STOCK EXCHANGE AGREEMENT BETWEEN VIROPRO INC.
Exhibit 10.1 Stock Exchange Agreement
BETWEEN
AND
CENTRAL NETWORK COMMUNICATIONS INC.
DATED JANUARY 21, 2004
STOCK EXCHANGE AGREEMENT, dated as of January 21, 2004, between Viropro
Inc., a Nevada corporation (the "Purchaser") and Central Network Communications
Inc., a Delaware corporation (the "Seller").
W I T N E S S E T H:
WHEREAS, the Seller is the sole owner of all the outstanding shares of CNC
Holdings Inc., a Canadian corporation (the "Company")
WHEREAS, the Seller wishes to sell, and the Purchaser wishes to purchase,
all of the Company's outstanding shares for 20,000,000 shares (the "Shares") of
the Seller's common stock, par value $0.001 per share (the "Common Stock"); and
WHEREAS, the Purchaser and the Seller wish to exchange/purchase the shares
of the Company for the Shares of Common Stock on the terms and subject to the
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1Defined Terms. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Affiliate" or "affiliate" shall mean, with respect to any Person, any
other Person that, directly or indirectly, controls, is controlled by or is
under common control with such Person. As used in this definition of
"Affiliate," the term "control" and any derivatives thereof mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
"Agreement" shall mean this Stock Purchase Agreement, including the
Schedules and Exhibits hereto, as it may be from time to time amended.
"Basis" shall mean any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act or transaction that forms or could form the basis for
any specified consequence.
"Business Day" shall mean any day, other than a Saturday, Sunday or legal
holiday under the federal laws of the United States or Canada or the laws of
the State of New York or the City of Montreal.
"Closing" shall have the meaning given to such term in Section 2.2 hereof.
"Closing Date" shall have the meaning given to such term in Section 2.2
hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Stock" shall have the meaning given to such term in the recitals.
"Company" shall have the meaning given to such term in the preamble, and
shall include, as the context requires, any Subsidiary of the Company in
existence at the time to which the applicable representation, warranty or
covenant hereof relates.
"Company Contracts" shall have the meaning given to such term in Section
3.15.
"Company Licenses" shall have the meaning given to such term in Section
3.22.
"Employee Plan" shall have the meaning given to such term in Section
3.16(a).
"Environmental Laws" shall mean all laws, rules, regulations, statutes,
ordinances, decrees or orders of any Governmental Entity relating to (a) the
control of any potential pollutant or protection of the air, water or land; (b)
solid, gaseous or liquid waste generation, handling, treatment, storage,
disposal or transportation; and (c) exposure to hazardous, toxic or other
substances alleged to be harmful, and includes without limitation final and
binding requirements related to the foregoing imposed by (i) the terms and
conditions of any license, permit, approval or other authorization by any
Governmental Entity, and (ii) applicable judicial, administrative or other
regulatory decrees, judgments and orders of any Governmental Entity. The term
"Environmental Laws" shall include, but not be limited to, the following
statutes and the regulations promulgated thereunder, as currently in effect or
as subsequently amended: the Clean Air Act, 42 U.S.C. {section} 7401 et seq.,
the Clean Water Act, 33 U.S.C. {section} 1251 et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. {section} 6901 et seq., the Superfund
Amendments and Reauthorization Act, 42 U.S.C. {section} 11011 et seq., the
Toxic Substances Control Act, 15 U.S.C. {section} 2601 et seq., the Water
Pollution Control Act, 33 U.S.C. {section} 1251, et seq., the Safe Drinking
Water Act, 42 U.S.C. {section} 300f et seq., the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. {section} 9601 et seq.,
and any similar state, federal or local statute or ordinance.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" shall mean any entity that would be deemed a "single
employer" with the Company under Section 414(b), (c), (m) or (o) of the Code or
Section 4001 of ERISA.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
"Financial Statements" shall have the meaning given to such term in
Section 3.7.
"Governmental Entity" shall mean any domestic or foreign court,
administrative agency or commission or other governmental authority or
instrumentality.
"Hazardous Substances" shall mean any (a) toxic or hazardous materials or
substances; (b) solid wastes, including asbestos, buried contaminants,
chemicals, flammable or explosive materials; (c) radioactive materials; (d)
petroleum wastes and spills or releases of petroleum products; and (e) any
other chemical, pollutant, contaminant, substance or waste that is regulated by
any Governmental Entity under any Environmental Law.
"Indemnifiable Expenses" shall have the meaning given to such term in
Section 5.1.
"Indemnified Party" shall have the meaning given to such term in Section
5.4.
"Indemnifying Party" shall have the meaning given to such term in Section
5.4.
"Intellectual Property" shall mean (a) all inventions (whether patentable
or unpatentable and whether or not reduced to practice), all improvements
thereto, and all patents, patent applications and patent disclosures, together
with all reissuances, continuations, continuations-in-part, revisions,
extensions and reexaminations thereof; (b) all trademarks, service marks, trade
dress, logos, trade names and corporate names, and Internet domain names
together with all translations, adaptations, derivations and combinations
thereof and including all goodwill associated therewith, and all applications,
registrations and renewals in connection therewith; (c) all copyrightable
works, all copyrights, and all applications, registrations and renewals in
connection therewith; (d) all mask works and all applications, registrations
and renewals in connection therewith; (e) all trade secrets and confidential
business information (including ideas, research and development, know-how,
formulas, compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, customer and supplier lists,
pricing and cost information, and business and marketing plans and proposals);
(f) all computer software (including data and related documentation); (g) all
other proprietary rights; and (h) all copies and tangible embodiments thereof
(in whatever form or medium).
"IRS" shall mean the Internal Revenue Service.
"Knowledge" means, with respect to the existence or non-existence of any
fact or situation described herein, that the appropriate corporate officer of
the company who, because of his management and supervisory positions, is
informed of the business and affairs of the company, has actual knowledge or
has made reasonable inquiry in determining the existence or non-existence of
such fact or situation as of the date the applicable representation or warranty
is made or deemed made.
"Liability" shall mean any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"Material Adverse Change" shall mean an occurrence, event or development
which has had or is reasonably likely to have a Material Adverse Effect on the
entity at issue.
"Material Adverse Effect" shall mean a material adverse effect on the
business, results of operations, financial condition, assets or prospects of
the entity at issue. In determining whether any individual event would result
in a Material Adverse Effect, notwithstanding that such event does not of
itself have such effect, a Material Adverse Effect shall be deemed to have
occurred if the cumulative effect of such event and all other then existing
events would result in a Material Adverse Effect.
"Multiemployer Plan" shall have the meaning set forth in Section 3(37) of
ERISA or Section 4001(a)(3) of ERISA.
Ordinary Course of Business" shall mean the ordinary course of business
consistent with past custom and practice (including with respect to quantity
and frequency).
"Person" shall mean an individual, corporation, limited liability company,
partnership, joint venture, trust or unincorporated organization, or a
government or any agency or political subdivision thereof.
"Purchase Price" shall have the meaning given to such term in Section
2.1.
"Purchaser" shall have the meaning given to such term in the preamble.
"SEC" shall mean the United States Securities and Exchange Commission, or
any other federal agency at the time administering the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations thereunder.
"Security Interest" shall mean any mortgage, pledge, lien, encumbrance,
charge, restriction (including without limitation restrictions on transfer) or
other security interest, other than (a) mechanic's, materialmen's and similar
liens; (b) liens for Taxes not yet due and payable or for Taxes that the
taxpayer is contesting in good faith through appropriate proceedings and for
which adequate reserves exist on such Person's books; (c) purchase money liens
and liens securing rental payments under capital lease arrangements; and (d)
other liens arising in the Ordinary Course of Business and not incurred in
connection with the borrowing of money.
"Seller" shall have the meaning given to such term in the preamble.
"Shares" shall have the meaning given to such term in the recitals.
"Subsidiary" of any Person shall mean any corporation, partnership, joint
venture, limited liability company, trust, estate or other Person of which (or
in which) more than fifty percent (50%) of (a) the issued and outstanding
capital stock or other equity interests having ordinary voting power to elect a
majority of the board of directors of such corporation or Persons performing
similar functions of any other Person (irrespective of whether at the time
capital stock or other equity interests of any other class or classes of such
corporation or other Person shall or might have voting power upon the
occurrence of any contingency); (b) the interest in the capital or profits of
such partnership, joint venture or limited liability company or other Person;
or (c) the beneficial interest in such trust or estate is at the time directly
or indirectly owned or controlled by such Person, by such Person and one or
more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Tax" or "Taxes" shall mean any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under
Section 59A of the Code), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty or addition thereto, whether disputed or not,
and any Tax liability arising as a result of being a successor or transferee.
"Tax Return" shall mean any return, declaration, report, claim for refund
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
Section 1.2Use of Defined Terms. Any defined term used in the plural
shall refer to all members of the relevant class, and any defined term used in
the singular shall refer to any one or more of the members of the relevant
class. The use of any gender shall be applicable to all genders.
Section 1.3Miscellaneous Terms. The terms "herein," "hereof," "hereto,"
"hereunder" and other terms similar to such terms shall refer to this Agreement
as a whole and not solely to the specific Article, Section, subsection or
clause where such terms may appear. The term "including" shall mean
"including, but not limited to."
ARTICLE II
AUTHORIZATION AND SALE OF THE SHARES
Section 2.1 Issuance and Sale of the Shares. Subject to the terms and
conditions of this Agreement, the Seller agrees to sell to the Purchaser at the
Closing, and the Purchaser hereby agrees to purchase from the Seller, all of
the Company's outstanding shares in exchange for 20,000,000 Shares (the
"Purchase Price").
Section 2.2 Closing; Delivery of the Shares. The closing of the purchase
and sale of the Shares (the "Closing") shall take place at the offices of the
Purchaser listed below, or at some other location as mutually agreed upon by
the parties, on the date the registration statement covering the Shares is
declared effective by the Securities and Exchange Commission and a certificate
of Amendment is filed in Nevada increasing the Purchaser's authorized share to
50,000,000 shares of common stock. The date on which the Closing occurs is
referred to herein as the "Closing Date." As payment in full for the Shares,
and against delivery of the stock certificates, the Purchaser shall issue
irrevocable instructions to its transfer agent to transfer the Shares, on a pro
rata basis, to the Seller's stockholders.
Section 2.3 Seller's Closing Deliveries. At the Closing, the Seller shall
deliver to the Purchaser the following, all in form satisfactory to the
Purchaser's counsel:
(a) a certificate of the secretary of the Seller, dated the Closing
Date, attaching the Certificate of Incorporation and Bylaws of the Company, and
the resolutions of the board of directors of the Company in connection with the
authorization and approval of the execution, delivery and performance by the
Seller of this Agreement, certified as being in full force and effect as of the
Closing Date;
(b) a certificate, dated as of the Closing Date or within three (3)
Business Days prior to the Closing Date, executed by Industry Canada, as to the
Company's good standing in Canada;
(c) the written opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq., counsel for the
Company and the Seller, dated the Closing Date, in substantially the form
attached to this Agreement as Exhibit A; and
Section 2.4 Purchaser's Closing Deliveries. At the Closing, the Purchaser
shall deliver to the Seller, in form satisfactory to the Seller's counsel, the
resignations of all its current officers; the appointment of the Seller's
designee to the Purchaser's board of directors; and the resignation of all
directors of the Purchaser, other than the newly appointed designee of the
Seller.
Section 2.5 Termination.This Agreement, and each party's obligations to the
other hereunder, may be terminated by the mutual written consent of the Boards
of Directors of either party at any time prior to the Closing, and by either
party if (i) its Board of Directors receives a written proposal to effect a
merger, sale of substantial assets or similar transaction and the Board
determines that such transaction is more favorable to the its stockholders than
the existing transaction, (ii) the exchange/purchase is enjoined or prohibited
by a court or governmental entity or (iii) the Closing has not occurred on or
before September 21, 2004, through no fault of the terminating party.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Purchaser that:
Section 3.1 Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of Canada and has full
corporate power and authority to conduct its business as it is now being
conducted and to own, operate or lease the properties and assets it currently
owns, operates or holds under lease. The Company is duly qualified or licensed
to do business and is in good standing as a foreign corporation in each
jurisdiction where the character of its business or the nature of its
properties makes such qualification or licensing necessary. The minute books
(containing the records of meetings of the shareholders, the Board of Directors
and any committees of the Board of Directors) and the stock record books of the
Company are correct and complete. There were no predecessors to the Company.
Section 3.2 Subsidiaries. Except as listed on Schedule 3.2, the Company
has no Subsidiaries and does not own of record or beneficially any capital
stock of, or equity interest or investment in, any Person, nor has the Company
made any commitment to, or subscribed for, the purchase of any such interest or
investment.
Section 3.3 Capitalization. Schedule 3.3 sets forth the authorized, issued
and outstanding capital stock of the Company. There are no shares of Common
Stock held as treasury shares. The designations, powers, preferences, rights,
qualifications, limitations and restrictions in respect of each class and
series of authorized capital stock of the Company are as set forth in the
Company's Certificate of Incorporation, and all such designations, powers,
preferences, rights, qualifications, limitations and restrictions are valid,
binding and enforceable and in accordance with all applicable laws. All
outstanding shares of capital stock of the Company have been duly authorized
and validly issued and are fully paid and non-assessable. There are no
outstanding options, warrants, convertible securities, calls, rights,
commitments, preemptive rights or agreements, instruments or understandings of
any character to which the Company is a party or by which the Company is bound,
obligating the Company to issue, deliver or sell, or cause to be issued,
delivered or sold, contingently or otherwise, additional shares of its capital
stock or any securities or obligations convertible into or exchangeable for
such shares or to grant, extend or enter into any such option, warrant,
convertible security, call, right, commitment, preemptive right or agreement.
There are no outstanding obligations, contingent or other, of the Company to
purchase, redeem or otherwise acquire any shares of its capital stock. There
are no voting trust agreements or other contracts, agreements, arrangements,
commitments, plans or understandings restricting or otherwise relating to
voting, dividend or other rights with respect to the capital stock of the
Company.
Section 3.4 Authorization. The Seller has all requisite corporate power
and authority to enter into this Agreement, to carry out its obligations under
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby, the performance by the Company of its obligations
hereunder, and the authorization, issuance and delivery of the Shares have been
duly authorized by all necessary corporate action on the part of the Company.
This Agreement has been duly executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms (except as the enforceability
thereof may be limited by any applicable bankruptcy, insolvency or other laws
affecting creditors' rights generally or by general principles of equity,
regardless of whether such enforceability is considered in equity or at law).
Section 3.5 No Violation. The execution and delivery of this Agreement by
the Seller does not, and the consummation by the Seller of the transactions
contemplated hereby and compliance with the terms hereof will not, (a) conflict
with, or result in any violation of or default or loss of any benefit under,
any provision of the Certificate of Incorporation or Bylaws of the Company; (b)
conflict with, or result in any violation of or default or loss of any benefit
under, any permit, concession, grant, franchise, law, rule or regulation, or
any judgment, decree or order of any court or other Governmental Entity to
which the Company is a party or to which any of its property is subject; (c)
conflict with, or result in a breach or violation of or default or loss of any
benefit under, or accelerate the performance required by, the terms of any
agreement, contract, indenture or other instrument to which the Company is a
party or to which any of its property is subject, or constitute a default or
loss of any right thereunder or an event which, with the lapse of time or
notice or both, might result in a default or loss of any right thereunder or
the creation of any Security Interest upon any of the assets or properties of
the Company; or (d) result in any suspension, revocation, impairment,
forfeiture or nonrenewal of any Company License.
Section 3.6 Approvals. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby by the Seller will not
require the consent, approval, order or authorization of any Governmental
Entity or any other Person under any statute, law, rule, regulation, permit,
license, agreement, indenture or other instrument to which the Company is a
party or to which any of its properties are subject, and no declaration, filing
or registration with any Governmental Entity is required by the Company in
connection with the execution and delivery of this Agreement, the consummation
of the transactions contemplated hereby, or the performance by the Company of
its obligations hereunder.
Section 3.7 Financial Statements. The Seller has delivered to the
Purchasers' representative true, correct and complete copies of the audited
balance sheets of the Company as of its last two fiscal years and the related
statements of income and retained earnings and of cash flows for the years then
ended as well as for the three and nine months ended August 31, 2003
("Financial Statements"), true, correct and complete copies of which are
attached hereto as Schedule 3.7. The Financial Statements are in accordance
with the books and records of the Company and have been prepared in accordance
with generally accepted accounting principles consistently applied, and the
balance sheets included therein present fairly the financial condition of the
Company as of their respective dates. All material liabilities and
obligations, whether absolute, accrued, contingent or otherwise, whether direct
or indirect, and whether due or to become due, which existed at the dates of
such Financial Statements have been disclosed in the appropriate balance sheet
included in the Financial Statements to the extent such liabilities were
required, under generally accepted accounting principles, to be so disclosed.
The statements of income and retained earnings included in the Financial
Statements present fairly the results of operations of the Company for the
periods indicated.
Section 3.8 No Undisclosed Liabilities. The Liabilities on the balance
sheets included in the Financial Statements consist solely of accrued
obligations and Liabilities incurred by the Company in the Ordinary Course of
Business. There are no Liabilities of the Company of any kind whatsoever, and
no existing condition, situation or set of circumstances that could reasonably
result in such a Liability, other than Liabilities disclosed in the Financial
Statements and which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. There are no asserted claims for
indemnification by any Person against the Company under any law or agreement or
pursuant to its Certificate of Incorporation, Bylaws or analogous
organizational documents and the Company has no Knowledge of any facts or
circumstances that might reasonably give rise to the assertion of such a claim
against the Company thereunder.
Section 3.9 Events Subsequent to Financial Statements Date. Since the date
of the Financial Statements, no Material Adverse Change has occurred. Without
limiting the generality of the foregoing, since such date the Company has not
(a) sold, leased, transferred or assigned any of its assets other than in the
Ordinary Course of Business; (b) entered into any agreement, contract, lease or
license involving more than $5,000; (c) discharged or satisfied any lien or
encumbrance or incurred or paid any obligation or liability (absolute, accrued
or contingent) other than current liabilities shown on the balance sheets
included in the Financial Statements; (d) imposed any Security Interest upon
any of its assets, tangible or intangible; (e) made any capital expenditure
involving more than $5,000; (f) made any capital investment in, any loan to, or
any acquisition of the securities or assets of, any other Person involving more
than $5,000; (g) borrowed any amount or incurred or become subject to any
liability, except current liabilities incurred in the Ordinary Course of
Business; (h) canceled, compromised, waived or released any right or claim
involving more than $5,000; (i) granted any license or sublicense of any rights
under or with respect to any Intellectual Property owned or licensed by the
Company; (j) made or authorized any change in its Certificate of Incorporation
or Bylaws; (k) issued, sold or otherwise disposed of any of its capital stock,
or granted any options, warrants or other rights to purchase or obtain
(including upon conversion, exchange or exercise) any of its capital stock; (l)
declared, set aside or paid any dividend or made any distribution with respect
to its capital stock (whether in cash or in kind) or redeemed, purchased or
otherwise acquired any of its capital stock; (m) experienced any damage,
destruction or loss (whether or not covered by insurance) to its property; (n)
made any loan to, or entered into any other transaction with, any of its
directors, officers and employees outside the Ordinary Course of Business; (o)
(i) granted any severance or termination pay to any of its directors, officers
or employees, (ii) entered into any employment, deferred compensation,
collective bargaining or other similar agreement (or any amendment to any such
existing agreement) or arrangement with any of its directors, officers or
employees, (iii) increased any benefits payable under any existing severance or
termination pay policies or employment agreements, or (iv) increased the
compensation, bonus or other benefits payable to any of its directors, officers
or employees; (p) accelerated, terminated, modified or canceled any agreement,
contract, lease or license, or had any third party do so, involving more than
$5,000; (q) made any material change in the manner of its business or
operations; (r) made any material change in any method of accounting or
accounting practice; (s) entered into any transaction except in the Ordinary
Course of Business or as otherwise contemplated hereby; or (t) entered into any
commitment (contingent or otherwise) to do any of the foregoing. Since the
date of the Financial Statements there has not been any other material
occurrence, event, incident, action, failure to act or transaction outside the
Ordinary Course of Business involving the Company. The above (and anything
else in this Agreement) notwithstanding, the Company shall dispose of its
Trivor subsidiary prior to the Closing.
Section 3.10 Taxes.
(a) The Company has duly and timely filed all Tax Returns that it was
required to file (taking into account all extensions). All such Tax Returns
are true, complete and correct in all respects. All Taxes owed by the Company
(whether or not shown on any Tax Return) have been fully and timely paid. The
Company currently is not the beneficiary of any extension of time within which
to file any Tax Return. There are no Security Interests on any of the assets
of the Company that arose in connection with any failure (or alleged failure)
to pay any Tax.
(b) The Company has withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, shareholder or other third party.
(c) The Company has not waived any statute of limitations in respect of
the assessment or collection of Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency.
(d) No claim has ever been made by a Taxing authority in a jurisdiction
where the Company does not file Tax Returns that it is or may be subject to Tax
in that jurisdiction. There is not currently pending any dispute or claim
concerning any Tax Liability of the Company either claimed or raised by any
Taxing authority in writing or of which the Company has Knowledge.
Section 3.11 Litigation. There is no action, suit, investigation,
arbitration or proceeding pending or, to the Knowledge of the Seller,
threatened against the Company, or any of its properties or rights (including,
without limitation, no charge of patent and/or trademark infringement), by or
before any Governmental Entity, or any Basis in fact therefor known to the
Seller, against or involving the Company or any of its officers, directors or
employees (in their capacity as such), assets, business or products, whether at
law or in equity. The Company is not subject to any outstanding injunction,
judgment, order, decree, ruling or charge of any Governmental Entity.
Section 3.12 Compliance with Laws. The Company and its Affiliates have
complied in all material respects with all applicable laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings and
charges thereunder) of any Governmental Entity relating to or affecting the
operation, conduct or ownership of the Company's property or business, and no
action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand or notice has been filed or commenced or, to the Knowledge of the
Company, threatened against it alleging any failure so to comply. Neither the
Company nor, to the Knowledge of the Seller, any of the Company's directors,
officers, consultants or employees (in their capacity as such), is in default
in any material respect with respect to any order, writ, injunction or decree
known to the Company or served upon the Company by any Governmental Entity.
Section 3.13 Title to Property. The Company has good and marketable title
to all of its properties and assets, both real and personal, tangible and
intangible, which the Company purports to own as reflected in the latest
balance sheet included in the Financial Statements or acquired after the date
thereof (except personal property disposed of in the Ordinary Course of
Business), free and clear of all Security Interests other than (a) liens of
current Taxes not yet due and payable and (b) Security Interests securing
obligations reflected in the Financial Statements.
Section 3.14 Environmental Compliance. (a) The Company has not generated,
used, transported, treated, stored, released or disposed of, and has not
suffered or permitted anyone else to generate, use, transport, treat, store,
release or dispose of any Hazardous Substance in violation of any Environmental
Laws; (b) there has not been any generation, use, transportation, treatment,
storage, release or disposal of any Hazardous Substance resulting from the
conduct of the Company or the use of any property or facility by the Company
or, to the Seller's Knowledge, any nearby or adjacent properties or facilities,
which has created or could reasonably be expected to create any material
Liability on the part of the Company under the Environmental Laws or that would
require reporting to or notification by the Company to any Governmental Entity;
and (c) any Hazardous Substance handled or dealt with in any way in connection
with the business of the Company, whether before or during the ownership by the
Company, has been and is being handled or dealt with in all respects in
compliance with the Environmental Laws in effect at the time such activities
were being conducted, except where such violation, liability, failure to report
or failure to comply would not have a Material Adverse Effect.
Section 3.15 Contracts. Schedule 3.15 contains a complete list or
description of all currently effective written or oral contracts, leases,
agreements, indentures, undertakings, arrangements or commitments (including,
without limitation, any collective bargaining contract or union agreement) of
the Company, other than (i) purchase orders entered into in the Ordinary Course
of Business and (ii) any such contracts, leases, agreements, indentures,
undertakings, arrangements or commitments that (A) do not involve the receipt
or payment of more than $5,000 each, (B) do not involve employment or labor
matters and (C) do not contain covenants restricting the Company from engaging
in any line of business (all agreements, arrangements or commitments to which
the Company is a party, whether or not listed on Schedule 3.15, being
hereinafter referred to as "Company Contracts"). True and correct copies of
all the Company Contracts listed on the Disclosure Schedule have been made
available to the Purchaser. With respect to each Company Contract: (1) the
agreement is legal, valid, binding, enforceable and in full force and effect
against the Company; (2) the agreement will continue to be legal, valid,
binding, enforceable and in full force and effect (in each case, as against the
Company and, to the Knowledge of the Company, each other party thereto) on
identical terms following the consummation of the transactions contemplated
hereby; (3) neither the Company nor, to the Knowledge of the Company, any other
party thereto, is in breach or default in any material respect, and no event
has occurred which with notice or lapse of time would constitute a material
breach or default on the part of the Company and, to the Knowledge of the
Company, any other party thereto, or permit termination, modification or
acceleration, under the agreement; and (4) neither the Company nor, to the
Knowledge of the Seller, any other party thereto has repudiated any provision
of the agreement. There are no material Liabilities of the Company or, to the
Knowledge of the Seller, any other party to any of the Company Contracts
arising from any breach of or default in any provision thereof, nor has there
occurred any breach or default thereof by the Company which would permit the
acceleration of any obligation of any party thereto or the creation of a
Security Interest upon any material asset of the Company. There are no
negotiations pending or in progress to revise any material terms of such
Company Contracts.
Section 3.16 Employee Plans and Employees.
(a) Except as disclosed on Schedule 3.16(a), the Company does not have
and is not obligated to contribute to, and has not sponsored, maintained,
participated in, or contributed to, (i) any "employee benefit plan," as such
term is defined in Section 3(3) of ERISA, whether or not subject to ERISA; (ii)
any personnel policy; and (iii) any other employment, consulting, collective
bargaining, stock option, stock bonus, stock purchase, phantom stock,
incentive, bonus, deferred compensation, retirement, severance, vacation,
dependent care, employee assistance, fringe benefit, medical, dental, sick
leave, death benefit, golden parachute or other compensatory plan, contract,
policy or arrangement which is not an employee benefit plan as defined in
Section 3(3) of ERISA (each such plan, contract, policy and arrangement being
herein referred to as an "Employee Plan"). True and complete copies of each of
the Employee Plans have been delivered to the Purchaser.
(b) There are no, nor have there ever been, any ERISA Affiliates. The
Company has not ever contributed to (or had an obligation to contribute to),
sponsored, participated in or had any liability with respect to a Multiemployer
Plan or any other plan subject to Title IV of ERISA. The Company has performed
all obligations required to be performed under, and is in compliance in all
material respects with, the terms of each Employee Plan and the requirements
applicable to each Employee Plan prescribed by ERISA, the Code and other
applicable law. No lawsuit, claim, audit or other action has been asserted,
instituted, threatened or anticipated with respect to any Employee Plan. The
consummation of the transactions contemplated by this Agreement (either alone
or in conjunction with any other event) will not give rise to any liability,
including, liability for severance pay, unemployment compensation or
termination pay or accelerate the time of payment or vesting or increase the
amount of compensation or benefits due to any employee, officer or director of
the Company (whether current, former, or retired) or their beneficiaries.
(c) Except as may be required under Section 4980(B) of the Code or any
similar state law requiring continuation coverage with respect to health plans,
the Company does not maintain or contribute to and is not obligated under, any
plan, contract, policy or arrangement providing health, death or other welfare
benefits (whether or not insured) to current or former employees or other
personnel beyond the termination of their employment or other services. Each
Employee Plan by its terms may be unilaterally terminated and/or amended by the
Company at any time.
(d) Schedule 3.16(d) sets forth a list of the names and positions of all
officers and directors of the Company, and of each employee or consultant of
the Company, and the salary, benefits and other compensation paid or provided
to each such Person. No such Person has furnished any notice of his intention
to, and to the Seller's Knowledge no such Person intends to, terminate his
relationship with the Company.
(e) Schedule 3.16(e) sets forth all outstanding loans and other advances
(other than travel advances in the Ordinary Course of Business which do not
exceed $1,000 per individual) made by the Company to any of its officers,
directors, employees, shareholders or consultants.
Section 3.17 Insurance Policies. Schedule 3.17 contains a correct and
complete description of all insurance policies of the Company covering the
Company, its business, employees, agents and assets. Each such policy is in
full force and effect, all premiums with respect to such insurance policies
have been paid on a timely basis, and no notice of cancellation or termination
has been received with respect to any such policy.
Section 3.18 Records. The Company has records that accurately and validly
reflect its transactions and accounting controls reasonably sufficient to
insure that such transactions are (a) in all material respects executed in
accordance with its management's general or specific authorization and (b)
recorded in conformity with generally accepted accounting principles.
Section 3.19 No Illegal or Improper Transactions. Neither the Company nor,
to the Knowledge of the Seller, any of its officers or directors, employees,
agents or Affiliates, has offered, paid or agreed to pay to any Person
(including any governmental official) or solicited, received or agreed to
receive from any such Person, directly or indirectly, any money or anything of
value for the purpose or with the intent of (a) obtaining or maintaining
business, (b) facilitating the purchase or sale of any product or service, or
(c) avoiding the imposition of any fine or penalty, in any such case in any
manner which is in violation of any applicable ordinance, regulation or law;
and to the Knowledge of the Seller, there have been no false or fictitious
entries made in the books or records of the Company.
Section 3.20 Brokerage Fees. Neither the Company nor any of its Affiliates
has retained any financial advisor, broker, agent or finder or paid or agreed
to pay any financial advisor, broker, agent or finder on account of this
Agreement or any transaction contemplated hereby or any transaction of like
nature that would be required to be paid by the Company or the Purchasers.
Section 3.21 Intellectual Property.
(a) The Company owns or has the right to use, pursuant to license,
sublicense, agreement or permission, all Intellectual Property used in or
necessary for the operation of the business of the Company as presently
conducted and as presently proposed to be conducted. Each material item of
Intellectual Property is set forth on Schedule 3.21. The Company has taken all
necessary action to maintain and protect each material item of Intellectual
Property that it owns or uses. All personnel, including employees, agents,
consultants and contractors, who have contributed to or participated in the
development of the Company's Intellectual Property either (i) have been party
to a "work-for-hire" arrangement or agreement with the Company, in accordance
with applicable federal or state law, that by its terms accords the Company
ownership of all intangible and intangible property thereby arising, or (ii)
have executed appropriate instruments of assignment in favor of the Company as
assignee that by their terms convey to the Company ownership of all tangible
and intangible property thereby arising.
(b) The Company has not infringed upon, misappropriated, or otherwise
violated any Intellectual Property rights of third parties, and none of the
Company and the directors and officers (and employees with responsibility for
Intellectual Property matters) of the Company has ever received any charge,
complaint, claim, demand or notice alleging any such infringement,
misappropriation or violation (including any claim that the Company must
license or refrain from using any Intellectual Property rights of any third
party). To the Knowledge of the Seller, no Person has interfered with,
infringed upon, misappropriated or otherwise violated any Intellectual Property
rights of the Company.
Section 3.22 Licenses. The Company has all material licenses, permits and
other governmental certificates, authorizations and approvals required by every
federal, state, local and foreign Governmental Entity for the conduct of its
business and the use of its properties as presently conducted or used,
including without limitation any federal, state, local or foreign law relating
to public health and safety, or employee health and safety (collectively,
"Company Licenses"). Schedule 3.22 contains a true and complete list of the
Company Licenses. All of the Company Licenses are in full force and effect in
all material respects and no action or claim is pending nor, to the Knowledge
of the Seller, is threatened to revoke or terminate any Company License or
declare any Company License invalid in any material respect. The Company has
taken all necessary action to maintain such Company Licenses.
Section 3.23 Registration Rights. The Company is not under any obligation
to register under the Securities Act any of its currently outstanding
securities nor any of its securities which may hereafter be issued.
Section 3.24 No Misleading Statements. No information furnished by or on
behalf of the Company to the Purchaser contains any untrue statement of a
material fact or omits to state a material fact necessary to make such
statement, in the light of the circumstances under which it was made, not
misleading. All written information, in whatever form, furnished by the Seller
or the Company to the Purchaser was true and correct as of the date so
furnished and, except as the accuracy thereof is affected by the passage of
time, remains true and correct in all material respects as of the date hereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company that:
Section 4.1 Existence and Authority. The Purchaser has all requisite power
and authority to own his assets and has all requisite power and authority to
execute, deliver and perform his obligations under this Agreement.
Section 4.2 Authorization; No Contravention. The execution, delivery and
performance by the Purchaser of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, the issuance
of the Shares: (a) is within the Purchaser's power and authority and has been
duly authorized by all necessary action on the part of the Purchaser; and (b)
will not violate, conflict with or result in any material breach or
contravention of (i) any contractual obligation of the Purchaser, or (ii) any
law, statute, rule, regulation, order or decree applicable to the Purchaser,
provided the registration statement for the Shares is declared effective by the
SEC.
Section 4.3 Binding Effect. This Agreement has been duly executed and
delivered by the Purchaser, and this Agreement constitutes the legal, valid and
binding obligation of the Purchaser, enforceable against it in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability.
ARTICLE V
INDEMNIFICATION
Section 5.1 Indemnification by the Seller. Subject to Section 5.3, the
Seller shall indemnify the Purchaser and hold the Purchaser harmless after the
Closing from and against and in respect of any losses, damages, expenses,
liabilities, claims, assessments and judgments (including reasonable costs and
attorneys' fees and other expenses arising out of any claim, or the defense or
investigation thereof, made with respect to any of the foregoing)
(collectively, the "Indemnifiable Expenses") incurred or suffered by the
Purchaser, arising out of, based upon or resulting from any breach by them or
the Company of their or the Company's representations, warranties and covenants
contained in this Agreement (without regard to any materiality qualifier,
including any Material Adverse Effect qualifier, contained in such
representation or warranty).
Section 5.2 Indemnification by the Purchaser. Subject to Section 5.3, the
Purchaser shall indemnify the Company and hold the Company harmless after the
Closing from and against and in respect of any Indemnifiable Expenses incurred
or suffered by the Company, arising out of, based upon or resulting from any
breach by the Purchaser of the Purchaser's representations, warranties and
covenants contained in this Agreement.
Section 5.3 Limitations. Neither the Purchaser nor the Company shall be
entitled to make any claim for indemnification under Section 5.1 or Section 5.2
with respect to the breach of any representation and warranty contained herein
after the date on which such representation and warranty ceases to survive
pursuant to Section 5.6. Neither the Purchaser nor the Company shall make any
claim for indemnification until the aggregate amounts of such Indemnifiable
Expenses exceeds $5,000, in which case the Purchaser or the Company, as the
case may be, may claim indemnification for the full amount due. At such time
as either the Company or the Purchaser seeks to recover Indemnifiable Expenses,
the parties seeking indemnification shall provide the other party with
information regarding the Indemnifiable Expenses, including, without
limitation, reasonable detail regarding the nature of the Indemnifiable
Expenses and the amount, or an estimate of the amount, of such Indemnifiable
Expenses. The Company and the Purchaser agree that in no event shall the
Purchaser's liability under this Article V exceed the Purchase Price paid by
Purchaser.
Section 5.4 Notice and Defense of Claims. Each party entitled to
indemnification under this Article V (the "Indemnified Party") shall give
written notice to the party required to provide indemnification (the
"Indemnifying Party") promptly after such Indemnified Party has actual
knowledge of any claim as to which indemnity may be sought, and, in the event
of any claim or demand asserted against an Indemnified Party by a third party,
shall permit the Indemnifying Party to assume the defense of any such claim or
any litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld, conditioned or delayed), and the Indemnified Party
may participate in such defense at such party's expense, and provided further
that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this Article
V unless such failure to give notice materially adversely affected the ability
of the Indemnifying Party to defend such claim. The Indemnifying Party, in the
defense of any such claim or litigation, shall not, except with the prior
written consent of the Indemnified Party (which consent shall not be
unreasonably withheld, conditioned or delayed), consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to the
Indemnified Party of a release from all liability in respect of such claim or
litigation. The Indemnified Party shall furnish such information regarding
itself or the claim in question as the Indemnifying Party may reasonably
request in writing and as shall be reasonably required in connection with
defense of such claim and litigation resulting therefrom. The Indemnified
Party shall not, except with the prior written consent of the Indemnifying
Party, consent to the entry of any judgment or enter into any settlement with
respect to such claim or litigation. The Indemnifying Party shall not be
liable for any judgment or settlement effected without the Indemnifying Party's
prior written consent.
Section 5.5 Non-Exclusive Remedy. Indemnification pursuant to this Article
V shall not preclude the Purchaser or the Company from exercising any other
remedies it may have.
Section 5.6 Survival of Representations and Warranties. All
representations and warranties contained in this Agreement shall survive the
Closing and shall remain in full force and effect until the expiration of two
years from the Closing Date regardless of any investigation made by or on
behalf of any party hereto, except that the representations and warranties
contained in Section 3.4 relating to the Company's shares shall survive as long
as any of such shares are owned by the Purchaser and the representations and
warranties contained in Section 3.10, Section 3.16(a), Section 3.16(b) and
Section 3.16(c) shall survive until 90 days after the expiration of the
applicable statute of limitations.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Effect of Due Diligence. No investigation by or on behalf of
the Purchaser or any of its members or representatives into the business,
operations, prospects, assets or condition (financial or otherwise) of the
Company shall diminish in any way the effect of any representations or
warranties made by the Seller herein or shall relieve the Company or the
Sellers of any of its or their obligations under this Agreement.
Section 6.2 Successors and Assigns. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties hereto.
Section 6.3 Entire Agreement. This Agreement contains the entire agreement
among the parties hereto with respect to the transactions contemplated hereby,
and controls and supersedes any prior understandings, agreements or
representations by or among the parties, written or oral, which conflicts with,
or may have related to, the subject matter hereof in any way.
Section 6.4 Notices. All notices or other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered
personally or sent by telefax, by recognized overnight courier marked for
overnight delivery, or by registered or certified mail, postage prepaid,
addressed as follows:
(a) If to the Purchaser, to Viropro Inc., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, with a copy (which shall not
constitute notice) to: Law Offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq., or such other addresses
as shall be furnished by like notice by such party.
(b) If to the Company or the Seller, to Central Network Communications
Inc., ▇▇▇▇ ▇▇▇-▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇) ▇▇▇▇▇▇ H3B
1G4, Attention ▇▇▇▇▇▇ Egery, with a copy (which shall not constitute notice) to
Law Offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇'▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇
(▇▇▇▇▇▇) ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq., or such other
addresses as shall be furnished by like notice by such party.
All such notices and communications shall, when telefaxed (immediately
thereafter confirmed by telephone), be effective when telefaxed, or if sent by
nationally recognized overnight courier service, be effective one Business Day
after the same has been delivered to such courier service marked for overnight
delivery, or, if mailed, be effective when received.
Section 6.5 Applicable Law and Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the internal laws of the State
of New York, without reference to or application of any conflicts of laws
principles. Any dispute arising under this Agreement shall be heard solely in
the federal or state courts located in Southern District of New York.
Section 6.6Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
Section 6.7 Amendments. This Agreement may not be amended or modified, and
no provisions hereof (other than the Closing deliveries set forth in Section
2.3 hereof) may be waived, without the mutual written consent of the parties.
Section 6.8 Expenses. Each party hereto shall each bear all of their
respective expenses, including attorneys' fees, in connection with preparation,
execution and negotiation of this Agreement and the transactions contemplated
hereby.
Section 6.9 Headings. The headings used in this Agreement are for
convenience only and are not to be considered in construing or interpreting any
term or provision of this Agreement.
Section 6.10 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner so as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision of this Agreement. If any provision contained
in this Agreement is determined to be invalid, illegal or unenforceable as
written, a court of competent jurisdiction shall, at any party's request,
reform the terms of this Agreement to the extent necessary to cause such
otherwise invalid provisions to be enforceable under applicable law.
[The remainder of this page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day, month and year first written above.
VIRIPRO INC.
By:
Name: ▇▇▇▇▇▇▇ ▇▇▇
Title: President & CEO
CENTRAL NETWORK COMMUNICATIONS INC.
By:
Name: ▇▇▇▇▇▇ Egery
Title: President