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Exhibit 1
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION is made and entered into as
of the __rd day of October, 1996, by and among American Phoenix Group, Inc., a
Delaware corporation (the "COMPANY"), TETHERLESS ACCESS ASIA LTD., an Australian
corporation ("TAAL"), and the TAAL shareholders listed in Annex 1 hereto (each
being referred to herein as a "SHAREHOLDER," collectively as the "SHAREHOLDERS"
and, collectively with TAAL, the "SELLER").
R E C I T A L S
A. Shareholders own an aggregate of 88,357,591 ordinary shares of TAAL
constituting all of the issued and outstanding capital stock of TAAL (the "TAAL
SHARES").
B. The Company desires to acquire all of the TAAL Shares, and the
Shareholders desire to exchange all of the TAAL Shares for voting shares of
Common Stock, $0.001 par value, of the Company in a transaction that qualifies
as a tax-free reorganization under Section 368(a)(1)(B) of the Internal Revenue
Code of 1954, as amended.
A G R E E M E N T
NOW THEREFORE, the parties agree as follows:
1.
EXCHANGE OF THE SHARES
1.1. Shares Being Exchanged. Subject to the terms and conditions of
this Agreement, at the Closing as provided for in Article 2 hereof (the
"CLOSING"), each Shareholder shall sell, assign, transfer and deliver to the
Company the number of TAAL Shares set forth opposite the name of such
Shareholder on Annex 1 hereto.
1.2. Consideration. Subject to the terms and conditions of this
Agreement, and in consideration of the sale, assignment and delivery of the TAAL
Shares to the Company, at the Closing the Company shall issue and deliver to the
Shareholders an aggregate of Four Million (4,000,000) shares of the Company's
Common Stock, $0.001 par value ("TAAL COMMON STOCK") and an aggregate of Eight
Million (8,000,000) shares of the Company's Preferred Stock (sometimes referred
to below as the "PREFERRED STOCK" and, collectively with the TAAL Common Stock
to be issued hereunder, the "COMPANY SHARES"), as follows:
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(a) Series A Preferred. Two Million (2,000,000) shares of Series A
Preferred Stock, automatically convertible into Six Million
(6,000,000) shares of Common Stock at six (6) months after the
Closing conferring voting rights together with Common Stock on an
as-converted basis.
(b) Series B Preferred. Two Million (2,000,000) shares of Series B
Preferred Stock, automatically convertible into Six Million
(6,000,000) shares of Common Stock at twenty-four (24 months after
the Closing conferring voting rights together with common stock on
an as-converted basis.
(c) Series C Preferred. Two Million (2,000,000) shares of Series C
Preferred Stock, automatically convertible into Six Million
(6,000,000) shares of Common Stock at thirty-six (36) months after
the Closing conferring voting rights together with common stock on
an as-converted basis.
(d) Series D Preferred. Two Million (2,000,000) shares of Series D
Preferred Stock, automatically convertible into Six Million
(6,000,000) shares of Common Stock at forty-eight (48) months after
the Closing conferring voting rights together with common stock on
an as-converted basis.
Each Shareholder shall receive the number of Company Shares set
forth opposite the name of such Shareholder on Annex 1 hereto. The
Preferred Stock shall have the rights and preferences as set forth
in the Certificate of Designation attached as Schedule 1.6 (the
"CERTIFICATE OF DESIGNATION").
1.3. Certain Adjustments. The number of Company Shares to be issued
pursuant to Section 1.2(a) through (d) presumes that the Company effects a 2:1
reverse split of its outstanding capital stock at or following the Closing as
provided in Section 6.2 hereof and that the number of issued and outstanding
shares of Common Stock, Preferred Stock, options, warrants and other securities
of the Company as of the Closing is as set forth in Section 5.2 hereof.
Accordingly, in addition to any adjustments as provided in Section 6.2, the
number of shares of Preferred Stock and the conversion ratio of the Preferred
Stock (as set forth in the Certificate of Designation) shall be adjusted
proportionately and amended, as applicable if and to the extent the Company has
not effected this reverse split or the ratio of the reverse split is not as
anticipated herein at or prior to conversion of the Preferred Stock.
1.4. Appointment of New Board of Directors. Following the Closing, the
TAAL Shareholders may elect up to a majority of the Company's Board of
Directors, upon and subject
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to the applicable provisions of the Delaware General Corporation Law, Section 14
of the Securities Exchange Act of 1934, as amended, and the rules promulgated
thereunder, and the NASD Bylaws.
2.
CLOSING
2.1. Time and Place. The Closing of the exchange provided for herein
shall occur at the offices of the Company, ▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, on such date as may be agreed by the parties within thirty
(30) days of execution of this Agreement.
2.2. Deliveries by the Shareholders. At the Closing, the Shareholders
are delivering to the Company (unless previously delivered) the following:
(a) Certificates representing the TAAL Shares, duly indorsed or
accompanied by stock powers duly executed in blank and otherwise
in form acceptable for transfer on the books of TAAL.
(b) The Investment Letters referred to in Section 3.3 hereof.
(c) Certificates executed by each Shareholder confirming the
continued accuracy and completeness of each of the representations
and warranties made by the Shareholders herein.
2.3. Deliveries by TAAL. At the Closing, TAAL is delivering to the
Company (unless previously delivered) the following:
(a) The stock books, stock ledgers, minute books and corporate
seal of TAAL (all books and records of TAAL being located in
TAAL's corporate offices).
(b) Certificates of Good Standing or equivalent of TAAL from the
proper territorial authority in Australia dated as of the most
recent practicable date.
(c) Certified resolutions of TAAL's Board of Directors authorizing
the execution and delivery of this Agreement and the performance
by TAAL of its obligations hereunder.
(d) Certificates executed by TAAL's Chief Financial Officer
confirming the continued accuracy and completeness of each of
TAAL's representations and warranties made herein.
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(e) The legal opinion(s) of TAAL's legal counsel substantially in
the form attached hereto as Schedule 2.3(e).
2.4. Deliveries by the Company. At the Closing, the Company is
delivering to the Shareholders (unless previously delivered) the following:
(a) Certificates representing the Company Shares issued in the
names of the Shareholders in accordance with Section 1.2 hereof.
(b) Certified resolutions of the Company's Board of Directors
authorizing the execution and delivery of this Agreement and the
performance by the Company of its obligations hereunder.
(c) A Certificate of Good Standing of the Company from the
Delaware Secretary of State dated as of the most recent
practicable date.
(d) The legal opinion of The Company's legal counsel substantially
in the form attached hereto as Schedule 2.4(d).
(e) Resignations of each member of the Company's Board of
Directors other than ▇▇▇▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇.
2.5. Certain Conditions to Closing. The Closing is subject to the
following additional terms and conditions, which may be waived wholly or in part
by TAAL [in the case of subsections (a) through (e)] or the Company [in the case
of subsections (e) through (h)], as the case may be, in its sole discretion:
(a) TAAL shall be reasonably assured of the continued inclusion of
the Company's securities in the Nasdaq interdealer quotation
system.
(b) The Company's sale or other disposition of its subsidiaries
Marine Turbine Australia Pty. Ltd., Masling Industries Pty Ltd.,
and Tokan Holdings Inc.; and its interest in the note portfolio
acquired from P.R. Finance & Investment Ltd. for not less than
US$10 million in cash or cash equivalents.
(c) TAAL's satisfaction of its due diligence investigation of the
Company, including without limitation no facts that would lead
TAAL to believe that the Company's contingent liabilities as set
forth in Section 5.8 are likely to exceed Two Hundred and Fifty
Thousand Dollars ($250,000).
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(d) Each of the representations and warranties of the Company set
forth in Article 5 below shall be true and correct in all material
respects as of the Closing.
(e) Each of TAAL, the TAAL Shareholders and the Company shall have
approved any Schedules to this Agreement that have been completed
or amended after execution of this Agreement.
(f) The Company's satisfaction of its due diligence investigation
TAAL.
(g) Each of the representations and warranties of TAAL and the
TAAL Shareholders set forth in Articles 3 and 4 below shall be
true and correct in all material respects as of the Closing.
(h) Any ordinary shares or options, warrants or other agreements
to acquire or sell securities of TAAL which are currently
outstanding other than the TAAL Shares shall have been
relinquished, canceled or renegotiated with the Company and to its
reasonable satisfaction.
(i)
3.
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS REGARDING THE TAAL SHARES
The Shareholders, severally and not jointly, hereby represent and
warrant to the Company as follows:
3.1. Title to the TAAL Shares. Each Shareholder is the sole owner of,
and is transferring to the Company at the Closing, good, valid, and marketable
title to the number of TAAL Shares set forth opposite the name of such
Shareholder on Annex 1 hereto, free and clear of all liens, claims, options,
charges, and encumbrances whatsoever. The Shareholders are the owners of all of
the issued and outstanding shares of TAAL capital stock, free of any liens,
claims, encumbrances, charges and agreements (including without limitation
voting, voting trust or similar agreements or instruments) of any person. There
are no outstanding options, warrants, rights, subscriptions, or other agreements
to sell, transfer, assign, mortgage or otherwise dispose of any of the TAAL
Shares of the respective Shareholders or any of TAAL's capital stock.
3.2. Valid and Binding Agreement. As to each Shareholder, this
Agreement constitutes the valid and binding agreement of such Shareholder,
enforceable in accordance with
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its terms, and, as to each Shareholder, neither the execution and delivery of
this Agreement nor the consummation by such Shareholder of the transactions
contemplated hereby (a) violates or will violate, to the knowledge of such
Shareholder, any statute or law, or any rule, regulation, or order of any court
or governmental authority, or (b) violates or will violate, or conflicts with or
will conflict with, or constitutes a default under or will constitute a default
under, any contract, commitment, agreement, understanding, arrangement, or
restriction of any kind to which such Shareholder is a party or by which such
Shareholder is bound.
3.3. Acquisition of Company Shares for Investment. Each Shareholder
represents and warrants to the Company that it is his present intention to
acquire the Company Shares for investment and not with a view to the
distribution or resale thereof, and is confirming such intention to the Company
by delivery to the Company at the Closing an investment letter in the form of
the Investment Letter attached as Schedule 3.3 hereto.
3.4. Legend and Stop Transfer Instructions. Each Shareholder agrees
that the Company may endorse on any certificate for the Company's Shares to be
delivered to the Shareholder pursuant to this Agreement an appropriate legend
referring to the provisions of the Investment Letter attached as Schedule 3.3
hereto, and that the Company may instruct its transfer agent not to transfer any
Company Shares unless advised by the Company that such provisions have been
complied with.
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4.
REPRESENTATIONS AND WARRANTIES OF SELLER.
Shareholders and TAAL, jointly and severally, each hereby represent and
warrant to the Company as follows:
4.1. Organization and Standing
(a) TAAL is a corporation duly organized, validly existing, and in
good standing under the laws of its territory of incorporation in
Australia and has the corporate power and authority to carry on
its business as presently conducted and to enter into and carry
out the provisions of this Agreement. TAAL has taken steps to
qualify to do business in California. Schedule 4.1(a) sets forth
each jurisdiction in which TAAL currently conducts business or
owns or leases properties.
(b) The copies of TAAL's Articles of Incorporation, all amendments
thereto, and of its bylaws, as amended to date, which have
heretofore been delivered to the Company, are true and correct
copies thereof as amended and in effect on the date hereof, as
certified by TAAL's corporate secretary. All minutes of meetings
of TAAL's Board of Directors and shareholders are contained in
minute books of TAAL heretofore furnished to the Company for
examination and being delivered to the Company at the Closing, and
no minutes have been included in such minute books since such
examination by the Company that have not also been furnished to
the Company.
(c) TAAL's share certificate book and transfer ledger are accurate
and complete in all respects.
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4.2. Capitalization.
(a) The authorized capital stock of TAAL consists of 2 billion
ordinary shares, no par value, of which 88,357,591 shares are
outstanding, and no shares of preferred stock. All outstanding
shares of stock of TAAL are duly authorized, validly issued, fully
paid and nonassessable. The Shareholders are the record and
beneficial owners of all of TAAL's outstanding ordinary shares.
(b) Except for the TAAL Shares and as set forth on Schedule
4.2(b), there are no shares of capital stock or other securities
of TAAL outstanding; there are no options, warrants, or rights to
purchase or acquire any securities of TAAL; there are no shares
held in treasury; no securities of TAAL are reserved for issuance
for any purpose; and there are no contracts, commitments,
agreements, or understandings that have not been fully performed,
nor any arrangements or restrictions to which TAAL is a party or
by which it is bound relating to any shares of capital stock or
other securities of TAAL (including the TAAL Shares), whether or
not outstanding.
4.3. Subsidiaries and Affiliates. Except as set forth on Schedule
4.3,TAAL does not own any capital stock or other securities of any corporation
or other business entity; does not control any other business entity; and has no
direct or indirect interest in any business other than the business presently
operated by it.
4.4. Authority. TAAL has the requisite power and authority to enter
into this Agreement, to carry out the transactions contemplated herein and to
own or lease its properties and to conduct its business as now conducted. TAAL
has taken all corporate action, including approval by its Board of Directors,
necessary to authorize this Agreement and the execution and delivery hereof. All
consents or approvals required to consummate the exchange of TAAL Shares for the
Company Shares and related transactions hereunder have been obtained.
4.5. Valid and Binding Agreement. This Agreement constitutes a valid
and binding agreement of TAAL, enforceable in accordance with its terms.
4.6. No Violation of Agreements. Neither the execution nor delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
(a) violates or will violate, or conflicts with or will conflict with, or
constitutes a default under and will constitute a default under the Articles of
Incorporation or bylaws, as amended, of TAAL or any contract, commitment,
agreement, understanding, arrangement, or restriction of any kind to which TAAL
is a party or by which it is bound, or (b) will cause, or give any person
grounds to cause (with
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or without notice, the passage of time, or both), the maturity of any liability
or obligation of TAAL to be accelerated, or will increase any such liability or
obligation.
4.7. Financial Statements. TAAL has delivered to the Company copies of
the unaudited balance sheets of TAAL for the two years ending June 30, 1995 and
1996 (the "TAAL FINANCIAL STATEMENTS"), and such financial statements are
attached as Schedule 4.7 hereto. The TAAL Financial Statements are correct and
complete, have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis, present fairly the consolidated
financial condition of TAAL as of the dates of such balance sheets and the
results of operations for the periods covered by such statements of operations,
and are of such a character and quality that an unqualified audit of such
financial statements may be performed within 60 days of the Closing, and shall
be accompanied by a certificate of the Chief Financial Officer of TAAL to such
effect.
4.8. No Undisclosed Liabilities. Other than as described in Schedule
4.8 hereto, TAAL has no material liability or obligation of any nature, whether
absolute, accrued, contingent, or otherwise and whether due or to become due,
that are not reflected or reserved against in TAAL's consolidated balance sheet
as of June 30, 1996 included in the TAAL Financial Statements attached as
Schedule 4.7 hereto.
4.9. Absence of Material Changes. Since June 30, 1996, there has not
been any material change in the condition (financial or otherwise) of the
properties, assets, liabilities, or business of TAAL, except as disclosed in
Schedule 4.9 attached hereto. 4.10. Litigation. Except as set forth in Schedule
4.10 hereto, there is no litigation, proceeding or investigation
pending or to Seller's knowledge, after due inquiry, threatened against TAAL
affecting any of its properties or assets, or, to Seller's knowledge, after due
inquiry, against any officer, director, key employee or shareholder of TAAL that
might result, either in any case or in the aggregate, in any material adverse
change in the business, operations, affairs or conditions of TAAL or any of its
properties or assets, or that might call into question the validity of this
Agreement, or any action taken or to be taken pursuant thereto, nor, to Seller's
knowledge, after due inquiry, has there occurred any event or does there exist
any condition on the basis of which any litigation, proceeding or investigation
might properly be instituted and which would have a material adverse effect on
TAAL. Neither TAAL nor any officer, director, key employee or shareholder of
TAAL is in default with respect to any order, writ, injunction, decree, ruling
or decision of any court, commission, board or other government agency that
might result, either in any case or in the aggregate, in any material adverse
change in the business, operations, affairs or conditions of TAAL or any of its
properties or assets. The foregoing sentences include, without limiting their
generality, actions pending or threatened (or any basis therefor known to
Seller) involving the prior employment of any officer, director,
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employee or shareholders of TAAL or any information or techniques allegedly
proprietary to any of their former employers.
4.11. Properties.
(a) Except as otherwise specified in the attached Schedule
4.11(a), TAAL has good and marketable title to all of its
properties and assets, real or personal, tangible or
intangible, reflected on the TAAL Financial Statements or
purported to have been acquired by TAAL since the date of the
TAAL Financial Statements, except personal property sold or
otherwise disposed of by TAAL in the ordinary course of its
business since that date. No personal property used by or in
the possession of TAAL is held on a consignment basis. All
properties and assets of TAAL (real or personal, tangible or
intangible) are free and clear of all defects of title, and
all mortgages, liens, pledges, charges, security interests and
other encumbrances of any kind whatsoever, except (i) such as
have been described in Schedule 4.11(a), and (ii) such
imperfections of title, easements, rights-of-way and other
similar restrictions on TAAL's real property, if any, as are
insubstantial in character, amount or extent, do not
materially detract from the value or interfere with the
present or proposed use of the affected property, and do not
otherwise adversely affect the business or operations of TAAL.
(b) Except as otherwise specified in the attached Schedule
4.11(b), to Seller's knowledge no financing statement under
the Uniform Commercial Code or equivalent document under other
applicable law names TAAL as debtor has been filed in any
jurisdiction. TAAL has not executed any such financing
statement or equivalent document, or any security agreement or
equivalent undertaking authorizing any secured party or
creditor to sign or to file any such financing statement or
equivalent document.
(c) None of the properties or assets the value of which is
reflected on the TAAL Financial Statements is held by TAAL as
lessee under any lease (excluding capitalized lease
obligations) or as conditional vendee under any conditional
sales contract, or other title retention agreement. TAAL
enjoys peaceful and undisturbed possession under each lease
under which it is operating. Each lease is valid and in full
force and effect, and none of the leases is in default.
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(d) All machinery and equipment used in connection with the
operations of TAAL are in good operating condition and repair,
other than machinery and equipment temporarily under repair or
out of service in the ordinary course of the business of TAAL.
4.12. Ownership of Intellectual Property Rights. TAAL owns or has a
valid right to use all patents, patent rights, licenses, permits, trade secrets,
trademarks, trademark rights, trade names or trade name rights, copyrights,
inventions, know-how, formulae, compounds, processes, technology, and
intellectual property rights which it utilizes to operate its business as now
operated and as now proposed to be operated, a complete list of which is
attached hereto as Schedule 4.12. Except as set forth in Schedule 4.12, TAAL has
no obligation to compensate any person, firm, corporation or other entity for
the use of any such patents or such other rights, nor has TAAL granted to any
person, firm, corporation or other entity for the use of any such patents or
such other rights, nor has TAAL granted to any person, firm, corporation or
other entity any license or other rights to use in any manner any of such
patents or such other rights of TAAL.
4.13. Contracts and Undertakings. Schedule 4.13 attached hereto
contains a list of all contracts, agreements, leases, licenses, arrangements,
commitments and undertakings is valid, binding and in full force and effect.
TAAL is not in material default, or, to Seller's knowledge, alleged to be in
material default, under any contract, agreement, lease, license, commitment,
instrument or obligation and to Seller's knowledge, no other party to any
contract, agreement, lease, license, commitment, instrument or obligation to
which TAAL is a party is in default thereunder nor, to the knowledge of Seller,
does there exist any condition or event which, after notice or lapse of time or
both, would constitute a default by any party to any such contract, agreement,
lease, license, commitment, instrument or obligation.
4.14. Transactions with Affiliates. Except as set forth in Schedule
4.14 hereto,
(a) TAAL is not a party to or bound by any agreement, lease,
transaction, instrument or contract (whether written or oral)
to which any Shareholder or any member of a Shareholder's
immediate family or any current or former director, officer,
employee or shareholder of TAAL (each, a "RELATED PERSON") is
or is to be come a party, or under which any Related Person
has or is to acquire any right, interest or benefit;
(b) No Related Person is the direct or indirect owner of an
interest in any corporation, firm, association, or business
organization which is a present or potential competitor,
customer or supplier of TAAL or the Company, nor does any
Related Person receive income from any
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source other than TAAL, which relates to the business of, or
should properly accrue to, TAAL;
(c) TAAL does not have any investment of any kind in any Related
Person;
(d) There is no indebtedness of TAAL to any Related Person; and
(e) There is no indebtedness of any Related Person to TAAL.
4.15. Taxes. TAAL has timely filed (within applicable extension
periods) with the appropriate government all governmental tax returns, reports
and declarations which are required to be filed by TAAL and has paid all taxes
which have become due pursuant thereto and all other taxes, assessments and
other governmental charges imposed by law upon TAAL or any of its properties,
assets, income, receipts, payrolls, transactions, capital, net worth or
franchise, other than those not delinquent or as disclosed in Schedule 4.15.
TAAL has not received any notice of deficiency or assessment of additional taxes
except as may be disclosed in Schedule 4.15, TAAL has not received any notice of
deficiency or assessment of additional taxes except as may be disclosed on
Schedule 4.15. United States federal income and other non-U.S. tax returns for
TAAL have never been examined by the IRS or, to Seller's knowledge, subject to
an equivalent procedure by the tax authorities of any other jurisdiction. Except
as may be disclosed in Schedule 4.15, TAAL has not granted any waiver of any
statute of limitations with respect to, or any extension of a period for the
assessment of, any governmental tax. The accruals and reserves for taxes
reflected on the Financial Statements are adequate to cover all taxes due and
payable or accruable through June 30, 1996, (including interest and penalties,
if any, thereon). Except as may be disclosed in Schedule 4.15, no issues have
been raised (and are currently pending) by the IRS or any other taxing authority
in connection with any matter concerning TAAL.
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4.16. Accuracy and Completeness of Representations.
(a) Seller has disclosed to the Company all facts material to the
properties, assets, liabilities and business of TAAL. No
representation or warranty by TAAL to the Company in this
Agreement, or in any statement, certificate, Schedule 4.7 or
other document furnished to the Company pursuant hereto or in
connection with the transactions contemplated hereby is false
or inaccurate in any material respect or contains any untrue
statement of a material fact or omits to state any fact
necessary to make the statements contained herein or therein
not misleading.
(b) With respect to any projections furnished to the Company, TAAL
represents that such projections were prepared with due care,
are based on reasonable assumptions and represent Seller's
best estimate of future results based on information available
as of the date of such projections. Without limiting the
foregoing, TAAL has disclosed to the Company any knowledge
that it has that there exits, or there is pending or planned,
with respect to the products of TAAL described in the Business
Plan, any patent, invention, device, application or principle
or, to the knowledge of TAAL, any statute, rule, law,
regulation, standard or code (other than prospective changed
in federal or state tax laws, of which Seller disclaims any
special knowledge) that would materially adversely affect the
condition, financial or otherwise, or the business of TAAL as
now operated and as now proposed to be operated.
4.17. Additional Schedules. At or prior to the Closing, Seller shall
deliver to the Company the following additional Schedules, each of which is true
and correct in all respects as of the Closing:
(a) Schedule 4.17(a), Real Property, setting forth a list of all
of the rights and interests of TAAL in each parcel of real
property which is owned, leased or otherwise used or claimed
by TAAL, identifying its location, stating the maximum
aggregate amounts secured by each mortgage or other lien on
each parcel of real property and the material items of any
leases of real property, and identifying the holders of each
such mortgage or lien and the landlords under each such lease.
(b) Schedule 4.17(b), Personal Property, setting forth lists of:
(i) tangible personal property, including all furniture,
furnishings, office equipment, supplies, machinery, tools and
equipment, and the location thereof,
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owned by TAAL and which had an original cost per item of US
$10,000 or more; (ii) all leases (oral or written) with
respect to all equipment, automobiles, trucks or other
vehicles leased by TAAL; and (iii) all conditional sales
contracts, chattel mortgages and other security agreements
with respect to personal property owned by TAAL.
(c) Schedule 4.17(c), Contracts, identifying: (i) each agreement,
instrument or contract (whether written or oral) entered into
or made by TAAL in the ordinary course of its business which
involves or may involve aggregate future payments by or to it
of more than US $10,000; (ii) each agreement, instrument or
contract (whether written or oral), entered into or made by
TAAL in the ordinary course of its business which has a term
ending later than one year after the Closing or which is
renewable at the option of any party for a period ending later
than one year after the Closing; (iii) each distributorship,
sales agency or franchise agreement (whether written or oral)
entered into or made by TAAL which may not be terminated by it
(without penalty) within thirty (30) days after the Closing;
(iv) each agreement, instrument or contract (whether written
or oral) containing any covenant prohibiting TAAL from
competing with any person, firm, corporation or any other
entity in any line of business in any territory, or
prohibiting TAAL from doing any kind of business with the same
in any territory; and (v) each agreement, instrument or
contract (whether written or oral) entered into by TAAL other
than in the ordinary course of its business, all or any part
of which is to be performed, complied with or observed by TAAL
at any time after the Closing.
(d) Schedule 4.17(d), Key Personnel, setting forth: (i) the names
and the current annual salaries of all current directors and
officers and all employees of TAAL who are currently receiving
from TAAL cash or other remuneration; (ii) a list of each
employment or compensation agreement or arrangement (whether
written or oral) of TAAL which may not be terminated by it
without penalty within thirty-one (31) days after the Closing;
(iii) a list of TAAL's sales agent agreements; (iv) the names
of all consultants, advisors, agents, professional service
firms or enterprise, independent contractors or other persons
(including, without limitation, all accountants and lawyers)
who have at any time been engaged or used by TAAL, under any
agreement, contract or arrangement (whether written or oral)
which exists at the Closing; and (v) a list of each such
agreement, contract or arrangement which may
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not be terminated by TAAL without penalty within thirty-one
(31) days after the Closing.
(e) Schedule 4.17(e). Benefit Plans, identifying each bonus,
incentive compensation, deferred compensation, profit-sharing,
stock option, 401(k) or similar retirement, pension, group
insurance, death benefit or other fringe benefit plan, trust
agreement or arrangement by TAAL which is in effect or under
which TAAL is obligated at the Closing or which is to be come
effective or will impose any obligation on TAAL at any time
after the Closing.
(f) Schedule 4.17(f), Indebtedness, identifying the principal
terms and conditions of each existing agreement, instrument,
commitment or arrangement (whether written or oral) on the
basis of which any indebtedness or commitment of TAAL (other
than trade payables incurred in the ordinary course of
business) has been incurred, assumed or issued on or prior to
the Closing or may be created, incurred, assumed or issued at
any time or from time to time after the Closing. No individual
or entity has guaranteed any indebtedness or obligation of
TAAL and TAAL has not guaranteed any indebtedness or
obligations of any individual or entity.
(g) Schedule 4.17(g), Investments, identifying the principal
terms and conditions of each existing agreement, instrument,
commitment or arrangement (whether written or oral) on the
basis of which any investments of TAAL have been made on or
prior to the execution of this Agreement or may be made at any
time or from time to time after the Closing.
(h) Schedule 4.17(h), Capital Expenditures, setting forth a
complete written description of each outstanding commitment or
obligation of TAAL to make capital expenditures, capital
additions or capital improvements with a cost in excess of US
$20,000.
(i) Schedule 4.17(i). Bank Information, setting forth:
(i) the name and address of each bank in which TAAL has an
account or a safe deposit box; (ii) all information necessary
to enable the Company to identify each such account and safe
deposit box; and (iii) the name and address of each person
having the power to borrow, discount debt obligations,
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cash or draw checks or otherwise act for or on behalf of TAAL
in any dealings with any one or more of such banks.
(j) Schedule 4.17(j), Insurance, identifying and briefly
describing: (i) each policy of fire, liability, products
liability, workers compensation, title and other form of
insurance held by TAAL; and (ii) each claim pending under the
policies (including employee benefit claims).
4.18. Compliance with Laws. Except as set forth on attached Schedule
4.18:
(a) Neither the Shareholders nor TAAL has received from any
governmental agency any notice, statement, order or complaint
alleging that: (i) TAAL has violated any of applicable laws;
(ii) any governmental agency has made any determination that,
or issued any order, decree or ruling to the effect that, this
Agreement, any term, condition or provision of this Agreement,
or any transaction contemplated by this Agreement, is illegal,
invalid or unenforceable; or (iii) any governmental agency has
issued, manifested any intention to issue, or otherwise
threatened to issue any order, decree or ruling enjoining,
restraining or otherwise prohibiting the consummation of any
transaction contemplated by this Agreement.
(b) Neither the Shareholders nor TAAL have received from any
governmental agency any notice or statement of the
commencement of any proceedings to take all or any part of its
properties or of any proceedings to take all or any part of
the properties or assets owned or used by it by condemnation,
exercise of right or eminent domain or otherwise, and no such
proceedings are threatened or pending.
(c) To Seller's knowledge, TAAL has no liability under, and
there is no fact currently existing that could hereafter give
rise to any liability of TAAL under, any federal, state, or
local U.S. laws, statutes, ordinances, regulations, rules and
orders pertaining to the environment, pollution and/or health
and safety of human beings (collectively, "ENVIRONMENTAL
LAWS"). To Seller's knowledge, there is no, and has been no,
discharge, spillage, uncontrolled loss, seepage or filtration
of hazardous waste (including without limitation all inks and
oils) on-site at any of TAAL's U.S. premises. To Seller's
knowledge, all hazardous waste onsite at the U.S. premises of
TAAL has been and shall continue
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to be disposed of in compliance with all Environmental Laws, and
is being managed in accordance with all Environmental Laws.
(d) To Seller's knowledge, neither TAAL nor any director,
officer, employee, agent or representative of TAAL has: (i) used
any of the funds of TAAL for unlawful contributions, gifts or
entertainment or for other unlawful expenses relating to political
activity or otherwise; (ii) made any direct or indirect unlawful
payments to any government official or employee from any of the
funds of TAAL or been reimbursed from such funds for any such
payment made (iii) established or maintained any unlawful or
unrecorded funds of corporate Moines or other assets of TAAL; (iv)
made nay false or fictitious entries on the records or books of
account of TAAL; (v) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment; or (vi) granted or
made any favors or gifts with an aggregate value in excess of U.S.
$6,000 in any tax year which would not be deductible for United
States federal income tax purposes.
5.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to TAAL and the Shareholders
as follows:
5.1. Organization of the Company.
(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 corporate power and authority to carry on
its business as presently conducted. The Company is not required
to be qualified as a foreign corporation in any state other than
California.
(b) The copies of the Certificate of Incorporation, and all
amendments thereto, of the Company, as certified by the Secretary
of State of Delaware, and of the bylaws, of the Company, as
certified by its Secretary, which have heretofore been delivered
to TAAL and made available to the Shareholders for examination,
are complete and correct copies of the Certificate of
Incorporation and bylaws of the Company as
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amended and in effect on the date hereof. All minutes of meetings
of the Board of Directors and shareholders of the Company are
contained in minute books of the Company heretofore furnished to
TAAL and made available to the Shareholders for examination, and
no minutes have been included in such minute books since such
delivery to TAAL that have not also been furnished to TAAL.
5.2. Capitalization of the Company.
(a) The authorized capital stock of the Company consists of
50,000,000 shares of common stock, $0.001 par value, of which
23,969,371 shares are outstanding, and 8,348,572 shares are
reserved for issuance upon exercise of outstanding Warrants or
options (including 2 million shares underlying options to be
granted to Investors Associates Inc.), and 10,000,000 shares of
preferred stock, no shares of which are outstanding. All
outstanding shares of stock of the Company are duly authorized,
validly issued, fully paid and nonassessable.
(b) Except for the shares of Common Stock and Preferred Stock
described in Section 5.2(a) and the Common Stock underlying the
Warrants and options outstanding, there are no shares of capital
stock or other securities of the Company outstanding; there are
no options, warrants or rights to purchase any securities of the
Company and no securities of the Company are reserved for
issuance for any purpose (except for shares reserved for issuance
upon exercise of the Warrants); and there are no contracts,
commitments, agreements or understandings that have not been
fully performed, nor any arrangements or restrictions to which
Company is a party or by which its is bound relating to any
shares of capital stock or other securities of the Company,
whether or not outstanding. Each Warrant entitles the holder to
purchase one share of Common Stock at a price of $3.75 per share,
in accordance with the terms and conditions of the Warrant
Agreement, a copy of which has been delivered to TAAL and made
available to the Shareholders for examination. None of the
Warrants have been exercised as of the date hereof. There are
currently outstanding options to purchase 95,760 shares of Common
Stock at $.10 per share.
5.3. Authority. The Company has full power and authority to enter into
this Agreement and to carry out the transactions contemplated herein, and
Company has taken all corporate action, including approval by its Board of
Directors, necessary to authorize this
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Agreement, the execution and delivery hereof and the issuance of the Company
Shares in accordance with the terms hereof.
5.4. Valid and Binding Agreement. This Agreement constitutes a valid
and binding agreement of the Company, enforceable in accordance with its terms.
5.5. No Violation of Agreements. Neither the execution nor delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
(a) violates or will violate, or conflicts with or will conflict with, or
constitutes a default under or will constitute a default under the Certificate
of Incorporation or bylaws of the Company or any contract, commitment,
agreement, understanding, arrangement, or restriction of any kind to which
Company is a party or by which it is bound, or (b) will cause, or give any
person grounds to cause (with or without notice, the passage of time, or both),
the maturity or any liability or obligation of the Company to be accelerated, or
will increase any such liability or obligation.
5.6. Financial Statements. The Company has delivered to TAAL and the
Shareholders copies of the audited balance sheet of the Company as of December
31, 1995, and the unaudited balance sheet of the Company as of June 30, 1996,
and the related statement of operations, shareholders' equity and changes in
financial position of the Company for each of the two fiscal years ending August
31, 1994 and August 31, 1995 and for the period ending May 31, 1996 as included
in the Company's Registration Statement on Form S-4 declared effective September
3, 1996 (File No. 333-10755; the "FORM S-4"), as well as certain pro forma
financial information, as filed with the Form S-4 or attached hereto as Schedule
5.6 (such pro forma financial information and financial statements included in
the Form S-4 or attached hereto sometimes referred to collectively as, the
"COMPANY'S FINANCIAL STATEMENTS").
5.7. Absence of Material Changes. Since June 30, 1996, there has not
been any material change in the condition (financial or otherwise) of the
properties, assets, liabilities, or business of the Company, except as disclosed
in Schedule 5.7 hereto.
5.8. No Undisclosed Liabilities. The Company has no material
liabilities of any nature except to the extent reflected or reserved against in
the Company's Financial Statements or as set forth on Schedule 5.8 hereto,
whether accrued, absolute, contingent or otherwise, including without limitation
tax liabilities and interest due or to become due.
5.9. Litigation. Except as set forth in Schedule 5.9 hereto, there is
no litigation, proceeding or investigation pending or, to its knowledge,
threatened against the Company affecting any of its properties or assets, or, to
the knowledge of the Company, after due inquiry, against any officer, director
or key employee of the Company that might result, either in any case or in the
aggregate, in any material adverse change in the business, operations, affairs
or conditions of the Company or any of its properties or assets, or that might
call into question to
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validity of this Agreement, or any action taken or to be taken pursuant thereto,
nor, to the knowledge of the Company, after due inquiry, has there occurred any
event or does there exist any condition on the basis of which any litigation,
proceeding or investigation might properly be instituted and which would have a
material adverse effect on Company. Neither Company nor, to the knowledge of the
Company, after due inquiry, any officer, director or key employee of the
Company, is in default with respect to any order, writ, injunction, decree,
ruling or decision of any court, commission, board or other aggregate, in any
material adverse change in the business, operations, affairs or conditions of
the Company or any of its properties or assets.
5.10. Properties.
(a) Except as otherwise specified in the attached Schedule
5.10(a), the Company has good and marketable title to all of
its properties and assets, real or personal, tangible or
intangible, reflected on the Company's Financial Statements or
purported to have been acquired by the Company since the date
of the Company's Financial Statements, except personal
property sold or otherwise disposed of by the Company in the
ordinary course of its business since that date. No personal
property used by or in the possession of the Company is held
on a consignment basis. All properties and assets of the
Company (real or personal, tangible or intangible) are free
and clear of all defects of title, and all mortgages, liens,
pledges, charges, security interests and other encumbrances of
any kind whatsoever, except (i) such as have been described in
Schedule 5.10(a), and (ii) such imperfections of title,
easements, rights-of-way and other similar restrictions on the
Company's real property, if any, as are insubstantial in
character, amount or extent, do not materially detract from
the value or interfere with the present or proposed use of the
affected property, and do not otherwise adversely affect the
business or operations of the Company.
(b) Except as otherwise specified in the attached Schedule
5.10(b), to Seller's knowledge no financing statement under
the Uniform Commercial Code or equivalent document under other
applicable law names the Company as debtor has been filed in
any jurisdiction. The Company has not executed any such
financing statement or equivalent document, or any security
agreement or equivalent undertaking authorizing any secured
party or creditor to sign or to file any such financing
statement or equivalent document.
(c) None of the properties or assets the value of which is
reflected on the Company's Financial Statements is held by the
Company as lessee
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under any lease (excluding capitalized lease obligations) or
as conditional vendee under any conditional sales contract, or
other title retention agreement. the Company enjoys peaceful
and undisturbed possession under each lease under which it is
operating. Each lease is valid and in full force and effect,
and none of the leases is in default.
(d) All machinery and equipment used in connection with the operations of the
Company are in good operating condition and repair, other than machinery and
equipment temporarily under repair or out of service in the ordinary course of
the business of the Company.
5.11. Delivery of Information to Shareholders and TAAL.
(a) The Company's Registration Statement on Form SB-2 and the Form
S-4 ("REGISTRATION STATEMENTS") were declared effective by the
Securities and Exchange Commission on August 11, 1995 and
September 3, 1996, respectively. The Registration Statement on
Form S-3 of certain selling security holders relating to their
offer and sale of the Company's securities ("FORM S-3") was
declared effective by the Securities and Exchange Commission on
October 8, 1996. No proceedings for a stop order have been
instituted, are pending, or to the Company's knowledge are
threatened and, to the Company's knowledge, no grounds exist for
the suspension of the Registration Statements or Form S-3.
(b) All sales of the Company's shares of Common Stock and other
securities to its shareholders prior to the date of this Agreement
were made either pursuant to valid exemptions from the
registration requirements of the Securities Act of 1933, as
amended (the "1933 Act"), or pursuant to the Registration
Statements.
(c) The Registration Statements, and each Prospectus forming a
part thereof ("Prospectus"), and the Form S-3 comply in all
material respects with the 1933 Act and the rules and regulations
promulgated thereunder and as of the effective date thereof did
not contain any untrue statement of a material fact or fail to
state any material fact required to be stated therein or necessary
to make the statements made therein not misleading.
(d) The Company has previously delivered or will deliver prior to
the Closing to TAAL true and complete copies, including exhibits
and,
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as applicable, amendments thereto, of (i) the Registration
Statements, (ii) each Prospectus, (iii) the Form S-3, (iv) its
Quarterly Report(s) on Form 10-Q or Form 10-QSB for each quarter
since the period covered by its latest Annual Report on Form 10-K
or Form 10-KSB, as applicable, and (v) all Form 8-K filings. All
reports or other filings required to be filed by the Company with
the Securities and Exchange Commission since the effective date of
each of the Registration Statements through the date hereof
(collectively, the "Reports") have been properly filed, comply
with the requirements of the 1933 Act and the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated
thereunder with respect to such reports. None of the Reports
contains any untrue statement of a material fact, or omits any
material fact required to be stated therein or necessary to make
the statements made therein not misleading.
5.12. Contracts and Undertakings. Other than this Agreement and as set
forth on Schedule 5.12, there are no material contracts, agreements, leases,
licenses, arrangements, commitments and undertakings to which Company is a party
or by which it or its property is bound except as described in the Registration
Statements. Each of such contracts, agreements, leases, licenses, arrangements,
commitments and undertakings is valid, binding and in full force and effect. The
Company is not in material default, or, to its knowledge, alleged to be in
material default, under any contract, agreement, lease, license, commitment,
instrument or obligation and to the knowledge of the Company, not other party to
any contract, agreement, lease, license, commitment, instrument or obligation to
which Company is a party is in default thereunder nor, to the knowledge of the
Company, does there exist any condition or event which, after notice or lapse of
time or both, would constitute a default by any party to any such contract,
agreement, lease, license, commitment, instrument or obligation, except as
described in such Registration Statements.
5.13. Taxes. The Company has timely filed (within applicable extension
periods) with the appropriate government all governmental tax returns, reports
and declarations which are required to be filed by the Company and has paid all
taxes which have become due pursuant thereto and all other taxes, assessments
and other governmental charges imposed by law upon the Company or any of its
properties, assets, income, receipts, payrolls, transactions, capital, net worth
or franchise, other than those not delinquent or as disclosed in the
Registration Statements or Schedule 5.13. The Company has not received any
notice of deficiency or assessment of additional taxes except as may be
disclosed in the Registration Statements or Schedule 5.13, the Company has not
received any notice of deficiency or assessment of additional taxes except as
may be disclosed in the Registration Statements or on Schedule 5.13. United
States federal income tax returns for the Company have never been examined by
the IRS.
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Except as may be disclosed in Schedule 5.13, the Company has not granted
any waiver of any statute of limitations with respect to, or any extension of a
period for the assessment of, any governmental tax. The accruals and reserves
for taxes reflected on the Financial Statements are adequate to cover all taxes
due and payable or accruable through May 31, 1996 (including interest and
penalties, if any, thereon). Except as may be disclosed in Schedule
5.13, no issues have been raised (and are currently pending) by the IRS or
any other taxing authority in connection with any matter concerning the Company.
5.14. Transactions with Affiliates. Other than as disclosed in the
Registration Statements,
(a) The Company is not a party to or bound by any agreement,
lease, transaction, instrument or contract (whether written or
oral) to which any officer or director or any member of an
officer's or director's immediate family or any current or
former director, officer, significant employee or affiliate of
the Company (each, a "RELATED PERSON') is or is to become a
party, or under which any Related Person has or is to acquire
any right, interest or benefit;
(b) No Related Person is the direct or indirect owner of an
interest in any corporation, firm, association, or business
organization which is a present or potential competitor,
customer or supplier of the Company or the Company, nor does
any Related Person receive income from any source other than
the Company, which relates to the business of, or should
properly accrue to, the Company;
(c) The Company does not have any investment of any kind in any
Related Person;
(d) There is no indebtedness of the Company to any Related Person;
and
(e) There is no indebtedness of any Related Person to the Company.
5.15. Accuracy and Completeness of Representations. The Company has
disclosed to TAAL and the Shareholders all facts material to the properties,
assets, liabilities and business of the Company. No representation or warranty
by the Company to TAAL and the Shareholders in this Agreement, or in any
statement, certificate, Schedule 5.15 or other document furnished to
Shareholders or Seller pursuant hereto or in connection with the transactions
contemplated hereby is false or inaccurate in any material respect or contains
any untrue statement of a material fact or omits to state any fact necessary to
make the statements contained herein or therein not misleading.
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6.
COVENANTS OF SELLER AND THE COMPANY
6.1. Covenants of Seller.
(a) TAAL shall, as soon as possible, but not later than
60 days following the Closing, use its reasonable best efforts
to cause its independent public accountants to complete an
audit of the TAAL Financial Statements for the two years
ending June 30, 1995 and 1996, and of Tetherless Access Ltd.,
a California corporation, for the two years ending December
31, 1994 and 1995 ("TAAL US FINANCIAL STATEMENTS"),
accompanied by a report of such accountants, delivered to the
Company, that the TAAL Financial Statements and TAAL US
Financial Statements present fairly the financial condition
and results of operations and changes in financial position of
TAAL for the periods presented, in conformity with generally
accepted accounting principles.
(b) At all times, Shareholders and TAAL shall cooperate
fully with the Company by making available to it any
information required to be disclosed in accordance with U.S.
federal or state securities laws.
(c) TAAL and the Shareholders shall first submit any press
release or other public disclosure to the Company for its and
its legal counsel's reasonable prior approval before TAAL or
any Shareholder issues any press release or makes any other
public disclosure concerning TAAL, the Shareholders, the
Company or this Agreement.
6.2. Covenants of the Company.
(a) Immediately following execution of this Agreement and
at or prior to the Closing, the Company shall
(i) cause the Certificate of Designation to be duly filed
with the Delaware Secretary of State;
(ii) at the next possible annual or special meeting of
shareholders, amend its Certificate of Incorporation as
necessary to increase the authorized number of shares of
Common Stock of the Company to permit the conversion of the
Preferred Stock; and
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(iii) at the next possible annual or special meeting of
shareholders, amend its Certificate of Incorporation as
necessary to effect a 2:1 reverse split of its Common Stock.
(b) As soon as practicable following execution of this
Agreement, at such time as the Board of Directors shall
determine, the Company shall cause to be filed at its expense
a registration statement under the 1933 Act covering the
issuance to and/or resale by the Shareholders of the Common
Stock, including the Common Stock underlying the Preferred
Stock, issued or to be issued pursuant to Section 1.2 above.
(c) If prior to the Closing the Company shall have issued
or distributed warrants, options or other securities for its
shareholders, the Company shall issue to the TAAL Shareholders
pro rata the number of warrant options or other securities to
which they would have been entitled had all of the Preferred
Stock been issued and converted into Common Stock at the time
of execution of this Agreement.
(d) The Company warrants and covenants that the aggregate
amount paid or payable in resolution or settlement of any
contingent liabilities reflected on Schedule 5.8 will not
exceed Two Hundred Fifty Thousand Dollars ($250,000),
exclusive of the value of any Common Stock or other securities
issued or to be issued in connection with any pending or
proposed settlement which has been previously approved by the
Company's Board of Directors of claims asserted by ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇. If the Company's
outstanding contingent liabilities as provided in Section 5.8
from and after execution of this Agreement until three (3)
years following the Closing exceed Two Hundred Fifty Thousand
Dollars ($250,000), the Company shall issue and deliver to the
Shareholders that number of additional shares of Common Stock
determined by: (a) the amount of the contingent liabilities in
excess of $250,000, divided by (b) Two Dollars and Forty Cents
($2.40).
All such shares issued or to be issued pursuant to this
Section 6.2 shall be governed by the provisions of this
Agreement including but not limited to the execution and
delivery of an Investment Letter in the form attached hereto
and the provisions of Section 6.2(b).
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(e) The Company shall first submit any press release or other
public disclosure to TAAL for its and its legal counsel's
reasonable prior approval before the Company issues any press
release or makes any other public disclosure concerning TAAL,
the Shareholders, the Company or this Agreement.
6.3. Conduct of Business. From and after execution of this
Agreement by all parties until the Closing, the Company and TAAL shall not, and
the Shareholders shall not cause TAAL to, undertake, make or enter into any
agreement for any of the following:
(a) Sale, assignment, transfer or other disposition of any
tangible properties or assets of TAAL or the Company other
than in the ordinary course of business.
(b) Sale, assignment, transfer or other disposition of any
of the intellectual property rights of TAAL or the Company.
(c) Increase in the remuneration paid or to become due and
payable by TAAL or the Company to:
(i) any of their officers, directors, management employees,
agents or representatives; or
(ii) any consultant, advisor, agent, professional services
firm or enterprise, independent contractor or other person
engaged, retained or used by TAAL or the Company to furnish
(other than as employees) any consulting, advisory or
professional service or assistance of any kind whatever,
except (in each case) increases representing ordinary merit
and cost-of-living increases made by TAAL or the Company
strictly in accordance with its past practices.
(d) Except as described on the attached Schedule 6.3, any
payment, grant or accrual of a bonus, percentage compensation,
service award or other like benefit; or, any new or different
incentive compensation, profit-sharing, pension or other
"fringe benefit" place or arrangement made or agreed to by
TAAL or the Company.
(e) Failure by TAAL or the Company to replenish its
inventories and supplies in a manner consistent with its prior
practice (and prudent business practices prevailing in the
industry) or any purchase commitment by TAAL or the Company in
excess of the normal, ordinary and usual requirements of its
business or at any price on excess of the then current market
price, or upon terms and
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conditions more onerous than those usual and customary in the
industry, or any change in TAAL's or the Company's selling or
pricing practices inconsistent with its prior practice and
prudent business practices prevailing in the industry, other
than in the ordinary course of business.
(f) Termination or receipt of notice of a termination with
respect to any relationship with TAAL's or the Company's
suppliers, distributors or customers.
(g) Capital expenditure or capital addition with value of
US$25,000 or more, other than in the ordinary course of
business.
(h) Institution, settlement or agreement to settle any
litigation, action or proceeding before the court or
governmental body relating to TAAL or the Company or their
properties.
(i) Waiver or release of any right or claim by TAAL or the
Company, other than in connection of pending litigation or
threatened claims.
(j) Issue additional shares of Common Stock, Preferred
Stock, options, warrants or other securities without the
Shareholders' consent.
7.
SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES
7.1. Survival of Covenants, Representations and Warranties.
All representations, warranties and covenants of the Company, TAAL and the
Shareholders contained herein shall survive the consummation of the transactions
contemplated herein and remain in full force and effect for a period of three
years after the Closing.
7.2.
8.
MISCELLANEOUS
8.1. Finder's Fees. The Shareholders and TAAL represent and
warrant that they have not retained or used the services of any person, firm or
corporation in such manner as to
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require the payment of any compensation as a finder or a broker in connection
with the transactions contemplated herein. Company represents and warrants that
it has not retained or used the services of any person, firm or corporation in
such manner as to require the payment of any compensation as a finder or a
broker in connection with the transactions contemplated herein.
8.2. Expenses. All fees and expenses incurred by the Shareholders and
TAAL in connection with this Agreement will be borne by them and all fees and
expenses incurred by the Company in connection with this Agreement will be borne
by the Company.
8.3. Further Assurances. From time to time, at the Company's request
and without further consideration, each Shareholder will execute and deliver to
the Company such documents and take such action as the Company may reasonably
request in order to consummate more effectively the transactions contemplated
hereby and to vest in the Company good, valid and marketable title to the TAAL
Shares.
8.4. Parties in Interest. Except as otherwise expressly provided
herein, all the terms and provisions of this Agreement shall be binding upon,
shall inure to the benefit of and shall be enforceable by the respective heirs,
beneficiaries, personal and legal representatives, successors and assigns of the
parties hereto.
8.5. Entire Agreement; Amendments. This Agreement, including the
annexes, exhibits and other documents and writings referred to herein or
delivered pursuant hereto, which form a part hereof, contains the entire
understanding of the parties with respect to its subject matter. There are no
restrictions, agreements, promises, warranties, covenants or undertakings other
than those expressly set forth herein or therein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to its
subject matter. This Agreement may be amended only by a written instrument duly
executed by the parties or their respective successors or assigns.
8.6. Headings, Etc. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretations of this Agreement.
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8.7. Notices. All notices, requests, demands and other communications
hereunder ("Notices") shall be in writing and shall be deemed to have been duly
given if delivered or mailed (registered or certified mail, postage prepaid,
return receipt requested) as follows:
If to the Shareholders:
At the addresses set forth opposite
their names on Annex 1 hereto.
If to the Company:
American Phoenix Group, Inc.
▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇
TEL: ▇▇▇.▇▇▇.▇▇▇▇
FAX: ▇▇▇.▇▇▇.▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
TEL: ▇▇▇.▇▇▇.▇▇▇▇
FAX: ▇▇▇.▇▇▇.▇▇▇▇
If to TAAL:
Tetherless Access Asia Ltd.
▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
TEL: ▇▇▇.▇▇▇▇.▇▇▇▇
FAX: ▇▇▇.▇▇▇▇.▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ Breed ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
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TEL: ▇▇▇.▇▇▇.▇▇▇▇
FAX: ▇▇▇.▇▇▇.▇▇▇▇
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that Notices of change of address shall
only be effective upon receipt. All Notices shall be deemed received on the date
of delivery or, if mailed, on the date appearing on the return receipt therefor.
8.8. Law Governing. This Agreement shall be governed by California law
in all respects.
8.9. Counterparts. This Agreement may be executed simultaneously in
several counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the Shareholders and by the duly authorized officers of the Company and TAAL
as of the date first above written.
THE COMPANY AMERICAN PHOENIX GROUP, INC.
By ___________________________
Name _________________________
Title _____________________
TAALTETHERLESS ACCESS ASIA LTD.
By ___________________________
Name _________________________
Title ______________________
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SHAREHOLDERS
GREENCHIP EMERGING GROWTH LTD. A.C.N.
/s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Executive Director
GREENCHIP INVESTMENTS LTD. A.C.N.
/s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Executive Director
GREENCHIP OPPORTUNITIES LTD. A.C.N.
/s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Executive Director
JGL INVESTMENTS PTY. LTD.
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
Director
THE JGL GROUP
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
Director
CONSORTIUM DEVELOPMENT FUND PTY. LTD.
/s/ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
---------------------------------
Director
CONSORTIUM INVESTMENT GROUP PTY. LTD.
/s/ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
---------------------------------
Director
BKP PARTNERS
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/s/ ▇▇▇ ▇▇▇▇
---------------------------------
General Partner
▇▇▇▇▇ & CO. CUSTODIAL SERVICES LTD.
/s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
CLIME INVESTMENT HOLDINGS LTD.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Authorized Signatory
▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
YAMUNI INVESTMENTS PTY. LTD.
/s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Director
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