acquirers
Section 4.5.
NASD OTC:BB Listing
Section 4.6.
Access to Information
Section 4.7.
Additional events; Reasonable Efforts
Section 4.8.
Indemnification
Section 4.9.
Notification of Certain Matters
ARTICLE 5. Conditions to Consummation of the Merger
Section 5.1.
Conditions to each Party's Obligation
Section 5.2.
Conditions to the Obligations of ETLB
Section 5.3.
Conditions to the Obligations of PINOAK
<PAGE>
ARTICLE 6. Termination; Amendment; Waiver
Section 6.1.
Termination
Section 6.2.
Effect of Termination
Section 6.3.
Fees and Expenses
Section 6.4.
Amendment
Section 6.5.
Extension; Waiver
ARTICLE 7. Miscellaneous
Section 7.1.
Nonsurvival of Representations and Warranties
Section 7.2.
Entire Agreement; Assignment
Section 7.3.
Validity
Section 7.4.
Notices
Section 7.5.
Governing Law
Section 7.6.
Descriptive Headings
Section 7.7.
Parties in Interest
Section 7.8.
Certain Definitions
Section 7.9.
Personal Liability
Section 7.10.
Specific Performance
Section 7.11.
Counterparts
<PAGE>
ACQUISITION AGREEMENT AND PLAN OF MERGER
This
Agreement and Plan of Merger (this "Agreement"), dated as of
April 14, 2006, is between Eaton Laboratories, Inc., a Nevada
corporation
("ETLB"), and PINOAK, INC., a Nevada corporation ("PINOAK").
Whereas, the Boards of Directors of ETLB and PINOAK each have, in
light of
and subject to the terms and conditions set forth herein, (i)
determined that
the Merger (as defined below) is fair to their respective
stockholders and in
the best interests of such stockholders and (ii) approved the
Acquisition
Agreement and Plan of Merger in accordance with this Agreement;
Whereas, for Federal income tax purposes, it is intended that the
Merger
qualify as a reorganization under the provisions of Section 368(a)
of the
Internal Revenue Code of 1986, as amended (the "Code"); and
Whereas, ETLB and PINOAK desire to make certain
representations,
warranties, covenants and agreements in connection with the Merger
and also
to prescribe various conditions to the Merger.
Now,
therefore, in consideration of the promises and the
representations,
warranties, covenants and agreements herein contained, and
intending to be
legally bound hereby, ETLB and PINOAK hereby agree as follows:
ARTICLE I
The Merger
Section 1.1. The
Merger. At the Effective Time (as defined below) and
upon the terms and subject to the conditions of this Agreement and
in
accordance with the
General Corporation Law of the State of Nevada (the
"NGCL"), PINOAK shall be merged with and into ETLB (as defined
below) (the
"Merger"). Following
the Merger, ETLB shall continue as the surviving
corporation (the "Successor Corporation"), shall continue to be
governed by
the laws of the jurisdiction of its incorporation or organization
and the
separate corporate existence of PINOAK shall cease to exist.
The Successor
Corporation shall continue to adapt the original Articles and
By-laws of Eaton
Laboratories, Inc. The
Merger is intended to qualify as a tax-free
reorganization under Section 368 of the Code as relates to the
non-cash
exchange of stock referenced herein.
Section 1.2. The
Acquisition.
ETLB shall purchase for cash all of the
issued and outstanding shares of PINOAK. PINOAK has 2,000,000 common
shares
issued and outstanding to one shareholder. This shareholder has agreed to
sell and ETLB has agreed to purchase all 2,000,000 shares for cash
at par
value $0.001 for a total of $4,000. Once ETLB purchases all of the
common
shares of PINOAK, ETLB will have complete ownership of PINOAK.
Further,
the 2,000,000 common shares of PINOAK will be cancelled upon the
closing of
the merger.
Section 1.3.
Effective Time.
Subject to the terms and conditions set
forth in this Agreement, a Certificate of Merger (the "Merger
Certificate")
shall be duly executed and acknowledged by each of PINOAK and ETLB,
and
thereafter the Merger Certificate reflecting the Merger shall be
delivered to
the Secretary of State of the State of Nevada for filing pursuant
to the NGCL
on the Closing Date (as defined in Section 1.3). The Merger shall become
effective at such time as a properly executed and certified copy of
the
Merger Certificate is duly filed by the Secretary of State of the
State
of Nevada in accordance with the NGCL or such later time as the
parties
may agree upon and set forth in the Merger Certificate (the time at
which
the Merger becomes effective shall be referred to herein a the
"Effective
Time").
Section 1.4.
Closing of the Merger.
The closing of the
Merger (the
"Closing") will take place at a time and on a date to be specified
by the
parties, which shall be no later than the second business day
after
satisfaction of the latest to occur of the conditions set forth in
Article 5
(the "Closing Date"), at the law offices of Thomas C. Cook, 2921 N.
Tenaya
Way, Suite 234, Las Vegas, NV 89128, unless another time, date
or place is
agreed to in writing by the parties hereto.
Section 1.5. Effects
of the Merger. The Merger shall have the effects
set forth in the NGCL.
Without limiting the generality of the foregoing,
and subject thereto, at the Effective Time, all the properties,
rights,
privileges, powers of PINOAK shall vest in the Successor
Corporation,
and all debts, liabilities and duties of PINOAK shall become the
debts,
liabilities and duties of the Successor Corporation.
<PAGE>
Section 1.6. Board of Directors and Officers of ETLB. At or prior to the
Effective Time, each
of PINOAK and ETLB agrees to take such action as is
necessary (i) to cause the number of directors comprising the full
Board of
Directors of ETLB to remain the same.
Section 1.7. Taking of Necessary Action; Further Action.
If, at any time
after the Effective
Time, PINOAK or ETLB reasonably determines that any deeds,
assignments, or instruments or confirmations of transfer are
necessary or
desirable to carry out the purposes of this Agreement and to vest
ETLB with
full right, title and possession to all assets, property, rights,
privileges,
powers and franchises of PINOAK, the officers and directors of ETLB
and PINOAK
are fully authorized in the name of their respective corporations
or otherwise
to take, and will take, all such lawful and necessary or desirable
action.
ARTICLE 2
Representations and Warranties of ETLB
Except as set forth on the Disclosure Schedule delivered by ETLB to
PINOAK
(the "ETLB Disclosure Schedule"), ETLB hereby represents and
warrants to PINOAK
as follows:
Section 2.1. Organization and Qualification.
(a)
ETLB is duly
organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization,
has
approximately 100 or more round lot (100 or more shares)
stockholders and has
all requisite power and authority to own, lease and operate its
properties
and to carry on its businesses as now being conducted, except where
the
failure to be so organized, existing and in good standing or to
have such
power and authority would not have a Material Adverse Effect (as
defined
below) on ETLB. When
used in connection with ETLB, the term "Material
Adverse Effect" means any change or effect (i) that is or is
reasonably likely
to be materially adverse to the business, results of operations,
condition
(financial or otherwise) or prospects of ETLB, other than any
change or
effect arising out of general economic conditions unrelated to any
business
in which ETLB is engaged, or (ii) that may impair the ability of
ETLB to
perform its obligations hereunder or to consummate the
transactions
contemplated hereby.
(b)
ETLB has heretofore delivered to PINOAK accurate and complete
copies of
the Articles of Incorporation and Bylaws (or similar governing
documents), as
currently in effect, of ETLB. Except as set forth on Schedule
2.1 of the ETLB
Disclosure Schedule, ETLB is duly qualified or licensed and in good
standing
to do business in each jurisdiction in which the property owned,
leased or
operated by it or the nature of the business conducted by it makes
such
qualification or licensing necessary, except in such jurisdictions
where the
failure to be so duly qualified or licensed and in good standing
would not
have a Material Adverse Effect on ETLB.
Section 2.2. Capitalization of ETLB.
(a)
The authorized capital
stock of ETLB consists of: (i) Seventy Million
(80,000,000) Authorized Shares of Common Stock, $0.001 par value,
10,873,750
Common shares are issued and outstanding as of December 31, 2005,
and held by
approximately 100 or more round lot (100 or more shares)
stockholders; (ii)
Twenty Million (20,000,000) Authorized Shares of Preferred Stock,
$0.001
par value, no Preferred Shares have been issued. Pursuant to the Merger
Agreement ETLB will not issue any shares to PINOAK, and purchase
the 2,000,000
issued and outstanding of PINOAK for cash at par value of $0.001
per share.
These 2,000,000 shares of PINOAK will be cancelled by closing the
merger. All
of the outstanding ETLB Shares have been duly authorized and
validly issued,
and are fully paid, nonassessable and free of preemptive rights.
Except as
set forth herein, as of the date hereof, there are no outstanding
(i) shares
of capital stock or other voting securities of ETLB, (ii)
securities of
ETLB convertible into or exchangeable for shares of capital stock
or voting
securities of ETLB, (iii) options or other rights to acquire from
ETLB, except
as set forth in 2.2(a) of the Disclosure Schedule, and, no
obligations of
ETLB to issue, any capital stock, voting securities or
securities
convertible into or
exchangeable for capital stock or voting securities of
ETLB, and (iv) equity equivalents, interests in the ownership or
earnings
of ETLB or other similar rights (collectively, "ETLB Securities").
As
of the date hereof, except as set forth on Schedule 2.2(a) of the ETLB
Disclosure Schedule there are no outstanding obligations of ETLB or
its
subsidiaries to repurchase, redeem or otherwise acquire any ETLB
Securities or stockholder agreements, voting trusts or other
agreements or
understandings to which ETLB is a party or by which it is bound
relating to
the voting or registration of any shares of capital stock of ETLB.
For
purposes of this Agreement, "Lien" means, with respect to any
asset
(including, without limitation, any security) any mortgage, lien,
pledge,
charge, security interest or encumbrance of any kind in respect of
such
asset.
<PAGE>
(b)
The ETLB Shares
constitute the only class of equity securities of
ETLB registered or required to be registered under the Exchange
Act.
(c)
ETLB does not own
directly or indirectly more than fifty percent
(50%) of the outstanding voting securities or interests (including
membership
interests) of any entity, other than as specifically disclosed in
the
disclosure documents.
Section 2.3. Authority Relative to this Agreement; Recommendation.
ETLB
has all necessary
corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby.
The
execution and
delivery of this Agreement and the
consummation of the
transactions contemplated hereby have been duly and validly
authorized by the
Board of Directors of ETLB (the "ETLB Board") and no other
corporate
proceedings on the part of ETLB are necessary to authorize this
Agreement or
to consummate the transactions contemplated hereby. This Agreement has been
duly and validly
executed and delivered by ETLB and constitutes a valid,
legal and binding
agreement of ETLB, enforceable against ETLB in accordance
with its terms.
Section 2.4. SEC
Reports; Financial Statements. SEC Reports; Financial
Statements.
(a)
ETLB has not
filed any reports with the U. S. Securities and
Exchange Commission.
Section 2.5.
Information Supplied. None of the information supplied or
to be supplied by ETLB for inclusion or incorporation by reference
in
connection with the Merger will at the date presented to the
stockholder of
PINOAK and at the times of the meeting or meetings of stockholders
of ETLB to be
held in connection with the Merger, contain any untrue statement of
a
material fact or omit to state any material fact required to be
stated
therein or necessary in order to make the statements therein, in
light of the
circumstances under which they are made, not misleading.
Section 2.6. Consents and Approvals; No Violations. Except for
filings,
permits, authorizations, consents and approvals as may be required
under, and
other applicable requirements of, the Securities Act, the Exchange
Act, state
securities or blue sky laws, the Hart-Scott-Rodino Antitrust
Improvements Act
of 1916, as amended (the "HSR Act"), the rules of the National
Association
of Securities Dealers, Inc. ("NASD"), the filing and recordation of
the
<PAGE>
Merger Certificate as required by the NGCL, and as set forth on
Schedule 2.6
of the ETLB Disclosure Schedule no filing
with or notice to, and no permit,
authorization, consent or approval of, any court or tribunal or
administrative, governmental or regulatory body, agency or
authority (a
"Governmental Entity") is necessary for the execution and delivery
by ETLB of
this Agreement or the consummation by ETLB of the transactions
contemplated
hereby, except where the failure to obtain such permits,
authorizations,
consents or approvals
or to make such filings or give such notice would not
have a Material Adverse Effect on ETLB.
Except as set forth in Section 2.6 of the ETLB Disclosure
Schedule,
neither the execution, delivery and performance of this Agreement
by ETLB nor
the consummation by ETLB of the transactions contemplated hereby
will (i)
conflict with or result in any breach of any provision of the
respective
Articles of Incorporation or Bylaws (or similar governing
documents) of ETLB,
(ii) result in a violation or breach of, or constitute (with or
without due
notice or lapse of time or both) a default (or give rise to
any right of
termination, amendment, cancellation or acceleration or Lien)
under, any of
the terms, conditions or provisions of any note, bond, mortgage,
indenture,
lease, license, contract, agreement or other instrument or
obligation to
which ETLB is a party or by which any of its properties or assets
may be
bound, or (iii) violate any order, writ, injunction, decree, law,
statute,
rule or regulation applicable to ETLB or any of its properties or
assets,
except in the case of (ii) or (iii) for violations, breaches
or defaults
which would not have a Material Adverse Effect on ETLB.
Section 2.7. No Default. Except as set forth in Section 2.7 of the
ETLB
Disclosure Schedule, ETLB is not in breach, default or violation
(and no
event has occurred which with notice or the lapse of time or both
would
constitute a breach default or violation) of any term, condition or
provision
of (i) its Articles of Incorporation or Bylaws (or similar governing
documents), (ii) any note, bond, mortgage, indenture, lease,
license,
contract, agreement or other instrument or obligation to which ETLB
is now a
party or by which any of its respective properties or assets may be
bound or
(iii) any order, writ injunction, decree, law, statute, rule or
regulation
applicable to ETLB or any of its respective properties or assets,
except in
the case of (ii) or (iii) for violations, breaches or defaults that
would not
have a Material Adverse Effect on ETLB. Except as set forth in
Section 2.7 of
the ETLB Disclosure Schedule, each note, bond, mortgage, indenture,
lease,
license, contract, agreement or other instrument or obligation to
which ETLB
is now a party or by which its respective properties or assets may
be bound
that is material to ETLB and that has not expired is in full force
and effect
and is not subject to any material default thereunder of which ETLB
is aware
by any party obligated to ETLB thereunder.
Section 2.8. No Undisclosed Liabilities; Absence of Changes. Except
as
and to the extent disclosed in the December 31, 2005 audited
financial
statements, none of ETLB or its subsidiaries had any liabilities
or
obligations of any nature, whether or not accrued, contingent or
otherwise,
that would be required by generally accepted accounting principles
to be
reflected on a consolidated balance sheet of ETLB and its
consolidated
subsidiaries (including the notes thereto) or which would
have a Material
Adverse Effect on ETLB. Except as disclosed by ETLB, none of ETLB
or its
subsidiaries has incurred any liabilities of any nature, whether or not
accrued, contingent or otherwise, which could reasonably be
expected to have,
and there have been no events, changes or effects with respect to
ETLB or its
subsidiaries having or which could reasonably be expected to have,
a Material
Adverse Effect on ETLB. Except as and to the extent disclosed by
ETLB there
has not been (i) any material change by ETLB in its accounting
methods,
principles or practices (other than as required after the date
hereof by
concurrent changes in generally accepted accounting principles),
(ii) any
revaluation by ETLB of any of its assets having a Material Adverse
Effect on
ETLB, including, without limitation, any write-down of the value of
any
assets other than in the ordinary course of business or (iii) any
other
action or event that would have required the consent of any other
party
hereto pursuant to Section 4.2 of this Agreement had such action or
event
occurred after the date of this Agreement.
Section 2.9. Litigation. Except as set forth in Schedule 2.9 of the
ETLB
Disclosure Schedule there is no suit, claim, action, proceeding
or
investigation pending or, to the knowledge of ETLB, threatened
against ETLB
or any of its subsidiaries or any of their respective properties or
assets
before any Governmental Entity which, individually or in the
aggregate, could
reasonably be expected to have a Material Adverse Effect on ETLB or
could
reasonably be expected to prevent or delay the consummation of
the
transactions contemplated by this Agreement. Except as disclosed by
ETLB,
none of ETLB or its subsidiaries is subject to any outstanding
order, writ,
injunction or decree which, insofar as can be reasonably foreseen
in the
future, could reasonably be expected to have a Material Adverse
Effect on
ETLB or could reasonably be expected to prevent or delay the
consummation of
the transactions contemplated hereby.
<PAGE>
Section 2.10. Compliance with Applicable Law. Except as disclosed
by
ETLB, ETLB and its subsidiaries hold all permits, licenses,
variances,
exemptions, orders and approvals of all Governmental Entities
necessary for
the lawful conduct of their respective businesses (the "ETLB
Permits"),
except for failures to hold such permits, licenses, variances,
exemptions,
orders and approvals which would not have a Material Adverse Effect
on ETLB.
Except as disclosed by ETLB, ETLB and its subsidiaries are in
compliance with
the terms of the ETLB Permits, except where the failure so to
comply would
not have a Material Adverse Effect on ETLB. Except as disclosed by
ETLB, the
businesses of ETLB and its subsidiaries are not being conducted in
violation
of any law, ordinance or regulation of any Governmental Entity
except that no
representation or warranty is made in this Section 2.10 with
respect to
Environmental Laws and except for violations or possible violations
which do
not, and, insofar as reasonably can be foreseen, in the future will
not, have
a Material Adverse Effect on ETLB. Except as disclosed by ETLB
no
investigation or review by any Governmental Entity with respect to
ETLB or
its subsidiaries is pending or, to the knowledge of ETLB,
threatened, nor, to
the knowledge of ETLB, has any Governmental Entity indicated an
intention to
conduct the same, other than, in each case, those which ETLB
reasonably
believes will not have a Material Adverse Effect on ETLB.
Section 2.11. Employee Benefit Plans; Labor Matters.
(a)
Except as set forth in Section 2.11(a) of the ETLB Disclosure
Schedule with respect to each employee benefit plan, program,
policy,
arrangement and contract (including, without limitation, any
"employee
benefit plan," as defined in Section 3(3) of the Employee
Retirement Income
Security Act of 1974, as amended ("ERISA")), maintained or
contributed to at
any time by ETLB or any entity required to be aggregated with ETLB
pursuant
to Section 414 of the Code (each, a "ETLB Employee Plan"), no event
has
occurred and to the knowledge of ETLB, no condition or set of
circumstances
exists in connection with which ETLB could reasonably be expected
to be
subject to any liability which would have a Material Adverse Effect
on ETLB.
(b)
(i) No ETLB Employee Plan is or has been subject to Title IV of
ERISA or Section 412 of the Code; and (ii) each ETLB Employee Plan
intended
to qualify under Section 401(a) of the Code and each trust intended
to
qualify under Section 501(a) of the Code is the subject of a
favorable
Internal Revenue Service determination letter, and nothing has
occurred which
could reasonably be expected to adversely affect such
determination.
(c)
Section 2.11(c) of the ETLB Disclosure Schedule sets forth a
true
and complete list, as of the date of this Agreement, of each person
who holds
any ETLB Stock Options, together with the number of ETLB Shares
which are
subject to such option, the date of grant of such option, the
extent to which
such option is vested (or will become vested as a result of the
Merger), the
option price of such option (to the extent determined as of the
date hereof),
whether such option is a nonqualified stock option or is intended
to qualify
as an incentive stock option within the meaning of Section
422(b) of the
Code, and the expiration date of such option. Section 2.11(c) of
the ETLB
Disclosure Schedule also sets forth the total number of such
incentive stock
options and such nonqualified options. ETLB has furnished PINOAK
with complete
copies of the plans pursuant to which the ETLB Stock Options were
issued.
Other than the automatic vesting of ETLB Stock Options that may
occur without
any action on the part of ETLB or its officers or directors, ETLB
has not
taken any action that would result in any ETLB Stock Options that
are
unvested becoming vested in connection with or as a result of the
execution
and delivery of this Agreement or the consummation of the
transactions
contemplated hereby.
(d)
There shall be no payment, accrual of additional benefits,
acceleration of payments, or vesting in any benefit under any ETLB
Employee
Plan or any agreement or arrangement disclosed under this Section
2.11 solely
by reason of entering into or in connection with the
transactions
contemplated by this Agreement.
<PAGE>
(e)
There are no
controversies pending or, to the knowledge of ETLB,
threatened, between ETLB and any of their employees, which
controversies have
or could reasonably be expected to have a Material Adverse Effect
on ETLB.
Neither ETLB nor any of its subsidiaries is a party to any
collective
bargaining agreement or other labor union contract applicable to
persons
employed by ETLB or any of its subsidiaries (and neither ETLB nor
any of its
subsidiaries has any outstanding material liability with respect to
any
terminated collective bargaining agreement or labor union
contract), nor does
ETLB know of any activities or proceedings of any labor union to
organize any
of its or employees.
ETLB has no knowledge of any strike, slowdown, work
stoppage, lockout or threat thereof, by or with respect to any of
its
employees.
Section 2.12. Environmental Laws and Regulations.
(a)
Except as publicly
disclosed by ETLB in the ETLB SEC Reports, (i)
ETLB is in material compliance with all applicable federal, state,
local and
foreign laws and
regulations relating to pollution or protection of human
health or the environment (including, without limitation, ambient
air,
surface water, ground water, land surface or subsurface strata)
(collectively, "Environmental Laws"), except for non-compliance
that would
not have a Material Adverse Effect on ETLB, which compliance
includes, but is
not limited to, the possession by ETLB of all material permits and
other
governmental authorizations required under applicable Environmental
Laws, and
compliance with the terms and conditions thereof; (ii) ETLB has not
received
written notice of, or, to the knowledge of ETLB, is the subject of,
any
action, cause of action, claim, investigation, demand or notice by
any person
or entity alleging
liability under or non-compliance with any Environmental
Law (an ``Environmental Claim") that could reasonably be expected
to have a
Material Adverse Effect on ETLB; and (iii) to the knowledge of
ETLB, there
are no circumstances that are reasonably likely to prevent or
interfere with
such material compliance in the future.
(b)
Except as publicly
disclosed by ETLB, there are no Environmental
Claims which could reasonably be expected to have a Material
Adverse Effect
on ETLB that are pending or, to the knowledge of ETLB, threatened
against
ETLB or, to the knowledge of ETLB, against any person or entity
whose
liability for any Environmental Claim ETLB has or may have retained
or
assumed either contractually or by operation of law.
Section 2.13. Tax
Matters.
(a)
Except as set forth in Section 2.13 of the ETLB Disclosure
Schedule:
(i) ETLB has filed or
has had filed on its behalf in a timely manner (within
any applicable
extension periods) with the appropriate Governmental Entity
all income and other material Tax Returns (as defined herein) with
respect to
Taxes (as defined herein) of ETLB and all Tax Returns were in all
material
respects true, complete and correct; (ii) all material Taxes with
respect to
ETLB have been paid in full or have been provided for in accordance
with GAAP
on ETLB's most recent balance sheet which is part of the ETLB SEC
Documents.
(iii) there are no outstanding agreements or waivers extending the
statutory
period of limitations applicable to any federal, state, local or
foreign
income or other material Tax Returns required to be filed by or
with respect
to ETLB; (iv) to the
knowledge of ETLB none of the Tax Returns of or with
respect to ETLB is currently being audited or examined by any
Governmental
Entity; and (v) no deficiency for any income or other material
Taxes has been
assessed with respect to ETLB which has not been abated or paid in
full.
(b)
For purposes of this
Agreement, (i) "Taxes" shall mean all taxes,
charges, fees, levies or other assessments, including, without
limitation,
income, gross receipts, sales, use, ad valorem, goods and services,
capital,
transfer, franchise, profits, license, withholding, payroll,
employment,
employer health, excise, estimated, severance, stamp, occupation,
property or
other taxes, customs duties, fees, assessments or charges of any
kind
whatsoever, together with any interest and any penalties, additions
to tax or
additional amounts imposed by any taxing authority and (ii) "Tax Return"
shall mean any report, return, documents declaration or other
information or
filing required to be supplied to any taxing authority or
jurisdiction with
respect to Taxes.
Section 2.14. Title to
Property. ETLB has good and defensible title to
all of its properties and assets, free and clear of all liens,
charges and
encumbrances except liens for taxes not yet due and payable and
such liens or
other imperfections of title, if any, as do not materially detract
from the
value of or interfere with the present use of the property affected
thereby
or which, individually or in the aggregate, would not have a
Material Adverse
<PAGE>
Effect on ETLB; and, to ETLB's knowledge, all leases pursuant to
which ETLB
leases from others real or personal property are in good standing,
valid and
effective in accordance with their respective terms, and there is
not, to the
knowledge of ETLB, under any of such leases, any existing material
default or
event of default (or event which with notice of lapse of time, or
both, would
constitute a default and in respect of which ETLB has not taken
adequate
steps to prevent such a default from occurring) except where the
lack of such
good standing,
validity and effectiveness, or the existence of such default
or event, would not have a Material Adverse Effect on ETLB.
Section 2.15. Intellectual Property.
(a)
ETLB owns, or
possesses adequate licenses or other valid rights to
use, all existing United States and foreign patents, trademarks,
trade names,
service marks, copyrights, trade secrets and applications therefore
that are
material to its business as currently conducted (the "ETLB Intellectual
Property Rights").
(b)
The validity of the
ETLB Intellectual Property Rights and the title
thereto of ETLB is not being questioned in any litigation to which
ETLB is a
party.
(c)
Except as set forth in
Section 2.15(c) of the ETLB Disclosure
Schedule, the conduct of the business of ETLB as now conducted does
not, to
ETLB's knowledge, infringe any valid patents, trademarks, trade
names,
service marks or copyrights of others. The consummation of the
transactions
completed hereby will not result in the loss or impairment of any
ETLB
Intellectual Property Rights.
(d)
ETLB has taken steps it believes appropriate to protect and
maintain
its trade secrets as such, except in cases where ETLB has elected
to rely on
patent or copyright protection in lieu of trade secret
protection.
Section 2.16. Insurance. ETLB currently maintains general liability
and
other business insurance.
Section 2.17.
Vote Required.
Approval of this Acquisition Agreement
and Plan of Merger by the Stockholders of ETLB is not required
pursuant to
current Nevada law.
Section 2.18. Tax Treatment. Neither ETLB nor, to the knowledge of
ETLB,
any of its affiliates has taken or agreed to take action that would
prevent
the Merger from constituting a reorganization qualifying under the
provisions
of Section 368(a) of the Code.
Section 2.19.
Affiliates.
Except for the
directors and executive
officers of ETLB, each
of whom is listed in Section 2.19 of the ETLB
Disclosure Schedule, there are no persons who, to the knowledge of
ETLB, may
be deemed to be affiliates of ETLB under Rule 1-02(b) of Regulation
S-X of
the SEC (the "ETLB Affiliates").
Section 2.20. Certain Business Practices. None of ETLB or any
directors,
officers, agents or employees of ETLB has (i) used any funds for
unlawful
contributions, gifts,
entertainment or other unlawful expenses relating to
political activity,
(ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic
political parties
or campaigns or violated any provision of the Foreign Corrupt
Practices Act
of 1977, as amended (the "FCPA"), or (iii) made any other unlawful
payment.
Section 2.21. Insider Interests. Except as set forth in Section
2.21 of
the ETLB Disclosure Schedule, neither any officer or director of
ETLB has any
interest in any material property, real or personal, including
without
limitation, any computer software or ETLB Intellectual Property
Rights, used
in or pertaining to the business of ETLB, expect for the ordinary
rights of a
stockholder or employee stock option holder.
Section 2.22. Opinion of Financial Adviser. No advisers, as of the date
hereof, have delivered to the ETLB Board a written opinion to the
effect
that, as of such date, the exchange ratio contemplated by the
Merger is fair
to the holders of ETLB Shares.
Section 2.23.
Brokers. No broker,
finder or investment banker (other
than the ETLB Financial Adviser, a true and correct copy of whose
engagement
agreement has been provided to PINOAK) is entitled to any
brokerage, finder's or
other fee or
commission in connection with the transactions contemplated
by
this Agreement based upon arrangements made by or on behalf of
ETLB.
<PAGE>
Section 2.24. Disclosure. No representation or warranty of ETLB in
this
Agreement or any certificate, schedule, document or other
instrument
furnished or to be furnished to PINOAK pursuant hereto or in
connection herewith
contains, as of the
date of such representation, warranty or instrument, or
will contain any untrue statement of a material fact or, at the
date thereof,
omits or will omit to state a material fact necessary to make any
statement
herein or therein, in light of the circumstances under which such
statement
is or will be made, not misleading.
Section 2.25. No
Existing Discussions. As of the date hereof, ETLB is
not engaged, directly or indirectly, in any discussions or
negotiations with
any other party with respect to any Third
Party Acquisition (as defined in
Section 4.4).
ARTICLE 3
Representations and Warranties of PINOAK
Except as set forth on the Disclosure Schedule delivered by PINOAK
to ETLB
(the "PINOAK Disclosure Schedule"),PINOAK hereby represents and
warrants to ETLB
as follows:
Section 3.1. Organization and Qualification.
(a)
Each of PINOAK and its subsidiaries is duly organized, validly
existing
and in good standing under the laws of the jurisdiction of its
incorporation
or organization and has all requisite power and authority to own,
lease and
operate its properties and to carry on its businesses as now being
conducted,
except where the failure to be so organized, existing and in good
standing or
to have such power and authority would not have a Material Adverse
Effect (as
defined below) on PINOAK. When used in connection with PINOAK, the
term
"Material Adverse Effect" means any change or effect (i) that is or
is
reasonably likely to be materially adverse to the business, results
of
operations, condition (financial or otherwise) or prospects of
PINOAK
and its subsidiaries, taken as a whole, other than any change or
effect
arising out of general economic conditions unrelated to any
businesses
in which PINOAK and its subsidiaries are engaged, or (ii) that
may
impair the ability of PINOAK to consummate the transactions
contemplated hereby.
<PAGE>
(b)
PINOAK has heretofore delivered to ETLB accurate and complete
copies of
the Articles of Incorporation and Bylaws (or similar governing
documents), as
currently in effect, of PINOAK. Each of PINOAK and its
subsidiaries is duly
qualified or licensed and in good standing to do business in
each
jurisdiction in which the property owned, leased or operated by it
or the
nature of the business conducted by it makes such qualification or
licensing
necessary except in such jurisdictions where the failure to be so
duly
qualified or licensed and in good standing would not have a
Material Adverse
Effect on PINOAK.
Section 3.2. Capitalization of PINOAK.
(a)
As of December 31,
2005, the authorized capital stock of PINOAK
consists of Twenty Million (20,000,000) PINOAK common Shares,
$0.001 par value,
of which 2,000,000 common Shares are issued and outstanding.
All of the
outstanding PINOAK Shares have been duly authorized and validly
issued, and are
fully paid, nonassessable and free of preemptive rights.
PINOAK has five
million (5,000,000) Authorized Shares of Preferred Stock, $0.001
par value, no
Preferred Shares have been issued.
(b)
Except as set forth in
Section 3.2(b) of the PINOAK Disclosure
Schedule, Rick Jesky is the record and beneficial owner of all of
the
issued and outstanding shares of capital stock of its
subsidiaries.
(c)
Except as set forth in
Section 3.2(c) of the PINOAK Disclosure
Schedule, between December 31, 1998 (inception) and the date
hereof, no shares
of PINOAK's capital stock have been issued and no PINOAK Stock
options have
been granted.Except as set forth in Section 3.2(a) above, as of the
date hereof,
there are no outstanding (i) shares of capital stock or other
voting securities
of PINOAK, (ii) securities of PINOAK or its subsidiaries
convertible into or
exchangeable for
shares of capital
stock or voting securities of PINOAK,
(iii) options or other rights to acquire from PINOAK or its
subsidiaries,
or obligations of PINOAK or its subsidiaries to issue, any capital
stock,
voting securities or securities convertible into or exchangeable for
capital stock or voting securities of PINOAK, or (iv) equity
equivalents,
interests in the ownership or earnings of PINOAK or its
subsidiaries or
other similar rights
(collectively, "PINOAK Securities"). As of the
date hereof, there are no outstanding obligations of PINOAK or any
of
its subsidiaries to repurchase, redeem or otherwise acquire any
PINOAK
Securities. There are
no stockholder agreements, voting trusts or other
agreements or understandings to which PINOAK is a party or by which
it
is bound relating to the voting or registration of any shares
of
capital stock of PINOAK.
(d)
Except as set forth in Section 3.2(d) of the PINOAK Disclosure
Schedule, there are no securities of PINOAK convertible into or
exchangeable
for, no options or other rights to acquire from PINOAK, and no
other contract,
understanding, arrangement or obligation (whether or not
contingent)
providing for the issuance or sale, directly or indirectly, of any
capital
stock or other ownership interests in, or any other securities of,
any
subsidiary of PINOAK.
(e)
The PINOAK Shares constitute the only class of equity
securities
of PINOAK or its subsidiaries.
(f)
Except as set forth in Section 3.2(f) of the PINOAK Disclosure
Schedule, PINOAK does not own directly or indirectly any
outstanding voting
securities or interests (including membership interests) of any
entity.
Section 3.3. Authority Relative to this Agreement;
Recommendation.
(a)
PINOAK has all necessary corporate power and authority to execute
and
deliver this Agreement and to consummate the transactions
contemplated
hereby. The execution and delivery of this Agreement and the
consummation of
the transactions contemplated hereby have been duly and validly
authorized by
the Board of Directors of PINOAK (the "PINOAK Board"), and no other
corporate
proceedings on the part of PINOAK are necessary to authorize this
Agreement or
to consummate the transactions contemplated hereby, except, as
referred to in
Section 3.17, the approval and adoption of this Agreement by the
holders of
at least a majority of the then outstanding PINOAK Shares. This
Agreement has
been duly and validly
executed and delivered by PINOAK and constitutes a valid,
legal and binding agreement of PINOAK, enforceable against PINOAK
in accordance
with its terms.
(b)
The PINOAK Board has resolved to recommend that the sole
stockholder of
PINOAK approved and adopted this Agreement.
<PAGE>
Section 3.4. SEC Reports; Financial Statements.
(a)
PINOAK has filed all required forms, reports and documents with
the
Securities and Exchange Commission (the "SEC") since December 31,
2005, each
of which has complied in all material respects with all
applicable
requirements of the Securities Act of 1933, as amended (the
"Securities
Act"), and the Exchange Act (and the rules and regulations
promulgated
thereunder, respectively), each as in effect on the dates such
forms, reports
and documents were
filed. PINOAK has
heretofore delivered or promptly will
deliver prior to the Effective Date to PINOAK, in the form filed
with the SEC
(including any amendments thereto but excluding any exhibits), (i)
its
initial Registration Statement on Form SB-2 filed January 3, 2002,
(ii) all
other reports or registration statements filed by PINOAK with the
SEC since its
inception on December 31, 1998 (all of the foregoing, collectively,
the "PINOAK
SEC Reports"). None of such PINOAK SEC Reports, including, without
limitation,
any financial statements or schedules included or incorporated by
reference
therein, contained, when filed, any untrue statement of a material
fact or
omitted to state a material fact required to be stated or
incorporated by
reference therein or necessary in order to make the statements
therein, in
light of the circumstances under which they were made, not
misleading. The
audited financial statements of PINOAK included in the PINOAK SEC
Reports fairly
present, in conformity with generally accepted accounting
principles applied
on a consistent basis (except as may be indicated in the notes
thereto), the
financial position of PINOAK as of the dates thereof and its
results of
operations and changes in financial position for the periods then
ended. All
material agreements, contracts and other documents required to be
filed as
exhibits to any of the PINOAK SEC Reports have been so filed.
(b)
PINOAK has heretofore made available or promptly will make
available to
ETLB a complete and correct copy of any amendments or modifications
which are
required to be filed with the SEC but have not yet been filed with
the SEC,
to agreements, documents or other instruments which previously had
been filed
by PINOAK with the SEC pursuant to the Exchange Act.
Section 3.5. Information Supplied. None of the information supplied
or
to be supplied by PINOAK for inclusion or incorporation by
reference to the 8-K
will, at the time the 8-K is filed with the SEC and at the time it
becomes
effective under the Securities Act, contain any untrue statement of
a
material fact or omit to state any material fact required to be
stated
therein or necessary to make the statements therein not
misleading.
Section 3.6. Consents and Approvals; No Violations. Except as set
forth
in Section 3.6 of the PINOAK Disclosure Schedule, and for filings,
permits,
authorizations, consents and approvals as may be required under,
and other
applicable requirements of, the Securities Act, the Exchange Act,
state
securities or blue sky laws, the HSR Act, the rules of the NASD,
and the
filing and recordation of the Merger Certificate as required by the
NGCL, no
filing with or notice to, and no permit, authorization, consent or
approval
of, any Governmental Entity is necessary for the execution and
delivery by
PINOAK of this Agreement or the consummation by PINOAK of the
transactions
contemplated hereby, except where the failure to obtain such
permits,
authorizations consents or approvals or to make such filings or
give such
notice would not have a Material Adverse Effect on PINOAK.
Neither the execution, delivery and performance of this Agreement
by PINOAK
nor the consummation by PINOAK of the transactions contemplated
hereby will (i)
conflict with or result in any breach of any provision of the
respective
Articles of Incorporation or Bylaws (or similar governing
documents) of PINOAK
or any of PINOAK's
subsidiaries,
