Exhibit 2.1 - Merger Agreement
ACQUISITION AGREEMENT AND PLAN OF MERGER
This ACQUISITION AND PLAN OF MERGER AGREEMENT ("Agreement") is made and
entered into on this 15th day of April, 2009 by and among AirtimeDSL,
a Nevada corporation (the "Parent"), AirtimeDSL Acquisition
Corporation, a Nevada Corporation (the "Merger Sub") which is a wholly
owned subsidiary of Parent and TAG Industries, Inc., a Florida
corporation ("TAG").
RECITALS:
A. Parent is a corporation formed under the laws of the State of Nevada
pursuant to Articles of Incorporation filed with the Nevada Secretary
of State on December 28, 2006 (the "Articles of Incorporation").
B. The Merger Sub is a Nevada Corporation formed under the laws of the
State of Nevada on March 25, 2009, as a subsidiary of AirtimeDSL.
C. TAG Industries, Inc., was formed under the laws of the State of
Florida pursuant to Articles of Organization filed with the Florida
Secretary of State on July 14, 2005.
D. The Board of Directors of the Parent and the majority shareholders
of the Parent have determined that a merger of TAG with and into the
Merger Sub (the "Merger"), upon the terms and subject to the conditions
set forth in this Agreement, would be fair and in the best interests of
its shareholders, and its Board of Directors has approved such Merger.
E. The Board of Directors of the Merger Sub and the majority
shareholders of the Merger Sub have determined that the Merger, upon
the terms and subject to the conditions set forth in this Agreement,
would be fair and in the best interests of its shareholders, and its
Board of Directors has approved such Merger.
F. The Board of Directors of TAG and as well as the requisite
shareholders of TAG have determined that the Merger, upon the terms and
subject to the conditions set forth in this Agreement, would be fair
and in the best interests of the shareholders of TAG, and its Board of
Directors has approved the Merger.
G. The Parent, Merger Sub, and TAG desire to make certain
representations, warranties, covenants and agreements in connection
with the Merger and also to prescribe various conditions to the Merger.
H. For federal income tax purposes, the parties intend that the Merger
shall qualify as a reorganization under the provisions of Section 368
of the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree
as follows:
I. DEFINITIONS
When used in this Agreement (and any Exhibits and Schedules in which
terms are not otherwise defined), the following terms shall have the
following meanings:
1.01 Capital Stock
"Capital Stock" shall mean the outstanding shares of common stock,
$0.001 par value, of Parent or Merger Sub.
1.02 Certificate of Merger
"Certificate of Merger" shall mean a Certificate of Merger in
substantially the form attached to this Agreement as Exhibit A and to
be filed with the States of Nevada and Florida.
1.03 Closing
"Closing" and "Closing Date" shall mean the closing of the transactions
contemplated by this Agreement.
1.04 Effective Time
"Effective Time" shall mean the later date of which the Certificate of
Merger is properly filed with the Secretaries of State of Florida and
Nevada as required under the applicable provisions of the law of such
jurisdictions, or such later date as may be agreed by the parties and
set forth in the Certificate of Merger.
1.05 Liens
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind, including, without limitation, any
conditional sale or other title retention agreement, any lease in the
nature thereof and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction and
including any lien or charge arising by statute or other law.
1.06 TAG's shares
"TAG's shares" shall mean the common stock, par value $0.001 per share
of TAG Industries, Inc.
1.07 Material Adverse Change
"Material Adverse Change" or "Material Adverse Effect" means, when used
in connection with TAG or Parent, any change or effect that either
individually or in the aggregate with all other such changes or effects
is materially adverse to the business, assets, properties, condition
(financial or otherwise) or results of operations of such party and its
subsidiaries taken as a whole (after giving effect in the case of
Parent to the consummation of the Merger).
1.08 Person
"Person" means an individual, corporation, partnership, joint venture,
association, trust, unincorporated organization or other entity.
1.09 Subsidiary
A "Subsidiary" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership
interests of which is sufficient to elect at least a majority of its
Board of Directors or other governing body (or, if there are no such
voting interests, fifty percent (50%) or more of the equity interests
of which) is owned directly or indirectly by such first person.
1.10 Surviving Corporation
"Surviving Corporation" shall have the meaning set forth in Section
2.01.
1.11 Tax Return
"Tax Return" shall include all returns and reports (including
elections, declarations, disclosures, schedules, estimates and
information returns (including Form 1099 and partnership returns filed
on Form 1065) required to be supplied to a Tax authority relating to
Taxes.
II. THE MERGER
2.01 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, the Certificate of Merger and in accordance
with Nevada Corporations Code (the "Nevada Statutes") and Florida
Revised Statutes (the "Florida Statutes"), TAG shall be merged with and
into the Merger Sub at the Effective Time of the Merger. At the
Effective Time of the Merger, the Merger Sub shall merger with TAG, and
TAG shall continue as a subsidiary of the Parent and shall continue its
corporate existence under the laws of the State of Florida . The
Parent shall change its corporate name to Clear-lite Holdings, Inc.
2.02 Effective Time. The Merger shall become effective on the date and
at the time the Articles of Merger is filed with the Secretary of State
of Florida in accordance with Section 607.1101 of the Florida Business
Corporation Act and with the Secretary of State of Nevada pursuant to
section 92A.200 of the Nevada Revised Statutes. The time at which the
Merger shall become effective as aforesaid is referred to hereinafter
as the "Effective Time."
2.03 Closing. The closing of the Merger (the "Closing") shall occur
concurrently with the Effective Time (the "Closing Date"). The Closing
shall occur at the Law Offices of Xxxxxx X. Xxxx, 000 X. Xxxxxxx, Xxxxx
000, Xxx Xxxxx, XX, unless another date, time or place is agreed to in
writing by the parties hereto.
2.04 Procedure for Closing.
At or prior to Closing, the following will occur:
(a) each TAG share that shall be outstanding immediately prior to the
Effective Time shall, by virtue of the Merger and without any action on
the part of the holder thereof, be converted into the right to receive
one share of common stock, par value $.001 per share, of the Merger
Sub, which will be subsequently exchanged for one common share of the
Parent, so that at the Effective Time, Parent shall be the holder of
all of the issued and outstanding shares of the TAG. TAG shareholders
shall surrender the certificates evidencing one hundred percent (100%)
of TAG shares, and all shares of TAG issued and outstanding immediately
prior to the Effective Date of the Merger, shall no longer be
outstanding and shall automatically be cancelled and retired and shall
cease to exist, and each holder of a certificate representing any such
TAG shares shall cease to have any rights with respect thereto, except
the common shares of the Surviving Corporation to be issued in
consideration therefore upon surrender of such certificate representing
TAG shares.
(b) the TAG shares which shares at the Closing will constitute all of
the issued and outstanding shares of capital stock of TAG beneficially
owned by the stockholders listed in Schedule A, shall, by
virtue of the Merger and without any action on the part of the holders
thereof, be converted into the right to receive one share of Capital
Stock for each TAG share. The shareholders of the Merger Sub shall
surrender the certificates evidencing one hundred percent (100%) of the
Merger Sub's Capital Stock, and all Capital Stock of the Merger Sub
issued and outstanding immediately prior to the Effective Time of the
Merger, shall no longer be outstanding and shall automatically be
cancelled and retired and exchanged for Parent Shares.
(c) Promptly after the Effective Time and upon surrender of a
certificate or certificates representing the TAG shares that were
outstanding immediately prior to the Effective Time or an affidavit and
indemnification in form reasonably acceptable to counsel for the Parent
stating that such stockholder has lost their certificate or
certificates or that such have been destroyed, Parent shall issue to
each record holder of TAG share surrendering such certificate or
certificates,, a certificate or certificates registered in the name of
such stockholder representing the number of shares of Capital Stock
that such stockholder shall be entitled to receive as set forth in
Section 2.04 (b) hereof. Until the certificate, certificates or
affidavit is or are surrendered as contemplated by this Section 2.04
(c) hereof, each certificate or affidavit that immediately prior to the
Effective Time represented any outstanding TAG shares shall be deemed
at and after the Effective Time to represent only the right to receive
upon surrender as aforesaid the Capital Stock specified in Schedule
2.04 (b) hereof for the holder thereof. The Parent will issue and
deliver twenty-six million six hundred seventy-one thousand eight
hundred seventy-five (26,671,875) shares of its Capital Stock to the
Merger Sub representing Shares issued in exchange for one hundred
percent (100%) of TAG shares. The Merger Sub will then issue and
deliver twenty-six million six hundred seventy-one thousand eight
hundred seventy-five (26,671,875) of the Parent's Capital Stock, as set
forth hereof in accordance with this agreement in exchange for the
Merger Sub's shares.
(d) Directors. The current director of the Parent shall resign and
pursuant to Nevada Corporate law, NRS 78.335(5) the vacant Parent board
member will be duly replaced with Xxxxxx X. Xxxxxx, until the earlier
of his resignation or removal or until his respective successors are
duly elected and qualified, as the case may be.
(e) Officers. At Closing, the officers of the Parent shall resign and
the officers nominated by shall be the officers of the Parent, until
the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be. The
board will appoint Xxxxxx X. Xxxxxx as Chairman and CEO; and Xxxx X.
Xxxxxxxxxxx as Senior VP of Marketing.
2.05 Effective Date of Merger. As soon as practicable following the
satisfaction or waiver of the conditions set forth in Article IV, the
parties shall file Articles of Merger with the respective Secretaries
of State of Florida and Nevada (the "Articles of Merger") executed in
accordance with the relevant provisions of the Nevada and Florida
Statutes shall make all other filings or recordings required under such
Statutes. The Merger shall become effective at the later of such date
as the Articles of Merger are duly filed with the Secretaries of State
of Nevada and Florida, or at such other time as is permissible in
accordance with the Nevada and Florida Statutes and as the Parent and
TAG shall agree (the time the Merger becomes effective being the
"Effective Time of the Merger"). Parent shall use reasonable efforts
to have the Closing Date and the Effective Time of the Merger to be the
same day.
2.06 Effects of the Merger. The Merger shall have the effects set forth
in the applicable provisions of Nevada and Florida Statutes.
2.07 Articles of Incorporation; Bylaws; Purposes.
(a) The Certificate of Incorporation of the Parent in effect
immediately prior to the Effective Time of the Merger shall be the
Certificate of Incorporation of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law.
(b) The Bylaws of the Parent in effect at the Effective Time of the
Merger shall be the Bylaws of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law.
(c) The purposes of the Surviving Corporation and the total number of
its authorized capital stock shall be as set forth in the Certificate
of Incorporation of the Parent in effect immediately prior to the
Effective Time of the Merger until such time as such purposes and such
number may be amended as provided in the Certificate of Incorporation
of the Surviving Corporation and by applicable law.
III. EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS
3.01 Effect on Capital Stock. As of the Effective Time of the Merger,
by virtue of the Merger and without any action on the part of the
holders of the TAG shares:
(a) Exchange. At closing, each TAG share issued and outstanding
immediately prior to the Effective Time of the Merger shall be
converted into one share of Merger Sub's Capital Stock issued for each
share of TAG held and shall subsequently be exchanged into the Parent's
Capital Stock at a ratio of one-to-one (1:1) TAG share of Parent's
Capital Stock ("the Merger Consideration"). Said differently, TAG's
shareholders currently own 26,671,875of TAG shares which will be
converted on a pro-rata basis in exchange for 26,271,875 of the Merger
Sub's shares and subsequently 26,671,875 of the Parent's common shares.
(b) No fractional Stock shall be issued in the Merger. If the product
of the number of shares a TAG shareholder holds immediately prior to
the Closing multiplied by the exchange ratio would result in the
issuance of a fractional share of Merger Sub's Capital Stock, that
product will be rounded down to the nearest whole number of shares of
Merger Sub's Capital Stock if it is equal to or less than the fraction
of one-half (.5) of one Parent Capital Stock or round up to the nearest
whole number of shares of Merger Sub's ' Capital Stock if the said
product is greater than the fraction of one-half (.5) of one Parent
Capital Stock. The Merger Sub's shares will be subsequently converted
into the Parent's shares.
(c) If at any time after the Effective Time, the Surviving Corporation
considers or is advised that any other actions or things are necessary
or desirable (a) to vest, perfect, or confirm of record or otherwise in
TAG its right, title, or interest in, to, or under any of the rights,
properties, or assets of TAG or (b) to otherwise carry out the
provisions of this Agreement, the Surviving Corporation is authorized,
in the name and on behalf of TAG, to execute and deliver all proper
deeds, assignments, confirmations, and assurances in law, and do all
such actions as may be necessary or desirable to vest, perfect, or
confirm in the Surviving Corporation all rights, title, and interests
in, to, and under such rights, properties, or assets or to otherwise
carry out this Agreement.
(d) The present Officers and Directors of Parent will cooperate and
sign an undertaking to assist the Surviving Corporation in all respects
disclosing the transactions set forth herein and other information
required by the Securities Act of 1933, as amended (the "Securities
Act").
(e) After the Effective Time of the Merger, there shall be no further
transfer on the records of TAG of certificates representing TAG shares
and there shall be no further transfer on the records of the Merger Sub
of certificates representing the Securities of the Merger Sub. If any
certificate for such Parent Capital Stock is to be issued in a name
other than that in which the certificate for Merger Sub's or TAG
Securities surrendered for exchange is registered, it shall be a
condition of such exchange that the certificate so surrendered shall be
properly endorsed, with signature guaranteed, or otherwise in proper
form for transfer and that the person requesting such exchange shall
pay to Parent or its transfer agent any transfer or other taxes or
other costs required by reason of the issuance of certificates for such
Parent Capital Stock in a name other than that of the registered holder
of the certificate surrendered, or establish to the satisfaction of
Parent or its transfer agent that all taxes have been paid.
(f) No Further Ownership Rights in Merger Sub's Capital Stock. All
shares of Parent Capital Stock issued upon the surrender of the TAG
shares in accordance with the terms of this Article III shall be deemed
to have been issued (and paid) in full satisfaction of all rights
pertaining to the TAG Shares theretofore represented by such
certificates.
(g) No Further Ownership Rights in TAG shares. All shares of Parent's
Capital Stock issued upon the surrender of TAG shares in accordance
with the terms of this Article III shall be deemed to have been issued
(and paid) in full satisfaction of all rights pertaining to TAG shares
theretofore represented by such certificates.
(h) Closing. One hundred percent (100%) of the Certificates
representing the TAG shares shall be delivered to Parent for
cancellation and one hundred percent (100%) of the Certificates
representing the TAG's shares shall be delivered to Parent for
cancellation.
IV. CONDITIONS PRECEDENT TO THE OBLIGATION OF TAG TO CLOSE
The obligation of TAG to complete the Closing is subject, at the option
of TAG, to the fulfillment on or prior to the Closing Date of the
following Conditions, any one or more of which may be waived by TAG and
Shareholders in writing:
4.01 Representations and Covenants. The representations and warranties
of the Parent and Merger Sub contained in this Agreement shall be true
in all respects on and as of the Closing Date with the same force and
effect as though made on and as of the Closing Date. The Parent and
Merger Sub shall have performed and complied with all covenants and
agreements required by this Agreement to be performed or complied with
by the Parent and Merger Sub on or prior to the Closing Date.
4.02 Governmental Permits and Approvals in Corporate Resolutions. Any
and all permits and approvals from any governmental or regulatory body
required for the lawful consummation of the Closing shall have been
obtained. The Board of Directors of Parent shall have approved the
transactions contemplated by this Agreement, and Parent and Merger Sub
shall have delivered to TAG, if requested, resolutions by their
respective Board of Directors certified by the Secretary of Parent or
Merger Sub authorizing the transactions contemplated by this Agreement.
4.03 Satisfactory Business Review. TAG and their representatives shall
have completed the review of the business of Parent and Merger Sub
contemplated by this Agreement, that none of the information revealed
thereby or in the Financial Statements has resulted in, or in the
opinion of them may result in, an adverse change in the assets,
properties, business, operations or condition (financial or otherwise)
of Parent or Merger Sub.
4.04 No Material Adverse Change. Between the date of this Agreement
and the Closing Date: (a) there shall have been no material adverse
change to Parent or Merger Sub or their respective business, financial
position, or results of operation excluding events which affect
companies business generally; (b) there shall have been no adverse
federal, state, or local legislative or regulatory change affecting in
any material respect the services, products or business of Parent or
Merger Sub; and (c) none of the properties or assets of Parent or
Merger Sub or its subsidiaries shall be damaged by fire, flood,
casualty, act of God or the public enemy or other cause (regardless of
insurance coverage for such damage) which damage may, in the opinion of
TAG have a material adverse affect on Parent.
4.05 Litigation. No action, suit, or proceeding shall have been
instituted before any court or governmental or regulatory body or
instituted or threatened by any governmental or regulatory body, to
restrain, modify or prevent the carrying out of the transactions
contemplated hereby, or to seek damages or a discovery order in
connection with such transactions, or which has or may have, in the
opinion of the Merger Sub, Parent and their Shareholders, a material
adverse affect on the assets, properties, business, operations, or
condition (financial or otherwise) of Parent or Merger Sub.
4.06 Parent will obtain Majority Shareholder approval for the Merger
prior to Closing.
4.07 Review of Financial Statements. TAG designated representatives
shall complete a satisfactory review of Financial Statements of Parent
and Merger Sub immediately prior to Closing in accordance with the
provisions herein.
4.08 Financial Condition. Parent shall have no assets and no
liabilities at the time of Closing.
4.09 Xx Xxxxxxxxx and his wife, individual shareholders of the Parent
shall deliver certificates of the Parent representing an aggregate of
40,050,000 shares of the Capital Stock of the Parent along with
irrevocable instructions to the transfer agent to cancel such
certificates and upon such cancellation. The cancellation of these
shares will be exchanged for the current assets of the Parent, which
includes: property, equipment, cash in corporate bank account, and
intellectual property.
4.10 Merger Sub shall have conducted no operations, had no activity
and have not issued or undertaken any obligation to issue any
securities of any nature other than in connection with the Merger as
set forth herein.
4.11 Other Documents. Parent and Merger Sub shall have delivered such
other documents, instruments, and certificates, if any, as are required
to be delivered pursuant to the provisions of this Agreement or which
may reasonably be requested in furtherance of the provisions of this
Agreement.
4.12 Agreement. The officers of Parent and Merger Sub shall have
delivered to TAG duly executed copies of this Agreement and the
Certificate of Merger as required by applicable law.
4.13 Shareholder Approval. This Agreement and the transactions
contemplated by this Agreement shall have been approved by one hundred
percent (100%) of the shareholders of TAG, one hundred percent (100%)
of the Shareholders of the Merger Sub, and by the majority of the
Shareholders of the Parent.
4.14 No Outstanding Opinions. Immediately before the Closing, there
shall be no options, warrants, or other securities or agreements
outstanding for the purchase of any Capital Stock or other interest in
Parent.
4.15 Other Legal Requirements. All statutory and other legal
requirements for the valid consummation of the Merger shall have been
fulfilled. No law or regulation shall have passed or been enacted that
would prevent the consummation of the transactions contemplated by this
Agreement.
4.16 Financial Condition. Merger Sub shall have no assets and no
liabilities at the time of Closing.
V. DOCUMENTS TO BE FURNISHED TO TAG BY PARENT AND MERGER SUB
(a) Certified copies of resolutions of the Parent and Merger Sub
approving and authorizing the execution, delivery and performance of
this Agreement and authorizing all of the necessary and proper action
to enable Parent and Merger Sub to comply with the terms of this
Agreement.
(b) The Corporate Book of Parent and Merger Sub.
(c) A list of the authorized and outstanding securities of Parent and
Merger Sub certified by their transfer agents.
(d) A list of the officers and directors of Parent and Merger Sub.
(e) Copies of the Articles of Incorporation and bylaws currently in
effect of Parent and Merger Sub.
(f) Copies of all contracts, agreements or commitments in which Parent
or Merger Sub is a party.
(g) A list of all fringe benefit plans and programs applying to
employees of Parent and Merger Sub including but not limited to,
pension, profit sharing, life insurance, medical, bonus, incentive and
similar plans and the approximate annual cost of each.
(h) A list of all employees of Parent and Merger Sub.
(i) A list of all letters, patents, patent applications, inventions
upon which patent application have not yet been filed, trade names,
trademarks, trademark registrations and applications, copyrights,
copyright registrations, both domestic and foreign presently owned by
Parent and Merger Sub together with the corporate owner.
(j) Copies of all financing or loan agreements, mortgages or similar
agreements to which Parent and Merger Sub are a party.
(k) Copies of all powers of attorney granted by Parent or Merger Sub.
(l) A list of each insurance policy owned by Parent, with the name of
the insurance carrier, the policy number, a brief description of the
coverage, the annual premium, the corporate owner and any claims
pending.
(m) A certificate from the Chief Executive Officer of Parent and Merger
Sub, to the effect that all representations and warranties of Parent
and Merger Sub made under this Agreement are true and correct as of the
Closing, the same as though originally given to TAG on said date.
(n) Such other instruments and documents as are required to be
delivered pursuant to the provisions of this Agreement.
(o) Corporate minutes and/or resolutions reflecting the Resignations
and Appoints set forth in Section 2.04 (c) and (d).
(p) The irrevocable transfer agent instruction set forth in Section
4.09 hereof, requesting the cancellation of 40,050,000 Capital Stock of
Parent.
VI. REPRESENTATIONS AND WARRANTIES
6.01 Representations and Warranties of TAG. Except as set forth in
TAG disclosure schedule (the "TAG Disclosure Schedule") TAG represents
and warrants to Parent as follows:
(a) Organization, Standing and Corporate Power. TAG is a Florida
corporation duly incorporated, validly existing and in good standing
under the laws of the State of Florida and has the requisite
organizational power and authority to carry on its business as now
being conducted. TAG is duly qualified or licensed to do business and
is in good standing in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes such
qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed (individually or in
the aggregate) would not have a Material Adverse Effect.
(b) Subsidiaries. TAG has no subsidiaries.
(c) Capital Structure. The issued and outstanding shares of TAG
consists of twenty six million six hundred seventy-one thousand and
eight hundred seventy-five (26,671,875) shares that are held by
approximately 25 shareholders. Except as set forth herein TAG has no
other securities of any nature issued, reserved for issuance or
outstanding. All outstanding TAG shares are duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive
rights. There are no outstanding bonds, debentures, notes or other
indebtedness or other securities of TAG having the right to vote (or
convertible into, or exchangeable for, securities having the right to
vote) on any matters on which shareholders of TAG may vote. There are
no outstanding securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to
which TAG is a party or by which it is bound obligating TAG to issue,
deliver or sell, or cause to be issued, delivered or sold, additional
TAG shares or other equity or voting securities of TAG or obligating
TAG to issue, grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or
undertaking. There are no outstanding contractual obligations,
commitments, understandings or arrangements of TAG to repurchase,
redeem or otherwise acquire or make any payment in respect of any TAG
shares or securities of TAG. There are no agreements or arrangements
pursuant to which TAG is or could be required to register TAG shares or
other securities under the Securities Act of 1933 or other agreements
or arrangements with or among any holders of TAG shares or with respect
to any securities of TAG.
(d) Authority; Noncontravention. TAG has the requisite power and
authority to enter into this Agreement and to consummate the Merger.
The execution and delivery of this Agreement by TAG and the
consummation by TAG of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of TAG.
This Agreement has been duly executed and delivered by TAG and
constitutes a valid and binding obligation of TAG, enforceable against
TAG in accordance with its terms. The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated
by this Agreement and compliance with the provisions hereof will not,
conflict with, or result in any breach or violation of, or default
(with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of or "put"
right with respect to any obligation or to loss of a material benefit
under, or result in the creation of any material lien upon any of the
properties or assets of TAG, except, with respect to this Agreement,
for the filing of the Articles of Merger with the Secretaries of State
of Nevada and Florida.
(e) Absence of Certain Changes or Events. Since December 31, 2008 TAG
has conducted its business only in the ordinary course consistent with
past practice, and there is not and has not been: (i) any Material
Adverse Change; (ii) any condition, event or occurrence which
individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect or give rise to a Material Adverse Change;
(iii) any event which, if it had taken place following the execution of
this Agreement, would not have been permitted under the terms of this
Agreement without prior consent of Parent; or (iv) any condition, event
or occurrence which could reasonably be expected to prevent, hinder or
materially delay the ability of TAG to consummate the transactions
contemplated by this Agreement.
(f) Litigation; Labor Matters; Compliance with Laws.
(i) There is no suit, action or proceeding or investigation pending or,
to the knowledge of TAG, threatened against or affecting TAG or any
basis for any such suit, action, proceeding or investigation that,
individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect or prevent, hinder or materially delay the
ability of TAG to consummate the transactions contemplated by this
Agreement, nor is there any judgment, decree, injunction, rule or order
of any Governmental Entity or arbitrator outstanding against TAG
having, or which, insofar as reasonably could be foreseen by TAG, in
the future could have, a Material Adverse Effect.
(ii) The conduct of the business of TAG complies with all statutes,
laws, regulations, ordinances, rules, judgments, orders, decrees or
arbitration awards applicable thereto except for such violation thereof
would not have a Material Adverse Effect.
(g) Environmental Matters. TAG is in compliance with all applicable
Environmental Laws except for such violation thereof would not have a
Material Adverse Effect. "Environmental Laws" means all applicable
federal, state and local statutes, rules, regulations, ordinances,
orders, decrees and common law relating in any manner to contamination,
pollution or protection of human health or the environment, and similar
state laws.
(h) Material Contract Defaults. TAG is not, or has not, received any
notice or has any knowledge that any other party is, in default in any
respect under any Material Contract; and there has not occurred any
event that with the lapse of time or the giving of notice or both would
constitute such a material default. For purposes of this Agreement, a
"Material Contract" means any contract, agreement or commitment that is
effective as of the Closing Date to which TAG is a party (i) with
expected receipts or expenditures in excess of $100,000, (ii) requiring
TAG to indemnify any person, (iii) granting exclusive rights to any
party, (iv) evidencing indebtedness for borrowed or loaned money in
excess of $100,000 or more, including guarantees of such indebtedness,
or (v) which, if breached by TAG in such a manner would (A) permit any
other party to cancel or terminate the same (with or without notice of
passage of time) or (B) provide a basis for any other party to claim
money damages (either individually or in the aggregate with all other
such claims under that contract) from TAG or (C) give rise to a right
of acceleration of any material obligation or loss of any material
benefit under any such contract, agreement or commitment.
(i) Properties. TAG has good, clear and marketable titles to all the
tangible properties and tangible assets reflected in the latest balance
sheet as being owned by TAG or acquired after the date thereof which
are, individually or in the aggregate, material to TAG's business
(except properties sold or otherwise disposed of since the date thereof
in the ordinary course of business), free and clear of all material
liens.
(j) Trademarks and Related Contracts. To the knowledge of TAG:
(i) Except as disclosed in this Agreement, TAG (i) owns or has the
right to use, free and clear of all Liens, claims and restrictions, all
patents, trademarks, service marks, trade names, copyrights, licenses
and rights with respect to the foregoing used in or necessary for the
conduct of its business as now conducted or proposed to be conducted
without infringing upon or otherwise acting adversely to the right or
claimed right of any Person under or with respect to any of the
foregoing and (ii) is not obligated or under any liability to make any
payments by way of royalties, fees or otherwise to any owner or
licensor of, or other claimant to, any patent, trademark, service xxxx,
trade name, copyright or other intangible asset, with respect to the
use thereof or in connection with the conduct of its business or
otherwise.
(ii) To the best knowledge of TAG, TAG owns and has the unrestricted
right to use all trade secrets, if any, including know-how, negative
know-how, formulas, patterns, programs, devices, methods, techniques,
inventions, designs, processes, computer programs and technical data
and all information that derives independent economic value, actual or
potential, from not being generally known or known by competitors
(collectively, "intellectual property") required for or incident to the
development, operation and sale of all products and services sold by
TAG, free and clear of any right, Lien or claim of others; provided,
however, the possibility exists that other Persons, completely
independent of TAG or its employees or agents, could have developed
intellectual property similar or identical to that of TAG. Except as
disclosed in the Agreement, TAG is not aware of any such development of
substantially identical trade secrets or technical information by
others.
(k) Tax Returns and Tax Payments. TAG has timely filed all tax returns
required to be filed by them, have paid all taxes shown thereon to be
due and have provided adequate reserves in their financial statements
for any taxes that have not been paid, whether or not shown as being
due on any returns. No material claim for unpaid taxes have been made
or become a lien against the property of TAG or is being asserted
against TAG, no audit of any tax return of TAG is being conducted by a
tax authority, and no extension of the statute of limitations on the
assessment of any taxes has been granted by TAG and is currently in
effect.
6.02 Representations and Warranties of Parent and Merger Sub. Except
as set forth in the disclosure schedule delivered by Parent to TAG at
the time of execution of this Agreement (the "Parent Disclosure
Schedule"), Parent and Merger Sub represents and warrants to TAG as
follows:
(a) Organization, Standing and Corporate Power. Parent and Merger Sub
are (or at Closing will be) duly incorporated, validly existing and in
good standing under the laws of the State of Nevada, as is applicable,
and has the requisite corporate power and authority to carry on its
business as now being conducted. Parent and Merger Sub are duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so
qualified or licensed (individually or in the aggregate) would not have
a material adverse effect with respect to Parent.
(b) Subsidiaries. The only direct or indirect subsidiaries of Parent
and Merger Sub are listed in the Parent Disclosure Schedule (the
"Parent Subsidiaries"). All the outstanding shares of capital stock of
each such Parent Subsidiary which is a corporation have been validly
issued and are fully paid and nonassessable and, except as set forth in
the Parent Disclosure Schedule, are owned (of record and beneficially)
by Parent, free and clear of all liens. Except for the capital stock
of its subsidiaries, which are corporations, Parent does not own,
directly or indirectly, any capital stock or other ownership interest
in any corporation, partnership, business association, joint venture or
other entity.
(c) Capital Structure. The authorized capital stock of Parent consists
of 195,000,000 shares of Parent Capital Stock, $0.001 par value, of
which 64,112,500 shares of Parent Capital Stock are issued and
outstanding prior to the cancellation of 40,050,000 Capital Shares of
Parent as set forth in 4.09 hereof. At Closing, immediately prior to
the issuance of the Merger Consideration to TAG shareholders, the
Parent will have 50,734,375 shares of the Capital Stock outstanding of
which twenty-six million six hundred seventy-one thousand eight hundred
seventy-five (26,671,875) will be issued to TAG shareholders based on
the pro-rata share ownership.
The Parent is also authorized to issue 5,000,000 shares of preferred
stock, $0.001 par value, none of which is issued and outstanding.
Except as set forth herein, no shares of capital stock or other equity
securities of Parent are issued, reserved for issuance or outstanding.
All outstanding shares of capital stock of Parent are, and all shares
which may be issued pursuant to this Agreement will be, when issued,
duly authorized, validly issued, fully paid and nonassessable and, not
subject to preemptive rights, and issued in compliance with all
applicable state and federal laws concerning the issuance of
securities. There are no outstanding bonds, debentures, notes or other
indebtedness or other securities of Parent having the right to vote (or
convertible into, or exchangeable for, securities having the right to
vote) of the Parent. There are no outstanding securities, options,
warrants, calls, rights, commitments, agreements, arrangements or
undertakings of any kind to which Parent is a party or by which any of
them is bound obligating Parent to issue, deliver or sell, or cause to
be issued, delivered or sold, additional shares of capital stock or
other securities of Parent or any of its subsidiaries or obligating
Parent or any of its subsidiaries to issue, deliver or sell, or cause
to be issued, delivered or sold, additional shares of capital stock or
other equity securities of Parent or any of its subsidiaries or
obligating Parent or any of its subsidiaries to issue, grant, extend or
enter into any such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking. There are no outstanding
contractual obligations, commitments, understandings or arrangements of
Parent or any of its subsidiaries to repurchase, redeem or otherwise
acquire or make any payment in respect of any shares of capital stock
or other Securities of Parent or any of its subsidiaries.
(d) Authority; Noncontravention. Parent and Merger Sub have all
requisite corporate authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement by Parent and the consummation
by Parent of the transactions contemplated by this Agreement has been
(or at Closing will have been) duly authorized by all necessary
corporate action on the part of Parent. This Agreement has been duly
executed and delivered by and constitutes a valid and binding
obligation of Parent, enforceable in accordance with its terms. The
execution and delivery of this Agreement does not, and the consummation
of the transactions contemplated by this Agreement and compliance with
the provisions of this Agreement will not, conflict with, or result in
any breach or violation of, or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of or "put" right with respect to any
obligation or to loss of a material benefit under, or result in the
creation of any lien upon any of the properties or assets of Parent or
any of its subsidiaries under, (i) the Articles of Incorporation or
bylaws of Parent or the comparable charter or organizational documents
of any other subsidiary of Parent, (ii) any loan or credit agreement,
note, bond, mortgage, indenture, lease or other agreement, instrument,
permit, concession, franchise or license applicable to Parent, or any
subsidiary of Parent or their respective properties or assets, or (iii)
subject to the governmental filings and other matters referred to in
the following sentence, any judgment, order, decree, statute, law,
ordinance, rule, regulation or arbitration award applicable to Parent
or any subsidiary of Parent or their respective properties or assets,
other than, in the case of clauses (ii) and (iii), any such conflicts,
breaches, violations, defaults, rights, losses or liens that
individually or in the aggregate could not have a material adverse
effect with respect to Parent or could not prevent, hinder or
materially delay the ability of Parent to consummate the transactions
contemplated by this Agreement. No consent, approval, order or
authorization of, or registration, declaration or filing with, or
notice to, any Governmental Entity is required by or with respect to
Parent or any subsidiary of Parent in connection with the execution and
delivery of this Agreement by Parent or the consummation by Parent, as
the case may be, of any of the transactions contemplated by this
Agreement, except for the filing of the Articles of Merger with the
Secretaries of State of Nevada and Florida, as required, and such other
consents, approvals, orders, authorizations, registrations,
declarations, filings or notices as may be required under the "blue
sky" laws of various states.
(e) S.E.C. Documents; Undisclosed Liabilities. Parent has filed all
reports, schedules, forms, statements and other documents as required
by the Securities and Exchange Commission (the "S.E.C.") and Parent has
delivered or made available to TAG all reports, schedules, forms,
statements and other documents filed with the S.E.C. (collectively, and
in each case including all exhibits and schedules thereto and documents
incorporated by reference therein, the "Parent S.E.C. Documents"). The
Parent S.E.C. Documents complied in all material respects with the
requirements of the Securities Act or the Securities Exchange Act of
1934, as amended, as the case may be, and the rules and regulations of
the S.E.C. promulgated thereunder applicable to such Parent S.E.C.
documents, and none of the Parent S.E.C. Documents (including any and
all consolidated financial statements included therein) as of such date
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading. Except to the extent revised or
superseded by a subsequent filing with the S.E.C. (a copy of which has
been provided to TAG prior to the date of this Agreement), none of the
Parent S.E.C. Documents contains any untrue statement of a material
fact or omits to state any material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The consolidated financial statements of Parent
included in such Parent S.E.C. Documents comply as to form in all
material respects with applicable accounting requirements and the
published rules and regulations of the S.E.C. with respect thereto,
have been prepared in accordance with generally accepted accounting
principles (except, in the case of unaudited consolidated quarterly
statements, as permitted by Form 10-Q of the S.E.C.) applied on a
consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated
financial position of Parent and its consolidated subsidiaries as of
the dates thereof and the consolidated results of operations and
changes in cash flows for the periods then ended (subject, in the case
of unaudited quarterly statements, to normal year-end audit adjustments
as determined by Parent's independent accountants). Except as set forth
in the Parent S.E.C. Documents, at the date of the most recent audited
financial statements of Parent included in the Parent S.E.C. Documents,
neither Parent nor any of its subsidiaries had, and since such date
neither Parent nor any of such subsidiaries has incurred, any
liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) which, individually or in the aggregate, could
reasonably be expected to have a material adverse effect with respect
to Parent.
(f) Absence of Certain Changes or Events. Except as disclosed in the
Parent S.E.C. Documents, since the date of the most recent financial
statements included in the Parent S.E.C. Documents, Parent and Merger
Sub have conducted their business only in the ordinary course
consistent with past practice in light of its current business
circumstances, and there is not and has not been: (i) any material
adverse change with respect to Parent; (ii) any condition, event or
occurrence which, individually or in the aggregate, could reasonably be
expected to have a material adverse effect or give rise to a material
adverse change with respect to Parent; (iii) any event which, if it had
taken place following the execution of this Agreement, would not have
been permitted by Section 7.01 without the prior consent of TAG; or
(iv) any condition, event or occurrence which could reasonably be
expected to prevent, hinder or materially delay the ability of Parent
to consummate the transactions contemplated by this Agreement.
(g) Litigation; Labor Matters; Compliance with Laws.
(i) There is no suit, action or proceeding or investigation pending or,
to the knowledge of Parent and Merger Sub, threatened against or
affecting Parent or any basis for any such suit, action, proceeding or
investigation that, individually or in the aggregate, could reasonably
be expected to have a material adverse effect with respect to Parent or
prevent, hinder or materially delay the ability of Parent to consummate
the transactions contemplated by this Agreement, nor is there any
judgment, decree, injunction, rule or order of any Governmental Entity
or arbitrator outstanding against Parent having, or which, insofar as
reasonably could be foreseen by Parent, in the future could have, any
such effect.
(ii) Parent and Merger Sub are not a party to, or bound by, any
collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization, nor is it the
subject of any proceeding asserting that it has committed an unfair
labor practice or seeking to compel it to bargain with any labor
organization as to wages or conditions of employment nor is there any
strike, work stoppage or other labor dispute involving it pending or,
to its knowledge, threatened, any of which could have a material
adverse effect with respect to Parent.
(iii) The conduct of the business of Parent and Merger Sub complies
with all statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees or arbitration awards applicable thereto.
(h) Benefit Plans. Parent and Merger Sub are not parties to any Benefit
Plan under which Parent or Merger Sub currently has an obligation to
provide benefits to any current or former employee, officer or director
of Parent or Merger Sub.
(i) Certain Employee Payments. Parent and Merger Sub are not parties
to any employment agreement which could result in the payment to any
current, former or future director or employee of Parent or Merger Sub
of any money or other property or rights or accelerate or provide any
other rights or benefits to any such employee or director as a result
of the transactions contemplated by this Agreement, whether or not (i)
such payment, acceleration or provision would constitute a "parachute
payment" (within the meaning of Section 280G of the Code), or (ii) some
other subsequent action or event would be required to cause such
payment, acceleration or provision to be triggered.
(j) Tax Returns and Tax Payments. Parent and Merger Sub have timely
filed all tax returns required to be filed by them, have paid all taxes
shown thereon to be due and have provided adequate reserves in their
financial statements for any taxes that have not been paid, whether or
not shown as being due on any returns. No material claim for unpaid
taxes have been made or become a lien against the property of Parent or
Merger Sub or is being asserted against Parent or Merger Sub, no audit
of any tax return of Parent or Merger Sub is being conducted by a tax
authority, and no extension of the statute of limitations on the
assessment of any taxes has been granted by Parent or Merger Sub and is
currently in effect.
(k) Environmental Matters. Parent is in compliance with all
applicable Environmental Laws.
(l) Material Contract Defaults. Parent and Merger Sub are not, or
have not, received any notice or has any knowledge that any other party
is, in default in any respect under any Material Contract; and there
has not occurred any event that with the lapse of time or the giving of
notice or both would constitute such a material default. For purposes
of this Agreement, a Material Contract means any contract, agreement or
commitment that is effective as of the Closing Date to which Parent is
a party (i) with expected receipts or expenditures in excess of
$10,000, (ii) requiring Parent to indemnify any person, (iii) granting
exclusive rights to any party, (iv) evidencing indebtedness for
borrowed or loaned money in excess of $10,000 or more, including
guarantees of such indebtedness, or (v) which, if breached by Parent in
such a manner would (A) permit any other party to cancel or terminate
the same (with or without notice of passage of time) or (B) provide a
basis for any other party to claim money damages (either individually
or in the aggregate with all other such claims under that contract)
from Parent or (C) give rise to a right of acceleration of any material
obligation or loss of any material benefit under any such contract,
agreement or commitment.
(m) Properties. Parent and Merger Sub have good, clear and marketable
title to all the tangible properties and tangible assets reflected in
the latest balance sheet as being owned by Parent or Merger Sub or
acquired after the date thereof which are, individually or in the
aggregate, material to Parent's or Merger Sub's businesses (except
properties sold or otherwise disposed of since the date thereof in the
ordinary course of business), free and clear of all material liens.
(n) Trademarks and Related Contracts.
(i) Merger Sub has no Intellectual Property.
(ii) Except as disclosed in this Agreement, the Parent (i) owns or has
the right to use, free and clear of all Liens, claims and restrictions,
all patents, trademarks, service marks, trade names, copyrights,
licenses and rights with respect to the foregoing used in or necessary
for the conduct of its business as now conducted or proposed to be
conducted without infringing upon or otherwise acting adversely to the
right or claimed right of any Person under or with respect to any of
the foregoing and (ii) is not obligated or under any liability to make
any payments by way of royalties, fees or otherwise to any owner or
licensor of, or other claimant to, any patent, trademark, service xxxx,
trade name, copyright or other intangible asset, with respect to the
use thereof or in connection with the conduct of its business or
otherwise
(iii) To the knowledge of Parent, Parent owns and has the unrestricted
right to use all trade secrets, if any, including know-how, negative
know-how, formulas, patterns, programs, devices, methods, techniques,
inventions, designs, processes, computer programs and technical data
and all information that derives independent economic value, actual or
potential, from not being generally known or known by competitors
(collectively, "intellectual property") required for or incident to the
development, operation and sale of all products and services sold by
Parent, free and clear of any right, Lien or claim of others; provided,
however, the possibility exists that other Persons, completely
independent of the Parent or its employees or agents, could have
developed intellectual property similar or identical to that of the
Parent. Except as disclosed in the Agreement, Parent is not aware of
any such development of substantially identical trade secrets or
technical information by others.
VII. COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO MERGER
7.01 Conduct of Parent and Merger Sub. From the date of this Agreement
and until the Effective Time, or until the prior termination of this
Agreement, the Parent and Merger Sub shall not, unless mutually agreed
to in writing:
(a) engage in any transaction, except in the normal and ordinary course
of business, or create or suffer to exist any lien or other encumbrance
upon any of their respective assets or which will not be discharged in
full prior to the Effective Time;
(b) sell, assign or otherwise transfer any of their assets, or cancel
or compromise any debts or claims relating to their assets, other than
for fair value, in the ordinary course of business, and consistent with
past practice;
(c) (i) directly or indirectly redeem, purchase or otherwise acquire to
redeem, purchase or otherwise acquire any shares of its capital stock;
(ii) issue or agree to issue any additional shares of, or options,
warrants rights of any kind to acquire any shares of Capital Stock;
(iii) amend its certificate of incorporation or bylaws, or split,
combine or reclassify the outstanding Capital Stock or declare, set
aside or pay any dividend payable in cash, stock or property or make
any distribution with respect to any such stock.
(d) fail to use reasonable efforts to preserve intact their present
business organizations, keep available the services of their employees
and preserve its material relationships with customers, suppliers,
licensors, licensees, distributors and others, to the end that its good
will and on-going business not be impaired prior to the Effective Time;
(e) except for matters related to complaints by former employees
related to wages, suffer or permit any material adverse change to occur
with respect to Parent and Merger Sub or their respective business or
assets; or
(f) make any material change with respect to their business in
accounting or bookkeeping methods, principles or practices, except as
required by GAAP.
VIII. ADDITIONAL AGREEMENTS
8.01 Access to Information; Confidentiality.
(a) TAG shall, and shall cause its officers, employees, counsel,
financial advisors and other representatives to, afford to Parent and
its representatives reasonable access during normal business hours
during the period prior to the Effective Time of the Merger to its
properties, books, contracts, commitments, personnel and records and,
during such period, TAG shall, and shall cause its officers, employees
and representatives to, furnish promptly to Parent all information
concerning its business, properties, financial condition, operations
and personnel as such other party may from time to time reasonably
request. For the purposes of determining the accuracy of the
representations and warranties of TAG set forth herein and compliance
by TAG of its obligations hereunder, during the period prior to the
Effective Time of the Merger, Parent shall provide TAG and its
representatives with reasonable access during normal business hours to
its properties, books, contracts, commitments, personnel and records as
may be necessary to enable TAG to confirm the accuracy of the
representations and warranties of Parent set forth herein and
compliance by Parent of their obligations hereunder, and, during such
period, Parent shall, and shall cause its subsidiaries, officers,
employees and representatives to, furnish promptly to TAG upon its
request (i) a copy of each report, schedule, registration statement and
other document filed by it during such period pursuant to the
requirements of federal or state securities laws and (ii) all other
information concerning its business, properties, financial condition,
operations and personnel as such other party may from time to time
reasonably request. Except as required by law, Parent will hold, and
will cause its respective directors, officers, employees, accountants,
counsel, financial advisors and other representatives and affiliates to
hold, any nonpublic information in strict confidence.
(b) No investigation pursuant to this Section 8.01 shall affect any
representations or warranties of the parties herein or the conditions
to the obligations of the parties hereto.
8.02 Best Efforts. Upon the terms and subject to the conditions set
forth in this Agreement, each of the parties agrees to use its best
efforts to take, or cause to be taken, all actions, and to do, or cause
to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Merger and
the other transactions contemplated by this Agreement. Parent, and TAG
will use their best efforts and cooperate with one another (i) in
promptly determining whether any filings are required to be made or
consents, approvals, waivers, permits or authorizations are required to
be obtained (or, which if not obtained, would result in an event of
default, termination or acceleration of any agreement or any put right
under any agreement) under any applicable law or regulation or from any
governmental authorities or third parties, including parties to loan
agreements or other debt instruments and including such consents,
approvals, waivers, permits or authorizations as may be required to
transfer the assets and related liabilities of TAG to the Surviving
Corporation in the Merger, in connection with the transactions
contemplated by this Agreement, and (ii) in promptly making any such
filings, in furnishing information required in connection therewith and
in timely seeking to obtain any such consents, approvals, permits or
authorizations. Parent and TAG shall mutually cooperate in order to
facilitate the achievement of the benefits reasonably anticipated from
the Merger.
8.03 Public Announcements. Parent, on the one hand, and TAG, on the
other hand, will consult with each other before issuing, and provide
each other the opportunity to review and comment upon, any press
release or other public statements with respect to the transactions
contemplated by this Agreement and shall not issue any such press
release or make any such public statement prior to such consultation,
except as may be required by applicable law or court process. The
parties agree that the initial press release or releases to be issued
with respect to the transactions contemplated by this Agreement shall
be mutually agreed upon prior to the issuance thereof except as may be
required by applicable law or court process.
8.04 Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expenses.
8.05 No Solicitation. Except as previously agreed to in writing by
the other party, neither Company or Parent shall authorize or permit
any of its officers, directors, agents, representatives, or advisors to
(a) solicit, initiate or encourage or take any action to facilitate the
submission of inquiries, proposals or offers from any person relating
to any matter concerning any merger, consolidation, business
combination, recapitalization or similar transaction involving Company
or Parent, respectively, other than the transaction contemplated by
this Agreement or any other transaction the consummation of which would
or could reasonably be expected to impede, interfere with, prevent or
delay the Merger or which would or could be expected to dilute the
benefits to TAG of the transactions contemplated hereby. Company or
Parent will immediately cease and cause to be terminated any existing
activities, discussions and negotiations with any parties conducted
heretofore with respect to any of the foregoing.
IX. TERMINATION, AMENDMENT AND WAIVER
9.01 Termination. This Agreement may be terminated and abandoned at
any time prior to the Effective Time of the Merger:
(a) by mutual written consent of Parent, Merger Sub and TAG;
(b) by either Parent and Merger Sub, on the one hand, or TAG on the
other hand, if any Governmental Entity shall have issued an order,
decree or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the Merger and such order, decree,
ruling or other action shall have become final and nonappealable;
(c) by either Parent and Merger Sub, on the one hand, or TAG on the
other hand, if the Merger shall not have been consummated on or before
April 30, 2009 (other than as a result of the failure of the party
seeking to terminate this Agreement to perform its obligations under
this Agreement required to be performed at or prior to the Effective
Time of the Merger);
(d) by Parent and Merger Sub, if a material adverse change shall have
occurred relative to the TAG Industries, Inc.;
(e) by Parent and Merger Sub, if TAG willfully fails to perform in any
material respect any of its material obligations under this Agreement;
or
(f) by TAG, if Parent or Merger Sub willfully fails to perform in any
material respect any of their respective obligations under this
Agreement; and
(g) by TAG or Merger Sub if the due diligence investigation by TAG if
the parent is not satisfactory to TAG.
9.02 Effect of Termination. In the event of termination of this
Agreement by either TAG or Parent, and Merger Sub as provided in
Section 9.01, this Agreement shall forthwith become void and have no
effect, without any liability or obligation on the part of Parent,
Merger Sub or TAG, other than the provisions of Section 8.01. Nothing
contained in this Section shall relieve any party for any breach of the
representations, warranties, covenants or agreements set forth in this
Agreement.
9.03 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties.
9.04 Extension; Waiver. Subject to Section 8.02 at any time prior to
the Effective Time of the Merger, the parties may (a) extend the time
for the performance of any of the obligations or other acts of the
other parties, (b) waive any inaccuracies in the representations and
warranties contained in this Agreement or in any document delivered
pursuant to this Agreement, or (c) waive compliance with any of the
agreements or conditions contained in this Agreement. Any agreement on
the part of a party to any such extension or waiver shall be valid only
if set forth in an instrument in writing signed on behalf of such
party. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver
of such rights.
9.05 Procedure for Termination, Amendment, Extension or Waiver. A
termination of this Agreement pursuant to Section 9.01, an amendment of
this Agreement pursuant to Section 9.03 or an extension or waiver of
this Agreement pursuant to Section 9.04 shall, in order to be
effective, require in the case of Parent, Merger Sub or TAG, action by
the corporation's Board of Directors and in the event of TAG action by
a majority of its shareholders.
9.06 Return of Documents. In the event of termination of this
Agreement for any reason, Parent and Company will return to the other
party all of the other party's documents, work papers, and other
materials (including copies) relating to the transactions contemplated
in this Agreement, whether obtained before or after execution of this
Agreement. Parent and Company will not use any information so obtained
from the other party for any purpose and will take all reasonable steps
to have such other party's information kept confidential.
X. INDEMNIFICATION AND RELATED MATTERS
10.01 Survival of Representations and Warranties. The representations
and warranties of the parties made in Section 6.01 and 6.02 of this
Agreement shall not survive beyond the one year anniversary of the
Effective Time.
10.02 Indemnification.
(a) Irrespective of any due diligence investigation conducted by
Company with regard the transactions contemplated hereby, the Parent
shall indemnify and hold TAG and each of its officers and directors
(the "TAG Representatives") harmless from and against any and all
liabilities, obligations, damages, losses, deficiencies, costs,
penalties, interest and expenses (collectively, "Losses") arising out
of, based upon, attributable to or resulting from any and all Losses
incurred or suffered by TAG or any of TAG representatives resulting
from or arising out of any breach of a representation, warranty or
covenant made by Parent as set forth herein.
(b) TAG shall indemnify and hold the Parent and each of its officers
and directors (the "Parent Representatives") harmless from and against
any and all liabilities, obligations, damages, losses, deficiencies,
costs, penalties, interest and expenses (collectively, "Losses")
arising out of, based upon, attributable to or resulting from any and
all Losses incurred or suffered by the Parent or any of the Parent
Representatives resulting from or arising out of any breach of a
representation, warranty or covenant made by Company as set forth
herein.
10.03 Notice of Indemnification. In the event any proceeding shall be
threatened or instituted or any claim or demand shall be asserted in
respect of which payment may be sought by the Parent or any Parent
Representative or by TAG or any TAG Representative, against the other,
as the case may be (each an "Indemnitee"), under the provisions of this
Article X (an "Indemnity Claim"), the Indemnitee shall promptly cause
written notice of the assertion of any such Claim of which it has
knowledge which is covered by this indemnity to be forwarded to the
Parent Representative, who shall be Xx Xxxxxxxxx, or the TAG
Representative, who shall be Xxxxxx X. Xxxxxx, as the case may be. Any
notice of an Indemnity Claim by reason of any of the representations,
warranties or covenants contained in this Agreement shall state
specifically the representation, warranty or covenant with respect to
which the Indemnity Claim is made, the facts giving rise to an alleged
basis for the Claim, and the amount of the liability asserted against
the Indemnitor by reason of the Indemnity Claim. Within ten (10) days
of the receipt of such written notice, the Parent Representative or
TAG, as the case may be, shall notify the Indemnitee in writing of its
intent to contest the indemnification obligation or to accept liability
hereunder.
XI. GENERAL PROVISIONS
11.01 Notices. All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be (i) personally
served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air
courier service with charges prepaid, or (iv) transmitted by hand
delivery, telegram, or facsimile, addressed as set forth below or to
such other address as such party shall have specified most recently by
written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand
delivery or delivery by facsimile, with accurate confirmation generated
by the transmitting facsimile machine, at the address or number
designated below (if delivered on a business day during normal business
hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day
during normal business hours where such notice is to be received) or
(b) on the first business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The
addresses for such communications shall be:
(a) if to Parent or Merger Sub, to:
AirtimeDSL
c/o Law Offices of Xxxxxx X. Xxxx, Ltd.
000 Xxxxx Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: Xx Xxxxxxxxx, President
Facsimile ( ) -
with a copy to (which shall not constitute notice):
Law Offices of Xxxxxx X. Xxxx
000 Xxxxx Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
(b) if to TAG, Industries, Inc. to:
TAG Industries, Inc.
000 XX 0xx Xxxxxx #000
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, CEO
Facsimile: (000)000-0000
with a copy to (which shall not constitute notice):
Xxxxxx + Xxxxxx LLP
000 Xxxxx 0 Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000 0000
11.02 Interpretation. When a reference is made in this Agreement to a
Section, Exhibit or Schedule, such reference shall be to a Section of,
or an Exhibit or Schedule to, 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".
11.03 Entire Agreement; No Third-Party Beneficiaries. This Agreement
and the other agreements referred to herein constitute the entire
agreement, and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter
of this Agreement. This Agreement is not intended to confer upon any
person other than the parties any rights or remedies.
11.04 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Nevada applicable to
contracts executed and performed in such State, without giving effect
to conflicts of laws principles. All controversies, claims and matters
of difference arising between the parties under this Agreement shall be
submitted to binding arbitration in Xxxxx County, Nevada under the
Commercial Arbitration Rules of the American Arbitration Association
("the AAA") from time to time in force (to the extent not in conflict
with the provisions set forth herein). This agreement to arbitrate
shall be specifically enforceable under applicable law in any court of
competent jurisdiction. Notice of the demand for arbitration shall be
filed in writing with the other parties to this Agreement and with the
AAA. Once the arbitral tribunal has been constituted in full, a
hearing shall be held and an aware rendered as soon as practicable.
The demand for arbitration shall be made within a reasonable time after
the claim, dispute or other matter in question has arisen, and the
parties are not making progress toward a resolution. In no event
shall it be made after the date when institution of legal or equitable
proceedings based on such claim, dispute or other matter would be
barred by the applicable contractual or other statutes of limitations.
The parties shall have reasonable discovery rights as determined by the
arbitration. The award rendered by the arbitrators shall be final and
judgment may be entered in accordance with applicable law and in any
court having jurisdiction thereof. The decision of the arbitrators
shall be rendered in writing and shall state the manner in which the
fees and expenses of the arbitrators shall be borne.
11.05 Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the
parties without the prior written consent of the other parties. Subject
to the preceding sentence, this Agreement will be binding upon, inure
to the benefit of, and be enforceable by, the parties and their
respective successors and assigns.
11.06 Severability. Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law but if any provision or
portion of any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or portion of any
provision in such jurisdiction, and this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal
or unenforceable provision or portion of any provision had never been
contained herein.
11.07 Counterparts. This Agreement may be executed in one or more
identical counterparts, all of which shall be considered one and the
same instrument and shall become effective when one or more such
counterparts shall have been executed by each of the parties and
delivered to the other parties.
11.08 Time. Time is of the essence in the performance of the parties
respective obligations herein contained.
11.09 Recitals, Disclosure Schedules and Exhibits. The Recitals,
Disclosure Schedules and Exhibits to this Agreement are incorporated
herein, by this reference, made a part hereof as if fully set forth
herein.
IN WITNESS WHEREOF, the undersigned have caused their duly authorized
officers to execute this Agreement as of the date first above written.
AIRTIMEDSL
/s/ Xx Xxxxxxxxx 4/15/2009
----------------------------------
Name: Xx Xxxxxxxxx Date
Title: President
AirtimeDSL Acquisition Corporation (Subsidiary of AirtimeDSL)
/s/ Xx Xxxxxxxxx 4/15/2009
----------------------------------
Name: Xx Xxxxxxxxx Date
Title: President
TAG Industries
/s/ Xxxxxx X. Xxxxxx 4/15/2009
----------------------------------
Name: Xxxxxx X. Xxxxxx Date
Title: Chief Executive Officer
