SHARE PURCHASE AGREEMENT
SCHEDULE
13D
EXHIBIT 2SHARE
PURCHASE AGREEMENT
THIS
SHARE PURCHASE AGREEMENT (this “Agreement”)
is
entered into as of April 20, 2007, between Trestle Holdings, Inc., a Delaware
corporation (the “Company”),
and
W-Net, Inc., a California corporation (the “Purchaser”).
W
I T
N E S S E T H:
WHEREAS,
Company desires to sell to Purchaser, and Purchaser desires to buy from Company,
135,000,000 shares (the “Shares”)
of
Company’s common stock, par value $0.001 per share (the “Common
Stock”),
representing
approximately 94% of Company’s issued and outstanding Common Stock.
NOW,
THEREFORE, in consideration of and subject to the mutual agreements, terms
and
conditions herein contained, the receipt and sufficiency of which are hereby
acknowledged, Company and Purchaser agree as follows:
1. SUBSCRIPTION
FOR AND PURCHASE OF SHARES
1.1 Purchase
of Shares.
Subject
to the terms and conditions set forth herein, Purchaser hereby subscribes
for
and agrees to purchase, and Company hereby agrees to sell, assign, transfer
and
deliver to Purchaser, the Shares for an aggregate consideration of $350,000.00
(the “Purchase
Price”).
1.2 Escrow.
In
connection with this Agreement, the parties have appointed, and hereby do
appoint, Xxxxxx Xxxxxxxx & Markiles, LLP, as escrow agent (the “Escrow
Agent”)
for
the transfer of the aggregate Purchase Price hereunder. The parties acknowledge
that upon the signing of this Agreement, Purchaser has deposited with the
Escrow
Agent an amount equal to the aggregate Purchase Price (the “Escrow
Amount”).
Upon
the
signing of this Agreement, the Parties hereby direct Escrow Agent to deliver
to
Company (by
wire
transfer of immediately available funds to an account designated by Company
in
writing)
a
portion of the Escrow Amount equal to Fifty
Thousand Dollars ($50,000.00) as a non-refundable deposit (except as set
forth
herein) of a portion of the Purchase Price (the “Deposit”)
for
and in anticipation of the closing of the transactions contemplated
herein.
1.3 Closing
Date.
The
closing of the transactions contemplated hereby shall take place at the offices
of Xxxxxx Xxxxxxxx & Markiles, LLP, 00000 Xxxxxxx Xxxx., 00xx
Xxxxx,
Xxxxxxx Xxxx, Xxxxxxxxxx 00000, at 10:00 a.m. PDT, on May 4, 2007, or at
such other location, date and time, as may be agreed upon between Purchaser
and
Company, or by facsimile or other electronic means (such closing being called
the “Closing”
and
such date and time being called the “Closing
Date”).
1.3 Delivery.
At the
Closing, (i) Company shall deliver to Purchaser or its designee a certificate
or
certificates registered solely in Purchaser’s name representing the Shares, (ii)
the parties will instruct the Escrow Agent in writing to deliver the Escrow
Amount, less the Deposit, by wire transfer of immediately available funds
to an
account designated by Company in writing, and (iii) Company shall retain
the
Deposit delivered on the date hereof.
1.4 Legend.
(a) The
certificate or certificates representing the Shares shall bear a legend
restricting transfer under the Securities Act of 1933, as amended (the
“Securities
Act”)
and
acknowledging the restrictions on transfer set forth herein, such legend
shall
be substantially in the following form:
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY STATE
SECURITIES LAW. NO TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE
SHALL
BE VALID OR EFFECTIVE UNLESS (A) SUCH TRANSFER IS MADE PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (B) THE HOLDER SHALL
DELIVER TO COMPANY AN OPINION OF ITS COUNSEL, IN FORM AND SUBSTANCE REASONABLY
ACCEPTABLE TO COMPANY AND REASONABLY CONCURRED IN BY COMPANY’S COUNSEL, THAT
SUCH PROPOSED TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT.
(b)
Company agrees (i) to remove the legend set forth in Section
1.4(a)
upon
receipt of an opinion of Purchaser’s counsel, reasonably concurred in by
Company’s counsel within ten (10) business days of Company’s receipt of such
opinion, that the Shares are eligible for transfer without registration under
the Securities Act and (ii) to remove such legend at such time as the Shares
are
subject to an effective registration statement registering the Shares under
the
Securities Act.
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2.
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REPRESENTATIONS
AND WARRANTIES OF COMPANY
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Company
represents and warrants to Purchaser that:
2.1 Organization.
Company
is a corporation duly organized and validly existing under the laws of the
State
of Delaware and is in good standing under such laws. Company has the requisite
corporate power to own and operate its properties and assets, and to carry
on
its business as presently conducted. Company is qualified to do business
as a
foreign corporation in each jurisdiction in which the ownership of its property
or the nature of its business requires such qualification, except where the
failure to be so qualified would not reasonably be expected to have a material
adverse effect on the business, assets, liabilities, operations or conditions
(financial or otherwise) of Company and its subsidiaries, taken as a whole
(a
“Material
Adverse Effect”).
Purchaser acknowledges that Company has no business or operations.
2.2 Authorization.
Company
has taken all corporate action necessary for the authorization, execution,
delivery and performance of this Agreement and the authorization, sale, issuance
and delivery of the Shares. This Agreement constitutes the legal, valid,
and
binding obligation of Company enforceable in accordance with its terms, except
to the extent limited by (a) applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws of general application related to the enforcement
of
creditors’ rights generally and (b) general principles of equity, and except
that enforcement of rights to indemnification contained herein may be limited
by
applicable federal or state laws or the public policy underlying such laws,
regardless of whether enforcement is considered in a proceeding in equity
or at
law.
2.3 No
Conflict.
The
execution and delivery of this Agreement does not, and the consummation of
the
transactions contemplated hereby will not, conflict with, or result in any
violation of, or default under (with or without notice or lapse of time,
or
both), or give rise to a right of termination, cancellation or acceleration
of
any obligation or to a loss of a material benefit under any provision of,
Company’s Amended and Restated Certificate of Incorporation or Bylaws, as
amended (“Organizational Documents”), or any mortgage, indenture, lease or other
agreement or instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to
Company
or its properties or assets.
2.4 Capitalization.
(a) The
authorized capital stock of Company consists solely of (i) 150,000,000 shares
of
Common Stock, of which 8,257,214
shares
are issued and outstanding, and (ii) 5,000,000 shares of preferred stock,
par
value $0.001 per share, none of which are issued and outstanding. All of
the
issued and outstanding shares of Common Stock have been duly authorized and
validly issued and are fully paid and nonassessable and are not subject to
any
preemptive rights. The Shares, when issued at the Closing, will be duly
authorized, validly issued, fully paid and nonassessable.
(b)
Except for warrants
to purchase 4,180,000 shares of Common Stock, which are exercisable at ranges
from $0.51 to $120.00 per share, and options to purchase 10,000 shares of
Common
Stock exercisable at $67.50 per share,
Company
has not issued or granted any outstanding options, warrants, rights or other
securities convertible into or exchangeable or exercisable for shares of
Company’s capital stock, any other commitments or agreements providing for the
issuance of additional shares of Company’s capital stock, the sale of treasury
shares or for the repurchase or redemption of shares of Company’s capital stock
or any obligations arising from canceled stock of Company. There are no
agreements of any kind which may obligate Company to issue, purchase, register
for sale or re-sale, redeem or otherwise acquire any of its securities or
interests. The issuance and sale of the Shares will not give rise to any
preemptive rights or rights of first refusal on behalf of any person in
existence on the date hereof. There are no outstanding or authorized stock
appreciation, phantom stock or similar rights with respect to Company. There
are
no outstanding securities of Company, or contracts binding on Company relating
to such securities, that give to their holders anti-dilution protections
or
similar rights. The issuance of the Shares will not give any other holder
of
Company’s securities the right to receive as a result of such issuance any
additional securities or property or change any material rights enjoyed with
respect to such securities.
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(c)
There are no voting trusts, stockholder agreements, proxies or other
agreements in effect with respect to the voting or transfer of the Shares
known
to the Company.
2.5 Compliance
With Securities Laws.
Subject
to and in reliance on the truth and accuracy of Purchaser’s representations and
warranties set forth in this Agreement, the offer, sale and issuance of the
Shares is exempt from the registration requirements of the Securities Act
and
any applicable state securities laws and neither Company nor any authorized
agent acting on its behalf will take any action hereafter that would cause
the
loss of such exemption.
2.6 SEC
Documents.
Company
has timely filed all required reports, schedules, forms, statements and other
documents with the Securities and Exchange Commission (the “SEC”)
since
December 31, 2005 (the “SEC
Documents”).
As of
their respective dates, the SEC Documents complied in all material respects
with
the requirements of the Securities Act or the Securities Exchange Act of
1934,
as amended (the “Exchange
Act”),
as
the case may be, and the rules and regulations of the SEC promulgated
thereunder, and, except to the extent that information contained in any SEC
Document has been revised or superseded by a later document filed with the
SEC
and made publicly available prior to the date of this Agreement, none of
the SEC
Documents contain any untrue statement of a material fact or omit 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. Company’s financial statements included in the SEC Documents
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with U.S. generally accepted
accounting principles (“GAAP”)
applied on a consistent basis during the periods involved and fairly present
the
consolidated financial position of Company and its consolidated subsidiaries
as
of the dates thereof and the consolidated results of their operation and
cashflows for the periods then ending in accordance with GAAP (subject, in
the
case of the unaudited statements, to normal year-end audit adjustments and
the
absence of footnotes). Except as disclosed in financial statements included
in
the SEC Documents, neither Company nor any of its subsidiaries has any
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise) required by GAAP to be set forth on a consolidated balance
sheet
of Company and its consolidated subsidiaries or in the notes thereto and
which
would reasonably be expected to have a Material Adverse Effect.
2.7 Absence
of Certain Changes or Events.
Since
the date of Company’s Quarterly Report on Form 10-QSB filed on April 16, 2007,
which contains unaudited financial statements of Company prepared in accordance
with the requirements of Form 10-QSB, (a) Company has conducted its business
in
the ordinary course and (b) there has not been any action taken and there
has
not been any event which would require Company to amend or supplement any
of the
SEC Documents or to file a Current Report on Form 8-K. Schedule
2.7
sets
forth (i) the
aggregate accounts payable, liabilities and other obligations of Company
expected to be accrued through May 4, 2007, and (ii) the aggregate accounts
payable, liabilities and other obligations of Company not expected to be
accrued
through May 4, 2007 but known to Company (including to any director, officer
or
employee of Company) (collectively, the “Reserved
Amounts”).
Schedule
2.7,
and the
Reserved Amounts reflected therein, shall be updated on and as of the Closing
Date by mutual agreement of the parties.
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2.8 Governmental
and Like Consents.
No
consent, approval or authorization of or designation, declaration or filing
with
any governmental authority on the part of Company is required in connection
with
the valid execution and delivery of this Agreement, the offer, sale or issuance
of the Shares or the consummation of any other transaction contemplated hereby,
except such filings as may be required to be made with the SEC, the
Over-the-Counter Bulletin Board or under applicable state securities
laws.
2.9 Litigation.
Except
as disclosed in the SEC Documents, there is no suit, action, or proceeding
pending or affecting Company or any of its subsidiaries that, individually
or in
the aggregate, would reasonably be expected to (a) have a Material Adverse
Effect, (b) impair Company’s ability to perform its obligations under this
Agreement or (c) prevent the consummation of any of the transactions
contemplated by this Agreement, nor is there any judgment, decree, injunction,
rule or order of any governmental entity or arbitrator outstanding against
Company or any of its subsidiaries having, or which, insofar as reasonably
can
be foreseen in the future have, any such effect.
3. REPRESENTATIONS
AND WARRANTIES OF PURCHASER
Purchaser
hereby represents and warrants to Company as follows:
3.1 Organization.
Purchaser is a corporation duly organized and validly existing under the
laws of
the State of California, with all requisite corporate power and authority
to
own, lease and operate its properties and to conduct its business as presently
conducted.
3.2 Authority.
Purchaser has taken all corporate action necessary for the authorization,
execution, delivery and performance of this Agreement. This Agreement has
been
duly executed and delivered by Purchaser and constitutes the legal, valid
and
binding obligation of Purchaser, enforceable in accordance with its terms,
except to the extent limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application related
to the
enforcement of creditors’ rights generally and (b) general principles of equity,
and except that enforcement of rights to indemnification contained herein
may be
limited by applicable federal or state laws or the public policy underlying
such
laws, regardless of whether enforcement is considered in a proceeding in
equity
or at law.
3.3 Investment.
Purchaser is acquiring the Shares for investment for its own account, not
as a
nominee or agent, and not with a view to, or for resale in connection with,
any
distribution thereof. Purchaser understands that the Shares have not been
registered under the Securities Act and are being issued pursuant to an
exemption from the registration requirements of the Securities Act.
3.4 Accredited
Investor Status.
Purchaser is an “accredited investor” within the meaning of Regulation D
promulgated under the Securities Act and is (a) fully capable of evaluating
the
risks and merits associated with the execution of this Agreement and the
purchase of the Shares, without qualification, and (b) able to bear the economic
risk of its investment in the Shares, hold the Shares for an indefinite period
of time and afford a complete loss of its investment.
3.5 Restricted
Securities.
Purchaser understands that the Shares are restricted securities under the
Securities Act insofar as they are being acquired from Company in a transaction
not involving a public offering and that under the Securities Act and applicable
regulations promulgated thereunder the Shares may be resold without registration
under the Securities Act only in certain limited circumstances. Purchaser
is
familiar with Rule 144 promulgated by the SEC, as presently in effect, and
understands the resale limitations imposed thereby and by the Securities
Act.
3.6 Distribution
of Proceeds.
Purchaser
acknowledges that Company will be distributing, immediately prior to the
Closing, all
existing cash and stock purchase proceeds received from the sale contemplated
hereunder, except for the Holdback Amount (as defined below) and the Reserved
Amounts,
to
shareholders of record as of April 19th, 2007, and that the Shares issued
to
Purchaser are exempt from the distribution of those
proceeds.
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3.7 Director’s
and Officer’s Insurance.
Purchaser will maintain and keep effective Company’s existing Director’s and
Officer’s Liability Insurance, in the form and containing the terms existing as
of the date hereof, through September 30, 2007. Additionally, Purchaser will
not, for a period of one year following the Closing Date, change Company’s
Organizational Documents regarding indemnification of directors and officers
except as may be required by law.
3.8 Adverse
Claims.
Neither
Purchaser (nor any of its principal stockholders or directors or executive
officers): (a) has ever been party to any adverse action brought by the
Securities and Exchange Commission or any similar state agency; (b) any material
criminal proceeding regarding the purchase or sale of securities or other
crimes, excluding only misdemeanor crimes; or (c) filed bankruptcy proceedings
within the past five years.
3.9 Filing.
Within
two (2) days of the execution of this Agreement, Purchaser will provide the
Company with the true and correct copy of the information needed to complete
the
information statement (the “Information
Statement”)
under
Rule 14(f)(1) of the Securities Exchange Act of 1934, as amended, containing
the
information required therein to be filed by the Company in connection with
this
Agreement.
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4.
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CONDITIONS
PRECEDENT TO CLOSING
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4.1 Conditions
to Obligations of Purchaser.
Purchaser’s obligation to purchase the Shares pursuant to this Agreement is
subject to the satisfaction or waiver, at or prior to the Closing Date, of
each
of the following conditions:
(a) Representations
and Warranties.
The
representations and warranties of Company under Section
2
of this
Agreement shall be true, complete and correct on and as of the Closing Date,
with the same effect as though such representations and warranties had been
made
on and as of such date, and Company’s Interim President shall have certified to
such effect to Purchaser in writing.
(b) No
Order Pending.
There
shall be no order, ruling, judgment or decree in effect, including of any
regulatory agency, which would enjoin or prohibit the transactions contemplated
hereby.
(c) Delivery
of Stock Certificates.
Company
shall have delivered a stock certificate or stock certificates representing
the
Shares.
(d) Agreements,
Conditions and Covenants.
Company
shall have performed or complied in all respects with all agreements, conditions
and covenants required by this Agreement to be performed or complied with
by it
on or before the Closing Date.
(e) Other
Closing Conditions.
The
following closing conditions must also have been satisfied, or otherwise
waived
by Purchaser:
(i) Company
shall have obtained
and delivered to Purchaser a resolution of its Board of Directors approving
(A)
the transactions contemplated hereby (including, without limitation, the
issuance of the Shares), (B) execution and performance of this Agreement,
(C)
the appointment of a new Board of Directors, (D) resignation of Company’s
current directors, and (E) the filing of a Form 8-K announcing a change in
control;
(ii) Company
shall have no liabilities exceeding its remaining cash;
(iii) Company
shall have no outstanding unresolved SEC issues;
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(iv) Company
shall have no operating business;
(v) Company
shall have obtained the resignation of its Board of Directors, effective
as of
the Closing Date, and shall have appointed a new Board of Directors, effective
as of the Closing Date, as directed by Purchaser prior to the Closing;
(vi) Company
shall have had no disagreements with its independent auditors or legal counsel;
(vii) at
least
ten (10) days prior to the Closing Date, Company shall have filed the
Information Statement under Rule 14(f)(1) of the Securities and Exchange
Act of
1934, as amended, disclosing the change of control of Company contemplated
by
the transactions herein;
(viii) Company
shall have distributed all existing cash and stock purchase proceeds hereunder,
except for the Holdback Amount (as defined below) and the Reserved Amounts,
to
its paying agent who will distribute such monies to Company’s record
shareholders as of April 19, 2007, and prior to issuing the Shares to Purchaser;
and
(ix)
Company
shall have no liens, security interests, encumbrances or other obligations
on or
in respect of any of its property or assets and shall cause all existing
UCC
financial statements to have been terminated.
4.2 Conditions
to Obligations of Company.
Company’s obligation to sell and transfer the Shares pursuant to this Agreement
is subject to the satisfaction or waiver at or prior to the Closing Date
of the
following conditions:
(a) Representations
and Warranties.
The
representations and warranties of Purchaser under Section
3
of this
Agreement shall be true, complete and correct on and as of the Closing Date,
with the same effect as though such representations and warranties had been
made
on and as of such date.
(b) No
Order Pending.
There
shall be no order, ruling, judgment or decree in effect, including of any
regulatory agency, which would enjoin or prohibit the transactions contemplated
hereby.
(c) Agreements,
Conditions and Covenants.
Purchaser shall have performed or complied in all respects with all agreements,
conditions and covenants required by this Agreement to be formed or complied
with by it on or before the Closing Date.
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5.
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COVENANTS
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5.1 The
parties will use their reasonable best efforts to complete the transactions
contemplated hereby no later than May 4, 2007. At Closing, the parties will
deliver such documentation as may be reasonably requested by the other party’s
counsel to effect the transactions contemplated herein.
5.2 A
portion
of the Purchase Price equal to $75,000 (the “Holdback
Amount”),
plus
an amount equal to the Reserved Amounts will, at the Closing, be deposited
into
a separate account to be held by Company on and after the Closing Date and
utilized for ordinary course business purposes in the sole discretion of
Company’s Board of Directors appointed on or following the Closing. Such uses
may include, but will not be limited to, paying any applicable accounts payable,
liabilities or other obligations of Company.
5.3 The
directors of Company prior to the Closing will compromise and settle all
amounts
of any kind due and owing to them by Company for any reason whatsoever, without
qualification, through and including the Closing Date, and
Company’s Interim President shall have certified to such effect, and shall have
provided written evidence thereof, to Purchaser in writing.
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5.4 Until
the
earlier of the termination hereof, the Closing, or the mutual written agreement
of the parties, the parties agree as follows:
(a) Company
shall operate its business, if any, prior to the Closing in the normal and
ordinary course consistent with past practices, and hereby agrees to take
all
necessary steps to ensure that Company does not incur any material
liabilities.
(b) Each
party shall keep confidential any information obtained in connection with
the
transactions contemplated herein, unless such information has been rightfully
obtained from a third party or is generally available to the public. In the
event that public disclosure is required to be made by any regulation or
law, or
by any regulatory filing in connection with the transactions contemplated
herein, such disclosure shall be agreed by all parties, including, without
limitation, approval as to form and content.
(c) Company
shall provide Purchaser and its representatives with access to financial
and
other information relating to Company as may be reasonably necessary in order
for Purchaser to make informed decisions as to the viability of the business
arrangements contemplated herein.
(d) (i) Between
the date hereof and 11:59 p.m. (Pacific Daylight Time) on May 4, 2007, or
such
earlier time and date as Purchaser and Company mutually agree in writing
to the
termination hereof (the “Expiration
Date”),
neither Company nor any of its officers, directors, employees, agents, advisors
or controlled affiliates will take any action to solicit, initiate, seek,
encourage or support any inquiry, proposal or offer from, furnish any
information to, or participate in any discussions and/or negotiations with,
any
corporation, partnership, person or other entity or group (an “Entity”)
(other
than discussions with Purchaser) regarding any acquisition of Company, any
merger or consolidation or any similar transaction with or involving Company,
or
any acquisition of any material portion of the stock or assets of Company
(each,
a “Competing
Transaction”).
Company agrees that any such negotiations (other than negotiations with
Purchaser) in progress as of the date hereof will be terminated or suspended
during such period.
(ii) Notwithstanding
any portion of the foregoing to the contrary, Company’s Board of Directors may
furnish information to, and enter into discussions and/or negotiations with,
any
Entity who makes (and does not withdraw) an unsolicited, written proposal
or
offer regarding a Competing Transaction if: (1) Company’s Board of
Directors has concluded in good faith, after consultation with its outside
legal
counsel, that such action is required in order for Company’s Board of Directors
to comply with its fiduciary obligations to Company’s stockholders under
applicable law; (2) (x) at least one (1) business day prior to
furnishing any such information to, or entering into discussions and/or
negotiations with, such Entity, Company gives Purchaser written notice of
Company’s intention to furnish information to, or enter into discussions and/or
negotiations with, such Entity, and (y) Company receives from such Entity
an
executed confidentiality agreement; and (3) contemporaneously with
furnishing any such information to such Entity, Company furnishes such
information to Purchaser (to the extent such information has not been previously
furnished by Company to Purchaser). Company will notify Purchaser promptly,
and
in any event within one (1) business day, after receipt by Company (or any
of
its officers, directors, employees, agents, advisors or controlled affiliates)
of any proposal or offer for, or inquiry respecting, any Competing Transaction
or any request for information in connection with such a proposal, offer
or
inquiry, or for access to the properties, books or records of Company by
any
Entity that informs Company that it is considering making, or has made, such
a
proposal, offer or inquiry. Such notice to Purchaser will indicate in reasonable
detail the identity of the Entity making such proposal, offer or inquiry
and the
terms and conditions of such proposal, offer or inquiry. Thereafter Company
shall provide Purchaser as promptly as practicable oral and written notice
setting forth all such information as is reasonably necessary to keep Purchaser
informed in all material respects of the status and details (including material
amendments or proposed material amendments) of any such proposal, offer,
inquiry
or request. In no event will Company enter into an agreement (other than
a
confidentiality agreement as provided above) concerning any such Competing
Transaction prior to the Expiration Date.
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5.5 Dividend.
Purchaser shall cause the Company after Closing to take no action which would
delay, interfere, interrupt or otherwise impede or stop the distribution
contemplated by Section 3.6 hereof.
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6.
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TERMINATION;
ESCROW
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6.1 Termination.
This
Agreement may be terminated only as follows:
(a) at
any
time by mutual agreement of Company and Purchaser; or
(b) by
Purchaser, by providing written notice to Company at any time (i) after the
Expiration Date, if the Closing shall not have occurred on or before that
date,
so long as Purchaser is not then in material breach of its obligations
hereunder, or (ii) if Company shall have materially breached its obligations
under this Agreement and shall have failed to cure such breach within ten
(10)
days following written notice thereof, or (iii) if, on or before the Expiration
Date, Company shall have communicated to Purchaser (whether in writing or
otherwise) its intention to enter into a Competing Transaction; or
(c) by
Company, by providing written notice to Purchaser (i) after the Expiration
Date,
if the Closing shall not have occurred on or before that date, so long as
Company is not then in material breach of its obligations hereunder, or
(ii) if Purchaser shall have materially breached its obligations under this
Agreement and shall have failed to cure such breach within ten (10) days
following written notice thereof, or (iii) at any time on or before the
Expiration Date, by providing written notice to Purchaser of its intention
to
enter into a Competing Transaction.
6.2 Effect
of Termination.
(a) In
the
event of termination of this Agreement by either Company or Purchaser as
provided in Section
6.1,
this
Agreement will forthwith become null and void and there will be no liability
or
obligations on the part of Company, on the one hand, or Purchaser, on the
other
hand, or any of their respective affiliates, officers, directors or
shareholders, except (i) with respect to the provisions of this Section
6.2,
as
applicable, and (ii) that no such termination will relieve any party from
liability for any breach of their respective representations, warranties,
covenants and other obligations hereunder prior to the date of
termination.
(b) If
this
Agreement is terminated mutually by the parties pursuant to Section
6.1(a),
by
Purchaser pursuant to Sections
6.1(b)(i)
or
6.1(b)(ii),
or by
Company pursuant to Section
6.1(c)(i),
then,
without limitation of a party’s rights and remedies hereunder or otherwise,
Purchaser shall be entitled to a return of the Escrow Amount and a full refund
of the Deposit. In such event, Purchaser shall notify the Escrow Agent in
writing and the Escrow Agent will immediately return the Escrow Amount (less
the
Deposit) as instructed. The Escrow Agent shall return the Escrow Amount (less
the Deposit) to Purchaser regardless of any dispute or written instrument
from
Company. Company shall further return the Deposit to Purchaser in cash or
by
wire transfer of immediately available funds within two (2) days following
the
effective date of any such termination.
(c) If
this
Agreement is terminated by Purchaser pursuant to Section
6.1(b)(iii),
or by
Company pursuant to Section
6.1(c)(iii),
then,
as Purchaser’s sole and exclusive remedy and as liquidated damages, Purchaser
shall be entitled to a return of the Escrow Amount (less the Deposit), a
full
refund of the Deposit, and Company will pay to Purchaser a termination fee
equal
to Ten Thousand Dollars ($10,000.00) (the “Termination
Fee”).
In
such event, Purchaser shall notify the Escrow Agent in writing and the Escrow
Agent will immediately return the Escrow Amount (less the Deposit) as
instructed. The Escrow Agent shall return the Escrow Amount (less the Deposit)
to Purchaser regardless of any dispute or written instrument from Company.
Company shall further return the Deposit and pay the Termination Fee to
Purchaser in cash or by wire transfer of immediately available funds, in
each
case within two (2) days following the effective date of any such
termination.
8
(d) If
this
Agreement is terminated by Company pursuant to Section
6.1(c)(ii),
then,
as Company’s sole and exclusive remedy and as liquidated damages, Company shall
be entitled to retain the Deposit without any further action required by
Purchaser. Purchaser will be entitled to the Escrow Amount (less the Deposit)
and shall accordingly notify the Escrow Agent in writing thereof. Upon Escrow
Agent’s receipt of notice from Purchaser, Escrow Agent will immediately forward
the Escrow Amount (less the Deposit) as instructed. The Escrow Agent shall
forward the Escrow Amount (less the Deposit) to Purchaser regardless of any
dispute or written instrument from Company.
|
7.
|
MISCELLANEOUS
|
7.1 Representations
and Warranties.
The
representations and warranties of Company and Purchaser shall not survive
beyond
the Closing.
7.2 Escrow
Agent; Waiver of Conflict.
(a) The
parties expressly acknowledge and agree that Escrow Agent is specifically
indemnified and held harmless hereby for its actions or inactions in following
any instructions hereunder. In the event of a dispute involving the escrow
instructions or the consideration to be delivered in escrow, the escrow agent
is
authorized to implead consideration received in the courts located in Orange
County, California upon ten days written notice, and be relieved of any further
escrow duties thereupon. Any and all costs of attorney’s fees and legal actions
of escrow agent for any dispute resolution or impleader action shall be paid
in
equal shares by the parties to this Agreement.
(b) The
parties acknowledge that the Escrow Agent has previously served as outside
corporate counsel to Company, provided, however, such services have not been
provided to Company for at least the two (2) year period prior to the date
hereof. The parties further acknowledge that the Escrow Agent is currently
serving as outside corporate counsel to Purchaser, including, without
limitation, in connection with the transactions contemplated herein. Company
hereby further acknowledges that Escrow Agent does not represent Company
in
connection with the transactions contemplated herein or in the Agreement,
and
that in the absence of any written agreement to the contrary, Escrow Agent
shall
owe no duties directly to Company, except such duties, if any, required in
its
express capacity as the escrow agent hereunder.
7.3 Waiver,
Amendment.
Neither
this Agreement nor any provisions hereof shall be waived, modified, changed,
discharged or terminated except by an instrument in writing signed by the
party
against whom any waiver, modification, change, discharge or termination is
sought.
7.4 Assignability.
Neither
this Agreement nor any right, remedy, obligation or liability arising hereunder
or by reason hereof shall be assignable by either Company or Purchaser, without
the prior written consent of each other party.
7.5 Section
and Other Headings.
The
section headings contained in this Agreement are for reference purposes only
and
shall not affect in any way the meaning or interpretation of this
Agreement.
7.6 Governing
Law.
This
Agreement shall be governed by, and construed and enforced in accordance
with,
the laws of the State of California, without regard to principles of conflicts
of laws thereof.
7.7 Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed and delivered shall be deemed to be an original and all of which
together shall be deemed to be one and the same agreement.
7.8 Notices.
All
notices and other communications provided for herein shall be in writing
and
shall be deemed to have been duly given if delivered personally or sent by
registered or certified mail, return receipt requested, postage
prepaid:
9
|
(a)
|
if
to Purchaser:
|
W-Net,
Inc.
0000
Xxxxxx Xxxxxx Xxxxxxxxx
Xxxxx
000
Xxxxxx
Xxxx, Xxxxxxxxxx 00000
Attn:
Xxxxx Xxxxxx, President
with
a
copy to (which copy shall not constitute notice):
Xxxxxx
Xxxxxxxx & Markiles, LLP
00000
Xxxxxxx Xxxx.
00xx
Xxxxx
Xxxxxxx
Xxxx, Xxxxxxxxxx 00000
Attn:
Xxxxxxx Xxxxxxxx, Esq.
|
(b)
|
if
to Company:
|
Trestle
Holdings, Inc.
0000
Xxxx
Xxxxxx Xxxx
Xxxxx
X
Xxxxxxx
Xxxxx Xxxxxxxxxx 00000
Attn:
Xxxx Xxxxxxxxxxxx, Interim President
with
copy
to (which copy shall not constitute notice):
Xxxx
Xxxxxxx, LLP
1999
Avenue of the Stars
Xxxxx
0000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn:
Xxxxx Xxxxx, Esq.
7.9 Binding
Effect.
The
provisions of this Agreement shall be binding upon and accrue to the benefit
of
the parties hereto and their respective heirs, legal representatives, permitted
successors and assigns.
10
IN
WITNESS WHEREOF, Company and Purchaser have executed this Agreement as of
the
date first written above.
|
TRESTLE
HOLDINGS, INC.
|
|||
|
By:
|
/s/
Xxxx Xxxxxxxxxxxx
|
||
|
Name:
Xxxx Xxxxxxxxxxxx
|
|||
|
Title:
Interim President
|
|||
|
W-NET,
INC.
|
|||
|
By:
|
/s/
Xxxxx Xxxxxx
|
||
|
Name:
Xxxxx Xxxxxx
|
|||
|
Title:
President
|
|||
ACKNOWLEDGEMENT
OF ESCROW AGENT
Xxxxxx
Xxxxxxxx & Markiles, LLP
|
By:
|
/s/
Xxxxxxx Xxxxxxxx
|
|
|
Name:
Xxxxxxx Xxxxxxxx
|
||
|
Title:
Partner
|
