EXHIBIT 2.1
AGREEMENT AND PLAN
OF MERGER
AMONG
CELCOR, INC.,
NORTHEAST (USA) CORP.
and
THE STOCKHOLDERS
of
NORTHEAST (USA) CORP.
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS 1-1
ARTICLE II THE PLAN OF MERGER 2-1
2.01 The Merger and the Surviving Corporation 2-1
2.02 Effectiveness of the Merger 2-2
2.03 Exchange of Securities 2-2
2.04 Adjustment Upon Recapitalization 2-3
2.05 Securities Law Matters 2-3
ARTICLE III REPRESENTATIONS AND WARRANTIES 3-1
3.1. Representation and Warranties of Northeast and Stockholders 3-1
3.1.1 Organization of Northeast 3-1
3.1.2 Capitalization 3-1
3.1.3 Subsidiaries 3-1
3.1.4 Foreign Qualifications 3-2
3.1.5 Other Business Names 3-2
3.1.6 Owned Real Estate Interests 3-2
3.1.7 Leased Real Estate 3-2
3.1.8 Tangible Personal Property 3-2
3.1.9 Intangible Personal Property; Computer Programs 3-2
3.1.10 Stockholders; Title to Northeast Stock 3-3
3.1.11 Title to Assets 3-3
3.1.12 Material Contracts 3-4
3.1.13 Labor Matters 3-4
3.1.14 Benefit Plans; ERISA 3-5
3.1.15 Licenses and Permits 3-5
3.1.16 Authority Relative to Agreement; Enforceability 3-5
3.1.17 Compliance with Other Instruments; Consents 3-6
3.1.18 Compliance with Applicable Laws 3-6
3.1.19 Environmental Compliance 3-6
3.1.20 Financial Statements 3-7
3.1.21 Taxes 3-7
3.1.22 Litigation 3-8
3.1.23 Brokerage 3-8
3.1.24 Full Disclosure 3-8
3.2 Representations and Warranties of Celcor 3-8
3.2.1 Organization 3-8
3.2.2 Capitalization 3-8
3.2.3 Authorization 3-9
3.2.4 Title to Assets 3-9
3.2.5 No Third Party Consent Required; No
Violation of Other Instruments 3-9
3.2.6 Litigation 3-9
3.2.7 Brokerage 3-10
3.2.8 Financial Statements 3-10
3.2.9 Full Disclosure 3-10
ARTICLE IV ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES 4-1
4.01 Corporate Approval 4-1
4.02 Stockholders' Agreement to Vote 4-1
4.03 Conduct of Business 4-1
4.04 Negative Covenants 4-1
4.05 Filing with Securities and Exchange Commission 4-1
4.06 Access 4-1
4.07 Best Efforts 4-2
4.08 Brokers or Finders 4-2
4.09 Environmental Matters 4-2
4.10 Exclusive Dealing 4-3
ARTICLE V THE CLOSING 5-1
5.01 The Closing 5-1
5.02 Termination 5-1
5.03 Liability on Termination 5-1
5.04 Termination Fees 5-2
ARTICLE VI CONDITIONS TO OBLIGATION OF EACH PARTY 6-1
6.01 No Prohibition of Transaction 6-1
6.02 Compliance with Law 6-1
6.03 Proceedings, Documentation and Consents 6-1
6.04 Tax Free Reorganization 6-1
ARTICLE VII CONDITIONS TO THE OBLIGATION OF CELCOR TO CLOSE 7-1
7.01 Representations and Warranties True at the Closing Date 7-1
7.02 No Material Adverse Change: Officers' Certificates 7-1
7.03 Corporation's Performance 7-1
7.04 Necessary Corporate Approvals 7-1
7.05 Resolutions Authorizing the Execution of this Agreement 7-1
7.06 Opinion of Counsel 7-1
7.07 Investment Letters 7-1
7.08 Satisfactory Searches 7-2
7.09 Environmental Review 7-2
7.10 Consents to Transaction 7-2
7.11 Dissenters' Rights 7-2
7.12 Title Insurance 7-2
7.13 Financial Statements 7-2
7.14 Fairness Opinion 7-2
7.15 Results of Investigation 7-2
ARTICLE VIII CONDITIONS TO NORTHEAST'S OBLIGATION TO CLOSE 8-1
8.01 Representations and Warranties True at the Closing 8-1
8.02 Celcor's Performance 8-1
8.03 No Material Adverse Change 8-1
8.04 Authority 8-1
8.05 Opinion of Celcor's Counsel 8-1
8.06 Results of Investigation 8-1
ARTICLE IX SURVIVAL OF REPRESENTATIONS AND INDEMNIFICATION 9-1
9.01 Representations to Survive Closing 9-1
9.02 Indemnification by the Stockholders 9-1
9.03 Indemnification by Celcor 9-1
9.04 Enforcement of Indemnification Rights 9-2
9.05 Remedies Cumulative 9-3
ARTICLE X MISCELLANEOUS 10-1
10.01 Notices 10-1
10.02 Assignability and Parties in Interest 10-1
10.03 Expenses 10-2
10.04 Governing Law 10-2
10.05 Counterparts 10-2
10.06 Headings 10-2
10.07 Pronouns 10-2
10.08 Complete Agreement 10-2
10.09 Modifications, Amendments and Waivers 10-2
10.10 Severability 10-2
APPENDICES
SECTION
DESCRIPTION REFERENCE
Appendix A Private Placement Questionnaire 2.05(a), 7.07
Appendix B Opinion of Northeast's Counsel 7.06
Appendix C Opinion of Celcor's Counsel 8.05
EXHIBITS
EXHIBIT
DESCRIPTION REFERENCE
Shareholders of Subsidiaries which are not wholly owned 3.1.3
Description of real estate interests 3.1.6
Leased real estate 3.1.7
Equipment List 3.1.8
Joint Venture and similar agreements 3.1.9
Shareholder List 3.1.10
Material Contracts 3.1.12
U.S. Employees 3.1.13
Underground Tanks 3.1.19
Tax elections 3.1.21
THIS AGREEMENT AND PLAN OF MERGER ("Agreement") has been made and
entered into as of this 15th day of March, 1995, among Celcor, Inc., a
Delaware corporation ("Celcor"), Northeast (USA) Corp., a New York corporation
("Northeast"), and the shareholders of Northeast listed on the signature page
of this Agreement ("Stockholders").
R E C I T A L S:
1. The respective Boards of Directors of Celcor and Northeast
have determined that it is in the best interests of each corporation and its
respective stockholders that Northeast be merged with and into Celcor (the
"Merger") in accordance with the laws of the States of Delaware and New York
in the manner and on the terms and conditions set forth herein.
2. Stockholders own 100% of the issued and outstanding voting
stock of Northeast and have agreed to vote their shares in favor of the Merger
contemplated hereby.
3. Pursuant to the Merger, the outstanding capital stock of
Northeast will be converted into the right to receive shares of Celcor common
stock ("Celcor Stock") on the basis of 10,000 shares of Celcor Stock for each
outstanding share of Northeast common stock.
4. The respective Boards of Directors of Celcor and Northeast
desire to effectuate the Merger as a tax free reorganization for United States
federal income tax purposes.
NOW, THEREFORE, in consideration of the mutual agreements and
covenants contained herein, the parties hereby adopt this Agreement as and for
a Plan of Reorganization (the "Plan") under Section 368(a)(1)(A) of the
Internal Revenue Code of 1986, as amended and agree that Northeast shall be
merged with and into Celcor and that the terms and conditions of such Merger
and the mode of carrying the same into effect shall be as follows:
ARTICLE I
DEFINITIONS
The terms defined in this Article (except as otherwise expressly
provided in this Agreement) for all purposes of this Agreement shall have the
respective meanings specified in this Article.
1.01 "Affiliate" shall mean any entity controlling or controlled
by another person, under common control with another person, or controlled by
any entity which controls such person.
1.02 "Agreement" shall mean this Agreement, and all the exhibits
and other documents attached to or referred to in the Agreement, and all
amendments and supplements, if any, to the Agreement.
1.03 "Closing" shall mean the meeting of the parties at which the
Closing Documents shall be exchanged by the parties, except for those
documents, or other items specifically required to be exchanged at a later
time.
1.04 "Closing Date" shall mean May 25, 1995, or such other date
as agreed to by the parties on which the Closing occurs.
1.05 "Closing Documents" shall mean the papers, instruments and
documents required to be executed and delivered at the Closing pursuant to
this Agreement.
1.06 "Code" shall mean the Internal Revenue of 1986, or any
successor law, and regulations issued by the Internal Revenue Service pursuant
to the Internal Revenue Code or any successor law.
1.07 "Encumbrance" shall mean any charge, claim, community
property interest, condition, equitable interest, lien, option, pledge,
security interest, right of first refusal, or restriction of any kind,
including any restriction on use, voting (in the case of any security),
transfer, receipt of income, or exercise of any other attribute of ownership.
1.08 "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
1.09 "GAAP" shall mean generally accepted accounting principles
applied in a manner consistent with prior periods.
1.10 "Knowledge" Any limitation or qualification of a
representation or warranty made in this Agreement which is based on
"knowledge" shall include facts known, or which should be known, to the
following person, in the case of a representation or warranty by Celcor:
Xxxxxxx X. Xxxxx, Xx. and the following person in the case of a representation
or warranty made by Northeast: Nanshan Wu.
1.11 "Ordinary Course of Business" shall mean actions consistent
with the past practices of the designated party which are similar in nature
and style to actions customarily taken by the designated party and which do
not require, and in the past have not received, specific authorization by the
board of directors of the designated party.
1.12 "Regulated Substances" includes any pollutant, chemical
substance, hazardous wastes, hazardous substances or contaminant regulated
under, or defined in or pursuant to the Solid Waste Disposal Act, as amended
(42 U.S.C. 6901 et seq.) ("SWDA"), the Comprehensive Environmental Response
Compensation and Liability Act (42 U.S.C. 9601 et seq.) ("CERCLA"), the Toxic
Substance Control Act, as amended (15 U.S.C. 2601, et seq.), the Clean Air
Act, as amended (42 U.S.C. 7401 et seq.), the Clean Water Act, as amended (33
U.S.C. 1251, et seq.), and any other federal, state or local law or regulation
designed to provide safe and healthful working conditions and to reduce
occupational safety and health hazards.
1.13 "SEC" shall mean the Securities and Exchange Commission.
1.14 "Taxes" shall include federal, state and local income taxes,
capital gains tax, value-added taxes, franchise, personal property and real
property taxes, levies, assessments, tariffs, duties (including any customs
duty), business license or other fees, sales, use and any other taxes relating
to the assets of Celcor or Northeast, as applicable, or the business of Celcor
or Northeast, as applicable, for all periods up to and including the Closing
Date, together with any related charge or amount, including interest, fines,
penalties and additions to tax, if any, arising out of tax assessments.
1.15 "Transaction" shall mean the transaction contemplated by
this Agreement.
1.16 Terms Defined in Other Sections. The following terms are
defined elsewhere in this Agreement in the following Sections:
Act 2.05(a)
Celcor Heading
Celcor Stock 2.03(a)
Effective Date 2.01(a)
Loss or Losses 10.02
Xxxxxx Xxxxxxx 0
Xxxxxxxxx Xxxxxxx
Xxxxxxxxx Xxxxx 2.03(b)
Outside Date 5.01
Plan Recitals
Stockholders Heading
Surviving Corporation 2.01(a)
ARTICLE II
THE PLAN OF MERGER
2.01 The Merger and the Surviving Corporation.
(a) Merger. Upon the date on which the Merger is to be
effective, as determined pursuant to Section 2.02 ("Effective Date"),
Northeast shall be merged with and into Celcor. Celcor shall be the surviving
corporation (the "Surviving Corporation"). The separate existence of
Northeast shall cease and the existence of Celcor shall continue unaffected
and unimpaired by the Merger, with all of the rights, privileges, immunities
and powers, and subject to all of the duties and liabilities of a corporation
organized under the general corporation law of the State of Delaware. All
rights, privileges, powers, immunities and franchises of Northeast shall, on
the Effective Date, be automatically vested in Celcor. All real and personal
property of Northeast, tangible and intangible, of every kind and description,
shall become vested in Celcor and all liabilities, claims and obligations of
Northeast may be enforced against Celcor, all without further action or deed
by either party. In all other respects, the effect of the Merger shall be as
set forth in Delaware General Corporation Law 252 ("Delaware General
Corporation Law" or "DGCL").
(b) Certificate of Incorporation. The Certificate of
Incorporation of Celcor shall be and remain the Certificate of Incorporation
of the Surviving Corporation following the Effective Date, until the same
shall be altered or amended, except that such Certificate of Incorporation
shall be amended (i) to change the name of the Surviving Corporation to
"Northeast, Inc." and (ii) to increase, if determined to be necessary, the
authorized capital stock to that number of shares which is sufficient to
enable Celcor to issue the number of shares of its common stock contemplated
by the Merger.
(c) By-Laws. The by-laws of Celcor shall be the by-laws
of the Surviving Corporation following the Effective Date, until the same
shall be altered or amended.
(d) Directors. From and after the Effective Date, the
Board of Directors of the Surviving Corporation shall consist of Xxxxxx Xxx,
Xxxxx Xxxxxx, Xxxxxxxx Xx Wu, Xxx Xxxx, Xxxxx Xxxx, Shi Hong-Yuan and Xxxxxxx
Xxx, until their respective successors shall be duly elected and qualified.
(e) Officers. From and after the Effective Date, the
officers of the Surviving Corporation shall consist of the persons listed
below, holding the respective office listed opposite such person's name, until
their respective successors shall be duly elected or appointed and qualified:
Name Title
Nanshan Wu President
Xxxxxxx X. Xxxxx, Xx. Vice President, Treasurer and
Chief Financial Officer
Xxxxxxx Xxx Secretary
2.02 Effectiveness of Merger.
(a) Certificate of Merger. Following the approval of the
Merger by the respective stockholders of Celcor and Northeast and upon the
fulfillment or waiver of the conditions specified in Articles VI, VII and VIII
hereof, and provided that this Agreement has not been terminated and abandoned
pursuant to Article V hereof, Celcor shall cause a Certificate of Merger to be
executed, acknowledged and filed with the Secretary of State of Delaware as
provided in Section 252(c) of the DGCL and with the New York Department of
State, as provided in Sections 904 and 907 of the Business Corporation Law of
the State of New York ("B.C.L.").
(b) Effective Date. The Merger shall become effective
immediately upon the filing of the Certificate of Merger referred to in
Section 2.02(a) hereof with the Secretary of State of the State of Delaware
and with the Secretary of State of the State of New York.
2.03 Exchange of Securities. The manner of converting the
securities of Northeast into securities of the Surviving Corporation at the
Effective Date shall be as follows:
(a) Celcor's Shares. Each share of common stock of Celcor
("Celcor Stock") which shall be outstanding at the Effective Date shall remain
outstanding, as the outstanding common stock of the surviving corporation.
(b) Northeast Common Stock. Each share of Common Stock,
no par value, of Northeast ("Northeast Stock") outstanding immediately prior
to the Effective Date shall, by virtue of the Merger and without any action on
the part of the holder thereof, be converted into the right to receive 10,000
shares of Celcor Stock.
(c) Treasury Stock. Any shares of Northeast Stock held by
Celcor, any subsidiary of Celcor, or in Northeast's treasury on the Effective
Date shall be canceled and given no effect in the Merger.
(d) Records. For the purposes of this Agreement, the
stock transfer books of Northeast shall be closed as of the Effective Date,
and no transfer of record of any shares of Northeast Stock shall take place
after the Effective Date.
(e) Surrender of Northeast Stock Certificates. On or
immediately after the Closing Date, each holder of an outstanding certificate
or certificates which prior thereto represented shares of Northeast Stock
shall surrender the same to Celcor. Each Stockholder who shall have
surrendered his certificate for shares of Northeast Stock shall be entitled to
receive in exchange therefor a certificate or certificates representing the
number of whole shares of Celcor Stock into which Northeast Stock shall have
been converted and exchanged. When the Merger becomes effective, the former
stockholders of Northeast shall thereupon cease to have any rights in respect
of Northeast Stock, other than to receive the certificates for Celcor Stock
described in Section 2.03(b) hereof. Unless and until any certificates shall
be so surrendered and exchanged, (i) the holder shall not have any voting
rights in respect of Celcor Stock into which the shares of Northeast Stock
shall have been so converted and exchanged, and (ii) dividends or other
distributions payable to holders of record of shares of Celcor Stock following
the Effective Date shall not be paid to the holder of the certificate. Upon
surrender of the certificate representing shares of Northeast Stock, there
shall be paid to the record holder of the certificate the amount of the
dividends or other distributions which shall have become payable following the
Effective Date with respect to the number of whole shares of Celcor Stock
represented by the certificate issued in exchange for the surrendered
certificate, but without interest.
2.04 Adjustment Upon Recapitalization. Subject to the
limitations of Section 4.03 hereof, the number of shares of Celcor Stock to be
issued at the Closing shall be appropriately adjusted in the event that, prior
to the Effective Date, the Celcor Stock should be split, combined, or
otherwise recapitalized, or if any stock dividend should be paid on the Celcor
Stock, or the record date for the payment of any such stock dividend should
occur.
2.05 Securities Law Matters.
(a) Private Offering. Northeast and Stockholders
understand that the Celcor Stock to be issued and delivered to Stockholders
pursuant to the Merger will not be registered under the Securities Act of
1933, as amended (the "Act"), but will be issued in reliance upon the
exemption afforded by Section 4(2) of the Act and Regulation D promulgated by
the SEC thereunder, and that Celcor is relying upon the truth and accuracy of
the representations set forth in the answers to the questionnaire in the form
of Appendix A hereto delivered concurrently with the execution of this
Agreement. Each certificate of Celcor Stock issued pursuant to this Agreement
shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND
MAY NOT BE TRANSFERRED UNLESS THEY ARE SO REGISTERED
OR, IN THE OPINION OF COUNSEL ACCEPTABLE TO THIS
CORPORATION, SUCH TRANSFER IS EXEMPT FROM REGISTRATION.
Celcor shall give instructions to its transfer agent consistent with the
foregoing legend.
(b) Limited Transfer Rights. The Stockholders may not
transfer, sell or assign the Celcor Stock until such shares are registered
pursuant to the Act; provided that, in the absence of such registration, a
Stockholder may transfer shares of Celcor Stock to one or more members of a
group consisting of (i) the spouse or children of any Stockholder, and (ii)
one or more trusts for their benefit; provided however, that the transferee in
each case will furnish Celcor with an investment letter in form and substance
satisfactory to counsel for Celcor who shall be satisfied with the competence
of such persons to give an investment letter.
(c) Blue Sky Filings. Celcor shall promptly institute and
diligently prosecute such proceedings before, and make such filings with, such
state regulatory agencies as may be necessary or appropriate in connection
with or preliminary to the issuance of Celcor Stock required to be issued to
the Stockholders pursuant to the Merger and any solicitation of the
Stockholders for their approval of the Plan and the matters related hereto.
(d) Removal of Legend. If any Stockholder desires to sell
his Celcor Stock at any time after the Closing, he shall notify Celcor of that
desire and the number of shares he desires to sell, together with such other
information concerning the transferee or purchaser and the manner of sale as
counsel to Celcor shall request. If counsel for Celcor is of the opinion that
such Celcor Stock may be sold without registration under the Act, and shall
render that opinion in writing to the Stockholder and the Transfer Agent for
Celcor Stock, the Transfer Agent shall deliver to that Stockholder,
certificates which are free of any restrictive legend representing shares of
Celcor Stock equal in number to the number of shares submitted for transfer by
that Stockholder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Northeast and
Stockholders. Northeast and the Stockholders jointly and severally represent
and warrant to Celcor as follows:
3.1.1 Organization of Northeast. Northeast is a corporation, duly
organized, validly existing, and in good standing under the laws of the State
of New York, and has all requisite corporate power, franchises, and licenses
to own its property and conduct the business in which it is engaged. Complete
copies of Northeast's certificate of incorporation, by-laws, as amended,
minutes, stock transfer records and agreements, if any, among some or all of
the Stockholders have been delivered to Celcor.
3.1.2 Capitalization.
3.1.2.1 Northeast has an authorized capital stock
consisting of 200 shares of common stock, no par value per share, of
which 175 shares are issued and outstanding. All of such shares of
Northeast Stock have been validly issued, fully paid, are non-
assessable, and were issued in compliance with applicable federal and
state securities laws.
3.1.2.2 Northeast does not have outstanding any
subscriptions, options, rights, warrants, convertible securities or
other agreements or commitments to issue, or contracts or any other
agreements obligating Northeast to issue, or to transfer from treasury,
any shares of its capital stock of any class or kind, or securities
convertible into such stock. No persons who are now holders of
Northeast Stock, and no persons who previously were holders of Northeast
Stock, are or ever were entitled to pre-emptive rights, other than
persons who exercised or waived those rights.
3.1.3 Subsidiaries. Northeast does not directly or indirectly
have any subsidiaries, nor hold any equity interest in any corporation,
partnership or joint venture, other than Shenyang United Vitatech Ltd. and
Northeast (Shenyang) Consulting Co. Ltd. (together, the "Subsidiaries"). The
Subsidiaries are each corporations, duly organized, validly existing and in
good standing under the laws of The Peoples Republic of China, and each has
all requisite corporate power, licenses and franchises to own its properties
and assets and conduct the business in which it is engaged. Complete copies
of the certificate of incorporation, by-laws, as amended, minutes, stock
transfer records and agreements, if any, among some or all of the stockholders
of the Subsidiaries (if not wholly owned by Northeast) have been delivered to
Celcor. Exhibit 3.1.3 lists the shareholders of any Subsidiary which is not
wholly owned.
3.1.4 Foreign Qualifications. Northeast and each Subsidiary is
duly qualified to conduct business as a foreign corporation in each state or
other jurisdiction in which it is required to be so qualified.
3.1.5 Other Business Names. Neither Northeast nor any Subsidiary
transacts business under any trade name or fictitious name.
3.1.6 Owned Real Estate; Real Estate Interests.
3.1.6.1 Northeast and each Subsidiary has good and
marketable title to the land which it owns, all of which is listed on
Exhibit 3.1.6 annexed hereto. The real estate owned by Northeast is
unimproved vacant land which has been acquired to build a residential
and office facility located in Queens, New York. The land is not
subject to any mortgage, lien or similar encumbrance.
3.1.6.2 The interest held by Shenyang United Viatech,
Ltd. in certain real estate located in Shenyang, China to develop a
factory to produce vitamin and cosmetic products is also described in
Exhibit 3.1.6 annexed hereto.
3.1.7 Leased Real Estate. Neither Northeast nor any Subsidiary
leases any real estate from any person, nor has Northeast or any Subsidiary
leased any real estate to any person, except as described in Exhibit 3.1.7.
3.1.8 Tangible Personal Property.
3.1.8.1 Exhibit 3.1.8 annexed hereto identifies all items
initially valued at more than $10,000.00 of machinery, motor vehicles,
computer equipment, furniture, fixtures, leasehold improvements, and all
other tangible personal property owned and used by Northeast and its
Subsidiaries in connection with their business on the date hereof.
3.1.8.2 Northeast and its Subsidiaries do not lease any
equipment which involve monthly payments of more than $1,000.00 on
account of any such lease. Copies of all equipment leases which are in
effect have been or will promptly be furnished to Celcor. Northeast is
not in default under any of such equipment leases and is not aware of
any fact which, with notice and/or passage of time, would constitute
such a default. All personal property owned by Northeast or its
Subsidiaries, or leased and used by Northeast or any Subsidiary in its
business is in good condition, normal wear and tear excepted, and is in
good operating order.
3.1.9 Intangible Personal Property; Computer Programs.
3.1.9.1 Northeast and its Subsidiaries do not own any
patents, patent applications, inventions, trademarks, trademark
applications, copyrights, trade names or proprietary technology, except
for certain formulas for the production of vitamins and cosmetic
products described on Exhibit 3.1.9. Except as listed on Exhibit 3.1.9
annexed hereto, neither Northeast nor any Subsidiary is a party to any
distributorship, franchise, joint venture or license agreements (whether
as grantor or grantee). Copies of all written instruments which
evidence such intangible personal property have been or will promptly be
delivered to Celcor.
3.1.9.2 There are no infringement or other claims or
demands against Northeast or its Subsidiaries with respect to any items
of intangible personal property, and no proceedings have been
instituted, are pending, or to the knowledge of Northeast, have been
threatened to terminate or cancel any agreement affording to Northeast
the right to use any intangible asset, or which challenge the rights of
Northeast or its Subsidiaries with respect to any of its intangible
assets; and there are no facts known to Northeast which make it likely
that any such license or similar agreement will not be renewed at its
next expiration date or which might reasonably serve as the basis, in
whole or in part, of any claim that any part of the business carried on
by Northeast or any Subsidiary infringes the patent, trademark, trade
name, copyright, or other rights of any other person. Northeast (or one
of its Subsidiaries) is the sole and exclusive owner of each of said
items of intangible personal property.
3.1.9.3 Northeast does not use, is not licensed to use and
has no need to use any patent, patent application, trademark, trademark
application, trade name, formula or copyright which is owned by an
unrelated third party.
3.1.10 Stockholders; Title to Northeast Stock. Exhibit
3.1.10 annexed hereto contains a complete list of the names and addresses of
all the Stockholders of Northeast and the number of shares of Northeast Stock
owned by each of them. Each of the persons listed on such Exhibit is the
record and beneficial owner of the shares of Northeast Stock listed on that
Exhibit, owns those shares of Northeast Stock free and clear of any security
interests, liens, encumbrances or claims, (other than a pledge of the shares
in favor of Celcor), and has the unrestricted right to vote the Northeast
Stock owned by such person in favor of the Transaction and transfer such
shares to Celcor without the consent of any person.
3.1.11 Title to Assets. Northeast and its Subsidiaries have
good and marketable title in and to all of their property reflected in the
most recent consolidated financial statement plus all assets purchased by
Northeast and its Subsidiaries since the date of that financial statement,
less all assets which Northeast and its Subsidiaries have disposed of in the
ordinary course, which property is free and clear of any security interests,
consignments, liens, judgments, encumbrances, restrictions, or claims of any
kind. The only liens or security interests which exist and, at the Closing
will exist, on Northeast's assets are those which either (a) secure
liabilities disclosed on the financial statements annexed hereto, or (b) are
liens for current taxes or assessments not yet due.
3.1.12 Material Contracts. Exhibit 3.1.12 annexed hereto
identifies the following contracts, leases and other obligations to which
Northeast or any of its Subsidiaries is a party or by which any of them is
bound and which are not identified elsewhere in any other Exhibit to this
Agreement: (a) contracts with or loans to any of Northeast's stockholders,
officers, directors, employees, agents, consultants, advisors, salesmen,
distributors or sales representatives; (b) secured loans and unsecured loans
and lines of credit; (c) contracts restricting Northeast or any of its
Subsidiaries from doing business in any areas or in any way limiting
competition; (d) contracts calling for aggregate payments by Northeast or by
any of its Subsidiaries in excess of $50,000 and which are not terminable
without cost or liability on notice of 60 days or less; and (e) guarantees by
Northeast or by any of its Subsidiaries of the obligations of any other party,
except those resulting from the endorsement of customer checks deposited by
the payee for collection. Except as disclosed on Exhibit 3.1.12, Northeast
and each of its Subsidiaries have, in all material respects, performed or
complied with all material obligations required on their part to be performed
or complied with through the date hereof under any of such contracts,
obligations or commitments to which each is a party or otherwise bound and no
default has occurred thereunder, whether waived or not waived, which could
have an adverse effect upon the business or financial condition of or impose a
liability upon Northeast or any of its Subsidiaries. All parties to such
contracts, obligations or commitments with Northeast or any of its
Subsidiaries are in substantial compliance therewith and no event has occurred
which, through the giving of notice or the passage of time or both, would
cause or constitute a material default under any such contracts, obligations
or commitments, or would cause the acceleration of any obligation of any party
thereto. Copies of the contracts listed or referred to in Exhibit 3.1.12 have
been or will promptly be delivered or made available to Celcor.
3.1.13 Labor Matters.
3.1.13.1 There are presently no employment or consulting
contracts with or covenants against competition by, any present or
former employees of Northeast or any of its Subsidiaries.
3.1.13.2 Annexed hereto as Exhibit 3.1.13 is a current
list showing the names of all United States employees of Northeast and
its Subsidiaries, their original dates of employment, job titles and
annual rate of pay for salaried employees and hourly rates for hourly
employees.
3.1.13.3 All employees of Northeast and its Subsidiaries
are employees at will who may be terminated by Northeast at any time
with no obligation to make any payment except wages to the date of
termination.
3.1.13.4 Neither Northeast nor any of its Subsidiaries is
indebted to, nor a creditor of, any Stockholder or of any relative of
any of such Stockholder, except for accrued wages and salaries.
3.1.13.5 Northeast and its Subsidiaries are in compliance
with all federal and state laws respecting employment, wages and hours,
and in compliance with any relevant Chinese laws. Northeast and its
subsidiaries are not engaged in any discriminatory hiring or employment
practices or any unfair labor practices nor have any employment
discrimination or unfair labor practice complaints against Northeast or
any of its Subsidiaries been filed, or to the knowledge of Northeast or
any Subsidiary threatened to be filed, with any Chinese, or any U.S.
federal or state agency having jurisdiction over Northeast's labor
matters. Neither Northeast nor any of its Subsidiaries has been
threatened by any former employee with any suit alleging wrongful
termination, nor does Northeast have knowledge of facts which might form
a basis for such a suit.
3.1.13.6 Northeast and its Subsidiaries have not,
directly or through agents and independent contractors, employed any
unauthorized aliens, as defined in 8 U.S.C. Section 1324a(h)(3).
Northeast and its Subsidiaries have complied, or caused any such agent
or independent contractor, to comply with the employment verification
and record-keeping requirements of 8 U.S.C. Section 1324a and 8 C.F.R.
Section 274a, as amended.
3.1.14 Benefit Plans; ERISA. Neither Northeast, nor any of
its Affiliates maintains a group health plan (within the meaning of Section
5000(b)(1) of the Code). Northeast does not now and has never maintained,
sponsored or contributed to any plan or program or arrangement providing post-
termination of employment retirement, health, dental, disability or life
insurance benefits with respect to employees or former employees and their
spouses and dependents.
3.1.15 Licenses and Permits. Northeast and its Subsidiaries
and their respective employees or agents have all material licenses, permits,
orders, approvals and authorizations required by Northeast or any such
Subsidiary for the conduct of businesses as presently and anticipated to be
conducted (including both U.S. and Chinese licenses, permits, authorizations
or approvals). Northeast and its Subsidiaries are acting within the terms of
such licenses, permits, orders, and approvals. Neither Northeast nor any of
its Subsidiaries has received any notice of investigation, evaluation or
suspension of any such licenses, permits, orders, approvals or authorizations.
To the best knowledge of Northeast and its Subsidiaries, no suspension or
cancellation of any such licenses, permits, orders, approvals and
authorizations has been threatened or is contemplated.
3.1.16 Authority Relative to Agreement; Enforceability. The
execution, delivery and performance of this Agreement is within the legal
capacity and power of Northeast and the Stockholders and have been duly
authorized by all requisite corporate action on the part of Northeast. This
Agreement is a legal, valid and binding obligation of Northeast and the
Stockholders, enforceable against Northeast and the Stockholders in accordance
with its terms, except insofar as its enforcement may be limited by (a)
bankruptcy, insolvency, moratorium or similar laws affecting the enforcement
of creditors' rights generally and (b) equitable principles limiting the
availability of equitable remedies. All persons who execute this Agreement on
behalf of Northeast have been duly authorized to do so.
3.1.17 Compliance with Other Instruments; Consents. Neither
the execution of this Agreement, nor the consummation of the Transaction, will
conflict with, violate or result in a breach or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a
default), or result in the termination of, or accelerate the performance
required by, or result in the creation of any lien or encumbrance upon any of
the assets of Northeast or any of its Subsidiaries under any provision of any
certificate of incorporation, by-law, indenture, mortgage, lien, lease,
agreement, contract, instrument, or any other restriction of any kind or
character to which Northeast or any of its Subsidiaries is subject or by which
Northeast or any of its Subsidiaries is bound, or require the consent of any
third party or governmental agency. To the extent the consent of Celcor to
the Merger is required under the terms of that certain pledge agreement among
Celcor and the shareholders of Northeast, by its execution of this Agreement,
Celcor consents to the Merger.
3.1.18 Compliance with Applicable Laws. Northeast and its
Subsidiaries are in compliance with all Chinese and U.S. federal, state,
county, and municipal laws, ordinances, regulations, judgments, orders or
decrees applicable to the conduct of the business of each, or to the assets
owned, used, or occupied by each, and neither Northeast nor any of its
Subsidiaries has received notice or advices to the contrary. All reports
required by any or all Chinese and U.S. federal, state and local governments
have been timely filed and all information contained therein is true and
correct. Neither the execution of this Agreement, nor consummation of the
Transaction will (a) violate any order, writ, injunction, statute, rule or
regulation applicable to Northeast or any of its Subsidiaries, or (b) require
the consent, approval, authorization or permission of, or the filing with or
the notification of any Chinese or U.S. federal, state or local government
agency.
3.1.19 Environmental Compliance.
3.1.19.1 Northeast and its Subsidiaries are in compliance
with all applicable Chinese and U.S. federal, state and local laws and
regulations relating to pollution control and environmental
contamination and all laws and regulations with regard to record-
keeping, notification and reporting requirements respecting Regulated
Substances. Neither Northeast nor any of its Subsidiaries has been
alleged to be in violation of, nor has any of the foregoing Companies
been subject to any administrative or judicial proceeding pursuant to
such laws or regulations, either now or any time during the past three
years.
3.1.19.2 None of the real property owned, used and/or
occupied by Northeast or any Subsidiary and located in the United Stated
has ever been used by previous or current owners, users and/or operators
to generate, manufacture, refine, transport, treat, store, handle,
dispose, transfer or process Regulated Substances.
3.1.19.3 Except as listed on Exhibit 3.1.19 annexed hereto,
Northeast and its Subsidiaries do not own or use underground storage
tanks at any of the real property owned or occupied by Northeast or any
of its Subsidiaries. If such tanks are owned or used, Northeast and its
Subsidiaries have complied in all respects with all laws regulating
underground storage tanks and the Federal Technical Standards and
Corrective Action Requirements for Owners and Operators of Underground
Storage Tanks (40 C.F.R. Part 280).
3.1.20 Financial Statements. Northeast and its Subsidiaries
have delivered to Celcor consolidated balance sheets and related consolidated
statements of operations, changes in stockholders' equity and cash flows for
the fiscal years ended June 30, 1993 and June 30, 1994 and the four months and
one year then ended, in each case audited by BDO Xxxxxxx, independent
certified public accountants. Within thirty days of the date of this
Agreement, Northeast and its Subsidiaries will deliver an unaudited
consolidated balance sheet dated December 31, 1994 and consolidated statement
of operations, changes in stockholders' equity and cash flows for the six
months ended December 31, 1994. The audited financial statements fairly
present and the interim financial statements, when delivered, will present,
the financial position of Northeast and its Subsidiaries and the results of
their operations as at the dates and for the periods to which they apply, and
such statements have been (and in the case of the interim statements, will be)
prepared in conformity with GAAP, applied on a consistent basis throughout the
periods involved. The interim statements will include all adjustments
(subject only to normal year-end audit adjustments) necessary for a fair
presentation of Northeast's consolidated financial position and results of
operations for that period.
3.1.21 Taxes.
3.1.21.1 All tax and information returns required to have
been filed by Northeast or any of its Subsidiaries have either been
filed with the appropriate taxing authority or Northeast has filed for
any required extension; and all Taxes of Northeast and its Subsidiaries
have been paid (or estimated taxes have been deposited) to the extent
such payments are required prior to the date hereof or accrued on the
books of Northeast and its Subsidiaries. The returns were (or will be)
correct as (or when) filed. Northeast's consolidated financial
statements include adequate provision for Taxes incurred or accrued as
of the date of the most recent balance sheet. True and complete copies
of the most recent federal, state and local tax returns of Northeast or
any of its Subsidiaries will promptly be delivered to Celcor when filed.
3.1.21.2 None of the federal taxes and state and local
franchise and sales tax returns of Northeast and its Subsidiaries have
been audited (or examined by IRS in the case of federal tax returns).
No assessments or additional Taxes have been proposed or threatened
against Northeast or any Subsidiary or any of their respective assets,
and neither Northeast nor any Subsidiary has executed any waiver of the
statute of limitations on the assessment or collection of any Tax
Liabilities.
3.1.21.3 There are no pending investigations of Northeast
or any of its Subsidiaries or their respective tax returns by any
federal, state or local taxing authority, and there are no federal,
state, local or foreign tax liens upon any of Northeast's assets or the
assets of any Subsidiary.
3.1.21.4 Exhibit 3.1.21 annexed hereto lists any elections
which Northeast has made with respect to the income tax treatment of any
items which cannot be revoked without the consent of the Commissioner of
Internal Revenue.
3.1.22 Litigation. There are no legal, administrative,
arbitration or other proceedings or claims pending or to the knowledge of
Northeast, threatened, against Northeast, or any of its Subsidiaries, nor is
Northeast or any Subsidiary subject to any existing judgment which might
affect the financial condition, business, property or prospects of Northeast
or any Subsidiary; nor has Northeast or any Subsidiary received any inquiry
from an agency of the federal or of any state or local government about the
Transaction, or about any violation or possible violation of any law,
regulation or ordinance affecting its business or assets; nor has Northeast or
any Subsidiary been subject to any products liability claims during the three
years ended on the date of this Agreement.
3.1.23 Brokerage. No broker or finder has rendered services
to Northeast or to any Stockholder in connection with the Transaction.
3.1.24 Full Disclosure. No representation or warranty made
by Northeast or any Subsidiary in this Agreement, and no certification
furnished or to be furnished to Celcor pursuant to this Agreement contains or
will contain any untrue statement of a material fact or omits, or will omit,
to state a material fact necessary to make the statements contained herein or
therein not misleading.
3.2 Representations and Warranties of Celcor. Celcor hereby
represents and warrants to Northeast and Stockholders that:
3.2.1 Organization. Celcor is duly organized, validly existing,
and in good standing under the laws of the state of its incorporation and has
the corporate power to execute, deliver, and perform this Agreement.
3.2.2 Capitalization.
3.2.2.1 Celcor has an authorized capital stock
consisting of 20,000,000 shares of common stock, par value $0.001 per
share, of which 3,364,674 shares are issued and outstanding and
2,000,000 shares of preferred stock, par value $0.001 per share, of
which 275,000 shares are issued and outstanding. All of such shares of
stock have been validly issued, fully paid, are non-assessable, and were
issued in compliance with applicable federal and state securities laws.
3.2.2.2 Except for its outstanding convertible preferred
stock, Celcor does not have outstanding any subscriptions, options,
rights, warrants, convertible securities or other agreements or
commitments to issue, or contracts or any other agreements obligating
Celcor to issue, or to transfer from treasury, any shares of its capital
stock of any class or kind, or securities convertible into such stock.
No persons who are now holders of Celcor Stock, and no persons who
previously were holders of Celcor Stock, are or ever were entitled to
pre-emptive rights other than persons who exercised or waived those
rights.
3.2.3 Authorization. The execution and delivery of this Agreement
and the consummation of the Transaction have been duly authorized by the Board
of Directors of Celcor. This Agreement constitutes the legal, valid and
binding obligation of Celcor, enforceable against it in accordance with its
terms, except insofar as the enforcement thereof may be limited by bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors' rights
generally and subject to equitable principles limiting the availability of
equitable remedies. All persons who have executed this Agreement on behalf of
Celcor have been duly authorized to do so.
3.2.4 Title to Assets. Celcor has good and marketable title in
and to all of its properties reflected in the most recent financial statement,
plus all assets purchased by Celcor since the date of that financial
statement, less all assets which Celcor has disposed of in the ordinary
course, which property is free and clear of any security interests,
consignments, liens, judgments, encumbrances, restrictions, or claims of any
kind. The only liens or security interests which exist and, at the Closing
will exist, on Celcor's assets are those which either (a) secure liabilities
disclosed in the financial statements annexed hereto, (b) secure the ownership
interests of lessors' of equipment used by Celcor, or (c) are liens for
current taxes or assessments not yet due.
3.2.5 No Third Party Consent Required; No Violation of Other
Instruments. Except for the need to obtain the consent of its stockholders,
neither the execution nor the performance of this Agreement by Celcor requires
the consent of any third party, nor will it violate or result in a breach or
constitute a default under any provision of the certificate of incorporation
or by-laws of Celcor, or any indenture, mortgage, lien, lease, agreement,
contract, instrument, order, judgment, decree, statute, ordinance, regulation
or any other restriction of any kind or character to which Celcor is subject
or by which it is bound.
3.2.6 Litigation. There are no legal, administrative, arbitration
or other proceedings or claims pending, or to the knowledge of Celcor,
threatened, against Celcor, nor is Celcor subject to any existing judgment
which might affect the financial condition, business, property or prospects of
Celcor; nor has Celcor received any inquiry from an agency of the federal or
of any state or local government about the Transaction, or about any violation
or possible violation of any law, regulation or ordinance affecting its
business or assets; nor has Celcor been subject to any products liability
claims during the three years ended on the date of this Agreement.
3.2.7 Brokerage. No broker or finder has rendered services to
Celcor in connection with the Transaction.
3.2.8 Financial Statements. Celcor has delivered to Northeast
Celcor's Annual Report to the SEC on Form 10-K for its year ended June 30,
1994, which includes its financial statements as of that date and for two
years then ended, and its quarterly report to the SEC on Form 10-Q for the
three and six month periods ended December 31, 1994. Those statements fairly
present the financial position of Celcor as at the dates and for the periods
to which they apply and have been prepared in conformity with GAAP.
3.2.9 Full Disclosure. No representation or warranty made by
Celcor in this Agreement, and no certification furnished or to be furnished to
Northeast and the Stockholders pursuant to this Agreement contains or will
contain any untrue statement of a material fact or omits, or will omit, to
state a material fact necessary to make the statements contained herein or
therein not misleading.
ARTICLE IV
ADDITIONAL COVENANTS AND AGREEMENTS OF
THE PARTIES
4.01 Corporate Approval. Promptly following the date hereof,
Celcor will call a special meeting of its stockholders for the purpose of
considering and approving this Agreement, the Transaction and the Plan.
Celcor shall promptly call that meeting by preparing a proxy statement and
giving written notice to all its stockholders in accordance with its by-laws
and applicable corporation law.
4.02 Stockholders' Agreement to Vote. Promptly following the
date hereof, Northeast will either call a special meeting of its stockholders
for the purpose of considering and approving this Agreement, the Transaction
and the Plan, or will obtain the written consent of its stockholders with
respect to such matters. The undersigned Stockholders hereby agree to vote
all Northeast Stock which they own in favor of the Transaction.
4.03 Conduct of Business. Prior to the Closing Date, each
corporation shall conduct its business only in the Ordinary Course of
Business, except as otherwise permitted by this Agreement or consented to the
other party in writing. Each party shall promptly advise the other in writing
of any material adverse change in the business, assets or prospects of such
corporation. Without the prior consent of the other party, neither Northeast
nor Celcor shall, prior to the Effective Date, (a) issue, sell, purchase or
redeem, or grant options or warrants or rights to purchase, or otherwise agree
to issue, sell, purchase or redeem, any common stock or other securities; (b)
incur any indebtedness or other liability, or discharge any obligation or
liability other than in the Ordinary Course of Business; (c) make any
distribution to its stockholders; (d) amend its Certificate of Incorporation
or by-laws; (e) enter into an employment agreement or make any changes in
compensation or other employment benefits for its executive officers; (f) sell
or otherwise dispose of any of its material assets; (g) mortgage, pledge or
subject to lien or other Encumbrance any of its assets; or (h) acquire or
enter into a contract to acquire any business or material asset.
4.05 Filing With Securities And Exchange Commission. Northeast
recognizes that Celcor may be required to report the Transaction to the SEC on
Form 8-K and will be obligated to solicit shareholder approval pursuant to a
proxy statement, each of which must be accompanied by financial statements of
Northeast. Northeast shall cause its regular accountants to furnish such
statements to Celcor and to consent to the use of those statements and their
related report in said proxy statement and Form 8-K.
4.06 Access. Between the date hereof and the Closing Date, each
party shall give to the other and their respective designees full access,
during normal business hours and upon reasonable notice, in such a manner as
not to disrupt normal business activities, to the premises, property, material
contracts and books of account and records of such party. Each party will
hold, and will cause all of its directors, officers, employees and
representatives to hold in complete confidence, all information so obtained
and will use such information only for the purpose of conducting its due
diligence investigation. If the Transaction is not consummated as
contemplated herein, each party will return to the other all returnable
information and data and will not disclose any such data or information to any
other person. Such obligation of confidentiality shall not extend to any
information which is shown to have been previously known to the party to whom
the information was provided, or generally known to others engaged in the same
trade or business as the party who provided the information, or that is part
of public knowledge.
4.07 Best Efforts. Northeast, the Stockholders and Celcor shall
use their best efforts, and shall cooperate with and assist each other in
their efforts to obtain such consents and approvals of third parties as may be
necessary to consummate the Transaction and to permit each party to enjoy the
benefits of the Transaction without any cost beyond that contemplated by this
Agreement.
4.08 Brokers or Finders. Each party agrees to hold the other
harmless and to indemnify it against the claims of any persons or entities
claiming to be entitled to any brokerage commission, finder's fee, advisory
fee or like payment from such other party based upon actions of the
indemnifying party in connection with the Transaction.
4.09 Environmental Matters.
4.9.1 Celcor shall have the right, at its expense, to make such
environmental studies of any real property owned by Northeast and its
Subsidiaries, or any real property which Northeast and its Subsidiaries have
the right to acquire, as it shall deem necessary to determine whether there is
any reason to believe there is contamination to any soil, subsurface condition
or groundwater caused by the presence of a Regulated Substance which could
give rise to an obligation to perform remediation or clean-up, and whether
Northeast's underground fuel storage tanks, if any, leak. If there should be
evidence of the presence of any Regulated Substance or improper installation
or leakage of a tank, Celcor will so advise the Stockholders who will cause
Northeast to take whatever action is necessary to remediate the situation,
including clean up of contaminated soil, removal of the tank, if appropriate,
or removal of the contents of the tank and filling of the tank with sand or
other non-polluting material. The entire cost of that cleanup shall be
accrued as a liability of Northeast.
4.9.2 If the Closing shall occur prior to the completion of that
remediation, the cleanup cost, as estimated by a consultant acceptable to
Celcor and Northeast, shall be accrued as a liability of Northeast. If the
actual cost of that cleanup, including but not limited to the cost of
preliminary studies, tank and soil removal, installation and operation of
monitoring xxxxx, governmental fees and fines relating to that pollution and
remediation should exceed the estimate, the Stockholders shall jointly and
severally reimburse Celcor for the excess cost.
4.9.3 If Celcor determines that any such tank is not leaking, it
shall so advise the Stockholders who shall then have no further obligation
with respect to the tank other than to pay for the cost of upgrading the tank
as required by the Federal Technical Standards and Correction Action
Requirements for Owners and Operators of Underground Storage Tanks and any
applicable state statute or regulation dealing with Northeast's underground
tanks.
4.10 Exclusive Dealing. Until this Agreement shall be
consummated or terminated in accordance with its terms, neither Northeast nor
any Stockholder shall take, or permit any other person acting on its or his
behalf, to take or refrain from taking any action, directly or indirectly, to
encourage, initiate or engage in discussions or negotiations with, or provide
information to, any person or group other than Celcor with respect to any
purchase of the stock of Northeast or any purchase of any substantial portion
of the assets of, or merger with, Northeast, other than disclosures consented
to in writing by Celcor. Northeast and the Stockholders shall promptly notify
Celcor of any solicitation or inquiry which any of them receive with respect
to any such matter.
ARTICLE V
THE CLOSING
5.01 The Closing. The Closing shall take place at the offices of
Xxxxxxxxxx, Sandler, Kohl, Xxxxxx & Xxxxxx, 00 Xxxxxxxxxx Xxxxxx, Xxxxxxxx,
Xxx Xxxxxx 00000, commencing at 9:00 a.m. local time on the Closing Date,
provided that all conditions precedent to the obligations of Northeast and
Celcor to close have then been met or waived. Either party may postpone the
Closing for a reasonable period of time if necessary to enable it to perform
any obligations hereunder. If the Closing shall not take place on or before
the 120 day following the date hereof (the "Outside Date"), this Agreement may
be terminated at the option of either party, other than a party whose act or
failure to act prevented the Closing from occurring on or before the Outside
Date.
5.02 Termination. This Agreement may be terminated at any time
until completion of the Closing as follows: (a) by mutual consent of Celcor
and Northeast; (b) by Celcor or Northeast, respectively, if, at or before the
completion of the Closing, any material condition set forth herein upon the
obligation of such party to consummate the Transaction shall not have been
duly satisfied or waived; (c) by Celcor or Northeast if the Closing shall not
have occurred on or before the Outside Date, but no party shall be entitled to
terminate pursuant to this clause if its own acts or failures to act delay the
Closing beyond the Outside Date; or (d) by Celcor or Northeast, respectively,
if it shall have discovered that any representation or warranty made herein
for its benefit, or in any certificate, schedule or document furnished to it,
pursuant to this Agreement is untrue in any material respect, or if the other
party shall have defaulted in the performance of any obligation to be
performed by such party under this Agreement; provided, however, that in order
to terminate this Agreement under Section 5.02 (b) or (d), the party seeking
to terminate this Agreement shall, upon discovery of a breach or default, give
written notice thereof to the other party and the other party shall fail to
cure the breach or default within ten (10) days after receipt of such notice.
5.03 Liability on Termination. Upon any termination of this
Agreement pursuant to Section 5.02 (a), no party shall have any liability or
obligation hereunder (except to observe the confidentiality provisions
hereof), and each party shall bear the expenses incurred by it. If a party
should terminate pursuant to Section 5.02(b) or Section 5.02(d), the
terminating party shall have no liability, but the defaulting party shall not
be excused from liability to the other party unless it can clearly demonstrate
that the failure to perform was caused by persons or acts beyond its control.
If the termination is the result of an event described in Section 5.02(c)
above, the terminating party shall have no liability to the other party
provided that the terminating party did not delay the closing beyond the
Outside Date, but the party causing that delay shall not be excused from
liability to the other party unless it can clearly demonstrate that such delay
was caused by persons or acts beyond its control.
5.04 Termination Fees. In order to induce each party to enter
into this Agreement, and as a means of compensating the parties for the
substantial efforts and direct and indirect monetary costs incurred and to be
incurred in connection with the Transaction, (i) in the event that Celcor
terminates this Agreement as a result of Northeast's failure to satisfy any of
the conditions set forth in Article VII, Northeast shall reimburse Celcor for
all reasonable out-of-pocket expenses actually incurred by it or on its behalf
in connection with this Agreement and the Transaction in an amount not to
exceed $25,000; and (ii) in the event that Northeast terminates this Agreement
as a result of Celcor's failure to satisfy any of the conditions set forth in
Article VIII, Celcor shall reimburse Northeast for all reasonable out-of-
pocket expenses actually incurred by it or on its behalf in connection with
this Agreement and the transaction in an amount not to exceed $25,000;
provided, however, that any claim that a representation of a party, which is
based on the knowledge of such party, is false shall not give rise to a claim
under this Section unless that representation is false to the knowledge of
such party on the date of this Agreement.
ARTICLE VI
CONDITIONS TO OBLIGATION OF EACH PARTY
The obligation of each party to effect the Transaction shall be
subject to the fulfillment, at or prior to the Closing Date, of the following
conditions:
6.01 No Prohibition of Transaction.
(a) No third party shall have instituted any suit or
proceeding to restrain, enjoin or otherwise prevent the consummation of the
Transaction, or to seek damages from or impose obligations upon either party
by reason of the Transaction which, in such party's reasonable judgment, would
involve expense or lapse of time that would be materially adverse to that
party's interest.
(b) No order shall have been issued by any court or
administrative body to inquire into, restrain, enjoin or otherwise prevent
consummation of the Transaction.
6.02 Compliance with Law. There shall have been obtained all
permits, approvals and consents of any governmental body or agency which
counsel for Celcor or Northeast may reasonably deem necessary or appropriate
to consummate the Transaction in compliance with laws applicable to the
Transaction, assets or business of either party.
6.03 Proceedings, Documentation and Consents. All proceedings
and Closing Documents contemplated by this Agreement, together with all
consents to and approvals of the Transaction (the form and substance of all of
which shall be reasonably satisfactory to the parties) as are necessary to
effect the Merger, shall have been obtained.
6.04 Tax Free Reorganization. The Merger and the receipt by the
shareholders of Northeast of shares of Celcor Stock in exchange for their
shares of Northeast Stock shall constitute a tax free reorganization pursuant
to Section 368(a)(i)(A) of the Internal Revenue Code of 1986, as amended.
ARTICLE VII
CONDITIONS TO THE OBLIGATION OF CELCOR TO CLOSE
The obligations of Celcor hereunder are subject to the
satisfaction, on or prior to the Closing Date, of all the following
conditions, compliance with which or the occurrence of which may be waived
in whole or in part by Celcor in writing.
7.01 Representations and Warranties True at the Closing Date.
Except for changes contemplated by this Agreement and changes which do not
individually or in the aggregate have a material adverse effect upon the
assets or business acquired, the representations and warranties of Northeast
contained in Article III shall be deemed to have been made again at and as of
the Closing Date and shall then be true and correct, except for changes in the
Ordinary Course of Business of Northeast.
7.02 No Material Adverse Change; Officers' Certificates. During
the period from the date of this Agreement to the Closing Date there shall not
have been any material adverse change in the financial condition, results of
operations or prospects of Northeast, nor any material loss or damage to its
assets, whether or not insured, which materially adversely affects its ability
to conduct its business.
7.03 Corporation's Performance. Each of the obligations of
Northeast to be performed on or before the Closing Date pursuant to the terms
of this Agreement shall have been duly performed.
7.04 Necessary Corporate Approvals. The board of directors and
stockholders of Northeast shall have duly authorized and approved the
execution and delivery of this Agreement and all corporate action necessary or
proper on the part of Northeast to authorize the execution, delivery and
performance of this Agreement and the Plan, shall have been taken on or prior
to the Closing Date.
7.05 Resolutions Authorizing the Execution of this Agreement. At
the Closing, Northeast will furnish to Celcor copies of the resolutions or
consents of Northeast's board of directors and its stockholders, appropriately
certified by Northeast's secretary, authorizing the execution, delivery, and
performance of this Agreement and the Plan.
7.06 Opinion of Counsel. Northeast shall have furnished Celcor
with a favorable opinion dated on and as of the Closing Date, of Cha and Pan,
counsel to Northeast, in the form of Appendix B hereto.
7.07 Investment Letters. On or prior to the Closing Date, each
Stockholder shall have executed and delivered to Celcor a letter agreement and
questionnaire in the form of Appendix A hereto, it being understood that
Celcor, in issuing the Celcor Stock, will be relying on the representations of
said persons therein contained.
7.08 Satisfactory Searches. Celcor shall have received evidence,
satisfactory to it, that (a) Northeast is duly organized, validly existing and
in good standing in its state of incorporation, (b) Northeast is qualified to
do business as a foreign Corporation where, in the opinion of counsel to
Northeast, it is required to be so qualified, and (c) Northeast has good title
to all assets listed in its financial statements free and clear of all
Encumbrances.
7.09 Environmental Review. Celcor shall not have discovered the
presence of Regulated Substances on any real property owned by Northeast
requiring remediation under any federal or state law, rule or regulation, nor
any improper installation of or leakage from any underground storage tanks on
such real property, or any violation of environmental laws, rules or
regulations with regard to such Regulated Substance or such tanks on such
property that shall not have been remediated prior to the Closing Date.
7.10 Consents to Transaction. On or prior to the Closing Date,
Northeast shall furnish Celcor with such consents to the Transaction as in the
opinion of Celcor or its counsel are required to permit Ceclor to enjoy the
benefits of the Transaction without any cost beyond that contemplated by this
Agreement.
7.11 Dissenters' Rights. Northeast shall not have received
notices from any holders of any class of Northeast Stock of their intent to
dissent from the Transaction.
[7.12 Title Insurance. Celcor shall have obtained a title
insurance policy or binder insuring the Surviving Corporation's interest in
any real estate owned by Northeast.]
7.13 Financial Statements. Northeast shall have delivered to
Celcor, at Northeast's expense, a consolidated balance sheet of Northeast as
of June 30, 1994, and consolidated statements of income and cash flows for the
year ended June 30, 19994, certified by BDO Xxxxxxx and interim financial
statements for the six months ended December 31, 1994, all, as required by SEC
Regulation S-X.
7.14 Fairness Opinion. Celcor shall have received an opinion
from Chartered Capital Advisors, Inc., dated as of the date of the proxy
statement sent to its stockholders, to the effect that the rate of exchange of
Celcor Stock for Northeast Stock is fair to the stockholders of Celcor from a
financial point of view, and such opinion shall not have been withdrawn prior
to the date of the meeting of Celcor stockholders held for the purpose of
approving the Plan.
7.15 Results of Investigation. Celcor shall have determined in
good faith that the results of its investigation do not show any losses,
liabilities, commitments, contingencies or other conditions of or relating to
Northeast which are not set forth or reflected in the financial statements of
Northeast previously delivered to Celcor or have not been otherwise disclosed
to Celcor and which in the aggregate materially and adversely affect the
business, financial condition, properties, results of operations, forecasts or
prospects of Northeast (as defined in SEC regulations).
ARTICLE VIII
CONDITIONS TO NORTHEAST'S OBLIGATION TO CLOSE
The obligations of Northeast hereunder are subject to the
satisfaction, on or prior to the Closing Date, of the following conditions,
compliance with which, or the occurrence of which may be waived in whole or in
part in writing by Northeast.
8.01 Representations and Warranties True at the Closing. The
representations and warranties of Celcor contained in Article III shall be
deemed to have been made again at and as of the Closing Date and shall then be
true and correct in all material respects except for changes in the Ordinary
Course of Business of Celcor.
8.02 Celcor's Performance. Each of the obligations of Celcor to
be performed on or before the Closing Date, pursuant to the terms of this
Agreement, shall have been duly performed at the Closing Date. There shall
have been no change in Celcor's financial or business condition, nor any
litigation or proceeding, actual or threatened, which is reasonably likely to
prevent Celcor from performing any obligation undertaken by it under this
Agreement which is to be performed after the Closing.
8.03 No Material Adverse Change. During the period from the date
of this Agreement to the Closing Date, there shall not have been any material
adverse change in the financial condition, results of operations or prospects
of Celcor, nor any material loss or damage to its assets, whether or not
insured, which materially affects Celcor's ability to conduct its business.
8.04 Authority. All actions required to be taken by or on the
part of Celcor to authorize the execution, delivery and performance of this
Agreement by Celcor and the consummation of the Transaction shall have been
duly and validly taken by the Board of Directors and stockholders of Celcor.
8.05 Opinion of Celcor's Counsel. Celcor shall have furnished
Northeast with an opinion of Xxxxxxxxxx, Sandler, Kohl, Xxxxxx & Xxxxxx, P.C.,
counsel to Celcor, dated the Closing Date, in the form of Appendix C hereto.
Such opinion may expressly rely as to matters of fact upon certificates of
appropriate officers of Celcor or appropriate governmental officials. Copies
of such certificates shall be delivered to Northeast.
8.06 Results of Investigation. Northeast shall have determined
in good faith that the results of its investigation do not show any losses,
liabilities, commitments, contingencies or other conditions of or relating to
Celcor which are not set forth or reflected in the financial statements of
Celcor previously delivered to Northeast or have not been otherwise disclosed
in writing to Northeast and which in the aggregate materially and adversely
affect the business, financial condition, properties, results of operations,
forecasts or prospects of Celcor.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND INDEMNIFICATION
9.01 Representations to Survive Closing. The representations and
warranties of Celcor, Northeast and the Stockholders contained herein or in
any document furnished pursuant hereto shall survive the Closing of the
Transaction, but the exclusive remedy following the Closing for a breach of
any representation or warranty shall be to assert a claim in accordance with
the provisions of this Article IX. Except as provided in this Article IX,
neither Celcor, Northeast, nor their respective stockholders, directors or
officers, shall have any liability to the other after the Effective Date on
account of any breach or failure or the incorrectness of any of those
representations and warranties.
9.02 Indemnification by the Stockholders.
(a) Obligation to Indemnify. The Stockholders jointly and
severally agree to and do hereby indemnify, and agree to defend and hold
Celcor and the Surviving Corporation and their respective directors, officers,
employees, fiduciaries, agents and affiliates, and each other person, if any,
who controls such persons, harmless against any claims, actions, suits,
proceedings, investigations, losses, expenses, damages, obligations,
liabilities, judgments, fines, fees, costs and expenses (including costs and
reasonable attorneys' fees) and amounts paid in settlement of any pending,
threatened or completed claim, action, suit, proceeding or investigation
(collectively "Loss" or "Losses") which arise or result from or are related to
(i) any breach or failure of Northeast and the Stockholders to perform any of
their covenants or agreements set forth herein, (ii) the inaccuracy of any
representation or warranty made by Northeast and Stockholders herein, (iii)
any fixed or contingent obligation or liability of Northeast (including but
not limited to liabilities arising in tort, contract, guarantees and
indemnities) which existed as of the Closing Date and would be required by
GAAP to be disclosed on Northeast's financial statements, or in the notes
thereto, and is not so disclosed prior to Closing, and (iv) any liability for
Taxes, other than those which are accrued as liabilities of Northeast,
together with interest and penalties and additions to tax, if any, arising out
of tax assessments. No liability shall attach under this Section 9.02,
however, until Celcor has incurred a Loss or Losses in the aggregate totaling
fifty thousand dollars ($50,000) and no claim shall be asserted by Celcor
after one year in the case of claims asserted on the basis of clause (i), two
years in the case of a claim asserted on the basis of clause (ii) or (iii),
and no time limitation in the case of a claim asserted on the basis of clause
(iv).
(b) Reimbursement on Demand. The Stockholders will
reimburse Celcor from time to time on demand for any payment made by Celcor at
any time in respect of any Loss which Celcor may sustain or incur to which the
foregoing indemnity relates.
9.03 Indemnification by Celcor.
(a) Obligation to Indemnify. Celcor agrees to and does
hereby indemnify and hold Northeast and the Stockholders harmless against any
claims, losses, damages, expenses or liabilities (including costs and
reasonable attorney's fees) resulting to Northeast and the Stockholders from
(i) any breach or failure of Celcor to perform any of its covenants or
agreements set forth herein, (ii) the inaccuracy of any representations or
warranties made by Celcor herein, (iii) any fixed or contingent obligation or
liability of Celcor (including but not limited to liabilities arising in tort,
contract, guarantees and indemnities) which existed as of the Closing Date and
would be required by GAAP to be disclosed on Celcor's financial statements, or
in the notes thereto, and is not so disclosed prior to closing, and (iv) any
liability for Taxes, other than those which are accrued as liabilities of
Celcor, together with interest and penalties and additions to tax, if any,
arising out of tax assessments. No liability shall attach under this Section
9.03, however, until the stockholders have incurred a Loss or Losses in the
aggregate totaling fifty thousand dollars ($50,000) and no claim shall be
asserted by Northeast or the stockholders after one year in the case of claims
asserted on the basis of clause (i), two years in the case of a claim asserted
on the basis of clause (ii) or (iii) and no time limitation in the case of a
claim asserted on the basis of clause (iv).
(b) Reimbursement on Demand. Celcor will reimburse the
Stockholders from time to time on demand for any payment made by the
Stockholders at any time in respect of any Loss which the Stockholders may
sustain or incur to which the foregoing indemnity relates.
9.04 Enforcement of Indemnification Rights.
(a) Notification. Any person or entity seeking
enforcement of indemnification rights hereunder shall notify each potentially
liable person or entity of (i) any payment made in respect of any liability,
obligation or claim to which the foregoing indemnity applies, (ii) any Loss
which such person or entity may sustain or incur, to which the foregoing
indemnity relates, and (iii) any claim made or suit filed against such person
or entity with respect to Northeast or Celcor, as applicable, their respective
assets or this Agreement. Such notification shall include a specific demand
for indemnification and defense if such person or entity wishes to assert his
or its indemnification rights hereunder.
(b) Disputes. If there is any dispute as to the right to
indemnification and defense hereunder, the disputing party shall give the
other party written notice of such dispute, specifying in detail the basis of
the dispute, not later than 20 days after receipt of demand for
indemnification. The parties agree to resolve any such dispute pursuant to
the New Jersey Alternate Procedure for Dispute Resolution Act (N.J.S.A.
2A:23A). All parties hereto agree to submit to the jurisdiction of such court
for the purpose of such suit or suits.
(c) Time Limit. If there is no dispute as to the right to
indemnification with respect to any such demand within such 20 day period,
TIME BEING OF THE ESSENCE, or upon resolution of any such dispute by the
parties or by a court, the person or entity entitled to indemnification shall
be promptly paid the amount of such demand, the amount agreed to by the
parties or the amount ordered by a court.
(d) Calculation of Loss. In determining the amount of any
Loss, net after tax proceeds of insurance received shall reduce the Loss. Tax
benefits, if any, derived from such Loss by the party seeking indemnification
shall not reduce the Loss, unless the amount paid to indemnify it for such
Loss shall not be treated by it as income subject to federal or state income
tax, in which event the amount of the Loss shall be reduced by the tax
benefits derived therefrom.
(e) Litigation Procedure. If a party entitled to be
indemnified pursuant to this Article IX notifies the other party of the
commencement of an action against it, the party obligated to provide
indemnification will be entitled, at his or its own expense, to (i)
participate in, and (ii) except in the case of a claim that relates to a tax
liability, assume the defense of the action. If the indemnifying party wishes
to assume the defense of that action, counsel selected by the indemnifying
party shall be reasonably satisfactory to the indemnified party, and the
indemnified party shall cooperate in all reasonable respects, at its cost and
expense, with the indemnifying party and such counsel in the investigation and
defense of such action and any appeal arising therefrom. After the
indemnifying party shall notify the indemnified party of its election to
assume the defense of any such action, the indemnifying party will not be
liable to the indemnified party under this Article IX for any legal fees or
other expense subsequently incurred by the indemnified party in connection
with the defense thereof. Even if the indemnifying party should assume the
defense of any such actions, the indemnified party shall have the right at its
expense to participate in the defense thereof. If the indemnifying party
assumes the defense of any such actions, it shall not settle or otherwise
compromise any such action without the prior written consent of the
indemnified party. If the indemnifying party should fail or refuse to assume
the defense of any such action, the indemnifying party shall jointly and
severally reimburse the indemnified party for the fees and expenses of counsel
engaged by it to defend that action.
9.05 Remedies Cumulative. Persons or entities entitled to
indemnification hereunder shall be entitled to such indemnification from time
to time and shall be entitled to rely upon one or more provisions of this
Agreement without waiving its right to rely upon any other provisions at the
same time or any other time.
ARTICLE X
MISCELLANEOUS
10.01 Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed delivered if
delivered by hand, by telecopier, by courier or mailed by certified or
registered mail, postage prepaid, addressed as follows:
If to Celcor:
Celcor, Inc.
Attn: Xx. Xxxxxxx X. Xxxxx, Xx.
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax No.: (000) 000-0000
with a copy to:
Xxxxxxxxxx, Sandler, Kohl, Xxxxxx & Xxxxxx
Attn: Xxxxxx X. Xxxxx, Esq.
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Tel. (000) 000-0000
Fax No. (000) 000-0000
If to Northeast or the Stockholders:
Northeast (USA) Corp.
Attn: Xx. X. Xx
000-00 00xx Xxx.
Xxxxxxxx, X.X. 00000
Fax No.
with copy to:
Cha Pan
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Fax No. (000) 000-0000
10.02 Assignability and Parties in Interest. This Agreement
shall not be assignable by any of the parties hereto without the consent of
all other parties hereto. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors. Nothing in
this Agreement is intended to confer, expressly or by implication, upon any
other person any rights or remedies under or by reason of this Agreement.
10.03 Expenses. Each party shall, except as otherwise
specifically provided, bear its own expenses and costs, including the fees of
any attorney retained by it, incurred in connection with the preparation of
this Agreement and consummation of the Transaction.
10.04 Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New
Jersey. Northeast consents to the personal jurisdiction of the federal and
state courts in the State of New Jersey in connection with any action arising
under or brought with respect to this Agreement.
10.05 Counterparts. This Agreement may be executed as of the same
effective date in one or more counterparts, each of which shall be deemed an
original.
10.06 Headings. The headings and subheadings contained in this
Agreement are included solely for ease of reference, and are not intended to
give a full description of the contents of any particular Section and shall
not be given any weight whatever in interpreting any provision of this
Agreement.
10.07 Pronouns, etc. Use of male, female and neuter pronouns in
the singular or plural shall be understood to include each of the other
pronouns as the context requires. The word "and" includes the word "or". The
word "or" is disjunctive but not necessarily exclusive.
10.08 Complete Agreement. This Agreement, the Appendices hereto,
and the documents delivered pursuant hereto or referred to herein or therein
contain the entire agreement between the parties with respect to the
Transaction and, except as provided herein, supersede all previous
negotiations, commitments and writings.
10.09 Modifications, Amendments and Waivers. This Agreement shall
not be modified or amended except by a writing signed by Celcor and Northeast.
Prior to the Closing, either Celcor or Northeast may amend any of the exhibits
to Article III by giving the other party notice of such amendments. If such
amended disclosures reveal material adverse information about the party making
the change, the recipient of the information may terminate this Agreement
without liability to the other party.
10.10 Severability. If any term or other provision of this
Agreement is invalid, illegal, or incapable of being enforced by any rule of
law or public policy, all other terms and provisions of this Agreement will
nevertheless remain in full force and effect so long as the economic or legal
substance of the Transaction is not affected in any manner adverse to any
party hereto. Upon any such determination that any term or other provision is
invalid, illegal, or incapable of being enforced, the parties hereto will
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in any acceptable manner to the
end that the Transaction is consummated to the extent possible.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first above written.
ATTEST: CELCOR, INC.
/S XXXXXXX X. XXXXX By: /S XXXXXXX X. XXXXX, XX.
President
ATTEST: NORTHEAST (USA) CORP.
/S XXXXX XXXX By: /S XXXXXXXX XX
Xxxxxxxx Xx Chairperson
Stockholders
By: /S TING-XXX XXX
Ting-Xxx Xxx President
Xxxxxxx Consultants, Ltd.
By: /S X.X. XXXX
X.X. Xxxx General Manager
Xxxxxx Holding Ltd.
By: /S X. X. XX
X. X. Xx General Partner
Dziou Tai Associates
By: /S XXXXXXXXX XXXXX
Xxxxxxxxx Xxxxx Secretary
Lyncroft Corporation
By: /S XXXX XXXX XXXX
Xxxx Xxxx Xxxx Representative in USA
Northeast General Pharmaceutical Factory
APPENDIX A
EXCHANGE AGREEMENT
Celcor, Inc.
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Re: Celcor, Inc., a Delaware corporation (the "Company")
Gentlemen:
Section Exchange.
Pursuant to the terms of an Agreement and Plan of Merger, dated
________, 0000, xxxxx xxx Xxxxxxx, Xxxxxxxxx (XXX) Corp. ("Northeast") and the
shareholders of Northeast, the undersigned, in its capacity as a shareholder
of Northeast, agrees to exchange ___ shares of Northeast common stock
("Northeast Stock") for ___ shares of the Company's common stock (the "Common
Stock") and in connection therewith irrevocably tenders this Exchange
Agreement, together with the Northeast Stock and such stock powers and other
documents as may be deemed necessary, in the sole discretion of the Company,
to effectuate such exchange.
Section Shareholder's Acknowledgments.
The Company has disclosed to the undersigned and the undersigned
shareholder understands that:
(a) There is a limited public market for the Common Stock.
(b) The Common Stock to be received by the undersigned will not
be registered under the Securities Act of 1933 or State securities laws and,
therefore, the Common Stock cannot be resold or transferred unless it is
subsequently registered under the Securities Act of 1933 and applicable State
securities or "Blue Sky" laws or exemptions from such registration are
available.
(c) A legend summarizing the restrictions on the transfer of the
Common Stock will be placed on the certificates representing the shares of
Common Stock to be received by me and stop transfer instructions will be given
to the transfer agent for the Common Stock to prohibit any transfer or
attempted transfer in violation of such restrictions.
(d) No Federal or State agency has made any finding or
determination as to the fairness of the investment, nor have they made any
recommendation or endorsement concerning the Common Stock.
Section Shareholder Representations.
The undersigned represents and warrants as follows:
(a) The undersigned Shareholder is acquiring the Common Stock
for its own account and not for or with a view to resale or distribution. The
undersigned has not entered into any contract, undertaking, agreement or
arrangement with any person to sell, transfer or pledge to such person or
anyone else the Common Stock which it will receive in exchange for its
Northeast Common Stock and the undersigned has no present plans or intentions
to enter into any such contract, undertaking, agreement or arrangement.
(b) The undersigned can bear the economic risk of losing its
entire investment in the Common Stock. The undersigned is prepared to bear
the economic risk of this investment for an indefinite time.
(c) The representatives of the undersigned have substantial
experience in making investment decisions of this type and, therefore, have
such knowledge and experience in financial and business matters that they are
capable of evaluating the merits and risks of an investment in the Company.
(d) The undersigned and its advisors (i) have had the
opportunity to ask questions of and receive answers from representatives of
the Company or persons acting on its behalf concerning the terms and
conditions of a proposed investment in the Company; (ii) have had the
opportunity to obtain additional information necessary to verify the accuracy
of information previously furnished about the Company; and (iii) are satisfied
that they have received information with respect to all matters that they
consider material to their decision to invest in the Company.
(e) The undersigned and its advisors have relied solely upon (i)
the Company's most recent annual report on Form 10-K for the year ended June
30, 1994 and quarterly report on Form 10-Q for the quarter ended December 31,
1994; (ii) the representations and disclosures contained in or delivered
pursuant to the Agreement and Plan of Merger among Celcor, Inc., Northeast
(USA) Corp. and the Stockholders of Northeast (USA) Corp. (the "Merger
Agreement"); and (iii) independent investigations made by the undersigned in
making its decision to accept the Common Stock. No other representations,
warranties or favorable descriptive statements about the business of the
Company or the Common Stock have been made to the undersigned.
(f) The undersigned has accurately completed the Questionnaire
annexed hereto as Exhibit A and hereby incorporates by reference into this
Exchange Agreement the information and representations contained therein.
Section Representations Relating to Authority.
The undersigned represents and warrants that:
(a) It is duly incorporated or organized, validly existing and
in good standing in its state and/or country of incorporation or organization
and in all other jurisdictions in which the character of its business makes
such qualification necessary.
(b) It has full power and authority to enter into, deliver and
perform this Exchange Agreement and the Merger Agreement and it has taken all
action required to authorize the execution and delivery of this Agreement and
the Merger Agreement and to consummate the transactions contemplated hereby
and thereby. This Agreement and the Merger Agreement are the valid and
binding obligations of the undersigned shareholder, enforceable against it in
accordance with its terms and the person signing such documents on behalf of
the undersigned has been duly authorized to act on behalf of and to bind the
undersigned.
(c) The execution and delivery of this Agreement and the Merger
Agreement and the consummation of the transactions contemplated hereby and
thereby will not violate any provision of the certificate of incorporation and
by-laws, or any other organizational document or any agreement or contract to
which the undersigned is a party or by which it is bound, or any applicable
law, ordinance, rule or regulation of any governmental body having
jurisdiction over the undersigned or its business or any order, judgment or
decree applicable to the undersigned.
Section Miscellaneous.
(a) Notices. All notices or other communications given or made
hereunder shall be in writing and shall be delivered or mailed by registered
or certified mail, return receipt requested, postage prepaid to the
undersigned at the address set forth below and to the Company at the following
address: 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000.
(b) Governing Law. Notwithstanding the place where this
Agreement may be executed by any of the parties hereto, the parties expressly
agree that all the terms and provisions hereof shall be governed by, and
construed in accordance with, the laws of the State of New Jersey without
regard to the choice of law principles thereof.
(c) Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto, their personal
representatives, successors and assigns; provided that neither party shall be
entitled to make any assignment of its rights hereunder without the prior
written consent of the other party.
(d) Further Assurances. The parties agree that they shall
execute and deliver any and all additional writings, instruments, and other
documents contemplated hereby or referred to herein and shall take such
further action as shall be reasonably required in order to effectuate the
terms and conditions of this Agreement.
(e) Interpretation. Whenever required by the context hereof,
the singular shall include the plural, and vice-versa; the masculine shall
include the feminine and neuter genders, and vice-versa; and the word "person"
shall include an individual, corporation, partnership, trust, estate or other
entity. Section headings contained in this Agreement are for reference
purposes and shall not affect the meaning or interpretation of this Agreement.
Section Foreign Person. (check one)
_____ The undersigned hereby certifies that it is not a "foreign person"
within the meaning of Section 7701(a)(30) of the Internal Revenue Code and
agrees to notify the Company prior to becoming a foreign person as so defined.
A "foreign person" is a person who is not a citizen or resident of the United
States.
_______ The undersigned hereby certifies that it is a "foreign person" within
the meaning of Section 7701(a)(30) of the Internal Revenue Code.
IN WITNESS WHEREOF, the undersigned has executed this Exchange
Agreement, this _________ day of ________________, 1995.
ATTEST
____________________________________
Stockholder Name
By: ______________________________
Name:____________________
Title:_____________________
________________________________
________________________________
Address
________________________________
Telephone Number
________________________________
Subscriber Taxpayer I.D. No.
QUESTIONNAIRE
This form should be completed by a corporate officer of the Stockholder.
1. Please furnish the following information:
Name of Stockholder: ___________________________________
Name of person completing form: ________________________
Address:________________________________________________
Telephone Number: ( )__________________________________
Taxpayer Identification Number(s) of Stockholder:_______
Provide the following information for the person making investment decisions
for the Stockholder:
2. Employment Information:
Occupation or Profession(s): ______________________________________
Current Position or Title: ________________________________________
Length of Time in Present Position:________________________________
Nature of Business: _______________________________________________
Name and Address of Employer(s):___________________________________
Office Telephone Number: ( )_____________________________________
3. List any business or professional education, including degrees received,
if any:
_______________________________________________________________________________
_______________________________________________________________________________
4. List any professional licenses or registrations, including bar
admissions, accounting certificates, real estate brokerage licenses, and
SEC, NASD, or state broker-dealer registrations held by you:
5(a). If the Stockholder is an accredited investor within the meaning of
Section 501(a) of Regulation D, as adopted pursuant to the Securities Act of
1933, check the appropriate box below to indicate the basis upon which the
undersigned stockholder qualifies as an accredited investor:
CHECK THE APPROPRIATE BOX(ES).
Subscriber is:
[ ] A corporation, business trust or partnership which has not been formed
for the purpose of making this investment and which has total assets
in excess of $5,000,000.
[ ] An entity which has not been formed for the purpose of making an
investment in the Company and in which all of the equity owners are
qualified accredited investors, on the basis of income (annual income
of not less than $200,000, or $300,000 with a spouse) or net worth (not
less than $1,000,000 net worth, including home, furnishings and
automobiles).
5(b). The undersigned stockholder is not an accredited investor _____________.
Approximate net worth $_______________.
6. Rule 506 of the Securities and Exchange Commission requires that each
purchaser have sufficient knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
an investment in the Common Stock, or that such purchaser retain the
services of a Purchaser Representative (who may be an attorney, accountant
or other financial advisor) for the purpose of this particular
transaction.
I hereby represent that:
The officers and professional advisors of the undersigned stockholder have
such knowledge and experience in financial and business matters that they
are capable of evaluating the merits and risks of an investment in the
Common Stock.
I understand that the Company will be relying on the accuracy and
completeness of my responses to the questions in this questionnaire and I
represent and warrant to the Company as follows:
(i) The answers to the above questions are complete and correct and may
be relied upon by the Company in determining whether the offering
in connection with which I have executed this questionnaire is
exempt from registration under the Securities Act of 1933, pursuant
to Rule 506 or otherwise; and
(ii) I will notify the Company immediately of any material change in any
statement made herein that occurs prior to the consummation of the
Merger.
Date: Stockholder Name: __________________________
Signed by: _________________________________
Title: _____________________________________
APPENDIX B
_____________, 1995
Celcor, Inc.
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Dear Ladies and Gentlemen:
We have acted as counsel to Northeast (USA) Corp., a New York corporation (the
"Company" or "Northeast"), in connection with its merger with Celcor, Inc.
("Celcor"), pursuant to an Agreement and Plan of Merger among the Company,
Celcor and the stockholders of Northeast (the "Northeast Stockholders"), dated
as of __________, 1995 (the "Agreement"). This opinion is delivered pursuant
to Section 7.06 of the Agreement. Capitalized terms not otherwise defined
herein shall have the meanings provided in the Agreement.
As counsel to the Company, we have reviewed the Agreement and have examined
such corporate records, certificates and other documents, and have considered
such questions of law as we considered appropriate for purposes of rendering
this opinion. In our examination of such records and documents, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals and the conformity to authentic documents of all
documents submitted to us as certified, conformed or photostatic copies.
As to certain factual matters material to the opinions expressed herein, we
have relied on the representations of Northeast in the Agreement and on
certificates of public officials and officers of Northeast, all without
independent investigation.
In this opinion, we express no opinion as to the laws of any jurisdiction
other than the federal laws of the United States of America, the laws of the
State of New York and to the extent relevant, The People's Republic of China.
Based upon the foregoing and subject to the qualifications, exceptions and
limitations set forth herein, we are of the opinion that:
7. The Company is duly organized, validly existing and in good standing
under the laws of the State of New York and has all requisite corporate power,
franchises and licenses to own its property and conduct the business in which
it is engaged.
8. The Company has the corporate power and authority to enter into and
perform the Agreement.
9. The Company does not directly or indirectly have any subsidiaries, nor
hold any equity interest in any corporation, partnership or joint venture,
other than Shenyang United Vitatech Ltd. and Northeast (Shenyang) Consulting
Co. Ltd. (together, the "Subsidiaries"). The Subsidiaries are each
corporations, duly organized, validly existing and in good standing under the
laws of The Peoples Republic of China, and each has all requisite corporate
power, licenses and franchises to own its properties and assets and conduct
the business in which it is engaged.
10. The Company has an authorized capital stock consisting of 200 shares of
common stock, no par value, of which 175 shares are presently issued and
outstanding. The outstanding shares of Northeast common stock are validly
issued, fully paid and non-assessable.
11. To the best of our knowledge, the Company does not have outstanding any
subscriptions, options, rights, warrants, convertible securities or other
agreements or commitments to issue, or contracts or any other agreements
obligating Northeast to issue, or to transfer from treasury, any shares of its
capital stock of any class or kind, or securities convertible into such stock.
No persons who are now holders of Northeast Stock, and no persons who
previously were holders of Northeast Stock, are or ever were entitled to pre-
emptive rights, other than persons who exercised or waived those rights.
12. The Company and each Subsidiary is duly qualified to conduct business as
a foreign corporation in each state or other jurisdiction in which it is
required to be so qualified.
13. To the best of our knowledge, neither the Company nor any Subsidiary
transacts business under any trade name or fictitious name.
14. The execution and delivery of this Agreement and the consummation
of the transaction contemplated thereby (the "Transaction") have been duly
authorized by the Board of Directors and Northeast Stockholders. The
Agreement constitutes the legal, valid and binding obligation of Northeast,
enforceable against it and its shareholders in accordance with its terms,
except insofar as the enforcement thereof may be limited by bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors' rights
generally and subject to equitable principles limiting the availability of
equitable remedies. All persons who have executed this Agreement on behalf of
Northeast have been duly authorized to do so.
15. Neither the execution of this Agreement, nor consummation of the
Transaction will (a) violate any order, writ, injunction, statute, rule or
regulation applicable to Northeast or any of its Subsidiaries, or (b) require
the consent, approval, authorization or permission of, or the filing with or
the notification of any Chinese or U.S. federal, state or local government
agency. Neither the execution nor the performance of this Agreement by
Northeast will conflict with, violate or result in a breach or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default), or result in the termination of, or accelerate the
performance required by, or result in the creation of any lien or encumbrance
upon any of the assets of Northeast or any of its Subsidiaries under any
provision of the certificate of incorporation or by-laws of Northeast or its
Subsidiaries, or any indenture, mortgage, lien, material lease, agreement, or
other material contract or instrument known to us, or any order, judgment or
decree of which we are aware, or any statute, ordinance or regulation to which
Northeast or its Subsidiaries are subject or by which they are bound.
16. To the best of our knowledge (i) there are no infringement or other
claims or demands against Northeast or its Subsidiaries with respect to any
items of intangible personal property; and (ii) no proceedings have been
instituted, are pending, or have been threatened to terminate or cancel
any agreement affording to Northeast the right to use any intangible asset,
or which challenge the rights of Northeast or its Subsidiaries with respect to
any of its intangible assets.
17. To the best of our knowledge, Northeast is not in default of any of
its obligations under the Joint Venture Agreement and related regulations
with China Northeast Pharmaceutical Factory pursuant to which Shenyang
United Vitatech Pharmaceutical Factory was established and such agreement
is in full force and effect.
18. To the best of our knowledge, (i) the Company and its Subsidiaries
and their respective employees or agents have all material licenses, permits,
orders, approvals and authorizations required by Northeast or any such
Subsidiary for the conduct of business as presently and anticipated to be
conducted (including both U.S. and Chinese licenses, permits, authorizations
or approvals); (ii) Northeast and its Subsidiaries are acting within the terms
of such licenses, permits, orders, and approvals; (iii) neither Northeast nor
any of its Subsidiaries has received any notice of investigation, evaluation
or suspension of any such licenses, permits, orders, approvals or
authorizations; and (iv) no suspension or cancellation of any such licenses,
permits, orders, approvals and authorizations has been threatened or is
contemplated.
19. To the best of our knowledge, the Company and its Subsidiaries are
in compliance with all Chinese and U.S. laws, ordinances, regulations,
judgments, orders or decrees applicable to the conduct of the business of
each, or to the assets owned, used, or occupied by each, and neither
Northeast nor any of its Subsidiaries has received notice or advices
to the contrary.
20. To our best knowledge (i) there are no legal, administrative,
arbitration or other proceedings or claims pending or threatened, against
Northeast; (ii) Northeast is not subject to any existing judgment which might
affect the financial condition, business, property or prospects of Northeast;
(iii) Northeast has not received any inquiry from an agency of the federal or
of any state or local government about the Transaction, or about any violation
or possible violation of any law, regulation or ordinance affecting its
business or assets; and (iv) Northeast has not been subject to any products
liability claims during the three years ended on the date of this Agreement.
Upon the filing of the Certificate of Merger with the Secretary of
State of New York, the merger will have become effective in accordance with
the provisions of the Business Corporation Law of the State of New York.
This opinion is rendered to you solely for your benefit in connection with the
Agreement. This opinion may not be relied upon by you for any other purpose,
nor may it be disclosed to or relied upon by any other person, firm or
corporation for any purpose without our prior written consent.
Very truly yours,
CHA & PAN
By: ________________________
___________________, Esq.
APPENDIX C
[Letterhead of Xxxxxxxxxx, Sandler, Kohl, Xxxxxx & Xxxxxx]
_____________, 0000
Xxxxxxxxx (XXX) Corp.
000-00 00xx Xxx.
Xxxxxxxx, X.X. 00000
Dear Ladies and Gentlemen:
We have acted as counsel to Celcor, Inc., a Delaware corporation (the
"Company"), in connection with its merger with Northeast (USA) Corp.
("Northeast"), pursuant to an Agreement and Plan of Merger among the Company,
Northeast and the stockholders of Northeast (USA) Corp. (the "Northeast
Stockholders"), dated as of __________, 1995 (the "Agreement"). This opinion
is delivered pursuant to Section 8.05 of the Agreement. Capitalized terms not
otherwise defined herein shall have the meanings provided in the Agreement.
As counsel to the Company, we have reviewed the Agreement and have examined
such corporate records, certificates and other documents, and have considered
such questions of law as we considered appropriate for purposes of rendering
this opinion. In our examination of such records and documents, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals and the conformity to authentic documents of all
documents submitted to us as certified, conformed or photostatic copies.
As to certain factual matters material to the opinions expressed herein, we
have relied on the representations of Celcor in the Agreement and on
certificates of public officials and officers of Celcor, all without
independent investigation.
In this opinion, we express no opinion as to the laws of any jurisdiction
other than the federal laws of the United States of America, the laws of the
State of New Jersey and to the extent relevant, the laws of the State of
Delaware.
Based upon the foregoing and subject to the qualifications, exceptions and
limitations set forth herein, we are of the opinion that:
22. The Company is validly existing and in good standing under the laws of
Delaware.
23. The Company has the corporate power and authority to enter into and
perform the Agreement.
24. The Company has an authorized capital stock consisting of 20,000,000
shares of common stock, par value $0.001 per share, and 2,000,000 shares of
preferred stock, par value $0.001 per share. The shares of Celcor common
stock being issued to the Northeast Stockholders upon consummation of the
merger will be validly issued, fully paid and non-assessable.
25. The execution and delivery of this Agreement and the consummation
of the Transaction have been duly authorized by the Board of Directors of
Celcor. This Agreement constitutes the legal, valid and binding obligation of
Celcor, enforceable against it in accordance with its terms, except insofar as
the enforcement thereof may be limited by bankruptcy, insolvency, or similar
laws affecting the enforcement of creditors' rights generally and subject to
equitable principles limiting the availability of equitable remedies. All
persons who have executed this Agreement on behalf of Celcor have been duly
authorized to do so.
26. Except for the need to obtain the consent of its stockholders, which
consent has been obtained, neither the execution nor the performance of
this Agreement by Celcor requires the consent of any third party, nor will it
violate or result in a breach or constitute a default under any provision of
the certificate of incorporation or by-laws of Celcor, or any indenture,
mortgage, lien, material lease, agreement, or other material contract or
instrument known to us, or any order, judgment or decree of which we are
aware, or any statute, ordinance or regulation to which Celcor is subject or
by which it is bound.
27. To our best knowledge (i) there are no legal, administrative,
arbitration or other proceedings or claims pending or threatened, against
Celcor; (ii) Celcor is not subject to any existing judgment which might affect
the financial condition, business, property or prospects of Celcor; (iii)
Celcor has not received any inquiry from an agency of the federal or of any
state or local government about the Transaction, or about any violation or
possible violation of any law, regulation or ordinance affecting its business
or assets; and (iv) Celcor has not been subject to any products liability
claims during the three years ended on the date of this Agreement.
28. Upon the filing of the Certificate of Merger with the Secretary of
State of Delaware, the merger will have become effective in accordance with
the provisions of the Delaware General Corporation Law.
This opinion is rendered to you solely for your benefit in connection with the
Agreement. This opinion may not be relied upon by you for any other purpose,
nor may it be disclosed to or relied upon by any other person, firm or
corporation for any purpose without our prior written consent, except that
copies of this opinion may be furnished to and relied upon by the Northeast
Stockholders.
Very truly yours,
XXXXXXXXXX, SANDLER, KOHL,
XXXXXX & XXXXXX
A Professional Corporation
By: ________________________
Xxxxxx J, Mazin, Esq.
A Member of the Firm
