AGREEMENT AND PLAN OF REORGANIZATION
THIS
AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement"), is made and
entered into as of December 3, 2007, by and among Tradeshow Products, Inc.,
a
Nevada corporation ("TPI"), Focus Views, Inc., a Delaware corporation
(the “Company”), and the shareholders of the Company set forth on the signature
page of this Agreement (the "Shareholders"; and collectively with the
Company and TPI, the "Parties"), with reference to the following
facts:
RECITALS
A. WHEREAS,
Company is a privately held
corporation.
B. WHEREAS,
the Shareholders collectively own all of the issued and outstanding shares
of
common stock of the Company (the “Company Shares”);
C. WHEREAS,
TPI desires to acquire all of the Company Shares and the Shareholders desire
to
exchange the Company Shares for shares of common stock of TPI;
D. WHEREAS,
for United States federal income tax purposes, it is intended that the
transaction contemplated by this Agreement shall qualify as a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue Code of 1986,
as
amended (the "Code"), and that this Agreement shall be, and is hereby,
adopted as a "plan of reorganization" for purposes of Section 368(a) of the
Code; and
E. WHEREAS,
the Parties have determined it to be in their best interest for TPI to issue
its
TPI Common Stock under the exemption made available pursuant to Section 4(2)
of
the Securities Act of 1933, as amended (the "Securities
Act");
NOW,
THEREFORE, in consideration of the mutual covenants, representations, warranties
and agreements contained herein, and intending to be legally bound hereby,
the
Parties agree as follows:
ARTICLE
I
EXCHANGE
OF THE SHARES AND CONSIDERATION
1.1 Shares
Being Exchanged. Subject to the terms and conditions of this
Agreement, at the closing provided for in Section 2 hereof (the “Closing”), each
of the Company Shareholders shall sell, assign, transfer and deliver to TPI
the
number of shares of Company common stock set forth opposite each such Company
Shareholder’s name on Schedule A attached hereto (the shares of Company common
stock sold, assigned and transferred to TPI hereunder are hereinafter referred
to as the “Company Shares”).
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1.2 Consideration. Subject
to the terms and conditions of this Agreement and in consideration of the sale,
assignment, transfer and delivery of the Company Shares to TPI, at the Closing
TPI shall issue, sell and deliver to the Company Shareholders shares of TPI
common stock as set forth on Schedule A.1 attached hereto (the shares of TPI
common stock issued, sold and delivered to the Company Shareholders hereunder
are hereinafter referred to as the “TPI Shares”).
ARTICLE
II
CLOSING
2.1 Time
and Place. Subject to the provisions of this Agreement, the
closing of the transactions contemplated by this Agreement (the "Closing")
shall
take place at the offices of the Company, on November __, 2007 (the "Closing
Date") or at such other place and on such other date as is mutually agreeable
to
TPI and the Company.
ARTICLE
III
CLOSING
DELIVERIES
3.1 Closing
Deliveries. At the Closing, each of the Parties shall make the
Closing deliveries required of it pursuant to Article IX of this
Agreement.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF COMPANY
Except
as
set forth in the written disclosure schedule attached hereto
as Schedule B dated as of the date hereof prepared by the Company,
signed by the President and Chief Financial Officer of the Company and delivered
to TPI simultaneously with the execution hereof (the “Company Disclosure
Schedule”), the Company represents and warrants to TPI that all
of the statements contained in this Article IV are true and correct as of the
date of this Agreement (or, if made as of a specified date, as of such date)
and
will be true, complete and correct as of the Closing Date (or if made as of
a
specified date, as of such date). Each exception set forth in the
Company Disclosure Schedule and each other response to this Agreement set forth
in the Company Disclosure Schedule is identified by reference to, or has been
grouped under a heading referring to, a specific individual section of this
Agreement and relates only to such section except to the extent that one portion
of the Company Disclosure Schedule specifically refers to another portion
thereof, identifying such other portion by section reference or similar specific
cross-reference.
4.1 Organization
and Qualification.
(a) The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the state of Delaware and has the requisite corporate power
and authority to carry on its business as it is now being
conducted. There is no pending or threatened proceeding for the
dissolution or liquidation of the Company.
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(b) The
Company (i) does not, directly or indirectly, own any interest in any
corporation, partnership, joint venture, limited liability company, or other
Person except for the subsidiary set forth on Schedule A.2 and (ii) is not
subject to any obligation or requirement to provide funds to or to make any
investment (in the form of a loan, capital contribution or otherwise) in or
to
any Person. For purposes of this Agreement, "Person" shall
mean any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, institution, government,
entity or any group comprised of one or more of the foregoing.
(c) The
Company is duly qualified or licensed to do business and is in good standing
in
each jurisdiction in which the nature of its business or the properties owned
or
leased by it makes such qualification or licensing necessary, except for any
such jurisdiction where the failure to so qualify or be licensed, individually
and in the aggregate for all such jurisdictions, would not reasonably be
expected to have a Material Adverse Effect. For purposes of this Agreement,
"Material Adverse Effect" means an action, event or occurrence if it has,
or could reasonably be expected to have, a material adverse effect on the
capitalization, financial condition or results of operations of the person
or
entity in question. Any item or event susceptible of measurement in
monetary terms which, when considered together with similar items or events,
does not exceed the amount of $25,000, shall not be considered a Material
Adverse Effect.
(d) The
Company has provided or will, promptly following the date of this Agreement,
provide to TPI complete and accurate copies of the Articles of Incorporation
and
Bylaws of the Company, as currently in effect, and minutes and other records
of
the meetings and other proceedings of the Board of Directors and shareholders
of
the Company. The Company is not in violation of any provisions of its
Articles of Incorporation or Bylaws.
4.2 Capitalization.
(a) The
authorized capital stock of Company consists of 10,000,000 shares of Common
Stock, $0.001 par value per share, of which 100,000 shares are issued and
outstanding. All issued and outstanding shares of Company Common
Stock are validly issued and outstanding, fully paid and nonassessable and
free
of preemptive rights. Other than the 10,000,000 shares of Company
Common Stock, (i) there are no shares of capital stock or other equity
securities of the Company outstanding and, (ii) there are no outstanding
options, warrants, subscription rights (including any preemptive rights), calls,
or commitments, or convertible notes or instruments of any character whatsoever
to which the Company is a party or is bound, requiring or which could require
the issuance, sale or transfer by the Company of any shares of capital stock
of
the Company or any securities convertible into or exchangeable or exercisable
for, or rights to purchase or otherwise acquire, any shares of capital stock
of
the Company. There are no stock appreciation, phantom stock or
similar rights relating to the Company.
(b) All
of
the shares of Company Common Stock as disclosed on Schedule A issued and
outstanding immediately prior to the Closing have been issued in compliance
with
applicable federal and state securities laws in reliance on exemptions from
registration or qualification thereunder.
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4.3 Authority. The
Company has the requisite corporate power and authority to enter into this
Agreement, to perform its obligations hereunder, and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby, have been duly authorized by all necessary corporate action
on the part of the Company. This Agreement has been duly executed and
delivered by the Company and constitutes a legal, valid and binding obligation
of the Company, enforceable against it in accordance with its
terms.
4.4 No
Conflict, Required Filings and Consents.
(a) The
execution and delivery of this Agreement and any instrument required hereby
to
be executed and delivered by the Company at the Closing does not, and the
performance of this Agreement by the Company will not, (i) conflict with or
violate the Articles of Incorporation or Bylaws of the Company; or (ii) conflict
with or violate any law, rule, regulation, order, judgment or decree applicable
to the Company or by which it or any of its properties is bound or affected;
or
(iii) result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default), or impair in any
material respect the Company's rights or materially alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of any note, bond,
mortgage, indenture, deed of trust, lease, permit, concession, franchise,
license, agreement or other instrument or obligation to which the Company is
a
party or to which the properties or assets of the Company are subject, or (iv)
result in the creation of any security interest, lien, claim, pledge, agreement,
limitation on voting rights, charge or other encumbrance of any material nature
(collectively, “Liens”) on any of the properties or assets of the Company
pursuant to any Company Agreement (as defined in Section 4.11
below).
(b) The
execution and delivery of this Agreement and any instrument required hereby
to
be executed and delivered by the Company at the Closing does not, and the
performance of this Agreement by the Company will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
court, administrative or regulatory agency or commission or other governmental
authority or instrumentality (whether domestic or foreign, a “Governmental
Entity”).
(c) The
consent of, or the delivery of notice to or filing with, any party to a Company
Agreement (as defined in Section 4.11 below) is not required for the execution
and delivery by the Company of this Agreement or the consummation of the
transactions contemplated by this Agreement.
4.5 Compliance;
Permits.
(a) The
Company is not in conflict with, or in default or violation of (and has not
received any notices of violation. with respect to), any law, rule, regulation,
order, judgment or decree applicable to the Company or by which it or any of
its
properties is bound or affected, and the Company has no knowledge of any such
conflict, default or violation thereunder, except in each case for any such
conflicts, defaults or violations that is not currently having or would not
have
a Material Adverse Effect on the Company.
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(b) The
Company holds all permits, licenses, easements, variances, exemptions, consents,
certificates, authorizations, registrations, orders and other approvals from
Governmental Entities that are material to the operation of the business of
the
Company as it is now being conducted (collectively, the “Company
Permits”). The Company Permits are in full force and effect, have
not been violated in any respect that is currently having or would have a
Material Adverse Effect on the Company, and no suspension, revocation or
cancellation thereof has been threatened and there is no action, proceeding
or
investigation pending or, to the Company's knowledge, threatened regarding
suspension, revocation or cancellation of any Company Permits, except where
the
suspension, revocation or cancellation of such Company Permits would not have
a
Material Adverse Effect on the Company.
4.6 Litigation. There
are no legal actions (a) pending or, to the knowledge of the Company, threatened
against the Company, its assets, or the transactions contemplated by this
Agreement or (b) pending or, to the knowledge of the Company, threatened against
any current employee, officer or director of the Company that in any way relates
to the Company, its assets or the transactions contemplated by this Agreement.
The Company is not subject to any order, judgment, writ, injunction or decree
of
any Governmental Entity.
4.7 Taxes. The
Company shall within 90 days of the Closing file all tax returns and reports
required to be filed by it (after giving effect to any filing extension properly
granted by a governmental entity having authority to do so) ("Company Tax
Return"). Each such Company Tax Return is true, correct and complete
in all material respects. Company has paid, within the time and
manner prescribed by law, all material taxes that are due and
payable. No Company Tax Return is the subject of any investigation,
audit or other proceeding by any federal, state or local tax
authority.
4.8 Labor
Matters.
(a) The
Company is in compliance in all material respects with all applicable laws
respecting employment and employment practices, terms and conditions of
employment and wages and laws, and is not engaged in any unfair labor
practices;
(b) There
are
no controversies pending or, to the knowledge of the Company, threatened,
between the Company and any of its respective employees, consultants or
independent contractors, which controversies have had or could reasonably be
expected to have a Material Adverse Effect on the Company;
(c) The
Company is not a party to any collective bargaining agreement or other labor
union contract applicable to persons employed by the Company, nor does the
Company know of any activities or proceedings of any labor union to organize
any
such employees; and
(d) The
Company has no knowledge of any labor disputes, strikes, slowdowns, work
stoppages, lockouts, or threats thereof, by or with respect to any employees
of,
or consultants or independent contractors to, the Company.
4.9 Benefit
Plans. The Company has not adopted and is not a party to any
bonus, pension, profit sharing, deferred compensation, incentive compensation,
stock ownership, stock purchase, stock option, phantom stock, retirement,
vacation, severance, disability, death benefit, hospitalization, medical or
other employee benefit plan, arrangement or understanding (whether or not
legally binding) providing benefits to any current or former employee, officer
or director of the Company or any person affiliated with the
Company.
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4.10 Financial
Statements. Attached to Section 4.10 of the Company Disclosure
Schedule are (i) the audited balance sheet of the Company as of December 31,
2006 (the “Audited Company Balance Sheet”), together with the related statements
of income and cash flows for each of the two fiscal years of the Company then
ended and for the cumulative period from the date of inception through December
31, 2006 (the “Audited Financial Statements”), all certified by Xxxxxxxx
& Company PA whose audit reports thereon are included therewith, and
(ii)
the unaudited balance sheet of the Company as of September 30, 2007 (the
"Company Balance Sheet"), together with the related statements of income
and cash flows for the nine months then ended and for the cumulative period
from
the date of inception through September 30, 2007 (together with the Audited
Financial Statements, the “Financial Statements”). Each of the
Financial Statements (including, in each case, any related notes thereto) (i)
was prepared in accordance with generally accepted accounting principles
(“GAAP”) applied on a consistent basis throughout the periods involved,
(ii) are complete and correct, and (iii) fairly presents the financial position
of the Company as of the dates thereof and the results of its operations and
cash flows and stockholder equity for the periods indicated. Except
as noted in the opinions contained in the Audited Financial Statements, such
Audited Financial Statements and opinions were rendered without qualification
or
exception and were not subject to any contingency. No event has
occurred since the preparation of the most recent Financial Statements that
would require a restatement of any of the Financial Statements under GAAP other
than by reason of a change in GAAP.
4.11 Contracts
and Commitments.
(a) Except
for the contracts, commitments, leases, licenses and agreements listed on
Section 4.11 of the Company Disclosure Schedule (the "Company
Agreements"), the Company is not party to or subject to:
(i) any
agreement (or group of related agreements) which requires future expenditures
by
the Company in excess of $5,000 or is otherwise material to the Company's
business;
(ii) any
material contract or agreement for the purchase or sale of any commodity,
product, material, supplies, equipment or other personal property, other than
purchase or sale orders entered into in the ordinary course of business
consistent with past practices;
(iii) any
employment, consulting or independent contractor agreements;
(iv) any
distributor, sales representative, sales agent, commission or similar agreement,
whether or not in writing;
(v) any
material license agreement (whether as licensor or licensee) or royalty
agreement;
6
(vi) any
agreement with any current or former stockholder, officer or director of the
Company, or any “affiliate” or “associate” of such persons (as such terms are
defined in the rules and regulations promulgated under the Securities Act),
including without limitation any agreement or other arrangement providing for
the furnishing of services by, rental of real or personal property from, or
otherwise requiring payments to, any such person;
(vii) any
agreement or other commitment with any person or entity containing covenants
limiting the freedom of the Company or any of the Company’s affiliates,
employees, directors, officers, consultants or agents to compete in any line
of
business or with any person or entity or in any geographical location or to
use
or disclose any information in their possession;
(viii) any
loan
agreement, indenture, note, bond, debenture, guarantee or any other document
or
agreement evidencing a capitalized lease obligation or indebtedness to any
person or any agreement of guaranty, indemnification or other similar commitment
with respect to the obligations or liabilities of any other Person;
(ix) any
agreement for the disposition of Company assets other than in the ordinary
course of business consistent with past practices;
(x) any
agreement for the acquisition of the business or shares of another party (except
repurchase rights in favor of the Company for shares of Company common stock
owned by any employee, officer, director, consultant, or advisor to the
Company);
(xi) any
contract or agreement concerning a partnership or joint venture with one or
more
Person;
(xii) any
lease
of real property;
(xiii) any
agreement which contains a fixed penalty or liquidated damages clause for late
performance or other default by the Company to the extent that such late
performance or default would have a Material Adverse Effect on the Company;
or
(xiv) any
other
agreement or contract (or group of related agreements or contracts) to the
extent not otherwise disclosed in the Company Disclosure Schedule, the
performance of which involves consideration paid by the Company in excess of
$5,000 in any one year period.
(b) Correct
and complete copies of all Company Agreements, including all amendments thereto,
have been delivered to TPI. The Company has not breached, is not in
default under, and has not received written notice of any breach of or default
under, any agreement required to be disclosed in Section 4.11 of the Company
Disclosure Schedule (each, a “Material Contract”). To the
Company’s knowledge, no other party to any Material Contract has breached or is
in default of any of its obligations thereunder to the extent that such breach
or default would have a Material Adverse Effect on the Company. Each
Material Contract is in full force and effect, except in any such case for
breaches, defaults or failures to be in full force and effect that do not
currently have or would not have a Material Adverse Effect on the Company.
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Each
Material Contract is a legal, valid and binding obligation of the Company
and
each of the other parties thereto, enforceable in accordance with its terms,
except that the enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in
effect relating to creditors' rights generally and (ii) general principles
of
equity.
(c) The
consent of, or the delivery of notice to or filing with, any party to a Material
Contract is not required for the execution and delivery by the Company of this
Agreement or the consummation of the transactions contemplated under the
Agreement.
4.12 Absence
of Certain Changes and Events. Since the date of the Audited
Company Balance Sheet, the Company has conducted its business in the ordinary
course consistent with past practice and, since such date, there has not
occurred:
(a) any
event, damage, destruction or loss, whether covered by insurance or not, which
has had or reasonably is expected to have a Material Adverse Effect on the
Company or its assets;
(b) any
entry
by the Company into a commitment or transaction material to the Company, which
is not in the ordinary course of business consistent with past
practice;
(c) any
change by the Company in accounting principles, methods or practices, except
insofar as may have been required by a change in GAAP;
(d) any
declaration, payment or setting aside for payment of any dividends or
distributions in respect to shares of Company Common Stock, or any redemption,
purchase or other acquisition of any shares of Company Common
Stock;
(e) any
cancellation of any debts or waiver or release of any right or claim of the
Company individually or in the aggregate material to the Company, whether or
not
in the ordinary course of business;
(f) any
revaluations by the Company of any of its assets or liabilities, including
without limitation, writing-off notes or accounts receivable;
(g) any
material increase in the rate or terms of compensation payable or to become
payable by the Company to any of its personnel or consultants; any bonus,
incentive compensation, service award or other benefit granted, made or accrued,
contingently or otherwise, for or to the credit of any Company personnel;
employee welfare, pension, retirement, profit-sharing or similar payment or
arrangement made or agreed to by the Company for any Company personnel except
for contributions in accordance with prior practice made to, and payments made
to employees under, plans and arrangements existing on the date of the Audited
Company Balance Sheet;
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(h) any
adoption of a plan of liquidation or resolutions providing for the liquidation,
dissolution, merger, consolidation or other reorganization of the Company,
other
than in connection with the transactions contemplated hereby;
(i) any
purchase, acquisition or sale by the Company of any assets, other than in the
ordinary course of business;
(j) any
amendment, cancellation or termination of any Material Contract, including,
without limitation, license or sublicense, or other instrument to which the
Company is a party or to which the Company or any of the assets of the Company
is bound;
(k) any
failure to pay when due any material obligation of the Company;
(l) any
failure to operate the business of the Company in the ordinary course with
an
effort to preserve the business intact, to keep available to the Company the
services of its personnel, and to preserve for the Company the goodwill of
its
customers and others having business relations with the Company except for
such
failures that would not have a Material Adverse Effect on the
Company;
(m) any
commitment to borrow money entered into by the Company, or any loans made or
agreed to be made by the Company, involving more than $10,000 individually
or
$25,000 in the aggregate (other than credit provided by suppliers or
manufacturers in the ordinary course of the Company's business consistent with
past practices);
(n) any
liabilities incurred by the Company involving $10,000 or more individually
and $25,000 or more in the aggregate, other than liabilities incurred in the
ordinary course of business consistent with past practices;
(o) any
payment, discharge or satisfaction of any material liabilities of the Company
or
any material capital expenditure of the Company, other than (i) the payment,
discharge or satisfaction in the ordinary course of business consistent
with prior practice of liabilities reflected or reserved against in the
Audited Financial Statements or incurred in the ordinary course of business
consistent with prior practice since the date of the Audited Company Balance
Sheet, and (ii) any capital expenditures involving $10,000 or less
individually and $25,000 or less in the aggregate;
(p) any
amendment of the Company's Articles of Incorporation or Company Bylaws;
or
(q) any
agreement by the Company to do any of the things described in the preceding
clauses (a) through (p) of this Section 4.12, other than as expressly
contemplated or provided for in this Agreement.
4.13 Properties,
Assets, Encumbrances; No Undisclosed Liabilities.
(a) The
Company has good, valid and marketable title to, a valid leasehold interest
in,
or valid license rights to, all the properties and assets which it purports
to
own, lease or license (real, personal and mixed, tangible and intangible),
including, without, limitation, all the properties and assets reflected in
the
Company Balance Sheet (except for personal property sold since the date of
the
Company Balance Sheet in the ordinary course of business consistent with past
practice), except as would not have a Material Adverse Effect on the Company,
and such properties and assets are all of the assets (whether tangible or
intangible) that are used or required for use in the operation of its business
as currently or proposed to be conducted.
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All
properties and assets reflected in the Company Balance Sheet are free and
clear
of all Liens, except for Liens reflected on the Company Balance Sheet and
Liens
for current taxes not yet due and other Liens that do not, individually or
in
the aggregate, materially detract from the value or impair the use of the
property or assets subject thereto. Section 4.13 of the Company
Disclosure Schedule contains a complete and accurate list of all leases pursuant
to which the Company leases from others material amounts of real or personal
property. Each such lease is in good standing, valid and effective in
accordance with its terms, and there is not under any such lease, any existing
material default or event of default (or event which with the giving of notice
or lapse of time, or both, would constitute a material
default).
(b) There
are
no liabilities of the Company, other than (i) liabilities disclosed or provided
for in the Company Balance Sheet, or (ii) liabilities incurred in the ordinary
course of business since the date of the Company Balance Sheet and which, if
existing, would not have a Material Adverse Effect on the
Company. There is no probable or reasonably possible loss contingency
(within the meaning of Statement of Financial Accounting Standards No. 5) known
to the Company which is not reflected in the Financial Statements (including
the
notes thereto).
4.14 Environmental
Matters.
(a) The
Company is in compliance in all material respects with all applicable
Environmental Laws (as defined below). The Company has not received
any communication from a Governmental Entity, citizens group, employee or other
person that alleges that the Company is not in full compliance with all
applicable Environmental Laws.
(b) There
is
no Environmental Claim (as defined below) pending against the Company or, to
the
Company's knowledge, threatened against any person whose liability for any
Environmental Claim the Company has or may have retained or assumed either
contractually or by operation of law.
(c) “Environmental
Claim” means any claim, action, cause of action, investigation or notice by
any person alleging potential liability arising out of, based on or resulting
from (i) the presence, or release into the environment, of any Material of
Environmental Concern at any location, whether or not owned by the Company,
or
(ii) circumstances forming the basis of any violation, or alleged violation,
of
any Environmental Law.
(d) “Environmental
Laws” means all federal, state, local and foreign laws and regulations
relating to pollution or protection or preservation of human health or the
environment including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata and natural resources, and including,
without limitation, all laws and regulations relating to emissions, discharges,
releases or threatened releases of Materials of Environmental Concern, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, containment (whether above ground or underground), disposal, transport
or handling of Materials of Environmental Concern, or the preservation of the
environment or mitigation of adverse effects thereon and all laws and
regulations with regard to recordkeeping, notification, disclosure and reporting
requirements respecting Materials of Environmental Concern.
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(e) “Materials
of Environmental Concern” means all pollutants, containments, toxic or
hazardous substances, materials and wastes, petroleum and petroleum products,
asbestos and asbestos-containing materials, polychlorinated biphenyls, radon
or
lead-based paints and materials.
4.15 Intellectual
Property.
(a) “Intellectual
Property” is defined as all intellectual property in which Company has any
right, title, or interest (including a licensed right other than rights to
licensed software that is generally commercially available) or which has been,
is being, or is expected to be used, exploited, or commercialized by Company
in
the conduct of its business, including but not limited to all “Patents”
(hereinafter defined), all “Marks” (hereinafter defined), all “Copyrights”
(hereinafter defined), and all “Confidential Information” (hereinafter
defined).
(1) “Patents”
is defined to include all concepts, ideas, designs, formulas, inventions
(whether patentable or not), techniques, all U.S. and foreign patent
applications, and all U.S. and foreign patents.
(2) “Marks”
is defined to include all words, names, logos, symbols, trade names, source
indicating indicia, trade dress, trademarks, marks, U.S. and foreign
applications to register marks, and U.S. and foreign registrations.
(3) “Copyrights”
is defined to include all copyrights, U.S. and foreign, whether registered
or
not, all copyright applications, all copyright registrations, including but
not
limited to the copyrights in Company's business documents and files, customer
documents and files, software, product designs and packaging, advertising,
promotional material, and software products (whether developed or in
development).
(4) “Confidential
Information” is defined to include, but not limited to, confidential
information, financial information, business trade secrets, marketing
information, financial and technical trade secrets, techniques, processes,
and
know-how.
(b) Section
4.15(b) of the Company Disclosure Schedule contains a complete and accurate
list
and description of (i) Intellectual Property which is material to the
business of the Company; (ii) all patent applications, issued patents,
trademark applications, trademark registrations, copyright applications, and
copyright registrations, (iii) all licenses of Intellectual Property to the
Company (other than licensed software that is generally commercially available)
which are material to the business of Company; and (iv) all licenses and other
agreements, written or not, from the Company to any third party granting any
rights or interests in the Intellectual Property.
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(c) Except
as
set forth in Section 4.15(c) of the Company Disclosure Schedule:
(1) Company
is the sole owner, free and clear of any Lien or encumbrance, and without the
payment of any monies or royalty except with respect to off-the-shelf software,
of the Intellectual Property;
(2) Company
has taken, and will continue to take, all actions which are necessary or
advisable to acquire and protect the Intellectual Property, consistent with
prudent commercial practices;
(3) Company's
rights in the Intellectual Property are valid and enforceable;
(4) Company
has received no demand, claim, notice or inquiry from any person in respect
of
the Intellectual Property which challenges, threatens to challenge or inquires
as to whether there is any basis to challenge, the validity of, the rights
of
the Company in, or the right of the Company to use, any such Intellectual
Property, and the Company knows of no basis for any such challenge;
(5) Company
is not in violation or infringement of, and has not violated or infringed,
any
proprietary rights of any other person;
(6) no
person has or is infringing, misappropriating, or making unauthorized use of
any
Intellectual Property;
(7) except
on an arm's-length basis for value and other commercially reasonable terms,
the
Company has not licensed, consented or acquiesced to the taking or use of any
Intellectual Property by any person;
(8) all
Marks and Copyrights which are material to the business of the Company were
either (a) authored by regular employees of Company within the scope of their
employment and Company was thus the original author pursuant to the work made
for hire doctrine, or (b) authored by independent contractors subject to
enforceable non-disclosure and assignment agreements;
(9) the
execution and consummation of this Agreement will not adversely impair or impact
the value of or TPI's future enjoyment and exploitation of the Intellectual
Property;
(10) all
current or former Company personnel, including partners, directors, officers,
employees, agents, consultants and contractors, who have contributed to or
participated in the conception, creation, or development of any Intellectual
Property have executed effective and proper agreements containing non-disclosure
and assignment provisions for the benefit of Company. True and
complete copies of these agreements have been delivered to TPI. After
giving effect to the transactions contemplated herein, no current or former
personnel of Company will possess any right, title or interest in the
Intellectual Property; and
12
(11) Company
is not in breach or violation of any agreement relating to any Intellectual
Property which would materially impair Company's rights, title, or interest
in
the Intellectual Property or agreement.
4.16 Insurance. Section
4.16 of the Company Disclosure Schedule contains a true, accurate and complete
list of all policies or binders of fire, liability, title, workers' compensation
and other forms of insurance (showing as to each policy or binder the carrier,
policy number, coverage limits, expiration dates, annual premiums and a general
description of the type of coverage provided) maintained by the Company on
the
business, assets or personnel of the Company. All of such
policies are sufficient for compliance with all requirements of all contracts
to
which the Company is a party and all state, federal, local or foreign laws,
rules and regulations applicable to the Company. The Company has paid
all premiums due on such insurance policies and is in compliance with and not
in
default under any of such policies or binders. The Company has not
failed to give any notice or to present any claim under any such policy or
binder in a due and timely fashion when the effect of such default or such
failure would be to render a material claim uninsured. The Company
has not received any notice from any insurer advising of reduced coverage or
increased premiums on existing policies or binders. There are no
outstanding unpaid claims under any such policies or binders. Such
policies and binders are in full force and effect, and the Company has delivered
true and correct copies of such policies and binders to TPI.
4.17 Equipment. All
of the tangible personal property of the Company that is material, either
individually or in the aggregate, to the operation of the Company's business
is
in good working order, operating condition and state of repair, ordinary wear
and tear excepted.
4.18 Interested
Party Transactions. No stockholder, officer or director of the
Company, or any person with whom any such stockholder, officer or director
has
any direct or indirect relation by blood, marriage or adoption, or any entity
in
which any such person owns any beneficial interest (other than a publicly-held
corporation whose stock is traded on a national securities exchange or in the
over-the-counter market and less than 1% of the stock of which is beneficially
owned by all of such persons), has any interest in (i) to the Company’s
knowledge, any contract, arrangement or understanding with, or relating to,
the
business or operations of the Company that could reasonably be expected to
result in a liability or obligation of the Company, (ii) any loan, arrangement,
understanding, agreement or contract for or relating to indebtedness with the
Company, (iii) any material property (real, personal or mixed), tangible or
intangible, used or currently intended to be used in the business or operations
of the Company, (iv) to the Company’s knowledge, any business or entity that
competes with the Company, or (v) to the Company’s knowledge, any other
transaction that would be required to be reported as a Certain Relationship
or
Related Transaction, pursuant to Item 404, or any other provisions of,
Regulation S-B promulgated by the SEC, if the Company filed such
reports.
4.19 Change
of Control Agreements. The Company has no plans, programs or
agreements to which it is a party, or to which it is subject, pursuant to which
payments (or acceleration of benefits) may be required upon, or may become
payable directly or indirectly as a result of, any change of control of the
Company.
13
4.20 Books
and Records. The books of account, minute books (including,
without limitation, all actions of the shareholders of the Company, the board
of
directors of the Company and all committees of the board of directors of the
Company) stock record books and other records of the Company are complete and
correct in all material respects and have been maintained in accordance with
sound business practices, including an adequate system of internal controls,
except for such failures with respect thereto as do not have a Material Adverse
Effect on the Company.
4.21 Brokers. Except
as described in Section 4.21 of the Company Disclosure Schedule, no broker,
finder or investment banker is entitled to any brokerage, finder's or other
fee
or commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company or any of the
Company Shareholders.
4.22 Disclosure. The
representations and warranties of the Company herein, or in any document,
exhibit, statement, certificate or schedule furnished by or on behalf of the
Company to TPI as required by this Agreement, do not contain and will not
contain any untrue statement of a material fact and do not omit and will not
omit to state any material fact necessary in order to make the statements herein
or therein, in light of the circumstances under which they were made, not
misleading. There are no material facts or circumstances relating to
the Company which have not been disclosed herein to TPI.
ARTICLE
V
SEVERAL
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
Except
as
set forth in the disclosure schedule attached hereto as Schedule C (the
“Shareholder Disclosure Schedule”), each Shareholder, by virtue of signing this
Agreement, severally but not jointly, represents and warrants to TPI that the
statements contained in this Article V are true, correct and complete as of
the
date of this Agreement (or, if made as of a specified date, as of such date)
and
will be true, correct and complete as of the Closing Date (or, if made as of
a
specified date, as of such date).
5.1 Ownership
of Shares. The Shareholder is the sole record and beneficial
owner of the shares of Company Common Stock set forth after such Shareholder’s
name on Schedule A hereto and has no other ownership interest or right to
acquire any shares of capital stock of the Company or securities convertible
into capital stock of the Company. Such Shareholder’s shares of Company Common
Stock are not subject to any encumbrance, any rights of first refusal of any
kind, options, preemptive rights, voting arrangements or other rights of third
parties to acquire any of such shares. The Shareholder has good and
valid title to, and has the unrestricted (except for restrictions imposed
generally under applicable federal and state securities laws) right to transfer
and sell such Shareholder’s shares of Company Common Stock to TPI in accordance
with the terms of this Agreement.
5.2 Authority. The
Shareholder has the power and authority to enter into and to perform his, her
or
its obligations under this Agreement and each of the agreements, certificates
and documents required to be delivered by such Shareholder pursuant to the
terms
of this Agreement.
14
The
execution, delivery and performance of this Agreement, and the consummation
of
the transactions contemplated hereby, have been duly authorized by all necessary
action on the part of such Shareholder. The Agreement constitutes the
legal, valid and binding obligation of the Shareholder, enforceable against
such
Shareholder in accordance with its terms, subject to the effect, if any, of
(a)
applicable bankruptcy and other similar laws affecting the rights of creditors
generally and (b) rules of law and equity governing specific performance,
injunctive relief and other equitable remedies.
5.3 Conflicts. Neither
the execution and delivery by the Shareholder of this Agreement nor the
performance by such Shareholder of his, her or its obligations hereunder will
conflict with any contract, agreement or arrangement (whether or not in writing)
to which such Shareholder is a party or any law, rule, regulation, order or
injunction applicable to such Shareholder. There are no legal
proceedings pending or, to the best knowledge of the Shareholder, threatened
against such Shareholder that would prevent the consummation of the transactions
contemplated by this Agreement. No consent, notice or approval is
required of any person in connection with such Shareholder’s execution, delivery
and performance of this Agreement or the consummation of the transactions
contemplated hereby.
5.4 Investment
Representations.
(a) Disclosure
of Information. The Shareholder has had an opportunity to ask
questions and receive answers from TPI’s management regarding the business,
properties, prospects and financial condition of TPI. The Shareholder
is aware of the risks of investing in TPI and of holding securities in companies
whose stock is traded on the OTC Bulletin Board.
(b) Accredited
Investor. Shareholder is an “accredited investor” as
that term is defined in Rule 501(a) of Regulation D promulgated under the
Securities Act. Shareholder is experienced in evaluating and
investing in securities of companies in a similar stage of development to TPI
and has sufficient knowledge and experience in financial and business matters
to
assess the relative merits and risks of an investment in TPI, and can bear
the
economic risk of this investment.
(c) Purchase
Entirely for Own Account. This Agreement is made with the Company
and Shareholder in part in reliance upon the Shareholder's representation to
TPI, which by the Shareholder's execution of this Agreement such Shareholder
hereby confirms, that the TPI Shares to be acquired by the Shareholder will
be
acquired for investment for the Shareholder's own account, not as a nominee
or
agent, and not with a view to the resale or distribution of any part thereof
(other than in accordance with applicable securities laws), and that Shareholder
has no present intention of selling, granting any participation in, or otherwise
distributing the same except to an entity which is owned or controlled by the
Shareholder and which is an accredited investor. By executing this
Agreement, the Shareholder further represents that he, she or it does not
presently have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participation to such person or to any third
person, with respect to any of the TPI Shares.
(d) Limited
Public Market. The Shareholder understands that a liquid public
market does not now exist for any of the TPI Common Stock and that TPI has
not
made any assurances that a liquid public market will ever exist for the TPI
Common Stock.
15
5.5 Restricted
Securities. The Shareholder understands that the TPI Shares have
not been, and will not be, registered under the Securities Act by reason of
a
specific exemption from the registration provisions of the Securities Act which
depends upon, among other things, the bona fide nature of the investment intent
and the accuracy of the Shareholder’s representations as expressed
herein. The Shareholder understands that the TPI Shares to be
received by Shareholder are “restricted securities” under applicable U.S.
federal and state securities laws and regulations, and that pursuant to these
laws, the Shareholder must hold the TPI
Shares indefinitely unless they are registered with the
Securities and Exchange Commission and qualified by state authorities or an
exemption from such registration and qualification requirements is
available. The Shareholder acknowledges that TPI has no obligation to
register or qualify the TPI Shares for resale. The Shareholder
further acknowledges that if an exemption from registration or qualification
is
available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the TPI Shares,
and requirements relating to TPI which are outside of the Shareholder's control
and which TPI is under no obligation, and may not be able, to
satisfy.
5.6 Legends. It
is understood that the TPI Shares, and any securities issued in respect thereof
or exchange therefor, may bear the following legend or a legend of similar
import and any legend required by the Blue Sky laws of any state of the United
States to the extent such laws are applicable to the shares represented by
the
certificate so legended:
“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD OR
OTHERWISE DISTRIBUTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED
THERETO OR AN OPINION OF COUNSEL IN A FORM REASONABLY SATISFACTORY TO THE ISSUER
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND LAWS.”
ARTICLE
VI
REPRESENTATIONS
AND WARRANTIES OF TPI
Except
as
set forth in the written disclosure schedule attached hereto as Schedule D
(the
“TPI Disclosure Schedule”), TPI represents and warrants to the Company and the
Shareholders that the statements contained in this Article VI are true, correct
and complete as of the date of this Agreement (or if made as of a specified
date, as of such date) and will be true, correct and complete as of the Closing
Date (or, if made as of a specified date, as of such date).
6.1 Organization
and Qualification.
(a) TPI
is a
corporation duly organized, validly existing and in good standing under the
laws
of the state of Nevada whose fiscal year end is September 30. TPI has
the requisite corporate power and authority to carry on its business as it
is
now being conducted.
16
(b) TPI
(i)
does not, directly or indirectly, own any interest in any corporation,
partnership, joint venture, limited liability company, or other Person and
(ii)
is not subject to any obligation or requirement to provide funds to or to make
any investment (in the form of a loan, capital contribution or otherwise) in
or
to any Person.
(c) TPI
is
duly qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the properties owned or
leased by it makes such qualification or licensing necessary, except for any
such jurisdiction where the failure to so qualify or be licensed, individually
and in the aggregate for all such jurisdictions, would not reasonably be
expected to have a Material Adverse Effect.
(d) TPI
has
provided or will, promptly following the date of this Agreement, provide to
Company complete and accurate copies of the Articles of Incorporation and Bylaws
of TPI, as currently in effect, and minutes and other records of the meetings
and other proceedings of the Board of Directors and shareholders of
TPI. TPI is not in violation of any provisions of its Articles of
Incorporation or Bylaws.
6.2 Capitalization. The
authorized capital stock of TPI consists of (i) 980,000,000 shares of TPI Common
Stock, $0.001 par value per share, and (ii) 5,000,000 shares of preferred stock,
$0.001 par value per share. Immediately prior to the Closing (after
giving effect to the cancellation of 23,275,000 shares of TPI Common Stock
contemplated by Section 8.11 of this Agreement), the issued and outstanding
capital stock of TPI will consist entirely of (i) 22,225,000 shares of TPI
Common Stock and (ii) no shares of preferred stock. All issued and
outstanding shares of TPI Common Stock are validly issued and outstanding,
fully
paid and nonassessable and free of preemptive rights. Other than such
shares, there are no shares of capital stock or other equity securities of
TPI
outstanding, and immediately prior to the Closing, there will be no outstanding
options, warrants, subscription rights (including any preemptive rights), calls,
or commitments, or convertible notes or instruments of any character whatsoever
to which TPI is a party or is bound, requiring or which could require the
issuance, sale or transfer by TPI of any shares of capital stock of TPI or
any
securities convertible into or exchangeable or exercisable for, or rights to
purchase or otherwise acquire, any shares of capital stock of
TPI. There are no stock appreciation, phantom stock or similar rights
relating to TPI.
6.3 Authority.
(a) TPI
has
the requisite corporate power and authority to enter into this Agreement, to
perform its obligations hereunder, and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by
TPI and the consummation by TPI of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of
TPI. This Agreement has been duly executed and delivered by TPI and
constitutes a legal, valid and binding obligation of TPI, enforceable against
it
in accordance with its terms.
17
(b) The
execution and delivery by TPI of this Agreement does not, and the consummation
of the transactions contemplated thereby will not, (i) conflict with, or result
in a violation of, any provision of the Articles of Incorporation or Bylaws
of
TPI, (ii) constitute or result in a breach of or default (or an event which
with
notice or lapse of time, or both, would constitute a default) under, or result
in the termination or suspension of, or accelerate the performance required
by,
or result in a right of termination, cancellation or acceleration of any
obligation or a loss of a benefit under, any note, bond, mortgage, indenture,
deed of trust, lease, permit, concession, franchise, license, agreement or
other
instrument or obligation to which TPI is a party or to which the properties
or
assets of TPI are subject, (iii) create any Lien upon any of the properties
or
assets of TPI, or (iv) constitute, or result in, a violation of any law
applicable to TPI or any of the properties or assets of TPI.
(c) No
consent, approval, order or authorization of, notice to, registration or filing
with any governmental authority or other person is necessary in connection
with
the execution and delivery of this Agreement by TPI or the consummation by
TPI
of the transactions contemplated by this Agreement, except for (i) the filing
of
an Information Statement with the SEC pursuant to Rule 14(f) of the Securities
Exchange Act of 1934 (the “Exchange Act”) regarding a change in control of the
Board of Directors of TPI, (ii) the filing of a Form D and related state
securities law notices in connection with the issuance of the TPI Shares to
the
Company Shareholders hereunder, and (iii) the filing of a current report on
form
8-K with the Securities and Exchange Commission (the "SEC") announcing
completion of the transactions contemplated by this Agreement.
6.4 SEC
Filings; Financial Statements.
(a) TPI
has
filed and made available to the Company all forms, reports, schedules,
statements and other documents required to be filed by TPI under the Exchange
Act with the SEC since September 30, 2006 (collectively, the "TPI SEC
Reports"). The TPI SEC Reports (i) at the time filed, complied in
all material respects with the applicable requirements of the Exchange Act
and
the rules and regulations promulgated thereunder, and (ii) with respect to
any
TPI SEC Reports filed on or after September 30, 2006, did not at the time they
were filed (or if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing) contain any untrue statement of
a
material fact or omit to state a material fact required to be stated in such
TPI
SEC Reports or necessary in order to make the statements in such TPI SEC
Reports, in light of the circumstances under which they were made, not
misleading.
(b) Each
of
the financial statements (including, in each case, any related notes), contained
in the TPI SEC Reports, including any TPI SEC Reports filed after the date
of
this Agreement until the Closing, complied, as of its respective date, in all
material respects with all applicable accounting requirements and the published
rules and regulations of the Commission with respect thereto, was prepared
in
accordance with GAAP applied on a consistent basis throughout the periods
involved and fairly presented the financial position of TPI as at the respective
dates and the results of its operations and cash flows for the periods
indicated, except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments which were not or are
not
expected to be material in amount.
(c) Between
September 30, 2007 and the date hereof, except as disclosed in the TPI SEC
Reports and other than as contemplated by this Agreement, there has not been
any
change in the business or operations of TPI that has had or reasonably would
be
expected to have a Material Adverse Effect on TPI.
18
6.5 Litigation. There
are no legal actions (a) pending or, to the knowledge of TPI, threatened against
TPI or the transactions contemplated by this Agreement or (b) pending or, to
the
knowledge of TPI, threatened against any current employee, officer or director
of TPI that, in any way relates to TPI. TPI is not subject to any
order, judgment, writ, injunction or decree of any governmental
authority.
6.6 Taxes. TPI
has timely filed all material tax returns and reports required to be filed
by it
(after giving effect to any filing extension properly granted by a governmental
entity having authority to do so) ("TPI Tax Return"). Each such TPI
Tax Return is included in Section 6.6 of the TPI Disclosure Schedule and is
true, correct and complete in all material respects. TPI has paid,
within the time and manner prescribed by law, all material taxes that are due
and payable. No TPI Tax Return is the subject of any known
investigation, audit or other proceeding by any federal, state or local tax
authority.
6.7 No
Employees; Labor Matters. Other than officers of TPI, TPI has no
employees. No unfair labor practice, or race, sex, age, disability or
other discrimination, complaint is pending, nor is any such complaint, to the
knowledge of TPI, threatened against TPI before the National Labor Relations
Board, Equal Employment Opportunity Commission or any other governmental
authority, and no grievance is pending, nor is any grievance, to the knowledge
of TPI, threatened against TPI.
6.8 Contracts
and Commitments.
(a) Except
for this Agreement, and the agreements and transactions specifically
contemplated by this Agreement, TPI is not a party to or subject
to:
(i) any
agreement or other commitments requiring any payments or performance of services
by TPI;
(ii) any
agreement or other commitments containing covenants limiting the freedom of
TPI
to compete in any line of business or with any Person or in any geographic
location or to use or disclose any information in its possession;
(iii) any
license agreement (as licensor or licensee) or royalty agreement;
(iv) any
agreement of indemnification, other than indemnification rights granted in
the
Bylaws or Articles of Incorporation of TPI;
(v) any
agreement or undertaking pursuant to which TPI is: (A) borrowing or is entitled
to borrow any money; (B) lending or has committed itself to lend any money;
or
(C) a guarantor or surety with respect to the obligations of any Person;
and
(vi) any
leases of real property.
19
(b) TPI
is
not in violation or breach of any material contract to which it is a
party. There does not exist any event or condition that, after notice
or lapse of time or both, would constitute an event of default or breach under
any material contract on the part of TPI or, to the knowledge of TPI, any other
party thereto or would permit the modification, cancellation or termination
of
any material contract or result in the creation of any lien upon, or any person
acquiring any right to acquire, any assets of TPI. TPI has not
received in writing any claim or threat that TPI has breached any of the terms
and conditions of any material contract.
(c) The
consent of, or the delivery of notice to or filing with, any party to a material
contract to which TPI is a party is not required for the execution and delivery
by TPI of this Agreement or the consummation of the transactions contemplated
under the Agreement.
6.9 Brokers. Except
as described in Section 6.9 of the TPI Disclosure Schedule, no broker, finder
or
investment banker is entitled to any brokerage, finder’s or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of TPI.
6.10 Disclosure. The
representations and warranties of TPI herein do not contain and will not contain
any untrue statement of a material fact and do not omit and will not omit to
state any material fact necessary in order to make the statements herein or
therein, in light of the circumstances under which they were made, not
misleading. There are no material facts or circumstances relating to
TPI which have not been disclosed to Company herein.
ARTICLE
VII
PRE-CLOSING
COVENANTS
7.1 Operation
of TPI.
(a) Except
as
specifically provided in this Agreement, between the date of this Agreement
and
the Closing Date, TPI shall:
(i) maintain
its books of account and records in the usual and ordinary manner, and in
conformity with its past practices;
(ii) pay
accounts payable and other obligations when they become due and payable in
the
ordinary course of business consistent with past practices except to the extent
disputed in good faith;
(iii) conduct
its business in the ordinary course consistent with past practices, or as
required by this Agreement;
(iv) pay
all
taxes when due and file all TPI Tax Returns on or before the due date therefor
except to the extent disputed in good faith;
(v) make
appropriate provisions in its books of account and records for taxes relating
to
its operations during such period (regardless of whether such taxes are required
to be reflected in a tax return having a due date on or prior to the Closing
Date);
(vi) withhold
all taxes required to be withheld and remitted by or on behalf of TPI in
connection with amounts paid or owing to any TPI personnel or other person,
and
pay such taxes to the proper governmental authority or set aside such taxes
in
accounts for such purpose;
20
(vii) make
all
required filings on a timely basis with the SEC or any other state, federal
or
local regulatory body, including, without limitation, making all filings under
the Exchange Act, on a timely basis so as to maintain TPI's status as a
reporting company in good standing under the Exchange Act; and
(viii) comply
with the listing requirements of, and take all steps reasonably necessary to
maintain TPI's listing on, the OTC Bulletin Board.
(b) Without
the prior written consent of the Company and except as contemplated by this
Agreement, between the date of this Agreement and the Closing Date (or
termination of this Agreement), TPI shall not:
(i) grant
any
increase in the compensation payable, or to become payable, to any TPI personnel
or enter into any bonus, insurance, pension, severance, change-in-control or
other benefit plan, payment, agreement or arrangement for or with any TPI
personnel, except as consistent with past practices in the ordinary course
of
business;
(ii) borrow
or
agree to borrow any funds, incur any indebtedness or directly or indirectly
guarantee or agree to guarantee the obligations of others, or draw or borrow
on
any lines of credit that may be available to TPI;
(iii) except
as
specifically contemplated by this Agreement, enter into any material agreement,
contract, lease or other commitment;
(iv) place
or
allow to be placed a lien on any of the assets of TPI;
(v) except
as
specifically contemplated by this Agreement, cancel, discount or otherwise
compromise any material indebtedness owing to TPI or any claims which TPI may
possess or waive any rights of material value;
(vi) sell
or
otherwise dispose of any assets of TPI, except in the ordinary course of
business consistent with past practices;
(vii) commit
any act or omit to do any act which will cause a breach of this Agreement or
any
other material agreement, contract, lease or commitment;
(viii) knowingly
violate any law or governmental approval, including, without limitation any
federal or state securities laws;
(ix) make
any
loan, advance, distribution or payment of any type or to any Person other than
as specifically contemplated by this Agreement;
(x) amend
its
Articles of Incorporation or Bylaws;
21
(xi) merge
or
consolidate with, or agree to merge or consolidate with, or purchase
substantially all of the assets of, or otherwise acquire any business or any
Person or division thereof;
(xii) make
any
tax election or settle or compromise any tax liability other than in the
ordinary course of business consistent with past practices; or
(xiii) take
any
action or series of actions that results in or is likely to result in (i) the
delisting of the TPI Common Stock from trading on the OTC Bulletin Board, or
(ii) TPI losing its status as a reporting company in good standing under the
Exchange Act.
7.2 Operation
of Company.
(a) Except
as
specifically provided in this Agreement, between the date of this Agreement
and
the Closing Date, the Company shall:
(i) maintain
its books of account and records in the usual and ordinary manner, and in
conformity with its past practices;
(ii) pay
accounts payable and other obligations when they become due and payable in
the
ordinary course of business consistent with past practices except to the extent
disputed in good faith;
(iii) conduct
its business, if any, in the ordinary course consistent with past practices,
or
as required by this Agreement;
(iv) pay
all
taxes when due and file all Company Tax Returns on or before the due date
therefor except to the extent disputed in good faith;
(v) make
appropriate provisions in its books of account and records for taxes relating
to
its operations during such period (regardless of whether such taxes are required
to be reflected in a tax return having a due date on or prior to the Closing
Date); and
(vi) withhold
all taxes required to be withheld and remitted by or on behalf of the Company
in
connection with amounts paid or owing to any Company personnel or other person,
and pay such taxes to the proper governmental authority or set aside such taxes
in accounts for such purpose.
(b) Without
the prior written consent of TPI, between the date of this Agreement and the
Closing Date (or termination of this Agreement), the Company shall
not:
(i) except
contemplated by this Agreement, issue or promise to issue any capital stock
or
any options, warrants or other rights to subscribe for or purchase any capital
stock or any securities convertible into or exchangeable or exercisable for,
or
rights to purchase or otherwise acquire, any shares of the capital stock of
the
Company;
22
(ii) declare
or pay any dividends on or make any other distributions (whether in cash, stock
or property) in respect of any of its capital stock, or split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of
its
capital stock, or repurchase or otherwise acquire, directly or indirectly,
any
shares of its capital stock;
(iii) enter
into any material contract or commitment, or amend or otherwise modify or waive
any of the terms of any of its material contracts, other than in the ordinary
course of business consistent with past practice, or violate or terminate any
such material contracts;
(iv) transfer,
assign or license to any person or entity any rights to its intellectual
property other than in the ordinary course of business consistent with past
practice;
(v) enter
into or amend any agreements pursuant to which any other party is granted
exclusive marketing or other exclusive rights of any type or scope with respect
to any of its products or intellectual property;
(vi) adopt
or
amend any employee benefit or stock purchase or option plan;
(vii) except
as
may be required or reasonably necessary in order to complete the transactions
contemplated by this Agreement, agree to borrow any funds, incur any
indebtedness or directly or indirectly guarantee or agree to guarantee the
obligations of others, or draw or borrow on any lines of credit that may be
available to Company;
(viii) place
or
allow to be placed a lien or encumbrance on any of the assets of the
Company;
(ix) pay,
discharge or satisfy in an amount in excess of $5,000 in any one case or $30,000
in the aggregate, any claim, liability or obligation (absolute, accrued,
asserted or unasserted, contingent or otherwise) arising other than in the
ordinary course of business, other than the payment, discharge or satisfaction
of liabilities reflected or reserved against in the Company's financial
statements;
(x) make
any
capital expenditures, capital additions or capital improvements except in the
ordinary course of business and consistent with past practice;
(xi) materially
reduce the amount of any material insurance coverage provided by existing
insurance policies;
(xii) terminate
or waive any right of substantial value;
(xiii) commence
a lawsuit other than (1) for the routine collection of bills, (2) in such cases
where it in good faith determines that failure to commence suit would result
in
the material impairment of a valuable aspect of its business, provided that
it
consults with TPI prior to the filing of such a suit, or (3) for a breach of
this Agreement;
23
(xiv) sell,
lease, license or otherwise dispose of or encumber any of its properties or
assets which are material, individually or in the aggregate, to its business,
except in the ordinary course of business consistent with past
practice;
(xv) commit
any act or omit to do any act which will cause a breach of this Agreement or
any
other material agreement, contract, lease or commitment to which the Company
is
party;
(xvi) violate
any law or governmental approval, including, without limitation any federal
or
state securities laws;
(xvii) make
any
loan, advance, distribution or payment of any type or to any Person other than
as contemplated by this Agreement;
(xviii) amend
its
Articles of Incorporation or Bylaws;
(xix) except
as
contemplated by this Agreement, consolidate with, or agree to merge or
consolidate with, or purchase substantially all of the assets of, or otherwise
acquire any business or any Person or division thereof;
(xx) make
any
tax election or settle or compromise any tax liability other than in the
ordinary course of business consistent with past practices;
(xxi) lease
or
purchase or agree to lease or purchase any assets or properties; or
(xxii) take,
or
agree in writing or otherwise to take, any action which would make any of its
representations or warranties contained in this Agreement untrue or incorrect
in
any material respect or prevent it from performing or cause it not to perform
its covenants hereunder in any material respect.
ARTICLE
VIII
ADDITIONAL
AGREEMENTS
8.1 Access
to Information.
(a) From
the
date hereof to the Closing Date, Company shall afford, and shall cause its
officers, directors, employees, representatives and agents to afford, to TPI
and
to the officers, employees and agents of TPI reasonable access during normal
business hours to Company's officers, employees, agents, representatives,
properties, books, records and contracts, and shall furnish to TPI all
financial, operating and other data and information as TPI, through its agents,
officers, employees or other representatives, may reasonably
request.
24
(b) From
the
date hereof to the Closing Date, TPI shall afford, and shall cause its officers,
directors, employees, representatives and agents to afford, to Company and
to
the officers, employees and agents of Company reasonable access during normal
business hours to TPI's officers, employees, agents, representatives,
properties, books, records and contracts, and shall furnish to Company all
financial, operating and other data and information as Company, through its
agents, officers, employees or other representatives, may reasonably
request.
(c) No
investigation pursuant to Section 8.1(a) shall affect any representations or
warranties of the Parties herein or the conditions to the obligations of the
Parties.
8.2 Expenses
and Taxes. Each of the Parties shall pay their respective costs
incurred in connection with the preparation, negotiation, execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby,
including, without limitation, the fees of the attorneys, accountants and
advisors.
8.3 News
Releases. Except as otherwise required by law or the rules of the
SEC or NASD, so long as this Agreement is in effect, TPI and the Company will
not, and will not permit any of their respective affiliates or representatives
to, issue or cause the publication of any press release or make any other public
announcement with respect to the transactions contemplated by this Agreement
without the consent of the other party, which consent shall not be unreasonably
withheld or delayed. Subject to the foregoing, TPI and the Company
will cooperate with each other in the development and distribution of all press
releases and other public announcements with respect to this Agreement and
the
transactions contemplated hereby, and will furnish the other with drafts of
any
such releases and announcements as far in advance as reasonably
possible.
8.4 Additional
Agreements. Subject to the terms and conditions of this
Agreement, each Party agrees to use all reasonable efforts to take, or cause
to
be taken, all action and to do, or cause to be done, all things necessary,
proper or advisable under applicable law to consummate and make effective the
transactions contemplated by this Agreement. If at any time after the
Closing Date any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and directors of each such
corporation shall take all such necessary or desirable action.
8.5 Notification
of Certain Matters.
(a) Company
shall give prompt notice to TPI of any material inaccuracy in any representation
or warranty made by it herein, or any material failure of Company to comply
with
or satisfy any covenant, condition or agreement to be complied with or satisfied
by Company under this Agreement; provided, however, that no such notification
shall affect the representations or warranties or covenants or agreements of
Company or the conditions to the obligations of TPI hereunder.
(b) TPI
shall
give prompt notice to Company of any material inaccuracy in any representation
or warranty made by it herein, or any material failure of TPI to comply with
or
satisfy any covenant, condition or agreement to be complied with or satisfied
by
it under this Agreement; provided, however, that no such notification shall
affect the representations or warranties or covenants or agreements of TPI
or
the conditions to the obligations of Company hereunder.
25
(c) Company
and TPI shall each promptly advise the other orally and in writing of any change
or event having, or which, insofar as can reasonably be foreseen, in the future
would have, a Material Adverse Effect or any adverse effect on the right or
ability of any Party to enter into and complete the transactions contemplated
hereby.
8.6 Confidentiality.
(a) Each
Party shall hold, and shall cause its officers, employees, agents and
representatives, including, without limitation, attorneys, accountants,
consultants and financial advisors who obtain such information to hold, in
confidence, and not use for any purpose other than evaluating the transactions
contemplated by this Agreement, any confidential information of another Party
obtained through the investigations permitted hereunder, which for the purposes
hereof shall not include any information which (i) is or becomes generally
available to the public other than as a result of disclosure by a Party or
one
of its affiliates in violation of its obligations under this subsection, (ii)
becomes available to a Party on a nonconfidential basis from a source, other
than the Party which alleges the information is confidential or its affiliates,
which has represented that such source is entitled to disclose it, or (iii)
was
known to a Party on a nonconfidential basis prior to its disclosure to such
Party hereunder. If this Agreement is terminated, at the request of a
Party, the other Party shall deliver, and cause its officers, employees, agents,
and representatives, including, without limitation, attorneys, accountants,
consultants and financial advisors who obtain confidential information of the
requesting Party pursuant to investigations permitted hereunder, to deliver
to
the requesting Party all such confidential information that is written
(including copies or extracts thereof).
(b) If
a
Party or a Person to whom a Party transmits confidential information of another
Party is requested or becomes legally compelled (by oral questions,
interrogatories, requests for information or documents, subpoena, criminal
or
civil investigative demand or similar process) to disclose any of such
confidential information, such Party or other Person will provide the other
Party with prompt written notice so that such Party may seek a protective order
or other appropriate remedy or waive compliance with Section
8.6(a). If such protective order or other remedy is not obtained, or
if the applicable Party waives compliance with Section 8.6(a), the Party or
Person subject to the request will furnish only that portion of such
confidential information which is legally required and will exercise reasonable
efforts to obtain reliable assurance that confidential treatment will be
accorded such confidential information.
8.7 Consents
and Filings. The Parties shall, promptly after execution of this
Agreement, make all required filings and submissions with respect to the
transactions contemplated by this Agreement. Each Party will take all
reasonable actions to obtain any other consent, authorization, order or approval
of, or any exemption by, any Person required to be obtained or made in
connection with the transactions contemplated by this Agreement. Each
Party will cooperate with and promptly furnish information to the other Party
in
connection with obtaining such consents or making any such filings and will
promptly furnish to the other Party a copy of all filings made with a
governmental authority.
26
8.8 TPI
SEC Filings. Between the date hereof and the Closing Date,
Company shall cooperate with TPI in connection with the preparation and filing
of, and provide to TPI for inclusion or incorporation by reference in, any
reports or filings to be filed by TPI with the Commission (the "TPI
Filings"). Without limiting the foregoing, Company shall take all
commercially reasonable actions requested by TPI to enable TPI to include or
incorporate by reference in the TPI Filings any Financial Statement of Company,
including, without limitation, any auditors' report thereon. TPI
agrees that (i) at least three (3) business days prior to filing, TPI shall
furnish the Company copies of all proposed TPI Filings relating to, disclosing
or describing the transactions contemplated by this Agreement, and (ii) it
shall
not make any TPI Filing described in the immediately preceding clause (i)
without the prior consent of the Company, which shall not be unreasonably
withheld, conditioned or delayed.
8.9 No
Solicitation.
(a) Prior
to
termination of this Agreement pursuant to Article X hereof, neither the Company,
its subsidiaries, if any, or any Shareholder shall, nor shall the Company or
any
Shareholder authorize or permit any officers, directors or employees of, or
any
investment bankers, attorneys or other agents or representatives retained by
or
acting on behalf of, the Company, any of its subsidiaries or Shareholders,
or
authorize any third party to: (i) initiate, solicit or encourage,
directly or indirectly, any inquiries or the making of any proposal that
constitutes an Acquisition Proposal (as hereinafter defined), (ii) engage or
participate in negotiations or discussions with, or furnish any information
or
data to, or take any other action to, facilitate any inquiries or making any
proposal by, any third party relating to an Acquisition Proposal, (iii) enter
into any agreement with respect to any Acquisition Proposal or approve an
Acquisition Proposal, (iv) negotiate or enter discussions with, or furnish
any
information to, any third party (a “Potential Acquiror”) with respect to
any unsolicited Acquisition Proposal, or (v) make or authorize any statement,
recommendation or solicitation in support of any possible Acquisition Proposal.
In the event that the Company shall receive any Acquisition Proposal, it shall
promptly (and in no event later than 48 hours after receipt thereof) furnish
to
TPI the identity of the recipient of the Acquisition Proposal and of the
Potential Acquiror, the terms of such Acquisition Proposal, and copies of such
Acquisition Proposal and all information provided by the Potential
Acquiror. The Company and the Shareholders understand and agree that
any violation of the restrictions set forth in this Section 8.9 by the Company
or any of its subsidiaries or Shareholders, or by any director or officer of
the
Company or any of its subsidiaries or any financial advisor, attorney or other
advisor or representative of the Company or any of its subsidiaries, whether
or
not such person is purporting to act on behalf of the Company, any of its
subsidiaries, the Shareholders or otherwise, or any violation of these
restrictions by any third party authorized by the Company or the Shareholders
to
do so, shall be deemed to be a breach of this Section 8.9 sufficient to enable
TPI to terminate this Agreement pursuant to Article X hereof and seek injunctive
and monetary relief to the fullest extent permitted by applicable
law.
27
(b) For
the
purposes of this Agreement, “Acquisition Proposal” shall mean (i) any
proposal, whether in writing or otherwise, made by any person other than TPI,
to
acquire “beneficial ownership” (as defined under Rule 13(d) of the Securities
Exchange Act of 1934, as amended) of any material part of the assets (other
than
in the ordinary course of the Company’s business) or outstanding capital stock
(or securities convertible into shares of capital stock) of any of the Company
or its subsidiaries pursuant to a merger, consolidation, exchange of shares
or
other business combination, sale of shares of capital stock (or securities
convertible into capital stock), sales of assets, tender offer or exchange
offer
or similar transaction involving the Company or its subsidiaries, including,
without limitation, any sale or transfer or license of the Company's
intellectual property, or (ii) any other transaction or proposed transaction,
the consummation of which would reasonably be expected to impede, interfere
with, prevent or materially delay the transactions contemplated by this
Agreement, or which would reasonably be expected to dilute the benefits of
such
transactions to TPI.
8.10 Tax-Free
Reorganization. The Parties intend that the transaction will
qualify as a reorganization within the meaning of Section 368(a) of the
Code. TPI and the Company shall each use its reasonable best efforts
to cause the transactions to so qualify. Neither TPI nor the Company
shall (nor shall the Company permit any Shareholder to) knowingly take any
action, or knowingly fail to take any action that would be reasonably likely
to
jeopardize the qualification of the transaction as a reorganization within
the
meaning of Section 368(a) of the Code. TPI, the Company and the
Shareholders acknowledge, however, that no Party hereto has made any
representation or warranty to the other with respect to the treatment of such
transaction or the effect thereof under the applicable tax laws, regulations
or
interpretations; and that no attorney’s opinion or private revenue ruling has
been obtained with respect to the effects thereof under the Code.
8.11 Cancellation
of Certain Shares. At or immediately prior to the Closing, TPI
and certain holders of TPI Common Stock will enter into agreements (the
“Cancellation Agreements”) pursuant to which such holders will agree to the
cancellation of an aggregate of 23,275,000 shares of TPI Common
Stock. The cancellation of such shares shall be effective immediately
prior to the Closing. TPI agrees that upon receipt of such shares and
written instructions to cancel them, such shares shall thereupon be cancelled
and returned to the status of authorized and unissued shares of common stock
of
TPI.
ARTICLE
IX
CLOSING
DELIVERIES AND CONDITIONS TO CLOSING
9.1 Documents
to be Delivered by TPI. At the Closing, TPI shall deliver to the
Shareholders the following:
(a) A
certificate of the Secretary of TPI dated the Closing Date as to (i) the
corporate actions taken by TPI and its board of directors to authorize the
transactions contemplated hereby, and (ii) the incumbency and signatures of
the
officers of TPI executing this Agreement and the other agreements, instruments
and other documents executed by or on behalf of TPI pursuant to this Agreement
or otherwise in connection with the transactions contemplated
hereby;
(b) A
certificate, executed by an officer of TPI, certifying that all representations,
warranties and covenants herein are true and correct as of the Closing
Date. The delivery of such certificate shall constitute a
representation and warranty of TPI as to the statements set forth
therein;
28
(c) A
copy of
the resolutions adopted by the Board of Directors of TPI (i)
authorizing the execution and delivery of this Agreement and the performance
by
TPI of its obligations hereunder, (ii) electing the person designated by the
Company as a director of TPI effective as of the Closing Date, (iii) electing
the persons designated by the Company as directors of TPI effective ten (10)
days after the filing with the SEC of an Information Statement pursuant to
Section 14(f) of the Exchange Act (the “Section 14(f) Information Statement”)
and distribution thereof to the TPI shareholders, and (iv) electing the persons
designated by the Company as officers of TPI effective as of the Closing Date,
certified by its Secretary.
(d) A
copy of the Cancellation Agreements contemplated by Section 8.11 above, signed
by all of the parties thereto.
(e) Such
other customary certificates or documents as may be reasonably required by
Company.
9.2 Documents
to be Delivered by Company. At the Closing, the Company shall
deliver to TPI the following:
(a) A
certificate of the Secretary and President of the Company, dated the Closing
Date, in form and substance reasonably satisfactory to TPI as to (i) the
corporate actions taken by Company and its board of directors to authorize
the
transactions contemplated hereby, and (ii) the incumbency and signatures of
the
officers of Company executing this Agreement and the other agreements,
instruments and other documents executed by or on behalf of Company pursuant
to
this Agreement or otherwise in connection with the transactions contemplated
hereby;
(b) A
certificate, executed by the President and Chief Financial Officer of the
Company, in such detail as TPI shall reasonably request, certifying that all
representations, warranties and covenants herein are true and correct as of
the
Closing Date. The delivery of such certificate shall constitute a
representation and warranty of Company as to the statements set forth
therein;
(c) A
copy of
the resolutions adopted by the Board of Directors of Company authorizing the
execution and delivery of this Agreement and the performance by the Company
of
its obligations hereunder, certified by the Secretary and President of the
Company; and
(d) A
certificate of good standing of the Company from the Secretary of State of
Delaware dated as of the most recent practicable date.
9.3 Documents
to be Delivered by the Shareholders. At the Closing, each
Shareholder shall deliver to TPI stock certificate(s) representing the number
of
Company Shares set forth opposite the name of such Shareholder on Schedule
A
hereto, together with such letters of transmittal, stock powers and other
documents as are necessary to effect the transfer thereof to TPI.
9.4 Conditions
to Obligations of Each Party. Each Party's obligations to
consummate the transactions contemplated by this Agreement is subject to the
satisfaction or waiver at or prior to the Closing, of each of the following
conditions:
29
(a) No
temporary restraining order, preliminary or permanent injunction or other order
issued by any governmental authority or other material legal restraint or
prohibition issued or promulgated by a governmental authority preventing the
consummation of the transactions contemplated by this Agreement shall be in
effect or shall be threatened, and there shall not be any law or regulation
enacted or deemed applicable to the transactions contemplated by this Agreement
that makes consummation of such transactions illegal.
9.5 Conditions
to Obligations of TPI. The obligation of TPI to consummate the
transactions contemplated by this Agreement are subject to the satisfaction
or
waiver, at or prior to the Closing, of each of the following
conditions:
(a) Each
of
the representations and warranties of the Company and the Shareholders set
forth
in this Agreement (i) that are not qualified by materiality must have been
true
and correct in all material respects as of the Closing Date, and (ii) that
are
qualified by materiality must have been true and correct as of the Closing
Date;
except, in each case, for inaccuracies that would not individually or in the
aggregate have a Material Adverse Effect on the Company.
(b) All
of
the obligations, covenants and agreements with which the Company or Shareholders
are required to comply or that the Company or the Shareholders are required
to
perform under this Agreement at or prior to the Closing shall have been complied
with and performed in all material respects.
(c) The
documents required to be delivered by the Company and the Shareholders pursuant
to Section 9.2 and Section 9.3, respectively, above shall have been delivered
simultaneously with the Closing.
9.6 Conditions
to Obligations of Company and the Shareholders. The obligation of
Company and the Shareholders to consummate the transactions contemplated by
this
Agreement are subject to the satisfaction or waiver, at or prior to the Closing,
of each of the following conditions:
(a) Each
of
the representations and warranties of TPI set forth in this Agreement (i) that
are not qualified by materiality must have been true and correct in all material
respects as of the Closing Date, and (ii) that are qualified by materiality
must
have been true and correct as of the Closing Date; except, in each case, for
inaccuracies that would not individually or in the aggregate have a Material
Adverse Effect on TPI.
(b) All
of
the obligations, covenants and agreements with which TPI is required to comply
or that TPI is required to perform under this Agreement at or prior to the
Closing shall have been complied with and performed in all material
respects.
(c) The
documents required to be delivered by TPI pursuant to Section 9.1 above shall
have been delivered simultaneously with the Closing.
30
ARTICLE
X
TERMINATION
10.1 Termination. This
Agreement may be terminated at any time prior to the Closing Date:
(a) by
mutual
written consent of the Company and TPI at any time prior to the
Closing;
(b) by
TPI in
the event of a material breach by Company or Shareholders of any provision
of
this Agreement for which written notice has been given to the Company and which
breach has not been cured prior to the earlier of (i) the Termination Date
or
(ii) thirty (30) days following notice of such breach; provided, however that
the right to terminate this Agreement under this Section 10.1(b) shall not
be
available to TPI if TPI has materially breached any provision of this Agreement
and such breach remains uncured;
(c) by
the
Company in the event of a material breach by TPI of any provision of this
Agreement which breach has not been cured prior to the Termination Date;
provided, however, that the right to terminate this Agreement under this Section
10.1(c) shall not be available to the Company if the Company has materially
breached any provision of this Agreement and such breach remains
uncured;
(d) by
the
Company if the Closing shall not have occurred by November 1, 2007 (the
"Termination Date"); provided, however, the right to terminate this
Agreement under this Section 10.1(d) shall not be available to any Party whose
failure to fulfill any obligation hereunder has been the cause of, or results
in, the failure of the Closing to have occurred on or before the Termination
Date;
10.2 Effect
of Termination. Except for the provisions of Sections 8.2, 8.3,
8.6, and the provisions of Article X hereof, each of which shall survive any
termination of this Agreement, in the event of termination of this Agreement
pursuant to Section 10.1, this Agreement shall forthwith become void and of
no
further force and effect and the Parties shall be released from any and all
obligations hereunder; provided, however, that termination of this Agreement
shall not relieve any Party from liability for the breach of any of its
obligations hereunder.
ARTICLE
XI
INDEMNIFICATION
11.1 Survival
of Representations and Warranties. All representations and
warranties of the Company, the Company Shareholders and TPI contained herein
or
in any document, certificate or other instrument required to be delivered
hereunder in connection with the transactions contemplated hereby shall survive
the Closing for the period ending on the date that is (12) months after the
Closing Date. No claim for indemnification for breach of a
representation or warranty may be commenced after the period of survival of
such
representation or warranty, provided, however, that claims made within the
applicable time period shall survive to the extent of such claim until such
claim is finally determined and, if applicable, paid.
31
11.2 Indemnification.
(a) TPI
agrees to indemnify, defend and hold harmless the Company and the Shareholders
from and against any and all demands, claims, actions or causes of action,
assessments, losses, damages, liabilities, costs and expenses, including
interest, penalties and reasonable attorneys’ fees and expenses (collectively
“Damages”) asserted against, resulting to, imposed upon or incurred by the
Company or the Shareholders, directly or indirectly, by reason of or resulting
from (i) any breach by TPI of this Agreement, or (ii) any inaccuracy in or
breach of any of the representations, warranties, covenants or agreements made
by TPI in this Agreement.
(b) Company
and the Shareholders agree to indemnify, defend and hold harmless TPI from
and
against any and all demands, claims, actions or causes of action, assessments,
losses, damages, liabilities, costs and expenses, including interest, penalties
and reasonable attorneys’ fees and expenses (collectively “Damages”) asserted
against, resulting to, imposed upon or incurred by TPI, directly or indirectly,
by reason of or resulting from (i) any breach by Company and the Shareholders
of
this Agreement, or (ii) any inaccuracy in or breach of any of the
representations, warranties, covenants or agreements made by Company and the
Shareholders in this Agreement.
11.3 Claims. Whenever
any claim shall arise for indemnification hereunder (a “Claim”), the party
entitled to indemnification (the “Indemnified Party”) shall promptly give
written notice to the party obligated to provide indemnity (the “Indemnifying
Party”) of the nature and extent of such Claim and the Damages incurred by
it. If the Damages are liquidated in amount, the notice shall so
state, and such amount shall be deemed the amount of such Claim of the
Indemnified Party against the Indemnifying Party. If the amount is
not liquidated, the notice shall so state and, in such event, such Claim shall
be deemed asserted against the Indemnifying Party but no payment or satisfaction
shall be made on account thereof until the amount of such claim is
liquidated.
If
the
Indemnifying Party shall not, within thirty (30) days after the giving of such
notice by the Indemnified Party, notify the Indemnified Party in accordance
herewith that the Indemnifying Party disputes the right of the Indemnified
Party
to indemnity in respect of such Claim, then any such Claim shall be paid or
satisfied as follows: (i) if said Claim is liquidated, then payment
of such Claim to the Indemnified Party shall be made by the Indemnifying Party
at the end of such period; or (ii) if the amount of such Claim is unliquidated
at the time notice is originally given to the Indemnifying Party, the
Indemnified Party shall give a second notice to the Indemnifying Party when
the
liquidated amount of such Claim is known and, unless the Indemnifying Party
shall object in writing to such amount (as opposed to the Claim itself, as
to
which the right to dispute had expired) within twenty (20) days after the giving
of said second notice, payment of such Claim to the Indemnified Party shall
be
made by the Indemnifying Party.
If
the
Indemnifying Party shall not have made payment to the Indemnified Party of
any
Claim when said payment is due, then the Indemnified Party shall have the right
to take any and all actions required to collect from the Indemnifying Party
the
amount of such Claim.
32
Any
portion of the amount of Damages asserted by the Indemnified Party in connection
with a Claim shall, if not objected to by the Indemnifying Party in accordance
with the procedures established herein, be considered to be subject to
satisfaction without further objection, as may be appropriate.
If
the
Indemnifying Party shall notify the Indemnified Party that he disputes any
Claim
or the amount thereof (which notice shall only be given if the Indemnifying
Party has a good faith belief that the Indemnified Party is not entitled to
indemnity or the full amount of indemnity as claimed) then the parties hereto
shall endeavor to settle and compromise such Claim, or may agree to submit
the
same to arbitration, and, if unable to agree on any settlement or compromise
or
on submission to arbitration, such claim shall be settled by appropriate
litigation, and any liability and the amount of the Damages established by
reason of such settlement, compromise, arbitration or litigation, or incurred
as
a result thereof, shall be paid and satisfied as provided herein.
11.4 Conditions
of Indemnification with Respect to Third Party Claims. The
Indemnified Party shall promptly give notice to the Indemnifying Party of any
claim of a third party which may reasonably be expected to result in a Claim
by
the Indemnified Party. The Indemnifying Party shall have the right to
participate in and, with respect to a third party Claim as to which he is
“wholly at risk,” direct the defense, compromise or settlement of such claim
with counsel selected by him, provided the Indemnifying Party gives written
notice to the Indemnified Party of his election to do so within thirty (30)
days
after receipt of notice in accordance with the preceding
sentence. For the purposes of this Section 11.4, the Indemnifying
Party shall be deemed to be “wholly at risk” except as to (i) Claims as to which
the Indemnified Party may have any direct monetary risk for which it is not
fully indemnified by the terms hereof or (ii) Claims as to which the Indemnified
Party in its reasonable judgment has any risk or liability for which
compensation by monetary damages would not be adequate. If the
Indemnifying Party fails to so notify the Indemnified Party of his election
to
defend any such third party claim, the Indemnified Party will (upon further
notice to the Indemnifying Party) have the right to undertake the defense,
compromise or settlement of such claim on behalf of and for the account and
expense of the Indemnifying Party, subject to the right of the Indemnifying
Party to assume the defense of such claim at any time prior to settlement,
compromise or final determination thereof.
If
the
proceeding involves matters as to which the Indemnifying Party is not “wholly at
risk,” then the defense, compromise or settlement of the Claim shall be the
responsibility of the Indemnified Party, but such defense, compromise and
settlement by the Indemnified Party shall be for the expense and account of
the
Indemnifying Party. Counsel for the Indemnifying Party shall consult
and cooperate at all times with counsel for the Indemnified Party in defending
against any such third party claim.
The
Indemnifying Party shall not under any circumstances, without the written
consent of the Indemnified Party, settle or compromise any claim or consent
to
the entry of any judgment which does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the Indemnified Party
a
release from all liability in respect of such claim.
33
11.5 Limitations. Notwithstanding
any of the provisions of the Article XI:
(a) None
of
the Parties to this Agreement nor any of their affiliates shall be entitled
to
indemnification under this Article XI until the aggregate amount of all Claims
exceeds $100,000 at which time all Claims shall be subject to
indemnification;
(b) In
no
event will any indemnifying party be liable for consequential damages under
this
Article XI.
ARTICLE
XII
GENERAL
PROVISIONS
12.1 Amendment. This
Agreement may not be amended except by an instrument in writing signed by each
of the Parties; provided, however, that for such purposes, the Shareholder
Representative may sign on behalf of all Shareholders.
12.2 Waiver. At
any time prior to the Closing Date, any Party may (a) extend the time for the
performance of any of the obligations or other acts of any other Party hereto
or
(b) waive compliance with any of the agreements of any other Party or with
any
conditions to its own obligations. Any such extension or waiver shall
be valid only if set forth in an instrument in writing signed on behalf of
the
Party making the waiver or granting the extension by a duly authorized
officer. No waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provision hereof (whether
or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
12.3 Assignment
and Binding Effect. Neither this Agreement nor any of the rights
or obligations hereunder may be assigned by Company without the prior written
consent of TPI or assigned by TPI without the prior written consent of
Company. Subject to the foregoing, this Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors,
transferees and assigns, and no other Person shall have any right, benefit
or
obligation hereunder.
12.4 Governing
Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of State of Nevada, without regard to the
conflict of law provisions thereof.
12.5 Entire
Agreement. This Agreement constitutes the entire agreement
between the Parties pertaining to the subject matter hereof and supersedes
all
prior agreements, understandings, negotiations and discussions, whether oral
or
written, of the Parties with respect to the subject matter hereof.
12.6 Severability. In
the event that any one or more of the provisions contained in this Agreement
or
in any other instrument referred to herein, shall, for any reason, be held
to be
invalid, illegal or unenforceable in any respect, then to the maximum extent
permitted by law, such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement or any other such
instrument.
34
12.7 Construction
and Titles. The titles, captions or headings of the Articles and
Sections herein are for convenience of reference only and are not intended
to be
a part of or to affect the meaning or interpretation of this Agreement. This
Agreement has been negotiated between the parties hereto, and the language
hereof shall not be construed for or against any party. A reference
herein to any section shall be deemed to include a reference to every subsection
thereof. All pronouns contained herein, and any variations thereof,
shall be deemed to refer to the masculine, feminine or neuter, singular or
plural, as to the identity of the parties hereto may require.
12.8 Arbitration. Any
dispute arising out of this Agreement, or its performance or breach, shall
be
resolved by binding arbitration in Las Vegas, Nevada under the Commercial
Arbitration Rules (the "AAA Rules") of the American Arbitration Association
(the
"AAA"). This arbitration provision is expressly made pursuant to and
shall be governed by the Federal Arbitration Act, 9 U. S. C. Sections 1-14
as
well as the AAA Rules. The Parties agree that pursuant to Section 9
of the Federal Arbitration Act, a judgment of a United States District Court
of
competent jurisdiction shall be entered upon the award made pursuant to the
arbitration. A single arbitrator, who shall have the authority to
allocate the costs of any arbitration initiated under this paragraph, shall
be
selected according to the AAA Rules within ten (10) days of the submission
to
the AAA of the response to the statement of claim or the date on which any
such
response is due, whichever is earlier. The arbitrator shall be
required to furnish to the parties to the arbitration a preliminary statement
of
the arbitrator's decision that includes the legal rationale for the arbitrator's
conclusion and the calculations pertinent to any damage award being made by
the
arbitrator. The arbitrator shall then furnish each of the parties to
the arbitration the opportunity to comment upon and/or contest the arbitrator's
preliminary statement of decision either, in the discretion of the arbitrator,
through briefs or at a hearing. The arbitrator shall render a final
decision following any such briefing or hearing. The arbitrator shall
conduct the arbitration in accordance with the Federal Rules of Evidence and
the
AAA Rules. The arbitrator shall decide the amount and extent of the
pre-hearing discovery which is appropriate. The arbitrator shall have
the power to enter any award of monetary and/or injunctive relief (including
the
power to issue permanent injunctive relief and also the power to reconsider
any
prior request for immediate injunctive relief by any Party and any order as
to
immediate injunctive relief previously granted or denied by a court in response
to a request therefor by any Party), including the power to render an award
as
provided in Rule 43 of the AAA Rules. The arbitrator shall have the
power to award the prevailing party its costs and reasonable attorney's fees;
provided, however, that the arbitrator shall not award attorneys' fees to a
prevailing party if the prevailing party received a settlement offer unless
the
arbitrator's award to the prevailing party is greater than such settlement
offer
without taking into account attorneys' fees in the case of the settlement offer
or the arbitrator's award. In addition to the above courts, the
arbitration award may be enforced in any court having jurisdiction over the
Parties and the subject matter of the arbitration.
12.9 Attorneys'
Fees. Should any Party institute any action or proceeding to
enforce any provision of this Agreement, including, without limitation, an
action or proceeding for declaratory relief, damages by reason of an alleged
breach of any provision of this Agreement, equitable relief or otherwise in
connection with this Agreement, or any provision hereof, the prevailing Party
shall be entitled to recover from the losing Party or Parties reasonable
attorneys' fees and costs for services rendered to the prevailing Party in
such
action or proceeding.
35
12.10 Multiple
Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
12.11 Notices. Unless
applicable law requires a different method of giving notice, any and all
notices, demands or other communications required or desired to be given
hereunder by any Party shall be in writing. Assuming that the
contents of a notice meet the requirements of the specific Section of this
Agreement which mandates the giving of that notice, a notice shall be validly
given or made to another Party if served either personally or if deposited
in
the United States mail, certified or registered, postage prepaid, or if
transmitted by telegraph, telecopy or other electronic written transmission
device or if sent by overnight courier service, and if addressed to the
applicable Party as set forth below. If such notice, demand or other
communication is served personally, service shall be conclusively deemed given
at the time of such personal service. If such notice, demand or other
communication is given by mail, service shall be conclusively deemed given
seventy-two (72) hours after the deposit thereof in the United States
mail. If such notice, demand or other communication is given by
overnight courier, or electronic transmission, service shall be conclusively
deemed given at the time of confirmation of delivery. The addresses
for the Parties are as follows:
|
If
to TPI:
|
c/x
Xxxxx Xxxxxxxxx, Xxx.
410
Xxxx Xxxxxxxx Xxxx.
XXX
X-000
Xxxxxxxx,
XX 00000
|
|
If
to the Shareholders or the Shareholder Representative
|
To
their addresses as set forth in the records of the
Company
|
|
If
to Company:
|
1920
East Hallandale Beach Blvd.
Suite
708
Hallandale,
Florida 33009
With
copies to:
Xxxxx
X. Xxxxxx
Xxxxxx
& Xxxxxx, LLP
195
Route 9 South, Suite 204
Manalapan,
New Jersey 07726
|
Any
Party may change such Party's
address for the purpose of receiving notices, demands and other communications
as herein provided, by a written notice given in the aforesaid manner to the
other Parties.
12.12 Incorporation
by Reference. All Exhibits and Schedules attached hereto or to be
delivered in connection herewith are incorporated herein by this
reference.
36
12.13 Shareholder
Representative. The holders of the outstanding shares of the
capital stock of the Company, by virtue of the execution and delivery of this
Agreement, will be deemed to have irrevocably constituted and appointed,
effective as of the date of this Agreement, Xxxxx Xxxxxxxx (together with his
permitted respective successors, collectively, the “Shareholder
Representative”), as their true and lawful agent and attorney-in-fact, and the
Shareholder Representative, by his execution of this Agreement shall be deemed
to have accepted such appointment, to enter into any agreement in connection
with the transactions contemplated by this Agreement, to exercise all or any
of
the powers, authority and discretion conferred on him under any such agreement,
to act as proxy for each Company Shareholder in connection with any shareholder
approvals required in connection with the transactions contemplated by this
Agreement, to waive or modify any terms and conditions of any such agreement,
to
give and receive notices on their behalf, and to be their exclusive
representative with respect to any matter, suit, claim, action or proceeding
arising with respect to any transaction contemplated by any such agreement,
including, without limitation, the assertion, prosecution, defense, settlement
or compromise of any claim, action or proceeding for which any Company
Shareholder or TPI may be entitled to indemnification and the Shareholder
Representative agrees to act as, and to undertake the duties and
responsibilities of, such agent and attorney-in-fact. This power of
attorney is coupled with an interest and is irrevocable. The
Shareholder Representative shall not be liable for any action taken or not
taken
by him in his capacity as Shareholder Representative either (i) with the consent
of Shareholders who, as of the date of this Agreement, own a majority in number
of the outstanding shares of Company Stock (considered on an as converted
basis), or (ii) in the absence of his own willful misconduct. If the
Shareholder Representative shall be unable or unwilling to serve in such
capacity, his successor shall be named by those persons holding a majority
of
the shares of Company Common Stock outstanding immediately prior to the Closing
Date who shall serve and exercise the powers of Shareholder Representative
hereunder. Solely with respect to any actions taken by the
Shareholder Representative in his capacity as such, the Shareholder
Representative shall have no liability to TPI, or any of its affiliates except
for claims based upon fraud by the Shareholder Representative.
[SIGNATURES
CONTINUED ON NEXT PAGE]
37
IN
WITNESS WHEREOF, this Agreement has been duly executed by the parties as of
the
date first written above.
|
Tradeshow
Products, Inc., a Nevada corporation
|
|
|
By: /s/
Xxxxxxx
Xxxxxx
|
|
|
Xxxxxxx
Milller
|
|
|
Its: President
|
|
|
Focus
Views, Inc., a Delaware corporation
|
|
|
By:
/s/ Xxxxx Xxxxxxxx
|
|
|
Xxxxx
Xxxxxxxx
|
|
|
Its: President
and Shareholder Representative
|
|
|
SHAREHOLDERS
|
|
| /s/ Xxxxx Xxxxxxxx | |
|
Xxxxx
Xxxxxxxx
|
|
| /s/ Xxxxxx Xxxx | |
|
Liberty
Consulting, Inc.
|
Schedule
A
Shareholder
Stock Schedule
Focus
Views, Inc., a Delaware Corporation, Shareholder Stock Schedule
|
Focus
Views, Inc., a Delaware corporation
|
||
|
Shareholder
|
Shares
|
Percentage
Owned
|
|
Xxxxx
Xxxxxxxx
|
95,500
shares
|
95.5%
|
|
Liberty
Consulting, Inc.
|
4,500
shares
|
4.5%
|
|
Total
|
100,000
shares
|
100%
|
Schedule
A.1
TPI
Shares to be Delivered to Company Shareholders
|
TPI
Stock Distribution
|
||
|
Shareholder
|
Shares
of TPI Stock
|
Percentage
Owned
|
|
Xxxxx
Xxxxxxxx
|
75,395,000
shares
|
74.483%
|
|
Liberty
Consulting, Inc.
|
3,505,000
shares
|
3.462%
|
|
Rock
Creek Capital Corp.
|
100,000
shares
|
0.095%
|
|
Total
|
79,000,000
shares
|
78.044%
|
Schedule
A.2
Focus
Views, Inc., a Florida corporation is wholly-owned by Focus Views, Inc., a
Delaware corporation. Focus Views, Inc., a Delaware corporation, owns
100,000 shares or 100% of the issued and outstanding shares of Focus Views,
Inc., a Florida corporation.
Schedule
B
Company
Disclosure Schedule
Schedule
C
TPI
Disclosure Schedule
