EXHIBIT 10.1
Execution Copy
AGREEMENT AND PLAN OF MERGER
DATED AS OF
January _____, 2010
BY AND AMONG
XXXX GLOBAL RESOURCES, INC.,
XXXX ACQUISITION CORP.,
AND
TOMBSTONE TECHNOLOGIES, INC.
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of January __, 2010 (this
"Agreement"), by and among Tombstone Technologies, Inc., a Colorado corporation
("TTI"), Xxxx Acquisition Corp., a Colorado corporation and wholly-owned
subsidiary of TTI ("Merger Sub"), and Xxxx Global Resources, Inc., a Texas
corporation ("HGR").
WHEREAS, the boards of directors of TTI, Merger Sub and HGR,
respectively, have each approved, as being in the best interests of the
respective corporations and their stockholders, the merger (the "Merger") of HGR
with and into Merger Sub, in accordance with the applicable provisions of the
Colorado Business Corporation Act (the "CBCA") and the Texas Business
Organizations Code (the "TBOC");
WHEREAS, pursuant to the Merger, each outstanding share of common
stock, no par value, of HGR ("HGR Common Stock") shall, in accordance with the
provisions of this Agreement, be converted into the number of shares of TTI's
common stock, no par value ("TTI Common Stock"), equal to the Conversion Amount;
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a tax-free reorganization under the provisions of
Section 368 of the Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, TTI, Merger Sub and HGR desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger; and
WHEREAS, this Agreement is intended to set forth the terms upon which
HGR will merge with and into Merger Sub;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and for
other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound hereby, the parties do
hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. Filing of Certificate of Merger; Effective Time
Subject to the provisions of this Agreement, a certificate of merger in
the forms approved by the parties hereto (the "Certificate of Merger") shall be
duly prepared, executed and acknowledged in accordance with the CBCA and the
TBOC and thereafter delivered to the Secretary of State of the State of Colorado
for filing as provided in the CBCA and to the Secretary of State of the State of
Texas for filing as provided in the TBOC simultaneously with the Closing (as
defined in Section 2.01). The Merger shall become effective upon the filing of
the Certificate of Merger with the Secretary of State of the State of Colorado
and the Secretary of State of the State of Texas for filing as provided in the
CBCA and the TBOC, respectively (the "Effective Time").
SECTION 1.02. Effects of the Merger.
(a) At the Effective Time and by virtue of the Merger, (i) the separate
corporate existence of HGR shall cease and HGR shall be merged with and into
Merger Sub, and Merger Sub shall be the surviving corporation (the "Surviving
Corporation"); (ii) all of the issued and outstanding HGR Common Stock shall be
converted as provided in Section 1.03; (iii) the certificate of incorporation of
Merger Sub as in effect immediately prior to the Effective Time shall be the
certificate of incorporation of the Surviving Corporation; and (iv) the by-laws
of Merger Sub as in effect immediately prior to the Effective Time shall be the
by-laws of the Surviving Corporation.
(b) Without limiting the generality of the foregoing, and subject thereto and to
any other applicable laws, at the Effective Time, all the properties, rights,
privileges, powers and franchises of HGR and Merger Sub shall vest in the
Surviving Corporation, and, subject to the terms of this Agreement, all debts,
liabilities, restrictions, disabilities and duties of HGR and Merger Sub shall
become the debts, liabilities, restrictions, disabilities and duties of the
Surviving Corporation. As promptly as possible after the Effective Time, the
Surviving Corporation shall change its name to Xxxx Global Resources, Inc.
SECTION 1.03. Conversion of Securities.
As of the Effective Time, by virtue of the Merger and without any
action on the part of any holder thereof:
(a) Each share of HGR Common Stock that is issued and outstanding immediately
prior to the Effective Time, other than shares of HGR Common Stock that are
owned by shareholders who have not consented to the Merger and who have
otherwise taken all of the steps required by Subchapter H of Chapter 10 of the
TBOC to properly exercise and perfect such shareholders' dissenters rights (such
shares of HGR Common Stock, the "Dissenting Shares") shall, except as set forth
below, be converted into that number of shares of TTI Common Stock and shares of
Class A & B Preferred Stock computed pursuant to the Conversion Amount. All such
shares of HGR Common Stock shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each holder
of a certificate representing such shares of HGR Common Stock shall cease to
have any rights with respect thereto, except (i) the right to receive the number
of shares of TTI Common Stock to be issued in consideration therefore upon
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surrender of such certificate in accordance with Section 1.05, without interest,
or (ii), in the case of Dissenting Shares, the right to receive the payment to
which reference is made in Section 1.04(a). Notwithstanding the foregoing, any
HGR Stockholders (each, a "Non-Certifying HGR Stockholder") who fail to provide
to HGR prior to the Effective Time either (i) the appropriate certifications
and/or questionnaires that such HGR Stockholder is an "accredited investor" as
such term is defined in Rule 502 of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), as determined by the
Surviving Corporation and its counsel, (ii) an executed Purchaser Representative
Agreement appointing a "purchaser representative" (as such term is defined in
Rule 501(h) of Regulation D promulgated under the Securities Act), or (iii) the
executed Exchange Agreement and Representations in the form provided by TTI,
acceptable to TTI, then such Non-Certifying HGR Stockholder(s) shall not be
entitled to receive shares of TTI Common Stock pursuant to this Section 1.03(a)
and in lieu thereof, shall receive cash in amount equal to the number of shares
of TTI Common Stock such HGR Stockholder would have received in the Merger
multiplied by a price per share of TTI Common Stock equal to $0.01. In addition,
no fractional shares shall be issued and in the event a HGR Stockholder is
entitled to receive a fractional share in an amount of (i) up to .49 of a share,
then the number of shares to be issued to such HGR Stockholder shall be rounded
down and (ii) .5 of a share or above, then the number of shares of TTI Common
Stock to be issued to such HGR Stockholder shall be rounded up to the nearest
whole share; and
(b) Each share of capital stock of Merger Sub that is issued and
outstanding immediately prior to the Effective Time shall be canceled and be
converted into one share of common stock of the Surviving Corporation, and each
certificate evidencing ownership of any such shares of Merger Sub shall
thereupon evidence ownership of the same number of shares of the Surviving
Corporation.
(c) Each share of TTI Common Stock that is issued and outstanding
immediately prior to the Effective Time and held by HGR shall be canceled and
each certificate evidencing ownership of any such shares shall thereupon be
canceled.
(d) Each outstanding option and warrant to purchase shares of HGR Common
Stock (each a "HGR Stock Option and Warrant" and, collectively, "HGR Stock
Options and Warrants") whether vested or unvested, shall be assumed by TTI. Each
HGR Stock Option and Warrant so assumed by TTI under this Agreement will
continue to have, and be subject to, the same terms and conditions of such HGR
Stock Option and Warrant, as the case may be, immediately prior to the Closing
(including without limitation, any repurchase rights or vesting provisions and
provisions regarding the acceleration of vesting on certain transactions, other
than the transactions contemplated by this Agreement), except that (i) each HGR
Stock Option and Warrant, as the case may be, will be exercisable (or will
become exercisable in accordance with its terms) for that number of whole shares
of TTI Common Stock equal to the product of the number of shares of HGR Common
Stock that were issuable upon exercise of such HGR Stock Option and Warrant, as
the case may be, immediately prior to the Closing multiplied by the Conversion
Amount, rounded up to the nearest whole number of shares of TTI Common Stock,
and (ii) the per share exercise price for the shares of TTI Common Stock
issuable upon exercise of such assumed HGR Stock Option and Warrant, as the case
may be, will be equal to the quotient determined by dividing the exercise price
per share of HGR Common Stock at which such HGR Stock Option or Warrant, as the
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case may be, was exercisable immediately prior to the Closing by the Conversion
Amount, rounded down to the nearest whole cent.
SECTION 1.04. Dissenting Shares.
(a) As promptly as practicable but in no event later than the 11th calendar
day following approval of this Agreement by the shareholders of HGR, HGR will
mail to every shareholder of record of HGR that did not consent to the approval
of this Agreement, notice of the fact and date of the approval of this Agreement
and the Merger in accordance with Section 6.202(d) of the TBOC and that the
shareholder may exercise the shareholder's right to dissent from the Merger in
accordance with Subchapter H of Chapter 10 of the TBOC. The notice shall be
accompanied by a copy of Subchapter H of Chapter 10 of the TBOC, a copy of this
Agreement, and such additional information and materials as the Surviving
Corporation or TTI may elect to provide.
(b) Any holder of shares of HGR Common Stock who perfects such holder's
rights of dissent and appraisal in accordance with and as contemplated by
Subchapter H of Chapter 10 of the TBOC shall not receive payment pursuant to
Section 1.03 but shall instead be entitled to receive from TTI, the fair value
of such shares in cash as determined pursuant to such provision of the TBOC;
provided, that no such payment shall be made to any dissenting shareholder
unless and until such dissenting shareholder has complied with the applicable
provisions of the TBOC and surrendered to TTI the certificate or certificates
representing the shares for which payment is being made. In the event that a
dissenting shareholder of HGR fails to perfect, or effectively withdraws or
loses, such holder's right to dissent and receive payment for such holder's
shares, TTI shall issue and deliver the consideration to which such holder of
shares of TTI Common Stock is entitled under this Article I (without interest)
upon surrender by such holder of the certificate or certificates representing
the shares of HGR Common Stock held by such holder.
(c) HGR shall give TTI prompt notice of any written demands for appraisal
or payment for shares of HGR Common Stock received by it, attempted withdrawals
of such demands and any other instruments served pursuant to applicable law that
are received by HGR with respect to shareholders' rights to dissent. HGR shall
not, without the prior written consent of TTI, voluntarily make any payment with
respect to, or settle or offer to settle, any such demands.
(d) TTI shall control all negotiations and proceedings with respect to any
demands for dissenter's rights. TTI shall promptly pay to any dissenting
shareholder any and all amounts due and owing to such holder as a result of any
settlement or final determination by any court of competent jurisdiction with
respect to such demands.
SECTION 1.05. Exchange Procedures.
(a) As soon as practicable after the Effective Time, TTI shall mail to each
participating and consenting HGR Stockholder a letter of transmittal and
instructions for use in effecting the surrender of certificates representing
shares of HGR Common Stock outstanding immediately prior to the Effective Time
(the "Certificates") in appropriate and customary form with such provisions as
the board of directors of TTI after the Merger may reasonably specify. Upon
surrender of a Certificate for cancellation to TTI, together with such letter of
transmittal, duly and properly executed, the holder of such Certificate shall be
entitled to receive in exchange therefore a certificate representing that number
of shares of TTI Common Stock as is equal to the product of the number of shares
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of HGR Common Stock represented by the certificate multiplied by the Conversion
Amount, together with any dividends and other distributions payable as provided
in Section 1.06 hereof, and the Certificate so surrendered shall be canceled.
Until surrendered as contemplated by this Section 1.05, each Certificate shall,
at and after the Effective Time, be deemed to represent only the right to
receive, upon surrender of such Certificate, TTI Common Stock as contemplated by
this Section 1.05, together with any dividends and other distributions payable
as provided in Section 1.06 hereof, and the holders thereof shall have no rights
whatsoever as stockholders of TTI. Shares of TTI Common Stock issued in the
Merger shall be issued, and be deemed to be outstanding, as of the Effective
Time. TTI shall cause all such shares of TTI Common Stock issued pursuant to the
Merger to be duly authorized, validly issued, fully paid and non-assessable and
not subject to preemptive rights.
(b) If any certificate representing shares of TTI Common Stock is to be
issued in a name other than that in which the Certificate surrendered in
exchange therefore is registered, it shall be a condition of such exchange that
the Certificate so surrendered shall be properly endorsed and otherwise in
proper form for transfer and that the person requesting such exchange shall pay
any transfer or other taxes required by reason of the issuance of certificates
for such shares of TTI Common Stock in a name other than that of the registered
holder of the Certificate so surrendered.
(c) In the event any Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person claiming such
Certificate to be lost, stolen or destroyed and upon the posting by such person
of a bond in such amount as TTI may reasonably direct as an indemnity against
any claim that may be made against it with respect to such Certificate, TTI will
issue in respect of such lost, stolen or destroyed Certificate one or more
certificates representing shares of TTI Common Stock as contemplated by this
Section 1.05 and such person shall be entitled to the dividend and other
distribution rights provided in Section 1.06 hereof.
(d) If any Certificates shall not have been surrendered prior to three
years after the Effective Time (or immediately prior to such earlier date on
which any payment in respect hereof would otherwise escheat or become the
property of any governmental unit or agency), the payment in respect of such
Certificates shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or interests
of any person previously entitled thereto.
(e) TTI shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of a Certificate
surrendered for shares of TTI Common Stock (and dividends or distributions with
respect to TTI Common Stock as contemplated by Section 1.06 hereof) such amount
as TTI is required to deduct and withhold with respect to the making of such
payment under the Code, or provisions of any state, local or foreign tax law. To
the extent that amounts are so deducted and withheld, such amounts shall be
treated for all purposes of this Agreement as having been paid to the holder of
such Certificate.
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SECTION 1.06. Dividends and Distributions.
No dividends or other distributions declared or made with respect to
TTI Common Stock with a record date on or after the Effective Time shall be paid
to the holder of a Certificate entitled by reason of the Merger to receive
certificates representing TTI Common Stock until such holder surrenders such
Certificate as provided in Section 1.05 hereof. Upon such surrender, there shall
be paid by TTI to the person in whose name certificates representing shares of
TTI Common Stock shall be issued pursuant to the terms of this Article I (i) at
the time of the surrender of such Certificate, the amount of any dividends and
other distributions theretofore paid with respect to that number of whole shares
of such TTI Common Stock represented by such surrendered Certificate pursuant to
the terms of this Article I, which dividends or other distributions had a record
date on or after the Effective Time and a payment date prior to such surrender
and (ii) at the appropriate payment date, the amount of dividends and other
distributions payable with respect to that number of whole shares of TTI Common
Stock represented by such surrendered Certificate pursuant to the terms of this
Article I, which dividends or other distributions have a record date on or after
the Effective Time and a payment date subsequent to such surrender.
SECTION 1.07. Directors.
Subject to applicable law, two directors designated by HGR immediately
prior to the Effective Time shall be appointed directors of the Surviving
Corporation and as directors of TTI and shall hold office until their respective
successors are duly elected and qualified, or their earlier death, resignation
or removal, in accordance with applicable law, effective upon and subject to
compliance with Section 14f of the Securities Exchange Act of 1934 Xxxx Xxx and
Xxxxxxx Xxxxxx shall resign as directors of TTI. The directors of TTI prior to
the Effective Time shall remain entitled to indemnification for acts and
omissions prior to the Effective Time to the fullest extent permitted under
Colorado law and the certificate of incorporation and bylaws of TTI in effect
prior to the Effective Time.
SECTION 1.08. Officers.
The officers of HGR immediately prior to the Effective Time shall be
the initial executive officers of the Surviving Corporation and shall hold
office until their respective successors are duly elected and qualified, or
their earlier death, resignation or removal. Immediately after the Effective
Time, the officers of TTI shall resign and the officers of HGR immediately prior
to the effective time shall be appointed as the officers of TTI, except that
Xxxx Xxx shall remain as CFO of TTI. The officers of TTI prior to the Effective
Time shall remain entitled to indemnification for acts and omissions prior to
the Effective Time to the fullest extent permitted under Colorado law and the
certificate of incorporation and bylaws of TTI in effect prior to the Effective
Time.
SECTION 1.09. No Liability.
Neither TTI nor HGR shall be liable to any holder of shares of HGR
Common Stock or TTI Common Stock, as the case may be, for such shares (or
dividends or distributions with respect thereto) or cash delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
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ARTICLE II
THE CLOSING
SECTION 2.01. Closing.
Unless this Agreement shall have been terminated and the transactions
herein contemplated shall have been abandoned pursuant to Article VIII, and
subject to the satisfaction or waiver of the conditions set forth in Article
VII, the closing of the Merger (the "Closing") shall take place as soon as
reasonably practicable (but in no event on written notice of less than two (2)
business days) after all of the conditions set forth in Article VII are
satisfied or, to the extent permitted thereunder, waived, at the offices of
Xxxxxxx X. Xxxxxxx, located at 0000 Xxxxxxx Xxxx, Xxxxxx, Xxxxxxxx or at such
other time and place as may be agreed to in writing by the parties hereto (the
date of such Closing being referred to herein as the "Closing Date").
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF TTI
Except as set forth in the applicable section of the disclosure
schedule delivered by TTI to HGR prior to the execution of this Agreement (the
"TTI Disclosure Schedule"), TTI represents and warrants to HGR as follows:
SECTION 3.01. Organization of TTI and Merger Sub; Authority.
TTI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado. Merger Sub is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Texas. Each of TTI and Merger sub has all requisite corporate power and
corporate authority to enter into the Transaction Documents to which it is a
party, to consummate the transactions contemplated hereby and thereby, to own,
lease and operate its properties and to conduct its business. Subject to the
receipt of stockholder approval, the execution, delivery and performance by each
of TTI and Merger Sub of the Transaction Documents to which it is a party and
the consummation of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate action on the part of TTI and Merger
Sub, including, without limitation the approval of the board of directors of
TTI. The Transaction Documents have been duly executed and delivered by each of
TTI and Merger Sub and, assuming that the Transaction Documents constitute a
valid and binding obligation of the other parties thereto, constitute a valid
and binding obligation of each of TTI and Merger Sub, enforceable against TTI
and Merger Sub in accordance with its terms. Each of TTI and Merger Sub is duly
qualified or licensed to do business as a foreign corporation and is in good
standing in each jurisdiction in which the property owned, leased or operated by
it or the nature of the business conducted by it makes such qualification
necessary, except where the failure to obtain such qualification or license
would not, individually or in the aggregate, have a TTI Material Adverse Effect.
TTI has heretofore delivered or made available to HGR complete and correct
copies of the certificate of incorporation and by-laws of TTI and Merger Sub,
the minute books and stock transfer records of TTI and Merger Sub, as in effect
as of the date of this Agreement. Neither TTI nor Merger Sub is in violation of
its organizational documents.
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SECTION 3.02. Capitalization.
The authorized capital stock of TTI consists of 1 million shares of
Preferred Stock of which none are outstanding and shares of TTI Common Stock, of
which 4,878,000 shares are outstanding on the date hereof. The authorized
capital stock of Merger Sub consists of 1,000 shares of common stock, par value
$.001 per share of which 1,000 shares are issued and outstanding on the date
hereof. No other shares of any other class or series of TTI Common Stock or
securities exercisable or convertible into or exchangeable for TTI Common Stock
("TTI Common Stock Equivalents") are authorized, issued or outstanding. The
outstanding shares of TTI Common Stock have been duly authorized and validly
issued and are fully paid and nonassessable and were not issued in violation of,
and are not subject to, any preemptive, subscription or similar rights. To TTI's
knowledge, none of the outstanding shares of TTI Common Stock was issued in
violation of any Law, including without limitation, federal and state securities
laws. There are no outstanding warrants, options, subscriptions, calls, rights,
agreements, convertible or exchangeable securities or other commitments or
arrangements relating to the issuance, sale, purchase, return or redemption,
and, to TTI' knowledge, voting or transfer of any shares, whether issued or
unissued, of TTI Common Stock, TTI Common Stock Equivalents or other securities
of TTI. On the Closing Date, the shares of TTI Common Stock for which shares of
HGR Common Stock shall be exchanged in the Merger will have been duly authorized
and, when issued and delivered in accordance with this Agreement, such shares of
TTI Common Stock will be validly issued, fully paid and nonassessable.
SECTION 3.03. No Violation; Consents and Approvals.
The execution and delivery by TTI of the Transaction Documents does
not, and the consummation of the transactions contemplated hereby and thereby
and compliance with the terms hereof and thereof will not, conflict with or
result in any violation of or default (or an event which, with notice or lapse
of time or both, would constitute a default) under, (a) the terms and conditions
or provisions of the certificate of incorporation or by-laws of TTI or any TTI
Subsidiary, (b) any Law applicable to TTI or any TTI Subsidiary or the property
or assets of TTI or any TTI Subsidiary, or (c) give rise to any right of
termination, cancellation or acceleration under, or result in the creation of
any Lien upon any of the properties of TTI or any TTI Subsidiary under any
Contract to which TTI or any TTI Subsidiary is a party or by which TTI or any
TTI Subsidiary or any assets of TTI or any TTI Subsidiary may be bound, except,
in the case of clauses (b) and (c), for such conflicts, violations or defaults
which are set forth in Section 3.04 of the TTI Disclosure Schedule and as to
which requisite waivers or consents will have been obtained prior to the Closing
or which, individually or in the aggregate, would not have a TTI Material
Adverse Effect. No Governmental Approval is required to be obtained or made by
or with respect to TTI or any TTI Subsidiary in connection with the execution
and delivery of this Agreement or the consummation by TTI of the transactions
contemplated hereby.
SECTION 3.04. Litigation; Compliance with Laws.
(a) There are: (i) no claims, actions, suits, investigations or proceedings
pending or, to the knowledge of TTI, threatened against, relating to or
affecting TTI or the TTI Subsidiaries, the business, the assets, or any
employee, officer, director, stockholder, or independent contractor of TTI or
the TTI Subsidiaries in their capacities as such, and (ii) no orders of any
Governmental Entity or arbitrator outstanding against TTI or the TTI
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Subsidiaries, the business, the assets, or any employee, officer, director,
stockholder, or independent contractor of TTI or the TTI Subsidiaries in their
capacities as such, or that could prevent or enjoin, or delay in any respect,
consummation of the transactions contemplated hereby. Section 3.12 of the TTI
Disclosure Schedule includes a description of all pending or threatened claims,
actions, suits, investigations or proceedings involving TTI or the TTI
Subsidiaries, the business, the assets, or any employee, officer, director,
stockholder or independent contractor of TTI or the TTI Subsidiaries in their
capacities as such.
(b) TTI and the TTI Subsidiaries have complied and are in compliance in all
material respects with all Laws applicable to TTI, any Subsidiary of TTI, its
business or its assets. Neither TTI nor the TTI Subsidiaries has received notice
from any Governmental Entity or other Person of any material violation of Law
applicable to TTI, any of the TTI Subsidiaries, their business or their assets.
TTI and the TTI Subsidiaries have obtained and hold all required Licenses (all
of which are in full force and effect) from all Government Entities applicable
to TTI, the TTI Subsidiaries, their business or their assets. No violations are
or have been recorded in respect of any such License and no proceeding is
pending, or, to the knowledge of TTI, threatened to revoke or limit any such
License.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF HGR
Except as set forth in the applicable section of the disclosure
schedule delivered by HGR to TTI prior to the execution of this Agreement (the
"HGR Disclosure Schedule"), HGR represents and warrants to TTI as follows:
SECTION 4.01. Organization of HGR; Authority.
HGR is a corporation duly organized, validly existing and in good
standing under the laws of the State of Texas and has all requisite corporate
power and corporate authority to enter into the Transaction Documents, to
consummate the transactions contemplated hereby and thereby, to own, lease and
operate its properties and to conduct its business. Subject to the receipt of
stockholder approval by HGR, the execution, delivery and performance by HGR of
the Transaction Documents and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate action
on the part of HGR, including, without limitation, the approval of the board of
directors of HGR. The Transaction Documents have been duly executed and
delivered by HGR and, assuming that the Transaction Documents constitute a valid
and binding obligation of TTI and Merger Sub, constitute a valid and binding
obligation of HGR. HGR is duly qualified or licensed to do business as a foreign
corporation and is in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification necessary, except where the failure to obtain such
qualification or license would not, individually or in the aggregate, have a HGR
Material Adverse Effect. HGR has heretofore delivered or made available to TTI
complete and correct copies of the articles of incorporation and by-laws of HGR,
the minute books and stock transfer records of HGR, as in effect as of the date
of this Agreement. HGR is not in violation of its organizational documents.
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SECTION 4.02. Capitalization.
(a) The authorized and outstanding capital stock of HGR is set forth in
Section 4.02(a) of the HGR Disclosure Schedule (the "HGR Capital Stock"). All of
the outstanding shares of the HGR Capital Stock are validly issued, fully paid
and non-assessable. To HGR's knowledge, none of the outstanding shares of HGR
Capital Stock or other securities of HGR was issued in violation of any Law,
including, without limitation, state and federal securities laws. There are no
Liens on or with respect to any outstanding shares of HGR Capital Stock.
(b) There are no outstanding: (i) securities convertible into or
exchangeable for HGR Capital Stock; (ii) options, warrants or other rights to
purchase or subscribe for HGR Capital Stock; or (iii) contracts, commitments,
agreements, understandings or arrangements of any kind relating to the issuance
of any HGR Capital Stock, any such convertible or exchangeable securities or any
such options, warrants or rights. There is no outstanding right, option or other
agreement of any kind to purchase or otherwise to receive from HGR, or any
stockholder of HGR, any ownership interest in HGR, and there is no outstanding
right or security of any kind convertible into such ownership interest. To HGR's
knowledge, there are no voting trusts, proxies or other similar agreements or
understandings with respect to the shares of HGR Capital Stock. There are no
obligations, contingent or otherwise, of HGR to repurchase, redeem or otherwise
acquire any shares of HGR Capital Stock or to provide funds to or make any
investment (in the form of a loan, capital contribution or otherwise) in any
other Person. There are no accrued and unpaid dividends with respect to any
outstanding shares of HGR Capital Stock.
SECTION 4.03. No Violation; Consents and Approvals.
The execution and delivery by HGR of the Transaction Documents does
not, and the consummation of the transactions contemplated hereby and thereby
and compliance with the terms hereof and thereof will not conflict with, or
result in any violation of or default (or an event which, with notice or lapse
of time or both, would constitute a default) under, (a) the terms and conditions
or provisions of the articles of incorporation or by-laws of HGR, (b) any Laws
applicable to HGR or the property or assets of HGR, or (c) give rise to any
right of termination, cancellation or acceleration under, or result in the
creation of any Lien upon any of the properties of HGR under, any Contracts to
which HGR is a party or by which HGR or any of its assets may be bound, except,
in the case of clauses (b) and (c), for such conflicts, violations or defaults
as to which requisite waivers or consents will have been obtained prior to the
Closing or which, individually or in the aggregate, would not have an HGR
Material Adverse Effect. Except as set forth in Section 4.04 of the HGR
Disclosure Schedule, no Governmental Approval is required to be obtained or made
by or with respect to HGR or any HGR Subsidiary in connection with the execution
and delivery of this Agreement or the consummation by HGR of the transactions
contemplated hereby, except where the failure to obtain such Governmental
Approval would not, individually or in the aggregate, have an HGR Material
Adverse Effect.
SECTION 4.04. Litigation; Compliance with Laws.
(a) Except as would not have a HGR Material Adverse Effect, there are: (i)
no claims, actions, suits, investigations or proceedings pending or, to the
knowledge of HGR, threatened against, relating to or affecting HGR, its
business, its assets, or any employee, officer, director, stockholder, or
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independent contractor of HGR in their capacities as such, and (ii) no orders of
any Governmental Entity or arbitrator are outstanding against HGR, its business,
its assets, or any employee, officer, director, stockholder, or independent
contractor of HGR in their capacities as such, or that could prevent or enjoin,
or delay in any respect, consummation of the transactions contemplated hereby.
Section 4.04 of the HGR Disclosure Schedule includes a description of all
claims, actions, suits, investigations or proceedings involving HGR, its
business, its assets, or any employee, officer, director, stockholder or
independent contractor of HGR in their capacities as such.
(b) Except as would not have an HGR Material Adverse Effect, HGR has
complied and is in compliance in all material respects with all Laws applicable
to HGR, its business or its assets. HGR has not received notice from any
Governmental Entity or other Person of any material violation of Law applicable
to it, its business or its assets. HGR has obtained and holds all required
Licenses (all of which are in full force and effect) from all Government
Entities applicable to it, its business or its assets. No violations are or have
been recorded in respect of any such License and no proceeding is pending, or,
to the knowledge of HGR threatened to revoke or limit any such License.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF
BUSINESS PENDING THE MERGER
SECTION 5.01. Conduct of the Business Pending the Merger.
(a) During the period from the date of this Agreement and continuing until
the Effective Time, TTI agrees as to itself and the TTI Subsidiaries, that TTI
shall not, and shall cause the TTI Subsidiaries not to, engage in any business
whatsoever other than in connection with the consummation of the transactions
contemplated by this Agreement, and shall use commercially reasonable efforts to
preserve intact its business and assets, maintain its assets in good operating
condition and repair (ordinary wear and tear excepted), retain the services of
its officers, employees and independent contractors and use reasonable
commercial efforts to keep in full force and effect liability insurance and
bonds comparable in amount and scope of coverage to that currently maintained
with respect to its business, unless, in any case, HGR consents otherwise in
writing.
(b) During the period from the date of this Agreement and continuing until
the Effective Time, HGR agrees that, other than in connection with the
consummation of the transactions contemplated hereby, it shall carry on its
business only in the ordinary course of business consistent with past practice,
use commercially reasonable efforts to preserve intact its business and assets
and use reasonable commercial efforts to keep in full force and effect liability
insurance and bonds comparable in amount and scope of coverage to that currently
maintained with respect to its business, unless, in any case, TTI consents
otherwise in writing; provided that HGR may take any and all of the actions
listed in Schedule 5.01(b) of the HGR Disclosure Schedules at any time prior to
or after the date of this Agreement without the consent of TTI.
(c) During the period from the date of this Agreement and continuing until
the Effective Time, each of HGR and TTI agrees as to itself and, with respect to
TTI, the TTI Subsidiaries, respectively, that except as expressly contemplated
or permitted by this Agreement, as disclosed in Section 5.01(c) of the HGR
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Disclosure Schedule or the TTI Disclosure Schedule, as applicable, or to the
extent that the other party shall otherwise consent in writing:
(i) It shall not amend or propose to amend its certificate of in-
corporation or by-laws or equivalent organizational documents except as
contemplated in this Agreement.
(ii) It shall not, nor in the case of TTI shall it permit the TTI
Subsidiaries to, issue, deliver, sell, redeem, acquire, authorize or propose to
issue, deliver, sell, redeem, acquire or authorize, any shares of its capital
stock of any class or any securities convertible into, or any rights, warrants
or options to acquire, any such shares or convertible securities or other
ownership interest, provided that: (1) TTI shall be permitted to issue the
shares of TTI Common Stock to be issued to HGR Stockholders hereunder, and (2)
each party shall be permitted to issue shares of its common stock pursuant to
the exercise of stock options, warrants and other convertible securities
outstanding as of the date hereof and listed on the HGR Disclosure Schedule or
the TTI Disclosure Schedule, as the case may be.
(iii) It shall not, nor in the case of TTI shall it permit any of
the TTI Subsidiaries to, nor shall it propose to: (i) declare, set aside, make
or pay any dividend or other distribution, payable in cash, stock, property or
otherwise, with respect to any of its capital stock or (ii) except with respect
to the Reverse Stock Split, reclassify, combine, split, subdivide or redeem,
purchase or otherwise acquire, directly or indirectly, any of its capital stock.
(iv) Other than dispositions in the ordinary course of business
consistent with past practice which would not cause a TTI Material Adverse
Effect or a HGR Material Adverse Effect (as applicable), individually or in the
aggregate, to it and its subsidiaries, taken as a whole, it shall not, nor shall
it permit any of its subsidiaries to, sell, lease, encumber or otherwise dispose
of, or agree to sell, lease (whether such lease is an operating or capital
lease), encumber or otherwise dispose of its assets.
(v) It shall promptly advise the other party hereto in writing of
any change in the condition (financial or otherwise), operations or properties,
businesses or business prospects of such party or any of its subsidiaries which
would result in a TTI Material Adverse Effect or HGR Material Adverse Effect, as
the case may be.
(vi) It shall not permit to occur any (1) change in accounting
principles, methods or practices, investment practices, claims, payment and
processing practices or policies regarding intercompany transactions, (2)
incurrence of Indebtedness or any commitment to incur Indebtedness, any
incurrence of a contingent liability, Contingent Obligation or other liability
of any type, except for, with respect to HGR, other than obligations related to
the acquisition of Inventory in the ordinary course of business consistent with
past practices, (3) cancellation of any debt or waiver or release of any
contract, right or claim, except for cancellations, waivers and releases in the
ordinary course of business consistent with its past practice which do not
exceed $50,000 in the aggregate, (4) amendment, termination or revocation of, or
a failure to perform obligations or the occurrence of any default under, (Y) any
contract or agreement (including, without limitation, leases) to which it is or,
as of December 31, 2006, was a party, other than in the ordinary course of
business consistent with past practice, or (Z) any License, (5) execution of
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termination, severance or similar agreements with any of its officers,
directors, employees, agents or independent contractors or (6) entering into any
leases of real property or agreement to acquire real property.
SECTION 5.02. No Action.
During the period from the date of this Agreement and continuing until
the Effective Time, each of HGR and TTI agrees as to itself and, with respect to
TTI, the TTI Subsidiaries, respectively, that it shall not, and TTI shall not
permit any of the TTI Subsidiaries to, take or agree or commit to take any
action, (i) that is reasonably likely to make any of its representations or
warranties hereunder inaccurate; or (ii) that is prohibited pursuant to the
provisions of this Article V.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Preparation of Notice to HGR Stockholders.
HGR agrees that as promptly as practicable following the date of this
Agreement it shall prepare a notice to stockholders describing the Merger (the
"HGR Notice"). HGR shall use commercially reasonable efforts to cause the HGR
Notice to be mailed to its stockholders at the earliest practicable date
following such filing.
SECTION 6.02. Access to Information.
From the date hereof until the Effective Time or the earlier
termination of this Agreement, each party shall give the other party and its
respective counsel, accountants, representatives and agents full access, upon
reasonable notice and during normal business hours, to such party's facilities
and the financial, legal, accounting and other representatives of such party
with knowledge of the business and the assets of such party and, upon reasonable
notice, shall be furnished all relevant documents, records and other information
concerning the business, finances and properties of such party and its
subsidiaries that the other party and its respective counsel, accountants,
representatives and agents, may reasonably request. No investigation pursuant to
this Section 6.02 shall affect or be deemed to modify any of the representations
or warranties hereunder or the condition to the obligations of the parties to
consummate the Merger; it being understood that the investigation will be made
for the purposes among others of the board of directors of each party
determining in its good faith reasonable business judgment the accuracy of the
representations and warranties of the other party. In the event of the
termination of this Agreement, each party, if so requested by the other party,
will return or destroy promptly every document furnished to it by or on behalf
of the other party in connection with the transactions contemplated hereby,
whether so obtained before or after the execution of this Agreement, and any
copies thereof (except for copies of documents publicly available) which may
have been made, and will use reasonable efforts to cause its representatives and
any representatives of financial institutions and investors and others to whom
such documents were furnished promptly to return or destroy such documents and
any copies thereof any of them may have made.
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SECTION 6.03. No Shop; Acquisition Proposals.
From the date hereof until the Effective Time or the earlier
termination of this Agreement, neither HGR nor TTI shall, nor shall they
authorize or permit any of their respective officers, directors or employees or
Subsidiaries or any investment banker, financial advisor, attorney, accountant
or other representative retained by it to, solicit, initiate or encourage
(including by way of furnishing information), or take any other action to
facilitate, any inquiries or the making of any proposal which constitutes, or
may reasonably be expected to lead to, any Takeover Proposal (as hereinafter
defined), or negotiate with respect to, agree to or endorse any Takeover
Proposal (except in any case if the board of directors or special committee of
TTI or HGR, as the case may be, determines in good faith, based upon the written
opinion of its outside legal counsel, that the failure to do so would constitute
a breach of the fiduciary duties of the TTI' or HGR's board of directors or
special committee, as the case may be, to its stockholders under applicable
law). HGR shall promptly advise TTI and TTI shall promptly advise HGR, as the
case may be, orally and in writing of any such inquiries or proposals and shall
also promptly advise TTI or HGR, as the case may be, of any developments or
changes regarding such inquiries or proposals. HGR and TTI shall immediately
cease and cause to be terminated any existing discussions or negotiations with
any persons (other than HGR, TTI and Merger Sub) conducted heretofore with
respect to any Takeover Proposal. HGR and TTI agree not to release (by waiver or
otherwise) any third party from the provisions of any confidentiality or
standstill agreement to which HGR or TTI is a party.
SECTION 6.04. Legal Conditions to Merger; Reasonable Efforts.
Each of HGR, TTI and Merger Sub shall take all reasonable actions
necessary to comply promptly with all legal requirements which may be imposed on
itself with respect to the Merger and will promptly cooperate with and furnish
information to each other in connection with any such requirements imposed upon
any of them or any of their Subsidiaries in connection with the Merger. Each of
HGR, TTI and Merger Sub will, and TTI will cause the TTI Subsidiaries to, take
all reasonable actions necessary to obtain (and will cooperate with each other
in obtaining) any consent, authorization, order or approval of, or any exemption
by, any Governmental Entity or other public or private third party, required to
be obtained or made by HGR, TTI or any of the TTI Subsidiaries in connection
with the Merger or the taking of any action contemplated thereby or by this
Agreement.
SECTION 6.05. Certain Filings.
Each party shall cooperate with the other in (a) connection with the
preparation of an 8-K, (b) determining whether any action by or in respect of,
or filing with, any governmental body, agency, official or authority is
required, or any actions, consents, approvals or waivers are required to be
obtained from parties to any material contracts, in connection with the
consummation of the transactions contemplated by this Agreement and (c) seeking
any such actions, consents, approvals or waivers or making any such filings,
furnishing information required in connection therewith or with the 8-K and
seeking timely to obtain any such actions, consents, approvals or waivers. Each
party shall consult with the other in connection with the foregoing and shall
use all reasonable commercial efforts to take any steps as may be necessary in
order to obtain any consents, approvals, permits or authorizations required in
connection with the Merger.
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SECTION 6.06. Public Announcements and Filings.
Each party shall give the other a reasonable opportunity to comment
upon, and, unless disclosure is required, in the opinion of counsel, by
applicable law, approve (which approval shall not be unreasonably withheld), all
press releases or other public communications of any sort relating to this
Agreement or the transactions contemplated hereby.
SECTION 6.07. Tax Treatment.
TTI and HGR shall each report the Merger as a tax-free reorganization
and shall not take, and shall use commercially reasonable efforts to prevent any
of their respective Subsidiaries or affiliates from taking, any actions that
could prevent the Merger from qualifying, as tax free under the provisions of
Section 351 of the Code or Section 368(a) of the Code.
SECTION 6.08. Tax Matters.
(a) HGR shall prepare and file on a timely basis all Tax Returns which are due
to be filed with respect to HGR (giving effect to any extension of time) on or
prior to the Closing Date. TTI shall be responsible for the preparation and
filing of all Tax Returns which are due to be filed (giving effect to any
extension of time) after the Closing Date, but HGR shall use its best efforts to
conduct its affairs such that any Tax Returns due after the Closing Date can be
filed on a timely basis.
(b) From the date hereof until the Effective Time or the earlier termination of
this Agreement, without the prior written consent of the other party or if
required in the opinion of counsel, neither TTI nor HGR shall make or change any
election, change an annual accounting period, adopt or change any accounting
method, file any amended Tax Return, enter into any closing agreement, settle
any Tax claim or assessment relating to it, surrender any right to claim a
refund of Taxes, consent to any extension or waiver of the limitation period
applicable to any Tax claim or assessment relating to it, or take any other
action relating to the filing of any Tax Return or the payment of any Tax.
SECTION 6.09. Supplements to Schedules.
Prior to the Closing, HGR will supplement or amend its disclosure
schedule with respect to any matter hereafter arising which, if existing or
occurring at the date of this Agreement, would have been required to be set
forth or described in such disclosure schedule. No supplement to or amendment of
the disclosure schedule made pursuant to this Section 6.09 shall be deemed to
cure any breach of any representation or warranty made in this Agreement unless
the other parties hereto specifically agree thereto in writing. Prior to the
Closing, TTI may supplement or amend its disclosure schedule with respect to any
matter which, if existing or occurring at the date of this Agreement, would have
been required to be set forth or described in such disclosure schedule. No
supplement to or amendment of the disclosure schedule made pursuant to this
Section 6.09 shall be deemed to cure any breach of any representation or
warranty made in this Agreement unless the other parties hereto specifically
agree thereto in writing.
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ARTICLE VII
CONDITIONS OF THE MERGER
SECTION 7.01. Conditions to Each Party's Obligation to Effect the Merger.
The respective obligations of each party to effect the Merger and the
other transactions contemplated herein shall be subject to the satisfaction at
or prior to the Effective Time of the following conditions, any or all of which
may be waived, in whole or in part to the extent permitted by applicable law:
(a) Stockholder Approval. This Agreement shall have been duly adopted and
joined pursuant to an Exchange Agreement (Exhibit A hereto) by the holders of
(i) at least 90% of the outstanding shares of HGR Common Stock; and (ii) a
majority of the outstanding shares of capital stock of Merger Sub.
(b) No Injunctions or Restraints. No governmental authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, execution order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is in effect and which
materially restricts, prevents or prohibits consummation of the Merger or any
transaction contemplated by this Agreement; provided, however, that the parties
shall use their reasonable commercial efforts to cause any such decree,
judgment, injunction or other order to be vacated or lifted.
SECTION 7.02. Additional Conditions of Obligations of TTI.
The obligations of TTI and Merger Sub to effect the Merger and the
other transactions contemplated by this Agreement are also subject to the
satisfaction at or prior to the Closing Date of the following additional
conditions unless waived by TTI:
(a) Representations and Warranties. The representations and warranties of
HGR set forth in this Agreement shall be true and correct in all material
respects (except for those representations and warranties qualified by
materiality, which shall be true and correct in all respects) as of the date of
this Agreement and as of the Closing Date as though made on and as of the
Closing Date, except as otherwise contemplated by this Agreement.
(b) Performance of Obligations of HGR. HGR shall have performed in all
material respects all conditions, covenants, agreements and obligations required
to be performed by it under this Agreement at or prior to the Closing Date.
(c) No Material Adverse Change to HGR. From the date hereof through and
including the Effective Time, no event shall have occurred which would have a
HGR Material Adverse Effect.
(d) Third Party Consents. HGR shall have obtained all consents and
approvals, required to be obtained prior to or at the Closing Date, from third
parties or governmental and regulatory authorities in connection with the
execution, delivery and performance by HGR of this Agreement and the
consummation of the transactions contemplated hereby.
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(e) No Governmental Order or Other Proceeding or Litigation. No order of
any Governmental Entity shall be in effect that restrains or prohibits the
transactions contemplated hereby and by the other Transaction Documents, and no
suit, action or other proceeding by any Governmental Entity shall have been
instituted or threatened which seeks to restrain or prohibit the transactions
contemplated hereby or thereby.
(f) Dissenters' Rights. Holders of not more than 10% of the aggregate
number of shares of HGR Common Stock shall have elected to exercise any
appraisal rights or similar rights within the law of the State of Texas, which
demand was not withdrawn or terminated as of the Closing Date.
(g) Financial Statements. HGR shall have delivered audited financial
statements for HGR for period from inception to 12/31/2009 prepared in
accordance with SEC Rules and Regulations, GAAP, and PCAOB Rules.
(h) Deliveries.
At the Closing, HGR shall have delivered to TTI:
(i) a certificate, dated the Closing Date, signed on behalf of HGR
by the Chief Executive Officer of HGR, certifying as to the fulfillment of the
conditions specified in subsections (a), (b) and (c) of this Section 7.02;
(ii) the consents set forth in Section 4.04 of the HGR Disclosure
Schedule;
(iii) true, correct and complete copies of (1) the certificate of
incorporation or other charter document, as amended to date, of HGR, certified
as of a recent date by the Secretary of State or other appropriate official of
the state or other jurisdiction of incorporation of HGR, (2) the by-laws or
other similar organizational document of HGR, and (3) resolutions duly and
validly adopted by the Board of Directors and the stockholders of HGR evidencing
the authorization of the execution and delivery of this Agreement, the other
Transaction Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby, in each case, accompanied by a
certificate of the Secretary or Assistant Secretary of HGR, dated as of the
Closing Date, stating that no amendments have been made thereto from the date
thereof through the Closing Date; and
(iv) good standing certificates for HGR from the Secretary of State
or other appropriate official of their respective states or other jurisdiction
of incorporation and from the Secretary of State or other appropriate official
of each other jurisdiction in which the operation of the business in such
jurisdiction requires HGR to qualify to do business as a foreign corporation, in
each case dated as of a recent date prior to the Closing Date;
SECTION 7.03. Additional Conditions of Obligations of HGR.
The obligation of HGR to effect the Merger and the other transactions
contemplated by this Agreement is also subject to the satisfaction at or prior
to the Closing Date of the following additional conditions unless waived by HGR:
17
(a) Representations and Warranties. The representations and warranties of
TTI and Merger Sub set forth in this Agreement shall be true and correct in all
material respects (except for those representations and warranties qualified by
materiality) as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date, except as otherwise contemplated by
this Agreement.
(b) Performance of Obligations of TTI and Merger Sub. TTI and Merger Sub
shall have performed in all material respects all conditions, covenants,
agreements and obligations required to be performed by them under this Agreement
at or prior to the Closing Date.
(c) No Material Adverse Change to TTI or Merger Sub. From the date hereof
through and including the Effective Time, no event shall have occurred which
would have a TTI Material Adverse Effect.
(d) Third Party Consents. TTI shall have obtained all consents and
approvals required to be obtained prior to or at the Closing Date from third
parties or governmental and regulatory authorities in connection with the
execution, delivery and performance by TTI of this Agreement and the
consummation of the transactions contemplated hereby.
(e) No Governmental Order or Other Proceeding or Litigation. No order of
any Governmental Entity shall be in effect that restrains or prohibits the
transactions contemplated hereby and by the other Transaction Documents, and no
suit, action or other proceeding by any Governmental Entity shall have been
instituted or threatened which seeks to restrain or prohibit the transactions
contemplated hereby or thereby.
(f) Deliveries.
At the Closing, TTI shall have delivered to HGR:
(i) certificates, dated the Closing Date, signed on behalf of each
of TTI and Merger Sub by the President of each of TTI and Merger, certifying as
to the fulfillment of the conditions specified in subsections (a), (b) and (c)
of this Section 7.03;
(ii) the consents set forth in Section 3.04 of the TTI Disclosure
Schedule;
(iii) true, correct and complete copies of (1) the certificate of
incorporation or other charter document, as amended to date, of each of TTI and
Merger Sub, certified as of a recent date by the Secretary of State or other
appropriate official of the state or other jurisdiction of incorporation of such
company, (2) the by-laws or other similar organizational document of each of TTI
and Merger Sub, and (3) resolutions duly and validly adopted by the Board of
Directors of each of TTI and Merger Sub evidencing the authorization of the
execution and delivery of this Agreement, the other Transaction Documents to
which it is a party and the consummation of the transactions contemplated hereby
and thereby, in each case, accompanied by a certificate of the Secretary of each
of TTI and Merger Sub, dated as of the Closing Date, stating that no amendments
have been made thereto from the date thereof through the Closing Date; and
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(iv) good standing certificates for TTI and Merger Sub from the
Secretary of State or other appropriate official of their respective states or
other jurisdiction of incorporation and from the Secretary of State or other
appropriate official of each other jurisdiction in which the operation of the
business in such jurisdiction requires TTI to qualify to do business as a
foreign corporation, in each case dated as of a recent date prior to the Closing
Date.
ARTICLE VIII
TERMINATION
SECTION 8.01. Termination.
This Agreement may be terminated at any time prior to the Effective
Time, by TTI or HGR as set forth below:
(a) by mutual consent of the boards of directors of TTI and HGR; or
(b) by TTI upon written notice to HGR, if: (A) any condition to the
obligation of TTI to close contained in Article VII hereof has not been
satisfied by April 1, 2010 (the "End Date") (unless such failure is the result
of TTI's breach of any of its representations, warranties, covenants or
agreements contained herein) or (B) the TTI stockholders do not approve the
Merger; or
(c) by HGR upon written notice to TTI, if: (A) any condition to the
obligation of HGR to close contained in Article VII hereof has not been
satisfied by the End Date (unless such failure is the result of HGR's breach of
any of its representations, warranties, covenants or agreements contained
herein); or (B) the HGR stockholders do not approve the Merger; or
(d) by TTI if the board of directors or special committee of TTI determines
in good faith, based upon the written opinion of its outside legal counsel, that
the failure to terminate this Agreement would constitute a breach of the
fiduciary duties of the TTI board of directors or special committee to the TTI
stockholders under applicable law; or
(e) by HGR if the board of directors or special committee of BBIs
determines in good faith, based upon the written opinion of its outside legal
counsel, that the failure to terminate this Agreement would constitute a breach
of the fiduciary duties of the HGR board of directors or special committee to
the HGR stockholders under applicable law.
SECTION 8.02. Fees and Expenses.
Whether or not the Merger is consummated, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expense, and, in connection
therewith, each of TTI and HGR shall pay, with its own funds and not with funds
provided by the other party, any and all property or transfer taxes imposed on
such party.
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ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
None of the representations and warranties of the parties set forth in this
Agreement shall survive the Closing. Following the Closing Date with respect to
any particular representation or warranty, no party hereto shall have any
further liability with respect to such representation and warranty. None of the
covenants, agreements and obligations of the parties hereto shall survive the
Closing.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices.
All notices, requests and other communications to any party hereunder
shall be in writing (including telecopy, telex or similar writing) and shall be
deemed given or made as of the date delivered, if delivered personally or by
telecopy (provided that delivery by telecopy shall be followed by delivery of an
additional copy personally, by mail or overnight courier), one day after being
delivered by overnight courier or three days after being mailed by registered or
certified mail (postage prepaid, return receipt requested), to the parties at
the following addresses:
if to TTI or Merger Sub, to:
with a copy to (which shall not constitute notice):
Xxxxxxx Xxxxxxx, Esq.
0000 Xxxxxxx Xxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
with a copy to (which shall not constitute notice):
or such other address or telex or telecopy number as such party may hereafter
specify for the purpose by notice to the other party hereto.
SECTION 10.02. Amendment; Waiver.
This Agreement may be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may be given, provided that
the same are in writing and signed by or on behalf of the parties hereto.
SECTION 10.03. Successors and Assigns.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
provided that no party shall assign, delegate or otherwise transfer any of its
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rights or obligations under this Agreement without the written consent of the
other party hereto.
SECTION 10.04. Governing Law.
This Agreement shall be construed in accordance with and governed by
the law of the State of Colorado without regard to principles of conflict of
laws.
SECTION 10.05. Waiver of Jury Trial.
Each party hereto hereby irrevocably and unconditionally waives any
rights to a trial by jury in any legal action or proceeding in relation to this
Agreement and for any counterclaim therein.
SECTION 10.06. Consent to Jurisdiction.
Each of the Parties hereby irrevocably and unconditionally submits to
the exclusive jurisdiction of any court of the State of Colorado or any federal
court sitting in Colorado for purposes of any suit, action or other proceeding
arising out of this Agreement and the Transaction Documents (and agrees not to
commence any action, suit or proceedings relating hereto or thereto except in
such courts). Each of the Parties agrees that service of any process, summons,
notice or document pursuant to the laws of the State of Colorado and on the
individuals designated in Section 10.01 shall be effective service of process
for any action, suit or proceeding brought against it in any such court.
SECTION 10.07. Counterparts; Effectiveness.
Facsimile transmissions of any executed original document and/or
retransmission of any executed facsimile transmission shall be deemed to be the
same as the delivery of an executed original. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
SECTION 10.08. Entire Agreement; No Third Party Beneficiaries; Rights of
Ownership.
Except as expressly provided herein, this Agreement (including the
documents and the instruments 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 hereof. Except as
expressly provided herein, this Agreement is not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder. The
parties hereby acknowledge that no person shall have the right to acquire or
shall be deemed to have acquired shares of common stock of the other party
pursuant to the Merger until consummation thereof.
SECTION 10.09. Headings.
The headings contained in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
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SECTION 10.10. No Strict Construction.
The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises under any provision of this Agreement, this Agreement
shall be construed as if drafted jointly by the parties thereto, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.
SECTION 10.11. Severability.
If any term or other provision of this Agreement is invalid, illegal or
unenforceable, all other provisions of this Agreement shall remain in full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in a manner that is materially adverse to
any party.
ARTICLE XI
DEFINITIONS
"Affiliate" shall mean (a) with respect to an individual, any member of
such individual's family including lineal ancestors and descendents; (b) with
respect to an entity, any officer, director, stockholder, partner, manager,
investor or holder of an ownership interest of or in such entity or of or in any
Affiliate of such entity; and (c) with respect to a Person, any Person which
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with such Person or entity.
"Agreement" shall have the meaning set forth in the preamble to this
Agreement.
"HGR" shall have the meaning set forth in the preamble to this
Agreement.
"HGR Capital Stock" shall have the meaning set forth in Section 4.02 of
this Agreement.
"HGR Common Stock" shall have the meaning set forth in the recitals to
this Agreement.
"HGR Material Adverse Effect" shall mean an event or change,
individually or in the aggregate with other events or changes, that could
reasonably be expected to have a material adverse effect on (a) the business,
properties, prospects, condition (financial or otherwise) or results of
operations of HGR taken as a whole (other than those events, changes or effects
resulting from general economic conditions or the industry in which HGR is
engaged generally) or (b) the ability of HGR to consummate the transactions
contemplated hereby.
"HGR Stockholders" means the holders of common stock in HGR.
"Certificate of Merger" shall have the meaning set forth in Section
1.01 of this Agreement.
"Certificates" shall have the meaning set forth in Section 1.05(a) of
this Agreement.
"TTI" shall have the meaning set forth in the preamble to this
Agreement.
22
TTI Common Stock" shall have the meaning set forth in the recitals to
this agreement.
"TTI Common Stock Equivalents" shall have the meaning set forth in
Section 3.02 of this Agreement.
"TTI Material Adverse Effect" shall mean an event or change,
individually, or in the aggregate with other events or changes, that could
reasonably be expected to have a material adverse effect on (a) the business,
properties, prospects, condition (financial or otherwise) or results of
operations of TTI and the TTI Subsidiaries taken as a whole (other than those
events, changes or effects resulting from general economic conditions or the
industry in which TTI is engaged generally) or (b) the ability of TTI to
consummate the transactions contemplated hereby.
"Closing" shall have the meaning set forth in Section 2.01 of this
Agreement.
"Closing Date" shall have the meaning set forth in Section 2.01 of this
Agreement.
"Code" shall have the meaning set forth in the recitals of this
Agreement.
"Contingent Obligation" as to any Person shall mean the undrawn face
amount of any letters of credit issued for the account of such Person and shall
also mean any obligation of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness, leases, dividends, letters of credit or
other obligations ("Primary Obligations") of any other Person (the "Primary
Obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (a) to
purchase any such Primary Obligation or any property constituting direct or
indirect security therefore, (b) to advance or supply funds (i) for the purchase
or payment of any such Primary Obligation or (ii) to maintain working capital or
equity capital of the Primary Obligor or otherwise to maintain the financial
condition or solvency of the Primary Obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the obligee under
any such Primary Obligation of the ability of the Primary Obligor to make
payment of such Primary Obligation, or (d) otherwise to assure or hold harmless
the obligee under such Primary Obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business.
"Contracts" shall mean all contracts, leases, subleases, notes, bonds,
mortgages, indentures, Permits and Licenses, non-competition agreements, joint
venture or partnership agreements, powers of attorney, purchase orders, and all
other agreements, arrangements and other instruments, in each case whether
written or oral, to which such Person is a party or by which any of them or any
of its assets are bound.
"Conversion Amount" shall mean an amount equal to a prorata a portion
of 29,000,000 shares of Common Stock, (29,000,000 / 100 x % of HGR common shares
owned = shareholder entitlement) and a prorata portion of each of 125,000 Class
A Preferred Convertible Shares (having a conversion ratio of one preferred to
208 common TTI shares; and subject to the common stock of the company having
traded at an average bid price of $3.00 for ten consecutive trading days) and
125,000 Class B Convertible Preferred Shares (having a conversion ratio of one
preferred for 248 common TTI shares; and subject to the common stock of the
23
company having traded at an average bid price of $7.00 for ten consecutive
trading days) computed as follows 125,000 / 100 x % of common shares of HGR
owned, = # of shares of stock receivable of TTI, Preferred A, and Preferred B.
"CBCA" shall have the meaning set forth in the recitals of this
Agreement.
"Effective Time" shall have the meaning set forth in Section 1.01 of
this Agreement.
"End Date" shall have the meaning set forth in Section 8.01 of this
Agreement.
"Governmental Approval" shall mean the consent, approval, order or
authorization of, or registration, declaration or filing with any court,
administrative agency or commission or other Governmental Entity, authority or
instrumentality, domestic or foreign.
"Governmental Entity" means the government of the United States of
America, any other nation or any political subdivision thereof, whether foreign,
state or local, and any agency, authority, instrumentality, regulatory body,
court, tribunal, arbitrator, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.
"Indebtedness" shall mean as to any Person and whether recourse is
secured by or is otherwise available against all or only a portion of the assets
of such Person and whether or not contingent, but without duplication: (a) every
obligation of such Person for money borrowed; (b) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (c) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (d) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (including
securities repurchase agreements but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business which are not more than
120 days overdue or which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in accordance
with GAAP); (e) every Capital Lease Obligation of such Person; (f) any
obligation of such Person to pay any discount, interest, fees, indemnities,
penalties, recourse, expenses or other amounts in connection with any sales by
such Person unless such sales are on a non-recourse basis (as to collectability)
of (i) accounts or general intangibles for money due or to become due, (ii)
chattel paper, instruments or documents creating or evidencing a right to
payment of money or (iii) other receivables, whether pursuant to a purchase
facility or otherwise, other than in connection with the disposition of the
business operations of such Person relating thereto or a disposition of
defaulted receivables for collection and not as a financing arrangement; (g)
every obligation of such Person under any forward contract, futures contract,
swap, option or other financing agreement or arrangement (including, without
limitation, caps, floors, collars and similar agreements), the value of which is
24
dependent upon interest rates, currency exchange rates, commodities or other
indices (a "derivative contract"); (h) every obligation in respect of
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent that such Person is liable therefore as a
result of such Person's ownership interest in or other relationship with such
entity, except to the extent that the terms of such Indebtedness provide that
such Person is not liable therefore and such terms are enforceable under
applicable law; and (i) every Contingent Obligation of such Person with respect
to Indebtedness of another Person.
"Laws" shall mean all foreign, federal, state and local statutes, laws,
ordinances, regulations, rules, resolutions, orders, writs, injunctions,
judgments and decrees applicable to the specified Person and to the businesses
and assets thereof.
"License" shall mean any franchise, authorization, license, permit,
certificate of occupancy, easement, variance, exemption, certificate, consent or
approval of any Governmental Entity or other Person.
"Lien" shall mean any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge or other encumbrance of any kind.
"Merger" shall have the meaning set forth in the recitals of this
Agreement.
"Merger Sub" shall have the meaning set forth in the preamble to this
Agreement.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, limited liability company,
association, corporation, institution, entity, party, Governmental Entity or any
other juridical entity of any kind or nature whatsoever.
"Post-Closing Tax Period" means a taxable period (or portion thereof)
that begins after the Closing Date.
"SEC" shall have the meaning set forth in Section 3.05 of this
Agreement.
"Surviving Corporation" shall have the meaning set forth in Section
1.02(a) of this Agreement.
"Subsidiary" shall mean any Person in which another Person, directly or
indirectly, owns 50% of either the equity interests in or voting control of,
such Person.
"Takeover Proposal" shall mean any proposal for a tender or exchange
offer, merger, consolidation, sale of all or substantially all of such party's
assets, sale of in excess of fifteen percent of the shares of capital stock or
other business combination involving such party or any proposal or offer to
acquire in any manner a substantial equity interest (including any interest
exceeding fifteen percent of the equity outstanding) in, or all or substantially
all of the assets of, such party other than the transactions contemplated by
this Agreement.
"Taxes" means all federal, state, county, local, municipal, foreign and
other taxes, assessments, duties or similar charges of any kind whatsoever,
including all corporate franchise, income, gross receipts, occupation, windfall
profits, sales, use, ad valorem, value-added, profits, license, withholding,
payroll, employment, excise, premium, real property, personal property, customs,
net worth, capital gains, transfer, stamp, documentary, social security,
disability, environmental, alternative minimum, recapture and other taxes, and
25
including all interest, penalties and additions imposed with respect thereto,
whether disputed or not and including any obligations to indemnify or otherwise
assume or succeed to the Tax liability of any Person, and any liability in
respect of any Tax as a result of being a member of any affiliated, combined,
consolidated, unitary or similar group.
"Tax Return" means any report, return, statement, estimate,
informational return, declaration or other written information required to be
supplied to a taxing authority in connection with Taxes.
"Taxing Authority" means any domestic, foreign, federal, national,
state, county or municipal or other local government, any subdivision, agency,
commission or authority thereof, or any quasi-governmental body exercising tax
regulatory authority.
"TBOC" shall have the meaning set forth in the recitals of this
Agreement.
"Transaction Documents" shall mean this Agreement
[Remainder of page intentionally left blank.]
26
IN WITNESS WHEREOF, the parties hereto have caused this Merger
Agreement to be duly executed as of the day and year first above written.
TOMBSTONE TECHNOLOGIES, INC.
By: _________________________________
Name: Xxxx X. Xxxxxx
Title: President/CEO & Director
By: _________________________________
Name: Xxxx X. Xxx
Title: CFO & Chairman
By: _________________________________
Name: Xxxxxxx X. Xxxxxx
Title: COO/CTO & Director
XXXX ACQUISITION CORP.
By: _________________________________
Name:
Title:
XXXX GLOBAL RESOURCES, INC.
By: _________________________________
Name: Xxxxxx X. Xxxxx
Title: CEO
By: _________________________________
Name: Jewel Xxxxxx Xxxx V
Title: Chairman
By: _________________________________
Name: Xxxx Xxxxxxxx Xxxx
Title: President
27
