UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) July 30, 2002
Commission File Number 0-33215
EMPS CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
NEVADA 87-0617371
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
875 Donner Way, Unit 705, Salt Lake City, Utah
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(Address of principal executive offices)
84108
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(Zip Code)
(801) 582-1881
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(Registrant's Executive Office Telephone Number)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
On February 28, 2002, EMPS Corporation (the "Company") entered into an
Agreement and Plan of Reorganization (the "Agreement") whereby the Company
agreed to acquire all of the issued and outstanding shares of Caspian Services
Group Limited, a British Virgin Island corporation ("Caspian") in exchange for
27,089,700 restricted common shares to be issued by the Company. Pursuant to the
terms of the Agreement, Caspian would become a wholly owned subsidiary of the
Company and the Caspian shareholders would assume the controlling interest in
EMPS Corporation. The Agreement was subject to approval of the shareholders of
the Company.
On May 29, 2002, the Company held a Special Meeting of Stockhholders.
At that meeting, the shareholders of the Company ratified the Agreement. The
Agreement was consummated on July 30, 2002. At the Special Meeting of
Stockholders, the shareholders elected three new directors to the Company's
Board of Directors - Mirgali Kunayev, Paul A. Roberts and Marat Cherdabayev. Mr.
Kunayev currently serves as a Vice President of Caspian. Mr Roberts is currently
the President and Chairman of the Board of Directors of Caspian. Mr. Cherdabayev
was recently appointed as Secretary of EMPS Corporation.
Following consummation, the two Caspian shareholders, Elcan Nominees
Limited and Mohul Nominees Limited were issued 27,089,700 restricted common
shares, which represents 90% of the issued and outstanding common shares of the
Company. Pursuant to the terms of the Agreement, Elcan Nominees Limited received
9,752,408 and Mohul Nominees Limited received 17,337,408. Mr Roberts may be
deemed to be the beneficial owner of 3,250,764 of the shares received by Elcan
Nominees Limited.
ITEM 2. ACQUISITION AND DISPOSITION OF ASSETS
As disclosed in Item 1 above, on July 30, 2002 the Company acquired all
of the assets and business of Caspian in exchange for the 27,089,700 restricted
common shares. As discussed in greater detail in Item 5 below, the primary
assets of Caspian include: a) a fleet of three specialized shallow draft
vessels; the Baskunchak, Caspian Yelena and Caspian Maria; and b) two joint
ventures located in the Port of Bautino on the Caspian Sea - a water
desalinization plant, and a development company which is currently building a
hotel that will be managed by the joint venture when it is completed. The
Company intends to continue the business of Caspian.
The amount of the consideration given for the acquisition was
determined pursuant to arm's length negotiations between the parties. Prior to
consummation of the Agreement the Company and Caspian shared no common officers,
directors or affiliates.
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ITEM 5. OTHER EVENTS
Information about Caspian Services Group, Limited
Caspian was incorporated in the British Virgin Islands on December 22,
1999, and has been primarily engaged in providing services to the oil and gas
industry in the Republic of Kazakhstan. Caspian carries out its primary business
activities from its branch located in Aktau, Kazakhstan, which has been
registered with the Ministry of Justice of the Republic of Kazakhstan since
April of 2000. Caspian currently employs 32 persons.
In recent years, the Republic of Kazakhstan has undergone substantial
political and economic changes which have created an emerging market. As a
result, Kazakhstan in general, has been successful in attracting investment
interest from oil and gas exploration and development companies. We believe that
the current infrastructure in Kazakhstan is insufficient to support and service
the new interest and investments being made by the oil and gas companies. We
hope to position Caspian to provide a range of services to these oil and gas
companies.
The current services provided by Caspian include the chartering of a
fleet of three specialized shallow draft vessels; the Baskunchak, Caspian Yelena
and Caspian Maria (collectively the "Vessels"). The Vessels are uniquely suited
to work in the shallow waters of the northeast Caspian Sea. These Vessels are
chartered by, and provide support services to, oil and gas contractors in the
Kazakh sector of the North Caspian Sea. The associated support services include
maintenance and upkeep of the Vessels, staffing the Vessels with a marine crew,
accommodations and meals on the Vessels, laundry and other related services to
those on the Vessels.
In addition, Caspian is a partner in two joint ventures located in the
Port of Bautino on the Caspian Sea. The Port of Bautino is the northernmost bay
in the Caspian Sea that does not freeze during the winter months.
Caspian's first joint venture in the Port of Bautino is a water
desalinization plant which purifies, bottles and markets and sells water. The
second joint venture is a development company which is constructing a hotel that
the joint venture will manage and operate. Caspian expects the first phase of
the hotel to be completed during the third quarter of 2002.
Caspian plans to expand its marine fleet to include supply, work and
survey vessels as well as barges and tug boats. As part of a natural progression
Caspian plans to develop a marine base on real property it currently owns in the
Port of Bautino. Eventually Caspian desires to also develop an emergency
response service that would react to offshore oil spills on the Caspian Sea.
Finally, Caspian is considering the development of an offshore seismic
exploration program.
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Caspian's competition includes varying local companies to large
worldwide corporations. We expect competition to be intense. Caspian's offshore
division currently has no known local competition, but does have to compete with
many larger foreign companies. We believe that Caspian has an advantage over
these larger companies because it has extensive experience operating vessels in
the Caspian Sea and conducting business within and complying with the laws and
regulations of the Republic of Kazakhstan. In addition, Caspian has developed
strong relationships with government authorities and other local companies.
ITEM 6. RESIGNATION OF REGISTRANT'S DIRECTORS
As discussed in Item 2 above, at the Special Meeting of Stockholders
the Company's shareholders elected three new members to the Company's Board of
Directors. The Company's prior directors declined to stand for reelection. To
the Company's knowledge neither director declined to stand for reelection as a
result of a disagreement with the Company on any matter relating to Company
operations, policies or practices.
Following are the names and a brief description of the experience of
the Company's new directors.
Mirgali Kunayev. Mr. Kunayev has been a Vice President for Caspian
Services Group Limited since 2000. Mr. Kunayev's primary responsibilities
include marine oil operations support, construction of infrastructure within the
Caspian region and negotiation of service contracts. From 1998 to 2000, Mr.
Kunayev was the President of OJSC Kazakhstancaspishelf. During that time he
worked collaboratively on the international project JNOC-KazakhOil with
geophysical companies including, JGI, Schlumberger, Western Geophysical and PGS.
From 1995 to 1998, Mr. Kunayev served as President of International Geophysics,
Ltd. He was primarily responsible to oversee geological-geophysical operations
and exploratory drilling. In January 2002, Mr. Kunayev earned a Ph.D. under the
discipline of Geological and Mineralogical Science from the Moscow Geological
University in Moscow, Russia. Mr. Kunayev is 45 years old.
Paul A. Roberts. Mr. Roberts has worked for Caspian Services Group
Limited since 2001. He was appointed President and Chairman of the Board of
Caspian Services in February 2002 where he oversees Caspian's operations. Prior
to that time, Mr. Roberts was a Vice President. As such, he was responsible for
business development, financial planning, contracts, marketing and operations in
Kazakhstan and Central Asia. In this position, he worked closely with government
authorities and state and local businesses. From 1999 to 2001, Mr. Roberts was
an Area Manager for PGS Onshore, Inc., in Almaty Kasakhstan. As Area Manager, he
was responsible for seismic exploration. He also performed many of the same
duties he performed in his capacity as Vice President of Caspian. From 1997 to
1999, Mr. Roberts was the Resident Manager for PetroAlliance (WGS) in Almaty,
Kazakhstan. He was responsible for land and marine seismic exploration. He also
oversaw business and financial planning, contract negotiations and operations in
Kazakhstan and Central Asia. Mr. Roberts is 45 years old.
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Marat Cherdabayev. Since January 2001, Mr. Cherdabayev has worked in
the Department of Project Finance at OJSC Kazakhtelecom in Almaty, Kazakhstan.
He currently serves as the Head of Project Planning and Monitoring, with
responsibility for analyzing the financial feasibilty of investment projects.
From October 2000 to January 2001, Mr. Cherdabayev served as the Advisor to the
President of TNS Plus, a private telecommunications company in Almaty,
Kazakhstan. In that capacity, he developed and advised the president on
marketing strategies, marketing analysis and optimization issues. From January
1999 to June 1999, Mr. Cherdabayev was a Mutual Fund Accountant for State Street
Corporation, in Boston, Massachusetts. His primary duties included producing and
verifying daily financial statements, monitoring general ledger activity and
pricing and reconciling five mutual funds on a daily basis. From January 1998 to
June 1998, Mr. Cherdabayev was a Financial Reporting Assistant at Boston Edison
in Boston Massachusetts. Mr. Cherdabayev graduated with a Bachelor of Science in
Business Adminstration from Northeastern University in June 2000. Mr.
Cherdabayev is 27 years old. Mr. Cherdabayev was also recently appointed as
Secretary of EMPS Corporation.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements.
The Company will file the following financial statements by
amendment to this filing within 60 days of this filing:
I. Audited Financial Statements of EMPS Corporation for
the Year Ended December 31, 2001;
II. Unaudited Financial Statements of EMPS Corporation
for the Six Months Ended June 30, 2002;
III. Audited Financial Statements of Caspian Services
Group Limited for the Year Ended December 31, 2001;
and
VI. Unaudited Financial Statements of Caspian Services
Group Limited for the Six Months Ended June 30, 2002.
(b) Pro Forma Information.
The Company will file the required pro forma financial
statements by amendment to this filing within 60 days of this
filing.
(c) Exhibits. The following exhibits are included as part of this
report:
Exhibit SEC
Number Ref. Title of Document Location
2 2.01 Agreement and Plan Attached
of Reorganization
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Current Report on Form 8-K to be signed on
its behalf by the undersigned hereunto duly authorized.
EMPS CORPORATION
Date: August 8, 2002 By /s/ Louis Naegle
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Louis Naegle, President
Date: August 8, 2002 By: /s/ Marat Cherdabayev
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Marat Cherdabayev, Secretary
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EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization ("the Agreement"), dated as
of the 28th day of February, 2002, by and between EMPS Corporation, a Nevada
corporation ("EMPS") and Caspian Services Group Limited, a British Virgin
Islands corporation ("Caspian") and the shareholders of Caspian, Mohul Nominees
Limited and Elcan Nominees Limited ("Shareholders"), with reference to the
following:
A. EMPS is a Nevada corporation organized in 1998. EMPS has authorized
capital stock of 150,000,000 shares, $.001 par value, of which 2,910,300 shares
are currently issued and outstanding. The common shares of EMPS are registered
under section 12(g) of the Securities Exchange Act of 1934 and are traded on the
OTCBB under the symbol EPSC. EMPS has a wholly owned subsidiary, EMPS Research
Corporation, a Utah Corporation ("EMPS Research").
B. Caspian is a privately held corporation organized under the laws of
the British Virgin Islands on December 22, 1999.
C. The respective Boards of Directors of EMPS and Caspian and the
shareholders of Caspian have deemed it advisable and in the best interests of
the Parties that Caspian be acquired by EMPS, pursuant to the terms and
conditions set forth in this Agreement.
D. The Parties propose to enter into this Agreement which provides
among other things that all of the outstanding shares of Caspian be acquired by
EMPS, in exchange for shares of EMPS and such additional items as more fully
described in the Agreement.
E. The parties desire the transaction to qualify as a tax-free
reorganization under Section 368 (a)(1)(B) of the Internal Revenue Code of 1986,
as amended.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
THE ACQUISITION
1.01 At the Closing, a total of 100 common shares, which represents all
of the outstanding shares of Caspian shall be acquired by EMPS in exchange for
27,089,700 restricted common shares of EMPS. The shares of EMPS to be issued in
this transaction shall be issued as set forth in Exhibit A to this Agreement.
1.02 At the Closing, the Caspian shareholders will deliver certificates
for the outstanding shares of Caspian, duly endorsed so as to make EMPS the sole
holder thereof, free and clear of all claims and encumbrances and EMPS shall
deliver a transmittal letter directed to the transfer agent
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of EMPS directing the issuance of shares to the shareholders of Caspian as set
forth on Exhibit A of this Agreement.
1.03 Following the reorganization, there will be a total of 30,000,000
shares, $.001 par value, issued and outstanding in EMPS.
1.04 Following the reorganization, Caspian will be a wholly owned
subsidiary of EMPS.
ARTICLE 2
THE CLOSING
2.01 The consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place at 136 East South Temple, Suite
1700-A, Salt Lake City, UT 84111 on or before July 30, 2002, (the "Closing
Date") or at such other place or date and time as may be agreed to in writing by
the parties hereto.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF EMPS
EMPS hereby represents and warrants to Caspian as follows:
3.01 EMPS shall deliver to Caspian, on or before Closing, each of the
following:
(a) Financial Statements. Audited financial statements of EMPS
including, but not limited to, balance sheets and profit and loss
statements from inception to its fiscal year ended December 31, 2001,
prepared in accordance with United States generally accepted accounting
principles and which fairly present the financial condition of EMPS at
the dates thereof. (Schedule A)
(b) Property. An accurate list and description of all
property, real or personal, owned by EMPS of a value equal to or
greater than $1,000.00. (Schedule B.)
(c) Liens and Liabilities. A complete and accurate list of all
material liens, encumbrances, easements, security interests or similar
interests in or on any of the assets listed on Schedule A. (Schedule
C.) A complete and accurate list of all debts, liabilities and
obligations of EMPS incurred or owing as of the date of this Agreement.
(Schedule C.1.)
(d) Leases and Contracts. A complete and accurate list
describing all material terms of each lease (whether of real or
personal property) and each contract, promissory note, mortgage,
license, franchise, or other written agreement to which EMPS is a party
which involves or can reasonably be expected to involve aggregate
future payments or receipts by EMPS (whether by the terms of such
lease, contract, promissory note, license, franchise or other written
agreement or as a result of a guarantee of the payment of or indemnity
against the failure to pay same) of $1,000.00 or more annually during
the twelve-month period ended
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December 31, 2001, or any consecutive twelve-month period thereafter,
except any of said instruments which terminate or are cancelable
without penalty during such twelve-month period. (Schedule D.)
(e) Loan Agreements. Complete and accurate copies of all loan
agreements and other documents with respect to obligations of EMPS for
the repayment of borrowed money. (Schedule E.)
(f) Consents Required. A complete list of all agreements
wherein consent to the transaction herein contemplated is required to
avoid a default thereunder; or where notice of such transaction is
required at or subsequent to closing, or where consent to an
acquisition, consolidation, or sale of all or substantially all of the
assets is required to avoid a default thereunder. (Schedule F.)
(g) Articles and Bylaws. Complete and accurate copies of the
Certificate and Articles of Incorporation and Bylaws of EMPS together
with all amendments thereto to the date hereof. (Schedule G.)
(h) Shareholders. A complete list of all persons or entities
holding capital stock of EMPS or any rights to subscribe for, acquire,
or receive shares of the capital stock of EMPS (whether warrants,
calls, options, or conversion rights), including copies of all stock
option plans whether qualified or nonqualified, and other similar
agreements. (Schedule H.)
(i) Officers and Directors. A complete and current list of all
Officers and Directors of EMPS. (Schedule I.)
(j) Salary Schedule. A complete and accurate list (in all
material respects) of the names and the current salary rate for each
present employee of EMPS who received $1,000.00 or more in aggregate
compensation from EMPS whether in salary, bonus or otherwise, during
the year 2001, or who is presently scheduled to receive from EMPS a
salary in excess of $1,000.00 during the year ending December 2001,
including in each case the amount of compensation received or scheduled
to be received, and a schedule of the hourly rates of all other
employees listed according to departments. (Schedule J.)
(k) Litigation. A complete and accurate list (in all material
respects) of all material civil, criminal, administrative, arbitration
or other such proceedings or investigations (including without
limitations unfair labor practice matters, labor organization
activities, environmental matters and civil rights violations) pending
or, to the knowledge of EMPS threatened, which may materially and
adversely affect EMPS. (Schedule K.)
(l) Tax Returns. Accurate copies of all Federal and State tax
returns for EMPS for the last fiscal year. (Schedule L.)
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(m) Agency Reports. Copies of all material reports or filings
(and a list of the categories of reports or filings made on a regular
basis) made by EMPS under ERISA, EEOC, FDA and all other governmental
agencies (federal, state or local) during the last fiscal year.
(Schedule M.)
(n) Banks. A true and complete list (in all material
respects), as of the date of this Agreement, showing (1) the name of
each bank in which EMPS has an account or safe deposit box, and (2) the
names and addresses of all signatories. (Schedule N.)
(o) Jurisdictions Where Qualified. A list of all jurisdictions
wherein EMPS is qualified to do business and is in good standing.
(Schedule O.)
(p) Subsidiaries. A complete list of all subsidiaries of EMPS.
(Schedule P.) The term "Subsidiary" or "Subsidiaries" shall include
corporations, unincorporated associations, partnerships, joint
ventures, or similar entities in which EMPS has an interest, direct or
indirect.
(q) Union Matters. An accurate list and description (in all
material respects) of all union contracts and collective bargaining
agreements of EMPS, if any. (Schedule Q.)
(r) Employee and Consultant Contracts. A complete and accurate
list of all employee and consultant contracts which EMPS may have,
other than those listed in the schedule on Union Matters. (Schedule R.)
(s) Employee Benefit Plans. Complete and accurate copies of
all salary, stock options, bonus, incentive compensation, deferred
compensation, profit sharing, retirement, pension, group insurance,
disability, death benefit or other benefit plans, trust agreements or
arrangements of EMPS in effect on the date hereof or to become
effective after the date thereof, together with copies of any
determination letters issued by the Internal Revenue Service with
respect thereto. (Schedule S.)
(t) Insurance Policies. A complete and accurate list (in all
material respects) and a description of all material insurance policies
naming EMPS as an insured or beneficiary or as a loss payable payee or
for which EMPS has paid all or part of the premium in force on the date
hereof, specifying any notice or other information possessed by EMPS
regarding possible claims thereunder, cancellation thereof or premium
increases thereon, including any policies now in effect naming EMPS as
beneficiary covering the business activities of EMPS. (Schedule T.)
(u) Customers. A complete and accurate list (in all material
respects) of the customers of EMPS, including presently effective
contracts of EMPS to be assigned to EMPS, accounting for the principle
revenues of EMPS, indicating the dollar amounts of gross income of each
such customer for the period ended December 31, 2001. (Schedule U.)
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(v) Licenses and Permits. A complete list of all licenses,
permits and other authorizations of EMPS. (Schedule V.)
3.02 Organization, Standing and Power. EMPS is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada with all requisite corporate power to own or lease its properties and
carry on its businesses as are now being conducted.
3.03 Qualification. EMPS is duly qualified and is licensed as a foreign
corporation authorized to do business in each jurisdiction wherein it conducts
its business operations. Such jurisdictions, which are the only jurisdictions in
which EMPS is duly qualified and licensed as a foreign corporation, are shown in
Schedule O.
3.04 Capitalization of EMPS. The authorized capital stock of EMPS
consists of 150,000,000 shares of Common Stock, $.001 par value, of which the
only shares issued and outstanding will be 2,910,300, which shares were or will
be duly authorized, validly issued and fully paid and nonassessable. There are
no preemptive rights with respect to the EMPS stock.
3.05 Authority. The execution and delivery of this Agreement and
consummation of the transactions contemplated herein have been duly authorized
by all necessary corporate actions, including but not limited to duly and
validly authorized action and approval by the Board of Directors, on the part of
EMPS. This Agreement constitutes the valid and binding obligation of EMPS
enforceable against it in accordance with its terms, subject to the principles
of equity applicable to the availability of the remedy of specific performance.
This Agreement has been duly executed by EMPS and the execution and delivery of
this Agreement and the consummation of the transactions contemplated by this
Agreement shall not result in any breach of any terms or provisions of EMPS's
Certificate and Articles of Incorporation or Bylaws or of any other agreement,
court order or instrument to which EMPS is a party or bound by.
3.06 Absence of Undisclosed Liabilities. EMPS has no material
liabilities of any nature, whether fixed, absolute, contingent or accrued, which
were not reflected on the financial statements set forth in Schedule A or
otherwise disclosed in this Agreement or any of the Schedules or Exhibits
attached hereto.
3.07 Absence of Changes. Since December 31, 2001 there has not been any
material adverse change in the condition (financial or otherwise), assets,
liabilities, earnings or business of EMPS, except for changes resulting from
completion of those transactions described in Section 5.01.
3.08 Tax Matters. All taxes and other assessments and levies which EMPS
is required by law to withhold or to collect have been duly withheld and
collected, and have been paid over to the proper government authorities or are
held by EMPS in separate bank accounts for such payment or are represented by
depository receipts, and all such withholdings and collections and all other
payments due in connection therewith (including, without limitation, employment
taxes, both the employee's and employer's share) have been paid over to the
government or placed in a separate and
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segregated bank account for such purpose. There are no known deficiencies in
income taxes for any periods and further, the representations and warranties as
to absence of undisclosed liabilities contained in Section 3.06 includes any and
all tax liabilities of whatsoever kind or nature (including, without limitation,
all federal, state, local and foreign income, profit, franchise, sales, use and
property taxes) due or to become due, incurred in respect of or measured by EMPS
income or business prior to the Closing Date.
3.09 Options, Warrants, etc. Except as otherwise described in Schedule
H, there are no outstanding options, warrants, calls, commitments or agreements
of any character to which EMPS or its shareholders are a party or by which EMPS
or its shareholders are bound, or are a party, calling for the issuance of
shares of capital stock of EMPS or any securities representing the right to
purchase or otherwise receive any such capital stock of EMPS.
3.10 Title to Assets. Except for liens set forth in Schedule C, EMPS is
the sole unconditional owner of, with good and marketable title to, all assets
listed in the schedules as owned by it and all other property and assets are
free and clear of all mortgages, liens, pledges, charges or encumbrances of any
nature whatsoever.
3.11 Agreements in Force and Effect. Except as set forth in Schedules D
and E, all material contracts, agreements, plans, promissory notes, mortgages,
leases, policies, licenses, franchises or similar instruments to which EMPS is a
party are valid and in full force and effect on the date hereof, and EMPS has
not breached any material provision of, and is not in default in any material
respect under the terms of, any such contract, agreement, plan, promissory note,
mortgage, lease, policy, license, franchise or similar instrument which breach
or default would have a material adverse effect upon the business, operations or
financial condition of EMPS.
3.12 Legal Proceedings, Etc. Except as set forth in Schedule K, there
are no civil, criminal, administrative, arbitration or other such proceedings or
investigations pending or, to the knowledge of either EMPS or the shareholders
thereof, threatened, in which, individually or in the aggregate, an adverse
determination would materially and adversely affect the assets, properties,
business or income of EMPS. EMPS has substantially complied with, and is not in
default in any material respect under, any laws, ordinances, requirements,
regulations or orders applicable to its businesses.
3.13 Governmental Regulation. To the knowledge of EMPS and except as
set forth in Schedule K, EMPS is not in violation of or in default with respect
to any applicable law or any applicable rule, regulation, order, writ or decree
of any court or any governmental commission, board, bureau, agency or
instrumentality, or delinquent with respect to any report required to be filed
with any governmental commission, board, bureau, agency or instrumentality which
violation or default could have a material adverse effect upon the business,
operations or financial condition of EMPS.
3.14 Brokers and Finders. EMPS shall be solely responsible for payment
to any broker or finder retained by EMPS for any brokerage fees, commissions or
finders' fees in connection with the transactions contemplated herein.
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3.15 Accuracy of Information. No representation or warranty by EMPS
contained in this Agreement and no statement contained in any certificate or
other instrument delivered or to be delivered to Caspian pursuant hereto or in
connection with the transactions contemplated hereby (including without
limitation all Schedules and exhibits hereto) contains or will contain any
untrue statement of material fact or omits or will omit to state any material
fact necessary in order to make the statements contained herein or therein not
misleading.
3.16 Subsidiaries. Except as listed in Schedule P, EMPS does not have
any other subsidiaries or own capital stock representing ten percent (10%) or
more of the issued and outstanding stock of any other corporation.
3.17 Consents. Except as listed in Schedule F, no consent or approval
of, or registration, qualification or filing with, any governmental authority or
other person is required to be obtained or accomplished by EMPS or any
shareholder thereof in connection with the consummation of the transactions
contemplated hereby.
3.18 Improper Payments. Neither EMPS, nor any person acting on behalf
of EMPS has made any payment or otherwise transmitted anything of value,
directly or indirectly, to (a) any official or any government or agency or
political subdivision thereof for the purpose of influencing any decision
affecting the business of EMPS (b) any customer, supplier or competitor of EMPS
or employee of such customer, supplier or competitor, for the purpose of
obtaining, retaining or directing business for EMPS or (c) any political party
or any candidate for elective political office nor has any fund or other asset
of EMPS been maintained that was not fully and accurately recorded on the books
of account of EMPS.
3.19 Copies of Documents. EMPS has made available for inspection and
copying by Caspian and its duly authorized representatives, and will continue to
do so at all times, true and correct copies of all documents which it has filed
with the Securities and Exchange Commission and all other governmental agencies
which are material to the terms and conditions contained in this Agreement.
Furthermore, all filings by EMPS with the Securities and Exchange Commission,
and all other governmental agencies, including but not limited to the Internal
Revenue Service, have contained information which is true and correct, to the
best knowledge of the Board of Directors of EMPS, in all material respects and
did not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements made therein not misleading or
which could have any material adverse effect upon the financial condition or
operations of EMPS or adversely effect the objectives of this Agreement with
respect to Caspian including, but not limited to, the issuance and subsequent
trading of the shares of common stock of EMPS to be received hereby, subject to
compliance by the shareholders of Caspian with applicable law.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
CASPIAN SERVICES GROUP LIMITED
Caspian hereby represents and warrants to EMPS as follows:
4.01 Caspian shall deliver to EMPS, on or before Closing, the
following:
(a) Financial Statements. Audited financial statements of
Caspian from its inception, through December 31, 2001, prepared in
accordance with United States generally accepted accounting principles
and which fairly present the financial condition of Caspian at the
dates thereof. (Schedule AA)
(b) Property. An accurate list and description of all
property, real or personal owned by Caspian of a value equal to or
greater than $1,000.00. (Schedule BB)
(c) Liens and Liabilities. A complete and accurate list of all
material liens, encumbrances, easements, security interests or similar
interests in or on any of the assets listed on Schedule AA. (Schedule
CC.) A complete and accurate list of all debts, liabilities and
obligations of Caspian incurred or owing as of the date of this
Agreement. (Schedule CC.1.)
(d) Leases and Contracts. A complete and accurate list
describing all material terms of material leases (whether of real or
personal property) and each contract, promissory note, mortgage,
license, franchise, or other written agreement to which Caspian is a
party which involves or can reasonably be expected to involve aggregate
future payments or receipts by Caspian (whether by the terms of such
lease, contract, promissory note, license, franchise or other written
agreement or as a result of a guarantee of the payment of or indemnity
against the failure to pay same) of $1,000.00 or more annually during
the twelve-month period ended December 31, 2001 or any consecutive
twelve-month period thereafter, except any of said instruments which
terminate or are cancelable without penalty during such twelve-month
period. (Schedule DD.)
(e) Loan Agreements. Complete and accurate copies of all loan
agreements and other documents with respect to obligations of Caspian
for the repayment of borrowed money. (Schedule EE.)
(f) Consents Required. A complete list of all agreements
wherein consent to the transaction herein contempla ted is required to
avoid a default thereunder; or where notice of such transaction is
required at or subsequent to closing, or where consent to an
acquisition, consolidation, or sale of all or substantially all of the
assets is required to avoid a default thereunder. (Schedule FF.)
8
(g) Articles and Bylaws. Complete and accurate copies of the
Articles of Incorporation and Bylaws of Caspian, together with all
amendments thereto to the date hereof. (Schedule GG.)
(h) Shareholders. A complete list of all persons or entities
holding capital stock of Caspian or any rights to subscribe for,
acquire, or receive shares of the capital stock of Caspian (whether
warrants, calls, options, or conversion rights), including copies of
all stock option plans whether qualified or nonqualified, and other
similar agreements. (Schedule HH.)
(i) Officers and Directors. A complete and current list of all
officers and Directors of Caspian. (Schedule II.)
(j) Salary Schedule. A complete and accurate list (in all
material respects) of the names and the current salary rate or each
present employee of Caspian who received $1,000 or more in aggregate
compensation from Caspian whether in salary, bonus or otherwise, during
the year 2001, or who is presently scheduled to receive from Caspian a
salary in excess of $1,000.00 during the year ending December 31, 2001,
including in each case the amount of compensation received or scheduled
to be received, and a schedule of the hourly rates of all other
employees listed according to departments. (Schedule JJ.)
(k) Litigation. A complete and accurate list (in all material
respects) of all material civil, criminal, administrative, arbitration
or other such proceedings or investigations (including without
limitations unfair labor practice matters, labor organization
activities, environmental matters and civil rights violations) pending
or, to the knowledge of Caspian threatened, which may materially and
adversely affect Caspian. (Schedule KK.)
(l) Tax Returns. Accurate copies of all tax returns of Caspian
filed in the British Virgin Islands or Kazakhstan through the period
ended December 31, 2001. (Schedule LL.)
(m) Agency Reports. Copies of all material reports or filings
(and a list of the categories of reports or filings made on a regular
basis) made by Caspian with any governmental agencies in the British
Virgin Islands or Kazakhstan. (Schedule MM.)
(n) A true and complete list (in all material respects), as of
the date of this Agreement, showing (1) the name of each bank in which
Caspian has an account or safe deposit box, and (2) the names and
addresses of all signatories. (Schedule NN.)
(o) Jurisdictions Where Qualified. A list of all jurisdictions
wherein Caspian is qualified to do business and is in good standing.
(Schedule OO.)
(p) Subsidiaries. A complete list of all subsidiaries of
Caspian. (Schedule PP.) The term "Subsidiary" or "Subsidiaries" shall
include corporations, unincorporated associations,
9
partnerships, joint ventures, or similar entities in which Caspian has
an interest, direct or indirect.
(q) Union Matters. An accurate list and description (in all
material respects of union contracts and collective bargaining
agreements of Caspian, if any. (Schedule QQ.)
(r) Employee and Consultant Contracts. A complete and accurate
list of all employee and consultant contracts which Caspian may have,
other than those listed in the schedule on Union Matters. (Schedule
RR.)
(s) Employee Benefit Plans. Complete and accurate copies of
all salary, stock option, bonus, incentive compensation, deferred
compensation, profit sharing, retirement, pension, group insurance,
disability, death benefit or other benefit plans, trust agreements or
arrangements of Caspian in effect on the date hereof or to become
effective after the date thereof, together with copies of any
determination letters issued by the Internal Revenue Service with
respect thereto. (Schedule SS.)
(t) Insurance Policies. A complete and accurate list (in all
material respects) and description of all material insurance policies
naming Caspian as an insured or beneficiary or as a loss payable payee
or for which Caspian has paid all or part of the premium in force on
the date hereof, specifying any notice or other information possessed
by Caspian regarding possible claims thereunder, cancellation thereof
or premium increases thereon, including any policies now in effect
naming Caspian as beneficiary covering the business activities of
Caspian. (Schedule TT.)
(u) Customers. A complete and accurate list (in all material
respects) of the customers of Caspian, including all presently
effective contracts of Caspian to be assigned to Caspian, accounting
for the principle revenues of Caspian, indicating the dollar amounts of
gross revenues of each such customer for the period ended December 31,
2001. (Schedule UU.)
(v) Licenses and Permits. A complete list of all licenses,
permits and other authorizations of Caspian. (Schedule VV.)
4.02 Organization, Standing and Power. Caspian is a corporation duly
organized, validly existing and in good standing under the laws of the British
Virgin Islands with all requisite corporate power to own or lease its properties
and carry on its business as is now being conducted and has a registered
corporate office in Kazakhstan with all requisite corporate power to own or
lease its properties and carry on its business as is now being conducted.
4.03 Qualification. Caspian is duly qualified and licensed as a foreign
corporation authorized to do business in each jurisdiction wherein it conducts
business operations. Such jurisdictions, which
10
are the only jurisdictions in which Caspian is duly qualified and licensed as a
foreign corporation, is shown in Schedule OO.
4.04 Capitalization of Caspian. The authorized capital stock of Caspian
consists of 50,000 shares of Common Stock, par value $1.00 per share, of which
the only shares issued and outstanding are 100 shares issued to the shareholders
listed on Schedule HH, which shares were duly authorized, validly issued and
fully paid and nonassessable. There are no preemptive rights with respect to the
Caspian stock.
4.05 Authority. The execution and delivery of this Agreement and
consummation of the transactions contemplated herein have been duly authorized
by all necessary corporate action, including but not limited to duly and validly
authorized action and approval by the Board of Directors, on the part of
Caspian. This Agreement constitutes the valid and binding obligation of Caspian,
enforceable against it in accordance with its terms, subject to the principles
of equity applicable to the availability of the remedy of specific performance.
This Agreement has been duly executed by Caspian and the execution and delivery
of this Agreement and the consummation of the transactions contemplated by this
Agreement shall not result in any breach of any terms or provisions of Caspian's
Articles of Incorporation or Bylaws or of any other agreement, court order or
instrument to which Caspian is a party or bound.
4.06 Absence of Undisclosed Liabilities. Caspian has no material
liabilities of any nature, whether fixed, absolute, contingent or accrued, which
were not reflected on the financial statements set forth in Schedule AA or
otherwise disclosed in this Agreement or any of the Schedules or Exhibits
attached hereto.
4.07 Absence of Changes. Since the date of inception, there has not
been any material adverse change in the condition (financial or otherwise),
assets, liabilities, earnings or business of Caspian, except for changes
resulting from completion of those transactions described in Section 5.02.
4.08 Tax Matters. All taxes and other assessments and levies which
Caspian is required by law to withhold or to collect have been duly withheld and
collected, and have been paid over to the proper government authorities or are
held by Caspian in separate bank accounts for such payment or are represented by
depository receipts, and all such withholdings and collections and all other
payments due in connection therewith (including, without limitation, employment
taxes, both the employee's and employer's share) have been paid over to the
government or placed in a separate and segregated bank account for such purpose.
There are no known deficiencies in income taxes for any periods and further, the
representations and warranties as to absence of undisclosed liabilities
contained in Section 4.06 includes any and all tax liabilities of whatsoever
kind or nature (including, without limitation, all federal, provincial, local
and foreign income, profit, franchise, sales, use and property taxes) due or to
become due, incurred in respect of or measured by Caspian income or business
prior to the Closing Date.
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4.09 Options, Warrants, etc. Except as otherwise described in Schedule
HH, there are no outstanding options, warrants, calls, commitments or agreements
of any character to which Caspian or its shareholders are a party or by which
Caspian or its shareholders are bound, or are a party, calling for the issuance
of shares of capital stock of Caspian or any securities representing the right
to purchase or otherwise receive any such capital stock of Caspian.
4.10 Title to Assets. Except for liens set forth in Schedule CC,
Caspian is the sole and unconditional owner of, with good and marketable title
to, all the assets and patents listed in the schedules as owned by them and all
other property and assets are free and clear of all mortgages, liens, pledges,
charges or encumbrances of any nature whatsoever.
4.11 Agreements in Force and Effect. Except as set forth in Schedules
DD and EE, all material contracts, agreements, plans, promissory notes,
mortgages, leases, policies, licenses, franchises or similar instruments to
which Caspian is a party are valid and in full force and effect on the date
hereof, and Caspian has not breached any material provision of, and is not in
default in any material respect under the terms of, any such contract,
agreement, plan, promissory note, mortgage, lease, policy, license, franchise or
similar instrument which breach or default would have a material adverse effect
upon the business, operations or financial condition of Caspian.
4.12 Legal Proceedings, Etc. Except as set forth in Schedule KK, there
are no civil, criminal, administrative, arbitration or other such proceedings or
investigations pending or, to the knowledge of Caspian, threatened, in which,
individually or in the aggregate, an adverse determination would materially and
adversely affect the assets, properties, business or income of Caspian. Caspian
has substantially complied with, and is not in default in any material respect
under, any laws, ordinances, requirements, regulations or orders applicable to
its businesses.
4.13 Governmental Regulation. To the knowledge of Caspian and except as
set forth in Schedule KK, Caspian is not in violation of or in default with
respect to any applicable law or any applicable rule, regulation, order, writ or
decree of any court or any governmental commission, board, bureau, agency or
instrumentality, or delinquent with respect to any report required to be filed
with any governmental commission, board, bureau, agency or instrumentality which
violation or default could have a material adverse effect upon the business,
operations or financial condition of Caspian. .
4.14 Broker and Finders. Caspian shall be solely responsible for
payment to any broker or finder retained by Caspian for any brokerage fees,
commissions or finders' fees in connection with the transactions contemplated
herein.
4.15 Accuracy of Information. No representation or warranty by Caspian
contained in this Agreement and no statement contained in any certificate or
other instrument delivered or to be delivered to EMPS pursuant hereto or in
connection with the transactions contemplated hereby (including without
limitation all Schedules and Exhibits hereto) contains or will contain any
untrue
12
statement of a material fact or omits or will omit to state any material fact
necessary in order to make the statements contained herein or therein not
misleading.
4.16 Subsidiaries. Except as listed in Schedule PP, Caspian does not
have any other subsidiaries or own capital stock representing ten percent (10%)
or more of the issued and outstanding stock of any other corporation.
4.17 Consents. Except as listed in Schedule FF, no consent or approval
of, or registration, qualification or filing with, any other governmental
authority or other person is required to be obtained or accomplished by Caspian
or any shareholder thereof, in connection with the consummation of the
transactions contemplated hereby.
4.18 Improper Payments. No person acting on behalf of Caspian has made
any payment or otherwise transmitted anything of value, directly or indirectly,
to (a) any official or any government or agency or political subdivision thereof
for the purpose of influencing any decision affecting the business of Caspian ,
or (b) any political party or any candidate for elective political office, nor
has any fund or other asset of Caspian been maintained that was not fully and
accurately recorded on the books of account of Caspian.
4.19 Copies of Documents. Caspian has made available for inspection and
copying by EMPS and its duly authorized representatives, and will continue to do
so at all times, true and correct copies of all documents which it has filed
with any governmental agencies which are material to the terms and conditions
contained in this Agreement. Furthermore, all filings by Caspian with
governmental agencies, including but not limited to any taxing authority, have
contained information which is true and correct in all material respects and did
not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements made therein not misleading or
which could have any material adverse effect upon the financial condition or
operations of Caspian or adversely affect the objectives of this Agreement.
4.20 Investment Intent of Shareholders. Each shareholder of Caspian
represents and warrants to EMPS that the shares of EMPS being acquired pursuant
to this Agreement are being acquired for his own account and for investment and
not with a view to the public resale or distribution of such shares and further
acknowledges that the shares being issued have not been registered under the
Securities Act and are "restricted securities" as that term is defined in Rule
144 promulgated under the Securities Act and must be held indefinitely unless
they are subsequently registered under the Securities Act or an exemption from
such registration is available.
ARTICLE 5
CONDUCT AND TRANSACTIONS PRIOR TO THE
EFFECTIVE TIME OF THE ACQUISITION
5.01 Conduct and Transactions of EMPS. During the period from the date
hereof to the date of Closing, EMPS shall:
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(a) Conduct its operations in the ordinary course of business,
including but not limited to, paying all obligations as they mature,
complying with all applicable tax laws, filing all tax returns required
to be filed and paying all taxes due;
(b) Maintain its records and books of account in a manner that
fairly and correctly reflects its income, expenses, assets and
liabilities;
EMPS shall not during such period, except in the ordinary course of
business, without the prior written consent of Caspian:
(a) Except as otherwise contemplated or required by this
Agreement, sell, dispose of or encumber any of its properties or
assets;
(b) Declare or pay any dividends on shares of its capital
stock or make any other distribution of assets to the holders thereof;
(c) Except as set forth in paragraph 5.01(c) above, issue,
reissue or sell, or issue options or rights to subscribe to, or enter
into any contract or commitment to issue, reissue or sell, any shares
of its capital stock or acquire or agree to acquire any shares of its
capital stock;
(d) Except as otherwise contemplated and required by this
Agreement, amend its Articles of Incorporation or merge or consolidate
with or into any other corporation or sell all or substantially all of
its assets or change in any manner the rights of its capital stock or
other securities;
(e) Except as contemplated or required by this Agreement, pay
or incur any obligation or liability, direct or contingent, of more
than $1,000, excluding the acquisitions identified in Paragraph B of
this Agreement;
(f) Incur any indebtedness for borrowed money, assume,
guarantee, endorse or otherwise become responsible for obligations of
any other party, or make loans or advances to any other party,
excluding the acquisitions identified in Paragraph B of this Agreement;
(g) Make any material change in its insurance coverage;
(h) Increase in any manner the compensation, direct or
indirect, of any of its officers or executive employees; except in
accordance with existing employment contracts;
(i) Enter into any agreement or make any commitment to any
labor union or organization;
14
(j) Make any capital expenditures, excluding the acquisitions
identified in Paragraph B of this Agreement.
5.02 Conduct and Transactions of Caspian. During the period from the
date hereof to the date of Closing, Caspian shall:
(a) Obtain an investment letter from each shareholder of
Caspian in a form substantially like that attached hereto as Exhibit B.
(b) Conduct the operations of Caspian in the ordinary course
of business.
Caspian shall not during such period, except in the ordinary course of
business, without the prior written consent of EMPS:
(a) Except as otherwise contemplated or required by this
Agreement, sell, dispose of or encumber any of the properties or assets
of Caspian;
(b) Declare or pay any dividends on shares of its capital
stock or make any other distribution of assets to the holders thereof;
(c) Issue, reissue or sell, or issue options or rights to
subscribe to, or enter into any contract or commitment to issue,
reissue or sell, any shares of its capital stock or acquire or agree to
acquire any shares of its capital stock;
(d) Except as otherwise contemplated and required by this
Agreement, amend its Articles of Incorporation or merge or consolidate
with or into any other corporation or sell all or substantially all of
its assets or change in any manner the rights of its capital stock or
other securities;
(e) Except as otherwise contemplated and required by this
Agreement, pay or incur any obligation or liability, direct or
contingent, of more than $1,000;
(f) Incur any indebtedness for borrowed money, assume,
guarantee, endorse or otherwise become responsible for obligations of
any other party, or make loans or advances to any other party;
(g) Make any material change in its insurance coverage;
(h) Increase in any manner the compensation, direct or
indirect, of any of its officers or executive employees; except in
accordance with existing employment contracts;
(i) Enter into any agreement or make any commitment to any
labor union or organization;
15
(j) Make any material capital expenditures.
(k) Allow any of the foregoing actions to be taken by any
subsidiary of Caspian.
ARTICLE 6
RIGHTS OF INSPECTION
6.01 During the period from the date of this Agreement to the date of
Closing of the acquisition, EMPS and Caspian agree to use their best efforts to
give the other party, including its representatives and agents, full access to
the premises, books and records of each of the entities, and to furnish the
other with such financial and operating data and other information including,
but not limited to, copies of all legal documents and instruments referred to on
any schedule or exhibit hereto, with respect to the business and properties of
EMPS or Caspian, as the case may be, as the other shall from time to time
request; provided, however, if there are any such investigations: (1) they shall
be conducted in such manner as not to unreasonably interfere with the operation
of the business of the other parties and (2) such right of inspection shall not
affect in any way whatsoever any of the representations or warranties given by
the respective parties hereunder. In the event of termination of this Agreement,
EMPS and Caspian will each return to the other all documents, work papers and
other materials obtained from the other party in connection with the
transactions contemplated hereby, and will take such other steps necessary to
protect the confidentiality of such material.
ARTICLE 7
CONDITIONS TO CLOSING
7.01 Conditions to Obligations of Caspian. The obligation of Caspian to
perform this Agreement is subject to the satisfaction of the following
conditions on or before the Closing unless waived in writing by Caspian.
(a) Representations and Warranties. There shall be no
information disclosed in the schedules delivered by EMPS which in the
opinion of Caspian would materially adversely affect the proposed
transaction and intent of the parties as set forth in this Agreement.
The representations and warranties of EMPS set forth in Article 3
hereof shall be true and correct in all material respects as of the
date of this Agreement and as of the Closing as though made on and as
of the Closing, except as otherwise permitted by this Agreement.
(b) Performance of Obligations. EMPS shall have in all
material respects performed all agreements required to be performed by
it under this Agreement and shall have performed in all material
respects any actions contemplated by this Agreement prior to or on the
Closing and EMPS shall have complied in all material respects with the
course of conduct required by this Agreement.
16
(c) Corporate Action. EMPS shall have furnished minutes,
certified copies of corporate resolutions and/or other documentary
evidence satisfactory to counsel for Caspian that EMPS has submitted
with this Agreement and any other documents required hereby to such
parties for approval as provided by applicable law.
(d) Consents. Execution of this Agreement by the shareholders
of Caspian and any consents necessary for or approval of any party
listed on any Schedule delivered by EMPS whose consent or approval is
required pursuant thereto shall have been obtained.
(e) Financial Statements. Caspian shall have been furnished
with audited financial statements of EMPS including, but not limited
to, balance sheets and profit and loss statements from inception
through the fiscal year end December 31, 2001. Such financial
statements shall have been prepared in conformity with United States
generally accepted accounting principles on a basis consistent with
those of prior periods and fairly present the financial position of
EMPS as of the periods stated.
(f) Statutory Requirements. All statutory requirements for the
valid consummation by EMPS of the transactions contemplated by this
Agreement shall have been fulfilled.
(g) Governmental Approval. All authorizations, consents,
approvals, permits and orders of all federal and state governmental
agencies required to be obtained by EMPS for consummation of the
transactions contemplated by this Agreement shall have been obtained.
(h) Changes in Financial Condition of EMPS. There shall not
have occurred any material adverse change in the financial condition or
in the operations of the business of EMPS, except expenditures in
furtherance of this Agreement, excluding the acquisitions identified in
Paragraph B of this Agreement.
(i) Absence of Pending Litigation. EMPS is not engaged in or
threatened with any suit, action, or legal, administrative or other
proceedings or governmental investigations pertaining to this Agreement
or the consummation of the transactions contemplated hereunder.
(j) Authorization for Issuance of Stock. Caspian shall have
received in form and substance satisfactory to counsel for Caspian a
letter instructing and authorizing the Registrar and Transfer Agent for
the shares of common stock of EMPS issue stock certificates
representing ownership of EMPS common stock to Caspian shareholders in
accordance with the terms of this Agreement and a letter from said
Registrar and Transfer Agent acknowledging receipt of the letter of
instruction and stating to the effect that the Registrar and Transfer
Agent holds adequate supplies of stock certificates necessary to comply
with the letter of instruction and the terms and conditions of this
Agreement.
17
7.02 Conditions to Obligations of EMPS. The obligation of EMPS to
perform this Agreement is subject to the satisfaction of the following
conditions on or before the Closing unless waived in writing by EMPS.
(a) Representations and Warranties. There shall be no
information disclosed in the schedules delivered by Caspian, which in
the opinion of EMPS, would materially adversely affect the proposed
transaction and intent of the parties as set forth in this Agreement.
The representations and warranties of Caspian set forth in Article 4
hereof shall be true and correct in all material respects as of the
date of this Agreement and as of the Closing as though made on and as
of the Closing, except as otherwise permitted by this Agreement.
(b) Performance of Obligations. Caspian shall have in all
material respects performed all agreements required to be performed by
it under this Agreement and shall have performed in all material
respects any actions contemplated by this Agreement prior to or on the
Closing and Caspian shall have complied in all respects with the course
of conduct required by this Agreement.
(c) Corporate Action. Caspian shall have furnished minutes,
certified copies of corporate resolutions and/or other documentary
evidence satisfactory to Counsel for EMPS that Caspian has submitted
with this Agreement and any other documents required hereby to such
parties for approval as provided by applicable law.
(d) Consents. Any consents necessary for or approval of any
party listed on any Schedule delivered by Caspian, whose consent or
approval is required pursuant thereto, shall have been obtained.
(e) Financial Statements. EMPS shall have been furnished with
audited financial statements of Caspian including, but not limited to,
balance sheets and profit and loss statements from inception through
the fiscal year end December 31, 2001. Such financial statements shall
have been prepared in conformity with United States generally accepted
accounting principles on a basis consistent with those of prior periods
and fairly present the financial position of Caspian as of the periods
stated.
(f) Statutory Requirements. All statutory requirements for the
valid consummation by Caspian of the transactions contemplated by this
Agreement shall have been fulfilled.
(g) Governmental Approval. All authorizations, consents,
approvals, permits and orders of all federal and state governmental
agencies required to be obtained by Caspian for consummation of the
transactions contemplated by this Agreement shall have been obtained.
(h) Employment Agreements. Existing Caspian employment
agreements will have been delivered to counsel for EMPS.
18
(i) Changes in Financial Condition of Caspian. There shall not
have occurred any material adverse change in the financial condition or
in the operations of the business of Caspian, except expenditures in
furtherance of this Agreement.
(j) Absence of Pending Litigation. Caspian is not engaged in
or threatened with any suit, action, or legal, administrative or other
proceedings or governmental investigations pertaining to this Agreement
or the consummation of the transactions contemplated hereunder.
(k) Shareholder Approval. The Caspian shareholders shall have
approved the Agreement and Plan of Reorganization.
ARTICLE 8
MATTERS SUBSEQUENT TO CLOSING
8.01 Covenant of Further Assurance. The parties covenant and agree that
they shall, from time to time, execute and deliver or cause to be executed and
delivered all such further instruments of conveyance, transfer, assignments,
receipts and other instruments, and shall take or cause to be taken such further
or other actions as the other party or parties to this Agreement may reasonably
deem necessary in order to carry out the purposes and intent of this Agreement.
ARTICLE 9
NATURE AND SURVIVAL OF REPRESENTATIONS
9.01 All statements contained in any written certificate, schedule,
exhibit or other written instrument delivered by EMPS or Caspian pursuant
hereto, or otherwise adopted by EMPS, by its written approval, or by Caspian by
its written approval, or in connection with the transactions contemplated
hereby, shall be deemed representations and warranties by EMPS or Caspian as the
case may be. All representations, warranties and agreements made by either party
shall survive for the period of the applicable statute of limitations and until
the discovery of any claim, loss, liability or other matter based on fraud, if
longer.
ARTICLE 10
TERMINATION OF AGREEMENT AND ABANDONMENT OF REORGANIZATION
10.01 Termination. Anything herein to the contrary notwithstanding,
this Agreement and any agreement executed as required hereunder and the
acquisition contemplated hereby may be terminated at any time before the Closing
as follows:
(a) By mutual written consent of the Boards of Directors of
EMPS and Caspian.
19
(b) By the Board of Directors of EMPS if any of the conditions
set forth in Section
7.02 shall not have been satisfied by the Closing Date.
(c) By the Board of Directors of Caspian if any of the
conditions set forth in Section 7.01 shall not have been satisfied by
the Closing Date.
10.02 Termination of Obligations and Waiver of Conditions; Payment of
Expenses. In the event this Agreement and the acquisition are terminated and
abandoned pursuant to this Article 10 hereof, this Agreement shall become void
and of no force and effect and there shall be no liability on the part of any of
the parties hereto, or their respective directors, officers, shareholders or
controlling persons to each other. Each party hereto will pay all costs and
expenses incident to its negotiation and preparation of this Agreement and any
of the documents evidencing the transactions contemplated hereby, including
fees, expenses and disbursements of counsel.
ARTICLE 11
EXCHANGE OF SHARES; FRACTIONAL SHARES
11.01 Exchange of Shares. At the Closing, EMPS shall issue a letter to
the transfer agent of EMPS with a copy of the resolution of the Board of
Directors of EMPS authorizing and directing the issuance of EMPS shares as set
forth on Exhibit A to this Agreement.
11.02 Restrictions on Shares Issued to Caspian. Due to the fact that
Caspian will receive shares of EMPS common stock in connection with the
acquisition which have not been registered under the1933 Act by virtue of the
exemption provided in Section 4(2) of such Act, those shares of EMPS will
contain the following legend:
The shares represented by this certificate have not been registered
under the Securities Act of 1933. The shares have been acquired for
investment and may not be sold or offered for sale in the absence of an
effective Registration Statement for the shares under the Securities
Act of 1933 or an opinion of counsel to the Corporation that such
registration is required.
ARTICLE 12
MISCELLANEOUS
12.01 Construction. This Agreement shall be construed and enforced in
accordance with the laws of the State of Utah excluding the conflicts of laws.
12.02 Notices. All notices necessary or appropriate under this
Agreement shall be effective when personally delivered or deposited in the
United States mail, postage prepaid, certified or
20
registered, return receipt requested, and addressed to the parties last known
address which addresses are currently as follows:
If to "EMPS" If to "Caspian "
EMPS Corporation Caspian Services Group Limited
875 Donner Way P.O. Box 544, 14 Britannia Place,
Unit 705 Bath Street
Salt Lake City, Utah 84108 St. Helier, Jersey JE 4 SU
Channel Islands
With copies to:
Ronald L. Poulton, Esq.
136 East South Temple, Suite 1700-A
Salt Lake City, UT 84111
12.03 Amendment and Waiver. The parties hereby may, by mutual agreement
in writing signed by each party, amend this Agreement in any respect. Any term
or provision of this Agreement may be waived in writing at any time by the party
which is entitled to the benefits thereof, such waiver right shall include, but
not be limited to, the right of either party to:
(a) Extend the time for the performance of any of the
obligations of the other;
(b) Waive any inaccuracies in representations by the other
contained in this Agreement or in any document delivered pursuant
hereto;
(c) Waive compliance by the other with any of the covenants
contained in this Agreement, and performance of any obligations by the
other; and
(d) Waive the fulfillment of any condition that is precedent
to the performance by the party so waiving of any of its obligations
under this Agreement. Any writing on the part of a party relating to
such amendment, extension or waiver as provided in this Section 12.03
shall be valid if authorized or ratified by the Board of Directors of
such party.
12.04 Remedies not Exclusive. No remedy conferred by any of the
specific provisions of this Agreement is intended to be exclusive of any other
remedy, and each and every remedy shall be cumulative and shall be in addition
to every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute or otherwise. The election of any one or more remedies by
EMPS or Caspian shall not constitute a waiver of the right to pursue other
available remedies.
12.05 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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12.06 Benefit. This Agreement shall be binding upon, and inure to the
benefit of, the respective successors and assigns of EMPS and Caspian and its
shareholders.
12.07 Entire Agreement. This Agreement and the Schedules and Exhibits
attached hereto, represent the entire agreement of the undersigned regarding the
subject matter hereof, and supersedes all prior written or oral understandings
or agreements between the parties.
12.08 Each Party to Bear its Own Expense. EMPS and Caspian shall each
bear their own respective expenses incurred in connection with the negotiation,
execution, closing, and performance of this Agreement, including counsel fees
and accountant fees.
12.09 Captions and Section Headings. Captions and section headings used
herein are for convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement.
Executed as of the date first written above.
"EMPS" "Caspian "
EMPS Corporation Caspian Services Group Limited
a Nevada corporation a British Virgin Islands corporation
By: /s/ Louis Naegle By: /s/ Paul Roberts
------------------------------ --------------------------------
Louis Naegle, President Paul Roberts, President
"Shareholders" "Shareholders"
Mohul Nominees Limited Elcan Nominees Limited
By: /s/ K. Carter By: /s/ I.A.G. Moodie
------------------------------ --------------------------------
K. Carter, Director I.A.G. Moodie, Director
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EXHIBIT A
Name of Shareholder Caspian Shares Owned EMPS Shares to be Issued
Elcan Nominees Limited 36 9,752,292
EMPS Corporation shares to be
issued as follows:
Paul Roberts 3,250,764
Laird Garrard 3,250,764
Dora International Ltd. 3,250,764
Mohul Nominees Limited 64 17,337,408
EMPS Corporation shares to be
issued as follows:
Techgrand Company, Ltd 3,250,764
Petroleum Group Services Ltd 14,086,644