EXHIBIT 2.1
SHARE EXCHANGE AGREEMENT BETWEEN CROSSNET COMMUNICATIONS, INC.
AND CIROND NETWORKS, INC. DATED MAY 15, 2002
SHARE EXCHANGE AGREEMENT
by and between
CROSSNET COMMUNICATIONS, INC., A COLORADO CORPORATION
and
CIROND NETWORKS, INC., A NEVADA CORPORATION
Dated as of May 15, 2002
TABLE OF CONTENTS
PAGE
THE SHARE EXCHANGE.............................................................4
1.1 THE SHARE EXCHANGE...........................................4
1.2 NUMBER OF SHARES OF CCI COMMON STOCK.........................4
1.3 CONVERSION OF CNI COMMON STOCK...............................4
1.4 EFFECTIVE TIME...............................................5
1.5 FRACTIONAL SHARES............................................5
1.6 RESERVATION OF SHARES........................................5
1.7 ADJUSTMENTS TO EXCHANGE RATIO................................5
1.8 DISSENTING SHARES............................................5
1.9 EXCHANGE OF CERTIFICATES.....................................5
1.10 NO FURTHER OWNERSHIP RIGHTS IN CNI COMMON STOCK..............6
1.11 LOST, STOLEN OR DESTROYED CERTIFICATES.......................6
1.12 EXEMPTION FROM REGISTRATION..................................6
1.13 REPORTING OF SHARE EXCHANGE..................................6
1.14 BOARD OF DIRECTORS AND OFFICERS OF CCI.......................6
1.15 TAKING OF NECESSARY ACTION; FURTHER ACTION...................6
THE CLOSING....................................................................6
2.1 TIME AND PLACE OF CLOSING....................................6
2.2 OBLIGATIONS OF CNI AND THE CNI SHAREHOLDERS AT OR
PRIOR TO THE CLOSING.........................................7
2.3 OBLIGATIONS OF CCI AT OR PRIOR TO THE CLOSING................7
REPRESENTATIONS AND WARRANTIES OF CNI..........................................8
3.1 ORGANIZATION AND QUALIFICATION...............................8
3.2 CAPITALIZATION...............................................8
3.3 SUBSIDIARIES AND AFFILIATES..................................8
3.4 OPTIONS OR OTHER RIGHTS......................................8
3.5 OWNERSHIP OF SHARES..........................................8
3.6 VALIDITY AND EXECUTION OF AGREEMENT..........................8
3.7 NO CONFLICT..................................................9
3.8 CONSENTS AND APPROVALS.......................................9
3.9 VIOLATION OF LAWS, PERMITS, ETC..............................9
3.10 BOOKS AND RECORDS............................................9
3.11 CNI FINANCIAL STATEMENTS....................................10
3.12 UNDISCLOSED LIABILITIES.....................................10
3.13 TITLE TO PROPERTY; ENCUMBRANCES.............................10
3.14 TAXES.......................................................10
3.15 LITIGATION..................................................11
3.16 CONTRACTS AND OTHER AGREEMENTS..............................11
3.17 ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE....................11
3.18 COMPENSATION ARRANGEMENTS; OFFICERS AND DIRECTORS...........12
3.19 ERISA.......................................................12
3.20 OPERATIONS..................................................12
3.21 INTANGIBLE PROPERTY AND INTELLECTUAL PROPERTY...............13
3.22 EMPLOYEE RELATIONS..........................................14
3.23 INSURANCE...................................................14
3.24 LICENSES AND PERMITS........................................14
3.25 BROKERS.....................................................14
3.26 DISCLOSURE..................................................15
REPRESENTATIONS AND WARRANTIES OF CCI.........................................15
4.1 ORGANIZATION AND QUALIFICATION..............................15
4.2 CAPITALIZATION..............................................15
4.3 SUBSIDIARIES AND AFFILIATES.................................15
4.4 OPTIONS OR OTHER RIGHTS.....................................15
4.5 VALIDITY AND EXECUTION OF AGREEMENT.........................15
4.6 NO CONFLICT.................................................16
4.7 CONSENTS AND APPROVALS......................................16
4.8 VIOLATION OF LAWS, PERMITS, ETC.............................16
4.9 BOOKS AND RECORDS...........................................16
4.10 CCI FINANCIAL STATEMENTS....................................16
4.11 UNDISCLOSED LIABILITIES.....................................17
4.12 TITLE TO PROPERTY; ENCUMBRANCES.............................17
4.13 TAXES.......................................................17
4.14 LITIGATION..................................................17
4.15 CONTRACTS AND OTHER AGREEMENTS..............................18
4.16 COMPENSATION ARRANGEMENTS; OFFICERS, DIRECTORS AND
EMPLOYEES...................................................18
4.17 ERISA.......................................................18
4.18 OPERATIONS..................................................18
4.19 INTANGIBLE PROPERTY AND INTELLECTUAL PROPERTY...............20
4.20 INSURANCE...................................................20
4.21 LICENSES AND PERMITS........................................20
4.22 BROKERS.....................................................20
4.23 APPROVAL OF SHARE EXCHANGE..................................21
4.24 SEC REPORTING STATUS........................................21
4.25 INVESTMENT COMPANY..........................................21
4.26 TRADING STATUS..............................................21
4.27 DISCLOSURE..................................................21
ACTIONS PRIOR TO CLOSING......................................................21
5.1 CORPORATE EXAMINATIONS AND INVESTIGATIONS...................21
5.2 CONDUCT AND PRESERVATION OF BUSINESS OF CCI.................22
5.3 CONDUCT AND PRESERVATION OF BUSINESS OF CNI.................22
5.4 ADVICE OF CHANGES...........................................22
5.5 OTC BULLETIN BOARD..........................................22
5.6 SEC REPORTS.................................................22
5.7 SHAREHOLDER APPROVALS.......................................23
5.8 OTHER AGREEMENTS............................................23
CONDITIONS PRECEDENT TO CLOSING...............................................23
6.1 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF CCI TO
COMPLETE THE CLOSING........................................23
6.2 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF CNI TO
COMPLETE THE CLOSING........................................25
POST-CLOSING COVENANTS........................................................26
7.1 FURTHER INFORMATION.........................................26
7.2 RECORD RETENTION............................................26
7.3 POST-CLOSING ASSISTANCE.....................................26
7.4 SEC REPORTING...............................................27
SURVIVAL; INDEMNIFICATION.....................................................27
8.1 SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND
WARRANTIES..................................................27
TERMINATION OF AGREEMENT......................................................27
9.1 TERMINATION.................................................27
9.2 SURVIVAL AFTER TERMINATION..................................28
MISCELLANEOUS.................................................................28
10.1 EXPENSES....................................................28
10.2 FURTHER ASSURANCES..........................................28
10.3 NOTICES.....................................................28
10.4 MEDIATION...................................................29
10.5 ARBITRATION.................................................30
10.6 PUBLICITY...................................................30
10.7 ENTIRE AGREEMENT............................................30
10.8 WAIVERS AND AMENDMENTS......................................30
10.9 GOVERNING LAW...............................................30
10.10 BINDING EFFECT, NO ASSIGNMENT............................30
10.11 COUNTERPARTS.............................................31
10.12 EXHIBITS AND SCHEDULES...................................31
10.13 EFFECT OF DISCLOSURE ON SCHEDULES........................31
10.14 HEADINGS.................................................31
10.15 SEVERABILITY OF PROVISIONS...............................31
SCHEDULE A - CNI SHAREHOLDERS
Share Exchange Agreement - Page 32
THIS SHARE EXCHANGE AGREEMENT is entered into as of May 15, 2002, by and between
CROSSNET COMMUNCATIONS, INC., a Colorado corporation ("CCI"), and CIROND
NETWORKS, INC., a Nevada corporation ("CNI").
RECITALS
A. The Boards of Directors of each of CCI and CNI have determined that it
is in the best interests of CCI and CNI (as applicable) and their
respective shareholders that CCI acquire CNI through a statutory share
exchange under the laws of Colorado and Nevada (the "SHARE EXCHANGE")
and, in furtherance thereof, have approved the Share Exchange, this
Agreement and the transactions contemplated hereby.
B. Pursuant to the Share Exchange, among other things, and subject to the
terms and conditions of this Agreement, all of the shares of capital
stock of CNI which are issued and outstanding immediately prior to the
Effective Time (as defined below) shall be converted into the right to
receive shares of common stock, no par value per share, of CCI ("CCI
COMMON STOCK") on the terms and subject to the conditions set forth
herein.
C. CCI and CNI desire to make certain representations, warranties,
covenants and agreements in connection with the Share Exchange.
AGREEMENT
NOW, THEREFORE, for and in consideration of the premises and the mutual
agreements hereinafter set forth, in accordance with the provisions of
applicable law, the parties hereby agree as follows:
ARTICLE I
THE SHARE EXCHANGE
1.1 THE SHARE EXCHANGE. At the Effective Time and upon the terms and
subject to the conditions of this Agreement and the applicable
provisions of the Colorado Business Corporation Act and all amendments
and additions thereto (the "COLORADO LAW") and the Nevada General
Corporation Law and all amendments and additions thereto (the "NEVADA
LAW"), by virtue of the Share Exchange and without any action on the
part of CCI or the holder of any shares of CNI Common Stock, the
following shall occur:
1.2 NUMBER OF SHARES OF CCI COMMON STOCK. The stockholders of CNI named on
SCHEDULE A attached to this Agreement (the "CNI SHAREHOLDERS") shall
receive an aggregate of 14,740,250 shares of CCI Common Stock on a pro
rata basis based on their percentage shareholdings in CNI at the
Effective Date, and CNI shall become a wholly-owned subsidiary of CCI.
1.3 CONVERSION OF CNI COMMON STOCK. Each share of CNI Common Stock issued
and outstanding immediately prior to the Effective Time (other than any
Dissenting Shares, as such term is defined in SECTION 1.8) will be
automatically cancelled and extinguished and
each share of CNI Common Stock that is issued and outstanding
immediately prior to the Effective Time shall be converted
automatically into the right to receive one (1) share of CCI Common
Stock (the "EXCHANGE RATIO").
1.4 EFFECTIVE TIME. The Share Exchange will become effective upon the
proper filing of Articles of Share Exchange with the Secretary of State
of the States of Colorado and Nevada, or such other jurisdictions as
required (the "EFFECTIVE TIME").
1.5 FRACTIONAL SHARES. No fraction of a share of CCI Common Stock will be
issued upon such exchange of shares of CNI Common Stock. Instead
amounts of shares will be rounded to the nearest whole number.
1.6 RESERVATION OF SHARES. CCI will reserve sufficient shares of CCI Common
Stock for issuance pursuant to SECTION 1.3.
1.7 ADJUSTMENTS TO EXCHANGE RATIO. The Exchange Ratio shall be equitably
adjusted to reflect fully the effect of any stock split, reverse split,
stock combination, stock dividend (including any dividend or
distribution of securities convertible into CCI Common Stock or CNI
Common Stock), reorganization, reclassification, recapitalization or
other like change with respect to CCI Common Stock or CNI Common Stock,
the effective date of which occurs after the date hereof and prior to
the Effective Time.
1.8 DISSENTING SHARES.
(a) Notwithstanding any provision of this Agreement to the
contrary, any shares of CNI Common Stock held by a holder who
has demanded and perfected appraisal rights for such shares in
accordance with the Nevada Law and who, as of the Effective
Time, has not effectively withdrawn or lost such appraisal or
dissenters' rights ("DISSENTING SHARES") shall not be
converted into or represent a right to receive CCI Common
Stock pursuant to SECTIONS 1.2 and 1.3, but the holder thereof
shall only be entitled to such rights as are granted by the
Nevada Law.
(b) Notwithstanding the provisions of SECTION 1.8(A), if any
holder of shares of CNI Common Stock who demands appraisal of
such shares under the Nevada Law shall effectively withdraw or
lose (through failure to perfect or otherwise) the right to
appraisal, then, as of the later of (i) the Effective Time or
(ii) the occurrence of such event, such holder's shares shall
automatically be converted into and represent only the right
to receive CCI Common Stock as provided in SECTIONS 1.2 and
1.3, without interest thereon, in accordance with SECTIONS 1.2
and 1.3.
(c) CNI shall give CCI (i) prompt notice of its receipt of any
written demands for appraisal of any shares of CCI Common
Stock, withdrawals of such demands, and any other instruments
relating to the Share Exchange received by CNI and (ii) the
opportunity to participate in all negotiations and proceedings
with respect to demands for appraisal under the Nevada Law.
1.9 EXCHANGE OF CERTIFICATES. At Closing, or as soon as practicable
thereafter, CCI shall have its transfer agent issue a letter of
transmittal to each CNI Shareholder listed on SCHEDULE A
hereto. After having received a completed letter of transmittal and
certificates representing such CNI Shareholder's CNI Common Stock, the
transfer agent shall deliver certificates representing the whole number
of shares of CCI Common Stock into which such CNI Shareholder's shares
of CNI Common Stock shall have been exchanged as set forth herein.
1.10 NO FURTHER OWNERSHIP RIGHTS IN CNI COMMON STOCK. All shares of CCI
Common Stock issued upon the surrender for exchange of shares of CNI
Common Stock in accordance with the terms hereof shall be deemed to
have been issued in full satisfaction of all rights pertaining to such
shares of CNI Common Stock, and there shall be no further registration
of transfers on the records of CNI of shares of CNI Common Stock which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, certificates are presented to the CCI for any reason,
they shall be canceled and exchanged as provided in this Article 1.
1.11 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any certificates
evidencing shares of CNI Common Stock shall have been lost, stolen or
destroyed, the transfer agent for CCI shall issue certificates
representing such shares of CCI Common Stock in exchange for such lost,
stolen or destroyed certificates, upon the making of an affidavit of
that fact by the holder thereof.
1.12 EXEMPTION FROM REGISTRATION. The shares of CCI Common Stock to be
issued pursuant to SECTIONS 1.2 and 1.3 in connection with the Share
Exchange will be issued in a transaction exempt from registration under
the Securities Act of 1933, as amended (including the rules and
regulations promulgated thereunder, the "SECURITIES ACT").
1.13 REPORTING OF SHARE EXCHANGE. For federal, state, and local income tax
return reporting purposes, all parties agree to treat the Share
Exchange as a nontaxable exchange under Section 368 of the Internal
Revenue Code.
1.14 BOARD OF DIRECTORS AND OFFICERS OF CCI. Simultaneously at Closing, the
number of directors of CCI shall be increased to three (3). All of the
existing officers and directors of CCI shall resign from their
positions and Xxxxxxxx Xxxxxx shall be appointed to fill the vacancies
as the sole officer and director of CCI.
1.15 TAKING OF NECESSARY ACTION; FURTHER ACTION. If, at any time after the
Effective Time, any such further action is necessary or desirable to
carry out the purposes of this Agreement, the officers and directors of
CCI are fully authorized to take, and will use their reasonable efforts
to take, all such lawful and necessary action.
ARTICLE II
THE CLOSING
2.1 TIME AND PLACE OF CLOSING. The closing of the Share Exchange (the
"CLOSING") shall, unless otherwise agreed to in writing by the parties,
take place at the law offices of Xxxx Xxxx Xxxx Xxxxxxxxxx & Xxxxxxxxx,
P.C., 000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000, at a time
to be determined by the parties, on or prior to June 30, 2002.
2.2 OBLIGATIONS OF CNI AND THE CNI SHAREHOLDERS AT OR PRIOR TO THE CLOSING.
At or prior to Closing, and subject to the satisfaction by CCI of its
obligations hereunder, CNI and the CNI Shareholders shall deliver to
CCI the following:
(a) A copy of the Articles of Incorporation of CNI certified as of
a date within ten days of the Closing by the Secretary of
State of the State of Nevada and certified by the corporate
secretary of CNI as to the absence of any amendments between
the date of certification by the Secretary of State and the
Closing;
(b) A certificate from the Secretary of State of the State of
Nevada as to the existence and good standing of CNI as of a
date within ten days of the Closing;
(c) A certificate of the corporate secretary of CNI attaching
thereto true and correct copies of the bylaws of CNI;
(d) The certificate of CNI referred to in SECTION 6.1 hereof;
(e) Such other documents as are required pursuant to this
Agreement or as may reasonably be requested from CNI by CCI or
its counsel; and
(f) The certificates evidencing the shares of CNI Common Stock
owned by the CNI Shareholders, duly endorsed for transfer to
CCI.
2.3 OBLIGATIONS OF CCI AT OR PRIOR TO THE CLOSING. At or prior to Closing,
and subject to the satisfaction by CNI of its obligations hereunder,
CCI shall deliver to CNI and the CNI Shareholders the following:
(a) A copy of the Articles of Incorporation of CCI certified as of
a date within ten days of the Closing by the Secretary of
State of the State of Colorado and certified by the corporate
secretary of CCI as to the absence of any amendments between
the date of certification by the Secretary of State and the
Closing;
(b) A certificate from the Secretary of State of the State of
Colorado as to the existence and good standing of CCI as of a
date within ten days of the Closing;
(c) A certificate of the corporate secretary of CCI attaching
thereto true and correct copies of the bylaws of CCI and the
corporate resolutions duly adopted by the board of directors
of CCI authorizing the consummation of the transactions
contemplated hereby;
(d) The certificate of CCI referred to in SECTION 6.2 hereof;
(e) Such other documents as are required pursuant to this
Agreement or as may reasonably be requested from CCI by CNI or
its counsel; and
(f) Certificates evidencing the CCI Common Stock to be issued to
the CNI Shareholders pursuant to ARTICLE I hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CNI
Except as expressly set forth and specifically identified by the section number
of this Agreement in the schedule delivered by CNI to CCI contemporaneously with
the execution of this Agreement (the "CNI DISCLOSURE SCHEDULE"), CNI represents,
warrants, and covenants to CCI as follows:
3.1 ORGANIZATION AND QUALIFICATION. CNI is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Nevada and has all requisite corporate power and authority to (a) own,
lease and operate its properties and assets as they are now owned,
leased and operated and (b) carry on its business as currently
conducted and as proposed to be conducted. CNI is duly qualified or
licensed to do business in each jurisdiction in which the failure to be
so qualified or licensed could have a material adverse effect in the
business, operations, properties, assets, liabilities, prospects, or
condition (financial or otherwise) of CNI (hereinafter a "MATERIAL
EFFECT").
3.2 CAPITALIZATION. The issued and outstanding capital stock of CNI
consists of 14,740,250 shares of common stock. All of the issued and
outstanding shares of capital stock of CNI are validly issued, fully
paid, and nonassessable, and none of such shares has been issued in
violation of the preemptive rights of any person.
3.3 SUBSIDIARIES AND AFFILIATES. Except as set forth in SECTION 3.3 of the
CNI Disclosure Schedule, CNI does not own or hold, directly or
indirectly, any equity, debt, or other interest in any entity or
business or any option to acquire any such interest.
3.4 OPTIONS OR OTHER RIGHTS. Except as set forth in SECTION 3.4 of the CNI
Disclosure Schedule, no options, warrants, calls, commitments or other
rights to acquire, sell or issue shares of capital stock or other
equity interests of CNI, whether upon conversion of other securities or
otherwise, are issued or outstanding, and there is no agreement or
understanding with respect to the voting of such capital stock or other
equity interests.
3.5 OWNERSHIP OF SHARES. The shares of CNI Common Stock are owned of record
and beneficially by the CNI Shareholders as set forth on Schedule A. To
the knowledge of CNI, the CNI Shareholders possess full authority and
legal right to sell, transfer, and assign the entire legal and
beneficial ownership of the shares of CNI common stock, free from all
liens, claims, and encumbrances of any kind.
3.6 VALIDITY AND EXECUTION OF AGREEMENT. CNI has the full legal right,
capacity and power required to enter into, execute and deliver this
Agreement and to carry out the transactions contemplated, subject to
approval of the shareholders of CNI and the terms set forth in this
Agreement. This Agreement has been duly executed and delivered by CNI
and constitutes the valid and binding obligation of CNI, enforceable in
accordance with its terms, subject to
the qualification that enforcement of the rights and remedies created
hereby is subject to (a) bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting the rights
and remedies of creditors and (b) general principles of equity
(regardless of whether such enforcement is considered in a proceeding
in equity or at law).
3.7 NO CONFLICT. Except as set forth in SECTION 3.7 of the CNI Disclosure
Schedule and to the knowledge of CNI, none of the execution, delivery,
or performance of this Agreement does or will: (a) result in any
violation or be in conflict with or constitute a default under any term
or provision of the Articles of Incorporation or bylaws of CNI or any
term or provision of any judgment, decree, order, statute, injunction,
rule, or regulation applicable to CNI that would cause a Material
Effect, or of any material note, bond, mortgage, indenture, lease,
license, franchise, agreement, or other instrument or obligation to
which CNI or is bound that would cause a Material Effect; (b) result in
the creation of any material option, pledge, security interest, lien,
charge, encumbrance, or restriction, whether imposed by agreement,
understanding, law or otherwise, except those arising under applicable
federal or state securities laws (hereinafter an "ENCUMBRANCE") upon
any of the properties or assets of CNI pursuant to any such term or
provision that would cause a Material Effect; or (c) constitute a
default under, terminate, accelerate, amend or modify, or give any
party the right to terminate, accelerate, amend, modify, abandon, or
refuse to perform or comply with, any material contract, agreement,
arrangement, commitment, or plan to which CNI is a party, or by which
CNI or any of its properties or assets may be subject or bound that
would cause a Material Effect.
3.8 CONSENTS AND APPROVALS. No federal, state, or other regulatory
approvals are required to be obtained, nor any regulatory requirements
complied with, by CNI in connection with the Share Exchange.
3.9 VIOLATION OF LAWS, PERMITS, ETC.
(a) CNI is not in violation of any term or provision of its
Articles of Incorporation or bylaws, or of any material term
or provision of any judgment, decree, order, statute, law,
injunction, rule, ordinance, or governmental regulation that
is applicable to it and where the failure to comply with which
would have a Material Effect.
(b) CNI has maintained in full force and effect all certificates,
licenses, and permits material to the conduct of its business,
and has not received any notification that any revocation or
limitation thereof is threatened or pending.
3.10 BOOKS AND RECORDS. The books and records of CNI (including, without
limitation, the books of account, minute books, and stock record books)
are complete and correct in all material respects and have been
maintained in accordance with sound business practices. The minute
books of CNI are complete and current in all material respects and, as
applicable, accurately reflect all actions taken by the shareholders
and the board of directors of CNI since the date of inception of CNI,
and all signatures contained therein are the true signatures of the
persons whose signatures they purport to be.
3.11 CNI FINANCIAL STATEMENTS. The unaudited balance sheet of CNI as of
March 31, 2002, and the related unaudited statement of income and
statement of cash flows for the three months then ended, together with
the audited balance sheet of CNI as of December 31, 2001, and the
related audited statements of income and statements of cash flow for
the period from inception to December 31, 2001 (the "CNI FINANCIAL
STATEMENTS"), true and complete copies of which have been delivered to
CCI, present fairly, in all material respects, the financial position
of CNI as at such dates and the results of operations of CNI for the
periods then ended, in accordance with generally accepted accounting
principles ("GAAP") consistently applied for the periods covered
thereby.
3.12 UNDISCLOSED LIABILITIES. To the knowledge of CNI, CNI does not have any
material direct or indirect indebtedness, liability, claim, loss,
damage, deficiency, obligation or responsibility, fixed or unfixed,
xxxxxx or inchoate, liquidated or unliquidated, secured or unsecured,
accrued, absolute, contingent or otherwise (all of the foregoing being
collectively referred to as "LIABILITIES" and individually as a
"LIABILITY"), of a kind required by GAAP to be set forth on a financial
statement that is not fully and adequately reflected or reserved
against on the CNI Financial Statements. CNI does not have any
Liabilities, whether or not of a kind required by GAAP to be set forth
on a financial statement, other than (a) Liabilities incurred in the
ordinary course of business since the date of the latest balance sheet
included in the CNI Financial Statements that are consistent with past
practice and are included in the latest CNI Financial Statements, (b)
Liabilities that are fully reflected on or reserved against on the
latest balance sheet included in the CNI Financial Statements, or (c)
as specifically disclosed in the CNI Financial Statements.
3.13 TITLE TO PROPERTY; ENCUMBRANCES. CNI has good and indefeasible title to
and other legal right to use all properties and assets, real, personal
and mixed, tangible and intangible, reflected as owned on the latest
balance sheet included in the CNI Financial Statements or acquired
after the date of such balance sheet, except for properties and assets
disposed of in accordance with customary practice in the business or
disposed of for full and fair value since the date of such balance
sheet in the ordinary course of business consistent with past practice
and except for matters that would not have a Material Effect.
3.14 TAXES. All returns, reports, information returns, or other documents
(including any related or supporting information) filed or required to
be filed with any federal, state, local, or foreign governmental entity
or others authority in connection with the determination, assessment or
collection of any Tax (whether or not such Tax is imposed on CNI) or
the administration of any laws, regulations or administrative
requirements relating to any Tax (hereinafter "TAX RETURNS"), reports
and declarations of estimated tax or estimated tax deposit forms
required to be filed by CNI have been duly and timely filed; CNI has
paid all taxes, charges, fees, levies or other assessments imposed by
any federal, state, local or foreign taxing authority, whether disputed
or not, including, without limitation, income, capital, estimated,
excise, property, sales, transfer, withholding, employment, payroll,
and franchise taxes and such terms shall include any interest,
penalties or additions attributable to or imposed on or with respect to
such assessments and any expenses incurred in connection with the
settlement of any tax liability (hereinafter "TAXES") which have become
due whether pursuant to such returns or any assessment received by it
or otherwise, and has paid
all installments of estimated Taxes due; and all Taxes which CNI is
required by law to withhold or to collect have been duly withheld and
collected, and have been paid over to the proper court, tribunal,
arbitrator or any government or political subdivision thereof, whether
federal, state, county, local or foreign, or any agency, authority,
official or instrumentality of any such government or political
subdivision (hereinafter "GOVERNMENTAL OR REGULATORY BODY"). There are
no tax liens upon any of the assets or properties of CNI except for any
lien, pledge, hypothecation, mortgage, security interest, claim, lease,
charge, option, right of first refusal, easement, servitude, transfer
restriction under any member or similar agreement, encumbrance or any
other restriction or limitation whatsoever, other than (i)
materialmen's, mechanics', repairmen's or other like liens arising in
the ordinary course of business for amounts either not yet due or being
contested in good faith and by appropriate proceedings so long as such
proceedings shall not involve any material danger of sale, forfeiture
or loss of any part of the assets and shall have been disclosed to CCI
hereunder, or (ii) any lien arising as a result of any act or omission
of CCI (hereinafter "LIENS") for Taxes not yet due. CNI is not a party
to any express tax settlement agreement, arrangement, policy or
guideline, formal or informal (a "SETTLEMENT AGREEMENT"), and CNI does
not have any obligation to make payments under any Settlement
Agreement.
3.15 LITIGATION.
(a) There is no action, proceeding, investigation, or inquiry
pending or, to the best of CNI's knowledge, threatened (i)
against or affecting any of CNI's assets or business that, if
determined adversely to CNI, would result in a Material Effect
or (ii) that questions this Agreement or any action
contemplated by this Agreement or in connection with the Share
Exchange.
(b) CNI has no knowledge of any state of facts or of the
occurrence or nonoccurrence of any event or group of related
events, that should reasonably cause CNI to determine that
there exists any basis for any material claim against CNI for
any of the matters described in paragraph (a) above.
3.16 CONTRACTS AND OTHER AGREEMENTS. CNI has made available to CCI complete
and correct copies of all material written agreements, contracts, and
commitments, together with all amendments thereto, and accurate (in all
material respects) descriptions of all material oral agreements. Such
agreements, contracts, and commitments are in full force and effect,
and, to the best of CNI's knowledge, all other parties to such
agreements, contracts, and commitments have performed all obligations
required to be performed by them to date thereunder in all material
respects and are not in default thereunder in any material respect.
3.17 ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE. All accounts receivable
reflected on the latest balance sheet of CNI included in the CNI
Financial Statements, and all accounts receivable arising subsequent to
March 31, 2002, (a) have arisen from BONA FIDE sales transactions in
the ordinary course of business on ordinary trade terms and (b) have
been collected or are collectible in the ordinary course of business in
the aggregate recorded amounts thereof in accordance with their terms
without valid set-off or counterclaim. CNI
has made payments on accounts payable and other current obligations
arising subsequent to March 31, 2002, in accordance with past practice
of the business of CNI.
3.18 COMPENSATION ARRANGEMENTS; OFFICERS AND DIRECTORS. SECTION 3.18 to the
CNI Disclosure Schedule sets forth: (a) the names of all present
officers and directors of CNI and current annual salary, including any
promised, expected or customary bonus or such other amount, and (b) the
names and titles of all directors and officers of CNI. CNI has not made
a commitment or agreement (verbally or in writing) to increase the
compensation or to modify the conditions or terms of employment of any
person listed in SECTION 3.18 to the CNI Disclosure Schedule. To the
knowledge of CNI, none of such persons has made a threat to CNI to
terminate such person's relationship with CNI.
3.19 ERISA. Except as set forth in SECTION 3.19 to the CNI Disclosure
Schedule, there are no employee benefit plans as defined in ERISA
("PLANS") maintained for the benefit of, or covering, any employee,
former employee, independent contractor or former independent
contractor of CNI, or their dependents or their beneficiaries, or
otherwise, now or heretofore contributed to by CNI, and no such Plan is
or has ever been subject to ERISA.
3.20 OPERATIONS. Except as expressly authorized by this Agreement, and
except as set forth in SECTION 3.20 to the CNI Disclosure Schedule,
since the date of the latest CNI Financial Statements, CNI has not:
(a) amended its Articles of Incorporation or By-Laws or merged
with or into or consolidated with any other entity, or changed
or agreed to rearrange in any manner the character of the
business of CNI;
(b) issued, sold or purchased options or rights to subscribe to,
or entered into any contracts or commitments to issue, sell or
purchase, any shares of its capital stock or other equity
interests except in the ordinary course of business and
consistent with past practices;
(c) issued any note, bond or other debt security, created,
incurred or assumed any indebtedness for borrowed money other
than in the ordinary course of business in connection with
trade payables, or guaranteed any indebtedness for borrowed
money or any capitalized lease obligation;
(d) declared, set aside or paid any dividends or declared or made
any other distributions of any kind to the shareholders, or
made any direct or indirect redemption, retirement, purchase
or other acquisition of any shares of its capital stock or
other equity interests;
(e) knowingly waived any right of material value to the business
of CNI;
(f) made any change in its accounting methods or practices or made
any changes in depreciation or amortization policies or rates
adopted by it or made any material
write-down of inventory or material write-off as uncorrectable
of accounts receivable;
(g) made any wage or salary increase or other compensation payable
or to become payable or bonus, or increase in any other direct
or indirect compensation, for or to any of its officers,
directors, employees, consultants, agents or other
representatives, or any accrual for or commitment or agreement
to make or pay the same, other than increases made in the
ordinary course consistent with past practice;
(h) entered into any transactions with any of its affiliates,
shareholders, officers, directors, employees, consultants,
agents or other representatives (other than employment
arrangements made in the ordinary course of business
consistent with past practice), or any affiliate of any
shareholder, officer, director, consultant, employee, agent or
other representative;
(i) made any payment or commitment to pay any severance or
termination pay to any person or any of its officers,
directors, employees, consultants, agents or other
representatives, other than payments or commitments to pay
such persons or their officers, directors, employees in the
ordinary course of business;
(j) except in the ordinary course of business, incurred or
assumed any debt, obligation or liability (whether absolute or
contingent and whether or not currently due and payable);
(k) except in the ordinary course of business, made any
acquisition of all or any part of the assets, properties,
capital stock or business of any other person;
(l) except in the ordinary course of business, paid, directly or
indirectly, any of its Liabilities before the same became due
in accordance with their terms or otherwise than in the
ordinary course of business, except to obtain the benefit of
discounts available for early payment;
(m) except in the ordinary course of business, created, incurred
or assumed any indebtedness for borrowed money, or guaranteed
any indebtedness for borrowed money or any capitalized lease
obligation, in each case in excess of $50,000 individually or
in the aggregate;
(n) except in the ordinary course of business, made any capital
expenditures or commitments for capital expenditures in
aggregate amount exceeding $50,000; or
(o) except in the ordinary course of business, terminated, failed
to renew, amended or entered into any contract or other
agreement of a type required to be disclosed pursuant to
SECTION 3.16.
3.21 INTANGIBLE PROPERTY AND INTELLECTUAL PROPERTY. CNI possesses all of the
necessary licenses, trademarks, trade names, domain names, patents
(hereinafter "INTELLECTUAL
PROPERTY RIGHTS") necessary to conduct its business in the manner that
is currently being conducted and anticipates conducting in the future.
All of such Intellectual Property Rights are held in the name of CNI.
To the knowledge of CNI, none of the Intangible Property of CNI
infringes upon the rights of any other person in any material respect
or, to the knowledge of CNI, is so infringed upon by any other person
or its property. CNI has not received any notice of any claim of any
other person relating to any of the Intangible Property or any process
or confidential information of CNI and does not know of any basis for
any such charge or claim. Except for the Intangible Property, no other
material intellectual property or intangible property rights are
required for CNI to conduct the business of CNI in the ordinary course
consistent with past practice. Except as separately identified in
SECTION 3.21 of the CNI Disclosure Schedule, no approval or consent of
any person is needed so that the interest of CNI in the Intangible
Property shall continue to be in full force and effect and enforceable
by CNI following the transactions contemplated by this Agreement.
3.22 EMPLOYEE RELATIONS. CNI is not a party any agreement with any labor
organization, collective bargaining or similar agreement with respect
to its employees. There are no material complaints, grievances or
arbitrations, employment-related litigation, administrative proceedings
or controversies either pending or, to the knowledge of CNI,
threatened, involving any employee, applicant for employment, or former
employee of CNI against CNI. During the past five years, CNI has not
suffered or sustained any labor dispute resulting in any work stoppage
and no such work stoppage is, to the knowledge of CNI, threatened. To
the knowledge of CNI, there are no attempts presently being made to
organize any employees employed by CNI.
3.23 INSURANCE. CNI has adequate policies of insurance for its operations.
CNI is not in default with respect to any material provision contained
in any policy or binder of insurance and has not failed to give any
notice or present any claim under any such policy or binder in due and
timely fashion. There are no outstanding unpaid claims under any such
policy or binder which have gone unpaid for more than 45 days or as to
which the carrier has disclaimed liability. CNI has not received any
notice of cancellation or non-renewal of any such policy or binder. CNI
has not received any notice from any of its insurance carriers that any
insurance premiums will be materially increased in the future or that
any existing insurance coverage will not be available in the future on
substantially the same terms as now in effect.
3.24 LICENSES AND PERMITS. Except as set forth in SECTION 3.24 of the CNI
Disclosure Schedule, CNI has obtained all material government permits,
licenses, domain name and other registrations, and other consents and
authorizations (federal, state, local and foreign) of any Governmental
or Regulatory Body (collectively, "PERMITS") are required to be
obtained by CNI in connection with its properties or the business of
CNI. CNI has not received any notice of any claim of revocation of any
such Permit and has no knowledge of any event, which would be likely to
give rise to such a claim.
3.25 BROKERS. All negotiations relating to this Agreement and the
transactions contemplated hereby have been carried out by CNI directly
with CCI without the intervention of any other
person on behalf of CNI in such manner as to give rise to any valid
claim by any person against CNI or CCI for a finder's fee, brokerage
commission or similar payment.
3.26 DISCLOSURE. To the knowledge of CNI, neither this Agreement, nor any
Schedule or Exhibit to this Agreement, contains an untrue statement of
a material fact or omits a material fact necessary to make the
statements contained herein or therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF CCI
Except as expressly set forth and specifically identified by the section number
of this Agreement in the schedule delivered by CCI to CNI contemporaneously with
the execution of this Agreement (the "CCI DISCLOSURE SCHEDULE"), CCI represents,
warrants, and covenants to CNI as follows:
4.1 ORGANIZATION AND QUALIFICATION. CCI is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Colorado and has all requisite corporate power and authority to (a)
own, lease and operate its properties and assets as they are now owned,
leased and operated and (b) carry on its business as currently
conducted and as proposed to be conducted. CCI is duly qualified or
licensed to do business in each jurisdiction in which the failure to be
so qualified or licensed could have a Material Effect.
4.2 CAPITALIZATION. The issued and outstanding capital stock of CCI
consists of 28,092,181 shares of common stock, no par value per share.
All of the issued and outstanding shares of capital stock of CCI are
validly issued, fully paid, and nonassessable, and none of such shares
has been issued in violation of the preemptive rights of any person.
The CCI Common Stock shall be validly issued, fully paid, and
nonassessable.
4.3 SUBSIDIARIES AND AFFILIATES. Except as set forth in SECTION 4.3 of the
CCI Disclosure Schedule, CCI does not own or hold, directly or
indirectly, any equity, debt, or other interest in any entity or
business or any option to acquire any such interest.
4.4 OPTIONS OR OTHER RIGHTS. Except as set forth in SECTION 4.4 of the CCI
Disclosure Schedule, no options, warrants, calls, commitments or other
rights to acquire, sell or issue shares of capital stock or other
equity interests of CCI whether upon conversion of other securities or
otherwise, are issued or outstanding except as set forth in the CCI
Disclosure Schedule, and there is no agreement or understanding with
respect to the voting of such capital stock or other equity interests.
4.5 VALIDITY AND EXECUTION OF AGREEMENT. CCI has the full legal right,
capacity, and power required to enter into, execute, and deliver this
Agreement and to carry out the transactions contemplated, subject to
approval of the shareholders of CCI and the terms set forth in this
Agreement. This Agreement has been duly and validly executed on behalf
of CCI and is a valid and binding obligation of CCI, enforceable in
accordance with its terms, subject to the qualification that
enforcement of the rights and remedies created hereby is subject to (a)
bankruptcy, insolvency, reorganization, moratorium and other laws of
general application
affecting the rights and remedies of creditors and (b) general
principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
4.6 NO CONFLICT. Except as set forth in SECTION 4.6 of the CCI Disclosure
Schedule and to the knowledge of CCI, none of the execution, delivery,
or performance of this Agreement does or will: (a) result in any
violation or be in conflict with or constitute a default under any term
or provision of the Articles of Incorporation or bylaws of CCI or any
term or provision of any judgment, decree, order, statute, injunction,
rule, or regulation applicable to CCI that would cause a Material
Effect, or of any material note, bond, mortgage, indenture, lease,
license, franchise, agreement, or other instrument or obligation to
which CCI is bound that would cause a Material Effect; (b) result in
the creation of any Encumbrance upon any of the properties or assets of
CCI pursuant to any such term or provision that would cause a Material
Effect; or (c) constitute a default under, terminate, accelerate, amend
or modify, or give any party the right to terminate, accelerate, amend,
modify, abandon, or refuse to perform or comply with, any material
contract, agreement, arrangement, commitment, or plan to which CCI is a
party, or by which CCI or any of its properties or assets may be
subject or bound that would cause a Material Effect.
4.7 CONSENTS AND APPROVALS. No federal, state, or other regulatory
approvals are required to be obtained, nor any regulatory requirements
complied with, by CCI in connection with the Share Exchange.
4.8 VIOLATION OF LAWS, PERMITS, ETC.
(a) CCI is not in violation of any term or provision of its
Articles of Incorporation or bylaws, or of any material term
or provision of any judgment, decree, order, statute, law,
injunction, rule, ordinance, or governmental regulation that
is applicable to it and where the failure to comply with which
would have a Material Effect.
(b) CCI has maintained in full force and effect all certificates,
licenses, and permits material to the conduct of its business,
and has not received any notification that any revocation or
limitation thereof is threatened or pending.
4.9 BOOKS AND RECORDS. The books and records of CCI (including, without
limitation, the books of account, minute books, and stock record books)
are complete and correct in all material respects and have been
maintained in accordance with sound business practices. The minute
books of CCI are complete and current in all material respects and, as
applicable, accurately reflect all actions taken by the shareholders
and the board of directors of CCI since the date of inception of CCI,
and all signatures contained therein are the true signatures of the
persons whose signatures they purport to be.
4.10 CCI FINANCIAL STATEMENTS. The unaudited balance sheet of CCI as of
March 31, 2002, and the related unaudited statement of operations and
statement of cash flows for the three months then ended, together with
the audited balance sheets of CCI as of December 31, 2001 and 2000, and
the related audited statements of operations, statements of cash flow
and statements of shareholders equity for the years then ended (the
"CCI FINANCIAL
STATEMENTS"), true and complete copies of which have been delivered to
CNI, present fairly, in all material respects, the financial position
of CCI as at such dates and the results of operations of CCI for the
periods then ended, in accordance with GAAP consistently applied for
the periods covered thereby.
4.11 UNDISCLOSED LIABILITIES. To the knowledge of CCI, CCI does not have any
Liabilities of a kind required by GAAP to be set forth on a financial
statement that is not fully and adequately reflected or reserved
against on the CCI Financial Statements. CCI does not have any
Liabilities, whether or not of a kind required by GAAP to be set forth
on a financial statement, other than (a) Liabilities incurred in the
ordinary course of business since the date of the latest balance sheet
included in the CCI Financial Statements that are consistent with past
practice and are included in the latest CCI Financial Statements, (b)
Liabilities that are fully reflected on or reserved against on the
latest balance sheet included in the CCI Financial Statements, or (c)
as specifically disclosed in the CCI Financial Statements.
4.12 TITLE TO PROPERTY; ENCUMBRANCES. CCI has good and indefeasible title to
and other legal right to use all properties and assets, real, personal
and mixed, tangible and intangible, reflected as owned on the latest
balance sheet included in the CCI Financial Statements or acquired
after the date of such balance sheet, except for properties and assets
disposed of in accordance with customary practice in the business or
disposed of for full and fair value since the date of such balance
sheet in the ordinary course of business consistent with past practice
and except for matters that would not have a Material Effect.
4.13 TAXES. All Tax Returns, reports and declarations of estimated tax or
estimated tax deposit forms required to be filed by CCI have been duly
and timely filed; CCI has paid all Taxes which have become due whether
pursuant to such returns or any assessment received by it or otherwise,
and has paid all installments of estimated Taxes due; and all Taxes
which CCI is required by law to withhold or to collect have been duly
withheld and collected, and have been paid over to the proper
Governmental or Regulatory Body. There are no tax liens upon any of the
assets or properties of CCI except for Liens for Taxes not yet due. CCI
is not a party to any Settlement Agreement, and CCI does not have any
obligation to make payments under any Settlement Agreement.
4.14 LITIGATION.
(a) There is no action, proceeding, investigation, or inquiry
pending or, to the best of CCI's knowledge, threatened (i)
against or affecting any of CCI's assets or business that, if
determined adversely to CCI, would result in a Material Effect
or (ii) that questions this Agreement or any action
contemplated by this Agreement or in connection with the Share
Exchange.
(b) CCI has no knowledge of any state of facts or of the
occurrence or nonoccurrence of any event or group of related
events, that should reasonably cause CCI to determine that
there exists any basis for any material claim against CCI for
any of the matters described in paragraph (a) above.
4.15 CONTRACTS AND OTHER AGREEMENTS. SECTION 4.15 to the CCI Disclosure
Schedule contains a complete and correct list as of the date hereof of
all material agreements, contracts, and commitments (and all amendments
thereto), written or oral, to which CCI is a party or by which any of
its properties is bound. CCI has made available to CNI complete and
correct copies of all material written agreements, contracts, and
commitments, together with all amendments thereto, and accurate (in all
material respects) descriptions of all material oral agreements. Such
agreements, contracts, and commitments are in full force and effect,
and, to the best of CCI's knowledge, all other parties to such
agreements, contracts, and commitments have performed all obligations
required to be performed by them to date thereunder in all material
respects and are not in default thereunder in any material respect.
4.16 COMPENSATION ARRANGEMENTS; OFFICERS, DIRECTORS AND EMPLOYEES. CCI does
not pay any compensation to any of its officers and directors and has
no employees. CCI has not made a commitment or agreement (verbally or
in writing) to pay any compensation to such persons.
4.17 ERISA. There are no Plans maintained for the benefit of, or covering,
any employee, former employee, independent contractor or former
independent contractor of CCI or their dependents or their
beneficiaries, or otherwise, now or heretofore contributed to by CCI
and no such Plan is or has ever been subject to ERISA.
4.18 OPERATIONS. Except as expressly authorized by this Agreement, or except
as set forth in SECTION 4.18 to the CCI Disclosure Schedule, since the
date of the latest CCI Financial Statements, CCI has not:
(a) amended its Articles of Incorporation or By-Laws or merged
with or into or consolidated with any other entity, or changed
or agreed to rearrange in any manner the character of the
business of CCI;
(b) issued, sold or purchased options or rights to subscribe to,
or entered into any contracts or commitments to issue, sell or
purchase, any shares of its capital stock or other equity
interests;
(c) entered into, amended or terminated any (i) employment
agreement or collective bargaining agreement, (ii) adopted,
entered into or amended any arrangement which is, or would be,
a Plan or (iii) made any change in any actuarial methods or
assumptions used in funding any Plan or in the assumptions or
factors used in determining benefit equivalencies thereunder;
(d) issued any note, bond or other debt security, created,
incurred or assumed any indebtedness for borrowed money other
than in the ordinary course of business in connection with
trade payables, or guaranteed any indebtedness for borrowed
money or any capitalized lease obligation;
(e) declared, set aside or paid any dividends or declared or made
any other distributions of any kind to the shareholders, or
made any direct or indirect redemption,
retirement, purchase or other acquisition of any shares of its
capital stock or other equity interests;
(f) knowingly waived any right of material value to the business
of CCI;
(g) made any change in its accounting methods or practices or made
any changes in depreciation or amortization policies or rates
adopted by it or made any material write-down of inventory or
material write-off as uncorrectable of accounts receivable;
(h) made any wage or salary increase or other compensation payable
or to become payable or bonus, or increase in any other direct
or indirect compensation, for or to any of its officers,
directors, employees, consultants, agents or other
representatives, or any accrual for or commitment or agreement
to make or pay the same, other than increases made in the
ordinary course consistent with past practice;
(i) entered into any transactions with any of its affiliates,
shareholders, officers, directors, employees, consultants,
agents or other representatives (other than employment
arrangements made in the ordinary course of business
consistent with past practice), or any affiliate of any
shareholder, officer, director, consultant, employee, agent or
other representative;
(j) made any payment or commitment to pay any severance or
termination pay to any person or any of its officers,
directors, employees, consultants, agents or other
representatives, other than payments or commitments to pay
such persons or their officers, directors, employees in the
ordinary course of business;
(k) except in the ordinary course of business and subject to the
provisions of SECTION 5.2 hereof, (i) entered into any lease
(as lessor or lessee), (ii) sold, abandoned or made any other
disposition of any of its assets or properties other than in
the ordinary course of business consistent with past practice,
(iii) granted or suffered any Lien on any of its assets or
properties other than sales of inventory in the ordinary
course of business, or (iv) entered into or amended any
material contract or other agreement to which it is a party,
or by or to which it or its assets or properties are bound or
subject, or pursuant to which it agrees to indemnify any
person or to refrain from competing with any person, in each
case or type required to be disclosed pursuant to SECTION 4.15
hereof;
(l) except in the ordinary course of business, incurred or
assumed any debt, obligation or liability (whether absolute or
contingent and whether or not currently due and payable);
(m) except for inventory or equipment acquired in the ordinary
course of business, made any acquisition of all or any part of
the assets, properties, capital stock or business of any other
person;
(n) except in the ordinary course of business, paid, directly or
indirectly, any of its Liabilities before the same became due
in accordance with their terms or otherwise than in the
ordinary course of business, except to obtain the benefit of
discounts available for early payment;
(o) except in the ordinary course of business, created, incurred
or assumed any indebtedness for borrowed money, or guaranteed
any indebtedness for borrowed money or any capitalized lease
obligation, in each case in excess of $5,000 individually or
in the aggregate;
(p) except in the ordinary course of business, made any capital
expenditures or commitments for capital expenditures in
aggregate amount exceeding $5,000; or
(q) except in the ordinary course of business and subject to the
provisions of SECTION 5.2 hereof, terminated, failed to renew,
amended or entered into any contract or other agreement of a
type required to be disclosed pursuant to SECTION 4.15.
4.19 INTANGIBLE PROPERTY AND INTELLECTUAL PROPERTY. CCI possesses all of the
necessary Intellectual Property Rights necessary to conduct its
business in the manner that is currently being conducted and
anticipates conducting in the future. All of such Intellectual Property
Rights are held in the name of CCI. To the knowledge of CCI, none of
the Intangible Property of CCI infringes upon the rights of any other
person in any material respect or, to the knowledge of CCI, is so
infringed upon by any other person or its property. CCI has not
received any notice of any claim of any other person relating to any of
the Intangible Property or any process or confidential information of
CCI and does not know of any basis for any such charge or claim. Except
for the Intangible Property, no other material intellectual property or
intangible property rights are required for CCI to conduct the business
of CCI in the ordinary course consistent with past practice. Except as
separately identified in SECTION 4.19 of the CCI Disclosure Schedule,
no approval or consent of any person is needed so that the interest of
CCI in the Intangible Property shall continue to be in full force and
effect and enforceable by CCI following the transactions contemplated
by this Agreement.
4.20 INSURANCE. CCI has not maintained any policies of insurance for its
operations
4.21 LICENSES AND PERMITS. Except as set forth in SECTION 4.21 of the CCI
Disclosure Schedule, no Permits are required to be obtained by CCI in
connection with its properties or the business of CCI. CCI has not
received any notice of any claim of revocation of any such Permit and
has no knowledge of any event, which would be likely to give rise to
such a claim.
4.22 BROKERS. All negotiations relating to this Agreement and the
transactions contemplated hereby have been carried out by CNI directly
with CCI without the intervention of any other person on behalf of CCI
in such manner as to give rise to any valid claim by any person against
CNI or CCI for a finder's fee, brokerage commission or similar payment.
4.23 APPROVAL OF SHARE EXCHANGE. The board of directors of CCI has approved
the Share Exchange without reservation or qualification.
4.24 SEC REPORTING STATUS. CCI filed a registration statement under Section
12(g) of the Securities Exchange Act of 1934 (the "EXCHANGE ACT") which
was declared effective on May 3, 1998. Since that date, CCI has filed
with the Securities and Exchange Commission ("SEC") all reports
required to be filed pursuant to Section 13 of the Exchange Act. It has
not filed a certification on Form 15 pursuant to Rule 12h-3 of the
Exchange Act.
4.25 INVESTMENT COMPANY. CCI is not an investment company within the meaning
of Section 3 of the Investment Company Act.
4.26 TRADING STATUS. The CCI Common Stock is quoted on the OTC Bulletin
Board under the symbol "CRNC".
4.27 DISCLOSURE. To the knowledge of CCI, neither this Agreement, nor any
Schedule or Exhibit to this Agreement, contains an untrue statement of
a material fact or omits a material fact necessary to make the
statements contained herein or therein not misleading.
ARTICLE V
ACTIONS PRIOR TO CLOSING
5.1 CORPORATE EXAMINATIONS AND INVESTIGATIONS. At or prior to the Closing
Date, each of CCI and CNI shall be entitled to make such investigation
of the assets, properties, business and operations of the other and
such examination of the books, records, Tax Returns, financial
condition and operations of the other as each may wish. Any such
investigation and examination shall be conducted at reasonable times
and under reasonable circumstances and CCI and CNI shall cooperate
fully therein. In order that each of CCI and CNI may have full
opportunity to make such a business, accounting and legal review,
examination or investigation as it may wish of the business and affairs
of the other, CCI or CNI, as the case may be, shall furnish to the
other during such period all such information and copies of such
documents concerning its affairs as CCI or CNI may reasonably request
and cause its officers, employees, consultants, agents, accountants and
attorneys to cooperate fully and provide all material facts affecting
its financial condition and business operations. Until the Closing and
if the Closing shall not occur, thereafter, CCI, CNI, and its
respective affiliates shall keep confidential and shall not use in any
manner inconsistent with the transactions contemplated by this
Agreement and after termination of this Agreement, CCI, CNI, and its
respective affiliates shall not disclose, nor use for their own
benefit, any information or documents obtained from the other
concerning its assets, properties, business and operations, unless (a)
readily ascertainable from public or published information, or trade
sources, (b) received from a third party not under an obligation to CCI
or CNI, as the case may be, to keep such information confidential or
(c) required by any Law or Order. If this transaction does not close
for any reason, CCI, CNI, and its respective affiliates shall return or
destroy all such confidential information and compilations thereof as
is practicable, and shall certify such destruction or return to CCI or
CNI, as the case may be.
5.2 CONDUCT AND PRESERVATION OF BUSINESS OF CCI. From the date hereof
through the Closing Date, CCI shall cause its corporate existence and
status as a reporting issuer with the SEC to be continued in the
ordinary course in the same manner as it has been conducted since it
inception. CCI covenants that, except with the prior written consent of
CNI, which consent shall not be unreasonably withheld, CCI will not:
(a) Do any of the restricted acts set forth in SECTION 4.18
hereof, or enter into any agreement of a nature set forth in
SECTION 4.15 hereof; or
(b) Enter into any transaction other than in the ordinary course
of business.
5.3 CONDUCT AND PRESERVATION OF BUSINESS OF CNI. From the date hereof
through the Closing Date, CNI shall cause its business to be conducted
in the ordinary course and in the same manner as it has been conducted
since its inception. CNI covenants that, except with the prior written
consent of CCI, which consent shall not be unreasonably withheld, CNI
will not:
(a) Do any of the restricted acts set forth in SECTION 3.20
hereof, or enter into any agreement of a nature set forth in
SECTION 3.16 hereof; or
(b) Enter into any transaction other than in the ordinary course
of business.
Further, CNI shall use commercially reasonable efforts to (i) preserve
intact its business, assets, properties and organizations, (ii) keep
available the services of its present officers, employees, consultants
and agents; and (iii) maintain its present suppliers and customers and
preserve its goodwill.
5.4 ADVICE OF CHANGES. CNI will promptly advise CCI in writing from time to
time prior to the Closing with respect to any matter hereafter arising
and known to them that, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in the
CNI Disclosure Schedule or would have resulted in any representation of
CNI in this Agreement being untrue. CCI will promptly advise CNI in
writing from time to time prior to the Closing with respect to any
matter hereafter arising and known to it that, if existing or occurring
at the date of this Agreement, would have been required to be set forth
or described in the CCI Disclosure Schedule or would have resulted in
any representation of CCI in this Agreement being untrue in any
material respect.
5.5 OTC BULLETIN BOARD. CCI will use its best efforts to maintain the
listing on the OTC Bulletin Board of the CCI Common Stock. CCI shall
take the necessary action to notify NASD Regulation of the Share
Exchange in a timely manner.
5.6 SEC REPORTS. CCI shall file with the SEC all reports and other
documents that are required by the Exchange Act and the rules and
regulations promulgated thereunder to be filed in connection with this
transactions contemplated by this Agreement.
5.7 SHAREHOLDER APPROVAL. CNI shall, as expeditiously as possible, take all
actions necessary to obtain the approval of its shareholders of the
transactions contemplated by this Agreement as required by the laws of
Nevada. CCI shall, as expeditiously as possible, take all actions
necessary to obtain the approval of its shareholders of the name change
and reverse stock split contemplated by this Agreement.
5.8 OTHER AGREEMENTS. CNI and CCI agree to take, or cause to be taken, all
actions and to do, or cause to be done, all things reasonably
necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this
Agreement, including, without limitation, the obtaining of all
necessary waivers, consents and approvals and the effecting of all
necessary registrations and filings, including, but not limited to,
submissions of information requested by Governmental or Regulatory
Bodies and any other persons required to be obtained by them for the
consummation of the closing and the continuance in full force and
effect of the permits, contracts and other agreements set forth on the
Schedules to this Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO CLOSING
6.1 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF CCI TO COMPLETE THE CLOSING.
The obligations of CCI to enter into and complete the Closing are
subject to the fulfillment of the following conditions, any one or more
of which may be waived by CCI:
(a) (i) All of the terms, covenants, and conditions of this
Agreement to be complied with or performed by CNI at or before
the Closing shall have been duly complied with and performed
in all material respects, (ii) the representations and
warranties of CNI set forth in Article III shall be true in
all material respects on and as of the Closing Date with the
same force and effect as if such representations and
warranties had been made on and as of the Closing, and (iii)
CCI shall have received a certificate to such effect from CNI,
specifically referencing SECTIONS 3.7 AND 3.8. CNI shall
provide a certificate from its transfer agent as to the
representations contained in SECTION 3.2.
(b) All consents, waivers, approvals, licenses, authorizations of,
or filings or declarations with third parties or Governmental
or Regulatory Bodies required to be obtained by CNI in order
to permit the transactions contemplated by this Agreement to
be consummated in accordance with agreements and court orders
applicable to CNI and applicable governmental laws, rules,
regulations and agreements shall have been obtained and any
waiting period thereunder shall have expired or been
terminated, and CCI shall have received a certificate from CNI
to such effect.
(c) All actions, proceedings, instruments, and documents in
connection with the consummation of the transactions
contemplated by this Agreement, including the forms of all
documents, legal matters, opinions, and procedures in
connection
therewith, shall have been approved in form and substance by
counsel for CCI, which approval shall not be unreasonably
withheld.
(d) CNI shall have furnished such certificates to evidence
compliance with the conditions set forth in this Article, as
may be reasonably requested by CCI or its counsel.
(e) CNI shall not have suffered any Material Effect.
(f) No material information or data provided or made available to
CCI by or on behalf of CNI shall be incorrect in any material
respect.
(g) No investigation and no suit, action, or proceeding before any
court or any governmental or regulatory authority shall be
pending or threatened by any state or federal governmental or
regulatory authority, against CNI or any of its affiliates,
associates, officers, or directors seeking to restrain,
prevent, or change in any material respect the transactions
contemplated hereby or seeking damages in connection with such
transactions that are material to CNI.
(h) All of the CNI Shareholders approving the Share Exchange shall
have acknowledged that the shares of CCI Common Stock are
restricted securities under the Securities Act and represent
that such CNI Shareholder (i) is acquiring the CCI Common
Stock for his own account without a view to distribution
within the meaning of the Securities Act; (ii) has received
from CCI its filings with the Securities and Exchange
Commission and all other information that he has deemed
necessary to make an informed investment decision with respect
to an investment in CCI in general and the CCI Common Stock in
particular; (iii) is financially able to bear the economic
risks of an investment in CCI; and (iv) has such knowledge and
experience in financial and business matters in general and
with respect to investments of a nature similar to the CCI
Common Stock so as to be capable, by reason of such knowledge
and experience, of evaluating the merits and risks of, and
making an informed business decision with regard to, the
acquisition of the CCI Common Stock. Such acknowledgment shall
also indicate that each CNI Shareholder understands and agrees
that the certificates evidencing the CCI Common Stock shall
bear the usual restrictive legend pertaining to Rule 144 under
the Securities Act and that the CCI Common Stock will not be
transferable except under an effective registration statement
under the Securities Act or in accordance with available
exemptions from registration under the Securities Act. Such
acknowledgment shall be substantially in the form attached
hereto as EXHIBIT A.
(i) CNI shall have received the necessary approvals from at least
90% of its shareholders to proceed with the transactions
contemplated herein.
(j) CNI shall have completed an audit of its financial statements
and prepared unaudited financial statements, if necessary, so
as to allow CCI to comply with its reporting requirements to
the SEC in connection with the proposed transaction.
6.2 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF CNI TO COMPLETE THE CLOSING.
The obligations of CNI to enter into and complete the Closing are
subject to the fulfillment on or prior to the Closing Date, of the
following conditions, any one or more of which may be waived by CNI:
(a) (i) All of the terms, covenants, and conditions of this
Agreement to be complied with or performed by CCI at or before
the Closing shall have been duly complied with and performed
in all material respects, (ii) the representations and
warranties of CCI set forth in Article IV shall be true in all
material respects on and as of the Closing Date with the same
force and effect as if such representations and warranties had
been made on and as of the Closing, and (iii) CNI shall have
received a certificate to such effect from CCI.
(b) All consents, waivers, approvals, licenses, authorizations of,
or filings or declarations with third parties or Governmental
or Regulatory Bodies required to be obtained by CCI in order
to permit the transactions contemplated by this Agreement to
be consummated in accordance with agreements and court orders
applicable to CCI and applicable governmental laws, rules,
regulations and agreements shall have been obtained and any
waiting period thereunder shall have expired or been
terminated, and CNI shall have received a certificate from CCI
to such effect.
(c) All actions, proceedings, instruments, and documents in
connection with the consummation of the transactions
contemplated by this Agreement, including the forms of all
documents, legal matters, opinions, and procedures in
connection therewith, shall have been approved in form and
substance by counsel for CNI, which approval shall not be
unreasonably withheld.
(d) CCI shall have furnished such certificates to evidence
compliance with the conditions set forth in this Article, as
may be reasonably requested by CNI or its counsel.
(e) CCI shall not have suffered any Material Effect.
(f) No material information or data provided or made available to
CNI by or on behalf of CCI shall be incorrect in any material
respect.
(g) No investigation and no suit, action, or proceeding before any
court or any governmental or regulatory authority shall be
pending or threatened by any state or federal governmental or
regulatory authority, against CCI or any of its affiliates,
associates, officers, or directors seeking to restrain,
prevent, or change in any material respect the transactions
contemplated hereby or seeking damages in connection with such
transactions that are material to CCI.
(h) The CCI Common Stock shall be approved for listing on the OTC
Bulletin Board.
(i) CCI shall satisfy the filing requirements set forth in Section
13 of the Exchange Act.
(j) CNI Shareholders holding no more than 10% of the issued and
outstanding CNI common stock shall have perfected appraisal
rights for their shares in accordance with the Nevada Law.
(k) CCI shall have obtained the approval from its stockholders to
effect a name change to a name approved by CNI and reverse
stock split to reduce its outstanding shares to 1,700,000
immediately prior to Closing.
ARTICLE VII
POST-CLOSING COVENANTS
The parties covenant to take the following actions after the Closing Date:
7.1 FURTHER INFORMATION. Following the Closing, each party will afford to
the other party, its counsel and its accountants, during normal
business hours, reasonable access to the books, records and other data
of CNI or CCI, as the case may be, relating to the business of CNI or
CCI in their possession with respect to periods prior to the Closing
and the right to make copies and extracts therefrom, to the extent that
such access may be reasonably required by the requesting party (a) to
facilitate the investigation, litigation and final disposition of any
claims which may have been or may be made against any party or its
affiliates and (b) for any other reasonable business purpose.
7.2 RECORD RETENTION. Each party agrees that for a period of not less than
five years following the Closing Date, such party shall not destroy or
otherwise dispose of any of the Books and Records of CNI or CCI
relating to the business of CNI or CCI in his or its possession with
respect to periods prior to the Closing Date. Each party shall have the
right to destroy all or part of such Books and Records after the fifth
anniversary of the Closing Date or, at an earlier time by giving each
other party hereto 30 days prior written notice of such intended
disposition and by offering to deliver to the other party or parties,
at the other party's or parties' expense, custody of such Books and
Records as such party may intend to destroy.
7.3 POST-CLOSING ASSISTANCE. CNI and CCI will provide each other with such
assistance as may reasonably be requested in connection with the
preparation of any Tax Return, any audit or other examination by any
taxing authority, or any judicial or administrative proceedings
relating to liability for Taxes, and each will retain and provide the
requesting party with any records or information that may be reasonably
relevant to such return, audit or examination, proceedings or
determination. The party requesting assistance shall reimburse the
other party for reasonable out-of-pocket expenses incurred in providing
such assistance. Any information obtained pursuant to this SECTION 7.3
or pursuant to any other Section hereof providing for the sharing of
information or the review of any Tax Return or other schedule relating
to Taxes shall be kept confidential by the parties hereto.
7.4 SEC REPORTING. With a view to making available the benefits of certain
rules and regulations of the SEC which may at any time permit the sale
of the CCI Common Stock to the public without registration, from and
after the Closing, the new management of CCI will:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act,
at all times;
(b) file with the SEC in a timely manner all reports and other
documents required of CCI under the Exchange Act; and
(c) continue a listing with a recognized securities manual for
a period of at least three years after the Closing.
ARTICLE VIII
SURVIVAL
8.1 SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND WARRANTIES. Notwithstanding
any investigation conducted or notice or knowledge obtained by or on
behalf of any party hereto, each agreement in this Agreement shall
survive the Closing without limitation as to time until fully performed
and each representation and warranty in this Agreement or in the
Exhibits, Schedules or certificates delivered pursuant to this
Agreement shall survive the Closing for a period of two years (other
than the representations and warranties contained in SECTION 3.5 which
shall survive the Closing without limitation as to time, and other than
the representations and warranties contained in SECTION 3.14, which
shall survive the Closing until the earlier of (i) three and one-half
years from the Closing Date and (ii) three years following the date on
which CCI files the Tax Return relating to the taxable period from
January 1, 2002 through the Closing Date). Notice must be given to the
party from whom indemnification is sought of any claim for
indemnification under Article VIII prior to the termination of the
relevant survival period.
ARTICLE IX
TERMINATION OF AGREEMENT
9.1 TERMINATION. This Agreement may be terminated at any time prior to the
Closing as follows:
(a) by mutual written consent of CCI and CNI;
(b) by CCI or CNI by written notice to the other party hereto, if
the Closing shall not have occurred on or prior to the close
of business on June 30, 2002 (unless such event has been
caused by a breach of this Agreement by the party seeking such
termination);
(c) by CCI or by CNI if a Governmental or Regulatory Body has
permanently enjoined or prohibited consummation of the Share
Exchange and such court or government action is final and
nonappealable;
(d) by CCI if CNI has failed to comply in any material respect
with any of its covenants or agreements under this Agreement
that are required to be complied with prior to the date of
such termination; or
(e) by CNI if CCI has failed to comply in any material respect
with any of its covenants or agreements under this Agreement
that are required to be complied with prior to the date of
such termination.
Should CNI terminate this Agreement for any reason other than a default
by CCI as described in SECTION 9.1(E) hereof, CNI shall be liable for
all damages caused by the failure to close. Similarly, if CCI should
terminate this Agreement for any reason other than a default by CNI as
described in SECTION 9.1(D) hereof, CCI shall be liable for all damages
caused by the failure to close.
9.2 SURVIVAL AFTER TERMINATION. If this Agreement is terminated pursuant to
SECTION 9.1, (a) this Agreement shall become null and void and of no
further force and effect, except for the provisions of SECTION 5.1
relating to the obligation to keep confidential certain information and
(b) there shall be no liability on the part of CNI or CCI or their
respective affiliates.
ARTICLE X
MISCELLANEOUS
10.1 EXPENSES. CCI and CNI shall each be responsible for its own legal and
accounting fees in connection with the Share Exchange.
10.2 FURTHER ASSURANCES. At any time and from time to time after the Closing
Date at the request of CCI, and without further consideration, CNI will
execute and deliver such other instruments of sale, transfer,
conveyance, assignment and confirmation and take such other action as
CCI may reasonably deem necessary or desirable in order to transfer,
convey and assign the Shares to CCI and to assist CCI in exercising all
rights with respect thereto. The parties shall use their best efforts
to fulfill or obtain the fulfillment of the conditions to the Closing,
including, without limitation, the execution and delivery of any
document or other papers, the execution and delivery of which are
conditions precedent to the Closing.
10.3 NOTICES. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and
shall be given personally, sent by facsimile transmission or sent by
prepaid air courier or certified or express mail, postage prepaid. Any
such notice shall be deemed to have been given (a) when received, if
delivered in person, sent by facsimile transmission and confirmed in
writing within three (3) business days thereafter or sent by prepaid
air courier or (b) three (3) business days following the mailing
thereof, if mailed by certified first class mail, postage prepaid,
return receipt requested, in
any such case as follows (or to such other address or addresses as a
party may have advised the other in the manner provided in this SECTION
10.3):
If to CNI:
Cirond Networks, Inc.
00000 X. Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxx, President
If to CCI:
Crossnet Communications, Inc.
00000 Xxxxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxxxx, President
with a copy to:
Xxxx Xxxx Xxxx Xxxxxxxxxx & Xxxxxxxxx, P.C.
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxx X. Xxxxxxxxx, Esq.
10.4 MEDIATION. The parties hereto encourage the prompt and equitable
settlement of all controversies or claims (a "DISPUTE") between or
among the parties and their affiliates including but not limited to
those arising out of or relating to this Agreement or the transactions
contemplated hereby. At any time, either party can give the other
written notice that it desires to settle a Dispute. Within 10 days of
delivery of such notice, the parties agree to cause their officers
having authority to resolve such differences to meet for two out of
four continuous days (the "NEGOTIATION PERIOD"), the parties agree to
submit their Dispute to a mediator to work with them to resolve their
differences. Such mediator shall be selected by mutual agreement of the
parties. The parties shall participate in the mediation proceeding in
good faith with the intention to settle. The mediation shall be
conducted pursuant to the rules generally used by the mediator in the
mediator's practice, which rules may be modified or amended with the
written consent of the parties. No later than three business days prior
to the mediation, each party shall deliver to the mediator all
information reasonably required for the mediator to understand the
Dispute and the issues presented. The mediation shall be determined
upon the first to occur of the following: (i) by the execution of a
settlement agreement resolving the Dispute by the parties; (ii) by a
written declaration of the mediator to the effect that further efforts
at mediation are no longer worthwhile; or (iii) after the completion of
two full days of mediation effect that mediation proceedings are
terminated. No party shall xxx any other party hereto in connection
with any Dispute, except for enforcement of the negotiation and
mediation process set forth herein, and the arbitration provisions set
forth in SECTION 10.5 hereof shall not be applicable, in each case,
prior to termination of the Negotiation Period and of the mediation as
provided above.
10.5 ARBITRATION. Any dispute, controversy, or claim arising out of,
relating to, or in connection with, this Agreement or the agreements or
transactions contemplated by this Agreement shall be finally settled by
binding arbitration. The arbitration shall be conducted and the
arbitrator chosen in accordance with the rule of the American
Arbitration Association in effect at the time of the arbitration,
except as they may be modified herein or by mutual agreement of CCI and
CNI. In connection with any such arbitration, each party shall be
afforded the opportunity to conduct discovery in accordance with the
Federal Rules of Civil Procedure.
(a) The seat of the arbitration shall be in Scottsdale, Arizona.
Each of CNI and CCI hereby irrevocably submits to the
jurisdiction of the arbitrator in Scottsdale, Arizona, and
waives any defense in an arbitration based upon any claim that
such party is not subject personally to the jurisdiction of
such arbitrator, that such arbitration is brought in an
inconvenient format, or that such venue is improper.
(b) The arbitral award shall be in writing and shall be final and
binding on each of the parties to this Agreement. The award
may include an award of costs, including reasonable attorneys'
fees and disbursements. Judgment upon the award may be entered
by any court having jurisdiction thereof or having
jurisdiction over the parties or their assets. CNI and CCI
acknowledge and agree that by agreeing to these arbitration
provisions each of the parties hereto is waiving any right
that such party may have to a jury trial with respect to the
resolution of any dispute under this Agreement or the
agreements or transactions contemplated hereby.
10.6 PUBLICITY. No publicity release or announcement concerning this
Agreement or the transactions contemplated hereby shall be made without
advance approval thereof by CCI and CNI except as may be required by
applicable law or the rules and regulations of the applicable
regulatory authorities.
10.7 ENTIRE AGREEMENT. This Agreement (including the Exhibits and Schedules)
and the agreements, certificates and other documents delivered pursuant
to this Agreement contain the entire agreement among the parties with
respect to the transactions described herein, and supersede all prior
agreements, written or oral, with respect thereto.
10.8 WAIVERS AND AMENDMENTS. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only
by a written instrument signed by the parties or, in the case of a
waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof
10.9 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado without regard to
principles of conflicts of law.
10.10 BINDING EFFECT, NO ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns. This Agreement is not assignable by any party hereto
without the prior written consent of the other parties hereto except by
operation of law and any other purported assignment shall be null and
void.
10.11 COUNTERPARTS. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of
a number of copies hereof each signed by less than all, but together
signed by all of the parties hereto.
10.12 EXHIBITS AND SCHEDULES. The Exhibits and Schedules are a part of this
Agreement as if fully set forth herein. All references herein to
Sections, subsections, clauses, Exhibits and Schedules shall be deemed
references to such parts of this Agreement, unless the context shall
otherwise require.
10.13 EFFECT OF DISCLOSURE ON SCHEDULES. Any item disclosed on any Schedule
to this Agreement shall only be deemed to be disclosed in connection
with (a) the specific representation and warranty to which such
Schedule is expressly referenced, (b) any specific representation and
warranty which expressly cross-references such Schedule and (c) any
specific representation and warranty to which any other Schedule to
this Agreement is expressly referenced if such other Schedule expressly
cross-references such Schedule.
10.14 HEADINGS. The headings in this Agreement are for reference only, and
shall not affect the interpretation of this Agreement.
10.15 SEVERABILITY OF PROVISIONS. If any provision or any portion of any
provision of this Agreement or the application of such provision or any
portion thereof to any person or circumstance, shall be held invalid or
unenforceable, the remaining portion of such provision and the
remaining provisions of this Agreement, or the application of such
provision or portion of such provision as is held invalid or
unenforceable to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
CCI:
CROSSNET COMMUNICATIONS, INC.
By: /S/ XXXX XXXXXXXXXXX
---------------------------------------
Name: Xxxx Xxxxxxxxxxx
Title: President
CNI:
CIROND NETWORKS, INC.
By: /S/ XXXXXXXX XXXXXX
---------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: President
SCHEDULE A
CNI SHAREHOLDERS
--------------------------------------------------------------------------------
CNI SHAREHOLDER CNI SHARES OWNED CCI SHARES TO BE ISSUED
--------------------------------------------------------------------------------
Xxxxxxxx X. Xxxxxx 7,266,667 7,266,667
--------------------------------------------------------------------------------
Consensus Investments Ltd. 1,600,000 1,600,000
--------------------------------------------------------------------------------
Doraldo Inc. 1,600,000 1,600,000
--------------------------------------------------------------------------------
Xxxxxxx Xxxxxx 1,600,000 1,600,000
--------------------------------------------------------------------------------
Xxxxx X'Xxxxx 1,550,000 1,550,000
--------------------------------------------------------------------------------
Xxxxx Xxxxxxx 400,000 400,000
--------------------------------------------------------------------------------
Xxxxx X'Xxxxx 325,000 325,000
--------------------------------------------------------------------------------
Solid Rock Management 66,666 66,666
--------------------------------------------------------------------------------
Xxxx Xxxx XXX 100,000 100,000
--------------------------------------------------------------------------------
Xxxx X. Xxxxxxxx XXX 9,333 9,333
--------------------------------------------------------------------------------
Xxxxx Xxxxxxxx XXX 70,667 70,667
--------------------------------------------------------------------------------
Satitya Boljano 72,000 72,000
--------------------------------------------------------------------------------
Xxxx Xxxxx Xxxxxxxx 67,250 67,250
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx 12,667 12,667
--------------------------------------------------------------------------------
TOTAL 14,740,250 14,740,250
--------------------------------------------------------------------------------
