Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (the "Agreement") is made as of the
20th day of January, 2005 by and among Corporate Road Xxxx.Xxx Inc., a New York
corporation (the "Company"), CRS Merger Sub, Inc., a Delaware corporation
("Merger Sub"), CRS Delaware, Inc., a Delaware corporation ("CRS Delaware"), and
Rexahn, Corp, a Maryland corporation ("Rexahn").
WHEREAS, Rexahn is authorized to issue 20,000,000 shares of its common
stock, par value $.01 per share ("Rexahn Common Stock"), of which 7,628,166
shares ("Issued Rexahn Shares") are issued and outstanding as of the date hereof
and 10,000,000 shares of its preferred stock, par value $.01 per share ("Rexahn
Preferred Stock"), of which no shares are issued and outstanding as of the date
hereof; and
WHEREAS, the Company is authorized to issue 500,000,000 shares of
common stock, par value $.0001 per share (the "Company Common Stock"), of which
289,780,000 shares are issued and outstanding as of the date hereof; and
WHEREAS, Merger Sub is a wholly owned subsidiary of the Company and is
authorized to issue 1,000 shares of common stock, par value $.01 per share (the
"Merger Sub Shares"), all of which are issued and outstanding and owned by the
Company as of the date hereof; and
WHEREAS, CRS Delaware is a wholly owned subsidiary of the Company and
is authorized to issue 1,000 shares of common stock, par value $.01 per share,
all of which are issued and outstanding and owned by the Company as of the date
hereof; and
WHEREAS, immediately prior to the consummation of the Reincorporation
(as defined below), the certificate of incorporation of CRS Delaware will be
amended and restated to provide that CRS Delaware is authorized to issue
500,000,000 shares of common stock, par value $.0001 per share (the "Rexahn
Pharmaceuticals Common Stock"), and 100,000,000 shares of preferred stock, par
value $.0001 per share; and
WHEREAS, immediately prior to the Merger, the Company will
reincorporate and change its state of incorporation from the State of New York
to the State of Delaware by means of a merger of the Company with and into CRS
Delaware (the "Reincorporation"), whereby each Company Common Stock will be
converted into the right to receive one share (after giving effect to the
Reverse Stock Split (as defined below)) or in lieu of the Reverse Stock Split,
one-one hundredth (1/100) of a share, of Rexahn Pharmaceuticals Common Stock,
with CRS Delaware surviving as a Delaware corporation under the name "Rexahn
Pharmaceuticals, Inc." ("Rexahn Pharmaceuticals"); and
WHEREAS, the respective Boards of Directors of the Company, Merger Sub,
CRS Delaware and Rexahn (the "Constituent Corporations") deem it advisable and
in the best interests of the Constituent Corporations, and their respective
stockholders, that Merger Sub be merged with and into Rexahn under the terms and
conditions hereinafter set forth (the "Merger") and the Merger be effected
pursuant to the Maryland General Corporation Law (the "MGCL") and the Delaware
General Corporation Law (the "DGCL"); and
WHEREAS, it is intended that the Merger and the Reincorporation each be
treated as a tax free reorganization under Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code"); and
NOW, THEREFORE, in consideration of the premises, covenants and
conditions hereof, the parties hereto do mutually agree as follows:
ARTICLE I
The Merger
SECTION 1.1 The Merger. On the basis of the representations,
warranties, covenants and agreements set forth in this Agreement and subject to
the satisfaction or waiver of the conditions set forth in this Agreement, at the
Effective Time (as defined below) and in accordance with the applicable
provisions of the MGCL and the DGCL:
(a) Merger Sub shall be merged with and into Rexahn and the
separate corporate existence of Merger Sub shall thereupon cease. Rexahn, as the
surviving corporation in the Merger and a wholly-owned subsidiary of the
Company, shall continue its existence under the name "Rexahn, Corp" and shall
continue to be governed by the MGCL. The Merger shall have the effects set forth
in Section 3-114 of the MGCL and Section 259 of the DGCL.
(b) The Articles of Incorporation and By-laws of Rexahn, as in
effect immediately prior to the Effective Time, shall thereafter be the articles
of incorporation and by-laws of the surviving corporation in the Merger until
duly amended or repealed.
(c) The members of the Board of Directors of Rexahn immediately
prior to the Effective Time shall thereafter be the members of the Board of
Directors of the surviving corporation in the Merger until the earlier of their
resignation or removal or until their respective successors are duly elected or
appointed and qualified in the manner
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provided in the articles of incorporation and by-laws of the surviving
corporation in the Merger, or as otherwise provided by law.
(d) The officers of Rexahn immediately prior to the Effective Time
shall be the initial officers of the surviving corporation in the Merger until
the earlier of their resignation or removal or until their respective successors
are duly elected or appointed and qualified.
SECTION 1.2 Closing. The closing of the transactions contemplated
by this Agreement (the "Closing") will take place at the offices of Xxxxxxxxxx &
Xxxxx LLP, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx, commencing at 10:00 a.m.
Eastern time on the next business day after all the conditions set forth in this
Agreement have been satisfied or waived, or such later date as agreed upon by
the parties hereto (the "Closing Date").
SECTION 1.3 Filing of Articles of Merger. Subject to the
provisions of this Agreement, as soon as practicable on the Closing Date, Merger
Sub and Rexahn shall cause Articles of Merger substantially in the form of
Exhibit A attached hereto (the "Articles of Merger") and the Certificate of
Merger substantially in the form of Exhibit B attached hereto (the "Certificate
of Merger") or other appropriate documents, duly executed in accordance with the
relevant provisions of the MGCL and the DGCL, to be filed and recorded as
required by the MGCL and the DGCL and will take any other further actions in
connection therewith as may be required by the MGCL and the DGCL to make the
Merger effective. The Merger shall become effective at the later of the time the
Articles of Merger are duly filed with the State Department of Assessments and
Taxation of the State of Maryland and the Certificate of Merger is filed with
the Secretary of State of the State of Delaware or at the effective time set
forth in the Articles of Merger and the Certificate of Merger (the "Effective
Time").
SECTION 1.4 Certain Effects of the Merger.
(a) At the Effective Time, Merger Sub shall be merged with and
into Rexahn and the separate existence of Merger Sub shall cease. Rexahn, as the
surviving corporation in the Merger, shall thereupon and thereafter possess all
the rights, privileges, powers and franchises, of a public or of a private
nature, and be subject to all restrictions, liabilities and duties of each of
Rexahn and Merger Sub and shall continue its existence as a Maryland
corporation.
(b) The parties to this Agreement intend that the Merger and the
Reincorporation shall each constitute a tax free "reorganization" within the
meaning of Section 368(a) of the Code and that this Agreement shall constitute a
"plan of reorganization" for the purposes of Section 368 of the Code. Each party
to this
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Agreement hereby agrees to file all tax returns, reports, or other documents,
and to act in all other respects, in a manner consistent therewith.
SECTION 1.5 Effect of Merger on Capital Stock.
(a) Cancellation of Rexahn Treasury Stock. At the Effective Time,
by virtue of the Merger and without any action on the part of the holders of
capital stock of Rexahn or of Merger Sub, each share of Rexahn Common Stock
issued and held in the treasury of Rexahn immediately prior to the Effective
Time shall cease to be outstanding, shall be canceled and retired without any
conversion thereof and without payment of any consideration therefor and shall
cease to exist.
(b) Conversion of Rexahn Common Stock.
(i) At the Effective Time, by virtue of the Merger and
without any action on the part of the holders of capital stock of
Rexahn or of Merger Sub, each share of Rexahn Common Stock issued and
outstanding immediately prior to the Effective Time (other than
Dissenting Shares (as defined below) and shares of Rexahn Common Stock
being canceled pursuant to Section 1.5(a)), shall be converted into the
right to receive, upon surrender of the certificate which immediately
prior to the Effective Time represented such share in accordance with
Section 1.7, five (the "Merger Ratio") shares of Rexahn Pharmaceuticals
Common Stock.
(ii) Each share of Rexahn Common Stock so converted at the
Effective Time shall be canceled and retired and shall cease to exist,
and each certificate which theretofore represented shares so converted
and canceled shall thereafter cease to have any rights with respect to
such shares except the right to receive the Rexahn Pharmaceuticals
Common Stock.
(c) Dissenting Shares. Notwithstanding anything in this Agreement
to the contrary, any shares of Rexahn Common Stock issued and outstanding
immediately prior to the Effective Time and held by a holder (a "Dissenting
Stockholder") who has not voted in favor of the Merger or consented thereto in
writing and who has properly demanded appraisal for such shares of Common Stock
in accordance with the MGCL ("Dissenting Shares") shall not be converted into a
right to receive the Rexahn Pharmaceuticals Common Stock in accordance with this
Section 1.5 at the Effective Time, but shall represent and become the right to
receive such consideration as may be determined to be due to such Dissenting
Stockholder pursuant to the laws of the State of Maryland, unless and until such
holder fails to perfect or withdraws or otherwise loses such holder's right to
appraisal and payment under the MGCL. At the Effective Time, by virtue of the
Merger and without any action on the part of the holder thereof, all
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Dissenting Shares shall be cancelled and shall cease to exist. If, after the
Effective Time, such Dissenting Stockholder fails to perfect or withdraws or
otherwise loses such holder's right to appraisal, such former Dissenting Shares
held by such holder shall be treated as if they had been converted as of the
Effective Time into a right to receive, upon surrender as provided above, Rexahn
Pharmaceuticals Common Stock in accordance with this Section 1.5 without any
interest thereon. Rexahn Pharmaceuticals shall be responsible for delivering the
shares of Rexahn Pharmaceuticals Common Stock in accordance with this Section
1.5 to such holder. Rexahn shall give Rexahn Pharmaceuticals prompt notice of
any demands received by the Company for appraisal of shares of Rexahn Common
Stock, any withdrawals of any such demands and any other instruments served
pursuant to the MGCL and received by Rexahn.
(d) Merger Sub Shares. At the Effective Time, by virtue of the
Merger and without any action on the part of the holder thereof, each Merger Sub
Share issued and outstanding immediately prior to the Effective Time shall be
converted into and become an issued and outstanding share of common stock of the
surviving corporation in the Merger.
(e) Securities Act Exemption. The Rexahn Pharmaceuticals Common
Stock to be issued in the Merger is intended to be exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to Section 4(2) of the Securities Act and/or Regulation S thereunder
and from applicable state securities laws. The Company will use reasonable
efforts to facilitate each Rexahn stockholder taking all reasonable actions and
executing all necessary documents to qualify the issuance of Rexahn
Pharmaceuticals Common Stock for such exemptions.
SECTION 1.6 Rexahn Options.
(a) At the Effective Time, each option to purchase Rexahn Common
Stock (a "Rexahn Option") that is outstanding and unexercised immediately prior
to the Effective Time shall cease to represent a right to acquire shares of
Rexahn Common Stock and shall be converted into an option to purchase shares of
Rexahn Pharmaceuticals Common Stock (a "Rexahn Pharmaceuticals Option") for a
number of shares of Rexahn Pharmaceuticals Common Stock and at an exercise price
determined as provided below (and otherwise subject to the terms of the Rexahn,
Corp Stock Option Plan pursuant to which such Rexahn Option has been issued and
the agreements evidencing grants thereunder):
(i) The number of shares of Rexahn Pharmaceuticals Common
Stock subject to the Rexahn Pharmaceuticals Option shall be equal to
the product of the number of shares of Rexahn Common Stock subject to
the Rexahn Option immediately prior to the Effective Time, multiplied
by the Merger Ratio, and, if
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any resultant fractional share of Rexahn Pharmaceuticals Common Stock
exists, rounded down to the nearest whole share, without any payment
for such fractional share; and
(ii) The exercise price per share of Rexahn Pharmaceuticals
Common Stock of the Rexahn Pharmaceuticals Option shall be equal to the
quotient of the exercise price per share of Rexahn Common Stock under
the Rexahn Option immediately prior to the Effective Time, divided by
the Merger Ratio, rounded up to the nearest hundredth of a cent;
provided, however, that in no event will the exercise price per share
of any Rexahn Pharmaceuticals Option be less than $.0001.
(b) The duration and other terms and conditions of the Rexahn
Pharmaceuticals Option, including vesting and exercisability, shall be the same
as the original Rexahn Option except that all references to Rexahn and Rexahn
Common Stock shall be deemed to be references to the Company and Rexahn
Pharmaceuticals Common Stock, respectively.
SECTION 1.7 Delivery of New Certificates. Promptly after the
Effective Time, Rexahn Pharmaceuticals shall mail to each record holder of
certificates formerly representing all of such holder's shares of Rexahn Common
Stock (the "Old Certificates"), at the address set forth on books of Rexahn, (i)
a notice of the effectiveness of the Merger and (ii) a Letter of Transmittal.
Upon surrender to Rexahn Pharmaceuticals of an Old Certificate, together with a
Letter of Transmittal duly executed and completed in accordance with the
instructions thereto, the holder of such Old Certificate (other than Old
Certificates representing Dissenting Shares or shares of Rexahn Common Stock to
be canceled pursuant to Section 1.5(a)) shall be entitled to receive in exchange
therefor, certificates representing the shares of Rexahn Pharmaceuticals Common
Stock into which such holder's shares of Rexahn Common Stock were converted
pursuant to the Merger (the "New Certificates") that such holder is entitled to
receive pursuant to Section 1.5(b)(i), which shall be delivered by Rexahn
Pharmaceuticals in accordance with the instructions provided by such holder in
the Letter of Transmittal executed by such holder.
SECTION 1.8 Share Certificates Issued in Different Names. If the
New Certificates to be delivered hereby are to be delivered in the name of a
Person other than the Person in whose name the Old Certificate surrendered is
registered, it shall be a condition of such delivery that the Old Certificate so
surrendered shall be properly endorsed or otherwise in proper form for transfer
and that the Person requesting such delivery shall pay any transfer or other
taxes required by reason of such delivery to a Person other than the registered
holder of the Old Certificate, or that such Person shall establish to the
satisfaction of the Company that such tax has been paid or
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is not applicable. Except as provided in the preceding sentence, any duty, stamp
or transfer tax required to effect the exchange of certificates as contemplated
by Section 1.7 shall be borne by Rexahn Pharmaceuticals.
SECTION 1.9 No Further Ownership Rights in Rexahn Common Stock.
All consideration paid upon the conversion of Rexahn Common Stock and the
surrender of Old Certificates in accordance with the terms of this Agreement
shall be deemed to have been paid in full satisfaction of all rights pertaining
to the shares of Rexahn Common Stock theretofore represented by such Old
Certificates. At the Effective Time, the stock transfer books of Rexahn shall be
closed, and there shall be no further registration of transfers on the stock
transfer books of the surviving corporation in the Merger of the shares of
Rexahn Common Stock that were outstanding immediately prior to the Effective
Time. If, after the Effective Time, Old Certificates are presented to Rexahn
Pharmaceuticals for any reason, they shall be canceled and exchanged as provided
in this Agreement.
SECTION 1.10 No Liability. Notwithstanding anything to the
contrary contained herein, none of the Company, Merger Sub, CRS Delaware, Rexahn
or Rexahn Pharmaceuticals shall be liable to any holder of an Old Certificate or
any other person or entity in respect of any cash delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
ARTICLE II
Representations and Warranties of Rexahn
Rexahn represents and warrants to the Company as follows, except
to the extent set forth on the corresponding sections of the schedule of
exceptions attached hereto and made a part hereof (the "Rexahn Schedule of
Exceptions"):
SECTION 2.1 Organization; Standing and Power. Rexahn is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Maryland and has all requisite corporate power and
authority required to own, lease and operate its properties and to carry on its
business as currently being conducted. Copies of the Articles of Incorporation
and By-laws, corporate minute books, stock certificate books and stock transfer
books of Rexahn have heretofore been delivered to the Company and are true,
correct and complete. Rexahn is not required to be qualified or licensed as a
foreign corporation in any other jurisdiction to conduct its business as
currently conducted.
SECTION 2.2 Authorization.
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(a) Rexahn has all requisite corporate power and authority to
execute and deliver this Agreement and, subject to the approval by the
stockholders of Rexahn whose consent is required in accordance with the laws of
the State of Maryland, to consummate the transactions contemplated by this
Agreement.
(b) Except for the consent and approval of the stockholders of
Rexahn and the filing of the Articles of Merger and the Certificate of Merger,
the execution, delivery and performance of the Agreement by Rexahn and the
consummation by Rexahn of the transactions contemplated by the Agreement will
not require on the part of Rexahn any permit, approval, order or authorization
of, or filing or registration with, or allowance by, or consent of or
notification to any federal, state or local government or any court,
administrative or regulatory agency or commission or other governmental agency
or authority, domestic or foreign (a "Governmental Authority") or any
individual, partnership, joint venture, corporation, limited liability company,
trust, unincorporated organization or other entity (including a Governmental
Authority) (a "Person").
SECTION 2.3 Binding Agreement. This Agreement has been duly
executed and delivered by Rexahn, and assuming the due execution and delivery of
this Agreement by the Company, Merger Sub and CRS Delaware, constitutes the
valid and binding obligation of Rexahn, enforceable against it in accordance
with its terms, except to the extent that its enforceability may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium,
receivership and other similar laws affecting the enforcement of creditors'
rights in general and general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
SECTION 2.4 No Conflicts. The execution, delivery and performance
of the Agreement by Rexahn and the consummation by Rexahn of the transactions
contemplated by the Agreement will not, with or without the giving of notice or
lapse of time, or both, violate, conflict with, result in a breach of,
constitute a default under or accelerate the performance required by any of the
terms, conditions or provisions of (i) the Articles of Incorporation or By-laws
of Rexahn or (ii) except for such violations, conflicts, breaches, defaults or
accelerations that, individually or in the aggregate, have a material adverse
effect on the business of Rexahn, any contract, covenant, agreement or
understanding, or any statute, rule, regulation, order, decree, ruling,
judgment, arbitration award, law, ordinance or stipulation to which Rexahn is a
party or to which it or any of its properties or assets is subject, or result in
the creation of any liens, pledges, security interests, charges, equities,
options, proxies, voting restrictions, rights of first refusal, encumbrances,
restrictions (other than restrictions arising under applicable securities laws)
and claims of every kind and character ("Encumbrances") on any of its properties
or assets.
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SECTION 2.5 Broker's or Finder's Fees. No agent, broker, firm or
other Person acting on behalf of Rexahn is, or will be, entitled to any
investment banking, commission, broker's or finder's fees from any of the
parties hereto, or from any Person controlling, controlled by or under common
control with any of the parties hereto, in connection with any of the
transactions contemplated by this Agreement, except for NeXend.
SECTION 2.6 Capitalization. The outstanding capitalization of
Rexahn is set forth on Schedule A annexed hereto. There are issued and
outstanding only the Issued Rexahn Shares, all of which are duly authorized and
validly issued. No securities of Rexahn are entitled to preemptive or similar
rights and no Person has any right of first refusal, right of participation, or
any similar right to participate in the transactions contemplated hereby. Except
as set forth on Schedule A, there are no outstanding options, warrants or other
rights to acquire capital stock of Rexahn, and there are no options, warrants,
calls, rights, commitments agreements, understandings or arrangements to which
Rexahn is a party or by which Rexahn is or may become bound to issue additional
shares of capital stock of Rexahn, or securities or rights convertible or
exchangeable into shares of capital stock of Rexahn prior to the Effective Time.
SECTION 2.7 Subsidiaries. Rexahn does not have any subsidiaries,
nor does it own any direct or indirect interest in any other business entity.
SECTION 2.8 Financial Statements. Rexahn has furnished the
Company with a true and complete copy of (i) the audited balance sheets of
Rexahn as of December 31, 2002 and 2003, and the related audited statements of
income and statements of cash flow of Rexahn for the fiscal years ended December
31, 2002 and 2003 (the "Audited Financial Statements") and (ii) the unaudited
balance sheets of Rexahn as of September 30, 2003 and 2004 and the related
unaudited statements of income and statements of cash flow for Rexahn for the
nine months ended September 30, 2003 and 2004 (the "Unaudited Financial
Statements" and, together with the Audited Financial Statements, the "Financial
Statements"). The Financial Statements fairly present in all material respects
the financial position, results of operations and other information purported to
be shown thereon of Rexahn, at the dates and for the respective periods to which
they apply, subject, in the case of the Unaudited Financial Statements, to
normal, immaterial year-end audit adjustments. All such Audited Financial
Statements have been audited by SF Partnership LLP and are accompanied by their
audit report and were prepared in conformity with United States generally
accepted accounting principles ("GAAP") consistently applied throughout the
periods involved, and have been adjusted for all normal and recurring accruals.
SECTION 2.9 No Adverse Changes. There has not been any material
adverse change in the financial condition of Rexahn from that set forth in the
Financial
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Statements except for (i) transactions in the ordinary course of
business since September 30, 2004 and (ii) transactions, including but not
limited to the incurring of expenses and liabilities, relating to this
Agreement.
SECTION 2.10 Liabilities; Claims. There are no liabilities
(including, but not limited to, tax liabilities) or claims against Rexahn
(whether such liabilities or claims are contingent or absolute, direct or
indirect, and matured or unmatured) not appearing in the Financial Statements,
other than (i) liabilities incurred in the ordinary course of business since
September 30, 2004, (ii) taxes accrued on earnings since September 30, 2004
which are not yet due or payable or (iii) other liabilities which do not exceed
$100,000 in the aggregate.
SECTION 2.11 Material Contracts. All written agreements,
contracts, letters of intent, arrangements, understandings and commitments to
which Rexahn is a party and which are material to Rexahn (collectively, "Rexahn
Contracts") are in good standing, valid and effective in accordance with their
respective terms, and neither Rexahn nor any other party to a Rexahn Contract
has violated any provision of, or committed or failed to perform any act which,
with or without notice, lapse of time or both, would constitute a default under
the provisions of, any such Rexahn Contract. Rexahn is not a party to or bound
by any contract which would prohibit or materially delay the consummation of
transactions contemplated by this Agreement.
SECTION 2.12 Tax Matters.
(a) All federal, state, county, local and foreign income, excise,
property and other tax returns required to be filed by Rexahn have been timely
filed and all such duly filed tax returns are true and correct in all material
respects. All required taxes, fees or assessments have been paid or an adequate
reserve therefor has been established (in accordance with GAAP) in the Financial
Statements. The federal income tax returns and state and foreign income tax
returns of Rexahn have not been audited by the Internal Revenue Service (the
"IRS") or any other taxing authority and Rexahn has not received any notice of
deficiency or assessment from any taxing authority with respect to liability for
taxes which has not been fully paid or finally settled. Neither the IRS nor any
state, local, foreign or other taxing authority has proposed in writing any
additional taxes, interest or penalties with respect to Rexahn or any of its
operations or businesses. There are no pending, or to the knowledge of Rexahn,
threatened, tax claims or assessments, and there are no pending, or to the
knowledge of Rexahn, threatened, tax examinations by any taxing authorities.
Rexahn has not given any waivers of rights (which are currently in effect) under
applicable statutes of limitations with respect to taxes of Rexahn for any
taxable period. There are no liens for taxes upon the assets of Rexahn except
for statutory liens for current taxes not yet due and payable or which may
thereafter be paid without penalty or are being contested in good faith. Rexahn
has not
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filed a request with the IRS for changes in accounting methods within the last
three (3) years which change would affect the accounting for tax purposes,
directly or indirectly, of its business.
(b) Rexahn has not taken any action nor does it have any knowledge
of any fact, agreement, plan or other circumstance, that is reasonably likely to
prevent the Merger from qualifying as a tax free reorganization within the
meaning of Section 368(a) of the Code.
(c) Rexahn does not have any liability for taxes of any person as
a result of being a member of an affiliated, consolidated, combined or unitary
group under Treasury Regulation Section 1.1502-6 (or any comparable provision of
state, local or foreign law), nor is it bound by any obligation under any tax
sharing agreement, tax indemnification agreement or similar contract or
arrangement.
SECTION 2.13 Legal Proceedings. There are no legal,
administrative, arbitral or other proceedings, claims, suits, actions or
governmental investigations of any nature pending, or to Rexahn's knowledge,
threatened, directly or indirectly involving Rexahn or its officers, directors,
employees or affiliates, which would reasonably be expected to have a material
adverse effect on the business of Rexahn or challenging the validity of the
transactions contemplated by this Agreement. Rexahn is not a party to any order,
judgment, injunction, rule or decree of any Governmental Authority or arbitrator
which would reasonably be expected to have a material adverse effect on the
business of Rexahn.
SECTION 2.14 Insurance. Rexahn has maintained casualty and
liability policies and other insurance policies with respect to its business
which are appropriate and customary for businesses similar in size, industry and
risk profile. All of the policies of insurance and bonds presently in force with
respect to Rexahn, including without limitation those covering properties,
buildings, machinery, equipment, worker's compensation, product liability,
officers and directors and public liability, are outstanding and in full force
and effect, with all premiums thereon duly paid, and Rexahn has not received any
notice of cancellation of any such policies.
SECTION 2.15 Intellectual Property.
(a) Rexahn owns, or has validly licensed or otherwise has the
right to use or exploit, as currently used or exploited, and as contemplated to
be used and exploited in the future, all material proprietary technology,
patents, trademarks, trade names, service marks and registered copyrights (and
all pending applications or current registrations for any of the foregoing), and
all licenses granted to Rexahn by third parties of patent rights, trademark
rights, trade name rights and service xxxx rights, used by
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Rexahn in the conduct of its business (together with trade secrets and know how
used in the conduct of its business, the "Rexahn Intellectual Property Rights"),
free of any lien or any obligation to make any payment (whether of a royalty,
license fee, compensation or otherwise). No claims are pending or, to the
knowledge of Rexahn, threatened against Rexahn that Rexahn is infringing or
otherwise violating the rights of any Person with regard to any Rexahn
Intellectual Property Right or that any Rexahn Intellectual Property Right is
invalid or unenforceable. To the knowledge of Rexahn, no Person is infringing
the rights of Rexahn with respect to any Rexahn Intellectual Property Right nor
has any Person threatened to do so. Neither Rexahn, nor, to the knowledge of
Rexahn, any of its employees, agents or independent contractors, in connection
with the performance of such Person's services with Rexahn, as the case may be,
has used, appropriated or disclosed, directly or indirectly, any trade secret or
other proprietary or confidential information of any other Person without the
right to do so, or otherwise violated any confidential relationship with any
other Person, other than such actions that have not had, or would not reasonably
be expected to have, a material adverse effect on the business of Rexahn.
(b) Except as set forth on Schedule 2.15:
(i) All former and current consultants or contractors of
Rexahn have executed and delivered written instruments with Rexahn,
that assign to Rexahn all rights to any inventions, improvements,
discoveries or information developed by them for or on behalf of
Rexahn. All employees of Rexahn who participated in the creation or
contributed to the development of the Rexahn Intellectual Property
Rights were employees of Rexahn at the time of rendering such services,
such services were within the scope of their employment and such
employees have validly assigned all rights to the Rexahn Intellectual
Property Rights to Rexahn; and
(ii) Rexahn has taken all such security measures as it has
determined are commercially reasonable and appropriate, including
entering into appropriate confidentiality and nondisclosure agreements
with all of their employees, consultants and contractors, and any other
persons with access to the Rexahn Intellectual Property Rights, trade
secrets or know how of Rexahn, to protect the secrecy, confidentiality
and value of all such Rexahn Intellectual Property Rights, trade
secrets or know how and there has not been any breach by Rexahn, nor,
to the knowledge of Rexahn, any other party to any such related
agreements, other than such that would not reasonably be expected to
have a material adverse effect on the business of Rexahn.
SECTION 2.16 Permits; Compliance with Laws. Rexahn has all
governmental licenses, authorizations, permits, consents and approvals
("Permits")
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required to own, lease and operate its properties and to carry on its business
as currently conducted. Rexahn: (i) is not in default under or in violation of
(and no event has occurred that has not been waived that, with notice or lapse
of time or both, would result in a default by Rexahn under), nor has Rexahn
received notice of a claim that it is in default under or that it is in
violation of, any indenture, mortgage, deed of trust or other agreement,
instrument or contract to which Rexahn is a party or by which it or any of its
assets or properties are bound (whether or not such default or violation has
been waived), (ii) is not in violation of any order of any court, arbitrator or
Governmental Authority, (iii) is not and has not been in violation of any law,
order, rule, regulation, writ, injunction, judgment or decree of any
Governmental Authority having jurisdiction over Rexahn or any of its business or
properties, including federal and state securities laws and regulations and (iv)
is not in violation of any of its Permits, except where the failure to so comply
did not have and would not reasonably be expected to have a material adverse
effect on the business of Rexahn.
SECTION 2.17 Related Party Contracts. Except as set forth on
Schedule 2.17, none of the officers, directors, or affiliates of Rexahn is
presently a party to any transaction with Rexahn (other than for services as
employees, officers and directors), including any loans, leases, agreements,
arrangements or understandings outstanding between Rexahn and any of its
officers, directors, or affiliates or any person related to or affiliated with
any such officers or directors.
SECTION 2.18 Benefit Plans. Except as set forth on Schedule 2.18,
Rexahn does not have any pension, retirement, savings, profit sharing,
stock-based, incentive compensation or other similar employee benefit plan.
SECTION 2.19 Employee Matters. No employees of Rexahn are on
strike or, to the best of Rexahn's knowledge, threatening any strike or work
stoppage. Rexahn does not have any obligations under any collective bargaining
or labor union agreements, nor is Rexahn involved in any material controversy
with any of its employees or any organization representing any of its employees.
SECTION 2.20 Trading With the Enemy Act; Patriot Act. No sale of
Rexahn's securities nor Rexahn's use of the proceeds from such sale has violated
the Trading with the Enemy Act, as amended, or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) or any enabling legislation or executive order relating
thereto. Without limiting the foregoing, Rexahn (i) is not a Person whose
property or interests in property are blocked pursuant to Section 1 of Executive
Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions
with Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg.
49079 (2001)) and (ii) does not engage in
13
any dealings or transactions, or is otherwise associated, with any such person.
Rexahn is in compliance with the USA Patriot Act of 2001.
ARTICLE III
Representations and Warranties Regarding Merger Sub
The Company and Merger Sub each jointly and severally represents
and warrants to Rexahn as follows with respect to Merger Sub:
SECTION 3.1 Organization; Capitalization. Merger Sub is a duly
organized and validly existing corporation in good standing under the laws of
the State of Delaware, authorized to issue only the Merger Sub Shares. On the
Closing Date there will be 1,000 issued and outstanding Merger Sub Shares, all
of which shall be fully paid and non-assessable and shall be owned solely by the
Company. There are no issued or outstanding options or warrants to purchase
Merger Sub Shares or any issued or outstanding securities of any nature
convertible into Merger Sub Shares, or any agreements or understandings to issue
any Merger Sub Shares, options or warrants.
SECTION 3.2 Authorization.
(a) Merger Sub has all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated by this Agreement.
(b) Except for the filing of the Articles of Merger and the
Certificate of Merger, the execution, delivery and performance of the Agreement
by Merger Sub and the consummation by Merger Sub of the transactions
contemplated by the Agreement will not require on the part of Merger Sub any
permit, approval, order or authorization of, or filing or registration with, or
allowance by, or consent of or notification to any Person.
SECTION 3.3 Binding Agreement. This Agreement has been duly
executed and delivered by Merger Sub, and assuming the due execution and
delivery of this Agreement by the Company, CRS Delaware and Rexahn, constitutes
the valid and binding obligation of Merger Sub, enforceable against it in
accordance with its terms, except to the extent that its enforceability may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium, receivership and other similar laws affecting the enforcement of
creditors' rights in general and general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
14
SECTION 3.4 No Conflicts. The execution, delivery and performance
of the Agreement by Merger Sub and the consummation by Merger Sub of the
transactions contemplated by the Agreement will not, with or without the giving
of notice or lapse of time, or both, violate, conflict with, result in a breach
of, constitute a default under or accelerate the performance required by any of
the terms, conditions or provisions of (i) the Certificate of Incorporation or
By-laws of Merger Sub or (ii) any statute, rule, regulation, order, decree,
ruling, judgment, arbitration award, law, ordinance or stipulation to which
Merger Sub or any of its properties or assets is subject, or result in the
creation of any Encumbrances on any of its properties or assets.
SECTION 3.5 Broker's or Finder's Fees. No agent, broker, firm or
other Person acting on behalf of Merger Sub is, or will be, entitled to any
investment banking, commission, broker's or finder's fees from any of the
parties hereto, or from any Person controlling, controlled by or under common
control with any of the parties hereto, in connection with any of the
transactions contemplated by this Agreement.
SECTION 3.6 Capitalization. On the date hereof, the authorized
capital stock of Merger Sub consists of 1,000 Merger Sub Shares.
SECTION 3.7 No Business Activity; Financial Condition. Merger Sub
has been organized solely for the purpose of consummating the Merger and, since
its inception, has had no business activity of any nature other than those
related to its organization or as contemplated by this Agreement. Merger Sub has
no contracts or commitments to which it is a party, except for this Agreement
and other documents and instruments contemplated hereby in connection with the
Merger. Except for (i) the incurring of expenses of its organization, (ii) the
issuance of the Merger Sub Shares to the Company, (iii) the incurring of
expenses relating to this Agreement and the consummation of the transactions
contemplated by this Agreement and (iv) the consummation of the Merger, Merger
Sub has had no financial or other transactions of any nature whatsoever. As of
the date hereof, Merger Sub has no subsidiaries.
ARTICLE IV
Representations and Warranties Regarding CRS Delaware
The Company and CRS Delaware each jointly and severally represents
and warrants to Rexahn as follows with respect to CRS Delaware:
SECTION 4.1 Organization; Standing and Power. CRS Delaware is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority required to
15
own, lease and operate its properties and to carry on its business as currently
being conducted. CRS Delaware is not required to be qualified or licensed as a
foreign corporation in any other jurisdiction to conduct its business as
currently conducted.
SECTION 4.2 Authorization.
(a) CRS Delaware has all requisite corporate power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated by this Agreement.
(b) Except for the filing of the certificate of merger with
respect to the Reincorporation, the execution, delivery and performance of the
Agreement by CRS Delaware and the consummation by CRS Delaware of the
transactions contemplated by the Agreement will not require on the part of CRS
Delaware any permit, approval, order or authorization of, or filing or
registration with, or allowance by, or consent of or notification to any Person.
SECTION 4.3 Binding Agreement. This Agreement has been duly
executed and delivered by CRS Delaware, and assuming the due execution and
delivery of this Agreement by the Company, Merger Sub and Rexahn, constitutes
the valid and binding obligation of CRS Delaware, enforceable against it in
accordance with its terms, except to the extent that its enforceability may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium, receivership and other similar laws affecting the enforcement of
creditors' rights in general and general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
SECTION 4.4 No Conflicts. The execution, delivery and performance
of this Agreement by CRS Delaware and the consummation by CRS Delaware of the
transactions contemplated by the Agreement will not, with or without the giving
of notice or lapse of time, or both, violate, conflict with, result in a breach
of, constitute a default under or accelerate the performance required by any of
the terms, conditions or provisions of (i) the Certificate of Incorporation or
By-laws of CRS Delaware or (ii) any statute, rule, regulation, order, decree,
ruling, judgment, arbitration award, law, ordinance or stipulation to which CRS
Delaware or any of its properties or assets is subject, or result in the
creation of any Encumbrances on any of its properties or assets.
SECTION 4.5 Broker's or Finder's Fees. No agent, broker, firm or
other Person acting on behalf of CRS Delaware is, or will be, entitled to any
investment banking, commission, broker's or finder's fees from any of the
parties hereto, or from any Person controlling, controlled by or under common
control with any of the parties hereto, in connection with any of the
transactions contemplated by this Agreement.
16
SECTION 4.6 Capitalization.
(a) As of the date of this Agreement, (i) there are 1,000 issued
and outstanding shares of Rexahn Pharmaceuticals Common Stock, all of which are
be fully paid and non-assessable and are owned solely by the Company and (ii)
except for the Reincorporation Merger Agreement (as defined in Section 8.7
hereto), there are no issued or outstanding options or warrants to purchase
shares of Rexahn Pharmaceuticals Common Stock or any issued or outstanding
securities of any nature convertible into shares of Rexahn Pharmaceuticals
Common Stock, or any agreements or understandings to issue any shares of Rexahn
Pharmaceuticals Common Stock, options or warrants.
(b) As of the Closing, (i) the authorized capital stock of CRS
Delaware will consist of 500,000,000 shares of Rexahn Pharmaceuticals Common
Stock, of which 2,897,800 shares of Rexahn Pharmaceuticals Common Stock will be
issued and outstanding (after giving effect to the Reincorporation) and
100,000,000 shares of preferred stock of the CRS Delaware, par value $.0001 per
share, of which no shares will be issued and outstanding, (ii) all of the issued
and outstanding shares of capital stock of CRS Delaware will have been duly
authorized and validly issued and will be fully paid and nonassessable, (iii) no
securities of CRS Delaware will be entitled to preemptive or similar rights,
(iv) no Person will have any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the transactions
contemplated hereby, (v) there will be no outstanding options, warrants or other
rights to acquire capital stock of CRS Delaware and (vi) except for this
Agreement and the Reincorporation Merger Agreement, there will be no securities,
options, warrants, calls, rights, commitments, agreements, understandings or
arrangements to which CRS Delaware is a party or by which CRS Delaware is or may
become bound to issue additional shares of capital stock of CRS Delaware, or
securities or rights convertible or exchangeable into shares of capital stock of
CRS Delaware.
(c) As of the Closing, there will be no outstanding obligations,
contingent or otherwise, of CRS Delaware to redeem, purchase or otherwise
acquire any capital stock or other securities of CRS Delaware.
(d) As of the Closing, there will be no stockholder agreements,
voting trusts or other agreements or understandings to which CRS Delaware is a
party or by which CRS Delaware is bound relating to the voting of any shares of
the capital stock of CRS Delaware.
SECTION 4.7 No Business Activity; Financial Condition. As of the
date hereof, (i) CRS Delaware has been organized solely for the purpose of
consummating the Reincorporation and, since its inception, has had no business
activity of any nature other than those related to its organization or as
contemplated by this
17
Agreement, (ii) CRS Delaware has no contracts or commitments to which it is a
party, except for this Agreement and other documents and instruments
contemplated hereby in connection with the Merger and Reincorporation, (iii)
except for (A) the incurring of expenses of its organization, (B) the issuance
of 1,000 shares of common stock, par value $.01 per share, of CRS Delaware to
the Company, (C) the incurring of expenses relating to this Agreement and the
consummation of the transactions contemplated by this Agreement and (D) the
consummation of the Reincorporation and the Merger, CRS Delaware has had no
financial or other transactions of any nature whatsoever and (iv) CRS Delaware
has no subsidiaries.
ARTICLE V
Representations and Warranties Regarding the Company
The Company hereby represents and warrants to Rexahn as follows,
except to the extent set forth on the corresponding sections of the schedule of
exceptions attached hereto and made a part hereof:
SECTION 5.1 Organization; Standing and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of New York and has all requisite corporate power and
authority required to own, lease and operate its properties and to carry on its
business as currently being conducted. Copies of the Certificate of
Incorporation and By-laws, corporate minute books, stock certificate books and
stock transfer books of the Company that have heretofore been delivered to
Rexahn are true, correct and complete. The Company is not required to be
qualified or licensed as a foreign corporation in any other jurisdiction to
conduct its business as currently conducted.
SECTION 5.2 Authorization.
(a) The Company has all requisite corporate power and authority to
execute and deliver this Agreement and, subject to the approval by the
stockholders of the Company whose consent is required in accordance with the
laws of the State of New York to consummate the Reincorporation and the
transactions related thereto, and to consummate the transactions contemplated by
this Agreement.
(b) Except for the consent and approval of the stockholders of the
Company to consummate the Reincorporation, which will include the conversion of
each outstanding share of Company Common Stock into one one-hundredth (1/100) of
a share of Rexahn Pharmaceuticals Common Stock (the "Reverse Stock Split"), the
name change of the Company to "Rexahn Pharmaceuticals, Inc." (the "Name
Change"), the
18
authorization to issue 100,000,000 shares of preferred stock, par value $.0001
per share, of Rexahn Pharmaceuticals (the "Preferred Stock Authorization") and
the filing of a certificate of merger to effect such Reincorporation, the
execution, delivery and performance of the Agreement by the Company and the
consummation by the Company of the transactions contemplated by the Agreement
will not require on the part of the Company any permit, approval, order or
authorization of, or filing or registration with, or allowance by, or consent of
or notification to any Person.
SECTION 5.3 Binding Agreement. This Agreement has been duly
executed and delivered by the Company, and assuming the due execution and
delivery of this Agreement by Rexahn, CRS Delaware and Merger Sub, constitutes
the valid and binding obligation of the Company, enforceable against it in
accordance with its terms, except to the extent that its enforceability may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium, receivership and other similar laws affecting the enforcement of
creditors' rights in general and general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
SECTION 5.4 No Conflicts. The execution, delivery and performance
of the Agreement by the Company and the consummation by the Company of the
transactions contemplated by this Agreement will not, with or without the giving
of notice or lapse of time, or both, violate, conflict with, result in a breach
of, constitute a default under or accelerate the performance required by any of
the terms, conditions or provisions of (i) the Certificate of Incorporation or
By-laws of the Company or (ii) except for such violations, conflicts, breaches,
defaults or accelerations that, individually or in the aggregate, have a
material adverse effect on the business of the Company, any contract, covenant,
agreement or understanding, or any statute, rule, regulation, order, decree,
ruling, judgment, arbitration award, law, ordinance or stipulation to which the
Company is a party or to which it or any of its properties or assets is subject,
or result in the creation of any Encumbrances on any of its properties or
assets.
SECTION 5.5 Broker's or Finder's Fees. No agent, broker, firm or
other Person acting on behalf of the Company is, or will be, entitled to any
investment banking, commission, broker's or finder's fees from any of the
parties hereto, or from any Person controlling, controlled by or under common
control with any of the parties hereto, in connection with any of the
transactions contemplated by this Agreement.
SECTION 5.6 Capitalization.
(a) The authorized capital stock of the Company consists of
500,000,000 shares of Common Stock. As of the date hereof, 289,780,000 shares of
19
Common Stock are issued and outstanding. All of the issued and outstanding
shares of capital stock of the Company have been duly authorized and validly
issued and are fully paid and nonassessable. All of the issued and outstanding
shares of capital stock of the Company have been offered, issued and sold by the
Company in compliance with all applicable federal and state securities laws. No
securities of the Company are entitled to preemptive or similar rights, and no
Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated hereby.
There are no outstanding options, warrants or other rights to acquire capital
stock of the Company and there are no securities, options, warrants, calls,
rights, commitments, agreements, understandings or arrangements to which the
Company is a party or by which the Company is or may become bound to issue
additional shares of capital stock of the Company, or securities or rights
convertible or exchangeable into shares of capital stock of the Company.
(b) There are no outstanding obligations, contingent or otherwise,
of the Company to redeem, purchase or otherwise acquire any capital stock or
other securities of the Company.
(c) There are no stockholder agreements, voting trusts or other
agreements or understandings to which the Company is a party or by which the
Company is bound relating to the voting of any shares of the capital stock of
the Company.
SECTION 5.7 Subsidiaries. Other than Merger Sub which the Company
wholly owns, the Company does not have any subsidiaries, nor does it own any
direct or indirect interest in any other business entity.
SECTION 5.8 Investment Company/Investment Adviser. The business
of the Company does not require it to be registered as an investment company, as
such term is defined under the Investment Company Act of 1940, as amended, nor
does it require the Company to be registered as an investment adviser, as such
term is defined under the Investment Advisers Act of 1940, as amended, or under
applicable New York State laws.
SECTION 5.9 SEC Reports; Financial Statements.
(a) The Company has filed all registration statements,
prospectuses, reports, schedules, forms, statements and other documents required
to be filed by it with the Securities and Exchange Commission (the "SEC") under
the Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), including pursuant to Section 13(a) or 15(d) thereof, since
April 29, 2003 (the foregoing materials being collectively referred to herein as
the "SEC Reports") on a timely basis. As of their respective dates (and as of
the date of any amendment to the respective SEC Report), the
20
SEC Reports complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the SEC
promulgated thereunder. None of the SEC Reports, as of their respective dates
(or, if amended or superseded by a filing prior to the date of this Agreement,
then on the date of such filing), contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The financial statements of the
Company included in the SEC Reports complied in all material respects with
applicable accounting requirements and the rules and regulations of the SEC with
respect thereto as in effect at the time of filing. Such financial statements
were prepared in accordance with GAAP consistently applied during the periods
involved, except as may be otherwise specified in such financial statements or
the notes thereto, and fairly present in all material respects the financial
position, results of operations and other information purported to be shown
thereon of the Company as of the dates and for the respective periods to which
they apply, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.
(b) Since September 30, 2004, except as specifically disclosed in
the SEC Reports:
(i) there has not been any material adverse change in the
business, financial condition or results of operations of the Company,
its liabilities, assets or any damage, loss or other change in
circumstances materially affecting the Company, its business or assets
or the Company's right to carry on its business;
(ii) the Company has not incurred, assumed, guaranteed or
endorsed any liabilities (contingent or otherwise) or amended of any
material term of any outstanding security;
(iii) there has been no sale, assignment, disposal, transfer,
mortgage, pledge, encumbrance or lease of any asset or property of the
Company;
(iv) there has been no change in accounting methods or
practices or the identity of its auditors, nor any revaluation of any
asset of the Company;
(v) there has been (x) no declaration or payment of a
dividend, or any other declaration, payment or distribution of any type
or nature to any stockholder of the Company in respect of its stock,
whether in cash or property, and (y) no purchase or redemption of any
share of the capital stock of the Company;
21
(vi) the Company has not issued any equity securities to any
officer, director or affiliate of the Company;
(vii) the Company has not made any loan, advance or capital
contributions to or investment in any Person;
(viii) the Company has not established, adopted or amended
(except as required by applicable law) any collective bargaining,
bonus, profit sharing, thrift, pension, retirement, deferred
compensation, compensation, stock option, restricted stock or other
benefit plan or arrangement covering any current or former director,
officer or employee of the Company;
(ix) the Company has not increased the compensation, bonus or
other benefits payable or otherwise made available to any current or
former director, officer or employee of the Company;
(x) the Company has not granted any severance or termination
pay to any current or former director, officer or employee of the
Company, or increased the benefits payable under any existing severance
or termination pay policies or employment agreements or entered into
any employment, deferred compensation or other similar agreement (or
any amendment to any such existing agreement) with any current or
former director, officer or employee of the Company;
(xi) the Company has not made any tax election or any
settlement or compromise of any tax liability, in either case that is
material to the Company or entered into any transaction by the Company
not in the ordinary course of business;
(xii) there has been no release, compromise, waiver or
cancellation of any debt to or claim by the Company, or waiver of any
right of the Company;
(xiii) there have been no capital expenditures by the
Company;
(xiv) there has been no material damage or destruction to, or
loss of, physical property (whether or not covered by insurance) of the
Company;
(xv) there has been no guaranty by the Company of any
indebtedness of any Person;
(xvi) the Company has not entered into any transaction or
commitment made, or any contract or agreement entered into, relating to
its
22
business or any of its assets (including the acquisition or
disposition of, or creation of a lien on, any assets) or any
relinquishment by the Company of any contract or other right;
(xvii) the Company has not participated or engaged in any
discussions or negotiations with any Person regarding, or entered into
any transaction concerning, a merger, stock exchange or consolidation,
other than with the other parties hereto, or liquidated or dissolved
itself (or suffered any liquidation or dissolution) or conveyed, sold,
leased, transferred or otherwise disposed of, in one transaction or a
series of related transactions, all or a substantial part of its
property, business, assets or capital stock or securities convertible
into equity, or made any material change in its current method of
conducting business;
(xviii) there has been no agreement or commitment by the
Company to do any of the foregoing described in clauses (i) through
(xviii); and
(xix) there has been no other event or condition of any
character that has had, or could reasonably be expected to have, a
material adverse effect on the properties, business, operations,
financial condition, assets or prospects of the Company.
SECTION 5.10 Assets; Liens. Except as set forth in the SEC
Reports, since September 30, 2004, the Company has not acquired any assets,
including, without limitation, goodwill, assets, real property, tangible
personal property, intangible personal property, rights and benefits under
contracts and cash. No Encumbrances exist on any of the Company's assets.
SECTION 5.11 Liabilities; Claims. Except as set forth in (i) the
SEC Reports and (ii) the amounts of accrued but unpaid salary due to Xxxxx
Xxxxxxx ("Xxxxxxx") under the Employment Agreement dated January 1, 2003 for the
period from September 30, 2004 through December 31, 2004, which aggregate amount
due to Xxxxxxx is $122,500 as of December 31, 2004, there are no liabilities
(including, but not limited to, tax liabilities) or claims against the Company
(whether such liabilities or claims are contingent or absolute, direct or
indirect, and matured or unmatured), and there is no existing condition,
situation or set of circumstances which could reasonably be expected to result
in such a liability or claim.
SECTION 5.12 Material Contracts. Except as filed as exhibits to
the SEC Reports, the Company has no "material contracts" (as defined in Item
601(b)(10) of Regulation S-B of the SEC) to which it is a party. The Company is
not a party to or bound by any contract which would prohibit or materially delay
the consummation of
23
the transactions contemplated by this Agreement. All of the Company's "material
contracts" are in good standing, valid and effective in accordance with their
respective terms, and neither the Company nor any other party to a "material
contract" of the Company has violated any provision of, or committed or failed
to perform any act which, with or without notice, lapse of time or both, would
constitute a default under the provisions of, any such "material contract".
SECTION 5.13 Tax Matters.
(a) All federal, state, county, local and foreign income, excise,
property and other tax returns required to be filed by the Company and its
subsidiaries have been timely filed and all such duly filed tax returns are true
and correct in all material respects. All required taxes, fees or assessments
have been paid or an adequate reserve therefor has been established (in
accordance with GAAP) in the financial statements of the Company included in the
SEC Reports. The federal income tax returns and state and foreign income tax
returns of the Company and its subsidiaries have not been audited by the IRS or
any other taxing authority and the Company or its subsidiaries have not received
any notice of deficiency or assessment from any taxing authority with respect to
liability for taxes which has not been fully paid or finally settled. Neither
the IRS nor any state, local, foreign or other taxing authority has proposed in
writing any additional taxes, interest or penalties with respect to the Company
or its subsidiaries or any of their operations or businesses. There are no
pending, or to the knowledge of the Company, threatened, tax claims or
assessments, and there are no pending, or to the knowledge of the Company,
threatened, tax examinations by any taxing authorities. Neither the Company nor
its subsidiaries have given any waivers of rights (which are currently in
effect) under applicable statutes of limitations with respect to taxes of the
Company or its subsidiaries for any taxable period. There are no liens for taxes
upon the assets of the Company or its subsidiaries except for statutory liens
for current taxes not yet due and payable or which may thereafter be paid
without penalty or are being contested in good faith. The Company or its
subsidiaries has not filed a request with the IRS for changes in accounting
methods within the last three (3) years which change would affect the accounting
for tax purposes, directly or indirectly, of its business.
(b) The Company and its subsidiaries have not taken any action nor
do they have any knowledge of any fact, agreement, plan or other circumstance,
that is reasonably likely to prevent the Merger or the Reincorporation from
qualifying as a tax free reorganization within the meaning of Section 368(a) of
the Code.
(c) The Company and its subsidiaries do not have any liability for
taxes of any person as a result of being a member of an affiliated,
consolidated, combined or unitary group under Treasury Regulation Section
1.1502-6 (or any comparable
24
provision of state, local or foreign law), nor is it bound by any obligation
under any tax sharing agreement, tax indemnification agreement or similar
contract or arrangement.
SECTION 5.14 Internal Accounting Controls; Xxxxxxxx-Xxxxx Act of
2002. The Company is in compliance with the requirements of the Xxxxxxxx-Xxxxx
Act of 2002 applicable to it as of the date of this Agreement. The Company
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management's general or specific authorization, and (iv)
the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. The Company has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
designed such disclosures controls and procedures to ensure that material
information relating to the Company, is made known to the certifying officers by
others within the Company, particularly during the period in which the Company's
Form 10-KSB or 10-QSB, as the case may be, is being prepared. The Company's
certifying officers have evaluated the effectiveness of the Company's controls
and procedures as of the date of its most recently filed periodic report (such
date, the "Evaluation Date"). The Company presented in its most recently filed
periodic report the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, there have
been no significant changes in the Company's internal control over financial
reporting (as such term is defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) or in other factors that could significantly affect the Company's
internal control over financial reporting. The Company's auditors, at all
relevant times, have been duly registered in good standing with the Public
Company Accounting Oversight Board.
SECTION 5.15 Solvency; Indebtedness. Based on the financial
condition of the Company as of the Closing Date: (i) the fair saleable value of
the Company's assets exceeds the amount that will be required to be paid on or
in respect of the Company's existing debts and other liabilities (including
known contingent liabilities) as they mature; (ii) the Company's assets do not
constitute unreasonably small capital to carry on its business for the current
fiscal year as now conducted and as proposed to be conducted, including its
capital needs taking into account the particular capital requirements of the
business conducted by the Company and projected capital requirements and capital
availability thereof; and (iii) the current cash flow of the Company, together
with the proceeds the Company would receive, were it to liquidate all of its
assets, after taking into account all anticipated uses of the cash, would be
sufficient to pay all amounts on or in respect of its debt when such amounts are
required
25
to be paid. The Company does not intend to incur debts beyond its ability to pay
such debts as they mature. The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for reorganization or
liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one (1) year from the Closing Date. The SEC Reports set forth as of the
dates thereof all outstanding secured and unsecured indebtedness of the Company,
or for which the Company has commitments. The Company is not in default with
respect to any indebtedness. At the Closing, there will be no outstanding
liabilities, obligations or indebtedness of the Company whatsoever.
SECTION 5.16 Legal Proceedings. There are no legal,
administrative, arbitral or other proceedings, claims, suits, actions or
governmental investigations of any nature pending, or to the Company's knowledge
threatened, directly or indirectly involving the Company or its officers,
directors or affiliates, including, but not limited to any stockholder claims or
derivative actions, or challenging the validity or propriety of the transactions
contemplated by this Agreement. The Company is not subject to any order,
judgment, injunction, rule or decree of any Governmental Authority or
arbitrator.
SECTION 5.17 Insurance. The Company has no casualty and liability
policies and other insurance policies.
SECTION 5.18 Intellectual Property. The Company has no patents,
patent applications, trademarks, trademark registrations or applications
therefor, service marks, service xxxx registrations or applications therefor,
trade names, copyrights, copyright registrations or applications therefor or any
other proprietary intellectual property and other rights relating to the
foregoing. The Company has no knowledge of any infringements by the Company of
any third party's intellectual property.
SECTION 5.19 Permits; Compliance with Laws. The Company has all
Permits required to own, lease and operate its properties and to carry on its
business as currently conducted. The Company: (i) is not in default under or in
violation of (and no event has occurred that has not been waived that, with
notice or lapse of time or both, would result in a default by the Company
under), nor has the Company received notice of a claim that it is in default
under or that it is in violation of, any indenture, mortgage, deed of trust or
other agreement, instrument or contract to which the Company is a party or by
which it or any of its assets or properties are bound (whether or not such
default or violation has been waived), (ii) is not in violation of any order of
any court, arbitrator or governmental body, (iii) is not and has not been in
violation of any law, order, rule, regulation, writ, injunction, judgment or
decree of any Governmental Authority having jurisdiction over the Company or any
of its business or properties, including federal and state securities laws and
regulations and (iv) is not in violation of any of its Permits.
26
SECTION 5.20 Related Party Contracts. Except as set forth in the
SEC Reports, none of the officers, directors, or affiliates of the Company
(including Xxxxxxx) is presently a party to any transaction with the Company
(other than for services as employees, officers and directors), including any
loans, leases, agreements, arrangements or understandings outstanding between
the Company and any of its officers, directors, or affiliates or any person
related to or affiliated with any such officers or directors.
SECTION 5.21 Employee Matters; Benefit Plans. Except for Xxxxxxx,
the Company has no employees and there are no labor disputes, grievances or
requests for arbitration. Except for the Company's 2003 Omnibus Stock Option
Plan, the Company has no pension, retirement, savings, profit sharing,
stock-based, incentive compensation or other similar employee benefit plan.
SECTION 5.22 Trading With the Enemy Act; Patriot Act. No sale of
the Company's securities or the Company's use of the proceeds from such sale has
violated the Trading with the Enemy Act, as amended, or any of the foreign
assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto. Without limiting the foregoing, the Company (i) is not a
person whose property or interests in property are blocked pursuant to Section 1
of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting
Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism
(66 Fed. Reg. 49079 (2001)) and (ii) does not engage in any dealings or
transactions, or be otherwise associated, with any such person. The Company is
in compliance with the USA Patriot Act of 2001.
SECTION 5.23 No Disagreements with Accountants and Lawyers. There
are no disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the accountants and lawyers formerly or
presently employed by the Company and the Company is current with respect to any
fees owed to its accountants and lawyers.
SECTION 5.24 Environmental Matters. The Company has complied with
all applicable environmental laws. There is no pending or threatened civil or
criminal litigation, written notice of violation, formal administrative
proceeding or investigation, inquiry or information request by any Governmental
Authority or other entity relating to any environmental law involving the
Company.
SECTION 5.25 Listing on the OTCBB. The Company Common Stock has
been approved for listing on the Over-The-Counter Bulletin Board (the "OTCBB")
and the Company has and continues to satisfy all of the requirements of the
OTCBB for such listing and for the trading of Company Common Stock thereunder.
27
SECTION 5.26 Disclosure. The Company confirms that neither it nor
any other Person acting on its behalf has provided Rexahn or its agents or
counsel with any information that constitutes or might constitute material,
nonpublic information concerning the Company. The Company understands and
confirms that Rexahn will rely on the foregoing representations in effecting
transactions in securities of the Company. All disclosure provided to Rexahn
regarding the Company, its business and the transactions contemplated hereby
furnished by or on behalf of the Company with respect to the representations and
warranties made herein are true and correct with respect to such representations
and warranties and do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made
therein not misleading. The Company acknowledges and agrees that Rexahn has not
made, nor is Rexahn making, any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth
herein.
ARTICLE VI
Non-Survival of Representations, Warranties and Agreements
SECTION 6.1 None of the representations, covenants and warranties
contained in this Agreement (including, but not limited to, all statements
contained in any certificate or other instrument delivered by or on behalf of
the Company, Merger Sub, CRS Delaware or Rexahn pursuant hereto or in connection
with the transactions contemplated hereby) shall survive the Effective Time,
except for the covenants and agreements that by their terms apply or are to be
performed in whole or in part after the Effective Time.
ARTICLE VII
Conditions of Obligations of Merger Sub, CRS Delaware and the Company
The obligation of Merger Sub, CRS Delaware and the Company to
consummate the Merger and other transactions contemplated hereby is subject to
the satisfaction or waiver of the following conditions prior to the Closing
Date:
SECTION 7.1 Compliance with Representations, Warranties and
Covenants. Each of the representations and warranties of Rexahn set forth in
this Agreement should be true and correct as the date hereof and as the Closing
Date as though made on and as of the Closing Date and Rexahn shall be in
compliance with its covenants contained herein in all material respects, and
Merger Sub and the Company
28
each shall receive from Rexahn certificates to such effect from an officer of
Rexahn as of the Closing Date.
SECTION 7.2 No Material Adverse Change. Except as disclosed in
this Agreement or in the Rexahn Schedule of Exceptions, no material adverse
change in the aggregate shall have occurred in the financial condition,
business, properties, assets, liabilities or results of operations of Rexahn
since September 30, 2004.
SECTION 7.3 Filings and Approvals. All applicable filings and
regulatory approvals, as well as any other third party approvals, required to be
made or obtained by Rexahn shall have been made or obtained.
SECTION 7.4 Stockholder Approvals. This Agreement and the
transactions contemplated hereby shall have been approved by appropriate action
of the stockholders of Rexahn and resolutions to that effect shall have been
delivered to the Company.
SECTION 7.5 No Claims. No claim, suit, action or other proceeding
shall be pending or threatened in writing before or by any court or Governmental
Authority against Rexahn that could materially and adversely affect the ability
of Rexahn to consummate the transactions contemplated by this Agreement.
SECTION 7.6 No Injunctions, Restraints or Pending Governmental
Actions; Illegality. No applicable laws shall have been adopted, promulgated or
enforced by any Governmental Authority, and no temporary restraining order,
preliminary or permanent injunction or other order issued by a court or other
Governmental Authority of competent jurisdiction (an "Injunction") shall be in
effect, having the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger. No proceeding initiated by any Governmental
Authority seeking, and which is reasonably likely to result in the granting of,
an Injunction shall be pending.
ARTICLE VIII
Conditions of Obligations of Rexahn
The obligations of Rexahn to consummate the Merger are subject to
the following conditions prior to the Closing Date:
SECTION 8.1 Compliance with Representations, Warranties and
Covenants. Each of the representations and warranties of Merger Sub, CRS
Delaware and the Company set forth in this Agreement (other than those
representations and warranties of CRS Delaware which are made as of a specified
date herein) shall be true
29
and correct as of the date hereof and as of Closing Date as though made on and
as of the Closing Date and Merger Sub, CRS Delaware and the Company shall be in
compliance with their respective covenants contained herein in all material
respects, and Rexahn shall have received from each of Merger Sub, CRS Delaware
and the Company a certificate to such effect from an officer of Merger Sub, CRS
Delaware and the Company, as the case may be, as of the Closing Date.
SECTION 8.2 No Material Transactions. Except as disclosed in this
Agreement or pursuant to the Reincorporation, no material transactions shall
have been entered into by Merger Sub, CRS Delaware or the Company, other than
transactions in the ordinary course of business, since September 30, 2004,
except as referred to in this Agreement or in connection herewith, with the
prior written consent of Rexahn.
SECTION 8.3 No Material Adverse Change. Except as disclosed in
this Agreement or pursuant to the Reincorporation, no material adverse change
shall have occurred in the financial condition, business, properties, assets,
liabilities or results of operations of Merger Sub, CRS Delaware or the Company
since September 30, 2004.
SECTION 8.4 Filings and Approvals. All applicable filings and
regulatory approvals, as well as any other third party approvals, required to be
made or obtained by the Company, Merger Sub or CRS Delaware have been made or
obtained, including but not limited to the filing with the SEC and mailing to
its stockholders of a proxy statement under Regulation 14A of the Exchange Act
with respect to a special meeting of the Company's stockholders to approve the
Reincorporation and the transactions related thereto (including the Reverse
Stock Split, the Name Change and the Preferred Stock Authorization) and a
statement containing the information required by Rule 14f-1 under the Exchange
Act and compliance with the applicable securities or "blue sky" laws and
regulations of any state or other Governmental Authority.
SECTION 8.5 Board Resignations. CRS Delaware shall have held a
meeting, or obtained the unanimous written consent, of its Board of Directors at
which meeting, or in which consent, all of its directors shall have resigned and
the persons designated by Rexahn shall have been appointed as directors of the
Company, to fill the vacancies created thereby, all subject to the consummation
of the Merger and effective upon the expiration of the time period following the
mailing of the statement required under Rule 14f-1 of the Exchange Act.
SECTION 8.6 Auditor. The independent auditors for the Company
shall have consented to their resignation as the independent auditor of the
Company, effective at the Closing, and to the use by Rexahn following the
Closing of all financial statements of the Company on which their audit opinion
was issued in all filings to be made with the SEC in which such financial
statements are required.
30
SECTION 8.7 Reincorporation. Immediately prior to the Closing,
the Company shall have consummated the Reincorporation as a tax free
reorganization within the meaning of Section 368(a) of the Code, which will
include the Reverse Stock Split, the Name Change and the Preferred Stock
Authorization, pursuant to the terms and conditions set forth in the Agreement
and Plan of Merger in the form attached hereto as Exhibit C (the
"Reincorporation Merger Agreement").
SECTION 8.8 Settlement Agreement. Prior to the Closing, the
Company and Xxxxxxx shall have executed a Settlement Agreement in the form
attached hereto as Exhibit D (the "Settlement Agreement").
SECTION 8.9 No Claims. No claim, suit, action or other proceeding
shall be pending or threatened in writing before or by any court or Governmental
Authority against the Company or Merger Sub that could materially and adversely
affect the ability of the Company or Merger Sub to consummate the transaction
contemplated by this Agreement.
SECTION 8.10 No Injunctions, Restraints or Pending Governmental
Actions; Illegality. No applicable laws shall have been adopted, promulgated or
enforced by any Governmental Authority, and no Injunction shall be in effect,
having the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger. No proceeding initiated by any Governmental
Authority seeking, and which is reasonably likely to result in the granting of,
an Injunction shall be pending.
ARTICLE IX
Other Covenants
SECTION 9.1 Company Special Meeting of Stockholders. The Company
shall hold a special meeting of stockholders to approve and adopt the
Reincorporation Merger Agreement and the Reincorporation, which will include the
Reverse Stock Split, the Name Change and the Preferred Stock Authorization.
SECTION 9.2 Rexahn Special Meeting of Stockholders. Rexahn shall
hold a special meeting of stockholders to approve and adopt this Agreement and
the Merger.
SECTION 9.3 Public Announcements. No press release or
announcement concerning the Merger, this Agreement or the transactions related
hereto will be issued by any party without the prior consent of the other
parties, except as such release or announcement may be required by law, in which
case the party required to
31
make the release or announcement will, to the extent practicable, allow the
other party reasonable time to comment on such release or announcement in
advance of such issuance.
SECTION 9.4 Preparation of Proxy Statement and Information
Statement. As promptly as practicable after the execution of this Agreement, the
Company will prepare and file with the SEC and mail to its stockholders a proxy
statement under Regulation 14A of the Exchange Act with respect to a special
meeting of the Company's stockholders to approve the Reincorporation and the
transactions related thereto (including the Reverse Stock Split, the Name Change
and the Preferred Stock Authorization) and a notice that complies with Rule
14f-1 of the Exchange Act and will prepare and file any other filings required
to be filed by it under the Exchange Act, the Securities Act or any other
federal, state or foreign laws relating to the Merger and the transactions
contemplated by this Agreement. The Company and Rexahn shall promptly supply the
other with any information which may be required in order to effectuate any
filings pursuant to this Section 9.4.
SECTION 9.5 Tax Treatment. None of the Company, Merger Sub, CRS
Delaware or Rexahn shall knowingly take any action that could reasonably be
expected to disqualify the Merger or the Reincorporation as a "reorganization"
within the meaning of Section 368(a) of the Code.
SECTION 9.6 Further Instruments and Actions. Each party shall
deliver such further instruments and take such further action as may be
reasonably requested by any other party hereto in order to carry out the intent
and purposes of this Agreement.
SECTION 9.7 Settlement Agreement. Prior to the Closing, each of
the Company and Xxxxxxx shall have executed the Settlement Agreement.
SECTION 9.8 Issuance of Stock. Following the Closing, the Company
shall issue 500,000 shares of Rexahn Pharmaceuticals Common Stock to Xxxxxxx
pursuant to the Settlement Agreement.
SECTION 9.9 Stockholders Agreements. Concurrently with the
execution and delivery of this Agreement, each of Xxxxxxx, Xxxx Xxx Xxxxx and
Xxxx Xxxx Park shall execute and deliver a Stockholders Agreement, substantially
in the form attached as Exhibit E hereto.
SECTION 9.10 Company Actions Prior to Closing. Except as
otherwise contemplated by this Agreement, from the date hereof through the
Closing, the Company (or, following the Reincorporation, the CRS Delaware) shall
not, other
32
than in the ordinary course of business consistent with past practice, without
the prior written consent of Rexahn:
(a) sell, lease, assign, transfer or otherwise dispose of any
material assets;
(b) agree to assume or assume, guarantee, endorse or
otherwise in any way be, or become responsible or liable for, directly
or indirectly, any material contingent obligation;
(c) participate or engage in any discussions or negotiations
with any Person regarding, or enter into any transaction concerning, a
merger, stock exchange or consolidation, other than with the other
parties hereto, or liquidate or dissolve itself (or suffer any
liquidation or dissolution) or convey, sell, lease, transfer or
otherwise dispose of, in one transaction or a series of related
transactions, all or a substantial part of its property, business,
assets or capital stock or securities convertible into equity, or make
any material change in its present method of conducting business;
(d) except for the filing of a certificate of merger to
effect the Reincorporation, make any amendment to its certificate of
incorporation or bylaws;
(e) except for the Settlement Agreement, enter into or amend
any employment agreements or increase the salary or bonus of any
existing employee or with any person to become an officer of the
Company;
(f) incur any liabilities (including, but not limited to. tax
liabilities) or claims against the Company (whether such liabilities or
claims are contingent or absolute, direct or indirect, and matured or
unmatured);
(g) create, incur, assume or suffer to exist, any mortgage,
pledge, lien, charge, security interest or encumbrance of any kind upon
any of its property, assets, income or profits, whether now owned or
hereafter acquired;
(h) declare or authorize any dividends or distributions on
any shares of its capital stock;
(i) make any tax election, change any annual tax accounting
period, amend any tax return, enter into any closing agreement, settle
any tax claim or assessment, surrender any right to claim a tax refund
or consent to any extension or waiver of the limitations period
applicable to any tax claim or assessment; or
33
(j) make any commitment, agreement or understanding with
respect to any of the foregoing.
SECTION 9.11 Rexahn Actions Prior to Closing. Except as set forth
on Schedule 9.11 or as otherwise contemplated by this Agreement, from the date
hereof through the Closing, Rexahn shall not, other than in the ordinary course
of business consistent with past practice, without the prior written consent of
the Company:
(a) sell, lease, assign, transfer or otherwise dispose of any
material assets;
(b) agree to assume or assume, guarantee, endorse or
otherwise in any way be, or become responsible or liable for, directly
or indirectly, any material contingent obligation;
(c) participate or engage in any discussions or negotiations
with any Person regarding, or enter into any transaction concerning, a
merger, stock exchange or consolidation, other than with the other
parties hereto, or liquidate or dissolve itself (or suffer any
liquidation or dissolution) or convey, sell, lease, transfer or
otherwise dispose of, in one transaction or a series of related
transactions, all or a substantial part of its property, business,
assets or capital stock or securities convertible into equity, or make
any material change in its present method of conducting business;
(d) make any amendment to its certificate of incorporation or
bylaws;
(e) enter into or amend any employment agreements or increase
the salary or bonus of any existing employee or with any person to
become an officer of Rexahn;
(f) create, incur, assume or suffer to exist, any mortgage,
pledge, lien, charge, security interest or encumbrance of any kind upon
any of its property, assets, income or profits, whether now owned or
hereafter acquired;
(g) declare or authorize any dividends or distributions on
any shares of its capital stock;
(h) make any tax election, change any annual tax accounting
period, amend any tax return, enter into any closing agreement, settle
any tax claim or assessment, surrender any right to claim a tax refund
or consent to any extension or waiver of the limitations period
applicable to any tax claim or assessment; or
34
(i) make any commitment, agreement or understanding with
respect to any of the foregoing.
ARTICLE X
Termination or Abandonment
SECTION 10.1 Termination or Abandonment. This Agreement may be
terminated and the Merger may be abandoned by mutual agreement or by either the
Company or Rexhan, acting by its Board of Directors, by written notice to the
other parties hereto, at any time in the event of the failure of any condition
in favor of such entity as to which the consummation of the Merger is subject.
In the event of termination of this Agreement, the same shall become wholly void
and of no effect, and there shall be no further liability or obligation
hereunder on the part of any of the Constituent Corporations, their respective
Boards of Directors or any other party to this Agreement.
ARTICLE XI
Miscellaneous
SECTION 11.1 Notices. All notices, requests and other
communications to any party hereunder shall be in writing and either delivered
personally, telecopied or sent by certified or registered mail, postage prepaid,
If to the Company: Corporate Road Xxxx.xxx Inc.
00 Xxxxxxx Xxxxx - Xxxxx 000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Xxxxx@xxxxxxxxxxxxxxxxx.xxx
With a copy to: Rubin, Bailin, Ortoli, Mayer & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
xxxxxxxxxxx@xxxxxx.xxx
If to Rexahn: Rexahn, Corp
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
35
Attn: Xxx T.H. Xxxxx
Facsimile: (000) 000-0000
Xxx@Xxxxxx.xxx
With a copy to: Xxxxxxxxxx & Xxxxx LLP
0000 Xxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attn: Xxxx Xxx, Esq.
Facsimile: (000) 000-0000
XXxx@Xxxxxxxxxx.xxx
If to Merger Sub: CR Merger Sub, Inc.
x/x Xxxxx Xxxxxxx
Xxxxxxxxx Xxxx Xxxx.xxx Inc.
00 Xxxxxxx Xxxxx - Xxxxx 000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Xxxxx@xxxxxxxxxxxxxxxxx.xxx
With a copy to: Rubin, Bailin, Ortoli, Mayer & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
xxxxxxxxxxx@xxxxxx.xxx
If to CRS Delaware: CRS Delaware, Inc.
x/x Xxxxx Xxxxxxx
Xxxxxxxxx Xxxx Xxxx.xxx Inc.
00 Xxxxxxx Xxxxx - Xxxxx 000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Xxxxx@xxxxxxxxxxxxxxxxx.xxx
With a copy to: Rubin, Bailin, Ortoli, Mayer & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
xxxxxxxxxxx@xxxxxx.xxx
36
or such other address or fax number as such party may hereafter specify for the
purpose by notice to the other parties hereto. All such notices, requests and
other communications shall be deemed received on the date delivered personally
or by overnight delivery service or telecopied or, if mailed, five (5) business
days after the date of mailing.
SECTION 11.2 Amendments; No Waivers.
(a) Any provision of this Agreement with respect to transactions
contemplated hereby may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed, in the case of an amendment, by the Company
and Rexahn; or in the case of a waiver, by the party against whom the waiver is
to be effective.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 11.3 Fees and Expenses. Except as otherwise provided in
this Agreement, all costs and expenses incident to negotiation, preparation and
performance of this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses, including, without
limitation, fees, expenses and disbursements of their respective financial
advisors, accountants and counsel.
SECTION 11.4 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, but any such transfer or assignment
will not relieve the appropriate party of its obligations hereunder.
SECTION 11.5 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to the principles of conflicts of law thereof.
SECTION 11.6 Jurisdiction. Any suit, action or proceeding seeking
to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought in any federal or state court located in the City of New York, Borough
of Manhattan, and each of the parties hereto consents to the jurisdiction of
such courts (and of the appropriate appellate courts therefrom) in any such
suit, action or proceeding and irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or
37
hereafter have to the laying of the venue of any such suit, action or proceeding
in any such court or that any such suit, action or proceeding which is brought
in any such court has been brought in an inconvenient forum. Process in any such
suit, action or proceeding may be served on any party anywhere in the world,
whether within or without the jurisdiction of any such court. Without limiting
the foregoing, each party agrees that service of process on such party as
provided in Section 11.1 shall be deemed effective service of process on such
party. Each party hereto (including its affiliates, agents, officers, directors
and employees) irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of
or relating to this Agreement or the transactions contemplated hereby.
SECTION 11.7 Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto has
received counterparts hereof signed by all of the other parties. No provision of
this Agreement is intended to confer upon any Person other than the parties
hereto any rights or remedies under this Agreement.
SECTION 11.8 Entire Agreement. This Agreement and the attached
Exhibits and Schedules constitute the entire agreement between the parties with
respect to the subject matter of this Agreement and supersedes all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter of this Agreement.
SECTION 11.9 Consent. Whenever consent is required to be given by
any party to any other party hereunder in connection with any matter
contemplated hereby, such consent shall not be unreasonably withheld, delayed or
conditioned.
SECTION 11.10 Captions. The captions are included for convenience
of reference only and shall be ignored in the construction or interpretation of
this Agreement.
SECTION 11.11 Joint Drafting. This Agreement shall be deemed to
have been drafted jointly by the parties hereto, and no inference or
interpretation against any party shall be made solely by virtue of such party
allegedly having been the draftsperson of this Agreement.
SECTION 11.12 Public Announcements. All parties hereto agree that
any public announcement, press release or other public disclosure of the signing
of this Agreement shall be made jointly and only after all parties hereto have
reviewed and approved the language and timing of such disclosure.
38
SECTION 11.13 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any parties. Upon
such a determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the fullest extent
possible.
SECTION 11.14 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the its terms and that the parties shall be
entitled to specific performance of the terms of this Agreement in addition to
any other remedy to which they are entitled at law or in equity.
[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]
39
IN WITNESS WHEREOF, the parties hereto have made and executed this
Agreement as of the day and year first above written.
CORPORATE ROAD XXXX.XXX INC.
By: /s/ Xxxxx Xxxxxxx
------------------------------
Name: Xxxxx Xxxxxxx
Title: President
CRS MERGER SUB, INC.
By: /s/ Cheong Chah
------------------------------
Name: Cheong Chah
Title: President
CRS DELAWARE, INC.
By: /s/ Cheong Chah
------------------------------
Name: Cheong Chah
Title: President
REXAHN, CORP
By: /s/ Xxxxx X. Xxx
------------------------------
Name: Xxxxx X. Xxx
Title: Chief Executive Officer
40
SCHEDULE A
Rexahn Outstanding Capitalization
--------------------------------------------------- --------------------------
Authorized Shares of Common Stock: 20,000,000
--------------------------------------------------- --------------------------
Authorized Shares of Preferred Stock: 10,000,000
--------------------------------------------------- --------------------------
Outstanding Shares of Common Stock: 7,628,166
--------------------------------------------------- --------------------------
Shares of Common Stock Issuable Upon 1,195,000
Exercise of Outstanding Options/Warrants: ----------
--------------------------------------------------- --------------------------
Fully-Diluted Common Shares Outstanding: 8,823,166
=========
--------------------------------------------------- --------------------------
