Acquisition Agreement and Plan of Merger between Copsil Corporation and Cochstedt International Airport, Inc. dated May 12, 2000

Summary

Copsil Corporation and Cochstedt International Airport, Inc., both Nevada corporations, have agreed to merge, with Copsil as the surviving company. The agreement outlines the terms of the merger, including the exchange of shares, the structure of the new board and officers, and the transfer of all assets and liabilities to the surviving corporation. The merger is intended to be tax-free under federal law and is subject to approval by both companies' shareholders and regulatory filings. The agreement also details representations, warranties, and conditions that must be met before the merger is finalized.

EX-1.1 2 0002.txt ACQUISITION AGREEMENT AND PLAN OF MERGER DATED AS OF MAY 12, 2000 BETWEEN COPSIL CORPORATION AND COCHSTEDT INTERNATIONAL AIRPORT, INC. TABLE OF CONTENTS ARTICLE 1. The Merger Section 1.1. The Merger Section 1.2. Effective Time Section 1.3. Closing of the Merger Section 1.4. Effects of the Merger Section 1.5. Board of Directors and Officers Section 1.6. Conversion of Shares Section 1.7. Exchange of Certificates Section 1.8. Stock Options Section 1.9. Taking of Necessary Action; Further Action ARTICLE 2. Representations and Warranties of COPSIL Section 2.1. Organization and Qualification Section 2.2. Capitalization of COPSIL Section 2.3.Authority Relative to this Agreement; Recommendation. Section 2.4. SEC Reports; Financial Statements Section 2.5. Information Supplied Section 2.6. Consents and Approvals; No Violations Section 2.7. No Default Section 2.8. No Undisclosed Liabilities; Absence of Changes Section 2.9. Litigation Section 2.10. Compliance with Applicable Law Section 2.11. Employee Benefit Plans; Labor Matters Section 2.12. Environmental Laws and Regulations Section 2.13. Tax Matters Section 2.14. Title To Property Section 2.15. Intellectual Property Section 2.16. Insurance Section 2.17. Vote Required Section 2.18. Tax Treatment Section 2.19. Affiliates Section 2.20. Certain Business Practices Section 2.21. Insider Interests Section 2.22. Opinion of Financial Adviser Section 2.23. Brokers Section 2.24. Disclosure Section 2.25. No Existing Discussion Section 2.26. Material Contracts ARTICLE 3. Representations and Warranties of CIA. Section 3.1. Organization and Qualification Section 3.2. Capitalization of CIA Section 3.3.Authority Relative to this Agreement; Recommendation Section 3.4. SEC Reports; Financial Statements Section 3.5. Information Supplied Section 3.6. Consents and Approvals; No Violations Section 3.7. No Default Section 3.8 No Undisclosed Liabilities; Absence of Changes Section 3.9. Litigation Section 3.10. Compliance with Applicable Law Section 3.11. Employee Benefit Plans; Labor Matters Section 3.12. Environmental Laws and Regulations Section 3.13. Tax Matters Section 3.14. Title to Property Section 3.15. Intellectual Property Section 3.16. Insurance Section 3.17. Vote Required Section 3.18. Tax Treatment Section 3.19. Affiliates Section 3.20. Certain Business Practices Section 3.21. Insider Interests Section 3.22. Opinion of Financial Adviser Section 3.23. Brokers Section 3.24. Disclosure Section 3.25. No Existing Discussions Section 3.26. Material Contracts ARTICLE 4. Covenants Section 4.1. Conduct of Business of COPSIL Section 4.2. Conduct of Business of CIA Section 4.3. Preparation of 8-K and the Proxy Statement Section 4.4. Other Potential Acquirers Section 4.5. Meetings of Stockholders Section 4.6. NASD OTC:BB Listing Section 4.7. Access to Information Section 4.8. Additional Agreements; Reasonable Efforts. Section 4.9.Employee Benefits; Stock Option and Employee Purchase Plans Section 4.10. Public Announcements Section 4.11. Indemnification Section 4.12. Notification of Certain Matters ARTICLE 5. Conditions to Consummation of the Merger Conditions to Each Party's Obligations to Effect the Section 5.1. Merger Section 5.2. Conditions to the Obligations of COPSIL Section 5.3. Conditions to the Obligations of CIA ARTICLE 6. Termination; Amendment; Waiver Section 6.1. Termination Section 6.2. Effect of Termination Section 6.3. Fees and Expenses Section 6.4. Amendment Section 6.5. Extension; Waiver ARTICLE 7. Miscellaneous Section 7.1. Nonsurvival of Representations and Warranties Section 7.2. Entire Agreement; Assignment Section 7.3. Validity Section 7.4. Notices Section 7.5. Governing Law Section 7.6. Descriptive Headings Section 7.7. Parties in Interest Section 7.8. Certain Definitions Section 7.9. Personal Liability Section 7.10. Specific Performance Section 7.11. Counterparts AGREEMENT AND PLAN OF MERGER This Agreement and Plan of Merger (this "Agreement"), dated as of May 12, 2000, is between Copsil Corporation, a Nevada corporation ("COPSIL"), and Cochstedt International Airport, Inc., a Nevada corporation ("CIA"). Whereas, the Boards of Directors of COPSIL and CIA each have, in light of and subject to the terms and conditions set forth herein, (i) determined that the Merger (as defined below) is fair to their respective stockholders and in the best interests of such stockholders and (ii) approved the Merger in accordance with this Agreement; Whereas, for Federal income tax purposes, it is intended that the Merger qualify as a reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"); and Whereas, COPSIL and CIA desire to make certain representations, warranties, covenants and agreements in connection with the Merger and also to prescribe various conditions to the Merger. Now, therefore, in consideration of the premises and the representations, warranties, covenants and agreements herein contained, and intending to be legally bound hereby, COPSIL and CIA hereby agree as follows: ARTICLE I The Merger Section 1.1. The Merger. At the Effective Time (as defined below) and upon the terms and subject to the conditions of this Agreement and in accordance with the General Corporation Law of the state of Nevada (the "NGCL"), CIA shall be merged with and into COPSIL (as defined below) (the ''Merger). Following the Merger, COPSIL shall continue as the surviving corporation (the "Surviving Corporation"), shall continue to be governed by the laws of the jurisdiction of its incorporation or organization and the separate corporate existence of CIA shall cease. Prior to the Effective Time, the parties hereto shall mutually agree as to the name of the Surviving Corporation; however, initially the Surviving Corporation shall be named Cochstedt International Airport, Inc. a Nevada corporation. The Merger is intended to qualify as a tax-free reorganization under Section 368 of the Code as relates to the non-cash exchange of stock referenced herein. Section 1.2. Effective Time. Subject to the terms and conditions set forth in this Agreement, a Certificate of Merger (the "Merger Certificate") shall be duly executed and acknowledged by each of CIA and COPSIL, and thereafter the Merger Certificate reflecting the Merger shall be delivered to the Secretary of State of the State of Nevada for filing pursuant to the NGCL on the Closing Date (as defined in Section 1.3). The Merger shall become effective at such time as a properly executed and certified copy of the Merger Certificate is duly filed by the Secretary of State of the State of Nevada in accordance with the NGCL or such later time as the parties may agree upon and set forth in the Merger Certificate (the time at which the Merger becomes effective shall be referred to herein as the "Effective Time"). Section 1.3. Closing of the Merger. The closing of the Merger (the "Closing") will take place at a time and on a date to be specified by the parties, which shall be no later than the second business day after satisfaction of the latest to occur of the conditions set forth in Article 5 (the "Closing Date"), at the offices of Sperry Young & Stoecklein, 1850 E. Flamingo Rd., Suite 111, Las Vegas, Nevada, unless another time, date or place is agreed to in writing by the parties hereto. Section 1.4. Effects of the Merger. The Merger shall have the effects set forth in the NGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the properties, rights, privileges, powers of CIA shall vest in the Surviving Corporation, and all debts, liabilities and duties of CIA shall become the debts, liabilities and duties of the Surviving Corporation. Section 1.5. Board of Directors and Officers of COPSIL. At or prior to the Effective Time, each of CIA and COPSIL agrees to take such action as is necessary (i) to cause the number of directors comprising the full Board of Directors of COPSIL to be two (2) persons and (ii) to cause Friedrich Gradl, and Norbert Doerr, (the "CIA Designees") to be elected as directors of COPSIL. In addition, majority stockholders of COPSIL prior to the Effective Time shall take all action necessary to cause, to the greatest extent practicable, the CIA Designees to serve on COPSIL's Board of Directors until the 2000 Annual Meeting. If the CIA Designees, respectively, shall decline or be unable to serve as a directors prior to the Effective Time, CIA shall nominate another person to serve in such person's stead which such person shall be subject to approval of the other party. From and after the Effective Time, and until successors are duly elected or appointed and qualified in accordance with applicable law, Friedrich Gradl shall be President and Norbert Doerr Secretary, and Treasurer of COPSIL. Section 1.6. Conversion of Shares. (a) At the Effective Time, each share of common stock, par value $.001 per share of CIA (individually a "CIA Share" and collectively, the "CIA Shares") issued and outstanding immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of CIA, COPSIL, or the holder thereof, be converted into and shall become fully paid and nonassessable COPSIL common shares determined by multiplying (i) the total number of shares of CIA, Three Million Three Hundred Thousand (3,300,000) outstanding immediately prior to the Effective Time by (ii) Ten (10) (the "Exchange Ratio"), less 28,300,000 shares which shares are to be issued to Cochstedt International Airport, Inc. and retained by COPSIL in Treasury for future financing. The holder of one or more shares of CIA common stock shall be entitled to receive in exchange therefor a number of shares of COPSIL Common Stock equal to the product of (x) (the number of shares of CIA common stock), times (y) (the Exchange Ratio. COPSIL Shares and CIA Shares are sometimes referred to collectively herein as "Shares." By way of example the number of shares of CIA common stock held by a stockholder (100,000) times the Exchange Ratio of 10 equals 1,000,000 shares of COPSIL Shares to be issued. (b) At the Effective Time, each CIA Share held in the treasury of CIA, by CIA immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of CIA or COPSIL be canceled, retired and cease to exist and no payment shall be made with respect thereto. Section 1.7. Exchange of Certificates. (a) Prior to the Effective Time, COPSIL shall enter into an agreement with, and shall deposit with, Sperry Young & Stoecklein, or such other agent or agents as may be satisfactory to COPSIL and CIA (the "Exchange Agent'), for the benefit of the holders of CIA Shares, for exchange through the Exchange Agent in accordance with this Article I: (i) certificates representing the appropriate number of COPSIL Shares to be issued to holders of CIA Shares issuable pursuant to Section 1.6 in exchange for outstanding CIA Shares. (b) As soon as reasonably practicable after the Effective Time, the Exchange Agent shall mail to each holder of record of a certificate or certificates which immediately prior to the Effective Time represented outstanding CIA Shares (the "Certificates") whose shares were converted into the right to receive COPSIL Shares pursuant to Section 1.6: (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent and shall be in such form and have such other provisions as CIA and COPSIL may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for certificates representing COPSIL Shares. Upon surrender of a Certificate to the Exchange Agent, together with such letter of transmittal, duly executed, and any other required documents, the holder of such Certificate shall be entitled to receive in exchange therefor a certificate representing that number of whole COPSIL Shares and, if applicable, a check representing the cash consideration to which such holder may be entitled on account of the Cash Fund, which such holder has the right to receive pursuant to the provisions of this Article I, and the Certificate so surrendered shall forthwith be canceled. In the event of a transfer of ownership of CIA Shares which are not registered in the transfer records of CIA, a certificate representing the proper number of COPSIL Shares may be issued to a transferee if the Certificate representing such CIA Shares is presented to the Exchange Agent accompanied by all documents required by the Exchange Agent or COPSIL to evidence and effect such transfer and by evidence that any applicable stock transfer or other taxes have been paid. Until surrendered as contemplated by this Section 1.7, each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the certificate representing COPSIL Shares as contemplated by this Section 1.8. (c) No dividends or other distributions declared or made after the Effective Time with respect to COPSIL Shares with a record date after the Effective Time shall be paid to the holder of any unsurrendered Certificate with respect to the COPSIL Shares represented thereby until the holder of record of such Certificate shall surrender such Certificate. (d) In the event that any Certificate for CIA Shares or COPSIL Shares shall have been lost, stolen or destroyed, the Exchange Agent shall issue in exchange therefor, upon the making of an affidavit of that fact by the holder thereof such COPSIL Shares and cash in lieu of fractional COPSIL Shares, if any, as may be required pursuant to this Agreement; provided, however, that COPSIL or the Exchange Agent, may, in its respective discretion, require the delivery of a suitable bond, opinion or indemnity. (e) All COPSIL Shares issued upon the surrender for exchange of CIA Shares in accordance with the terms hereof (including any cash paid pursuant to Section 1.10 shall be deemed to have been issued in full satisfaction of all rights pertaining to such CIA Shares. There shall be no further registration of transfers on the stock transfer books of either of CIA or COPSIL of the CIA Shares or COPSIL Shares which were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to COPSIL for any reason, they shall be canceled and exchanged as provided in this Article I. (f) No fractional COPSIL Shares shall be issued in the Merger, but in lieu thereof each holder of CIA Shares otherwise entitled to a fractional COPSIL Share shall, upon surrender of its, his or her Certificate or Certificates, be entitled to receive an additional share to round up to the nearest round number of shares. Section 1.8. At the Effective Time, each outstanding option to purchase CIA Shares, if any (a "CIA Stock Option" or collectively, "CIA Stock Options") issued pursuant to any CIA Stock Option Plan or CIA Long Term Incentive Plan whether vested or un-vested, shall be cancelled. Section 1.9. Taking of Necessary Action; Further Action. If, at any time after the Effective Time, CIA or COPSIL reasonably determines that any deeds, assignments, or instruments or confirmations of transfer are necessary or desirable to carry out the purposes of this Agreement and to vest COPSIL with full right, title and possession to all assets, property, rights, privileges, powers and franchises of CIA, the officers and directors of COPSIL and CIA are fully authorized in the name of their respective corporations or otherwise to take, and will take, all such lawful and necessary or desirable action. ARTICLE 2 Representations and Warranties of COPSIL Except as set forth on the Disclosure Schedule delivered by COPSIL to CIA (the "COPSIL Disclosure Schedule"), COPSIL hereby represents and warrants to CIA as follows: Section 2.1. Organization and Qualification. (a) COPSIL is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization and has all requisite power and authority to own, lease and operate its properties and to carry on its businesses as now being conducted, except where the failure to be so organized, existing and in good standing or to have such power and authority would not have a Material Adverse Effect (as defined below) on COPSIL. When used in connection with COPSIL, the term "Material Adverse Effect" means any change or effect (i) that is or is reasonably likely to be materially adverse to the business, results of operations, condition (financial or otherwise) or prospects of COPSIL, other than any change or effect arising out of general economic conditions unrelated to any business in which COPSIL is engaged, or (ii) that may impair the ability of COPSIL to perform its obligations hereunder or to consummate the transactions contemplated hereby. (b) COPSIL has heretofore delivered to CIA accurate and complete copies of the Certificate of Incorporation and Bylaws (or similar governing documents), as currently in effect, of COPSIL. Except as set forth on Schedule 2.1 of the COPSIL Disclosure Schedule, COPSIL is duly qualified or licensed and in good standing to do business in each jurisdiction in which the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary, except in such jurisdictions where the failure to be so duly qualified or licensed and in good standing would not have a Material Adverse Effect on COPSIL. Section 2.2. Capitalization of COPSIL. (a) The authorized capital stock of COPSIL consists of: (i) Twenty Million (20,000,000) Common Shares, of which, as of March 31, 2000, Ten Million (10,000,000) Common Shares were issued and outstanding, and no Common Shares were held in treasury, (ii) Five Million (5,000,000) Preferred Shares at $.001 par value of which no Preferred Shares were issued or outstanding. Concurrent with the Execution of the Plan of Merger, the authorized common stock shall be amended to 100,000,000. All of the outstanding COPSIL Shares have been duly authorized and validly issued, and are fully paid, nonassessable and free of preemptive rights. Except as set forth herein, as of the date hereof, there are no outstanding (i) shares of capital stock or other voting securities of COPSIL, (ii) securities of COPSIL convertible into or exchangeable for shares of capital stock or voting securities of COPSIL, except for the preferred shares of COPSIL, (iii) options or other rights to acquire from COPSIL and, except as described in the COPSIL SEC Reports (as defined below), no obligations of COPSIL to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of COPSIL, and (iv) equity equivalents, interests in the ownership or earnings of COPSIL or other similar rights (collectively, "COPSIL Securities"). As of the date hereof, except as set forth on Schedule 2.2(a) of the COPSIL Disclosure Schedule there are no outstanding obligations of COPSIL or its subsidiaries to repurchase, redeem or otherwise acquire any COPSIL Securities or stockholder agreements, voting trusts or other agreements or understandings to which COPSIL is a party or by which it is bound relating to the voting or registration of any shares of capital stock of COPSIL. For purposes of this Agreement, ''Lien" means, with respect to any asset (including, without limitation, any security) any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset. (b) The COPSIL Shares constitute the only class of equity securities of COPSIL registered or required to be registered under the Exchange Act. (c) COPSIL does not own directly or indirectly more than fifty percent (50%) of the outstanding voting securities or interests (including membership interests) of any entity, other than as specifically disclosed in the disclosure documents. Section 2.3. Authority Relative to this Agreement; Recommendation. (a) COPSIL has all necessary corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by the Board of Directors of COPSIL (the "COPSIL Board") and no other corporate proceedings on the part of COPSIL are necessary to authorize this Agreement or to consummate the transactions contemplated hereby, except, as referred to in Section 2.17, the approval and adoption of this Agreement by the holders of at least a majority of the then outstanding COPSIL Shares. This Agreement has been duly and validly executed and delivered by COPSIL and constitutes a valid, legal and binding agreement of COPSIL, enforceable against COPSIL in accordance with its terms. (b) The COPSIL Board has resolved to recommend that the stockholders of COPSIL approve and adopt this Agreement. Section 2.4. SEC Reports; Financial Statements. (a) COPSIL has filed all required forms, reports and documents with the Securities and Exchange Commission (the "SEC") since March 31, 2000, each of which has complied in all material respects with all applicable requirements of the Securities Act of 1933, as amended (the "Securities Act"), and the Exchange Act (and the rules and regulations promulgated thereunder, respectively), each as in effect on the dates such forms, reports and documents were filed. COPSIL has heretofore delivered or promptly will deliver prior to the Effective Date to CIA, in the form filed with the SEC (including any amendments thereto but excluding any exhibits), (i) its Form 10-KSB for period ending December 31, 1999, (ii) all definitive proxy statements relating to COPSIL's meetings of stockholders (whether annual or special) held since December 31, 1999, if any, and (iii) all other reports or registration statements filed by COPSIL with the SEC since March 31, 2000 (all of the foregoing, collectively, the "COPSIL SEC Reports"). None of such COPSIL SEC Reports, including, without limitation, any financial statements or schedules included or incorporated by reference therein, contained, when filed, any untrue statement of a material fact or omitted to state a material fact required to be stated or incorporated by reference therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The audited financial statements of COPSIL included in the COPSIL SEC Reports fairly present, in conformity with generally accepted accounting principles applied on a consistent basis (except as may be indicated in the notes thereto), the financial position of COPSIL as of the dates thereof and its results of operations and changes in financial position for the periods then ended. All material agreements, contracts and other documents required to be filed as exhibits to any of the COPSIL SEC Reports have been so filed. (b) COPSIL has heretofore made available or promptly will make available to CIA a complete and correct copy of any amendments or modifications which are required to be filed with the SEC but have not yet been filed with the SEC, to agreements, documents or other instruments which previously had been filed by COPSIL with the SEC pursuant to the Exchange Act. Section 2.5. Information Supplied. None of the information supplied or to be supplied by COPSIL for inclusion or incorporation by reference in connection with the Merger (the "Proxy Statement") will at the date mailed to stockholders of COPSIL and at the times of the meeting or meetings of stockholders of COPSIL to be held in connection with the Merger, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Proxy Statement, insofar as it relates to the meeting of COPSIL's stockholders to vote on the Merger, will comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations thereunder. Section 2.6. Consents and Approvals; No Violations. Except for filings, permits, authorizations, consents and approvals as may be required under, and other applicable requirements of, the Securities Act, the Exchange Act, state securities or blue sky laws, the Hart-Scott-Rodino Antitrust Improvements Act of 1916, as amended (the ''HSR Act''), the rules of the National Association of Securities Dealers, Inc. ("NASD"), the filing and recordation of the Merger Certificate as required by the NGCL, and as set forth on Schedule 2.6 of the COPSIL Disclosure Schedule no filing with or notice to, and no permit, authorization, consent or approval of, any court or tribunal or administrative, governmental or regulatory body, agency or authority (a "Governmental Entity") is necessary for the execution and delivery by COPSIL of this Agreement or the consummation by COPSIL of the transactions contemplated hereby, except where the failure to obtain such permits, authorizations, consents or approvals or to make such filings or give such notice would not have a Material Adverse Effect on COPSIL. Except as set forth in Section 2.6 of the COPSIL Disclosure Schedule, neither the execution, delivery and performance of this Agreement by COPSIL nor the consummation by COPSIL of the transactions contemplated hereby will (i) conflict with or result in any breach of any provision of the respective Certificate of Incorporation or Bylaws (or similar governing documents) of COPSIL, (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration or Lien) under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation to which COPSIL is a party or by which any of its properties or assets may be bound, or (iii) violate any order, writ, injunction, decree, law, statute, rule or regulation applicable to COPSIL or any of its properties or assets, except in the case of (ii) or (iii) for violations, breaches or defaults which would not have a Material Adverse Effect on COPSIL. Section 2.7. No Default. Except as set forth in Section 2.7 of the COPSIL Disclosure Schedule, COPSIL is not in breach, default or violation (and no event has occurred which with notice or the lapse of time or both would constitute a breach default or violation) of any term, condition or provision of (i) its Certificate of Incorporation or Bylaws (or similar governing documents), (ii) any note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation to which COPSIL is now a party or by which any of its respective properties or assets may be bound or (iii) any order, writ injunction, decree, law, statute, rule or regulation applicable to COPSIL or any of its respective properties or assets, except in the case of (ii) or (iii) for violations, breaches or defaults that would not have a Material Adverse Effect on COPSIL. Except as set forth in Section 2.7 of the COPSIL Disclosure Schedule, each note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation to which COPSIL is now a party or by which its respective properties or assets may be bound that is material to COPSIL and that has not expired is in full force and effect and is not subject to any material default thereunder of which COPSIL is aware by any party obligated to COPSIL thereunder. Section 2.8. No Undisclosed Liabilities; Absence of Changes. Except as set forth in Section 2.8 of the COPSIL Disclosure Schedule and except as and to the extent publicly disclosed by COPSIL in the COPSIL SEC Reports, as of March 31, 2000, COPSIL does not have any liabilities or obligations of any nature, whether or not accrued, contingent or otherwise, that would be required by generally accepted accounting principles to be reflected on a balance sheet of COPSIL (including the notes thereto) or which would have a Material Adverse Effect on COPSIL. Except as publicly disclosed by COPSIL, since March 31, 2000, COPSIL has not incurred any liabilities of any nature, whether or not accrued, contingent or otherwise, which could reasonably be expected to have, and there have been no events, changes or effects with respect to COPSIL having or which reasonably could be expected to have, a Material Adverse Effect on COPSIL. Except as and to the extent publicly disclosed by COPSIL in the COPSIL SEC Reports and except as set forth in Section 2.8 of the COPSIL Disclosure Schedule, since March 31, 2000, there has not been (i) any material change by COPSIL in its accounting methods, principles or practices (other than as required after the date hereof by concurrent changes in generally accepted accounting principles), (ii) any revaluation by COPSIL of any of its assets having a Material Adverse Effect on COPSIL, including, without limitation, any write-down of the value of any assets other than in the ordinary course of business or (iii) any other action or event that would have required the consent of any other party hereto pursuant to Section 4.1 of this Agreement had such action or event occurred after the date of this Agreement. Section 2.9. Litigation. Except as publicly disclosed by COPSIL in the COPSIL SEC Reports, there is no suit, claim, action, proceeding or investigation pending or, to the knowledge of COPSIL, threatened against COPSIL or any of its subsidiaries or any of their respective properties or assets before any Governmental Entity which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect on COPSIL or could reasonably be expected to prevent or delay the consummation of the transactions contemplated by this Agreement. Except as publicly disclosed by COPSIL in the COPSIL SEC Reports, COPSIL is not subject to any outstanding order, writ, injunction or decree which, insofar as can be reasonably foreseen in the future, could reasonably be expected to have a Material Adverse Effect on COPSIL or could reasonably be expected to prevent or delay the consummation of the transactions contemplated hereby. Section 2.10. Compliance with Applicable Law. Except as publicly disclosed by COPSIL in the COPSIL SEC Reports, COPSIL holds all permits, licenses, variances, exemptions, orders and approvals of all Governmental Entities necessary for the lawful conduct of their respective businesses (the `'COPSIL Permits"), except for failures to hold such permits, licenses, variances, exemptions, orders and approvals which would not have a Material Adverse Effect on COPSIL. Except as publicly disclosed by COPSIL in the COPSIL SEC Reports, COPSIL is in compliance with the terms of the COPSIL Permits, except where the failure so to comply would not have a Material Adverse Effect on COPSIL. Except as publicly disclosed by COPSIL in the COPSIL SEC Reports, the business of COPSIL is not being conducted in violation of any law, ordinance or regulation of any Governmental Entity except that no representation or warranty is made in this Section 2.10 with respect to Environmental Laws (as defined in Section 2.12 below) and except for violations or possible violations which do not, and, insofar as reasonably can be foreseen, in the future will not, have a Material Adverse Effect on COPSIL. Except as publicly disclosed by COPSIL in the COPSIL SEC Reports, no investigation or review by any Governmental Entity with respect to COPSIL is pending or, to the knowledge of COPSIL, threatened, nor, to the knowledge of COPSIL, has any Governmental Entity indicated an intention to conduct the same, other than, in each case, those which COPSIL reasonably believes will not have a Material Adverse Effect on COPSIL. Section 2.11. Employee Benefit Plans; Labor Matters. (a) Except as set forth in Section 2.11(a) of the COPSIL Disclosure Schedule with respect to each employee benefit plan, program, policy, arrangement and contract (including, without limitation, any "employee benefit plan," as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")), maintained or contributed to at any time by COPSIL or any entity required to be aggregated with COPSIL pursuant to Section 414 of the Code (each, a "COPSIL Employee Plan"), no event has occurred and to the knowledge of COPSIL, no condition or set of circumstances exists in connection with which COPSIL could reasonably be expected to be subject to any liability which would have a Material Adverse Effect on COPSIL. (b) (i) No COPSIL Employee Plan is or has been subject to Title IV of ERISA or Section 412 of the Code; and (ii) each COPSIL Employee Plan intended to qualify under Section 401(a) of the Code and each trust intended to qualify under Section 501(a) of the Code is the subject of a favorable Internal Revenue Service determination letter, and nothing has occurred which could reasonably be expected to adversely affect such determination. (c) Section 2.11(c) of the COPSIL Disclosure Schedule sets forth a true and complete list, as of the date of this Agreement, of each person who holds any COPSIL Stock Options, together with the number of COPSIL Shares which are subject to such option, the date of grant of such option, the extent to which such option is vested (or will become vested as a result of the Merger), the option price of such option (to the extent determined as of the date hereof), whether such option is a nonqualified stock option or is intended to qualify as an incentive stock option within the meaning of Section 422(b) of the Code, and the expiration date of such option. Section 2.11(c) of the COPSIL Disclosure Schedule also sets forth the total number of such incentive stock options and such nonqualified options. COPSIL has furnished CIA with complete copies of the plans pursuant to which the COPSIL Stock Options were issued. Other than the automatic vesting of COPSIL Stock Options that may occur without any action on the part of COPSIL or its officers or directors, COPSIL has not taken any action that would result in any COPSIL Stock Options that are unvested becoming vested in connection with or as a result of the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby. (d) COPSIL has made available to CIA (i) a description of the terms of employment and compensation arrangements of all officers of COPSIL and a copy of each such agreement currently in effect; (ii) copies of all agreements with consultants who are individuals obligating COPSIL to make annual cash payments in an amount exceeding $60,000; (iii) a schedule listing all officers of COPSIL who have executed a non-competition agreement with COPSIL and a copy of each such agreement currently in effect; (iv) copies (or descriptions) of all severance agreements, programs and policies of COPSIL with or relating to its employees, except programs and policies required to be maintained by law; and (v) copies of all plans, programs, agreements and other arrangements of COPSIL with or relating to its employees which contain change in control provisions all of which are set forth in Section 2.11(d) of the COPSIL Disclosure Schedule. (e) There shall be no payment, accrual of additional benefits, acceleration of payments, or vesting in any benefit under any COPSIL Employee Plan or any agreement or arrangement disclosed under this Section 2.11 solely by reason of entering into or in connection with the transactions contemplated by this Agreement. (f) There are no controversies pending or, to the knowledge of COPSIL, threatened, between COPSIL and any of their employees, which controversies have or could reasonably be expected to have a Material Adverse Effect on COPSIL. Neither COPSIL nor any of its subsidiaries is a party to any collective bargaining agreement or other labor union contract applicable to persons employed by COPSIL or any of its subsidiaries (and neither COPSIL nor any of its subsidiaries has any outstanding material liability with respect to any terminated collective bargaining agreement or labor union contract), nor does COPSIL know of any activities or proceedings of any labor union to organize any of its or employees. COPSIL has no knowledge of any strike, slowdown, work stoppage, lockout or threat thereof, by or with respect to any of its employees. Section 2.12. Environmental Laws and Regulations. (a) Except as publicly disclosed by COPSIL in the COPSIL SEC Reports, (i) COPSIL is in material compliance with all applicable federal, state, local and foreign laws and regulations relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata) (collectively, "Environmental Laws"), except for non-compliance that would not have a Material Adverse Effect on COPSIL, which compliance includes, but is not limited to, the possession by COPSIL of all material permits and other governmental authorizations required under applicable Environmental Laws, and compliance with the terms and conditions thereof; (ii) COPSIL has not received written notice of, or, to the knowledge of COPSIL, is the subject of, any action, cause of action, claim, investigation, demand or notice by any person or entity alleging liability under or non-compliance with any Environmental Law (an ''Environmental Claim") that could reasonably be expected to have a Material Adverse Effect on COPSIL; and (iii) to the knowledge of COPSIL, there are no circumstances that are reasonably likely to prevent or interfere with such material compliance in the future. (b) Except as publicly disclosed by COPSIL, there are no Environmental Claims which could reasonably be expected to have a Material Adverse Effect on COPSIL that are pending or, to the knowledge of COPSIL, threatened against COPSIL or, to the knowledge of COPSIL, against any person or entity whose liability for any Environmental Claim COPSIL has or may have retained or assumed either contractually or by operation of law. Section 2.13. Tax Matters. (a) Except as set forth in Section 2.13 of the COPSIL Disclosure Schedule: (i) COPSIL has filed or has had filed on its behalf in a timely manner (within any applicable extension periods) with the appropriate Governmental Entity all income and other material Tax Returns (as defined herein) with respect to Taxes (as defined herein) of COPSIL and all Tax Returns were in all material respects true, complete and correct; (ii) all material Taxes with respect to COPSIL have been paid in full or have been provided for in accordance with GAAP on COPSIL's most recent balance sheet which is part of the COPSIL SEC Documents. (iii) there are no outstanding agreements or waivers extending the statutory period of limitations applicable to any federal, state, local or foreign income or other material Tax Returns required to be filed by or with respect to COPSIL; (iv) to the knowledge of COPSIL none of the Tax Returns of or with respect to COPSIL is currently being audited or examined by any Governmental Entity; and (v) no deficiency for any income or other material Taxes has been assessed with respect to COPSIL which has not been abated or paid in full. (b) For purposes of this Agreement, (i) "Taxes" shall mean all taxes, charges, fees, levies or other assessments, including, without limitation, income, gross receipts, sales, use, ad valorem, goods and services, capital, transfer, franchise, profits, license, withholding, payroll, employment, employer health, excise, estimated, severance, stamp, occupation, property or other taxes, customs duties, fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any taxing authority and (ii) "Tax Return" shall mean any report, return, documents declaration or other information or filing required to be supplied to any taxing authority or jurisdiction with respect to Taxes. Section 2.14. Title to Property. COPSIL has good and defensible title to all of its properties and assets, free and clear of all liens, charges and encumbrances except liens for taxes not yet due and payable and such liens or other imperfections of title, if any, as do not materially detract from the value of or interfere with the present use of the property affected thereby or which, individually or in the aggregate, would not have a Material Adverse Effect on COPSIL; and, to COPSIL's knowledge, all leases pursuant to which COPSIL leases from others real or personal property are in good standing, valid and effective in accordance with their respective terms, and there is not, to the knowledge of COPSIL, under any of such leases, any existing material default or event of default (or event which with notice of lapse of time, or both, would constitute a default and in respect of which COPSIL has not taken adequate steps to prevent such a default from occurring) except where the lack of such good standing, validity and effectiveness, or the existence of such default or event, would not have a Material Adverse Effect on COPSIL. Section 2.15. Intellectual Property. (a) COPSIL owns, or possesses adequate licenses or other valid rights to use, all existing United States and foreign patents, trademarks, trade names, service marks, copyrights, trade secrets and applications therefor that are material to its business as currently conducted (the "COPSIL Intellectual Property Rights"). (b) The validity of the COPSIL Intellectual Property Rights and the title thereto of COPSIL is not being questioned in any litigation to which COPSIL is a party. (c) Except as set forth in Section 2.15(c) of the COPSIL Disclosure Schedule, the conduct of the business of COPSIL as now conducted does not, to COPSIL's knowledge, infringe any valid patents, trademarks, trade names, service marks or copyrights of others. The consummation of the transactions completed hereby will not result in the loss or impairment of any COPSIL Intellectual Property Rights. (d) COPSIL has taken steps it believes appropriate to protect and maintain its trade secrets as such, except in cases where COPSIL has elected to rely on patent or copyright protection in lieu of trade secret protection. Section 2.16. Insurance. COPSIL currently does not maintain general liability and other business insurance. Section 2.17. Vote Required. The affirmative vote of the holders of at least a majority of the outstanding COPSIL Shares is the only vote of the holders of any class or series of COPSIL's capital stock necessary to approve and adopt this Agreement and the Merger. Section 2.18. Tax Treatment. Neither COPSIL nor, to the knowledge of COPSIL, any of its affiliates has taken or agreed to take action that would prevent the Merger from constituting a reorganization qualifying under the provisions of Section 368(a) of the Code. Section 2.19. Affiliates. Except for Principal COPSIL Stockholder ("PVS") and the directors and executive officers of COPSIL, each of whom is listed in Section 2.19 of the COPSIL Disclosure Schedule, there are no persons who, to the knowledge of COPSIL, may be deemed to be affiliates of COPSIL under Rule 1-02(b) of Regulation S-X of the SEC (the "COPSIL Affiliates"). Section 2.20. Certain Business Practices. None of COPSIL or any directors, officers, agents or employees of COPSIL has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns or violated any provision of the Foreign Corrupt Practices Act of 1977, as amended (the "FCPA"), or (iii) made any other unlawful payment. Section 2.21. Insider Interests. Except as set forth in Section 2.21 of the COPSIL Disclosure Schedule, neither PVS nor any officer or director of COPSIL has any interest in any material property, real or personal, tangible or intangible, including without limitation, any computer software or COPSIL Intellectual Property Rights, used in or pertaining to the business of COPSIL, expect for the ordinary rights of a stockholder or employee stock option holder. Section 2.22. Opinion of Financial Adviser. No advisers, as of the date hereof, have delivered to the COPSIL Board a written opinion to the effect that, as of such date, the exchange ratio contemplated by the Merger is fair to the holders of COPSIL Shares. Section 2.23. Brokers. No broker, finder or investment banker (other than the COPSIL Financial Adviser, a true and correct copy of whose engagement agreement has been provided to CIA) is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of COPSIL. Section 2.24. Disclosure. No representation or warranty of COPSIL in this Agreement or any certificate, schedule, document or other instrument furnished or to be furnished to CIA pursuant hereto or in connection herewith contains, as of the date of such representation, warranty or instrument, or will contain any untrue statement of a material fact or, at the date thereof, omits or will omit to state a material fact necessary to make any statement herein or therein, in light of the circumstances under which such statement is or will be made, not misleading. Section 2.25. No Existing Discussions. As of the date hereof, COPSIL is not engaged, directly or indirectly, in any discussions or negotiations with any other party with respect to any Third Party Acquisition (as defined in Section 4.4). Section 2.26. Material Contracts. (a) COPSIL has delivered or otherwise made available to CIA true, correct and complete copies of all contracts and agreements (and all amendments, modifications and supplements thereto and all side letters to which COPSIL is a party affecting the obligations of any party thereunder) to which COPSIL is a party or by which any of its properties or assets are bound that are, material to the business, properties or assets of COPSIL taken as a whole, including, without limitation, to the extent any of the following are, individually or in the aggregate, material to the business, properties or assets of COPSIL taken as a whole, all: (i) employment, product design or development, personal services, consulting, non-competition, severance, golden parachute or indemnification contracts (including, without limitation, any contract to which COPSIL is a party involving employees of COPSIL); (ii) licensing, publishing, merchandising or distribution agreements; (iii) contracts granting rights of first refusal or first negotiation; (iv) partnership or joint venture agreements; (v) agreements for the acquisition, sale or lease of material properties or assets or stock or otherwise entered into since March 31, 2000; (vi) contracts or agreements with any Governmental Entity. and (vii) all commitments and agreements to enter into any of the foregoing (collectively, together with any such contracts entered into in accordance with Section 4.1 hereof, the "COPSIL Contracts"). COPSIL is not a party to or bound by any severance, golden parachute or other agreement with any employee or consultant pursuant to which such person would be entitled to receive any additional compensation or an accelerated payment of compensation as a result of the consummation of the transactions contemplated hereby. (b) Each of the COPSIL Contracts is valid and enforceable in accordance with its terms, and there is no default under any COPSIL Contract so listed either by COPSIL or, to the knowledge of COPSIL, by any other party thereto, and no event has occurred that with the lapse of time or the giving of notice or both would constitute a default thereunder by COPSIL or, to the knowledge of COPSIL, any other party, in any such case in which such default or event could reasonably be expected to have a Material Adverse Effect on COPSIL. (c) No party to any such COPSIL Contract has given notice to COPSIL of or made a claim against COPSIL with respect to any breach or default thereunder, in any such case in which such breach or default could reasonably be expected to have a Material Adverse Effect on COPSIL. ARTICLE 3 Representations and Warranties of CIA Except as set forth on the Disclosure Schedule delivered by CIA to COPSIL (the "CIA Disclosure Schedule"), CIA hereby represents and warrants to COPSIL as follows: Section 3.1. Organization and Qualification. (a) Each of CIA and its subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization and has all requisite power and authority to own, lease and operate its properties and to carry on its businesses as now being conducted, except where the failure to be so organized, existing and in good standing or to have such power and authority would not have a Material Adverse Effect (as defined below) on CIA. When used in connection with CIA, the term "Material Adverse Effect'' means any change or effect (i) that is or is reasonably likely to be materially adverse to the business, results of operations, condition (financial or otherwise) or prospects of CIA and its subsidiaries, taken as a whole, other than any change or effect arising out of general economic conditions unrelated to any businesses in which CIA and its subsidiaries are engaged, or (ii) that may impair the ability of CIA to consummate the transactions contemplated hereby. (b) CIA has heretofore delivered to COPSIL accurate and complete copies of the Certificate of Incorporation and Bylaws (or similar governing documents), as currently in effect, of CIA. Each of CIA and its subsidiaries is duly qualified or licensed and in good standing to do business in each jurisdiction in which the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary except in such jurisdictions where the failure to be so duly qualified or licensed and in good standing would not have a Material Adverse Effect on CIA. Section 3.2. Capitalization of CIA. (a) As of March 31, 2000, the authorized capital stock of CIA consists of; (i) Twenty-Five Million (25,000,000) CIA common Shares, $.001 par value, 3,300,000 common Shares were issued and were outstanding, and (ii) no preferred shares were authorized. All of the outstanding CIA Shares have been duly authorized and validly issued, and are fully paid, nonassessable and free of preemptive rights. (b) Except as set forth in Section 3.2(b) of the CIA Disclosure Schedule, CIA is the record and beneficial owner of all of the issued and outstanding shares of capital stock of its subsidiaries. (c) Except as set forth in Section 3.2(c) of the CIA Disclosure Schedule, between March 31, 2000 and the date hereof, no shares of CIA's capital stock have been issued and no CIA Stock options have been granted. Except as set forth in Section 3.2(a) above, as of the date hereof, there are no outstanding (i) shares of capital stock or other voting securities of CIA, (ii) securities of CIA or its subsidiaries convertible into or exchangeable for shares of capital stock or voting securities of CIA, (iii) options or other rights to acquire from CIA or its subsidiaries, or obligations of CIA or its subsidiaries to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of CIA, or (iv) equity equivalents, interests in the ownership or earnings of CIA or its subsidiaries or other similar rights (collectively, "CIA Securities"). As of the date hereof, there are no outstanding obligations of CIA or any of its subsidiaries to repurchase, redeem or otherwise acquire any CIA Securities. There are no stockholder agreements, voting trusts or other agreements or understandings to which CIA is a party or by which it is bound relating to the voting or registration of any shares of capital stock of CIA. (d) Except as set forth in Section 3.2(d) of the CIA Disclosure Schedule, there are no securities of CIA convertible into or exchangeable for, no options or other rights to acquire from CIA, and no other contract, understanding, arrangement or obligation (whether or not contingent) providing for the issuance or sale, directly or indirectly, of any capital stock or other ownership interests in, or any other securities of, any subsidiary of CIA. (e) The CIA Shares constitute the only class of equity securities of CIA or its subsidiaries. (f) Except as set forth in Section 3.2(f) of the CIA Disclosure Schedule, CIA does not own directly or indirectly more than fifty percent (50%) of the outstanding voting securities or interests (including membership interests) of any entity. Section 3.3. Authority Relative to this Agreement; Recommendation. (a) CIA has all necessary corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by the Board of Directors of CIA (the "CIA Board"), and no other corporate proceedings on the part of CIA are necessary to authorize this Agreement or to consummate the transactions contemplated hereby, except, as referred to in Section 3.17, the approval and adoption of this Agreement by the holders of at least a majority of the then outstanding CIA Shares. This Agreement has been duly and validly executed and delivered by CIA and constitutes a valid, legal and binding agreement of CIA, enforceable against CIA in accordance with its terms. (b) The CIA Board has resolved to recommend that the stockholders of CIA approve and adopt this Agreement. Section 3.4. SEC Reports; Financial Statements. CIA is not required to file forms, reports and documents with the SEC. Section 3.5. Information Supplied. None of the information supplied or to be supplied by CIA for inclusion or incorporation by reference to (i) the 8-K will, at the time the 8-K is filed with the SEC and at the time it becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and (ii) the Proxy Statement will, at the date mailed to stockholders of COPSIL, if any, and at the times of the meeting or meetings of stockholders of COPSIL to be held in connection with the Merger, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Proxy Statement, insofar as it relates to the meeting of CIA's stockholders to vote on the Merger, will comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations thereunder, and the 8-K will comply as to form in all material respects with the provisions of the Securities Act and the rules and regulations thereunder. Section 3.6. Consents and Approvals; No Violations. Except as set forth in Section 3.6 of the CIA Disclosure Schedule, and for filings, permits, authorizations, consents and approvals as may be required under, and other applicable requirements of, the Securities Act, the Exchange Act, state securities or blue sky laws, the HSR Act, the rules of the NASD, and the filing and recordation of the Merger Certificate as required by the NGCL, no filing with or notice to, and no permit, authorization, consent or approval of, any Governmental Entity is necessary for the execution and delivery by CIA of this Agreement or the consummation by CIA of the transactions contemplated hereby, except where the failure to obtain such permits, authorizations consents or approvals or to make such filings or give such notice would not have a Material Adverse Effect on CIA. Neither the execution, delivery and performance of this Agreement by CIA nor the consummation by CIA of the transactions contemplated hereby will (i) conflict with or result in any breach of any provision of the respective Certificate of Incorporation or Bylaws (or similar governing documents) of CIA or any of CIA's subsidiaries, (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration or Lien) under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation to which CIA or any of CIAis subsidiaries is a party or by which any of them or any of their respective properties or assets may be bound or (iii) violate any order, writ, injunction, decree, law, statute, rule or regulation applicable to CIA or any of CIA's subsidiaries or any of their respective properties or assets, except in the case of (ii) or (iii) for violations, breaches or defaults which would not have a Material Adverse Effect on CIA. Section 3.7. No Default. None of CIA or any of its subsidiaries is in breach, default or violation (and no event has occurred which with notice or the lapse of time or both would constitute a breach, default or violation) of any term, condition or provision of (i) its Certificate of Incorporation or Bylaws (or similar governing documents), (ii) any note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation to which CIA or any of its subsidiaries is now a party or by which any of them or any of their respective properties or assets may be bound or (iii) any order, writ, injunction, decree, law, statute, rule or regulation applicable to CIA, its subsidiaries or any of their respective properties or assets, except in the case of (ii) or (iii) for violations, breaches or defaults that would not have a Material Adverse Effect on CIA. Each note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation to which CIA or any of its subsidiaries is now a party or by which any of them or any of their respective properties or assets may be bound that is material to CIA and its subsidiaries taken as a whole and that has not expired is in full force and effect and is not subject to any material default thereunder of which CIA is aware by any party obligated to CIA or any subsidiary thereunder. Section 3.8. No Undisclosed Liabilities; Absence of Changes. Except as and to the extent disclosed by CIA in the CIA, none of CIA or its subsidiaries had any liabilities or obligations of any nature, whether or not accrued, contingent or otherwise, that would be required by generally accepted accounting principles to be reflected on a consolidated balance sheet of CIA and its consolidated subsidiaries (including the notes thereto) or which would have a Material Adverse Effect on CIA. Except as disclosed by CIA, none of CIA or its subsidiaries has incurred any liabilities of any nature, whether or not accrued, contingent or otherwise, which could reasonably be expected to have, and there have been no events, changes or effects with respect to CIA or its subsidiaries having or which could reasonably be expected to have, a Material Adverse Effect on CIA. Except as and to the extent disclosed by CIA there has not been (i) any material change by CIA in its accounting methods, principles or practices (other than as required after the date hereof by concurrent changes in generally accepted accounting principles), (ii) any revaluation by CIA of any of its assets having a Material Adverse Effect on CIA, including, without limitation, any write-down of the value of any assets other than in the ordinary course of business or (iii) any other action or event that would have required the consent of any other party hereto pursuant to Section 4.2 of this Agreement had such action or event occurred after the date of this Agreement. Section 3.9. Litigation. Except as set forth in Schedule 3.9 of the CIA Disclosure Schedule there is no suit, claim, action, proceeding or investigation pending or, to the knowledge of CIA, threatened against CIA or any of its subsidiaries or any of their respective properties or assets before any Governmental Entity which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect on CIA or could reasonably be expected to prevent or delay the consummation of the transactions contemplated by this Agreement. Except as disclosed by CIA, none of CIA or its subsidiaries is subject to any outstanding order, writ, injunction or decree which, insofar as can be reasonably foreseen in the future, could reasonably be expected to have a Material Adverse Effect on CIA or could reasonably be expected to prevent or delay the consummation of the transactions contemplated hereby. Section 3.10. Compliance with Applicable Law. Except as disclosed by CIA, CIA and its subsidiaries hold all permits, licenses, variances, exemptions, orders and approvals of all Governmental Entities necessary for the lawful conduct of their respective businesses (the "CIA Permits"), except for failures to hold such permits, licenses, variances, exemptions, orders and approvals which would not have a Material Adverse Effect on CIA. Except as disclosed by CIA, CIA and its subsidiaries are in compliance with the terms of the CIA Permits, except where the failure so to comply would not have a Material Adverse Effect on CIA. Except as disclosed by CIA, the businesses of CIA and its subsidiaries are not being conducted in violation of any law, ordinance or regulation of any Governmental Entity except that no representation or warranty is made in this Section 3.10 with respect to Environmental Laws and except for violations or possible violations which do not, and, insofar as reasonably can be foreseen, in the future will not, have a Material Adverse Effect on CIA. Except as disclosed by CIA no investigation or review by any Governmental Entity with respect to CIA or its subsidiaries is pending or, to the knowledge of CIA, threatened, nor, to the knowledge of CIA, has any Governmental Entity indicated an intention to conduct the same, other than, in each case, those which CIA reasonably believes will not have a Material Adverse Effect on CIA. Section 3.11. Employee Benefit Plans; Labor Matters. (a) With respect to each employee benefit plan, program, policy, arrangement and contract (including, without limitation, any "employee benefit plan," as defined in Section 3(3) of ERISA), maintained or contributed to at any time by CIA, any of its subsidiaries or any entity required to be aggregated with CIA or any of its subsidiaries pursuant to Section 414 of the Code (each, a "CIA Employee Plan"), no event has occurred and, to the knowledge of CIA, no condition or set of circumstances exists in connection with which CIA or any of its subsidiaries could reasonably be expected to be subject to any liability which would have a Material Adverse Effect on CIA. (b) (i) No CIA Employee Plan is or has been subject to Title IV of ERISA or Section 412 of the Code; and (ii) each CIA Employee Plan intended to qualify under Section 401(a) of the Code and each trust intended to qualify under Section 501(a) of the Code is the subject of a favorable Internal Revenue Service determination letter, and nothing has occurred which could reasonably be expected to adversely affect such determination. (c) Section 3.11(c) of the CIA Disclosure Schedule sets forth a true and complete list, as of the date of this Agreement, of each person who holds any CIA Stock Options, together with the number of CIA Shares which are subject to such option, the date of grant of such option, the extent to which such option is vested (or will become vested as a result of the Merger), the option price of such option (to the extent determined as of the date hereof), whether such option is a nonqualified stock option or is intended to qualify as an incentive stock option within the meaning of Section 422(b) of the Code, and the expiration date of such option. Section 3.11(c) of the CIA Disclosure Schedule also sets forth the total number of such incentive stock options and such nonqualified options. CIA has furnished COPSIL with complete copies of the plans pursuant to which the CIA Stock Options were issued. Other than the automatic vesting of CIA Stock Options that may occur without any action on the part of CIA or its officers or directors, CIA has not taken any action that would result in any CIA Stock Options that are unvested becoming vested in connection with or as a result of the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby. (d) CIA has made available to COPSIL (i) a description of the terms of employment and compensation arrangements of all officers of CIA and a copy of each such agreement currently in effect; (ii) copies of all agreements with consultants who are individuals obligating CIA to make annual cash payments in an amount exceeding $60,000; (iii) a schedule listing all officers of CIA who have executed a non-competition agreement with CIA and a copy of each such agreement currently in effect; (iv) copies (or descriptions) of all severance agreements, programs and policies of CIA with or relating to its employees, except programs and policies required to be maintained by law; and (v) copies of all plans, programs, agreements and other arrangements of the CIA with or relating to its employees which contain change in control provisions. (e) Except as disclosed in Section 3.11(e) of the CIA Disclosure Schedule there shall be no payment, accrual of additional benefits, acceleration of payments, or vesting in any benefit under any CIA Employee Plan or any agreement or arrangement disclosed under this Section 3.11 solely by reason of entering into or in connection with the transactions contemplated by this Agreement. (f) There are no controversies pending or, to the knowledge of CIA threatened, between CIA or any of its subsidiaries and any of their respective employees, which controversies have or could reasonably be expected to have a Material Adverse Effect on CIA. Neither CIA nor any of its subsidiaries is a party to any collective bargaining agreement or other labor union contract applicable to persons employed by CIA or any of its subsidiaries (and neither CIA nor any of its subsidiaries has any outstanding material liability with respect to any terminated collective bargaining agreement or labor union contract), nor does CIA know of any activities or proceedings of any labor union to organize any of its or any of its subsidiaries' employees. CIA has no knowledge of any strike, slowdown, work stoppage, lockout or threat thereof by or with respect to any of its or any of its subsidiaries' employees. Section 3.12. Environmental Laws and Regulations. (a) Except as disclosed by CIA, (i) each of CIA and its subsidiaries is in material compliance with all Environmental Laws, except for non-compliance that would not have a Material Adverse Effect on CIA, which compliance includes, but is not limited to, the possession by CIA and its subsidiaries of all material permits and other governmental authorizations required under applicable Environmental Laws, and compliance with the terms and conditions thereof; (ii) none of CIA or its subsidiaries has received written notice of, or, to the knowledge of CIA, is the subject of, any Environmental Claim that could reasonably be expected to have a Material Adverse Effect on CIA; and (iii) to the knowledge of CIA, there are no circumstances that are reasonably likely to prevent or interfere with such material compliance in the future. (b) Except as disclosed by CIA, there are no Environmental Claims which could reasonably be expected to have a Material Adverse Effect on CIA that are pending or, to the knowledge of CIA, threatened against CIA or any of its subsidiaries or, to the knowledge of CIA, against any person or entity whose liability for any Environmental Claim CIA or its subsidiaries has or may have retained or assumed either contractually or by operation of law. Section 3.13. Tax Matters. Except as set forth in Section 3.13 of the CIA Disclosure Schedule: (i) CIA and each of its subsidiaries has filed or has had filed on its behalf in a timely manner (within any applicable extension periods) with the appropriate Governmental Entity all income and other material Tax Returns with respect to Taxes of CIA and each of its subsidiaries and all Tax Returns were in all material respects true, complete and correct; (ii) all material Taxes with respect to CIA and each of its subsidiaries have been paid in full or have been provided for in accordance with GAAP on CIA's most recent balance sheet which is part of the CIA SEC Documents; (iii) there are no outstanding agreements or waivers extending the statutory period of limitations applicable to any federal, state, local or foreign income or other material Tax Returns required to be filed by or with respect to CIA or its subsidiaries; (iv) to the knowledge of CIA none of the Tax Returns of or with respect to CIA or any of its subsidiaries is currently being audited or examined by any Governmental Entity; and (v) no deficiency for any income or other material Taxes has been assessed with respect to CIA or any of its subsidiaries which has not been abated or paid in full. Section 3.14. Title to Property. CIA and each of its subsidiaries have good and defensible title to all of their properties and assets, free and clear of all liens, charges and encumbrances except liens for taxes not yet due and payable and such liens or other imperfections of title, if any, as do not materially detract from the value of or interfere with the present use of the property affected thereby or which, individually or in the aggregate, would not have a Material Adverse Effect on CIA; and, to CIA's knowledge, all leases pursuant to which CIA or any of its subsidiaries lease from others real or personal property are in good standing, valid and effective in accordance with their respective terms, and there is not, to the knowledge of CIA, under any of such leases, any existing material default or event of default (or event which with notice or lapse of time, or both, would constitute a material default and in respect of which CIA or such subsidiary has not taken adequate steps to prevent such a default from occurring) except where the lack of such good standing, validity and effectiveness, or the existence of such default or event of default would not have a Material Adverse Effect on CIA. Section 3.15. Intellectual Property. (a) Each of CIA and its subsidiaries owns, or possesses adequate licenses or other valid rights to use, all existing United States and foreign patents, trademarks, trade names, services marks, copyrights, trade secrets, and applications therefor that are material to its business as currently conducted (the "CIA Intellectual Property Rights"). (b) Except as set forth in Section 3.15(b) of the CIA Disclosure Schedule the validity of the CIA Intellectual Property Rights and the title thereto of CIA or any subsidiary, as the case may be, is not being questioned in any litigation to which CIA or any subsidiary is a party. (c) The conduct of the business of CIA and its subsidiaries as now conducted does not, to CIA's knowledge, infringe any valid patents, trademarks, tradenames, service marks or copyrights of others. The consummation of the transactions contemplated hereby will not result in the loss or impairment of any CIA Intellectual Property Rights. (d) Each of CIA and its subsidiaries has taken steps it believes appropriate to protect and maintain its trade secrets as such, except in cases where CIA has elected to rely on patent or copyright protection in lieu of trade secret protection. Section 3.16. Insurance. CIA and its subsidiaries maintain general liability and other business insurance that CIA believes to be reasonably prudent for its business. Section 3.17. Vote Required. The affirmative vote of the holders of at least a majority of the outstanding CIA Shares is the only vote of the holders of any class or series of CIA's capital stock necessary to approve and adopt this Agreement and the Merger. Section 3.18. Tax Treatment. Neither CIA nor, to the knowledge of CIA, any of its affiliates has taken or agreed to take any action that would prevent the Merger from constituting a reorganization qualifying under the provisions of Section 368(a) of the Code. Section 3.19. Affiliates. Except for the directors and executive officers of CIA, each of whom is listed in Section 3.19 of the CIA Disclosure Schedule, there are no persons who, to the knowledge of CIA, may be deemed to be affiliates of CIA under Rule 1-02(b) of Regulation S-X of the SEC (the "CIA Affiliates"). Section 3.20. Certain Business Practices. None of CIA, any of its subsidiaries or any directors, officers, agents or employees of CIA or any of its subsidiaries has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns or violated any provision of the FCPA, or (iii) made any other unlawful payment. Section 3.21. Insider Interests. Except as set forth in Section 3.21 of the CIA Disclosure Schedule, no officer or director of CIA has any interest in any material property, real or personal, tangible or intangible, including without limitation, any computer software or CIA Intellectual Property Rights, used in or pertaining to the business of CIA or any subsidiary, except for the ordinary rights of a stockholder or employee stock optionholder. Section 3.22. Opinion of Financial Adviser. No advisers, as of the date hereof, have delivered to the CIA Board a written opinion to the effect that, as of such date, the exchange ratio contemplated by the Merger is fair to the holders of CIA Shares. Section 3.23. Brokers. No broker, finder or investment banker (other than the CIA Financial Adviser, a true and correct copy of whose engagement agreement has been provided to COPSIL) is entitled to any brokerage, finders or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of CIA. Section 3.24. Disclosure. No representation or warranty of CIA in this Agreement or any certificate, schedule, document or other instrument furnished or to be furnished to COPSIL pursuant hereto or in connection herewith contains, as of the date of such representation, warranty or instrument, or will contain any untrue statement of a material fact or, at the date thereof, omits or will omit to state a material fact necessary to make any statement herein or therein, in light of the circumstances under which such statement is or will be made, not misleading. Section 3.25. No Existing Discussions. As of the date hereof, CIA is not engaged, directly or indirectly, in any discussions or negotiations with any other party with respect to any Third Party Acquisition (as defined in Section 5.4). Section 3.26. Material Contracts. (a) CIA has delivered or otherwise made available to COPSIL true, correct and complete copies of all contracts and agreements (and all amendments, modifications and supplements thereto and all side letters to which CIA is a party affecting the obligations of any party thereunder) to which CIA or any of its subsidiaries is a party or by which any of their properties or assets are bound that are, material to the business, properties or assets of CIA and its subsidiaries taken as a whole, including, without limitation, to the extent any of the following are, individually or in the aggregate, material to the business, properties or assets of CIA and its subsidiaries taken as a whole, all: (i) employment, product design or development, personal services, consulting, non-competition, severance, golden parachute or indemnification contracts (including, without limitation, any contract to which CIA is a party involving employees of CIA); (ii) licensing, publishing, merchandising or distribution agreements; (iii) contracts granting rights of first refusal or first negotiation; (iv) partnership or joint venture agreements; (v) agreements for the acquisition, sale or lease of material properties or assets or stock or otherwise. (vi) contracts or agreements with any Governmental Entity; and (vii) all commitments and agreements to enter into any of the foregoing (collectively, together with any such contracts entered into in accordance with Section 5.2 hereof, the 'CIA Contracts"). Neither CIA nor any of its subsidiaries is a party to or bound by any severance, golden parachute or other agreement with any employee or consultant pursuant to which such person would be entitled to receive any additional compensation or an accelerated payment of compensation as a result of the consummation of the transactions contemplated hereby. (b) Each of the CIA Contracts is valid and enforceable in accordance with its terms, and there is no default under any CIA Contract so listed either by CIA or, to the knowledge of CIA, by any other party thereto, and no event has occurred that with the lapse of time or the giving of notice or both would constitute a default thereunder by CIA or, to the knowledge of CIA, any other party, in any such case in which such default or event could reasonably be expected to have a Material Adverse Effect on CIA. (c) No party to any such CIA Contract has given notice to CIA of or made a claim against CIA with respect to any breach or default thereunder, in any such case in which such breach or default could reasonably be expected to have a Material Adverse Effect on CIA. ARTICLE 4 Covenants Section 4.1. Conduct of Business of COPSIL. Except as contemplated by this Agreement or as described in Section 4.1 of the COPSIL Disclosure Schedule, during the period from the date hereof to the Effective Time, COPSIL will conduct its operations in the ordinary course of business consistent with past practice and, to the extent consistent therewith, with no less diligence and effort than would be applied in the absence of this Agreement, seek to preserve intact its current business organization, keep available the service of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that goodwill and ongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, except as otherwise expressly provided in this Agreement or as described in Section 4.1 of the COPSIL Disclosure Schedule, prior to the Effective Time, COPSIL will not, without the prior written consent of CIA: (a) amend its Certificate of Incorporation or Bylaws (or other similar governing instrument); (b) amend the terms of any stock of any class or any other securities (except bank loans) or equity equivalents. (c) split, combine or reclassify any shares of its capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, make any other actual, constructive or deemed distribution in respect of its capital stock or otherwise make any payments to stockholders in their capacity as such, or redeem or otherwise acquire any of its securities; (d) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of COPSIL (other than the Merger); (e) (i) incur or assume any long-term or short-term debt or issue any debt securities except for borrowings or issuances of letters of credit under existing lines of credit in the ordinary course of business; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person. (iii) make any loans, advances or capital contributions to, or investments in, any other person; (iv) pledge or otherwise encumber shares of capital stock of COPSIL; or (v) mortgage or pledge any of its material assets, tangible or intangible, or create or suffer to exist any material Lien thereupon (other than tax Liens for taxes not yet due); (f) except as may be required by law, enter into, adopt or amend or terminate any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the benefit or welfare of any director, officer or employee in any manner, or increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any plan and arrangement as in effect as of the date hereof (including, without limitation, the granting of stock appreciation rights or performance units); provided, however, that this paragraph (f) shall not prevent COPSIL from (i) entering into employment agreements or severance agreements with employees in the ordinary course of business and consistent with past practice or (ii) increasing annual compensation and/or providing for or amending bonus arrangements for employees for fiscal 1999 in the ordinary course of year-end compensation reviews consistent with past practice and paying bonuses to employees for fiscal 1999 in amounts previously disclosed to CIA (to the extent that such compensation increases and new or amended bonus arrangements do not result in a material increase in benefits or compensation expense to COPSIL); (g) acquire, sell, lease or dispose of any assets in any single transaction or series of related transactions (other than in the ordinary course of business); (h) except as may be required as a result of a change in law or in generally accepted accounting principles, change any of the accounting principles or practices used by it; (i) revalue in any material respect any of its assets including, without limitation, writing down the value of inventory or writing-off notes or accounts receivable other than in the ordinary course of business; (j) (i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or any equity interest therein; (ii) enter into any contract or agreement other than in the ordinary course of business consistent with past practice which would be material to COPSIL; (iii) authorize any new capital expenditure or expenditures which, individually is in excess of $1,000 or, in the aggregate, are in excess of $5,000; provided, however that none of the foregoing shall limit any capital expenditure required pursuant to existing contracts; (k) make any tax election or settle or compromise any income tax liability material to COPSIL; (l) settle or compromise any pending or threatened suit, action or claim which (i) relates to the transactions contemplated hereby or (ii) the settlement or compromise of which could have a Material Adverse Effect on COPSIL; (m) commence any material research and development project or terminate any material research and development project that is currently ongoing, in either case, except pursuant to the terms of existing contracts or in the ordinary course of business; or (n) take, or agree in writing or otherwise to take, any of the actions described in Sections 4.1(a) through 4.1(m) or any action which would make any of the representations or warranties of contained in this Agreement untrue or incorrect. Section 4.2. Conduct of Business of CIA. Except as contemplated by this Agreement or as described in Section 4.2 of the CIA Disclosure Schedule during the period from the date hereof to the Effective Time, CIA will conduct its operations in the ordinary course of business consistent with past practice and, to the extent consistent therewith, with no less diligence and effort than would be applied in the absence of this Agreement, seek to preserve intact its current business organization, keep available the service of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that goodwill and ongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, except as otherwise expressly provided in this Agreement or as described in Section 4.2 of the CIA Disclosure Schedule, prior to the Effective Time, CIA will not, without the prior written consent of: (a) amend its Certificate of Incorporation or Bylaws (or other similar governing instrument); (b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities (except bank loans) or equity equivalents (including, without limitation, any stock options or stock appreciation rights; (c) split, combine or reclassify any shares of its capital stock, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, make any other actual, constructive or deemed distribution in respect of its capital stock or otherwise make any payments to stockholders in their capacity as such, or redeem or otherwise acquire any of its securities; (d) adopt a plan of complete or partial liquidation, dissolution, merger consolidation, restructuring, recapitalization or other reorganization of CIA (other than the Merger); (e) (i) incur or assume any long-term or short-term debt or issue any debt securities except for borrowings or issuances of letters of credit under existing lines of credit in the ordinary course of business. (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person; (iii) make any loans, advances or capital contributions to or investments in, any other person; (iv) pledge or otherwise encumber shares of capital stock of CIA or its subsidiaries; or (v) mortgage or pledge any of its material assets, tangible or intangible, or create or suffer to exist any material Lien thereupon (other than tax Liens for taxes not yet due); (f) except as may be required by law, enter into, adopt or amend or terminate any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit stock equivalent, stock purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the benefit or welfare of any director, officer or employee in any manner, or increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any plan and arrangement as in effect as of the date hereof (including, without limitation, the granting of stock appreciation rights or performance units); provided, however, that this paragraph (f) shall not prevent CIA or its subsidiaries from (i) entering into employment agreements or severance agreements with employees in the ordinary course of business and consistent with past practice or (ii) increasing annual compensation and/or providing for or amending bonus arrangements for employees for fiscal 1999 in the ordinary course of yearend compensation reviews consistent with past practice and paying bonuses to employees for fiscal 1999 in amounts previously disclosed to (to the extent that such compensation increases and new or amended bonus arrangements do not result in a material increase in benefits or compensation expense to CIA); (g) acquire, sell, lease or dispose of any assets in any single transaction or series of related transactions other than in the ordinary course of business; (h) except as may be required as a result of a change in law or in generally accepted accounting principles, change any of the accounting principles or practices used by it; (i) revalue in any material respect any of its assets, including, without limitation, writing down the value of inventory of writing-off notes or accounts receivable other than in the ordinary course of business; (j) (i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership, or other business organization or division thereof or any equity interest therein; (ii) enter into any contract or agreement other than in the ordinary course of business consistent with past practice which would be material to CIA; (iii) authorize any new capital expenditure or expenditures which, individually, is in excess of $1,000 or, in the aggregate, are in excess of $5,000: provided, however that none of the foregoing shall limit any capital expenditure required pursuant to existing contracts; (k) make any tax election or settle or compromise any income tax liability material to CIA and its subsidiaries taken as a whole; (l) settle or compromise any pending or threatened suit, action or claim which (i) relates to the transactions contemplated hereby or (ii) the settlement or compromise of which could have a Material Adverse Effect on CIA; (m) commence any material research and development project or terminate any material research and development project that is currently ongoing, in either case, except pursuant to the terms of existing contracts or except in the ordinary course of business; or (n) take, or agree in writing or otherwise to take, any of the actions described in Sections 4.2(a) through 4.2(m) or any action which would make any of the representations or warranties of the CIA contained in this Agreement untrue or incorrect. Section 4.3. Preparation of 8-K and the Proxy Statement. CIA and shall promptly prepare and file with the SEC the Proxy Statement, if required by counsel. Section 4.4. Other Potential Acquirers. (a) CIA, its affiliates and their respective officers, directors, employees, representatives and agents shall immediately cease any existing discussions or negotiations, if any, with any parties conducted heretofore with respect to any Third Party Acquisition. Section 4.5. Meetings of Stockholders. Each of CIA and COPSIL shall take all action necessary, in accordance with the respective General Corporation Law of its respective state, and its respective certificate of incorporation and bylaws, to duly call, give notice of, convene and hold a meeting of its stockholders as promptly as practicable, to consider and vote upon the adoption and approval of this Agreement and the transactions contemplated hereby. The stockholder votes required for the adoption and approval of the transactions contemplated by this Agreement shall be the vote required by the NGCL and its charter and bylaws, in the case of COPSIL and the General Corporation Law of its respective state, and its charter and bylaws, in the case of CIA. COPSIL and CIA will, through their respective Boards of Directors, recommend to their respective stockholders approval of such matters Section 4.6. OTC:BB Listing. The parties shall use all reasonable efforts to cause the COPSIL Shares, subject to Rule 144, to be traded on the Over The Counter Bulletin Board (OTC:BB). Section 4.7. Access to Information. (a) Between the date hereof and the Effective Time, COPSIL will give CIA and its authorized representatives, and CIA will give COPSIL and its authorized representatives, reasonable access to all employees, plants, offices, warehouses and other facilities and to all books and records of itself and its subsidiaries, will permit the other party to make such inspections as such party may reasonably require and will cause its officers and those of its subsidiaries to furnish the other party with such financial and operating data and other information with respect to the business and properties of itself and its subsidiaries as the other party may from time to time reasonably request. (b) Between the date hereof and the Effective Time, COPSIL shall furnish to CIA, and CIA will furnish to COPSIL, within 25 business days after the end of each quarter, quarterly statements prepared by such party in conformity with its past practices) as of the last day of the period then ended. (c) Each of the parties hereto will hold and will cause its consultants and advisers to hold in confidence all documents and information furnished to it in connection with the transactions contemplated by this Agreement. Section 4.8. Additional Agreements, Reasonable Efforts. Subject to the terms and conditions herein provided, each of the parties hereto agrees to use all reasonable efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things reasonably necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement, including, without limitation, (i) cooperating in the preparation and filing of the Proxy Statement and the 8-K, any filings that may be required under the HSR Act, and any amendments to any thereof; (ii) obtaining consents of all third parties and Governmental Entities necessary, proper or advisable for the consummation of the transactions contemplated by this Agreement; (iii) contesting any legal proceeding relating to the Merger and (iv) the execution of any additional instruments necessary to consummate the transactions contemplated hereby. Subject to the terms and conditions of this Agreement, CIA and COPSIL agree to use all reasonable efforts to cause the Effective Time to occur as soon as practicable after the stockholder votes with respect to the Merger. In case at any time after the Effective Time any further action is necessary to carry out the purposes of this Agreement, the proper officers and directors of each party hereto shall take all such necessary action. Section 4.9. Employee Benefits; Stock Option and Employee Purchase Plans. Subject to the provisions of Section 1.6(d) hereof, prior to the Effective Time, COPSIL will take or cause to be taken all action necessary to adopt and or revise the employment agreements of Ralph Massetti with COPSIL. It is the parties' present intent to provide after the Effective Time to employees of CIA employee benefit plans (other than stock option or other plans involving the potential issuance of securities of COPSIL) which, in the aggregate, are not less favorable than those currently provided by CIA. Notwithstanding the foregoing, nothing contained herein shall be construed as requiring the parties to continue any specific employee benefit plans. Section 4.10. Public Announcements. CIA, and COPSIL will consult with one another before issuing any press release or otherwise making any public statements with respect to the transactions contemplated by this Agreement, including, without limitation, the Merger, and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable law or by obligations pursuant to any listing agreement with the NASD Over The Counter Bulletin Board (OTC:BB) as determined by CIA or COPSIL. Section 4.11. Indemnification. (a) To the extent, if any, not provided by an existing right under one of the parties' directors and officers liability insurance policies, from and after the Effective Time, COPSIL shall, to the fullest extent permitted by applicable law, indemnify, defend and hold harmless each person who is now, or has been at any time prior to the date hereof, or who becomes prior to the Effective Time, a director, officer or employee of the parties hereto or any subsidiary thereof (each an "Indemnified Party" and, collectively, the ''Indemnified Parties") against all losses, expenses (including reasonable attorneys' fees and expenses), claims, damages or liabilities or, subject to the proviso of the next succeeding sentence, amounts paid in settlement arising out of actions or omissions occurring at or prior to the Effective Time and whether asserted or claimed prior to, at or after the Effective Time) that are in whole or in part (i) based on, or arising out of the fact that such person is or was a director, officer or employee of such party or a subsidiary of such party or (ii) based on, arising out of or pertaining to the transactions contemplated by this Agreement. In the event of any such loss expense, claim, damage or liability (whether or not arising before the Effective Time), (i) COPSIL shall pay the reasonable fees and expenses of counsel selected by the Indemnified Parties, which counsel shall be reasonably satisfactory to COPSIL, promptly after statements therefor are received and otherwise advance to such Indemnified Party upon request reimbursement of documented expenses reasonably incurred, in either case to the extent not prohibited by the NGCL or its certificate of incorporation or bylaws, (ii) COPSIL will cooperate in the defense of any such matter and (iii) any determination required to be made with respect to whether an Indemnified Party's conduct complies with the standards set forth under the NGCL and COPSIL's certificate of incorporation or bylaws shall be made by independent counsel mutually acceptable to COPSIL and the Indemnified Party; provided, however, that COPSIL shall not be liable for any settlement effected without its written consent (which consent shall not be unreasonably withheld). The Indemnified Parties as a group may retain only one law firm with respect to each related matter except to the extent there is, in the opinion of counsel to an Indemnified Party, under applicable standards of professional conduct, c conflict on any significant issue between positions of any two or more Indemnified Parties. (b) In the event COPSIL or any of its successors or assigns (i) consolidates with or merges into any other person and shall not be the continuing or surviving corporation or entity or such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any person, then and in either such case, proper provision shall be made so that the successors and assigns of COPSIL shall assume the obligations set forth in this Section 4.11. (c) To the fullest extent permitted by law, from and after the Effective Time, all rights to indemnification now existing in favor of the employees, agents, directors or officers of COPSIL and CIA and their subsidiaries with respect to their activities as such prior to the Effective Time, as provided in COPSIL's and CIA's certificate of incorporation or bylaws, in effect on the date thereof or otherwise in effect on the date hereof, shall survive the Merger and shall continue in full force and effect for a period of not less than six years from the Effective Time. (d) The provisions of this Section 4.11 are intended to be for the benefit of, and shall be enforceable by, each Indemnified Party, his or her heirs and his or her representatives. Section 4.12. Notification of Certain Matters. The parties hereto shall give prompt notice to the other parties, of (i) the occurrence or nonoccurrence of any event the occurrence or nonoccurrence of which would be likely to cause any representation or warranty contained in this Agreement to be untrue or inaccurate in any material respect at or prior to the Effective Time, (ii) any material failure of such party to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder, (iii) any notice of, or other communication relating to, a default or event which, with notice or lapse of time or both, would become a default, received by such party or any of its subsidiaries subsequent to the date of this Agreement and prior to the Effective Time, under any contract or agreement material to the financial condition, properties, businesses or results of operations of such party and its subsidiaries taken as a whole to which such party or any of its subsidiaries is a party or is subject, (iv) any notice or other communication from any third party alleging that the consent of such third party is or may be required in connection with the transactions contemplated by this Agreement, or (v) any material adverse change in their respective financial condition, properties, businesses, results of operations or prospects taken as a whole, other than changes resulting from general economic conditions; provided, however, that the delivery of any notice pursuant to this Section 4.12 shall not cure such breach or non-compliance or limit or otherwise affect the remedies available hereunder to the party receiving such notice. ARTICLE 5 Conditions to Consummation of the Merger Section 5.1. Conditions to Each Party's Obligations to Effect the Merger. The respective obligations of each party hereto to effect the Merger are subject to the satisfaction at or prior to the Effective Time of the following conditions: (a) this Agreement shall have been approved and adopted by the requisite vote of the stockholders of COPSIL and CIA; (b) this Agreement shall have been approved and adopted by the Board of Directors of COPSIL and CIA; (c) no statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or enforced by any United States court or United States governmental authority which prohibits, restrains, enjoins or restricts the consummation of the Merger; (d) any waiting period applicable to the Merger under the HSR Act shall have terminated or expired, and any other governmental or regulatory notices or approvals required with respect to the transactions contemplated hereby shall have been either filed or received; and Section 5.2. Conditions to the Obligations of COPSIL. The obligation of COPSIL to effect the Merger is subject to the satisfaction at or prior to the Effective Time of the following conditions: (a) the representations of CIA contained in this Agreement or in any other document delivered pursuant hereto shall be true and correct (except to the extent that the breach thereof would not have a Material Adverse Effect on CIA) at and as of the Effective Time with the same effect as if made at and as of the Effective Time (except to the extent such representations specifically related to an earlier date, in which case such representations shall be true and correct as of such earlier date), and at the Closing CIA shall have delivered to COPSIL a certificate to that effect; (b) each of the covenants and obligations of CIA to be performed at or before the Effective Time pursuant to the terms of this Agreement shall have been duly performed in all material respects at or before the Effective Time and at the Closing CIA shall have delivered to COPSIL a certificate to that effect; (d) CIA shall have obtained the consent or approval of each person whose consent or approval shall be required in order to permit the Merger, as relates to any obligation, right or interest of CIA under any loan or credit agreement, note, mortgage, indenture, lease or other agreement or instrument, except those for which failure to obtain such consents and approvals would not, in the reasonable opinion of COPSIL, individually or in the aggregate, have a Material Adverse Effect on CIA; (e) there shall have been no events, changes or effects with respect to CIA or its subsidiaries having or which could reasonably be expected to have a Material Adverse Effect on CIA; and Section 5.3. Conditions to the Obligations of CIA. The respective obligations of CIA to effect the Merger are subject to the satisfaction at or prior to the Effective Time of the following conditions: (a) the representations of COPSIL contained in this Agreement or in any other document delivered pursuant hereto shall be true and correct (except to the extent that the breach thereof would not have a Material Adverse Effect on COPSIL) at and as of the Effective Time with the same effect as if made at and as of the Effective Time (except to the extent such representations specifically related to an earlier date, in which case such representations shall be true and correct as of such earlier date), and at the Closing COPSIL shall have delivered to CIA a certificate to that effect; (b) each of the covenants and obligations of COPSIL to be performed at or before the Effective Time pursuant to the terms of this Agreement shall have been duly performed in all material respects at or before the Effective Time and at the Closing COPSIL shall have delivered to CIA a certificate to that effect; (c) there shall have been no events, changes or effects with respect to COPSIL having or which could reasonably be expected to have a Material Adverse Effect on COPSIL. ARTICLE 6 Termination; Amendment; Waiver Section 6.1. Termination. This Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time, whether before or after approval and adoption of this Agreement by COPSIL's or CIA's stockholders: (a) by mutual written consent of COPSIL and CIA; (b) by CIA or COPSIL if (i) any court of competent jurisdiction in the United States or other United States Governmental Entity shall have issued a final order, decree or ruling or taken any other final action restraining, enjoining or otherwise prohibiting the Merger and such order, decree, ruling or other action is or shall have become nonappealable or (ii) the Merger has not been consummated by June 1, 2000; provided, however, that no party may terminate this Agreement pursuant to this clause (ii) if such party's failure to fulfill any of its obligations under this Agreement shall have been the reason that the Effective Time shall not have occurred on or before said date; (c) by COPSIL if (i) there shall have been a breach of any representation or warranty on the part of CIA set forth in this Agreement, or if any representation or warranty of CIA shall have become untrue, in either case such that the conditions set forth in Section 5.2(a) would be incapable of being satisfied by June 1, 2000 (or as otherwise extended), (ii) there shall have been a breach by CIA of any of their respective covenants or agreements hereunder having a Material Adverse Effect on CIA or materially adversely affecting (or materially delaying) the consummation of the Merger, and CIA, as the case may be, has not cured such breach within 20 business days after notice by COPSIL thereof, provided that COPSIL has not breached any of its obligations hereunder, (iii) COPSIL shall have convened a meeting of its stockholders to vote upon the Merger and shall have failed to obtain the requisite vote of its stockholders; or (iv) COPSIL shall have convened a meeting of its Board of Directors to vote upon the Merger and shall have failed to obtain the requisite vote; (d) by CIA if (i) there shall have been a breach of any representation or warranty on the part of COPSIL set forth in this Agreement, or if any representation or warranty of COPSIL shall have become untrue, in either case such that the conditions set forth in Section 5.3(a) would be incapable of being satisfied by June 1, 2000 (or as otherwise extended), (ii) there shall have been a breach by COPSIL of its covenants or agreements hereunder having a Material Adverse Effect on COPSIL or materially adversely affecting (or materially delaying) the consummation of the Merger, and COPSIL, as the case may be, has not cured such breach within twenty business days after notice by CIA thereof, provided that CIA has not breached any of its obligations hereunder, (iii) the COPSIL Board shall have recommended to COPSIL's stockholders a Superior Proposal, (iv) the COPSIL Board shall have withdrawn, modified or changed its approval or recommendation of this Agreement or the Merger or shall have failed to call, give notice of, convene or hold a stockholders' meeting to vote upon the Merger, or shall have adopted any resolution to effect any of the foregoing, (v) CIA shall have convened a meeting of its stockholders to vote upon the Merger and shall have failed to obtain the requisite vote of its stockholders or (vi) COPSIL shall have convened a meeting of its stockholders to vote upon the Merger and shall have failed to obtain the requisite vote of its stockholders. Section 6.2. Effect of Termination. In the event of the termination and abandonment of this Agreement pursuant to Section 6.1, this Agreement shall forthwith become void and have no effect, without any liability on the part of any party hereto or its affiliates, directors, officers or stockholders, other than the provisions of this Section 6.2 and Sections 4.7(c) and 6.3 hereof. Nothing contained in this Section 6.2 shall relieve any party from liability for any breach of this Agreement. Section 6.3. Fees and Expenses. Except as specifically provided in this Section 6.3, each party shall bear its own expenses in connection with this Agreement and the transactions contemplated hereby. Section 6.4. Amendment. This Agreement may be amended by action taken by COPSIL and CIA at any time before or after approval of the Merger by the stockholders of COPSIL and CIA (if required by applicable law) but, after any such approval, no amendment shall be made which requires the approval of such stockholders under applicable law without such approval. This Agreement may not be amended except by an instrument in writing signed on behalf of the parties hereto. Section 6.5. Extension; Waiver. At any time prior to the Effective Time, each party hereto may (i) extend the time for the performance of any of the obligations or other acts of any other party, (ii) waive any inaccuracies in the representations and warranties of any other party contained herein or in any document, certificate or writing delivered pursuant hereto or (iii) waive compliance by any other party with any of the agreements or conditions contained herein. Any agreement on the part of any party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party hereto to assert any of its rights hereunder shall not constitute a waiver of such rights. ARTICLE 7 Miscellaneous Section 7.1. Nonsurvival of Representations and Warranties. The representations and warranties made herein shall not survive beyond the Effective Time or a termination of this Agreement. This Section 7.1 shall not limit any covenant or agreement of the parties hereto which by its terms requires performance after the Effective Time. Section 7.2. Entire Agreement; Assignment. This Agreement (a) constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all other prior agreements and understandings both written and oral, between the parties with respect to the subject matter hereof and (b) shall not be assigned by operation of law or otherwise. Section 7.3. Validity. If any provision of this Agreement, or the application thereof to any person or circumstance, is held invalid or unenforceable, the remainder of this Agreement, and the application of such provision to other persons or circumstances, shall not be affected thereby, and to such end, the provisions of this Agreement are agreed to be severable. Section 7.4. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by facsimile or by registered or certified mail (postage prepaid, return receipt requested), to each other party as follows: If to CIA: Cochstedt International Airport, Inc. 6170 W. Desert Inn Rd. Las Vegas, Nevada 89146 with a copy to: Donald J. Stoecklein Sperry Young & Stoecklein 1850 East Flamingo Rd. Suite 111 Las Vegas, Nevada 89119 ###-###-#### ###-###-#### if to COPSIL: COPSIL CORPORATION 7621 Genzer Drive Las Vegas, Nevada 89128 or to such other address as the person to whom notice is given may have previously furnished to the others in writing in the manner set forth above. Section 7.5. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, without regard to the principles of conflicts of law thereof. Section 7.6. Descriptive Headings. The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. Section 7.7. Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each party hereto and its successors and permitted assigns, and except as provided in Sections 4.9 and 4.11, nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement. Section 7.8. Certain Definitions. For the purposes of this Agreement, the term: (a) "affiliate" means (except as otherwise provided in Sections 2.19, 3.19 and 4.13) a person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the first mentioned person; (b) "business day" means any day other than a day on which Nasdaq is closed; (c) "capital stock" means common stock, preferred stock, partnership interests, limited liability company interests or other ownership interests entitling the holder thereof to vote with respect to matters involving the issuer thereof; (d) "knowledge'' or "known'' means, with respect to any matter in question, if an executive officer of COPSIL or CIA or its subsidiaries, as the case may be, has actual knowledge of such matter; (e) "person" means an individual, corporation, partnership, limited liability company, association, trust, unincorporated organization or other legal entity; and (f) "subsidiary" or "subsidiaries" of COPSIL, CIA or any other person, means any corporation, partnership, limited liability company, association, trust, unincorporated association or other legal entity of which COPSIL, CIA or any such other person, as the case may be (either alone or through or together with any other subsidiary), owns, directly or indirectly, 50% or more of the capital stock, the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such corporation or other legal entity. Section 7.9. Personal Liability. This Agreement shall not create or be deemed to create or permit any personal liability or obligation on the part of any direct or indirect stockholder of COPSIL or CIA or any officer, director, employee, agent, representative or investor of any party hereto. Section 7.10. Specific Performance. The parties hereby acknowledge and agree that the failure of any party to perform its agreements and covenants hereunder, including its failure to take all actions as are necessary on its part to the consummation of the Merger, will cause irreparable injury to the other parties for which damages, even if available, will not be an adequate remedy. Accordingly, each party hereby consents to the issuance of injunctive relief by any court of competent jurisdiction to compel performance of such party's obligations and to the granting by any court of the remedy of specific performance of its obligations hereunder; provided, however, that, if a party hereto is entitled to receive any payment or reimbursement of expenses pursuant to Sections 6.3(a), (b) or (c), it shall not be entitled to specific performance to compel the consummation of the Merger. Section 7.11. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. In Witness Whereof, each of the parties has caused this Agreement to be duly executed on its behalf as of the day and year first above written. Cochstedt International Airport, Inc. By:/s/ Friedrich Gradl Name: Friedrich Gradl Title: President Copsil Corporation By:/s/ Debra Nicholson Name: Debra Nicholson Title: President COPSIL DISCLOSURE SCHEDULE Schedule 2.1 Organization See Amended Articles/Bylaws/Minutes Schedule 2.6 Consents & Approvals None Required Schedule 2.7 No Default Not Applicable Schedule 2.8 No Undisclosed Liability None Exist Schedule 2.9 Litigation None Exist Schedule 2.10 Compliance with Applicable Law Not Applicable - full disclosed in 10KSB Schedule 2.11 Employee Benefit Plans Section 2.11(a) Not Applicable - None Exist Section 2.11(b) No Benefit Plan Exist Section 2.11( c)No Options Exist Section 2.11(d) No Agreements Exist Schedule 2.12 Environmental Laws and Regs Not Applicable Schedule 2.13 Tax Matters None Exist Schedule 2.14 Title to Property None Exist Schedule 2.15 Intellectual Property None Exist Schedule 2.16 Insurance None Exist Schedule 2.17 Vote Required See Shareholder Meeting Certificate Schedule 2.18 Tax Treatment Not Applicable Schedule 2.19 Affiliates Debra Nicholson Schedule 2.20 Certain Business Practices None Exist Schedule 2.21 Insider Interest None Exist Schedule 2.22 Opinion of Financial Adviser Waived - None Exist Schedule 2.23 Broker None Exist Schedule 4.1 Conduct of Business See Amended & Restated Articles CIA DISCLOSURE SCHEDULE Schedule 3.2(b) Subsidiary Stock None Exist Schedule 3.2(c) Capital Stock Rights None Exist other than as in Articles Schedule 3.2(d) Securities conversions None Exist Schedule 3.2 (f) Subsidiaries None Exist Schedule 3.6 Consents & Approvals None Required Schedule 3.7 No Default Not Applicable Schedule 3.8 No Undisclosed Liability None Exist Schedule 3.9 Litigation None Exist Schedule 3.10 Compliance with Applicable Law Not Applicable Schedule 3.11 Employee Benefit Plans Section 3.11( c)No Options Exist Section 3.11(e) No Agreements Exist Schedule 3.12 Environmental Laws and Regs Not Applicable Schedule 3.13 Tax Matters None Exist Schedule 3.14 Title to Property None Exist Schedule 3.15(b) Intellectual Property None Exist Schedule 3.16 Insurance None Exist Schedule 3.17 Vote Required See Shareholder Meeting Certificate Schedule 3.18 Tax Treatment Not Applicable Schedule 3.19 Affiliates Friedrich Gradl Jorg Bartholomaus Norbert Doerr Schedule 3.20 Certain Business Practices None Exist Schedule 3.21 Insider Interest None Exist Schedule 3.22 Opinion of Financial Adviser Waived - None Exist Schedule 2.23 Broker None Exist Schedule 4.2 Conduct of Business See Amended & Restated Articles