AGREEMENT AND PLAN OF MERGER Among TENTHGATE INCORPORATED a Delaware Corporation, TENTHGATE INTERNATIONAL, INC., a Delaware Corporation, and TENTHGATE MERGER SUB, INC. a Utah Corporation, Dated as of March 12, 2007 Effective March 22, 2007
Among
TENTHGATE
INCORPORATED
a
Delaware Corporation,
TENTHGATE
INTERNATIONAL, INC.,
a
Delaware Corporation,
and
TENTHGATE
MERGER SUB, INC.
a
Utah Corporation,
Dated
as of
March
12, 2007
Effective
March 22, 2007
This
AGREEMENT AND PLAN OF MERGER (this
“Agreement”), is entered as of March 12, 2007 by and among TENTHGATE
INCORPORATED,
a
Delaware corporation (“TenthGate”), TENTHGATE
INTERNATIONAL, INC.,
a
Delaware corporation (“TenthGate Int.”), and TENTHGATE
MERGER SUB, INC.,
a Utah
corporation and a direct wholly-owned subsidiary of TenthGate Int. (“Merger
Sub").
RECITALS
| 1. |
The
Boards of Directors of TenthGate and TenthGate Int. deem it advisable
and
in the best interests of each corporation and its respective shareholders
for TenthGate Int. to acquire TenthGate, which acquisition will be
effected through the merger of TenthGate with and into Merger Sub
(the
“Merger”) pursuant to, and upon the terms and subject to the conditions
set forth in, this Agreement.
|
| 2. |
TenthGate
Int. has caused Merger Sub to be organized as its wholly-owned subsidiary
for the purpose of effectuating the Merger contemplated herein and
carry
on TenthGate's business after the Merger.
|
| 3. |
For
federal income tax purposes, it is intended that the Merger shall
qualify
as a reorganization with the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the “Code”), and the regulations
promulgated thereunder.
|
NOW,
THEREFORE,
in
consideration of the premises and the respective representations, warranties,
covenants and agreements set forth in this Agreement and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
expressly acknowledged, the parties, intending to be legally bound hereby,
agree
as follows:
ARTICLE
I.
THE
MERGER; CERTAIN RELATED MATTERS
SECTION
1.1: The
Merger. Upon
the
terms and subject to the conditions set forth in this Agreement, and in
accordance with the applicable provisions of the Delaware Corporation Law
(“Delaware Law”), Merger Sub shall be merged with and into TenthGate and the
separate existence of Merger Sub shall thereupon cease. TenthGate shall be
the
surviving corporation in the Merger, shall continue its corporate existence
under the laws of the State of Delaware, and shall succeed, without other
transfer, to all the rights and property of Merger Sub and shall be subject
to
all the debts and liabilities of Merger Sub in the same manner as if Merger
Sub
itself had incurred them.
SECTION
1.2: Closing.
Upon the
terms and subject to the conditions set forth in this Agreement, the closing
of
the Merger (the “Closing”) shall be held at the place and time as agreed upon by
the parties (as defined in Section 7.11) after all conditions precedent to
the
Closing shall have been satisfied, or waived, or at such other time and place
as
the parties hereto shall mutually agree (the actual date of the Closing being
referred to herein as the “Closing Date”). The parties hereto hereby agree to
deliver at the Closing such documents, certificates of officers and such other
instruments as are specified in Article V and as reasonably may be required
to
effect the Merger. All events which shall occur at the Closing shall be deemed
to occur simultaneously.
SECTION
1.3: Effective
Time & Date.
As soon
as practicable following the satisfaction or waiver of the conditions specified
in Article V, and provided that this Agreement has not been terminated or
abandoned pursuant to Article VI, the parties shall file this Agreement with
the
Secretary of State of the State of Delaware, all applicable tax clearance
certificates with respect to TenthGate with the Secretary of State of the State
of Delaware as may be required by Delaware Law, and all other filings or
recordings required under Delaware Law. Subject to and in accordance with
Delaware Law, the Merger will become effective at the date and time this
Agreement is filed with the Secretary of State of the State of Delaware or
such
later time or date as may be specified in this Agreement (the “Effective Time”).
Each of the parties will use its best efforts to cause the Merger to be
consummated as soon as practicable following the fulfillment or waiver of the
conditions specified in Article V., but not sooner than 10 days from the closing
date to allow notification of shareholders as required under Delaware
Law.
SECTION
1.4: Effects
of the Merger.
At and
after the Effective Time, the Merger will have the effects set forth in Delaware
Law.
SECTION
1.5: Charter
and Bylaws; Officers and Directors.
(a) Charter.
The
certificate of incorporation of TenthGate, as in effect immediately prior to
the
Effective Time, shall be the certificate of incorporation of the surviving
corporation after the Effective Time.
(b) Bylaws.
The
Bylaws of TenthGate, as in effect immediately prior to the Effective Time,
shall
be the Bylaws of the surviving corporation after the Effective
Time.
(c) Officers.
The
officers of TenthGate immediately prior to the Effective Time shall be the
officers of the surviving corporation after the Effective Time.
(d) Directors.
The
directors of TenthGate immediately prior to the Effective Time shall be the
directors of the surviving corporation after the Effective Time.
SECTION
1.6: Effects
on TenthGate Stock.
As of
the Effective Time, by virtue of the Merger and without any action on the part
of any holder of any share of Common Stock, $0.001 par value per share, of
TenthGate (the “TenthGate Stock”):
(a) Cancellation
of Treasury Stock.
All
shares of TenthGate Stock issued and owned by TenthGate, if any, at the
Effective Time shall, by virtue of the Merger, cease to be outstanding and
shall
be canceled and retired, and no consideration shall be delivered in exchange
therefore.
(b) Conversion
of TenthGate Stock.
Subject
to Section 2.3, each issued and outstanding share of TenthGate Stock, other
than
shares to be canceled in accordance with Section 1.6(a) and Dissenting Shares
(as defined in Section 1.9), if any, shall be converted into the right to
receive fully paid and nonassessable shares of Common Stock, par value $.001
per
share, of TenthGate Int. (the “TenthGate Int. Stock”) as follows:
|
Each
Share of
TenthGate
Stock
|
Number
of Shares of TenthGate Int. Stock
Into
Which Converted
|
|
One
(1)
|
One
(1) (as the same may be adjusted according to Section 1.10, the “Exchange
Ratio”) of TenthGate Int. Stock
|
The
shares of TenthGate Int. Stock into which shares of TenthGate Stock are
converted pursuant to the foregoing are referred to herein collectively as
the
“Merger Consideration.”
As
a
result of the Merger and without any action on the part of the holders thereof,
at the Effective Time, all shares of TenthGate Stock shall cease to be
outstanding and shall be canceled and retired and shall cease to exist, and
each
holder of a certificate which immediately prior to the Effective Time
represented any such share of TenthGate Stock (such certificate or other
evidence of ownership, a “Certificate”) shall thereafter cease to have any
rights with respect to such shares of TenthGate Stock, except the right (subject
to Section 1.6(a) and Section 1.9) to receive the applicable Merger
Consideration with respect thereto and any dividends or other distributions
to
which holders of TenthGate Stock become entitled all in accordance with this
Article I upon the surrender of such Certificate.
(c) Issuance
of Shares of TenthGate.
TenthGate will issue TenthGate Int. One Hundred (100) shares of TenthGate common
stock. Whereupon, TenthGate will become a wholly-owned subsidiary of TenthGate
Int. at Closing.
SECTION
1.7: Restrictions
on Transfer. The
shares of TenthGate Int. Stock issuable pursuant to this Agreement are subject
to restrictions and limitations on transfer and shall not be transferred unless
permitted by law and in accordance with the provisions of this Section 1.7,
as
follows:
(a) Merger
Consideration.
All of
the Merger Consideration will be subject to a restriction on transfer for a
period of 180 days after the Effective Time.
(b) Limitations
on Transfer.
In
addition to any other limitation on transfer created by applicable securities
laws, each recipient of TenthGate Int. Stock agrees that such recipient (which
term shall include any permitted transferee or assignee) shall not assign,
encumber or dispose of any interest in the shares of TenthGate Int. Stock except
in compliance with applicable securities laws.
(c) Legends.
The
certificate(s) representing the shares of TenthGate Int. Stock issuable pursuant
to this Agreement shall bear the following or similar legends (as well as any
legends required by applicable laws):
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE
SECURITIES LAWS, OR OTHER APPLICABLE LAWS, AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT AND QUALIFICATION UNDER
APPLICABLE STATE SECURITIES LAWS OR OTHER APPLICABLE LAWS OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM SUCH REGISTRATION
IS
AVAILABLE.
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE
WITH THE TERMS OF THE MERGER AGREEMENT PURSUANT TO WHICH SUCH SECURITIES WERE
ISSUED AND THAT IS ON FILE WITH THE SECRETARY OF THE COMPANY.
SECTION
1.8: Certain
Adjustments.
If,
between the date of this Agreement and the Effective Time, the outstanding
shares of TenthGate Int. Stock shall have been increased, decreased, changed
into or exchanged for a different number of shares or different class, in each
case, by reason of any reclassification, recapitalization, stock split,
split-up, combination or exchange of shares or a stock dividend or dividend
payable in any other securities shall be declared with a record date within
such
period, or any similar event shall have occurred, the applicable Merger
Consideration shall be appropriately adjusted to provide to the holder of
TenthGate Stock the same economic effect as contemplated by this Agreement
prior
to such event.
SECTION
1.9: Dissenting
Shares.
Notwithstanding anything in this Agreement to the contrary, shares of TenthGate
Stock which are issued and outstanding immediately prior to the Effective Time
and which are held by holders of such shares of TenthGate Stock who have
properly exercised appraisal rights with respect thereto in accordance with
Section 1300 et seq. of the Delaware Law (the "Dissenting Shares") shall not
be
converted into or be exchangeable for the right to receive the Merger
Consideration, and holders of such shares of TenthGate Stock shall be entitled
to receive payment of the appraised value of such shares of TenthGate Stock
in
accordance with the provisions of such provisions of the Delaware Law unless
and
until such holders fail to perfect or shall have effectively withdrawn or lost
their rights to appraisal and payment under the Delaware Law. If, after the
Effective Time, any such holder fails to perfect or shall have effectively
withdrawn or lost such right, such shares of TenthGate Stock shall thereupon
be
treated as if they had been converted into and to have become exchangeable
for,
at the Effective Time, the right to receive the Merger Consideration to which
the holder of such shares of TenthGate Stock is entitled, without any interest
or dividends thereon.
ARTICLE
II.
EXCHANGE
OF CERTIFICATES
SECTION
2.1: Exchange
of Stock Certificates.
(a) At
any
time on or after the Effective Time, holders of Certificates will be entitled,
upon surrender of such certificates to TenthGate Int. or its transfer agent,
to
receive in exchange therefor one or more new stock certificates evidencing
ownership of the number of TenthGate Int. Stock into which such TenthGate Stock
represented thereby shall have been converted in the Merger. If any certificate
representing shares of TenthGate Int. Stock is to be issued in a name other
than
that in which the certificate surrendered in exchange therefor is registered,
it
shall be a condition of the issuance thereof that the certificate so surrendered
shall be properly endorsed and otherwise in proper form for transfer, and that
the issuance is in compliance with all applicable securities laws.
(b) From
and
after the Effective Time, TenthGate Int. shall be entitled to treat the
Certificates which prior to the Effective Time represented shares of TenthGate
Stock and which have not yet been surrendered for exchange as evidencing the
ownership of the number of full shares of TenthGate Int. Stock into which the
shares of TenthGate Stock represented thereby shall have been converted pursuant
to Section 1.6, notwithstanding the failure to surrender such certificates.
SECTION
2.2: Distributions
with Respect to Unexchanged Shares.
No
dividends or other distributions with a record date after the Effective Time
shall be paid to the holder of any unsurrendered Certificate with respect to
the
shares of TenthGate Int. Stock that such holder would be entitled to receive
upon surrender of such Certificate until such holder shall surrender such
Certificate in accordance with Section 2.1. Following surrender of any such
Certificate, there shall be paid to the record holder thereof without interest,
(a) the amount of dividends or other distributions with a record date after
the
Effective Time theretofore paid with respect to such whole shares of TenthGate
Int. Stock, and (b) at the appropriate payment date, the amount of dividends
or
other distributions with a record date after the Effective Time and a payment
date subsequent to such surrender payable with respect to such shares of
TenthGate Int. Stock.
SECTION
2.3: No
Fractional Shares of TenthGate Int. Stock.
(a) No
certificates or scrip for fractional shares of TenthGate Int. Stock shall be
issued upon the surrender for exchange of Certificates pursuant to this Article
II in the Merger and such fractional share interest will not entitle the owner
thereof to vote or to have any rights of a stockholder of TenthGate Int. or
a
holder of shares of TenthGate Int. Stock.
(b) Notwithstanding
any other provision to this Agreement, any fraction of a share of TenthGate
Int.
Stock to which a holder of shares of TenthGate Stock shall be entitled to
receive in exchange pursuant to the Merger (determined after taking into account
all Certificates delivered by such holder) shall be rounded to the nearest
whole
number.
SECTION
2.4: Lost
Certificates.
If any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate to be lost,
stolen or destroyed and, if required by TenthGate Int., the posting by such
Person of a bond in such reasonable amount as TenthGate Int. may direct as
indemnity against any claim that may be made against it with respect to such
Certificate, TenthGate Int. or its transfer agent will deliver in exchange
for
such lost, stolen or destroyed Certificate the applicable Merger Consideration
with respect to the share of TenthGate Stock formerly represented thereby and
unpaid dividends and distributions on shares of TenthGate Int. Stock deliverable
in respect thereof, pursuant to this Agreement.
SECTION
2.5: Further
Assurances.
At and
after the Effective Time, the officers and directors of TenthGate Int. will
be
authorized to execute and deliver, in the name and on behalf of TenthGate,
any
deeds, bills of sale, assignments or assurances and to take and do, in the
name
and on behalf of TenthGate, any other actions and things to vest, perfect or
confirm of record or otherwise in TenthGate Int. any and all right, title and
interest in, to and under any of the rights, properties or assets acquired
or to
be acquired by TenthGate Int. as a result of, or in connection with, the
Merger.
SECTION
2.6: Closing
of Transfer Books.
The
stock transfer books of TenthGate shall be closed immediately upon the Effective
Time and there shall be no further registration of transfers of shares of
TenthGate thereafter on the records of TenthGate.
ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES
SECTION
3.1: Representations
and Warranties of TenthGate.
TenthGate represents and warrants to TenthGate Int. as follows:
(a) Organization,
Standing and Power; Subsidiaries.
(i) TenthGate
is a corporation duly organized, validly existing and in good standing under
the
laws of the State of Delaware, has and authority to own, lease and operate
its
properties and to carry on its business as now being conducted, and is duly
qualified and in good standing to do business in each jurisdiction in which
the
nature of its business or the ownership or leasing of its properties makes
such
qualification necessary other than in such jurisdictions where the failure
to so
qualify or to be in good standing would not reasonably be expected to have
a
material adverse effect on the business, financial condition or results of
operations of TenthGate, taken as a whole.
(ii) The
copies of the certificate of incorporation and bylaws of TenthGate which were
previously furnished or made available to TenthGate Int. are true, complete
and
correct copies of such documents as in effect on the date of this
Agreement.
(b) Capital
Structure.
As of
the date of this Agreement, the only authorized capital stock of TenthGate
consists of 150,000,000_ common shares of TenthGate Stock, of which 52,450,200
shares are outstanding and 50,000,000 preferred shares of TenthGate Stock of
which 0 shares are outstanding. As of the date of this Agreement, there are
no
outstanding options, warrants, commitments, agreements or any other rights
of
any character entitling any person to acquire any of the capital stock or other
interest in TenthGate except for the 4 Convertible Notes Holders (“NOTES”) as
previously provided to TenthGate Int. in due diligence disclosures.
(c) Authority;
No Conflicts.
(i) TenthGate
has all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby, subject to
the
approval of this Agreement by the affirmative vote of the holders of a majority
of the outstanding shares of TenthGate Stock. The execution and delivery of
this
Agreement and the consummation of the transactions contemplated hereby have
been
duly authorized by all necessary corporate action on the part of TenthGate
and
no other corporate proceedings on the part of TenthGate are necessary to
authorize the execution and delivery of this Agreement or to consummate the
Merger and the other transactions contemplated hereby, subject to the approval
of this Agreement by the affirmative vote of the holders of a majority of the
outstanding shares of TenthGate Stock. This Agreement has been duly executed
and
delivered by TenthGate and constitutes a valid and binding agreement of
TenthGate, enforceable against TenthGate in accordance with its terms, except
as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting creditors
generally or by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(ii) Neither
the execution, delivery and performance by TenthGate of this Agreement nor
the
consummation of the transactions contemplated hereby (1) violates any provision
of the articles of incorporation or bylaws of TenthGate; (2) violates, conflicts
with or results in a breach or default under (after the giving of notice or
the
passage of time or both), permits the termination of, or relieves the other
party of its obligations under, any agreement or instrument to which TenthGate
is a party or by which it or any of its properties or assets may be bound,
or
results in the creation of any mortgage, lien, security interest, charge or
other encumbrance of any kind upon any of its properties or assets; or (3)
violates any laws, regulations or orders of any applicable jurisdiction which
are binding on TenthGate.
(iii) No
consent, approval, order or authorization of, or registration, declaration
or
filing with, any governmental agency or authority is required by TenthGate
in
connection with the execution and delivery of this Agreement or the consummation
of the Merger and the other transactions contemplated hereby, except for those
required under (A) Delaware Law, and (B) any applicable state securities or
“blue sky” laws.
(d) Litigation.
There
are no actions, suits, claims, judgments or proceedings pending or, to the
knowledge of TenthGate, threatened, against or affecting TenthGate which,
individually or in the aggregate, would reasonably be expected to have a
material adverse effect on the business, financial condition or results of
operations of TenthGate.
(e) Brokers
or Finder.
No
agent, broker, investment banker, or other firm or Person is or will be entitled
to any broker’s or finder’s fee or any other similar commission in connection
with any of the transactions contemplated by this Agreement.
(f) Disclosure.
Neither
this Agreement, the Schedules hereto, nor any audited or unaudited financial
statements, documents or certificates furnished or to be furnished to TenthGate
Int. by or on behalf of TenthGate pursuant to this Agreement or in connection
with the transactions contemplated hereby contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary in order to make the statements contained herein or therein not
misleading.
(g) Accredited
Shareholders. All
Shareholders of TenthGate are "accredited persons" as this term is defined
under
Rule 501 of Regulation D of the Securities Act of 1933, as amended.
SECTION
3.2: Representations
and Warranties of TenthGate Int..
TenthGate Int. represents and warrants to TenthGate as follows:
(a) Organization,
Standing and Power; Subsidiaries.
(i) TenthGate
Int. is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, has and authority to own, lease and
operate its properties and to carry on its business as now being conducted,
and
is duly qualified and in good standing to do business in the State of Delaware
and in each other jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification necessary other
than in such jurisdictions where the failure to so qualify or to be in good
standing would not reasonably be expected to have a material adverse effect
on
the business, financial condition or results of operations of TenthGate Int.
and
its Subsidiar(ies), taken as a whole. Merger Sub is a corporation duly
organized, validly existing and in good standing under the laws of the State
of
Utah, and has and authority to own, lease and operate its properties and to
carry on its business as now being conducted.
(ii) TenthGate
Int. does not have any Subsidiaries and does not directly or indirectly own
any
interest or investment in any other Person, except for Merger Sub.
(iii) The
copies of the certificate or articles of incorporation and bylaws of TenthGate
Int. and Merger Sub which were previously furnished or made available to
TenthGate are true, complete and correct copies of such documents as in effect
on the date of this Agreement.
(b) Capital
Structure.
As of
the date of this Agreement, the only authorized capital stock of TenthGate
Int.
consists of 200,000,000 common shares of TenthGate Int. Stock, of which
22,500,000 shares are outstanding and 10,000,000 shares of preferred stock
of
which 0 shares are outstanding. As of the date of this Agreement, there are
no
outstanding options, warrants, commitments, agreements or any other rights
of
any character entitling any person to acquire any of the capital stock or other
interest in TenthGate Int. As of the date of this Agreement, the authorized
capital stock of Merger Sub consists of 1,000,000 shares of common stock, $.001
par value per share, of which, 100 shares of common stock have been issued
to
TenthGate Int. at a price of $.001 per share.
(c) Authority;
No Conflicts.
(i) Each
of
TenthGate Int. and Merger Sub has all requisite 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 authorized
by all necessary corporate action on the part of each of TenthGate Int. and
Merger Sub and no other corporate proceedings on the part of TenthGate Int.
or
Merger Sub are necessary to authorize the execution and delivery of this
Agreement or to consummate the Merger and the other transactions contemplated
hereby. This Agreement has been duly executed and delivered by each of TenthGate
Int. and Merger Sub and constitutes a valid and binding agreement of each of
TenthGate Int. and Merger Sub, enforceable against them in accordance with
its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws relating to or affecting
creditors generally or by general equitable principles (regardless of whether
such enforceability is considered in a proceeding in equity or at
law).
(ii) Neither
the execution, delivery and performance by TenthGate Int. or Merger Sub of
this
Agreement nor the consummation of the transactions contemplated hereby (1)
violates any provision of the articles of incorporation or bylaws of TenthGate
Int. or Merger Sub; (2) violates, conflicts with or results in a breach or
default under (after the giving of notice or the passage of time or both),
permits the termination of, or relieves the other party of its obligations
under, any agreement or instrument to which TenthGate Int. or Merger Sub is
a
party or by which it or any of its properties or assets may be bound, or results
in the creation of any mortgage, lien, security interest, charge or other
encumbrance of any kind upon any of its properties or assets; or (3) violates
any laws, regulations or orders of any applicable jurisdiction which are binding
on TenthGate Int. or Merger Sub.
(iii) No
consent, approval, order or authorization of, or registration, declaration
or
filing with, any governmental agency or authority is required by TenthGate
Int.
or Merger Sub in connection with the execution and delivery of this Agreement
or
the consummation of the Merger and the other transactions contemplated hereby,
except for those required under (A) Delaware Law, and (B) any applicable state
securities or “blue sky” laws.
(d) Litigation.
There
are no actions, suits, claims, judgments or proceedings pending or, to the
knowledge of TenthGate Int., threatened, against or affecting TenthGate Int.
or
Merger Sub which, individually or in the aggregate, would reasonably be expected
to have a material adverse effect on the business, financial condition or
results of operations of TenthGate Int. and its Subsidiaries, taken as a whole.
There are no debts, obligations, claims or taxing authority liabilities that
will survive the merger transaction. If such are ever deemed to exist anytime
post merger, they will remain as the sole responsibility and liability of the
previous, pre-merger officers and directors of TenthGate Int.
(e) Brokers
or Finder.
No
agent, broker, investment banker, or other firm or Person is or will be entitled
to any broker’s or finder’s fee or any other similar commission in connection
with any of the transactions contemplated by this Agreement.
(f) Disclosure.
Neither
this Agreement, the Schedules hereto, nor any audited or unaudited financial
statements, documents or certificates furnished or to be furnished to TenthGate
by or on behalf of TenthGate Int. or Merger Sub pursuant to this Agreement
or in
connection with the transactions contemplated hereby contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact necessary in order to make the statements contained herein or
therein not misleading.
(g) Securities
Compliance; Blue Sky.
The
TenthGate Int. Common Stock to be issued pursuant to Section 1.6 hereof will
be
issued in a transaction exempt from registration under the Securities Act,
by
reason of Section 4(2) thereof. TenthGate Int. shall take such action as
TenthGate Int. shall reasonably determine to be necessary in order to obtain
an
exemption for or to qualify its Common Stock, if any, to be issued in connection
with the Merger under applicable securities or “Blue Sky” laws of the states of
the United States; provided, however, that TenthGate Int. shall not for any
such
purpose be required to qualify to transact business as a foreign corporation
in
any jurisdiction where it is not so qualified or to consent to general service
of process in any such jurisdiction.
ARTICLE
IV.
COVENANTS
AND AGREEMENTS
SECTION
4.1: Conduct
of Business. During
the period from the date of this Agreement and continuing until the Effective
Time, each of TenthGate and TenthGate Int. agrees as to itself and its
Subsidiaries (except as expressly contemplated or permitted by this Agreement,
or to the extent the other party shall otherwise consent in
writing):
(a) To
carry
on their respective businesses in the usual, regular and ordinary course in
all
material respects, in substantially the same manner as heretofore conducted,
to
preserve intact their present business organization and structure, to keep
available the services of their present officers, agents and full-time
employees, to use best efforts to preserve and maintain their assets and the
goodwill of their respective businesses and to use best efforts to preserve
their relationships with customers, clients, independent contractors, employees
and other persons having business dealings with it or material to the operation
of their respective businesses;
(b) Not
to
declare, set aside, distribute or pay any dividend or other distributions in
respect of its capital stock, or split, combine or reclassify any of its capital
stock, or authorize for issuance, issue, sell, deliver or agree or commit to
issue, sell or deliver (whether through the issuance or granting of options,
warrants, convertible or exchangeable securities, commitments, subscriptions,
rights to purchase or otherwise) any shares of capital stock or any other
securities, or amend any of the terms of any such securities;
(c) Not
to
incur any liability (other than liabilities incurred in the ordinary course
of
their respective businesses, consistent with past practice, which are not in
the
aggregate material thereto), or pay, discharge or satisfy any material claim
or
liability, other than the payment, discharge or satisfaction in the ordinary
course, of their respective businesses of claims or liabilities incurred in
the
ordinary course, consistent with past practice; or
(d) Not
to
sell, transfer convey, assign or otherwise dispose of any assets, except in
the
ordinary course, consistent with past practices, or create, incur or assume
any
Lien on any Assets.
SECTION
4.2: Access
to Information.
Prior to
the Closing Date, upon reasonable notice, each party shall (and shall cause
its
Subsidiaries to) afford to the officers, employees, accountants, counsel,
financial advisors, agents and other representatives (collectively, the
“Representatives”) of the other party reasonable access during normal business
hours to its properties, books, contracts, commitments, records, officers and
employees, and, during such period, such party shall (and shall cause its
Subsidiaries to) furnish promptly to the other party copies of such information
concerning it and its business, properties and personnel as such other party
may
reasonably request.
SECTION
4.3: Consents,
Filings and Authorizations; Efforts to Consummate.
Subject
to the terms and conditions of this Agreement, as promptly as practicable after
the date hereof, each party will use its good faith efforts to take, or cause
to
be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under this Agreement and applicable laws and regulations
to
consummate the Merger and the other transactions contemplated by this Agreement,
including without limitation, all filings and submissions under applicable
laws
as may be required for them to consummate the transactions contemplated hereby
in accordance with the terms hereof, and such consents of any third party,
whether private or governmental, required in connection with such party's
performance of such transactions, shall furnish copies thereof to each other
party prior to such filing, and shall not make any such filing or submission
to
which the other party reasonably objects in writing. All such filings shall
comply in form and content in all material respects with applicable laws. Each
party hereto shall cooperate with the other in all of the foregoing.
SECTION
4.4: Approval
of Shareholders.
TenthGate shall (a) as soon as reasonably practicable for the purpose of voting
on the adoption and approval of this Agreement and the Merger (the “Proposal”)
and in accordance with Delaware Law, applicable federal and state securities
laws and its articles of incorporation and bylaws, either obtain the written
consent of the holders of a majority of the outstanding shares of TenthGate
Stock or cause a meeting of its shareholders to be duly called and held, (b)
recommend to its shareholders approval of the Proposal (except to the extent
that the board of directors of TenthGate Int. determines, after receiving the
written advice of counsel, that such act is not permitted by such board of
directors in the discharge of their fiduciary duties to TenthGate), (c) use
its
best efforts to obtain the necessary approval of its shareholders, and (d)
take
all action required under Delaware Law with respect to the holders of Dissenting
Shares. TenthGate Int. will take any action required to be taken under Delaware
Law, and applicable federal and state securities laws and will also take action
to secure all necessary exemptions or clearances under Delaware Law and all
securities laws applicable to (i) the Merger, and (ii) the issuance of TenthGate
Int. Stock pursuant thereto.
SECTION
4.5: Tax-Free
Qualification.
Each
party hereto shall use its reasonable best efforts not to, and shall use its
reasonable best efforts not to permit any of its Subsidiaries to, take any
action that would prevent or impede the Merger from qualifying as a
reorganization under Section 368 of the Code.
SECTION
4.6: Confidentiality.
Each
party shall hold in strict confidence, and shall use its best efforts to cause
each of its Representatives to hold in strict confidence, unless compelled
to
disclose by judicial or administrative process, or by other requirements of
law,
all information concerning the other party which it has obtained prior to,
on or
after the date hereof in connection with this Agreement and the transactions
contemplated hereby, and each party shall not use or disclose to others, or
permit the use of or disclosure of, any such information so obtained, and will
not release or disclose such information to any other Person, except its
Representatives who need to know such information in connection with this
Agreement and the transactions contemplated hereby. The foregoing provision
shall not apply to any such information to the extent a party can demonstrate
(i) was known by it prior to disclosure by the other party, (ii) was rightfully
obtained by it from a third party who lawfully obtained such information under
conditions which did not require that such information be held in confidence,
or
(iii) was, at the time of disclosure or thereafter becomes, generally available
to the public through no act or failure on its part. If this Agreement is
terminated as provided herein, each party hereto shall return to the other
all
tangible evidence of all such disclosed information.
SECTION
4.7: Public
Announcements.
The
parties will consult with each other before issuing any press release or
otherwise making any public statement with respect to this Agreement and the
transactions contemplated hereby, and will not issue any such press release
or
make any such public statement without the prior approval of the other party,
except as may be required by applicable law in which event the other party
shall
have the right to review and comment upon (but not approve) any such press
release or public statement prior to its issuance.
SECTION
4.8: Expenses.
Except
as otherwise specifically provided in this Agreement, the parties hereto shall
bear their respective expenses incurred in connection with the preparation,
execution and performance of this Agreement and the transactions contemplated
hereby, including without limitation, all fees and expenses of their respective
counsel, accountants and other representatives.
SECTION
4.9: Directors’
and Officers’ Indemnification and Insurance.
TenthGate Int. shall (a) indemnify and hold harmless, and provide advancement
of
expenses to, all past and present directors, officers, employees, agents and
advisors of TenthGate and its Subsidiaries (in all their capacities) (i) to
the
same extent such persons are indemnified or have the right to advancement of
expenses as of the date of this Agreement by TenthGate pursuant to TenthGate’s
certificate of incorporation, bylaws and indemnification agreements, if any,
in
existence on the date hereof with any directors, officers, employees, agents
and
advisors of TenthGate and its Subsidiaries, and (b) without limitation to clause
(a), to the fullest extent permitted by law, in each case for acts or omissions
occurring at or prior to the Effective Time (including for acts or omissions
occurring in connection with the approval of this Agreement and the consummation
of the transactions contemplated hereby), (ii) include and cause to be
maintained in effect in TenthGate Int. (or any successor’s) certificate of
incorporation and bylaws after the Effective Date, provisions regarding
elimination of liability of directors, indemnification of officers, directors,
employees, agents and advisors, and advancement of expenses which are, in the
aggregate, no less advantageous to the intended beneficiaries than the
corresponding provisions contained in the current articles of incorporation
and
bylaws of TenthGate.,
SECTION
4.10: Directors
and Executive Officers of TenthGate Int.
The
parties hereto will take all action necessary to cause (a) the Board of
Directors of TenthGate Int. as of the Effective Time to be comprised of the
persons listed in Part 4.10(a) of the Disclosure Schedule; and (b) the
individuals listed in Part 4.10(b) of the Disclosure Schedule to be appointed
as
officers of TenthGate Int. as of the Effective Time.
ARTICLE
V.
CONDITIONS
TO CLOSING
SECTION
5.1: Conditions
to the Obligations Each Party.
The
respective obligations of each party to effect the Merger are subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) No
Injunction.
No
provision of any applicable law and no order, decree, ruling or other action
of
any governmental authority shall prohibit the consummation of the transactions
contemplated by this Agreement.
(b) No
Proceeding or Litigation.
No
action, suit, claim before any legal, administrative or arbitration proceeding
instituted by any person shall have been commenced or pending against any of
the
parties hereto or any of their respective affiliates, officers or directors
which seeks to restrain, prevent, change or delay in any material respect the
Merger or seeks to challenge any of the material terms or provisions of this
Agreement or seeks material damages in connection with any of such
transactions.
(c) Government
Consents.
All
consents, approvals, authorizations or orders of, or filings with, any
governmental agency required for the consummation of the transactions
contemplated hereby shall have been obtained or made.
(d) Corporate
Proceedings.
This
Agreement shall have been adopted by the requisite affirmative vote of the
shareholders of TenthGate in accordance with TenthGate’s certificate of
incorporation and bylaws and Delaware Law.
SECTION
5.2: Additional
Conditions to Obligations of TenthGate.
The
obligation of TenthGate to effect the Merger are subject to the satisfaction,
or
waiver by TenthGate Int., on or prior to the Closing Date of the following
additional conditions:
(a) Performance.
TenthGate Int. shall have performed and complied with all agreements,
obligations and covenants required by this Agreement to be performed or complied
with by it on or prior to the Closing Date.
(b) Representations
and Warranties.
The
representations and warranties of TenthGate Int. contained in this Agreement
shall be true and correct in all material respects as of the date of this
Agreement and as of the Closing Date as though made on and as of the Closing
Date.
SECTION
5.3: Additional
Conditions to Obligations of TenthGate Int. The
obligation of TenthGate Int. to effect the Merger are subject to the
satisfaction, or waiver, on or prior to the Closing Date of the following
additional conditions:
(a) Performance.
TenthGate shall have performed and complied with all agreements, obligations
and
covenants required by this Agreement to be performed or complied with by it
on
or prior to the Closing Date.
(b) Representations
and Warranties.
The
representations and warranties of TenthGate contained in this Agreement shall
be
true and correct in all material respects as of the date of this Agreement
and
as of the Closing Date as though made on and as of the Closing
Date.
ARTICLE
VI.
TERMINATION
SECTION
6.1: Termination.
This
Agreement may be terminated and the Merger and other transactions contemplated
hereby may be abandoned at any time prior to the Effective Time:
(a) By
mutual
written consent of the parties hereto;
(b) By
TenthGate, if TenthGate Int. shall have breached or failed to perform any of
its
representation, warranties, covenants or other agreements contained in this
Agreement, such that the conditions set forth in Section 5.1(a) or (b) are
not
capable of being satisfied on or before March 30, 2007 (the “Termination
Date”);
(c) By
TenthGate Int., if TenthGate shall have breached or failed to perform any of
its
representation, warranties, covenants or other agreements contained in this
Agreement, such that the conditions set forth in Section 5.1(a) or (b) are
not
capable of being satisfied on or before the Termination Date; or
(d) By
either
party hereto, if any governmental entity shall have issued an order, decree
or
ruling or other action permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement, and such order,
decree, ruling or other action shall have become final and
nonappealable.
SECTION
6.2: Effect
of Termination; Right to Proceed.
In the
event that this Agreement shall be terminated pursuant to this Article VI,
all
further obligations of the parties under the Agreement shall terminate without
further liability of any party hereunder (except with respect to Section 4.6
(Confidentiality), Section 4.7 (Public Announcements), and Section 4.8
(Expenses) as provided below). The agreements contained in Sections 4.6, 4.7
and
4.8 shall survive the termination hereof. In the event that a condition
precedent to its obligation is not met, nothing contained herein shall be deemed
to require any party to terminate this Agreement, rather than to waive such
condition precedent and proceed with the Merger and the other transactions
contemplated hereby.
ARTICLE
VII.
GENERAL
PROVISIONS
SECTION
7.1: Non-Survival
of Representations, Warranties and Agreements. None
of
the representations, warranties, covenants and other agreements in this
Agreement or in any instrument delivered pursuant to this Agreement, including
any rights arising out of any breach of such representations, warranties,
covenants, agreements and other provisions, shall survive the Effective Time,
except for those covenants, agreements and other provisions contained herein
that by their terms apply or are to be performed in whole or in part after
the
Effective Time and this Article VII.
SECTION
7.2: Notices.
All
notices and other communications hereunder shall be in writing and shall be
deemed duly given (a) on the date of delivery if delivered personally, or by
telecopy or telefacsimile, upon confirmation of receipt, (b) on the first
Business Day following the date of dispatch if delivered by a recognized
next-day courier service, or (c) on the tenth Business Day following the date
of
mailing if delivered by registered or certified mail, return receipt requested,
postage prepaid. All notices hereunder shall be delivered as set forth below,
or
pursuant to such other instructions as may be designated in writing by the
party
to receive such notice:
|
If
to TenthGate to:
|
TENTHGATE
INCORPORATED
0000
Xxxxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxx,
XX 00000
Attention: Xxx
Xxxxx, Chief Executive Officer
Fax: 000-000-0000
|
|
with
a copy to:
|
Xxxxxx
& Jaclin, LLP
000
Xxxxx 0 Xxxxx, Xxxxx 000
Xxxxxxxxx,
XX 00000
Attention:
Xxxxx Xxxxxx, Esq.
Fax:
000-000-0000
|
|
|
|
|
If
to TenthGate Int. or Merger Sub to:
|
TenthGate
Int., Inc.
00000
Xxxxx Xxxxx Xxxxx Xxxx
Xxxxx
000
Xxxxx
Xxxxxx, Xxxx 00000
Fax:
000 000-0000
|
|
with
a copy to:
|
Xxxxxx
Enterprises, Inc.
0000
Xxxxxxxx Xxxxx, #000
Xxxxxxxxxxx,
XX 00000
|
|
Attention:
Xxxxxxx Xxxxxx
|
|
|
Fax:
000-000-0000
|
SECTION
7.3: Entire
Agreement; No Third Party Beneficiaries.
(a) This
Agreement (including the Schedules and Exhibits hereto) and the other agreements
and instruments of the parties delivered in connection herewith constitute
the
entire agreement and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof.
(b) This
Agreement shall be binding upon and inure solely to the benefit of each party
hereto, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, other than Section 4.9 (which
is intended to be for the benefit of the Persons covered thereby).
SECTION
7.4: Waivers
and Amendments, Non-Contractual Remedies, Preservation of
Remedies.
This
Agreement may be amended, superseded, canceled, renewed or extended only by
a
written instrument signed by the parties hereto. The provisions hereof may
be
waived in writing by the parties hereto. No delay on the part of any party
in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any such right, power
or privilege, nor any single or partial exercise of any such right, power or
privilege, preclude any further exercise thereof or the exercise of any other
such right, power or privilege. Except as otherwise provided herein, the rights
and remedies herein provided are cumulative and are not exclusive of any rights
or remedies that any party may otherwise have at law or in equity.
SECTION
7.5: Governing
Law.
This
Agreement shall be governed and construed in accordance with the laws of the
State of Delaware applicable to agreements made and to be performed entirely
within such State, without regard to the conflict of law rules
thereof.
SECTION
7.6: Consent
to Jurisdiction and Service of Process.
The
parties hereto irrevocably (a) agree that any suit, action or other legal
proceeding arising out of this Agreement may be brought in the courts of the
State of Delaware or the courts of the United States located in the State of
Delaware, (b) consent to the jurisdiction of each court in any such suit, action
or proceeding, (c) waive any objection which they, or any of them, may have
to
the laying of venue of any such suit, action or proceeding in any of such
courts, and (d) waive the right to a trial by jury in any such suit, action
or
other legal proceeding.
SECTION
7.7: Binding
Effect, No Assignment.
This
Agreement and all of its provisions, rights and obligations shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto, in
whole or in part (whether by operation of law or otherwise), without the prior
written consent of the other parties, and any purported assignment, unless
so
consented to, shall be void and without effect.
SECTION
7.8: Exhibits.
All
Exhibits and Schedules attached hereto are hereby incorporated by reference
into, and made a part of, this Agreement.
SECTION
7.9: Severability.
If any
provision of this Agreement for any reason shall be held to be illegal, invalid
or unenforceable, such illegality shall not affect any other provision of this
Agreement, but this Agreement shall be construed as if such illegal, invalid
or
unenforceable provision had never been included herein.
SECTION
7.10: Counterparts;
Facsimile Signatures.
The
Agreement may be executed in any number of counterparts, each of which shall
be
deemed to be an original as against any party whose signature appears thereon,
and all of which shall together constitute one and the same instrument. This
Agreement shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all of the parties
reflected hereon as the signatories. The parties shall be entitled to rely
upon
and enforce a facsimile of any authorized signature as if it were the
original.
SECTION
7.11: Definitions.
The
following terms, as used herein, have the following meanings:
(a) “Business
Day” means any day other than a Saturday, Sunday or other day on which banks are
not required or authorized to close in the City of San Francisco.
(b) The
term
"control",
with
respect to any Person, means the power to direct the management and policies
of
such Person, directly or indirectly, by or through stock ownership, agency
or
otherwise, or pursuant to or in connection with an agreement, arrangement or
understanding (written or oral) with one or more other persons by or through
stock ownership, agency or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
(c) "Person"
means
an individual, corporation, partnership, joint venture, association, trust,
unincorporated organization or other entity, including a government or political
subdivision or an agency or instrumentality thereof.
(d) "Subsidiary"
of a
Person means any entity of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions are owned directly or indirectly through
one or more intermediaries, or both, such Person.
SECTION
7.12: Interpretation.
When a
reference is made in this Agreement to Sections or Articles, such reference
shall be to a Section or Articles of this Agreement unless otherwise indicated.
The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
Whenever the words "include", "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation."
IN
WITNESS WHEREOF,
the
undersigned have executed this Agreement as of the date set forth
above.
|
TENTHGATE
INCORPORATED
|
TENTHGATE
INT., INC.
|
|
By:
/s/ Xxx Xxxxx
|
By:
/s/ Xxxx Xxxxxx
|
|
Name: Xxx
Xxxxx
|
Name: Xxxx
Xxxxxx
|
|
Title: President
|
Title: President
|
|
MERGER
SUB, INC.
|
|
|
By:
/s/ Xxxx Xxxxxx
|
|
|
Name: Xxxx
Xxxxxx
|
|
|
Title: President
|
|
PART
4.10
OF
DISCLOSURE
SCHEDULE TO
DIRECTORS
AND EXECUTIVE OFFICERS
OF
TENTHGATE INT. AS OF THE EFFECTIVE TIME
(a) Board
of
Directors of TenthGate Int.:
|
Xxx
Xxxxx, Chairman
|
|
Xxxxx
Xxxxxx
|
|
Xxxxxxx
Xxxxxx
|
|
R.
Xxxx Xxxx
|
|
Xxxx
Xxxxxxx
|
|
Xxxx
X. Xxxxxxxx
|
(b) Officers
of TenthGate Int.:
|
Name
|
Position
and Title
|
|
Xxx
Xxxxx
|
CEO,
President, CFO
|
|
R.
Xxxx Xxxx
|
Secretary,
Treasurer, Exec. VP of Bus. Development
|
