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
January 14, 2000
Date of Report
(Date of Earliest Event Reported)
KURCHATOV RESEARCH HOLDINGS, LTD.
(Exact Name of Registrant as Specified in its Charter)
Wiesbadener Street, 17
D 12309, Berlin, Germany
(Address of principal executive offices)
49 (0) 30-746 52 09
49 (0) 30-746 81 91 (fax)
Registrant's telephone number
ABERDEEN ACQUISITION CORPORATION
1504 R Street, N.W.
Washington, D.C. 20009
Former name and former address
Delaware 0-23761 13-4000208
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) Pursuant to an Agreement and Plan of Reorganization
(the "Acquisition Agreement") dated December 24, 1999, Kurchatov
Research Holdings, Ltd. ("Kurchatov" or the "Company"), a Delaware
corporation, acquired all the outstanding shares of common stock of
Aberdeen Acquisition Corporation ("Aberdeen"), a Delaware
corporation, from the shareholders thereof in an exchange for an
aggregate of 400,000 shares of common stock of Kurchatov (the
"Acquisition"). As a result, Aberdeen became a wholly-owned
subsidiary of Kurchatov.
The Acquisition was approved by the unanimous consent of the
Board of Directors of Kurchatov on December 22, 1999. The Acquisition
was effective on January 14, 2000. The
Acquisition is intended to qualify as a reorganization within the
meaning of Section 368(a)(1)(B) of the Internal Revenue Code of
1986, as amended.
Kurchatov had 21,460,911 shares of common stock issued and
outstanding prior to the Acquisition, and 21,860,911 shares issued
and outstanding following the Acquisition.
Upon effectiveness of the Acquisition, pursuant to Rule
12g-3(a) of the General Rules and Regulations of the Securities and
Exchange Commission, Kurchatov elected to become the successor
issuer to Aberdeen for reporting purposes under the Securities
Exchange Act of 1934 and elects to report under the Act effective
January 14, 2000.
A copy of the Acquisition Agreement is filed as an exhibit
to this Form 8-K and is incorporated in its entirety herein. The
foregoing description is modified by such reference.
(b) The following table contains information regarding the
shareholdings of Kurchatov's current directors and executive
officers and those persons or entities who beneficially own more
than 5% of its common stock (giving effect to the exercise of the
warrants held by each such person or entity):
Number of shares of Percent of
Common Stock Beneficially Common Stock
Name Owned Beneficially Owned (1)
ERBC Holdings, Ltd. 5,000,000 (2) 22.87%
CIS Development Corp. 7,150,000 (3) 32.7%
(1) Based upon 21,860,911 outstanding shares of common stock.
(2) ERBC Holdings, Ltd. is a co-founder of Kurchatov Research
Holdings, Ltd. and is beneficially owned by Kurt Seifman.
(3) CIS Development Corp. is a co-founder of Kurchatov Research
Holdings, Ltd. and is beneficially owned by Peter Gulko.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The consideration exchanged pursuant to the Acquisition
Agreement was negotiated between Aberdeen and Kurchatov. In
evaluating the Acquisition, Aberdeen used criteria such as the value
of assets of Kurchatov, Kurchatov's ability to recognize
patentability and merchantability of a technology or an invention,
Kurchatov's ability to compete in the market for new technologies,
the unique nature of Kurchatov's products and developing
technologies, Kurchatov's current and anticipated business
operations, and Kurchatov's management's experience and reputation
in the technology transfer market. In evaluating Aberdeen, Kurchatov
placed a primary emphasis on Aberdeen's status as a reporting
company under the Section 12(g) of the Securities Exchange Act of
1934, as amended, and Aberdeen's facilitation of
Kurchatov's becoming a reporting company under the Act.
(b) The Company intends to maintain growth at its existing
facilities and to achieve its expansion objectives by continuing the
search and acquisition of ownership interests in companies with
growth capabilities based on proprietary information or technologies
emanating from Israel, Russia and Germany.
BUSINESS
COMPANY
Kurchatov Research Holdings, Ltd. ("Kurchatov" or the
"Company"), is a development-stage company, incorporated under the
laws of the State of Delaware on October 10, 1995. The Company was
organized to identify, assess, acquire and capitalize on innovative
technologies introduced and developed by scientists throughout the
world with particular emphasis on technologies originating in
Israel, Russia and Germany.
The Company is in the development stage and its efforts,
since inception, included the appointment of Russian scientists to
the Company's technical advisory board, the negotiation of an
agreement with ERBC Holdings, Ltd. ("ERBC") to manage the Company's
operations in Russia, the review of certain Israeli heating element
technologies for commercialization, and the negotiation of an
agreement with Eurotech, Ltd. ("Eurotech") to acquire ownership
interest in a certain silicon compound technology known as "EKOR
Compound." The Company also has entered into a letter of intent with
Bavaria Tech., Ltd. ("Bavaria Tech") to acquire all of the
outstanding shares of its common stock on a share for share basis.
Bavaria Tech, in turn, intends to acquire a certain device and
method for examining metal alloying by means of Gamma or Beta rays
technology developed by scientists in Israel.
The Kurchatov Research Holdings, Ltd. is not, in any form or
manner, affiliated with Igor Kurchatov, (1903-1960), a Russian
nuclear physicist that led the former Soviet Union's efforts to
develop an atomic bomb. Nor is the Company, in any form or manner,
other than in the ordinary course of its business, affiliated with
the Kurchatov Research Institute in Moscow, Russia.
TECHNOLOGIES
The Company has acquired interests in two technologies
relating to thick film heating elements and organic waste processing
with generation of fuel products ("Flexitech's PHE Technology" and
"Pirocat's Organic Waste Conversion Technology," respectively).
Also, as of December 3, 1999, the Company has transferred its
ownership interest in a certain silicon compound ("EKOR Compound")
back to Eurotech, Ltd. a technology holding company that owned
exclusive rights in the EKOR Compound.
1. Israeli Technologies
A. Flexitech's PHE Technology. This technology allows for
the application of a proprietary polymer thick film onto a polymer,
ceramic or metal surface, which, when charged with an energy source,
emits heat. The surface to which the film is applied becomes a
heating element, thereby allowing for the application of heat
directly to the surface to be heated. The more energy is supplied to
the polymer film, the higher the temperature. The heating element
involved is highly conductive, flexible and energy efficient. The
proprietary film which forms the basis of the PHE technology can be
printed onto hard-to-reach areas which permits the PHE technology to
be intimately applied onto multidimensional surfaces. The advantages
of the PHE technology over the existing heat sources include its
higher heat dissipation from the unit surface on the surface to be
heated, its durability, versatility, very low thermal mass and high
price competitiveness with similar heat technologies. The commercial
applications of the PHE technology may include consumer heating
appliances, automotive industry for heated rear view mirrors,
industrial machinery requiring heating elements.
B. Pirocat's Organic Waste Conversion Technology. Organic
Waste Conversion technology represents a process whereby organic
elements present primarily in plastics are converted into liquid
fuel base products which are used to make market grade gasoline,
diesel fuel and fuel oils. The process is based on pyrolisis and
catalytic cracking of the hydrocarbons and fluidized bed
technologies which have been in use for many years. More
specifically, pyrolisis is the process of heating plastic into a
liquid. Once liquified, plastic is subjected to catalytic cracking
whereby the plastic is broken down to elemental components,
including hydrocarbons which comprise fuels such as gasoline. The
process appears to offer oil products that are both ecologically
cleaner and more economical to produce. The advantages of this
conversion technology include better environmental characteristics,
higher quality fuel, relative simplicity and low costs of operating.
2. EKOR Compound Technology.
A. Silicon Compound Technology (the "EKOR Compound"). EKOR
Compound is a patented silicon geo-polymer developed by scientists
at the Kurchatov Research Institute in Moscow, Russia, specifically
for containment of ecologically hazardous radioactive materials that
persist from the 1986 explosion of the Chernobyl Nuclear Power Plant
Reactor 4 in Chernobyl, Ukraine. Application of the EKOR Compound
foam layer is intended to contain radioactive dust in an enclosed
area by forming a permanent barrier between the soil and the air
thus trapping the contamination. In testings conducted at the
Kurchatov Research Institute, the EKOR Compound has been shown to be
highly resistant to radiation and structural degradation from
exposure to radiation, fire-resistant, water-proof, and capable of
being formulated in densities that display considerable structural
strength and weight-bearing properties. In high dosage radiation
tests, the EKOR Compound has met or exceeded all specifications for
containment materials developed by the Chernobyl authorities.
Eurotech Ltd. has exclusive licensing rights to the production and
application of this compound and is marketing it to the nuclear
waste industry as the only tested material capable of containing
radioactive waste for hundreds of years.
3. Gamma Ray Examination Technology.
Gamma Ray Examination technology allows a manufacturer to
test and ascertain the homogenuity, precise composition and
structure of a metal alloy. More specifically, the technology
detects whether two or more materials formed an alloy after the
thermal process is deployed to create one and whether the weld is
free of cracks or other defects both externally and internally. This
feature was not previously available on any other similar device.
Bavaria Tech is in the process of completing
its acquisition of this technology developed by Israeli scientists.
Management of Bavaria Tech has identified several applications for
the Gamma Ray Examination technology, including industries in which
the composition and reliability of particular materials is critical
and any industry that desires to test the efficacy of welds between
parts, e.g. automotive, ship building industries, etc. Bavaria Tech
is intending to license this technology to individual companies
throughout the world in the event that it is successful in acquiring
a working prototype of the device utilizing this alloy examination
technology.
KEY AGREEMENTS AND TERMS
In the effort to accomplish its formation goals, the Company
has acquired ownership interests in the companies and technologies
described below.
Israeli Heating Elements and Waste Conversion Agreements.
The Company has entered into agreements
with Ofek Le-Oleh Foundation, Ltd. (the "Foundation"), an Israeli
incubator company with an authority to manage and distribute Israeli
government funds needed to create infrastructure for the incubation
technologies. The Foundation holds a 20% ownership interest in two
Israeli companies, Flexitech, Ltd. ("Flexitech"), and Pirocat, Ltd.
("Pirocat"). Under the terms of the agreements with the Foundation,
the Company acquired 20% equity interest in certain technologies
developed by Flexitech and Pirocat. Flexitech has developed a
heating element which can be printed on a thin film substrate and
Pirocat has developed a technology which allows for conversion of
plastic waste into fuel which can be used to produce gasoline,
diesel fuel and heating oil.
Under the terms of the agreements with those companies, the
Company received 20% of each of Flexitech's and Pirocat's common
equity in exchange for a $60,000 investment in Flexitech and
Pirotech. The $60,000 investment is payable in four payments of
$15,000 to each company involved. The first such payment has been
paid to each Israeli company. In addition, the Company also obtained
an option to purchase additional 20% to 25% of the common equity of
either or both Israeli companies for a sum to be determined in the
future. This option is exercisable for a period of 90 days
commencing after the first year of the period during which Flexitech
and Pirocat receive financing from the government of Israel. Such
sale of the common equity of both Flexitech and Pirocat requires
consent of the Chief Scientist of the Israeli Ministry of Commerce
and Technology. Also pursuant to the terms of the same agreements,
the Company is represented by a director on each of Flexitech's and
Pirocat's Boards' of Directors. Each Board is comprised of four
directors: two directors appointed by the Foundation, a director
appointed by the scientist, and the Company's director. All
decisions of the Board must be made by a majority of the directors.
EKOR Compound Agreement. The Company has also entered into
an agreement with Eurotech Ltd., ("Eurotech"), a technology holding
company formed to capitalize on acquisition and commercialization of
advanced technologies developed by research institutes and
individual researchers worldwide. On December 3, 1999 the Company
announced several substantive revisions to the original agreement
between parties. Under the terms of the most recent agreement
between the Company and Eurotech, Eurotech gives back to the Company
its equity holding in the Company and issues 2,000,000 restricted
shares of Eurotech common stock to the Company. Additionally,
Eurotech assumed a $1,100,000 Kurchatov debt, which will be
converted into restricted stock, and Eurotech will pay a 2%
perpetual royalty from the gross revenue received on any contract
related to the EKOR Compound technology, including sales, servicing
and licensing. The original contract did not provide for servicing
royalties by Eurotech on the sales of the EKOR Compound. In
exchange, Kurchatov gives back to Eurotech Kurchatov's 50% equity
interest in the EKOR Compound's profits. The new arrangement was
undertaken to allow both companies to independently concentrate on
their respective technology areas.
Kurchatov's Acquisition of Cetoni Umwelttechnolog
Entwicklungs GmbH, ("Cetoni"). On December 6, 1999, the Company
announced that is has completed the acquisition of Cetoni, a German
company focusing on engineering and design of the consumer products.
The Company has agreed to acquire all assets of Cetoni and to assume
a certain part of Cetoni's liabilities. As consideration for the
acquisition, the Company delivered to the principal shareholders of
Cetoni an aggregate of 5,000,000 share of common stock of the
Company. During years prior to the acquisition, Cetoni has focused
its engineering and design resources on the development of product
offerings in the automotive and consumer sector products, e.g.
bathroom accessories, resealable pop-top can technology, resalable
soft pack technology, fruit peeler, and butter spreader. Cetoni products
have been sold to the consumer markets in Europe and the United
States through retail and wholesale distributors.
A Proposed Bavaria Tech, Ltd. Agreement. On May 26, 1999,
the Company entered into a non-binding letter of intent with Bavaria
Tech, an affiliate of the Company by virtue
of common principal shareholders. The letter of intent contemplates
a proposed acquisition of all of Bavaria Tech'a outstanding shares
of common stock for the common stock of the Company. The number of
shares to be exchanged is initially set on a one-for-one basis and
would approximate 9.5 million shares. This number of shares is
subject to adjustment based upon a valuation of the assets Bavaria
Tech. Bavaria Tech is in the process of completing its acquisition
of a certain device and method for examining metal alloying by means
of gamma or beta rays ("Gamma Ray Examination Technology") developed
by Israeli scientists. No assurance is given that the Company will
complete the proposed acquisition of Bavaria Tech or that if such
transaction is consummated that the Company will be successful in
marketing Bavaria Tech's products, that any such products or
technologies gain market acceptance, that superior products or
technologies will not be developed which may render these products
or technologies obsolete, or that the Company will generate
sufficient revenue therefrom.
CURRENT OPERATIONS
The competition in the technology proliferation and transfer
market is highly intense and is based on product and technology
recognition and acceptance, novelty and marketability of an
invention, price, and sales expertise. Currently, the Company has
placed the primary emphasis on product development, dependability
and patentability of its acquired inventions. As a part of the
Company's day-to-day operations, the Company's consultants review a
number of technologies, innovations, ideas and intellectual
properties with the purpose of evaluating the novelty of a
technological idea, assessing additional research and development
investment required to bring an invention to a point where it may be
commercially exploited, and prospects for patentability and
marketability of a reviewed technology. The Company consultants also
estimate the costs and time required to complete research and
development of a technology necessary to achieve commercial
viability as well as initial steps required for introducing the
technology to the market, e.g. production of samples and development
of marketing strategy and documentation required to obtain patent
protection covering the technology. A proposed acquisition of an
invention or technology is usually accomplished by means of equity
investment, purchase, assignment and licensing arrangements directly
from the scientists or technology developers.
To date, the Company has not generated any revenues from
any of its acquired technologies and is currently operating at a
loss. The Company requires additional funding to achieve its growth
objectives. If the Company does not receive additional funding, it
will not be able to pursue the intended marketing plan and, in such
case, may not be able to successfully conduct its operations. There
is no assurance that the Company will be successful in marketing any
of its technologies or in generating any meaningful revenues from
operations.
MARKETING
The Company's primary business focus is placed upon the
commercialization of advanced technologies
and commercial products resulting therefrom. The Company anticipates
that chemical manufacturing, radioactive contamination containment,
correction and transportation industries will be the primary markets
for the Company's products and technologies. The Company has limited
experience in marketing of products and services in these fields and
intends to rely on licensing and joint venture opportunities with
multinational companies for the marketing and sale of its technologies.
Also, with the acquisition of Cetoni, the Company acquired a
wide range of basic consumer products to be distributed both at the
retail and wholesale level worldwide. The Company also has little
experience marketing products of a consumer nature. There is no
assurance that the Company will be successful in developing a market
for any of its products or that it will gain any market recognition
and acceptance.
TRADEMARKS AND PATENTS
Israeli PHE and Waste Conversion Patents. The Company has
entered into exclusive patent arrangements with Flexitech and
Pirocat concerning Heating Element and Waste Conversion technologies.
EKOR Compound Technology. Eurotech, Ltd. holds exclusive
rights of all right, title and interest, inclusive of all patent and
other intellectual property rights, in and to the EKOR Compound
technology in Canada, China, Japan, Republic of Korea, the United
States of America, Ukraine and all member countries of the European
Patent Agreement (the "EAPS") until August 1, 2014. On March 23,
1999, EAPS was issued a patent on the process for manufacturing its
EKOR Compound from the United States Patent and Trademark Office,
Patent No. 5,886,060. On November 28, 1997, the Ministry of Health
of the Russian Federation certified EKOR Compound and its components
as non-toxic, thereby allowing for EKOR's production, delivery, sale
and use in the Russian Federation.
Cetoni's consumer patents. The Company has acquired several
patents as a result of the acquisition of Cetoni. All of the patent
arrangements entered by the Company are on an exclusive basis.
Gamma Ray Examination Technology. Under the terms of the
proposed acquisition of Bavaria Tech by the Company, the Company
intends to acquire Gamma Ray Examination Technology patent only.
This transaction is not complete as of the date of filing of this
report.
PROPERTY
The Company's principal executive offices are at ERBC
Holdings, Ltd. in Berlin, Germany. The 800 square feet executive
space is located at Wiesbadener Street, 17, D 12309, Berlin, Germany
and its telephone number is (30) 746 5209. This building is a leased
facility with a monthly rent of $800.00. The lease term is one year
and it will terminate on December 31, 1999. The Company is currently
in process of searching for a new executive space.
EMPLOYEES
The Company currently employs five full-time and no part-time
employees. The Company engages a number of independent consultants to assist
in the identification, assessment and acquisition of technologies in
the regular course of business.
LITIGATION
There is no current outstanding litigation in which the
Company is involved and the Company is unaware of any pending
actions or claims against it.
DESCRIPTION OF SECURITIES
The Company has an authorized capitalization of 50,000,000
shares of Common Stock, $.0001 par value per share, of which
21,460,911 shares have been issued and outstanding, and 1,000,000
shares of Preferred Stock, $.001 par value per share, of which no
shares have been issued and outstanding.
MARKET FOR THE COMPANY'S SECURITIES
The Company has been a non-reporting publicly traded company
with certain of its securities exempt from registration under the
Securities Act of 1933 pursuant to Rule 504 of Regulation D of the
General Rules and Regulations of the Securities and Exchange
Commission. The sale of the Rule 504 of Regulation D shares
generated gross proceeds of $613,000 during the year ended December
31, 1997. During March and April of 1999, the Company completed a
Convertible Debenture financing for $750,000. The Company's common
stock is traded on the NASD OTC Bulletin Board under the symbol
KRHL. The Nasdaq Stock Market has implemented a change in its rules
requiring all companies trading securities on the NASD OTC Bulletin
Board to become reporting companies under the Securities Exchange
Act of 1934.
The Company was required to become a reporting company by
the close of business on January 19, 2000. Kurchatov acquired all
the outstanding shares of Aberdeen to become successor issuer to it
pursuant to Rule 12g-3 in order to comply with the reporting company
requirements implemented by the Nasdaq Stock Market.
Exchange OTC BB
52-Week Average: Average Price 1.42 (50-day) 1.74 (200-day)
Average Volume 36,100 (50-day) 25,800 (200-day)
52-Week High 3.625 on Friday, April 30, 1999
52-Week Low 0.125 on Wednesday, January 13, 1999
Date Volume High/Ask Low/Bid Close
December 31, 1999 101,000 1 7/8 1 3/8 1 3/8
January 7, 2000 194,500 2 5/8 1 5/16 2 1/16
January 12, 2000 33,100 2 1/4 2 2 1/8
MANAGEMENT
Name Age Title
Hans Joachim Skrobanek 51 President, Director
Jacques J. Saunder 79 Director
Hans Joachim Schuerholz 76 Director
HANS JOACHIM SKROBANEK serves as president of the Company.
From December 1999 to present, Mr. Skrobanek has been a managing
director of ERBC Holdings, Ltd. in Berlin, Germany. Mr. Skrobanek
was engaged in project financing and technology proliferation from
Russia and Ukraine. From 1995 to 1999, Mr. Skrobanek has been
employed as a consultant to Eurotech, Ltd. and was directly involved
in technology transfers from Russia and Israel to Western markets.
Mr. Skrobanek graduated from University of Frankfurt in 1976 with a
Bachelor of Commerce degree.
HANS JOACHIM SCHUERHOLZ serves as a director of the
Company. From 1995 to present, Mr. Schuerholz has served as a
managing director and consultant for a real estate company in
Saxony, Germany. From 1993 to 1995, Mr. Schuerholz was employed as a
legal consultant to the City of Dresden, Germany, in the area of
restitution and priority investment law. He graduated from
University of Menster in 1953 with a legal degree.
JACQUES J. SAUNDER serves as a director of the Company. For
the past 5 years, Mr. Saunder has been the President of Advanced
Technologies Industries and from inception until January 2000,
President of the Company. Mr. Saunder graduated from College Royale
Francais in Berlin, Germany in 1938 with a degree in business, from
the Haute Etude Commercial in Paris, France in 1949 and from
City College of New York in 1965.
EXECUTIVE COMPENSATION
All executive compensation is currently deferred.
RISK FACTORS
THE COMPANY IS CURRENTLY OPERATING AT A LOSS. As o f
December 31, 1998, the Company had a working capital deficiency of
$477,873, stockholder deficiency of $435,283 and a net loss of
$2,054,513. If losses continue, the Company may need to raise
additional capital through the placement of its securities or from
debt or equity financing. If the Company is not able to raise such
financing or obtain alternative sources of funding, management will
be required to curtail operations. There is no assurance that the
Company will be able to continue to operate if additional sales of
its securities cannot be generated or other sources of financing
located.
LIMITED HISTORY OF OPERATIONS. The Company did not commence
its operations until 1995. The Company has only a limited history of
operations. The Company operations are subject to the risks and
competition inherent in the establishment of a relatively new
business enterprise in a highly competitive field of technology
transfer. There can be no assurance that future operations will be
profitable. Revenues and profits, if any, will depend upon various
factors, including market acceptance of its products and
technologies, market awareness, its ability to expand its network of
participating distributors, its ability to promptly and accurately
recognize a marketable and patentable technology or invention,
dependability of its advertising and recruiting network, and general
economic conditions. There is no assurance that the Company will
achieve its expansion goals and the failure to achieve such goals
would have an adverse impact on it.
THE COMPANY MAY NEED ADDITIONAL FINANCING. Future events,
including the problems, delays, expenses and difficulties frequently
encountered by startup companies may lead to cost increases that
could make the Company's source of funds insufficient to fund the
Company's proposed operations. The Company may seek additional
sources of capital, including an additional offering of its equity
securities, an offering of debt securities or obtaining financing
through a bank or other entity. The Company has not established a
limit as to the amount of debt it may incur nor has it adopted a
ratio of its equity to a debt allowance. If the Company needs to
obtain additional financing, there is no assurance that financing
will be available, from any source, or that it will be available on
terms acceptable to the Company, or that any future offering of
securities will be successful. The Company could suffer adverse
consequences if it is unable to obtain additional capital when needed.
LOSS OF THE COMPANY KEY EMPLOYEES MAY ADVERSELY AFFECT
GROWTH OBJECTIVES. The Company's success in achieving its growth
objectives depends upon the efforts of Hans Joachim Skrobanek,
President of the Company and other top Company management and
research personnel whose international research and academic
credentials and industry-wide contacts significantly benefit the
Company. The loss of the services of any of these individuals may
have a material adverse effect on the Company business, financial
condition and results of operations. There is no assurance that the
Company will be able to maintain and achieve its growth objectives
should it lose any or all of these individuals' services.
THE COMPANY MAY FAIL TO GENERATE SUFFICIENT INTEREST IN
ACQUIRED TECHNOLOGIES. The Company must undertake substantial
effort to educate the buying public, consumers, businesses and
governments, in the United States and worldwide, as to the Company's
products and technologies. There is no assurance that the Company
will be able to generate interest in and to create and maintain
steady demand for its products over time.
DOING BUSINESS IN THE FORMER SOVIET UNION. The Company has
alliances, collaboration agreements, licensing agreements with
entities that are based in Russia and Ukraine. Both of these
countries have experienced volatile and frequently unfavorable
economic, political and social conditions. The Russian economy and
the Ukranian economy are characterized by declining gross domestic
production, high levels of inflation, increasing rates of
unemployment, unstable currencies, and high levels of governmental
debt. The prospects of widespread insolvencies and the collapse of
various economic sectors exist in both countries. Thus, the
Company's business, assets and prospects may be materially and
adversely affected by developments with respect to economic,
political or social activities in Russia or Ukraine. The Company has
no control over such developments and conditions, and, thus, can
provide no assurance that such developments and conditions will not
adversely affect the its operations.
TECHNOLOGIES INVOLVING SUBSTANTIAL RISK OF ENVIRONMENTAL
HAZARD. Two out of three of the Company's technologies, namely,
Pirocat's Organic Waste Conversion Technology and EKOR Compound
technology, involve a substantial risk of environmental hazard in
the production processes. There is no assurance that the Company
will be able to contain the environmental hazards of the production.
There is also no assurance that the Company will have sufficient
resources to meet the clean-up and possible litigation costs that
may be involved in a case of environmental disaster.
RELIANCE ON FUTURE TECHNOLOGY ACQUISITIONS STRATEGY. The
Company expects to rely on technology acquisitions as a primary
component of its growth strategy. It regularly engages in
evaluations of potential target candidates, including evaluations
relating to acquisitions that may be material in size and/or scope.
There is no assurance that the Company will be able to identify
potentially successful companies that provide suitable acquisition
opportunities or that the Company will be able to acquire any such
companies on favorable terms. Also, acquisitions involve a number of
special risks including the diversion of management's attention,
assimilation of the personnel and operations of the acquired
companies, and possible loss of key employees. There is no assurance
that the acquired companies will be able to successfully integrate
into the Company's existing infrastructure or to operate profitably.
There is also no assurance given as to the Company's ability to
obtain adequate funding to complete any contemplated acquisition or
that any such acquisition will succeed in enhancing the Company's
business and will not ultimately have an adverse effect on the
Company's business and operations.
POSSIBLE INABILITY TO FINANCE ACQUISITIONS. In transactions
in which the Company agrees to acquire a company for cash, it will
have to locate financing from third-party sources such as banks or
other lending sources or it will have to raise cash through the sale
of its securities. There is no assurance that such funding will be
available to the Company when required to close a transaction or if
available on terms acceptable to the Company.
COMMERCIAL VIABILITY OF THE COMPANY'S CURRENT TECHNOLOGIES.
The Company was organized to identify, assess, acquire and
capitalize on technologies introduced and developed by scientists
throughout the world with particular emphasis on technologies
originating in Israel, Russia and Germany. These technologies are
new and in their research and development stage. Generally, it
requires a substantial time and resource effort to bring be able to
both recognize a commercially successful technology or invention at
an early stage and conduct a successful marketing campaign to sell
this technology or invention. There is no assurance that all or any
of the Company's research and development efforts will result in
commercially viable final products.
ISRAELI GOVERNMENTAL CONSENT IS NOT GUARANTEED. In addition
to the Company's existing equity ownership in Israeli incubator
companies, the Company obtained an option to purchase additional 20%
to 25% of the common equity of either or both Israeli companies for
a sum to be determined in the future. This option is exercisable for
a period of 90 days commencing after the first year of the period
during which Flexitech and Pirocat receive financing from the
government of Israel. Such sale of the common equity of both
Flexitech and Pirocat will require the consent of the Chief
Scientist of the Israeli Ministry of Commerce and Technology. There
is no assurance that the Company will be able to obtain such consent.
FAILURE TO ATTRACT QUALIFIED PERSONNEL. A change in labor
market conditions that either further reduces the availability of
employees or increases significantly the cost of labor could have a
material adverse effect on the Company's business, financial
condition and results of operations. The Company's business is
dependent upon its ability to attract and retain highly
sophisticated research and development personnel, business
administrators and corporate management. There is no assurance that
the Company will be able to employ a sufficient number of such
personnel in order to accomplish its growth objectives.
TRADEMARK PROTECTION AND PROPRIETARY MARKS. The Company
has obtained several patents and trademarks as a result of its
recent company acquisition. There is no assurance that the Company
will be able to prevent competitors from using the same or similar
names, marks, concepts or appearances or that it will have the
financial resources necessary to protect its marks against
infringing use.
ISSUANCE OF FUTURE SHARES MAY DILUTE INVESTORS SHARE VALUE.
The Certificate of Incorporation of the Company authorizes the
issuance of 50,000,000 shares of common stock and 1,000,000 shares
of preferred stock. The future issuance of all or part of the
remaining authorized common or preferred stock may result in
substantial dilution in the percentage of the Company's common stock
held by the its then existing shareholders. Moreover, any common
stock issued in the future may be valued on an arbitrary basis by
the Company. The issuance of the Company's shares for future
services or acquisitions or other corporate actions may have the
effect of diluting the value of the shares held by investors, and
might have an adverse effect on any trading market, should a trading
market for the Company's common stock.
PENNY STOCK REGULATION. The Company's common stock is
deemed to be a penny stock. Penny stocks generally are equity
securities with a price of less than $5.00 per share other than
securities registered on certain national securities exchanges or
quoted on the Nasdaq Stock Market, provided that current price and
volume information with respect to transactions in such securities
is provided by the exchange or system. The Company's securities may
be subject to "penny stock rules" that impose additional sales
practice requirements on broker-dealers who sell such securities to
persons other than established customers and accredited investors
(generally those with assets in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 together with their spouse).
For transactions covered by these rules, the broker-dealer must make
a special suitability determination for the purchase of such
securities and have received the purchaser's written consent to the
transaction prior to the purchase. Additionally, for any
transaction involving a penny stock, unless exempt, the "penny stock
rules" require the delivery, prior to the transaction, of a
disclosure schedule prescribed by the Commission relating to the
penny stock market. The broker-dealer also must disclose the
commissions payable to both the broker-dealer and the registered
representative and current quotations for the securities. Finally,
monthly statements must be sent disclosing recent price information
on the limited market in penny stocks. Consequently, the "penny
stock rules" may restrict the ability of broker-dealers to sell the
Company's securities. The foregoing required penny stock
restrictions will not apply to the Company's securities if such
securities maintain a market price of $5.00 or greater. There can be
no assurance that the price of the Company's securities will reach
or maintain such a level.
COMPUTER SYSTEMS REDESIGNED FOR YEAR 2000. Many existing
computer programs use only two digits to identify a year in such
program's date field. These programs were designed and developed
without consideration of the impact of the change in the century for
which four digits will be required to accurately report the date.
If not corrected, many computer applications could fail or create
erroneous results in or following the year 2000 (the "Year 2000
problem"). Many of the computer programs containing such date
language problems have been corrected by the companies or
governments operating such programs. The Company's operations are
dependent upon the properly functioning computer equipment which may
fail because of such Year 2000 problems. The Company does not know
what steps, if any, have been taken by any of its business partners
in regard to the Year 2000 problems. The Company's operations will
be severally curtailed if one or more of its business partners were
to suffer Year 2000 problems. Furthermore, it is impossible to
predict if the basic utilities serving the Company will continue
uninterrupted.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
Successor Issuer Election.
Pursuant to Rule 12g-3(a) of the General Rules and
Regulations of the Securities and Exchange Commission, the Company
elected to become the successor issuer to Aberdeen for reporting
purposes under the Securities Exchange Act of 1934 and elects to
report under the Act effective January 14, 2000.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
The sole officer and director of
Aberdeen resigned effective upon completion of the Acquisition.
ITEM 7. FINANCIAL STATEMENTS
No financials are filed herewith. The Registrant is required
to file financial statements by amendment hereto no later than 60
days after the date that this Current Report on Form 8-K must be
filed.
ITEM 8. CHANGE IN FISCAL YEAR
Not applicable.
EXHIBITS
2.1. Agreement and Plan of Reorganization between Kurchatov
Research Holdings, Ltd. and Aberdeen Acquisition
Corporation, dated December 24, 1999.
*27.1. Financial Data schedule.
_______
*To be filed by amendment
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.
KURCHATOV RESEARCH HOLDINGS, LTD.
By_______________________________
Hans Joachim Skrobanek
President
Date: January 14, 2000.
EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") among
ABERDEEN ACQUISITION CORPORATION, a Delaware corporation
("Aberdeen"), KURCHATOV RESEARCH HOLDINGS, LTD., a Delaware
corporation ("Kurchatov") and the persons listed in Exhibit A hereof
(collectively the "Shareholders"), being the owners of record of all
of the issued and outstanding stock of Aberdeen.
Whereas, Kurchatov wishes to acquire and the Shareholders
wish to transfer all of the issued and outstanding securities of
Aberdeen in a transaction intended to qualify as a reorganization
within the meaning of Section 368(a)(1)(B) of the Internal Revenue
Code of 1986, as amended.
Now, therefore, Aberdeen, Kurchatov and the Shareholders
adopt this plan of reorganization and agree as follows:
1. EXCHANGE OF STOCK
1.1. NUMBER OF SHARES. The Shareholders agree to transfer
to Kurchatov at the Closing (defined below) the number of shares of
common stock of Aberdeen, $.0001 par value per share, shown opposite
their names in Exhibit A, in an exchange for an aggregate of 400,000
shares of voting common stock of Kurchatov, $0.0001 par value per
share.
1.2. EXCHANGE OF CERTIFICATES. Each holder of an
outstanding certificate or certificates theretofore representing
shares of Aberdeen common stock shall surrender such certificate(s)
for cancellation to Kurchatov, and shall receive in exchange a
certificate or certificates representing the number of full shares
of Kurchatov common stock into which the shares of Aberdeen common
stock represented by the certificate or certificates so surrendered
shall have been converted. The transfer of Aberdeen shares by the
Shareholders shall be effected by the delivery to Kurchatov at the
Closing of certificates representing the transferred shares endorsed
in blank or accompanied by stock powers executed in blank.
1.3. FRACTIONAL SHARES. Fractional shares of Kurchatov
common stock shall not be issued, but in lieu thereof Kurchatov
shall round up fractional shares to the next highest whole number.
1.4. FURTHER ASSURANCES. At the Closing and from time to
time thereafter, the Shareholders shall execute such additional
instruments and take such other action as Kurchatov may request in
order more effectively to sell, transfer, and assign the transferred
stock to Kurchatov and to confirm Kurchatov's title thereto.
2. RATIO OF EXCHANGE. The securities of Aberdeen owned
by the Shareholders, and the relative securities of Kurchatov for
which they will be exchanged, are set out opposite their names in
Exhibit A.
3. CLOSING.
3.1. TIME AND PLACE. The Closing contemplated herein
shall be held as soon as possible at the offices of Cassidy &
Associates at 1504 R Street, NW, Washington, D.C. unless another
place or time is agreed upon in writing by the parties without
requiring the meeting of the parties hereof. All proceedings to be
taken and all documents to be executed at the Closing shall be
deemed to have been taken, delivered and executed simultaneously,
and no proceeding shall be deemed taken nor documents deemed
executed or delivered until all have been taken, delivered and
executed. The date of Closing may be accelerated or extended by
agreement of the parties.
3.2. FORM OF DOCUMENTS. Any copy, facsimile
telecommunication or other reliable reproduction of the writing or
transmission required by this Agreement or any signature required
thereon may be used in lieu of an original writing or transmission
or signature for any and all purposes for which the original could
be used, provided that such copy, facsimile telecommunication or
other reproduction shall be a complete reproduction of the entire
original writing or transmission or original signature.
4. UNEXCHANGED CERTIFICATES. Until surrendered, each
outstanding certificate that prior to the Closing represented
Aberdeen common stock shall be deemed for all purposes, other than
the payment of dividends or other distributions, to evidence
ownership of the number of shares of Kurchatov common stock into
which it was converted. No dividend or other distribution shall be
paid to the holders of certificates of Aberdeen common stock until
presented for exchange at which time any outstanding dividends or
other distributions shall be paid.
5. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
The Shareholders, individually and separately, represent and
warrant as follows:
5.1. TITLE TO SHARES. The Shareholders, and each of them,
are the owners, free and clear of any liens and encumbrances, of the
number of Aberdeen shares which are listed in the attached schedule
and which they have contracted to exchange.
5.2. LITIGATION. There is no litigation or proceeding
pending, or to any Shareholder's knowledge threatened, against or
relating to shares of Aberdeen held by the Shareholders.
6. REPRESENTATIONS AND WARRANTIES OF ABERDEEN .
Aberdeen represents and warrants that:
6.1. CORPORATE ORGANIZATION AND GOOD STANDING. Aberdeen
is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware and is qualified to
do business as a foreign corporation in each jurisdiction, if any,
in which its property or business requires such qualification.
6.2. REPORTING COMPANY STATUS. Aberdeen has filed with
the Securities and
Exchange Commission a registration statement on Form 10-SB which
became effective pursuant to the Securities Exchange Act of 1934 and
is a reporting company pursuant to Section12(g) thereunder.
6.3. REPORTING COMPANY FILINGS. Aberdeen has timely filed
and is current on all
reports required to be filed by it pursuant to Section13 of the
Securities Exchange Act of 1934.
6.4. CAPITALIZATION. Aberdeen 's authorized capital stock
consists of 120,000,000 shares
of Common Stock, $.0001 par value, of which 5,000,000 shares are
issued and outstanding, and 20,000,000 shares of Preferred Stock,
$.0001 par value per share, of which no shares are issued or
outstanding.
6.5. ISSUED STOCK. All the outstanding shares of its
Common Stock are duly
authorized and validly issued, fully paid and non-assessable.
6.6. STOCK RIGHTS. Except as set out by schedule attached
hereto, there are no
stock grants, options, rights, warrants or other rights to purchase
or obtain Aberdeen Common or Preferred Stock issued or committed to
be issued.
6.7. CORPORATE AUTHORITY. Aberdeen has all requisite
corporate power and authority
to own, operate and lease its properties, to carry on its business
as it is now being conducted and to execute, deliver, perform and
conclude the transactions contemplated by this Agreement and all
other agreements and instruments related to this agreement.
6.8. AUTHORIZATION. Execution of this agreement has been
duly authorized and
approved by Aberdeen 's board of directors.
6.9. SUBSIDIARIES. Except as set out by the schedule
attached hereto, Aberdeen has
no subsidiaries.
6.10. FINANCIAL STATEMENTS. Aberdeen's financial
statements dated as of
September 30, 1999, copies of which will have been delivered by
Aberdeen to Kurchatov prior to the Closing Date (the "Aberdeen
Financial Statements"), fairly present the financial condition of
Aberdeen as of the date therein and the results of its operations
for the periods then ended in conformity with generally accepted
accounting principles consistently applied.
6.11. ABSENCE OF UNDISCLOSED LIABILITIES. Except to the
extent reflected or
reserved against in the Aberdeen Financial Statements, Aberdeen did
not have at that date any liabilities or obligations (secured,
unsecured, contingent, or otherwise) of a nature customarily
reflected in a corporate balance sheet prepared in accordance with
generally accepted accounting principles.
6.12. NO MATERIAL CHANGES. Except as set out by attached
schedule, there has been
no material adverse change in the business, properties, or financial
condition of Aberdeen since the date of the Aberdeen Financial
Statements.
6.13. LITIGATION. Except as set out by attached schedule,
there is not, to the knowledge
of Aberdeen , any pending, threatened, or existing litigation,
bankruptcy, criminal, civil, or regulatory proceeding or
investigation, threatened or contemplated against Aberdeen or
against any of its officers.
6.14. CONTRACTS. Except as set out by attached schedule,
Aberdeen is not a party to
any material contract not in the ordinary course of business that is
to be performed in whole or in part at or after the date of this
agreement.
6.15. TITLE. Except as set out by attached schedule,
Aberdeen has good and marketable
title to all the real property and good and valid title to all other
property included in the Aberdeen Financial Statements. Except as
set out in the balance sheet thereof, the properties of Aberdeen are
not subject to any mortgage, encumbrance, or lien of any kind except
minor encumbrances that do not materially interfere with the use of
the property in the conduct of the business of Aberdeen .
6.16. TAX RETURNS. Except as set out by attached schedule,
all required tax returns
for federal, state, county, municipal, local, foreign and other
taxes and assessments have been properly prepared and filed by
Aberdeen for all years for which such returns are due unless an
extension for filing any such return has been filed. Any and all
federal, state, county, municipal, local, foreign and other taxes
and assessments, including any and all interest, penalties and
additions imposed with respect to such amounts have been paid or
provided for. The provisions for federal and state taxes reflected
in the Aberdeen Financial Statements are adequate to cover any such
taxes that may be assessed against Aberdeen in respect of its
business and its operations during the periods covered by the
Aberdeen Financial Statements and all prior periods.
6.17. NO VIOLATION. The Closing will not constitute or
result in a breach or default
under any provision of any charter, bylaw, indenture, mortgage,
lease, or agreement, or any order, judgment, decree, law, or
regulation to which any property of Aberdeen is subject or by which
Aberdeen is bound.
7. REPRESENTATIONS AND WARRANTIES OF KURCHATOV.
Kurchatov represents and warrants that:
7.1. CORPORATE ORGANIZATION AND GOOD STANDING. Kurchatov
is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware and is qualified to
do business as a foreign corporation in each jurisdiction, if any,
in which its property or business requires such qualification.
7.2. CAPITALIZATION. Kurchatov's authorized capital stock
consists of 50,000,000 shares of Common Stock, $.0001 par value per
share, of which 16,505,911 shares have been issued and are
outstanding, and 1,000,000 shares of Preferred Stock, $.001 par
value per share, of which no shares have been issued and outstanding.
7.3. ISSUED STOCK. All the outstanding shares of its
Common Stock are duly authorized and validly issued, fully paid and
non-assessable.
7.4. STOCK RIGHTS. Except as set out by attached
schedule, there are no stock grants, options, rights, warrants or
other rights to purchase or obtain Kurchatov Common or Preferred
Stock issued or committed to be issued.
7.5. CORPORATE AUTHORITY. Kurchatov has all requisite
corporate power and authority to own, operate and lease its
properties, to carry on its business as it is now being conducted
and to execute, deliver, perform and conclude the transactions
contemplated by this Agreement and all other agreements and
instruments related to this agreement.
7.6. AUTHORIZATION. Execution of this agreement has been
duly authorized and approved by Kurchatov's board of directors.
7.7. SUBSIDIARIES. Except as set out by attached
schedule, Kurchatov has no subsidiaries.
7.8. FINANCIAL STATEMENTS. Kurchatov's financial
statements dated as of December 31, 1998, copies of which will have
been delivered by Kurchatov to Aberdeen prior to the Closing Date
(the "Kurchatov Financial Statements"), fairly present the financial
condition of Kurchatov as of the date therein and the results of its
operations for the periods then ended in conformity with generally
accepted accounting principles consistently applied.
7.9. ABSENCE OF UNDISCLOSED LIABILITIES. Except to the
extent reflected or reserved against in the Kurchatov Financial
Statements, Kurchatov did not have at that date any liabilities or
obligations (secured, unsecured, contingent, or otherwise) of a
nature customarily reflected in a corporate balance sheet prepared
in accordance with generally accepted accounting principles.
7.10. NO MATERIAL CHANGES. Except as set out by attached
schedule, there has been no material adverse change in the business,
properties, or financial condition of Kurchatov since the date of
the Kurchatov Financial Statements.
7.11. LITIGATION. Except as set out by attached schedule,
there is not, to the knowledge of Kurchatov, any pending,
threatened, or existing litigation, bankruptcy, criminal, civil, or
regulatory proceeding or investigation, threatened or contemplated
against Kurchatov or against any of its officers.
7.12. CONTRACTS. Except as set out by attached schedule,
Kurchatov is not a party to any material contract not in the
ordinary course of business that is to be performed in whole or in
part at or after the date of this agreement.
7.13. TITLE. Except as set out by attached schedule,
Kurchatov has good and marketable title to all the real property and
good and valid title to all other property included in the Kurchatov
Financial Statements. Except as set out in the balance sheet
thereof, the properties of Kurchatov are not subject to any
mortgage, encumbrance, or lien of any kind except minor encumbrances
that do not materially interfere with the use of the property in the
conduct of the business of Kurchatov.
7.14. TAX RETURNS. Except as set out by attached schedule,
all required tax returns for federal, state, county, municipal,
local, foreign and other taxes and assessments have been properly
prepared and filed by Kurchatov for all years for which such returns
are due unless an extension for filing any such return has been
filed. Any and all federal, state, county, municipal, local,
foreign and other taxes and assessments, including any and all
interest, penalties and additions imposed with respect to such
amounts have been paid or provided for. The provisions for federal
and state taxes reflected in the Kurchatov Financial Statements are
adequate to cover any such taxes that may be assessed against
Kurchatov in respect of its business and its operations during the
periods covered by the Kurchatov Financial Statements and all prior
periods.
7.15. NO VIOLATION. The Closing will not constitute or
result in a breach or default under any provision of any charter,
bylaw, indenture, mortgage, lease, or agreement, or any order,
judgment, decree, law, or regulation to which any property of
Kurchatov is subject or by which Kurchatov is bound.
8. CONDUCT PENDING THE CLOSING
Aberdeen, Kurchatov and the Shareholders covenant that
between the date of this Agreement and the Closing as to each of them:
8.1. No change will be made in the charter documents,
by-laws, or other corporate documents of Aberdeen .
8.2. Aberdeen will use its best efforts to maintain and
preserve its business organization, employee relationships, and
goodwill intact, and will not enter into any material commitment
except in the ordinary course of business.
8.3. No change will be made in the charter documents,
by-laws, or other corporate documents of Kurchatov.
8.4. Kurchatov will use its best efforts to maintain and
preserve its business organization, employee relationships, and
goodwill intact, and will not enter into any material commitment
except in the ordinary course of business.
8.5. None of the Shareholders will sell, transfer, assign,
hypothecate, lien, or otherwise dispose or encumber the Aberdeen
shares of common stock owned by them.
9. CONDITIONS PRECEDENT TO OBLIGATION OF THE SHAREHOLDERS
The Shareholder's obligation to consummate this exchange
shall be subject to fulfillment on or before the Closing of each of
the following conditions, unless waived in writing by the
Shareholders as appropriate:
9.1. KURCHATOV'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Kurchatov set forth herein shall
be true and correct at the Closing as though made at and as of that
date, except as affected by transactions contemplated hereby.
9.2. KURCHATOV'S COVENANTS. Kurchatov shall have
performed all covenants required by this Agreement to be performed
by it on or before the Closing.
9.3. BOARD OF DIRECTOR APPROVAL. This Agreement shall
have been approved by the Board of Directors of Kurchatov.
9.4. SUPPORTING DOCUMENTS OF KURCHATOV. Kurchatov shall
have delivered to the Shareholders supporting documents in form and
substance reasonably satisfactory to the Shareholders, to the effect
that:
(a) A good standing certificate from the jurisdiction of
Kurchatov's organization stating that Kurchatov is a corporation
duly organized, validly existing, and in good standing;
(b) Secretary's certificate stating that Kurchatov's
authorized capital stock is as set forth herein;
(c) Certified copies of the resolutions of the board of
directors of Kurchatov authorizing the execution of this Agreement
and the consummation hereof;
(d) Secretary's certificate of incumbency of the officers
and directors of Kurchatov;
(e) Kurchatov's Financial Statements; and
(f) Any document as may be specified herein or required
to satisfy the conditions, representations and warranties enumerated
elsewhere herein.
10. CONDITIONS PRECEDENT TO OBLIGATION OF KURCHATOV
Kurchatov's obligation to consummate this exchange shall be
subject to fulfillment on or before the Closing of each of the
following conditions, unless waived in writing by Kurchatov:
10.1. SHAREHOLDERS' REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Shareholders set forth herein
shall be true and correct at the Closing as though made at and as of
that date, except as affected by transactions contemplated hereby.
10.2. SHAREHOLDERS' COVENANTS. The Shareholders shall have
performed all covenants required by this Agreement to be performed
by them on or before the Closing.
10.3. ABERDEEN 'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Aberdeen set forth herein shall be
true and correct at the Closing as though made at and as of that
date, except as affected by transactions contemplated hereby.
10.4. ABERDEEN 'S COVENANTS. Aberdeen shall have performed
all covenants required by this Agreement to be performed by them on
or before the Closing.
10.5. BOARD OF DIRECTOR APPROVAL. This Agreement shall
have been approved by the Board of Directors of Aberdeen .
10.6. SUPPORTING DOCUMENTS OF ABERDEEN. Aberdeen shall
have delivered to the Shareholders supporting documents in form and
substance reasonably satisfactory to the Shareholders, to the effect
that:
(a) A good standing certificate from the jurisdiction of
Aberdeen's organization stating that Aberdeen is a corporation duly
organized, validly existing, and in good standing;
(b) Secretary's certificate stating that Aberdeen's
authorized capital stock is as set forth herein;
(c) Certified copies of the resolutions of the board of
directors of Aberdeen authorizing the execution of this Agreement
and the consummation hereof;
(d) Secretary's certificate of incumbency of the officers
and directors of Aberdeen ;
(e) Aberdeen's Financial Statements; and
(f) Any document as may be specified herein or required
to satisfy the conditions, representations and warranties enumerated
elsewhere herein.
11. SHAREHOLDER REPRESENTATIVE. The Shareholders hereby
irrevocably designate and appoint Cassidy & Associates, 1504 R
Street, N.W. Washington, District of Columbia 20009, as their agent
and attorney in fact (the "Shareholders' Representative") with full
power and authority until the Closing to execute, deliver, and
receive on their behalf all notices, requests, and other
communications hereunder; to fix and alter on their behalf the date,
time, and place of the Closing; to waive, amend, or modify any
provisions of this Agreement, and to take such other action on their
behalf in connection with this Agreement, the Closing, and the
transactions contemplated hereby as such agent or agents deem
appropriate; provided, however, that no such waiver, amendment, or
modification may be made if it would decrease the number of shares
to be issued to the Shareholders hereunder or increase the extent of
their obligation to indemnify Reorganization hereunder.
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties
of the Shareholders, Kurchatov and Aberdeen set out herein shall
survive the Closing.
13. ARBITRATION
13.1. SCOPE. The parties hereby agree that any and all
claims (except only for requests for injunctive or other equitable
relief) whether existing now, in the past or in the future as to
which the parties or any affiliates may be adverse parties, and
whether arising out of this agreement or from any other cause, will
be resolved by arbitration before the American Arbitration
Association within the District of Columbia.
13.2. CONSENT TO JURISDICTION, SITUS AND JUDGEMENT. The
parties hereby irrevocably consent to the jurisdiction of the
American Arbitration Association and the situs of the arbitration
(and any requests for injunctive or other equitable relief) in New
York City, New York. Any award in arbitration may be entered in any
domestic or foreign court having jurisdiction over the enforcement
of such awards.
13.3. APPLICABLE LAW. The law applicable to the
arbitration and this agreement shall be that of the State of
Delaware, determined without regard to its provisions which would
otherwise apply to a question of conflict of laws.
13.4. DISCLOSURE AND DISCOVERY. The arbitrator may, in its
discretion, allow the parties to make reasonable disclosure and
discovery in regard to any matters which are the subject of the
arbitration and to compel compliance with such disclosure and
discovery order. The arbitrator may order the parties to comply
with all or any of the disclosure and discovery provisions of the
Federal Rules of Civil Procedure, as they then exist, as may be
modified by the arbitrator consistent with the desire to simplify
the conduct and minimize the expense of the arbitration.
13.5. RULES OF LAW. Regardless of any practices of
arbitration to the contrary, the arbitrator will apply the rules of
contract and other law of the jurisdiction whose law applies to the
arbitration so that the decision of the arbitrator will be, as much
as possible, the same as if the dispute had been determined by a
court of competent jurisdiction.
13.6. FINALITY AND FEES. Any award or decision by the
American Arbitration Association shall be final, binding and
non-appealable except as to errors of law or the failure of the
arbitrator to adhere to the arbitration provisions contained in this
agreement. Each party to the arbitration shall pay its own costs
and counsel fees except as specifically provided otherwise in this
agreement.
13.7. MEASURE OF DAMAGES. In any adverse action, the
parties shall restrict themselves to claims for compensatory damages
and\or securities issued or to be issued and no claims shall be made
by any party or affiliate for lost profits, punitive or multiple
damages.
13.8. COVENANT NOT TO SUE. The parties covenant that under
no conditions will any party or any affiliate file any action
against the other (except only requests for injunctive or other
equitable relief) in any forum other than before the American
Arbitration Association, and the parties agree that any such action,
if filed, shall be dismissed upon application and shall be referred
for arbitration hereunder with costs and attorney's fees to the
prevailing party.
13.9. INTENTION. It is the intention of the parties and
their affiliates that all disputes of any nature between them,
whenever arising, whether in regard to this agreement or any other
matter, from whatever cause, based on whatever law, rule or
regulation, whether statutory or common law, and however
characterized, be decided by arbitration as provided herein and that
no party or affiliate be required to litigate in any other forum any
disputes or other matters except for requests for injunctive or
equitable relief. This agreement shall be interpreted in
conformance with this stated intent of the parties and their
affiliates.
13.10. SURVIVAL. The provisions for arbitration contained
herein shall survive the termination of this agreement for any reason.
14. GENERAL PROVISIONS.
14.1. FURTHER ASSURANCES. From time to time, each party
will execute such additional instruments and take such actions as
may be reasonably required to carry out the intent and purposes of
this agreement.
14.2. WAIVER. Any failure on the part of either party
hereto to comply with any of its obligations, agreements, or
conditions hereunder may be waived in writing by the party to whom
such compliance is owed.
14.3. BROKERS. Each party agrees to indemnify and hold
harmless the other party against any fee, loss, or expense arising
out of claims by brokers or finders employed or alleged to have been
employed by the indemnifying party.
14.4. NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to have been given
if delivered in person or sent by prepaid first-class certified
mail, return receipt requested, or recognized commercial courier
service, as follows:
If to Aberdeen, to:
Aberdeen Acquisition Corporation
1504 R Street, N.W.
Washington, D.C. 20009
If to Kurchatov, to:
Kurchatov Research Holdings, Ltd.
Wiesbadener Str. 17
D-12309
Berlin, Germany
If to the Shareholders, to:
Cassidy & Associates
1504 R Street, N.W.
Washington, D.C. 20009
14.5. GOVERNING LAW. This agreement shall be governed by
and construed and enforced in accordance with the laws of the State
of Delaware.
14.6. ASSIGNMENT. This agreement shall inure to the
benefit of, and be binding upon, the parties hereto and their
successors and assigns; provided, however, that any assignment by
either party of its rights under this agreement without the written
consent of the other party shall be void.
14.7. COUNTERPARTS. This agreement may be executed
simultaneously in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one
and the same instrument. Signatures sent by facsimile transmission
shall be deemed to be evidence of the original execution thereof.
14.8. EXCHANGE AGENT AND CLOSING DATE. The Exchange Agent
shall be the law firm of Cassidy & Associates, Washington, D.C. The
Closing shall take place upon the fulfillment by each party of all
the conditions of Closing required herein, but not later than 15
days following execution of this agreement unless extended by mutual
consent of the parties.
14.9. REVIEW OF AGREEMENT. Each party acknowledges that it
has had time to review this agreement and, as desired, consult with
counsel. In the interpretation of this agreement, no adverse
presumption shall be made against any party on the basis that it has
prepared, or participated in the preparation of, this agreement.
14.10. SCHEDULES. All schedules attached hereto, if any,
shall be acknowledged by each party by signature or initials thereon
and shall be dated.
14.11. EFFECTIVE DATE. This effective date of this
agreement shall be December 24 1999.
SIGNATURE PAGE TO AGREEMENT AND PLAN OF REORGANIZATION
AMONG ABERDEEN, KURCHATOV AND THE SHAREHOLDERS OF ABERDEEN
IN WITNESS WHEREOF, the parties have executed this agreement.
ABERDEEN ACQUISITION CORPORATION
By___________________________________
James M. Cassidy
KURCHATOV RESEARCH HOLDINGS, LTD.
By___________________________________
Jacques J. Saunder
THE SHAREHOLDERS OF ABERDEEN
ACQUISITION CORPORATION:
TPG CAPITAL CORPORATION:
By__________________________________
James M. Cassidy,
President
