Amendment to Current Report — Form 8-K Filing Table of Contents
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1: 8-K/A Amendment to Current Report HTML 22K
2: EX-10.1 Amended and Restated Merger Agreement Dated HTML 223K February 5, 2008 by and Among Trustcash Holdings, Inc., Tchh Acquisition Corp. and Paivis, Corp.
3: EX-99.1 Press Release Dated February 5, 2008. HTML 16K
EX-10.1 — Amended and Restated Merger Agreement Dated February 5, 2008 by and Among Trustcash Holdings, Inc., Tchh Acquisition Corp. and Paivis, Corp.
AMENDED
AND RESTATED AGREEMENT AND
PLAN OF MERGER dated as of February 5, 2008 (the “Agreement”) by and
among TRUSTCASH HOLDINGS, INC., a Delaware corporation (“PARENT”), TCHH
ACQUISITION CORP., a Nevada corporation (“SUB”) and PAIVIS,
CORP., a Nevada corporation (“TARGET”). PARENT,
SUB and TARGET are each referred to herein individually as a “Party” and
collectively as the “Parties.”
PREAMBLE
WHEREAS,
the respective Boards
of Directors of each of PARENT, SUB and TARGET deem it advisable and in the
best
interests of each corporation and its respective shareholders, that SUB and
TARGET combine in order to advance the long-term business strategies of PARENT
and TARGET;
WHEREAS,
the Board of
Directors of TARGET has unanimously determined that the merger of SUB with
and
into TARGET (the “Merger”) and this Agreement are fair to, and in the best
interests of, TARGET and the holders of all the common stock of TARGET, par
value $0.0002 per share (the “TARGET Common Stock”);
WHEREAS,
the Board of
Directors of PARENT has unanimously determined that the Merger and this
Agreement are fair to, and in the best interests of, PARENT and the holders
of
the common stock of Parent, par value $0.001 per share (the “PARENT Common
Stock”);
WHEREAS,
the respective Boards
of Directors of each of PARENT, SUB and TARGET have approved this Agreement
and
the Merger on the terms and conditions contained in this Agreement and in so
doing, have recommended approval of the Merger to the shareholders of the
respective corporations;
WHEREAS,
PARENT, as the sole
stockholder of SUB, has approved this Agreement, the Merger and the transactions
contemplated by this Agreement pursuant to action taken by unanimous written
consent in accordance with the requirements of the Nevada Revised
Statutes;
WHEREAS,
for federal income
tax purposes, it is intended by the parties hereto that the Merger shall qualify
as a tax-free “reorganization” within the meaning of Section 368 of the Internal
Revenue Code of 1986, as amended (the “Code”).
NOW,
THEREFORE, in
consideration of the foregoing and the respective representations, warranties,
covenants and agreements contained in this Agreement and intending to be legally
bound hereby, the parties hereto agree as follows:
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CERTAIN
DEFINITIONS
As
used in this Agreement, the
following terms shall have the meanings set forth below:
“Applicable
Law” means any domestic or foreign law, statute, regulation, rule, policy,
guideline or ordinance applicable to the businesses of the Parties, the Merger
and/or the Parties.
“Common
Stock” means the common stock of PARENT, par value $0.001 per
share.
“Commission”
means the United States Securities and Exchange Commission.
“Dollar”
and “$” means lawful money of the United States of America.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“GAAP”
means generally accepted accounting principles in the United States of America
as promulgated by the American Institute of Certified Public Accountants and
the
Financial Accounting Standards Board or any successor Institutes concerning
the
treatment of any accounting matter, and applied in a consistent
manner.
“Knowledge”
means the knowledge, which either is obtained after reasonable inquiry, or
which
would have been obtained if one made a reasonable inquiry.
“Lien”
means, with respect to any property or asset, any mortgage, lien, pledge,
charge, security interest, encumbrance or other adverse claim of any kind in
respect of such property or asset.
“Material
Adverse Effect” with respect to any entity or group of entities means any event,
change or effect that has or would have a materially adverse effect on the
financial condition, business or results of operations of such entity or group
of entities, taken as a whole.
“Parent”
means Trustcash Holdings, Inc., a Delaware corporation.
“Parent
Disclosure Schedule” means the disclosure schedule delivered by Parent to Target
concurrently with the execution and delivery of this Agreement, as the same
may
be amended or supplemented by Parent.
-7-
“Parent
SEC Reports” means all filings required to be made by Parent with, or submitted
by Parent to, the Commission under the Securities Act and the Exchange
Act.
“Person”
means any individual, corporation, partnership, limited liability company,
trust
or unincorporated organization or a government or any agency or political
subdivision thereof.
“Securities
Act” means the Securities Act of 1933, as amended.
“Shares”
means
the issued and
outstanding shares of TARGET Common Stock.
“Target
SEC Reports” means all filings required to be made by Target with, or submitted
by Target to, the Commission under the Securities Act and the Exchange
Act.
“Tax”
(and, with correlative meaning, “Taxes” and “Taxable”) means:
(i)
any net income, alternative or
add-on minimum tax, gross income, gross receipts, sales, use, ad valorem,
transfer, franchise, profits, license, withholding, payroll employment, excise,
severance, stamp, occupation, property, environmental or windfall profit tax,
custom, duty or other tax, governmental fee or other like assessment or charge
of any kind whatsoever together with any interest or any penalty, addition
to
tax or additional amount imposed by any governmental entity (a “Tax Authority”)
responsible for the imposition of any such tax (domestic or foreign),
and
(ii)
any liability for the payment of
any amounts of the type described in clause (i) above as a result of being
a
member of an affiliated, consolidated, combined or unitary group for any Taxable
period, and
(iii)
any liability for the payment of
any amounts of the type described in clauses (i) or (ii) above as a result
of
any express or implied obligation to indemnify any other person.
“Tax
Return” means any return, statement, report or form, including, without
limitation, estimated Tax Returns and reports, withholding Tax Returns and
reports and information reports and returns required to be filed with respect
to
Taxes.
-8-
ARTICLE
I
THE
MERGER
SECTION
1.01 THE MERGER
Upon
the terms and subject to the
conditions set forth in this Agreement and in accordance with the statutes
of
the State of Nevada, at the Effective Time (as defined herein), SUB shall be
merged with and into TARGET, the separate existence of SUB shall cease and
TARGET shall continue as the surviving entity of the Merger (where appropriate,
the “Surviving Entity”).
SECTION
1.02 CLOSING
The
closing of the Merger (the
“Closing”) will take place at the offices of the PARENT AND SUB , at 400 Park
Avenue Suite 1420 NY, NY10022, on the day immediately following the
satisfaction or waiver of the conditions precedent set forth in Article V or
at
such other date as SUB and TARGET shall agree; provided,
however, that (a) the Parties shall use their best efforts to effect the
Closing on or before March 31, 2008, or as soon thereafter as is practicable,
and (b) the Closing may take place by facsimile or other means as may be
mutually agreed upon in advance by the Parties. The date on which the Closing
is
held is referred to in this Agreement as the “Closing
Date.” Unless extended in writing by each of the PARENT and
TARGET in the event the Closing shall not occur by June 30, 2008 (the “Outside Closing
Date”) then either PARENT or TARGET may terminate this Agreement without
any further liability to the other.
SECTION
1.03 EFFECTIVE TIME
On
the Closing Date, the Parties shall
cause the Merger to be effective by the filing of articles or a certificate
of
merger, and the Merger shall become effective immediately upon the acceptance
of
such filings, (the “Merger Certificate”)
with the Secretary of State of the State of Nevada in substantially the form
attached hereto as Exhibit A executed
in
accordance with the relevant provisions of the statutes of the Nevada Revised
Statutes. The Merger shall become effective at the time such Merger Certificate
is duly accepted for filing or at such other time as may be specified as the
date and time of effectiveness in the Merger Certificate, (the “Effective Time”). The
date on which the Effective Time occurs is referred to as the “Effective
Date.”
SECTION
1.04 EFFECT OF THE MERGER
At
and after the Effective Time, the
Merger shall be effective as provided in the applicable provisions of the Nevada
Revised Statutes. The existence of TARGET, as the Surviving Entity,
with all of its purposes and powers, shall continue unaffected and unimpaired
by
the Merger, and, as the Surviving Entity, it shall be governed by the laws
of
the State of Nevada and succeed to all rights, assets, liabilities and
obligations of SUB in accordance with the Nevada Revised Statutes. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, except as otherwise provided herein, all the property, rights, privileges,
powers and franchises of SUB shall vest in the Surviving Entity, and all debts,
liabilities and duties of SUB shall become the debts, liabilities and duties
of
the Surviving Entity. The separate existence and corporate organization of
SUB
shall cease at the Effective Time and thereafter SUB and TARGET shall be a
single entity, to wit, the Surviving Entity.
The
Certificate of Incorporation and Bylaws of TARGET as in effect
immediately
prior to the Effective Time shall be the Certificate of Incorporation
and
Bylaws of the Surviving Entity following the Merger, until thereafter
changed or amended as provided therein or by applicable
law.
(ii)
The
officers and directors of the Parent following the Merger shall
be those
persons listed on Schedule
1.05(a), until the earlier of their death, resignation or removal
or until their respective successors are duly appointed and
qualified.
SECTION
1.06 FURTHER ACTIONS
If
at any time after the Effective
Time, SUB and TARGET shall consider or be advised that any further assignment
or
assurances or any other things that are necessary or desirable to vest, perfect
or confirm, of record or otherwise, in the Surviving Entity, the title to any
property or right of SUB acquired or to be acquired by reason of or as a result
of the Merger, then SUB and TARGET and their respective officers and directors
in office shall use all reasonable efforts to execute and deliver, or cause
to
be executed and delivered, all such proper deeds, assignments and assurances
and
do all things reasonably necessary and proper to vest, perfect or confirm title
to such property or rights in the Surviving Entity and otherwise carry out
the
purpose of this Agreement, and the officers of SUB and the Surviving Entity
are
fully authorized in the name of TARGET or otherwise to take any and all such
action with the same effect as if such persons were officers of
TARGET.
SECTION
1.07 CONVERSION
As
of the Effective Time, by virtue of the Merger and without any action on the
part of SUB or TARGET:
(i)
SUB
shares of Common Stock. Each share of Common Stock of SUB
issued and outstanding immediately prior to the Effective Time shall
be
converted into one fully paid and nonassessable share of common stock
of
the Surviving Corporation.
(ii)
Cancellation
of
Treasury Stock and Parent-Owned Stock. All Shares that are owned by
the TARGET and any Shares owned by Parent, SUB or any of their respective
Subsidiaries shall be cancelled and shall cease to exist, and no
consideration shall be delivered in exchange
therefor.
(iii)
Conversion
of
Shares. Each issued and outstanding Share of TARGET (other than
Shares to be cancelled in accordance with Section 1.07(ii) shall be
converted into the right to receive $0.10 payable to the holder thereof
in
cash without interest (the “Cash Consideration”), plus one
share of common stock of the Parent (the “ Issuable Shares”). The Cash
Consideration together with the Issuable Shares is herein referred
to as
the “Merger
Consideration”. From and after the Effective Time, all such Shares
shall no longer be outstanding and shall automatically be cancelled
and
shall cease to exist, and each holder of a Share shall cease to have
any
rights with respect thereto, except the right to receive the Merger
Consideration therefor upon the surrender of such Share in accordance
with
Section 1.08, without interest
thereon.
(iv)
Fractional
Shares. In calculating the number of Issuable Shares to issue to
each TARGET shareholder, general rounding principles should control
the
actual calculation, which shall result in no issuance of any fractional
shares to the TARGET shareholders.
(v)
Full
Satisfaction of
Rights. All Issuable Shares into which the Shares shall
have been converted pursuant to this Article 1 shall be deemed to
have
been issued in full satisfaction of all rights pertaining to the
Shares.
(vi)
Adjustment
to Merger
Consideration. The Merger Consideration shall be adjusted
appropriately to reflect the effect of any stock split, reverse stock
split, stock dividend (including any dividend or distribution of
securities convertible into Common Stock), cash dividend, reorganization,
recapitalization, reclassification, combination, exchange of shares
or
other like change with respect to Common Stock occurring on or after
the
date hereof and prior to the Effective
Time.
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SECTION
1.08 EXCHANGE AND SURRENDER OF CERTIFICATES
(i)
Paying
Agent.
Prior to the Effective Time, Purchaser shall designate an escrow
agent,
bank or trust company to act as the payment agent in connection with
the
Merger (the “Paying
Agent”).
Parent or SUB shall deposit, or cause to be deposited, funds with
the
Paying Agent on the next Business Day following the Effective Time
in the
amount necessary to enable the Paying Agent to make payments of the
Merger
Consideration pursuant to Section 1.08(ii). Such funds shall be
invested by the Paying Agent as directed by Parent, in its sole
discretion, pending payment thereof by the Paying Agent to the holders
of
the Shares. Earnings from such investments shall be the sole and
exclusive
property of Parent, and no part of such earnings shall accrue to
the
benefit of holders of Shares.
(ii)
Procedures
for
Surrender. Promptly after the Effective Time, the Paying Agent
shall mail to each holder of record of a certificate or certificates
which
immediately prior to the Effective Time represented outstanding Shares
(the “Certificates”)
or non-certificated Shares represented by book-entry (“Book-Entry
Shares”) and whose Shares were converted pursuant to
Section 1.07 into the right to receive the Merger Consideration
(i) a letter of transmittal (which shall specify that delivery shall
be effected, and risk of loss and title to the Certificates shall
pass,
only upon delivery of the Certificates to the Paying Agent and shall
be in
such form and have such other provisions as mutually agreed by the
Company
and Parent) and (ii) instructions for effecting the surrender of
the
Certificates or Book-Entry Shares in exchange for payment of the
Merger
Consideration. Upon surrender of a Certificate or Book-Entry Share
for
cancellation to the Paying Agent or to such other agent or agents
as may
be appointed by Parent (i.e. the stock transfer agent of the Parent
being
Signature Stock Transfer, Inc., 2301 Ohio Drive, Suite 100, Plano,
Texas,
75093), together with such letter of transmittal, duly executed,
the
holder of such Certificate or Book-Entry Share shall be entitled
to
receive promptly in exchange therefor the Merger Consideration for
each
Share formerly represented by such Certificate and for each Book-Entry
Share and the Certificate so surrendered shall forthwith be cancelled.
If
payment of the Merger Consideration is to be made to a Person other
than
the Person in whose name the surrendered Certificate is registered,
it
shall be a condition precedent of payment that (A) the Certificate so
surrendered shall be properly endorsed or shall be otherwise in proper
form for transfer and (B) the Person requesting such payment shall
have
paid any transfer and other similar taxes required by reason of the
payment of the Merger Consideration to a Person other than the registered
holder of the Certificate surrendered or shall have established to
the
satisfaction of the Surviving Corporation that such tax either has
been
paid or is not required to be paid. Until surrendered as contemplated
by
this Section 1.08, each Certificate shall be deemed at any time after
the Effective Time to represent only the right to receive the Merger
Consideration in cash as contemplated by this Section 1.08, without
interest thereon. The Surviving Corporation shall pay all charges
and
expenses, including those of the Paying Agent, in connection with
the
exchange of Merger Consideration for
Shares.
(iii)
Closing
of Transfer
Books; No Further Ownership Rights in Shares. At the Effective
Time, the stock transfer books of the Company shall be closed and
thereafter there shall be no further registration of transfers of
Shares
on the records of the Company. From and after the Effective Time,
the
holders of Certificates outstanding immediately prior to the Effective
Time shall cease to have any rights with respect to such Shares except
as
otherwise provided for herein or by applicable law. If, after the
Effective Time, Certificates are presented to the Surviving Corporation
for any reason, they shall be cancelled and exchanged as provided
in this
Article I.
(iv)
Termination
of Fund;
No Liability. At any time following one year after the Effective
Time, the Surviving Corporation shall be entitled to require the
Paying
Agent to deliver to it any funds (including any interest received
with
respect thereto) made available to the Paying Agent and not disbursed
(or
for which disbursement is pending subject only to the Paying Agent’s
routine administrative procedures) to holders of Certificates or
Book-Entry Shares, and thereafter such holders shall be entitled
to look
only to the Surviving Corporation (subject to abandoned property,
escheat
or other similar laws) only as general creditors thereof with respect
to
the Merger Consideration payable upon due surrender of their Certificates
and compliance with the procedures in Section 2.2(b), without any
interest thereon. Notwithstanding the foregoing, none of Parent,
the
Surviving Corporation nor the Paying Agent shall be liable to any
holder
of a Certificate or Book-Entry Shares for Merger Consideration properly
delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.
(v)
Lost,
Stolen or
Destroyed Certificates. In the event that any Certificates shall
have been lost, stolen or destroyed, the Paying Agent shall issue
in
exchange for such lost, stolen or destroyed Certificates, upon the
making
of an affidavit of that fact by the holder thereof, the Merger
Consideration payable in respect thereof pursuant to Section 2.1
hereof; provided,
however,
that
Parent may, in its discretion and as a condition precedent to the
payment
of such Merger Consideration, require the owners of such lost, stolen
or
destroyed Certificates to deliver a bond in such sum as it may reasonably
direct as indemnity against any claim that may be made against Parent,
the
Surviving Corporation or the Paying Agent with respect to the Certificates
alleged to have been lost, stolen or
destroyed.
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SECTION
1.09 FINANCING
The
Parties agree that Closing is subject to the execution by Parent of an agreement
for an equity or debt financing to the Parent of up to Twenty Million Dollars
($20,000,000) but no less than Sixteen Million Dollars ($16,000,000) on terms
agreeable to both Parent and Target for the purposes of completing the
acquisition of Detroit Phone Cards Inc. (“DPC”), AAAA Media Services Ltd. (“A4”)
by the Target, the payment of the Cash Consideration portion of the Merger
Consideration hereunder and working capital for the Parent (“the
Financing”).
The
Closing is further subject to the Financing being advanced to the Parent on
or
before Closing.
SECTION
1.10 RESTRICTIONS ON RESALE
All
series of the Issuable Shares of
the PARENT will not be registered under the Securities Act, or the securities
laws of any state, and absent an exemption from registration contained in such
laws, cannot be transferred, hypothecated, sold or otherwise disposed of until;
(i) a registration statement with respect to such securities is declared
effective under the Securities Act, or (ii) PARENT receives an opinion of
counsel for PARENT that an exemption from the registration requirements of
the
Securities Act is available.
The
certificates representing the
number of Issuable Shares into which the Shares shall have been converted
pursuant to this Agreement shall contain legends substantially as
follows:
“THE
SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH
RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR THE COMPANY RECEIVES
AN
OPINION OF COUNSEL FOR THE COMPANY THAT AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT IS AVAILABLE.”
SECTION
1.11 ISSUANCE OF PARENT COMMON STOCK
The
Issuable Shares issuable to the holders of the TARGET Shares will when issued
pursuant to this Agreement be duly and validly authorized and issued, fully
paid
and non-assessable.
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ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF SUB AND PARENT
Except
as set forth in the PARENT SEC
Reports or the PARENT Disclosure Schedule or the SUB Disclosure Schedule,
disclosure in any one of which shall apply to any and all representations and
warranties made in this Agreement, and except as otherwise disclosed in writing
by PARENT and/or SUB to TARGET, PARENT and SUB hereby represent and warrant
to
TARGET, as of the date of this Agreement and as of the Effective Time, as
follows:
SECTION
2.01 ORGANIZATION, STANDING AND POWER
SUB
is a Nevada company and PARENT is a
Nevada corporation. Both SUB and PARENT are duly incorporated,
validly existing and in good standing under the laws of the State of Nevada,
and
have corporate power and authority to conduct their business as presently
conducted by it and to enter into and perform this Agreement and to carry out
the transactions contemplated by this Agreement. SUB and PARENT are duly
qualified to do business as a foreign limited liability company and corporation,
respectively, doing business in each state in which they own or lease real
property and where the failure to be so qualified and in good standing would
have a Material Adverse Effect on SUB and PARENT or their business. Except
as
disclosed on Schedule
2.01 hereto, neither SUB nor PARENT have any material ownership interest
in any corporation, partnership (general or limited), limited liability company
or other entity, whether foreign or domestic (collectively such ownership
interests including capital stock).
SECTION
2.02 CAPITALIZATION
Subject
to modification by the PARENT
prior to the Closing for purposes of effectuating the terms of this Agreement,
the authorized capital stock of PARENT consists of 350,000,000 shares of common
stock, $0.001 par value per share, and 50,000,000 of preferred stock. As of
December 31, 2008, there were 77,549,138 shares of common stock issued and
outstanding. Except as disclosed on Schedule 2.02(a)
hereto, no shares have been reserved for issuance to any person, and there
are
no other outstanding rights, warrants, options or agreements for the purchase
of
capital stock from PARENT except as provided in this Agreement. Except as
disclosed on Schedule
2.02(b) hereto, no Person is entitled to any rights with respect to the
issuance or transfer of the Issuable Shares. The outstanding shares are validly
issued, fully paid, non-assessable, and have been issued in compliance with
all
state and federal securities laws or other Applicable Law.
The
authorized capital stock of SUB consists of 1,000 shares of common stock,
$0.0001 par value per share, and no authorized shares of preferred stock. As
of
the date of this Agreement, there were 10 shares of common stock issued and
outstanding. Except as disclosed on Schedule 2.02(b)
hereto, no shares have been reserved for issuance to any person, and there
are
no other outstanding rights, warrants, options or agreements for the purchase
of
capital stock from SUB except as provided in this Agreement. Except as disclosed
on Schedule
2.02(b) hereto, no Person is entitled to any rights with respect to the
issuance or transfer of the Issuable Shares. The outstanding shares are validly
issued, fully paid, non-assessable, and have been issued in compliance with
all
state and federal securities laws or other Applicable Law. As of the Effective
Time, SUB shall not have filed a registration statement as to any of its
shares.
-13-
SECTION
2.03 AUTHORITY FOR AGREEMENT
The
execution, delivery, and
performance of this Agreement by SUB and PARENT have been duly authorized by
all
necessary corporate action, except for the approval of SUB's Stockholders (the
“SUB Stockholders”), and this Agreement, upon its execution by the Parties, will
constitute the valid and binding obligation of SUB and PARENT enforceable
against it in accordance with and subject to its terms, except as enforceability
may be affected by bankruptcy, insolvency or other laws of general application
affecting the enforcement of creditors' rights, provided, that no such
obligation shall arise or be binding unless the SUB Stockholders approve this
Agreement. Except as set forth above or in Schedule 2.03
attached hereto, the execution and consummation of the transactions contemplated
by this Agreement and compliance with its provisions by SUB and PARENT will
not
violate any provision of Applicable Law and will not conflict with or result
in
any breach of any of the terms, conditions, or provisions of, or constitute
a
default under, SUB's Certificate of Incorporation or Bylaws or PARENT’s
Certificate of Incorporation or Bylaws, as the case may be and in each case
as
amended, or, in any material respect, any indenture, lease, loan agreement
or
other agreement or instrument to which SUB and PARENT are a party or by which
they or any of their properties are bound, or any decree, judgment, order,
statute, rule or regulation applicable to SUB and PARENT except to the extent
that any breach or violation of any of the foregoing would not constitute or
result in a Material Adverse Effect on SUB or PARENT taken as a
whole.
SECTION
2.04 STATUS OF PARENT AND SUB; FINANCIAL STATEMENTS
(i)
Currently
the shares of common stock of PARENT are traded on the Electronic
Bulletin
Board in the over-the-counter market (“OTCBB”). Currently the
shares of common stock of SUB are not
traded.
(ii)
SUB
is a non-reporting company.
(iii)
PARENT
is a reporting company.
(iv)
SUB
does not have any material liabilities, except as provided in Schedule
2.05.
(v)
PARENT
has made available to TARGET copies of its audited financial statements
at
December 31, 2004, 2005 and 2006 for the three fiscal years then
ended
(collectively, “PARENT Financial
Statements”).
(vi)
The
PARENT Financial Statements (i) are consistent in all material respects
with the books and records of PARENT; (ii) have been or will be prepared
in accordance with GAAP consistently applied; (iii) reflect and provide
adequate reserves and disclosures in respect of all liabilities of
PARENT,
including all contingent liabilities, as of the respective dates
of the
Financial Statements, and (iv) present fairly in all material respects
the
financial position of PARENT at such dates and the results of operations
and cash flows of PARENT for the periods then
ended.
(vii)
Except
as otherwise disclosed in the PARENT Disclosure Schedule or in the
PARENT
Financial Statements, PARENT does not have any liabilities or obligations
that would be required to be set forth in PARENT Financial Statements
in
accordance with GAAP.
SECTION
2.05 GOVERNMENTAL CONSENT
No
consent, waiver, approval, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other federal, state, county, local
or
other foreign governmental authority, instrumentality, agency or commission
or
any third party (other than the approval of the SUB Stockholders), including
a
party to any agreement with SUB or PARENT, is required by or with respect to
SUB
or PARENT in connection with the execution and delivery of this Agreement or
the
consummation of the transactions contemplated hereby, except for (i) such
consents, waivers, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable securities laws
thereby, and (ii) the filing of the Certificate of Merger with the Secretary
of
State of the State of Nevada.
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SECTION
2.06 LITIGATION
Except
as disclosed on Schedule 2.07 hereof,
there is no action, suit, investigation, audit or proceeding pending against,
or
to the best knowledge of SUB and PARENT threatened against or affecting, SUB
and
PARENT or any of their assets or properties before any court or arbitrator
or
any governmental body, agency or official.
SECTION
2.07 INTERESTED PARTY TRANSACTIONS
Intentionally
omitted.
SECTION
2.08 COMPLIANCE WITH APPLICABLE LAWS
To
the Knowledge of SUB and PARENT, the
business of SUB and PARENT has not been, and is not being, conducted in
violation of any Applicable Law, except for possible violations which
individually or in the aggregate have not had and are not reasonably likely
to
have a Material Adverse Effect. No investigation or review by any governmental
entity with respect to SUB and PARENT is pending or, to the Knowledge of SUB
and
PARENT, threatened, nor has any governmental entity indicated an intention
to
conduct the same, except for investigations or reviews which individually or
in
the aggregate would not have, nor be reasonably likely to have, a Material
Adverse Effect.
SECTION
2.09 NO UNDISCLOSED LIABILITIES
Except
as set forth on Schedule 2.10 hereto,
there are no liabilities, debts or other obligations of SUB and PARENT of any
kind whatsoever, whether accrued, contingent, absolute, determined, determinable
or otherwise, and there is no existing condition, situation or set of
circumstances which could reasonably be expected to result in such a liability
or debt.
SECTION
2.10 TAX RETURNS AND PAYMENT
SUB
and PARENT have filed all material
Tax Returns required by it and have paid all Taxes shown thereon to be due,
except for Taxes being contested in good faith. There is no
material claim for Taxes that is a lien against the property of SUB and PARENT
other than liens for taxes not yet due and payable. Neither SUB nor
PARENT have received notification of any audit of any Tax Return of SUB and
PARENT being conducted or pending by a Tax Authority where an adverse
determination could have a Material Adverse Effect, no extension or waiver
of
the statute of limitations on the assessment of any taxes has been granted
by
SUB and PARENT which is currently in effect, and SUB and PARENT are not a party
to any agreement, contract or arrangement with any Tax Authority, which may
result in the payment of any material amount. Neither SUB nor PARENT
are a party
to
any tax-sharing or allocation agreement, nor does they owe any amount under
any
tax-sharing or allocation agreement. Neither SUB nor PARENT have been (nor
does
it have any liability for unpaid Taxes because it once was) a member of an
“affiliated group” within the meaning of Code Section 1502.
-15-
SECTION
2.11 BOARD APPROVAL AND
SHAREHOLDER APPROVAL.
The
Board of Directors of SUB and PARENT have approved this Agreement and the
transactions contemplated hereby and SUB will submit it to the sole Stockholder
for its approval. To the extent that shareholder approval of PARENT, SUB
and/or
TARGET is required by state corporate law, this agreement will be submitted
to
the respective Stockholders for their
approval.
SECTION
2.12 FULL DISCLOSURE
The
representations and warranties of
SUB and PARENT contained in Article II of this Agreement or to be furnished
in
or in connection with documents mailed or delivered to the SUB Stockholders
in
connection with soliciting their consent to this Agreement, do not contain
or
will not contain, any untrue statement of a material fact, or omit to state
a
material fact required to be stated herein or therein or necessary to make
the
statements herein or therein, in the light of the circumstances under which
they
were made, not misleading.
SECTION
2.13 BROKERS’ AND FINDERS’ FEES
Neither
SUB nor PARENT has incurred,
nor will they incur, directly or indirectly, any liability for brokers’ or
finders’ fees or agents’ commissions or investment bankers’ fees or any similar
charges in connection with this Agreement or any transaction contemplated
hereby.
SECTION
2.14 PARENT SEC REPORTS
Except
as
disclosed in the PARENT Schedules, PARENT has filed all forms, statements,
reports and documents required to be filed or, if permissible, furnished by
it
with the Commission since such reports were required. The PARENT SEC Reports
(i)
were prepared in accordance with the requirements of the Securities Act or
the
Exchange Act, as the case may be, and the rules and regulations promulgated
thereunder, and (ii) did not, at the time they were filed, or, if amended,
as of
the date of such amendment, contain any untrue statement of a material fact
or
omit to state a material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. As of its filing date,
each PARENT SEC Report complied as to form in all material respects with the
applicable requirements of the Securities Act and the Exchange Act, as the
case
may be. There has not occurred any material adverse change, or any
development constituting a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or operations
of
PARENT since its latest report on Form 10-QSB. Neither the offer or
sale of the PARENT Stock pursuant hereto nor the consummation of the
transactions as contemplated by this Agreement give rise to any rights for
or
relating to the registration of shares of PARENT Common Stock or other
securities of PARENT except as set forth on the PARENT Disclosure
Schedule. PARENT is not required to prepare and deliver to its
shareholders and file with the Commission any proxy, information statement
or
similar report in advance of the consummation of the transactions contemplated
hereby, except for such reports as may need be filed in accordance with Form
8-K
and Schedule 14F-1.
In
the
event that PARENT is not current in filing all PARENT SEC Reports when due,
or
in the event that PARENT is no longer eligible to have its securities quoted
on
the Electronic Bulletin Board maintained by the Nasdaq Stock Market, Inc. on
the
Closing Date, TARGET may elect to terminate this Agreement.
-16-
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF TARGET
Except
as set forth in the TARGET SEC
Reports or the TARGET Disclosure Schedule, disclosure in any one of which shall
apply to any and all representations and warranties made in this Agreement,
and
except as otherwise disclosed in writing by TARGET to PARENT, TARGET hereby
represents and warrants to PARENT, as of the date of this Agreement and as
of
the Effective Time, as follows:
SECTION
3.01 ORGANIZATION, STANDING AND POWER
(i)
TARGET is a Nevada corporation duly formed, validly existing and in good
standing under the laws of the State of Nevada and has full corporate power
and
authority to conduct its business as presently conducted by it and to enter
into
and perform this Agreement and to carry out the transactions contemplated by
this Agreement. TARGET is duly qualified to do business in each state or other
jurisdiction it owns or leases real property and where the failure to be so
qualified and in good standing would have a Material Adverse Effect. A schedule
of TARGET’S subsidiaries is attached hereto as Schedule 3.04, which discloses
TARGET’S interests in any corporation, partnership (general or limited), limited
liability company or other entity, whether foreign or domestic (collectively
such ownership interests including capital stock).
SECTION
3.02 CAPITALIZATION
The
authorized capital stock of TARGET
consists of 125,000,000 shares of common stock, $0.0002 par value per share,
and
15,000,000 shares of preferred stock, $.0001 par value per share. As of December31, 2008, there were approximately 93,004,647 shares of common stock issued
and
outstanding, and there were 3,350,750 shares of preferred stock issued and
outstanding. Except as disclosed on Schedule 3.02(a)
hereto, no shares have been reserved for issuance to any person, and there
are
no other outstanding rights, warrants, options or agreements for the purchase
of
capital stock from TARGET except as provided in this Agreement. Except as
disclosed on Schedule
3.02(b) hereto, no Person is entitled to any rights with respect to the
issuance or transfer of the Issuable Shares. The outstanding shares are validly
issued, fully paid, non-assessable, and have been issued in compliance with
all
state and federal securities laws or other Applicable Law.
SECTION
3.03 AUTHORITY FOR AGREEMENT
The
execution, delivery and performance
of this Agreement by TARGET has been duly authorized by all necessary corporate
or company action, as the case may be, and this Agreement constitutes the valid
and binding obligation of TARGET, enforceable against it in accordance with
its
terms, except as enforceability may be affected by bankruptcy, insolvency or
other laws of general application affecting the enforcement of creditors'
rights. The execution and consummation of the transactions contemplated by
this
Agreement and compliance with its provisions by TARGET will not violate any
provision of Applicable Law and will not conflict with or result in any breach
of any of the terms, conditions, or provisions of, or constitute a default
under, its certificate of incorporation or bylaws, or, in any material respect,
any indenture, lease, loan agreement or other agreement instrument to which
TARGET is a party or by which it or any of its properties are bound, or any
decree, judgment, order, statute, rule or regulation applicable to TARGET except
to the extent that any breach or violation of any of the foregoing would not
constitute or result in a Material Adverse Effect.
Except
as disclosed on Schedule 3.04 hereof,
TARGET has no other subsidiaries.
SECTION
3.05 STOCKHOLDERS
Except
as disclosed on Schedule 3.05, there
are no other holders of the TARGET Common Stock.
SECTION
3.06 GOVERNMENTAL CONSENT
No
consent, waiver, approval, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other federal, state, county, local
or
other foreign governmental authority, instrumentality, agency or commission
or
any third party, including a party to any agreement with TARGET, is required
by
or with respect to TARGET in connection with the execution and delivery of
this
Agreement or the consummation of the transactions contemplated hereby, except
for (i) such consents, waivers, approvals, orders, authorizations,
registrations, declarations and filings as may be required under applicable
securities laws thereby, and (ii) the filing of the Certificate of Merger with
the Secretary of State of the State of Nevada.
SECTION
3.07 STATUS OF TARGET; FINANCIAL STATEMENTS
(i)
Currently
the shares of common stock of TARGET are quoted on
the OTCBB.
(ii)
As
of the date hereof, TARGET is not current in its reports. After the
Execution of this Agreement and prior to Closing, TARGET may upon
discretion of it Board of Directors of TARGET and after providing
notice
to the Parent file a Form 15 to de-register the stock and it shall
as a
result, become a non-reporting
company.
(iii)
TARGET
has made available to PARENT copies of its audited financial statements
as
of December 31, 2003, 2004 and 2005 for the three fiscal years then
ended
(collectively, “TARGET
Financial
Statements”).
(iv)
The
TARGET Financial Statements (i) are consistent in all material respects
with the books and records of TARGET; (ii) have been or will be prepared
in accordance with GAAP consistently applied; (iii) reflect and provide
adequate reserves and disclosures in respect of all liabilities of
TARGET,
including all contingent liabilities, as of the respective dates
of the
Financial Statements, and (iv) present fairly in all material respects
the
financial position of TARGET at such dates and the results of operations
and cash flows of TARGET for the periods then
ended.
(v)
Except
as otherwise disclosed in the TARGET Disclosure Schedule or in the
TARGET
Financial Statements, TARGET does not have any liabilities or obligations
that would be required to be set forth in TARGET Financial Statements
in
accordance with GAAP.
-18-
SECTION
3.08 LITIGATION
Except
as otherwise disclosed in the
TARGET Disclosure Schedule there is no action, suit, investigation, audit or
proceeding pending against, or to the best knowledge of TARGET, threatened
against or affecting, TARGET or any of its assets or properties before any
court
or arbitrator or any governmental body, agency or official.
SECTION
3.09 RESTRICTIONS ON BUSINESS ACTIVITIES
There
is no agreement (non-compete or
otherwise), commitment, judgment, injunction, order or decree to which TARGET
is
a party or otherwise binding upon TARGET which has or may have the effect of
prohibiting or impairing any business practice of TARGET, any acquisition of
property (tangible or intangible) by TARGET or the conduct of business by
TARGET. Without limiting the foregoing, TARGET has not entered into
any agreement under which TARGET is restricted from selling, licensing or
otherwise distributing any of its technology or products to or providing
services to, customers or potential customers or any class of customers, in
any
geographic area, during any period of time or in any segment of the
market.
SECTION
3.10 INTERESTED PARTY TRANSACTIONS
Intentionally
omitted.
SECTION
3.11 COMPLIANCE WITH APPLICABLE LAWS
To
the Knowledge of TARGET, the
business of TARGET has not been, and is not being, conducted in violation of
any
Applicable Law, except for possible violations which individually or in the
aggregate have not had and are not reasonably likely to have a Material Adverse
Effect. No investigation or review by any governmental entity with respect
to
TARGET is pending or, to the Knowledge of TARGET, threatened, nor has any
governmental entity indicated an intention to conduct the same, except for
investigations or reviews which individually or in the aggregate would not
have,
nor be reasonably likely to have, a Material Adverse Effect.
SECTION
3.12 GOVERNMENTAL AUTHORIZATION
Schedule
3.12
accurately lists each consent, license, permit, grant or other authorization
issued to TARGET by a governmental entity (i) pursuant to which TARGET currently
operates or holds any interest in any of their properties or (ii) which is
required for the operation of the business of TARGET or the holding of any
such
interest (collectively, the “TARGET
Authorizations”). The TARGET Authorizations are in full force
and effect and constitute all TARGET Authorizations required to permit TARGET
to
operate or conduct its business or hold any interest in its properties or
assets.
-19-
SECTION
3.13 ABSENCE OF CHANGES
Since
the TARGET Financial Statements
Date there has not been:
(i)
any
event, occurrence, development or state of circumstances or facts
which
would, individually or in the aggregate, have a Material Adverse
Effect on
TARGET;
(ii)
any
amendment of any material term of any outstanding security of
TARGET;
(iii)
any
incurrence, assumption or guarantee by TARGET of any indebtedness
for
borrowed money;
(iv)
any
creation or other incurrence by TARGET of any Lien on any material
asset;
(v)
the
making of any loan, advance or capital contributions to or investment
in
any Person;
(vi)
any
damage, destruction or other casualty loss (whether or not covered
by
insurance) affecting the business or any asset(s) of TARGET which
would,
individually or in the aggregate, have a Material Adverse Effect
on
TARGET;
(vii)
any
transaction or commitment made, or any contract or agreement entered
into,
by TARGET or any relinquishment by TARGET of any contract or other
right;
(viii)
any
change in any method of accounting, method of tax accounting, or
accounting practice by TARGET;
(ix)
any
(a) grant of any severance or termination pay to any current or former
director, officer or employee of TARGET, (b) increase in benefits
payable
under any existing severance or termination pay policies or employment
agreements, (c) entering into any employment, deferred compensation
or
other similar agreement (or any amendment to any such existing agreement)
with any current or former director, officer or employee of TARGET,
(d)
establishment, adoption or amendment (except as required by applicable
law) of any collective bargaining, bonus, profit sharing, thrift,
pension,
retirement, deferred compensation, compensation, stock option, restricted
stock or other benefit plan or arrangement covering any current or
former
director, officer or employee of TARGET, or (e) increase in compensation,
bonus or other benefits payable or otherwise made available to any
current
or former director, officer or employee of TARGET;
(x)
any
labor dispute, other than routine individual grievances; or
(xi)
any
tax election or any settlement or compromise of any tax liability,
in
either case that is material to
TARGET.
-20-
SECTION
3.14 OPERATIONS SINCE FINANCIAL STATEMENTS DATE
Since
the TARGET Financial Statements
Date, except for as contemplated by this Agreement or in the TARGET Financial
Statements, TARGET:
(i)
has
operated its businesses substantially as it was operated prior to
that
date and only in the ordinary course;
(ii)
has
not declared or otherwise become liable with respect to any dividend
or
distribution of cash, assets or capital
stock;
(iii)
has
maintained or kept current its books, accounts, records, payroll,
and
filings in the usual and ordinary course of business, consistent
in all
material respects with past practice;
and
(iv)
has
not made any capital expenditure, commitment or investment other
than in
the ordinary course of business.
SECTION
3.15 NO UNDISCLOSED LIABILITIES
Except
as set forth on Schedule 3.15 hereto,
there are no liabilities or debts of TARGET of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, and there
is no existing condition, situation or set of circumstances which could
reasonably be expected to result in such a liability or debt.
SECTION
3.16 ACCOUNTS RECEIVABLE
(i)
TARGET
has made available to SUB a list of all consolidated accounts receivable
of TARGET (“Accounts
Receivable”) as of June 30, 2007 along with a range of days elapsed
since the date of each invoice.
(ii)
Except
as set forth on Schedule
3.16(a), all Accounts Receivable of TARGET arose in the ordinary
course of business and are collectible except to the extent of
reserves
therefore set forth in the TARGET Financial Statements
Date. Except as set forth on Schedule
3.16(b), no person has any Lien on any of such Accounts Receivable
and no request or agreement for deduction or discount has been
made with
respect to any of such Accounts
Receivable.
SECTION
3.17 INSURANCE
TARGET
has obtained and maintained in
full force and effect insurance with responsible and reputable insurance
companies or associations in such amounts, on such terms and covering such
risks, including fire and other risks insured against by extended coverage,
as
is reasonably prudent. With respect to the insurance policies and
fidelity bonds covering the assets, business, equipment, properties, operations,
employees, officers and directors of TARGET, there is no claim by TARGET pending
under any of such policies or bonds as to which coverage has been questioned,
denied or disputed by the underwriters of such policies or bonds. All
premiums due and payable under all such policies and bonds have been
paid. TARGET is otherwise in material compliance with the terms of
such policies and bonds (or other policies and bonds providing substantially
similar insurance coverage). TARGET has no Knowledge of any
threatened termination of, or material premium increase with respect to, any
of
such policies.
-21-
SECTION
3.18 TITLE TO PROPERTIES; LIENS
TARGET
does not own any real
property. All of the assets of TARGET, except those disposed of in
the ordinary course of business, are free and clear of all Liens, security
interests, charges and encumbrances, except (i) as disclosed on the TARGET
Financial Statements, (ii) Liens for current taxes not yet due and payable,
(iii) Liens in favor of any lessor with respect to capital lease obligations
disclosed in Schedule
3.18 attached hereto, (iv) such imperfections of title or zoning
restrictions, easements or encumbrances, if any, as do not materially interfere
with the present use of such property or assets, and (vi) Liens which arise
by
operation of law.
Except
for: (i) contracts
with clients and other contracts executed by TARGET in the ordinary course of
business; (ii) employment agreements with officers; and (iii) other material
contracts which are listed on Schedule 3.19(a)
hereof, TARGET is not a party to or bound by any material indenture, lease,
license, loan agreement, other agreement or other instrument (collectively,
the
“Material
Contracts”). Except as disclosed on Schedule
3.19(b)
hereof, TARGET’s Material Contracts are enforceable in accordance with their
respective terms, and to the knowledge of TARGET, TARGET is not in violation
of,
and has received no notice of being in violation of such Material
Contracts.
SECTION
3.20 NON-CONTRAVENTION
The
execution and delivery by TARGET of
this Agreement and the consummation by TARGET of the transactions contemplated
hereby and performance of their obligations hereunder do not and will not (i)
violate the Certificate of Incorporation or Bylaws of TARGET, (ii) violate
any
applicable law, rule, regulation, judgment, injunction, order or decree, (iii)
require any consent or other action by any Person under, constitute a default
under, result in a violation of, conflict with, or give rise to any right of
termination, cancellation or acceleration of any right or obligation of TARGET,
or to a loss of any benefit to which TARGET is entitled under any provision
of
any agreement or other instrument binding upon TARGET, or any license,
franchise, permit, certificate, approval or other similar authorization
affecting, or relating in any way to, the assets or business of TARGET, or
(iv)
result in the creation or imposition of any Lien (as defined herein) on any
asset of TARGET.
SECTION
3.21 LABOR RELATIONS
TARGET
is not a party to any collective
bargaining agreement and, to the Knowledge of TARGET, no organizational efforts
are presently being made with respect to any employees of
TARGET. TARGET has complied in all material respects with all
applicable laws (including, but not limited to, the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”)), and
regulations relating to employment matters including, but not limited to, those
relating to wages, hours, discrimination and payment of social security and
similar taxes.
-22-
SECTION
3.22 TAX RETURNS AND PAYMENT
Except
as disclosed on Schedule 3.22 hereof,
TARGET has filed all material Tax Returns required from it and has paid all
Taxes shown thereon to be due, except as reflected in the TARGET Financial
Statements and except for Taxes being contested in good faith and except for
such delinquent tax returns that TARGET is required to file within 90 days
after
the Effective Time of the Merger. Except as disclosed in the
TARGET Financial Statements, there is no material claim for Taxes that is a
lien
against the property of TARGET other than liens for taxes not yet due and
payable. TARGET has not received notification of any audit of any Tax
Return of TARGET being conducted or pending by a Tax Authority where an adverse
determination could have a Material Adverse Effect, no extension or waiver
of
the statute of limitations on the assessment of any taxes has been granted
by
TARGET which is currently in effect, and TARGET is not a party to any agreement,
contract or arrangement with any Tax Authority, which may result in the payment
of any material amount in excess of the amount reflected on the TARGET Financial
Statements. . TARGET is not a party
to
any tax-sharing or allocation agreement, nor does it owe any amount under any
tax-sharing or allocation agreement. TARGET has never been (nor does it have
any
liability for unpaid Taxes because it once was) a member of an “affiliated
group” within the meaning of Code Section 1502.
SECTION
3.23 INTELLECTUAL PROPERTY
Except
as disclosed on Schedule 3.23 hereof,
TARGET has title to all material patents, trademarks or trade secrets, or
adequate licenses and rights to use the patents, trademarks, copyrights, trade
names and trade secrets of others, necessary to the conduct of its business.
The
business of TARGET is being carried on without known conflicts with patents,
licenses, trademarks, copyrights, trade names and trade secrets of others and,
to the Knowledge of TARGET, no other persons are conducting their businesses
in
conflict with patents, licenses, trademarks, copyrights, trade names and trade
secrets used by TARGET.
SECTION
3.24 ENVIRONMENTAL MATTERS
To
the Knowledge of TARGET: (i) TARGET
has obtained all material permits and licenses which are required in connection
with its business under all applicable laws and regulations relating to
pollution or protection of the environment (the “Environmental Laws”)
and is in material compliance therewith; (ii) TARGET has at all times conducted
its business in material compliance with all Environmental Laws and TARGET
has
not received any written notice of any past, present or future events,
conditions or circumstances, which would interfere with or prevent material
compliance or continued material compliance with any Environmental Laws or
which
form the basis of any material claim, demand or investigation, based on or
related to TARGET’s business or other activities; (iii) there is no civil,
criminal or administrative action or proceeding pending or threatened against
TARGET, arising under any Environmental Laws; and (iv) there does not exist,
and
at no time since TARGET acquired any premises leased or used by it, has there
existed any conditions that TARGET believes would require remediation by TARGET
under any Environmental Laws
SECTION
3.25 EMPLOYMENT AGREEMENTS
Schedule
3.25 hereof
lists each employment agreement between TARGET and any director, officer or
employee of TARGET and copies of all such agreements have been provided to
SUB
prior to the date hereof. Except as provided in such employment agreements,
all
other employees of TARGET are terminable at will without expense or liability
to
TARGET other than as may be set forth in said Schedule 3.25
attached hereto or as may be required by law.
-23-
SECTION
3.26 WARRANTY CLAIMS
To
the Knowledge of TARGET and except
as set forth in Schedule 3.26
attached hereto, there are no pending or threatened material claims against
TARGET for any work performed by TARGET for any client, including but not
limited to, any services rendered under any warranties.
SECTION
3.27 BROKERS’ AND FINDERS’ FEES
TARGET
has not incurred, nor will it
incur, directly or indirectly, any liability for brokers’ or finders’ fees or
agents’ commissions or investment bankers’ fees or any similar charges in
connection with this Agreement or any transaction contemplated
hereby.
SECTION
3.28 BOARD APPROVAL
The
Board of Directors of TARGET has
approved this Agreement and the transactions contemplated hereby and will submit
it to the Stockholders for their approval.
SECTION
3.29 FULL DISCLOSURE
The
representations and warranties of
TARGET contained in this Article III of this Agreement or to be furnished in
or
in connection with documents mailed or delivered to the Stockholders of TARGET
in connection with soliciting their consent to this Agreement, do not contain
or
will not contain, any untrue statement of a material fact, or omit to state
a
material fact required to be stated herein or therein or necessary to make
the
statements herein or therein, in the light of the circumstances under which
they
were made, not misleading.
SECTION
3.30 TARGET SEC REPORTS
Except
as
disclosed in the TARGET Schedules, TARGET has filed all forms, statements,
reports and documents required to be filed or, if permissible, furnished by
it
with the Commission since such forms have been required. The TARGET SEC Reports
(i) were prepared in accordance with the requirements of the Securities Act
or
the Exchange Act, as the case may be, and the rules and regulations promulgated
thereunder, and (ii) did not, at the time they were filed, or, if amended,
as of
the date of such amendment, contain any untrue statement of a material fact
or
omit to state a material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. As of its filing date,
each TARGET SEC Report complied as to form in all material respects with the
applicable requirements of the Securities Act and the Exchange Act, as the
case
may be.
-24-
ARTICLE
IV
CERTAIN
COVENANTS AND AGREEMENTS
SECTION
4.01 COVENANTS OF TARGET
TARGET
covenants and agrees that,
during the period from the date of this Agreement until the Closing Date, TARGET
shall conduct its business as presently operated and solely in the ordinary
course, and consistent with such operation, and, in connection therewith,
without the written consent of SUB and PARENT:
shall
not pay or agree to pay to any employee, officer or director compensation
that is in excess of the current compensation level of such employee,
officer or director other than salary increases or payments made
in the
ordinary course of business or as otherwise provided in any contracts
or
agreements with any such employees;
(iii)
shall
not merge or consolidate with any other entity or acquire or agree
to
acquire any other entity;
(iv)
shall
not sell, transfer, or otherwise dispose of any assets required
for the
operations of TARGET’s business except in the ordinary course of business
consistent with past practices;
(v)
shall
not create, incur, assume, or guarantee any indebtedness for money
borrowed except in the ordinary course of business, or create or
suffer to
exist any mortgage, lien or other encumbrance on any of its assets,
except
those in existence on the date hereof or those granted pursuant
to
agreements in effect on the date of this Agreement or provided
by SUB and
PARENT and/or any of their affiliates;
(vi)
shall
not make any capital expenditure or series of capital expenditures
except
in the ordinary course of business, with the exception of the acquisition
referred to in Section 4.01(iii) hereof;
(vii)
shall
not declare or pay any dividends on or make any distribution of any
kind
with respect to the TARGET Common Stock;
(viii)
shall
maintain its facilities, assets and properties in reasonable repair,
order
and condition, reasonable wear and tear excepted, and to notify SUB
and
PARENT immediately in the event of any material loss or damage to
any of
TARGET’s material assets;
(ix)
shall
maintain in full force and effect all present insurance coverage
of the
types and in the amounts as are in effect as of the date of this
Agreement;
(x)
shall
seek to preserve the present employees, reputation and business
organization of TARGET and TARGET’s relationship with its clients and
others having business dealings with it;
(xi)
shall
not issue any additional TARGET Common Stock or take any action affecting
the capitalization of TARGET;
(xii)
shall
use commercially reasonable efforts to comply with and not be in
default
or violation under any law, regulation, decree or order applicable
to
TARGET’s business, operations or assets where such violation would have
a
Material Adverse Effect;
(xiii)
shall
not grant any severance or termination pay to any director, officer
or any
other employees of TARGET, other than pursuant to agreements in effect
on
the date of this Agreement or as otherwise disclosed in the documents
delivered pursuant to this Agreement;
(xiv)
shall
not change any of the accounting principles or practices used by
it,
except as may be required as a result of a change in law or in GAAP,
whether in respect of Taxes or otherwise;
(xv)
shall
not terminate or waive any right of substantial value other than
in the
ordinary course of business; and
(xvi)
shall
not enter into any material contract or commitment other than in
the
ordinary course of business.
-25-
SECTION
4.02 COVENANTS OF PARENT
PARENT
covenants and agrees that,
during the period from the date of this Agreement until the Closing Date, PARENT
shall conduct its business as presently operated and solely in the ordinary
course, and consistent with such operation, and, in connection therewith,
without the written consent of TARGET:
(i)
Employment
Additionally, PARENT shall employ such employees of TARGET as determined
by PARENT, upon such terms and conditions as shall be acceptable
to PARENT
and such individuals.
(ii)
Resignation
of
Directors, Nomination of Directors and Officers. PARENT
shall, prior to the Closing, cause none of its directors to resign
subsequent to the Effective Time. In addition, PARENT agrees
and accepts the officers and directors of the PARENT following
the Merger
of persons listed on Schedule
1.05(a), until the earlier of their death, resignation or removal
or until their respective successors are duly appointed and
qualified.
shall
not pay or agree to pay to any employee, officer or director compensation
that is in excess of the current compensation level of such employee,
officer or director other than salary increases or payments made
in the
ordinary course of business or as otherwise provided in any contracts
or
agreements with any such employees;
(v)
shall
not merge or consolidate with any other entity or acquire or agree
to
acquire any other entity;
(vi)
shall
not sell, transfer, or otherwise dispose of any assets required for
the
operations of PARENT’s business except in the ordinary course of business
consistent with past practices;
(vii)
shall
not create, incur, assume, or guarantee any indebtedness for money
borrowed except in the ordinary course of business, or create or
suffer to
exist any mortgage, lien or other encumbrance on any of its assets,
except
those in existence on the date hereof or those granted pursuant to
agreements in effect on the date of this Agreement or provided by
TARGET
and/or any of its affiliates;
(viii)
shall
not make any capital expenditure or series of capital expenditures
except
in the ordinary course of business;
(ix)
shall
not declare or pay any dividends on or make any distribution of any
kind
with respect to its securities;
(x)
shall
maintain its facilities, assets and properties in reasonable repair,
order
and condition, reasonable wear and tear excepted, and to notify TARGET
immediately in the event of any material loss or damage to any of
PARENT’s
material assets;
(xi)
shall
maintain in full force and effect all present insurance coverage
of the
types and in the amounts as are in effect as of the date of this
Agreement;
(xii)
shall
seek to preserve the present employees, reputation and business
organization of SUB and PARENT and SUB’s and PARENT’s relationship with
its clients and others having business dealings with it;
(xiii)
shall
not issue any securities other than as contemplated hereby.
(xiv)
shall
use commercially reasonable efforts to comply with and not be in
default
or violation under any law, regulation, decree or order applicable
to
SUB’s and PARENT’s business, operations or assets where such violation
would have a Material Adverse Effect;
(xv)
shall
not grant any severance or termination pay to any director, officer
or any
other employees of SUB and PARENT except as otherwise disclosed in
the
documents delivered pursuant to this Agreement;
(xvi)
shall
not change any of the accounting principles or practices used by
it,
except as may be required as a result of a change in law or in GAAP,
whether in respect of Taxes or otherwise;
(xvii)
shall
not terminate or waive any right of substantial value other than
in the
ordinary course of business;
(xviii)
shall
not enter into any material contract or commitment other than in
the
ordinary course of business; and
(xix)
during
the period from the date of this Agreement until the Closing Date,
SUB and
PARENT shall conduct its business as presently operated and solely
in the
ordinary course, and consistent with such operation, and, in connection
therewith, without the written consent of
TARGET.
-26-
SECTION
4.03 COVENANTS OF THE PARTIES
(i)
Announcement. Neither
TARGET, on the one hand, nor SUB and PARENT on the other hand, shall
issue
any press release or otherwise make any public statement with respect
to
this Agreement or the transactions contemplated hereby without the
prior
consent of the other Parties (which consent shall not be unreasonably
withheld), except as may be required by applicable law or securities
regulation. Notwithstanding anything in this Section 4.03 to the
contrary,
the Parties will, to the extent practicable, consult with each other
before issuing, and provide each other the opportunity to review
and
comment upon, any such press release or other public statements with
respect to this Agreement and the transactions contemplated hereby
whether
or not required by Applicable Law.
(ii)
Notification
of
Certain Matters. TARGET shall give prompt notice to SUB
and PARENT, and SUB and PARENT shall give prompt notice to TARGET,
of:
(a)
The
occurrence, or nonoccurrence, of any event the occurrence, or
nonoccurrence, of which would be reasonably likely to cause any
representation or warranty contained in this Agreement to be
untrue or
inaccurate in any material respect at or prior to the Effective
Time;
and
(b)
Any
material failure of TARGET on the one hand, or SUB and PARENT,
on the
other hand, to comply with or satisfy any covenant, condition
or agreement
to be complied with or satisfied by it
hereunder.
(iii)
Reasonable
Best
Efforts. Before Closing, upon the terms and subject to
the conditions of this Agreement, the Parties agree to use
their
respective reasonable best efforts to take, or cause to be
taken, all
actions, and to do, or cause to be done, all things necessary,
proper or
advisable (subject to applicable laws) to consummate and make
effective
the Merger and other transactions contemplated by this Agreement
as
promptly as practicable including, but not limited
to:
(a)
The
preparation and filing of all forms, registrations and notices
required to
be filed to consummate the Merger, including without limitation,
the
corporate resolutions to be sent to the SUB Stockholders
(including the
definitive and any amendments thereto, the “Shareholder Resolution”), and
the other approvals, consents, orders, exemptions or waivers
by any third
party or governmental entity; and
(b)
The
satisfaction of the other Parties' conditions precedent
to
Closing.
(iv)
Representation
of
Counsel. Each of the Parties has engaged separate counsel and have
relied upon the advice provided by their
counsel.
(v)
Shareholder
Resolution. SUB will use its reasonable best efforts to
seek the approval of the SUB Stockholders for the Merger. As promptly
as
is reasonably practicable after the date of this Agreement, SUB
shall
deliver to its sole Stockholder a corporate resolution and copy
of this
Agreement for the purpose of approving and authorizing this
Agreement.
(vi)
Access
to
Information
(a)
Inspection
by
TARGET. SUB and PARENT will make available for
inspection by TARGET, during normal business hours and in a manner
so as
not to interfere with normal business operations, all of SUB’s and
PARENT’s records (including tax records), books of account, premises,
contracts and all other documents in SUB’s and PARENT’s possession or
control that are reasonably requested by TARGET to inspect and
examine the
business and affairs of SUB and PARENT. SUB and PARENT will cause
its
managerial employees and regular independent accountants to be
available
upon reasonable advance notice to answer questions of TARGET concerning
the business and affairs of SUB and PARENT. TARGET will treat
and hold as confidential any information they receive from SUB
and PARENT
in the course of the reviews contemplated by this Section
4.03(vii). No examination by TARGET will, however, constitute a
waiver or relinquishment by TARGET of its rights to rely on SUB’s and
PARENT’s covenants, representations and warranties made herein or pursuant
hereto.
(b)
Inspection
by
SUB. TARGET will make available for inspection by SUB
and PARENT, during normal business hours and in a manner so as
not to
interfere with normal business operations, all of TARGET’s records
(including tax records), books of account, premises, contracts
and all
other documents in TARGET’s possession or control that are reasonably
requested by SUB and PARENT to inspect and examine the business
and
affairs of TARGET. TARGET will cause its managerial employees
and regular
independent accountants to be available upon reasonable advance
notice to
answer questions of SUB and PARENT concerning the business and
affairs of
TARGET. SUB and PARENT will treat and hold as confidential any
information they receive from TARGET in the course of the reviews
contemplated by this Section 4.03 (vii). No examination by SUB
and PARENT will, however, constitute a waiver or relinquishment
by SUB and
PARENT of its rights to rely on TARGET’s covenants, representations and
warranties made herein or pursuant
hereto.
-27-
ARTICLE
V
CONDITIONS
PRECEDENT
SECTION
5.01 CONDITIONS PRECEDENT TO THE PARTIES' OBLIGATIONS
The
obligations of the Parties as
provided herein shall be subject to each of the following conditions precedent,
unless waived by the parties:
(i)
Consents,
Approvals. The Parties shall have obtained all consents
and approvals of their respective boards of directors and stockholders,
and all material consents, including any material consents and
waivers by
the Parties’ respective lenders and other third-parties, if necessary, to
the consummation of the transactions contemplated by this
Agreement.
(ii)
Absence
of Certain
Litigation. No action or proceeding shall be threatened
or pending before any governmental entity or authority which,
in the
reasonable opinion of counsel for the Parties, is likely to result in a
restraint, prohibition or the obtaining of damages or other relief
in
connection with this Agreement or the consummation of the
Merger.
SECTION
5.02 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SUB AND PARENT
The
obligations of SUB and PARENT as
provided herein shall be subject to each of the following conditions precedent,
unless waived by SUB and PARENT:
(i)
Consents
And
Approvals. TARGET shall have obtained all material
consents, including any material consents and waivers by TARGET's
lenders
and other third-parties, if necessary, to the consummation of
the
transactions contemplated by this
Agreement.
(ii)
Representations
and
Warranties. The representations and warranties by TARGET in Article
III herein shall be true and accurate in all material respects
on and as
of the Closing Date with the same force and effect as though
such
representations and warranties had been made at and as of the
Closing
Date, except to the extent that any changes therein are specifically
contemplated by this Agreement.
(iii)
Performance.
TARGET shall have performed and complied in all material respects
with all
agreements to be performed or complied with by them pursuant
to this
Agreement prior at or prior to the
Closing.
(iv)
Proceedings
and
Documents. All corporate and other proceedings in connection with
the transactions contemplated by this Agreement and all documents
and
instruments incident to such transactions shall be reasonably
satisfactory
in substance and form to SUB and PARENT and its counsel, and
SUB and its
counsel shall have received all such counterpart originals (or
certified
or other copies) of such documents as they may reasonably
request.
(v)
Certificate
of Good
Standing. TARGET shall have delivered to SUB and PARENT a
certificate as to the good standing of TARGET in the State of
Nevada
certified by the Secretary of State of the State of Nevada on
or within 20
calendar days of the Closing Date.
(vi)
Material
Changes. Except as contemplated by this Agreement, since the date
hereof, TARGET shall not have suffered a Material Adverse
Effect.
(vii)
Certified
List of
Shareholders. TARGET shall have delivered to PARENT a certified
list of shareholders and their shareholdings from the Transfer
Agent, as
well as a schedule showing any options, warrants, scrip or any
other
rights to purchase stock, plus the terms of any such purchase
rights.
(viii)
Reduction
of Debt on
Balance Sheet of TARGET. TARGET shall have to the satisfaction of
Parent reduced or have bonified agreements in place to reduce its
current
liabilities (as reported in the TARGET 10QSB for the period ending
June30, 2007) by no less than fifty percent (50%) on or before
Closing.
(ix)
Audited
Financial
Statements of TARGET, DPC and A4. TARGET shall have been delivered
to PARENT, a certified list of shareholders and their shareholdings
from
the Transfer Agent, as well as a schedule showing any options,
warrants,
scrip or any other rights to purchase stock, plus the terms of
any such
purchase rights.
-28-
SECTION
5.03 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF TARGET
The
obligation of TARGET on the Closing
Date as provided herein shall be subject to the satisfaction, on or prior to
the
Closing Date, of the following conditions precedent, unless waived by
TARGET:
(i)
Consents
And
Approvals. SUB and PARENT shall have obtained the
consent and approval of their respective lenders and other third-parties,
if necessary, to the consummation of the transactions contemplated
by this
Agreement.
(ii)
Representations
And
Warranties. The representations and warranties by SUB and PARENT
in
Article II herein shall be true and accurate in all material
respects on
and as of the Closing Date with the same force and effect as
though such
representations and warranties had been made at and as of the
Closing
Date, except to the extent that any changes therein are specifically
contemplated by this Agreement.
(iii)
Performance.
SUB and PARENT shall have performed and complied in all material
respects
with all agreements to be performed or complied with by them
pursuant to
this Agreement prior to or at the
Closing.
(iv)
Proceedings
And
Documents. All corporate, company and other proceedings in
connection with the transactions contemplated by this Agreement
and all
documents and instruments incident to such transactions shall
be
reasonably satisfactory in substance and form to TARGET and its
counsel,
and TARGET and its counsel shall have received all such counterpart
originals (or certified or other copies) of such documents as
they may
reasonably request.
(v)
Certificate
of Good
Standing. SUB and PARENT shall have delivered to TARGET a
certificate as to the good standing of SUB certified by the Secretary
of
State of the State of Nevada, on or within 2 business days of
the Closing
Date.
(vi)
Material
Changes. Except as contemplated by this Agreement, since the date
hereof, SUB shall not have suffered a Material Adverse
Effect.
(vii)
Certified
List of
Shareholders. PARENT shall have delivered to TARGET a certified
list of shareholders and their shareholdings from the Transfer
Agent, as
well as a schedule showing any options, warrants, scrip or any
other
rights to purchase stock, plus the terms of any such purchase
rights.
(viii)
FINANCING.
Delivery of FINANCING as described in Section 1.09
herein.
-29-
ARTICLE
VI
TERMINATION,
AMENDMENT AND WAIVER
SECTION
6.01 TERMINATION
This
Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time
by:
(i)
The
mutual written consent of the Boards of Directors of the
Parties;
(ii)
Either
SUB and PARENT, on the one hand, or TARGET, on the other hand,
if any
governmental entity or court of competent jurisdiction shall
have issued
an order, decree or ruling or taken any other action (which order,
decree,
ruling or other action the parties to this Agreement shall use
their
reasonable efforts to lift), which restrains, enjoins or otherwise
prohibits the Merger or the acceptance for payment of, or payment
for,
Issuable Shares pursuant to the Merger and such order, decree,
ruling or
other action shall have become final and
non-appealable;
(iii)
SUB
and PARENT, if TARGET shall have breached in any material respect
any of
their respective representations, warranties, covenants or other
agreements contained in this Agreement, and the breach cannot
be or has
not been cured within 15 calendar days after the giving of written
notice
by SUB and PARENT to TARGET;
(iv)
TARGET,
if SUB and PARENT shall have breached in any material respect
any of their
representations, warranties, covenants or other agreements contained
in
this Agreement, and the breach cannot be or has not been cured
within 15
calendar days after the giving of written notice by TARGET to
SUB and
PARENT; or
(v)
Without
any action on the part of the Parties if required by Applicable
Law.
(vi)
On
April 30, 2008 if the Merger is not closed prior thereto, unless
this date
is extended by the mutual agreement in writing of the Parties prior
thereto.
(vii)
TARGET
and/or PARENT if the provisions of Section 4.02(iii) have not been
satisfied.
SECTION
6.02 EFFECT OF TERMINATION
If
this Agreement is terminated as
provided in Section 6.01, written notice of such termination shall be given
by
the terminating Party to the other Party specifying the provision of this
Agreement pursuant to which such termination is made, this Agreement shall
become null and void and there shall be no liability on the part of SUB and
PARENT or TARGET; provided that nothing in this Agreement shall relieve any
Party from any liability or obligation with respect to any willful breach of
this Agreement.
-30-
ARTICLE
VII
CONFIDENTIALITY;
NON-SOLICITATION; EXCLUSIVITY
SECTION
7.01 CONFIDENTIALITY
SUB
and PARENT, on the one hand, and
TARGET, on the other hand, will keep confidential all information and documents
obtained from the other, including but not limited to any information or
documents provided pursuant to Section 4.03(vii) hereof, which are designated
by
such Party as confidential (except for any information disclosed to the public
pursuant to a press release authorized by the Parties) and in the event the
Closing does not occur or this Agreement is terminated for any reason, will
promptly return such documents and all copies of such documents and all notes
and other evidence thereof, including material stored on a computer, and will
not use such information for its own advantage, except to the extent that (i)
the information must be disclosed by law, (ii) the information becomes publicly
available by reason other than disclosure by the Party subject to the
confidentiality obligation, (iii) the information is independently developed
without use of or reference to the other Party’s confidential information, (iv)
the information is obtained from another source not obligated to keep such
information confidential, or (v) the information is already publicly known
or
known to the receiving Party when disclosed as demonstrated by written
documentation in the possession of such Party at such time.
SECTION
7.02 NON-SOLICITATION
During
the period from the date of this
Agreement until the consummation or termination of this Agreement or the Merger
and, in the event of the termination of this Agreement or the Merger for any
reason, during the one (1) year period following the date of such termination,
neither Party shall, without the consent of the other Party, directly or
indirectly solicit the employment or engagement, as an employee or consultant,
any “restricted employee” or encourage any “restricted employee” to leave the
employment of the other Party or any subsidiary of the other Party. A
“restricted employee” shall mean any person who is employed by a Party or any of
its subsidiaries on the date of this Agreement or at any time during the six
(6)
months prior thereto.
SECTION
7.03 EXCLUSIVITY
Except
for the transactions
contemplated by this Agreement, none of the Parties shall (i) solicit, initiate,
or encourage the submission of any proposal or offer relating to the acquisition
of any capital stock or other voting securities or any substantial portion
of
the assets of such or any other Party hereto (including any acquisition
structured as a merger, consolidation, or share exchange) or (ii) participate
in
any discussions or negotiations regarding, furnish any information with respect
to, assist or participate in, or facilitate in any other manner any effort
or
attempt by any Person to do or seek any of the foregoing. The Parties
shall notify each other Party immediately if any Person makes any proposal,
offer, inquiry, or contact with respect to any of the foregoing.
-31-
ARTICLE
VIII
INDEMNIFICATION
SECTION
8.01 INDEMNIFICATION BY SUB AND PARENT
SUB
and PARENT shall indemnify, defend
and hold harmless, TARGET, and each person who is now, or has been at any time
prior to the date hereof or who becomes prior to the Closing, an officer,
director or partner of, TARGET or an employee of, TARGET and their respective
heirs, legal representatives, successors and assigns (the “TARGET Indemnified
Parties”) against all losses, claims, damages, costs, expenses (including
attorneys’ fees), liabilities or judgments or amounts that are paid in
settlement of or in connection with any threatened or actual claim, action,
suit, proceeding or investigation based in whole or in part on or arising in
whole or in part out of (i) any breach of this Agreement by SUB and PARENT,
including but not limited to failure of any representation or warranty to be
true and correct at or before the Closing, or (ii) any act, omission or conduct
of any officer, director or agent of SUB and PARENT prior to the Closing,
whether asserted or claimed prior to, or at or after, the Closing, or (iii)
relating to the consummation of the transactions contemplated herein, and any
action taken in connection therewith (“TARGET Indemnified
Liabilities”). Any TARGET Indemnified Party wishing to claim
indemnification under this Section 8.01, upon learning of any such claim,
action, suit, proceeding or investigation, shall notify SUB and PARENT, but
the
failure so to notify shall not relieve SUB and PARENT from any liability that
it
may have under this Section 8.01, except to the extent that such failure would
materially prejudice SUB and PARENT.
SECTION
8.02 INDEMNIFICATION BY TARGET
TARGET
shall indemnify, defend and hold
harmless SUB and PARENT and each person who is now, or has been at any time
prior to the date hereof or who becomes prior to the Closing, an officer,
director or partner of SUB and PARENT, or an employee of SUB and PARENT and
their respective heirs, legal representatives, successors and assigns
(collectively the “SUB Indemnified Parties”) against all losses, claims,
damages, costs, expenses (including attorneys’ fees), liabilities or judgments
or amounts that are paid in settlement of or in connection with any threatened
or actual claim, action, suit, proceeding or investigation based in whole or
in
part on or arising in whole or in part out of (i) any breach of this Agreement
by TARGET, including but not limited to failure of any representation or
warranty to be true and correct at or before the Closing, or (ii) any act,
omission or conduct of any officer, director or agent of TARGET prior to the
Closing, whether asserted or claimed prior to, or at or after, the Closing,
or
(iii) relating to the consummation of the transactions contemplated herein,
and
any action taken in connection therewith (collectively “SUB Indemnified
Liabilities”). Any SUB Indemnified Party wishing to claim
indemnification under this Section 8.02, upon learning of any such claim,
action, suit, proceeding or investigation, shall notify TARGET, but the failure
so to notify shall not relieve TARGET from any liability that it may have under
this Section 8.02, except to the extent that such failure would materially
prejudice TARGET.
SECTION
8.03 SURVIVAL OF INDEMNIFICATION
All
rights to indemnification under
this Article 8 shall survive the consummation of the Merger and the termination
of this Agreement. The provisions of this Article 8 are intended to
be for the benefit of, and shall be enforceable by, each TARGET Indemnified
Party and each SUB Indemnified Party, and his or her heirs and
representatives. No Party shall enter into any settlement regarding
the foregoing without prior approval of the TARGET Indemnified Party or SUB
Indemnified Party, as the case may be.
-32-
ARTICLE
IX
MISCELLANEOUS
SECTION
9.01 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES
None
of the representations and
warranties in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Effective Time, except as set forth in Article
VIII.
All such representations and warranties will be extinguished on consummation
of
the Merger and none of the Parties nor any of their officers, directors,
employees or stockholders shall be under any liability whatsoever with respect
to any such representation or warranty after such time. This Section 9.01 shall
not limit any covenant or agreement of the Parties which by its terms
contemplates performance after the Effective Time.
SECTION
9.02 EXPENSES
Except
as contemplated by this
Agreement, all costs and expenses incurred in connection with this Agreement
and
the consummation of the transactions contemplated by this Agreement shall be
paid by the Party incurring such expenses.
SECTION
9.03 APPLICABLE LAW AND CONSENT TO JURISDICTION
The
interpretation and enforcement of
this Agreement shall be exclusively governed by the laws of the State of Nevada
as applied to agreements entered into and to be performed in such state. The
parties hereto also consent to the exclusive jurisdiction and venue of the
United States District Court—District of Nevada in the event that any
dispute among the parties arises from this Agreement or any other dispute among
the parties hereto.
SECTION
9.04 NOTICES
All
notices and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given or made as follows:
(i)
If
sent by registered or certified mail in the United States, return
receipt
requested, upon receipt;
(ii)
If
sent by reputable overnight air courier (such as Federal Express),
2
business days after being sent;
(iii)
If
sent by facsimile transmission, with a copy mailed on the same
day in the
manner provided in clauses (i) or (ii) above, when transmitted
and receipt
is confirmed by telephone; or
(iv)
If
otherwise actually personally delivered, when
delivered.
-33-
All
notices and other communications
under this Agreement shall be sent or delivered as follows:
If
to SUB (Nevada corporation and
PARENT (Delaware corporation), to:
TRUSTCASH
HOLDINGS, INC.
400
Park
Avenue Suite 1420
NY
NT 10022
Each
Party may change its address by
written notice in accordance with this Section.
-34-
SECTION
9.05 ENTIRE AGREEMENT
This
Agreement (including the documents
and instruments referred to in this Agreement) contains the entire understanding
of the Parties with respect to the subject matter contained in this Agreement,
and supersedes and cancels all prior agreements, negotiations, correspondence,
undertakings and communications of the Parties, oral or written, respecting
such
subject matter.
SECTION
9.06 ASSIGNMENT
Neither
this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned by
any
of the Parties (whether by operation of law or otherwise) without the prior
written consent of the other Parties. Subject to the immediately foregoing
sentence of this Section 9.06, this Agreement will be binding upon, inure to
the
benefit of and be enforceable by, the Parties and their respective successors
and assigns.
SECTION
9.07 HEADINGS; REFERENCES
The
article, section and paragraph
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. All
references herein to “Articles” or “Sections” shall be deemed to be references
to Articles or Sections of this Agreement unless otherwise
indicated.
SECTION
9.08 COUNTERPARTS
This
Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an original but all
of
which shall be considered one and the same agreement.
SECTION
9.09 NO THIRD PARTY BENEFICIARIES
Except
as otherwise contemplated by
this Agreement, nothing herein is intended to confer upon any person or entity
not a Party to this Agreement any rights or remedies under or by reason of
this
Agreement.
SECTION
9.10 SEVERABILITY; ENFORCEMENT
Any
term or provision of this Agreement
that is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability
of
any of the terms or provisions of this Agreement in any other jurisdiction.
If
any provision of this Agreement is so broad as to be unenforceable, the
provisions shall be interpreted to be only so broad as is
enforceable.
[THE
BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK – SIGNATURE PAGES
FOLLOW]
-35-
IN
WITNESS WHEREOF, the
parties have duly executed this Agreement as of the date first above
written.
SUB
PARENT
TCHH
ACQUISITION
CORP.
TRUSTCASH
HOLDINGS,
INC.
A
Nevada corporation
A
Delaware corporation
/s/
Greg Moss
/s/
Greg Moss
Greg
Moss
Greg
Moss
Title:
CEO
Title:
CEO
TARGET
PAIVIS,
CORP.
A
Nevada corporation
/s/
Edwin Kwong
Edwin
Kwong
Title:
CEO
-36-
Dates Referenced Herein and Documents Incorporated by Reference
