Exhibit 2.1
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") dated this 20th day of January
2003, among Telecommunication Products, Inc. a Colorado corporation and publicly
traded company located at 0000 Xxxxxxxx Xxxx, Xxxxx X, Xxxxxxxx Xxxxx, XX. 00000
("Buyer") and Omega Funding, Inc, a privately held corporation located 00000
Xxxxxx Xx, Xxxx Xxxxx XX 00000 ("Seller") hereafter collectively referred to as
the "Parties".
RECITALS
Buyer is a SEC reporting company, publicly traded under the symbol TCPD
organized in Colorado, and engaged in the business of videoconferencing,
developing and providing video on demand systems and otherwise exploting the
internet and communication based data systems.
Seller is a privately held corporation, wholly owned by Xxxx X Xxxxxx, which
owns certain assets free and clear of any encumbrances which it desires to sell
to the buyer.
WITNESSETH:
WHEREAS, Buyer desires to purchase from Seller and Seller desires to sell to
Buyer, on the terms and subject to the conditions of this Agreement, certain
assets of Seller:
THEREFORE, in consideration of the mutual covenants, agreements, representations
and warranties contained in this Agreement, the parties agree as follows:
ARTICLE 1. TRANSFER OF ASSETS
Subject to the terms and conditions set forth in this Agreement, Seller agrees
to sell, convey, transfer, assign and deliver to Buyer, and Buyer agrees to
purchase from Seller at the Closing described in Article 3 hereof, the property
described below and collectively referred to in this Agreement as all of the
assets and properties of Seller held by Seller in the eighty thousand square
foot warehouse located at 0000 Xxxxxxx Xxxx, Xxxxxxxxx, XX including
miscellaneous parts and hardware as well as those assets listed in Exhibit A
attached hereto, collectively referred to in this Agreement as the "Assets."
1.1 LISTED PROPERTY. All of the property and assets of Seller described in
Exhibit A attached hereto.
1.2 MISCELLANEOUS PROPERTY. All of the assets and properties of Seller held
by Seller in the eighty thousand square foot warehouse located at 0000
Xxxxxxx Xxxx, Xxxxxxxxx, XX, including miscellaneous parts and
hardware.
1.3 DELIVERY. At the Closing, Seller shall deliver to Buyer the equipment
as set forth in Schedule 1.2, or appropriate documents transferring the
ownership of the Equipment, free of any claim or encumbrance. Good and
marketable title to all such equipment shall be transferred on
delivery, free and clear of any encumbrances.
ARTICLE 2. PURCHASE PRICE
2.1 PAYMENT OF PURCHASE PRICE. In consideration for the transfer and
assignment by Seller of the Assets, and in consideration of the
representations, warranties and covenants of the Seller set forth
herein, Buyer on the conditions set forth herein and subject to the
provisions in Article 9 state that:
(a) The Buyer shall pay to the Seller the sum of Five Thousand ($5,000) US
Dollars upon execution of this agreement.
(b) The Buyer shall pay to the Seller the sum of Forty Five Thousand
($45,000) US Dollars on or before February 28, 2003.
(c) The Buyer shall pay to the Seller the sum of Fifty Thousand ($50,000)
US Dollars on or before March 25, 2003.
(d) Buyer shall have issued 1,900,000 shares of Telecommunication Products,
Inc ("TCPD") restricted common stock (hereinafter referred to as the
"Shares") to the Seller within fifteen (15) business days after the
execution of this agreement.
(e) If, one (1) year from the date of closing, TCPD's common shares are
selling in the open market at less than one ($1.00) US dollar per
common share, Buyer shall issue to Seller sufficient additional shares
of Buyer's common stock to reach a total value of one million nine
hundred thousand ($1,900,000) US dollars in TCPD's common shares.
(f) All of the common shares issued to Seller under this agreement shall be
subject to SEC Rule 144 restrictions. In addition, the Sellers agree
not to liquidate in the open market more than five thousand (5,000)
shares of TCPD's common stock in any one day, or more than fifteen
thousand (15,000) shares of TCPD's common stock in any one calendar
week without Buyer's written approval.
(g) Buyer agrees to assume the lease on the warehouse located at 0000
Xxxxxxx Xxxx, Xxxxxxxxx, XX and render all warehouse lease payments
thereunder, contingent upon agreement in writing by the landlord (who
is the Oak Valley Partnership) of the warehouse, to waive all lease
monthly payments through June 30, 2003. Rent beginning July 1, 2003
through December 31, 2003 will be at the rate of five thousand ($5,000)
dollars per month.
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(h) Buyer agrees to pay the full rent payable to the Warehouse landlord for
calendar year 2004 pursuant to the lease therefore, which will continue
at the rate of five thousand ($5,000) US dollars per month. If however,
the then current market trading price of TCPD's common stock is no less
than $1.50 on Jan 2, 2004, the payments of rent for all of calendar
year 2004 will be waived.
2.2 PAYMENT IN IMMEDIATELY AVAILABLE FUNDS. The Purchase Price set forth in
Section 2.1 shall be paid in immediately available funds, either by
cashier's check or by wire transfer, on terms and conditions
satisfactory to the recipient thereof, or in the form of stock, as the
case may be.
2.3 SALES AND TRANSFER TAXES. Seller shall be responsible for the payment
of any sales or transfer taxes associated with the transfer of the
Acquired Assets to Buyer.
ARTICLE 3. THE CLOSING
The closing of the purchase and sale of the Assets by Seller to Buyer (the
"Closing") shall take place at the offices of Buyer, located at 0000 Xxxxxxxx
Xxxx, Xxxxx X, Xxxxxxxx Xxxxx, XX 00000 on or before 10;00 AM local time, on
December 31, 2002, or at such other place and/or time as the parties may agree
in writing (the "Closing Date"). In the event that the conditions specified in
this Agreement have not been fulfilled by such date, Buyer may extend the
Closing Date for a period or periods not exceeding an aggregate of 30 days by
giving written notice to the Seller.
Buyer shall perform its due diligence inspection of Sellers; equipment,
properties, contracts and all other items reasonably necessary to complete the
inspection on or before the Closing Date of closing set forth above.
3.1 SELLERS OBLIGATIONS AT THE CLOSING. At the Closing, Sellers shall
deliver or cause to be delivered to Buyer:
(a) instruments of assignment and transfer of all of the Assets of
Seller to be transferred hereunder, in form and substance
satisfactory to Buyer's counsel;
(b) instruments of assignment and transfer of all contracts being
transferred by seller to buyer as outlined in Exhibit A.
(c) The certificate of the President or Secretary of the seller
confirming that proper minutes and resolutions of the seller's
Board of Directors and shareholders have been secured prior to
the Closing whereby the Assets have been approved.
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Simultaneously with the consummation of the transfer, Seller, through its
officers, agents, and employees, shall put Buyer into full possession and
enjoyment of all the Assets to be conveyed and transferred by this Agreement.
Seller, at any time before or after the closing Date, shall execute,
acknowledge, and deliver any further assignments, conveyances and other
assurances, documents and instruments of transfer, reasonably requested by Buyer
and shall take any other action consistent with the terms of this Agreement that
may reasonably be requested by Buyer for the purpose of assigning, transferring,
granting, conveying and confirming to Buyer, or reducing to possession, any or
all property and assets to be conveyed and transferred by this Agreement. If
requested by Buyer, Seller further agree to prosecute or otherwise enforce in
their own names for the benefit of Buyer any claims, rights, or benefits that
are transferred to Buyer by this Agreement and that require prosecution or
enforcement in either of the Sellers name. Any prosecution or enforcement of
claims, rights, or benefits under this Section shall be solely at Buyer's
expense; unless Seller make the prosecution or enforcement necessary by breach
of this Agreement.
3.2 BUYER'S OBLIGATIONS AT CLOSING. Subject to the provision of Article 9,
at the Closing, Buyer shall deliver to Seller the following instruments
and documents against delivery of the items specified in Section 3.1:
a) Buyer Stock Certificates issued in the name of Omega Funding,
Inc. for 1,900,000 shares of restricted common stock;
b) the certificate of the President or Secretary of the Buyer
confirming that proper minutes and resolutions of the Buyer's
Board of Directors have been secured prior to the Closing
whereby the purchase of the Assets has been approved.
ARTICLE 4. ASSUPTION OF LIABILITIES
Buyer is not assuming any debt, liability or obligation of Seller, except the
warehouse lease as outlined above in Article 2.
ARTICLE 5. EXCISE AND PROPERTY TAXES
Seller shall pay all sales, use and transfer taxes arising out of the transfer
of the Assets and shall pay its portion, prorated as of the Closing Date, of
state and local personal property taxes of the business. Buyer shall not be
responsible for any business, occupation, withholding or similar tax, or for any
taxes of any kind related to any period before the Closing Date.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller, hereby represent and warrant to Buyer that the following facts and
circumstances are, and except as contemplated hereby, at all times up to the
Closing Date will be true and correct, and hereby acknowledge that such facts
and circumstances constitute the basis upon which Buyer is induced to enter into
and perform this Agreement. Each warranty set forth in this Article 6 shall
survive the Closing and any investigation made by or on behalf of Buyer.
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6.1 ORGANIZATION. Good Standing and Qualification. Sellers is a corporation
duly organized, validly existing, and in good standing under the laws
of Florida, has all necessary powers to own its properties and to carry
on its business as now owned and operated by it, and is duly qualified
to transact interstate business and is in good standing in all
jurisdictions in which the nature of its business or of its properties
makes such qualification necessary.
6.2 Absence of Specified Changes Since December 1, 2002, there has not been
any:
(a) material adverse change in the assets of Seller;
(b) destruction, damage to, or loss of any assets of Seller
(whether or not covered by insurance) that materially and
adversely affects the financial condition of Seller;
(c) change in accounting methods or practices (including, without
limitation, any change in depreciation or amortization
policies or rates) by Seller;
(d) revaluation by Seller of any of its assets;
(e) sale or transfer of any asset of Seller;
(f) mortgage, pledge or other encumbrance of any asset of Seller;
(g) other event or condition of any character that has or might
reasonably have a material and adverse effect on the financial
condition, assets or prospects of Seller; or
(h) agreement by Seller to do any of the things described in the
preceding clauses (a) through (g).
6.3 TAX RETURNS AND AUDITS. Within the times and in the manner prescribed
by law regarding the Assets being purchased, Seller has filed all
domestic and foreign, federal, state and local tax returns required by
law and has paid all taxes, assessments and penalties due and payable.
There are no present disputes as to taxes of any nature payable by
Seller.
6.4 INVENTORIES. No items included in the Seller's inventories have been
pledged as collateral or are held by the Seller on consignment from
others.
6.5 OTHER TANGIBLE PERSONAL PROPERTY. The Equipment described in Exhibit A
of this Agreement constitutes all the items of tangible personal
property owned by, in the possession of, or used by Seller in
connection with the assets sold pursuant to this Agreement.
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6.6 TITLE TO ASSETS. Seller has good and marketable title to all of the
Assets and interests in Assets, whether personal, tangible, and
intangible, which constitute all the Assets and interests in assets
that are used in the business of Seller to be sold pursuant to this
Agreement. All the Assets are free and clear of mortgages, liens,
pledges, charges, encumbrances, equities, claims, easements, rights of
way, covenants, conditions, or restrictions, (i) the lien of current
taxes not yet due and payable; and (ii) possible minor matters that, in
the aggregate, are not substantial in amount and do not materially
detract from or interfere with the present or intended use of any of
the Assets, nor materially impair business operations. All tangible
personal property of Seller is in good operating condition and repair,
ordinary wear and tear excepted. Except as set forth on the appropriate
SCHEDULE listing such Assets, neither any partner, nor any individual
or employee of Seller, nor any spouse, child or other relative of any
of these persons, owns, or has any interest, directly or indirectly, in
any of the personal property owned by Sellers.
6.7 INSURANCE POLICIES. SCHEDULE B to this Agreement is a description of
all insurance policies held by Seller concerning the Assets. All these
policies are in the respective principal amounts set forth in SCHEDULE
B Seller has maintained and now maintains (i) insurance on all the
Assets of a type customarily insured, covering property damage and loss
of income by fire or other casualty, and (ii) adequate insurance
protection against all liabilities, claims, and risks against which it
is customary to insure.
6.8 COMPLIANCE WITH LAWS. Seller has complied with, and is not in violation
of, applicable federal, state or local statutes, laws and regulations
(including, without limitation, any applicable environmental, health,
building, zoning or other law, ordinance or regulation) affecting the
Assets or the operation of its business to be sold pursuant to this
Agreement.
6.9 LITIGATION. Except as set forth in SCHEDULE C, there is no suit,
action, arbitration or legal, administrative or other proceeding, or
governmental investigation pending, or to the best knowledge of Seller,
threatened, against or affecting Seller, or any of its business, assets
or financial condition. Seller is not in default with respect to any
order, writ, injunction or decree of any federal, state, local or
foreign court, department, agency or instrumentality. Except as set
forth in Schedule C, Seller is not presently engaged in any legal
action to recover moneys due to it or damages sustained by it.
6.10 AGREEMENT WILL NOT CAUSE BREACH OR VIOLATION. Neither the entry into
this Agreement nor the consummation of the transactions contemplated
hereby will result in or constitute any of the following: (i) a breach
of any term or provision of this Agreement; (ii) a default or an event
that, with notice or lapse of time, or both, would be a default, breach
or violation of the Articles of Incorporation or Bylaws of Seller or
any lease, license, promissory note, conditional sales contract,
commitment, indenture, mortgage, deed of trust or other agreement,
instrument or arrangement to which Seller is a party or by which Seller
or the Assets are bound; (iii) an event that would permit any party to
terminate any agreement or to accelerate the maturity of any
indebtedness or other obligation of Seller; (iv) the creation or
imposition of any lien, charge or encumbrance on any of the Assets; or
(v) the violation of any law, regulation, ordinance, judgment, order or
decree applicable to or affecting Seller or the Assets.
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6.11 AUTHORITY AND CONSENTS. Seller has the right, power, legal capacity and
authority to enter into, and perform its obligations under this
Agreement, and no approvals or consents of any persons or entity other
than Seller are necessary in connection with it. The execution and
delivery of this Agreement by Seller have been duly authorized by all
necessary corporate action of Seller (including any necessary action by
Seller's security holders), and this Agreement constitutes a legal,
valid and binding obligation of Seller enforceable in accordance with
its terms.
6.12 DOCUMENTS DELIVERED. Each copy or original of any agreement, contract
or other instrument which is identified in any exhibit delivered by
Seller or their counsel to Buyer (or its counsel or representatives),
whether before or after the execution hereof, is in fact what it is
purported to be by the Seller and has not been amended, canceled or
otherwise modified.
6.13 FULL DISCLOSURE. None of the representations and warranties made by
Seller or made in any letter, certificate or memorandum furnished or to
be furnished by Seller, or on their behalf, contains or will contain
any untrue statement of a material fact, or omits any material fact the
omission of which would make the statements made misleading. There is
no fact known to Seller which materially adversely affects, or in the
future may (so far as Seller can now reasonably foresee) materially
adversely affect the condition, Assets, liabilities, business
operations or prospects of Seller that has not been set forth herein or
heretofore communicated to Buyer in writing pursuant hereto.
6.14 BULK SALES PROVISIONS. Seller in compliance with the bulk sales
provisions of the California Uniform Commercial Code-Bulk sales is
selling less than one-half of the Seller's inventory and equipment, as
measured by the value on the date of this Agreement is entered into by
the Seller.
ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER.
Buyer, represent and warrant to the Seller and the Shareholders as follows:
7.1 ORGANIZATION AND QUALIFICATION. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Colorado.
7.2 AUTHORITY RELATIVE TO THIS AGREEMENT. Buyer 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 and validly authorized by the Board
of Directors of Buyer, and no other corporate proceedings on the part
of Buyer are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly and validly
executed and delivered by Buyer and, assuming this Agreement
constitutes a valid and binding obligation of the Seller, this
Agreement constitutes a valid and binding agreement of Buyer,
enforceable against Buyer in accordance with its terms.
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7.3 CONSENTS AND APPROVALS: NO VIOLATION. Neither the execution and
delivery of this Agreement by Buyer nor the consummation of the
transactions contemplated hereby nor compliance by Buyer with any of
the provisions hereof will conflict with or result in any breach of any
provision of the Articles of Incorporation or by-laws of Buyer or any
Subsidiary, require any consent, approval, authorization or permit of,
or filing with or notification to, any Governmental Authority,
7.4 LITIGATION. ETC. Except as disclosed by the Buyer, there is no action,
claim, or proceeding pending or, to the knowledge of Buyer, threatened,
to which Buyer is or would be a party before any court or Governmental
Authority acting in an adjudicative capacity or any arbitrator or
arbitration tribunal with respect to which there is a reasonable
likelihood of a determination having, or which, insofar as reasonably
can be foreseen in the future would have, a material adverse effect on
Buyer.
7.5 COMPLIANCE WITH LAW AND PERMITS. Buyer has owned and operated its
properties and assets in substantial compliance with the provisions and
requirements of all laws, orders, regulations, rules and ordinances
issued or promulgated by all Governmental Authorities having
jurisdiction with respect thereto. All necessary governmental
certificates, consents, permits, licenses or other authorizations with
regard to the ownership or operation by Buyer of their respective
properties and assets have been obtained and no violation exists in
respect of such licenses, permits or authorizations. None of the
documents and materials filed with or furnished to any Governmental
Authority with respect to the properties, assets or businesses of Buyer
contains any untrue statement of a material fact or fails to state a
material fact necessary to make the statements therein not misleading.
7.6 TCPD COMMON STOCK. The shares to be issued pursuant to this Agreement
have been duly authorized and, when issued in accordance with the terms
of the this Agreement, will be validly authorized and issued and fully
paid and nonassessable, and no shareholder of Buyer will have any
preemptive rights or dissenter's right with respect thereto.
ARTICLE 8. SELLERS OBLIGATIONS BEFORE CLOSING.
Seller covenants that, except as otherwise agreed in writing by Buyer, from the
date of this Agreement until the Closing:
8.1 BUYER'S ACCESS TO PREMISES AND INFORMATION. Buyer and its counsel,
accountants and other representatives shall be entitled to have full
access during normal business hours to all Seller's properties, books,
accounts, records, contracts and documents of or relating to the
Assets. Seller shall furnish or cause to be furnished to Buyer and its
representatives all data and information concerning the business,
finances and properties of Seller that may reasonably be requested.
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8.2 CONDUCT OF BUSINESS IN NORMAL COURSE. Seller shall carry on its
business and activities diligently and in substantially the same manner
as it previously has been carried on, and shall not make or institute
any unusual or novel methods of purchase, sale, lease, management,
accounting or operation that will vary materially from the methods used
by Seller as of the date of this Agreement.
8.3 PRESERVATION OF BUSINESS RELATIONSHIPS. Seller shall use its best
efforts, without making any commitments on behalf of Buyer, to preserve
its business organization intact, to keep available to Seller its
present employees, and to preserve its present relationships with
suppliers, customers and others having business relationships with it.
8.4 MAINTENANCE OF INSURANCE. Seller shall continue to carry its existing
insurance, if any, subject to variations in amounts required by the
ordinary operations of its business. At the request of Buyer and at
Buyer's sole expense, the amount of insurance against fire and other
casualties which, at the date of this Agreement, Seller carries on any
of the Assets or in respect of its operations shall be increased by
such amount or amounts as Buyer shall specify. Seller shall cause Buyer
to be named as an additional insured on each existing insurance policy
carried by Seller.
8.5 NEW TRANSACTIONS. Seller shall not do, or agree to do without the prior
written consent of the Buyer, any of the following acts:
(a) enter into any contract, commitment or transaction not in the
usual and ordinary course of its business; or
(b) enter into any contract, commitment or transaction in the
usual and ordinary course of business involving an amount
exceeding $1,000.00, individually, or $5,000.00 in the
aggregate; or
(c) sell or dispose of any capital assets which are the subject of
this purchase agreement.
8.7 EXISTING AGREEMENTS. Seller shall not modify, amend, cancel or
terminate any of its existing contracts or agreements, or agree to do
any of those acts.
8.8 CONSENT OF OTHERS. As soon as reasonably practical after the execution
and delivery of this Agreement, and in any event on or before the
Closing Date, Seller shall obtain the written consent of all Seller's
partners and will furnish to Buyer executed copies of these consents to
the assignment of the Assets.
8.9 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. Seller shall use their
best efforts to assure that all representations and warranties of
Seller set forth in this Agreement and in any written statements
delivered to Buyer by Seller under this Agreement will also be true and
correct as of the Closing Date as if made on that date and that all
conditions precedent to Closing shall have been met.
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8.10 SALES AND USE TAX ON PRIOR SALES. Seller agrees to furnish to Buyer a
clearance certificate from the appropriate agencies and any related
certificates that Buyer may reasonably request as evidence that all
sales and use and other tax liabilities of Seller, if any (other than
income tax liabilities) accruing before the Closing Date have been
fully satisfied or provided for.
8.11 STATUTORY FILLINGS. Seller shall cooperate fully with Buyer in
preparing and filing all information and documents deemed necessary or
desirable by Buyer under any statutes or governmental rules or
regulations pertaining to the transactions contemplated by this
Agreement.
ARTICLE 9. CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE
The obligations of Buyer to purchase the Assets under this Agreement are subject
to the satisfaction, at or before the Closing, of all the conditions set out
below in this Article 9. Buyer may waive any or all of these conditions in
accordance with Section 14.2 hereof, provided however, that no such waiver of a
condition shall constitute a waiver by Buyer of any of its other rights or
remedies, at law or in equity, if Seller shall be in default of any of its
representations, warranties or covenants under this Agreement.
9.1 ACCURACY OF SELLERS REPRESENTATIONS AND WARRANTIES. All representations
and warranties by Seller in this Agreement or in any written statement
that shall be delivered to Buyer by Seller under this Agreement shall
be true on and as of the Closing Date as though made at that time.
9.2 SELLER PERFORMANCE. Seller shall have performed, satisfied, and
complied with all covenants, agreements, and conditions required by
this Agreement to be performed or complied with by Seller on or before
the Closing Date.
9.3 CERTIFICATION BY SELLER. Buyer shall have received a certificate, dated
the Closing Date, signed and verified by Seller's managing partner,
certifying, in such detail as Buyer and its counsel may reasonably
request, that the conditions specified in Sections 9.1 and 9.3 have
been fulfilled.
9.4 ABSENCE OF LITIGATION. No action, suit or proceeding before any court
or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened on or before the Closing Date.
9.5 PARTNERSHIP APPROVAL. The execution and delivery of this Agreement by
Seller, and the performance of its covenants and obligations under it,
shall have been duly authorized by all necessary partnership action,
and Buyer shall have received copies of all resolutions pertaining to
that authorization, certified by the secretary of Seller.
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9.6 CONSENTS. All necessary agreements and consents of any parties to the
consummation of the transaction contemplated by this Agreement, or
otherwise pertaining to the matters covered by it, shall have been
obtained by Seller and delivered to Buyer.
9.7 APPROVAL OF DOCUMENTATION. The form and substance of all certificates,
instruments and other documents delivered to Buyer under this Agreement
shall be satisfactory in all reasonable respects to Buyer and its
counsel.
9.8 CONDITION OF ASSETS. The Assets shall not have been materially or
adversely affected in any way as a result of any sale, fire, accident,
storm, or other casualty or labor or civil disturbance or act of God or
the public enemy.
9.9 RESALE CERTIFICATE. Buyer shall have received from Seller a sales tax
resale certificate or other comparable document, as appropriate,
reasonably satisfactory to Buyer, with respect to the Assets being
purchased by Seller for resale.
9.10 VALUATION OF ASSETS. Buyer shall have accepted the valuation of the
Assets, as set forth on the schedules attached hereto (as adjusted as
of the Closing Date).
9.11 COMPLETION OF DUE DILIGENCE. All due diligence reasonably required by
the Buyer has been completed, and the results of such due diligence are
satisfactory to the Buyer in its sole discretion and judgement with
regard to all aspects of the transaction, including by not limited to
matters relating to the Assets, or the intellectual property or
financial prospects of the business to be sold pursuant to this
Agreement.
9.12 COMPLIANCE WITH BULK SALES LAWS. The parties have complied with all
applicable Bulk Sales Laws or similar provisions, as necessary.
ARTICLE 10. CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE
The obligations of Seller to sell and transfer the Assets under this Agreement
are subject to the satisfaction, at or before the Closing, of all the following
conditions:
10.1 ACCURACY OF BUYER'S REPRESENTATIONS AND WARRANTIES. All representations
and warranties by Buyer contained in this Agreement or in any written
statement delivered by Buyer under this Agreement shall be true on and
as of the Closing as though such representations and warranties were
made on and as of that date.
10.2 BUYER'S PERFORMANCE. Buyer shall have performed and complied with all
covenants and agreements, and satisfied all conditions that it is
required by this Agreement to perform, comply with, or satisfy, before
or at the Closing.
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10.3 BUYER'S CORPORATE APPROVAL. Buyer shall have received corporate
authorization and approval for the execution and delivery of this
Agreement and all corporate action necessary or proper to fulfill the
obligations of Buyer to be performed under this Agreement on or before
the Closing Date.
ARTICLE 11. SECURITIES ASPECTS OF AGREEMENT
11.1 All parties to this Agreement mutually understand, agree and covenant
that any referenced sale or other disposition of any security under
this Agreement shall be controlled and governed by this section.
Specifically should there arise any conflict of application or
interpretation under this section and any other provision or section of
this Agreement; this section shall be given primary definition and
control. The term "securities" for the purposes of this Agreement shall
mean and include all shares of TCPD, and any warrants to acquire those
shares as well as any other instrument or obligation customary or
commonly described as a security. Each of the following terms and
conditions of the issuance and distribution of the securities shall be
fully applicable unless otherwise specifically waived or treated in the
following paragraphs.
11.2 Each security issued pursuant to the terms of this Agreement shall be a
"restricted" security unless otherwise specifically referenced as being
issued pursuant to a registration or offering.
11.3 Seller understands and agrees that a restricted security for the
purposes of this Agreement is one, which is issued without meeting
registration requirements under both federal and state law within the
United States. Each party to this Agreement further agrees and
acknowledges that the nature of restricted security is that it is not
freely tradable. That is, the holder of such security cannot
immediately market or further distribute such security in the open
market, or through private transactions without the express written
consent of the issuer.
11.4 Seller fully acknowledges and understands that the resale of a
restricted security will normally require substantial holding periods
unless subsequently subject to an intervening registration under
applicable federal and state securities laws. Seller acquiring
restricted stock under this Agreement further acknowledges and agrees
that the principal, though not exclusive, means by which restricted
securities are resold under United States law and conforming state laws
and regulations is Securities and Exchange Commission ("SEC") Rule 144,
which essentially requires a holding period of one year before the
stock can be resold or any interest therein further sold or assigned.
In general terms, Rule 144 would require that there be current public
information about the Company before the provisions of the Rule could
be relied upon for subsequent resale, that the aforementioned holding
period had been met, that the sales occurred through independent
arms-length and unsolicited brokerage transactions, that certain volume
limitations on the number of shares sold in each three month period be
observed, and that a report of sales will be filed with the SEC. Seller
understands that the foregoing constitutes only a general description
of Rule 144 and that such person is or has the means to become familiar
with all of the specific provisions and terms of Rule 144 through his
independent legal advisors. Sellers further acknowledges and agrees
that while Rule 144 is not exclusive, that it is anticipated and
intended that it would be the primary means by which securities
acquired under this Agreement could be resold absent the specific
registration provisions of this Agreement.
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11.5 Seller further acknowledges and agrees that, except as specifically
provided by the terms of this Agreement, none of the corporate parties
will have any obligation to register securities issued, and have no
present intention to register such securities other than is
specifically provided for by this Agreement. Each person under this
Agreement acquiring securities further understands and agrees that
individual registration of securities, absent registration by the
issuer, is usually not practical and should not be relied upon as a
means for resale or other distributions of securities acquired under
this Agreement.
11.6 Any entity acquiring securities pursuant to this Agreement with the
intent to divide such securities among its principal shareholders as
part of the acquisition process, will be responsible for obtaining the
knowledgeable consent and agreement of such actual shareholder to the
terms of this Agreement, specifically referencing this paragraph.
11.7 Seller fully understands and agrees that should such person be deemed
to be in a "control" position as to Buyer incident to the completion of
this Agreement, that such person must comply with the volume
limitations of Rule 144 to complete sales of his or her securities
acquired, except for securities which have been otherwise registered
pursuant to this Agreement. A control person has been defined by the
SEC, and by most state securities regulatory agencies, as a person who
has the capacity to exercise control over the issuing company. While no
precise mathematical formulation of a control person is applicable to
all situations, the following are generally presumed to be control
people:
(i) a person holding 10% or more of the shares of the issuing
company;
(ii) any principal officer or any director of the issuing company.
11.8 Seller represents that it is acquiring the Shares for its own account,
for investment and not with a view to the distribution or resale
thereof. The Seller further represent that their financial and other
circumstances are such that they have adequate means of providing for
their current and anticipated future needs without having to sell or
otherwise dispose of the Shares, and that the Seller are able to bear
the economic risks of this investment and consequently are able to hold
the Shares for an indefinite period of time and to sustain the loss of
their entire investment in the Shares, in the event such a loss should
occur.
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11.9 Seller acknowledges and represents that, due to its knowledge and
experience in financial and business matters, its investment experience
generally and its experience with investments similar to the Shares in
particular, Seller, either alone or together with its advisors, if any,
is able to understand and merits of, and the risks involved in, its
proposed investment in the Shares. Seller, either alone or together
with its advisors, if any, has the capacity to protect its own
interests in connection with this transaction.
11.10 Seller acknowledges that the Buyer or TCPD have furnished or made
available to Seller all financial and other data relating to TCPD,
required by Seller to enable it to make an informed decision concerning
its approval of this transaction and its resulting acquisition of the
Shares. In particular, Seller acknowledges that it has received and
reviewed the financial statements of TCPD for the past two years and
complete copies of all of TCPD's SEC Reports for such period. Seller is
aware of, and has thoroughly evaluated, to its own satisfaction, the
high degree of risk associated with investing in TCPD, including but
not limited to, the specific risks associated with TCPD's business and
the risks associated with the ownership of common stock.
ARTICLE 12. FORM OF AGREEMENT
12.1 HEADINGS. The subject headings of the Articles and Sections of this
Agreement are included for purposes of convenience only, and shall not
affect the construction or interpretation of any of its provisions.
12.2 ENTIRE AGREEMENT: MODIFICATION: WAIVER. This Agreement constitutes the
entire agreement between the parties pertaining to the subject matter
contained in it and supersedes all prior and contemporaneous
agreements, representations, and understandings of the parties. No
supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by all the parties. No waiver of any
of the provisions of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, whether or not similar,
nor shall any waiver constitute a continuing waiver. No waiver shall be
binding unless executed in writing by the party making the waiver.
12.3 COUNTERPARTS. This Agreement may be executed simultaneously in one or
more counterparts, each of, which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
ARTICLE 13. PARTIES
13.1 PARTIES IN INTEREST. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any persons other than the parties to it
and their respective successors and assigns, nor is anything in this
Agreement intended to relieve or discharge the obligation or liability
of any third persons to any party to this Agreement, nor shall any
provisions give any third persons any right of subrogation or action
over against any party to this Agreement.
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13.2 ASSIGNMENT. This Agreement shall be binding on and shall inure to the
benefit of the parties to it and their respective heirs, legal
representatives, successors and assigns. Buyer agrees to obtain the
written consent of Seller if Buyer sells, assigns or otherwise
transfers all or any ownership interest in a material portion of the
Assets prior to the time that the Buyer has completed the terms of
payment above in Article 2. Seller agrees not to unduly withhold its
consent to any sale, assignment or transfer of the assets after written
notice is served upon it according to the terms of this Agreement.
Seller shall give its written consent to the Buyer within five (5) days
of receipt of the Buyer's request for Seller's consent. An assignment
of the purchase to TCPD in hereby agreed to by the Seller.
ARTICLE 14. REMEDIES
14.1 RECOVERY OF LITIGATION COSTS. If any legal action or any arbitration or
other proceeding so brought for the enforcement of this Agreement, or
because of an alleged dispute, breach, default or misrepresentation in
connection with any of the provisions of this Agreement, the successful
or prevailing party or parties shall be entitled to recover reasonable
attorneys' fees and other costs incurred in that action or proceeding,
in addition to any other relief to which it or they may be entitled.
14.2 CONDITIONS PERMITTING TERMINATION. Subject to the provisions of Article
3 relating to the postponement of the Closing Date, either party may on
or prior to the Closing Date terminate this Agreement by written notice
to the other, without liability to the other, if any bona fide action
or proceeding shall be pending against either party on the Closing Date
that could result in an unfavorable judgment, decree or order that
would prevent or make unlawful the carrying out of this Agreement.
14.3 DEFAULTS PERMITTING TERMINATION. If either Buyer or Seller materially
defaults in the due and timely performance of any of its warranties,
covenants, or agreements under this Agreement, the non-defaulting party
or parties may on the Closing Date give notice of termination of this
Agreement, in the manner provided in Article 16. The notice shall
specify with particularity the default or defaults on which the notice
is based. The termination shall be effective five days after the
Closing Date, unless the specified default or defaults have been cured
on or before this effective date for termination. Upon material default
of the Buyer's payment obligations under this Agreement, the Seller may
foreclose its security interest in the assets as referred to in
paragraph 2(f) above.
ARTICLE 15. NATURE AND SURVIVAL OF REPRESENTIONS AND WARRANTIES
All representations, warranties, covenants and agreements of the parties
contained in this Agreement, or in any instrument, certificate, opinion or other
writing provided for in it, shall survive the Closing.
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ARTICLE 16. NOTICES
All notices, requests, demands and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given on the date of
service if served personally on the party to whom notice is to be given, or on
the third day after mailing if mailed to the party to whom notice is to be
given, by first class mail, registered or certified, postage prepaid, and
properly addressed as follows:
Buyer:
Telecommunication Products, Inc.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx X
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn; Xxxxxx X. Xxxxxxxx, Esq
Telephone: (000)000-0000
Facsimile: (000)000-0000
Sellers:
Omega Funding, Inc.
00000 Xxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may change its address for purposes of this Article by giving the
other parties written notice of the new address in the manner set forth above.
ARTICLE 17. GOVERNING LAW
This Agreement shall be construed in accordance with, and governed by the laws
of the State of Florida.
ARTICLE 18. MISCELLANEOUS
18.1 ANNOUNCEMENTS. None of Sellers will make any announcements to the
public or to employees of Seller concerning this Agreement or the
transactions contemplated hereby without the prior approval of Buyer,
which will not be unreasonably withheld. Notwithstanding any failure of
Buyer to approve it, Sellers may make an announcement of substantially
the same information as theretofore announced to the public by Buyer or
any announcement required by applicable law, but Seller shall in either
case notify Buyer of the contents thereof reasonably promptly in
advance of its issuance.
18.2 REFERENCES. Unless otherwise specified, references to Sections or
Articles are to Sections or Articles in this Agreement.
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IN WITNESS WHEREOF, the parties to this Agreement have duly executed it as of
the day and year first above written.
BUYER: TELECOMMUNICATION PRODUCTS, INC.
a Colorado corporation
By Date:
-------------------------------- -------------------------
Its: Chief Executive Officer
SELLER: OMEGA FUNDING, INC.
a Florida corporation
By /s/ Xxxx X. Xxxxxx Date:
-------------------------------- -------------------------
Xxxx X. Xxxxxx
Its; President & Sole Shareholder.
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