Exhibit No. 2 Agreement and Plan of Merger dated February 19, 2004
AGREEMENT AND PLAN OF MERGER
Agreement entered into as of February 19, 2004, by and between Technology
Connections, Inc., a North Carolina corporation ("Technology"), HouseRaising,
Inc., a Delaware corporation ("HouseRaising"), and the persons whose names are
set forth on the signature page hereof, who are the owners of record of all of
the issued and outstanding stock of HouseRaising (the "HouseRaising
Stockholders"). Technology, HouseRaising and the HouseRaising Stockholders are
referred to collectively herein as the "Parties".
This Agreement contemplates a tax-free merger of HouseRaising with and into
Technology in a reorganization pursuant to Code 368(a)(1)(A). However, none of
the Parties is seeking tax counsel or legal or accounting opinions on whether
the merger qualifies for tax free treatment and tax free treatment of the merger
is not a condition precedent to the obligations of the Parties to this
Agreement. HouseRaising Stockholders will receive capital stock in Technology in
exchange for their capital stock in HouseRaising.
Now, therefore, in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties, and covenants
herein contained, the Parties agree as follows.
ARTICLE I
THE MERGER TRANSACTION
1.01 The Merger.
On and subject to the terms and conditions of this Agreement, HouseRaising will
merge with and into Technology (the "Merger") at the Closing as defined in
Section 1.02 herein. Technology shall be the corporation surviving the Merger
(the "Surviving Corporation") and HouseRaising will cease to exist.
1.02 The Closing.
The Closing of the transactions contemplated by this Agreement (the "Closing")
shall take place at the offices of Technology in Charlotte, North Carolina,
commencing at 9:00 a.m. local time on the second business day following the
satisfaction or waiver of all conditions to the obligations of the Parties to
consummate the transactions contemplated hereby (other than conditions with
respect to actions the respective Parties will take at the Closing itself) or
such other date as the Parties may mutually determine (the "Closing Date").
1.03 Actions by Technology Prior to Closing:
Prior to closing, Technology will timely file the following documents with the
Securities and Exchange Commission ("the Commission"):
(i) Form 8K;
(ii) Schedule 14C, disclosing the merger and amendment to the Articles of
Incorporation; and
(iii) All other filings and periodic filing Technology is required to file,
including but not limited to its Form 10-KSB for the fiscal year ended December
31, 2003, and its Form 10-QSB for the quarter ended March 31, 2004, if such
reports are required to be filed prior to the Closing Date.
1.04 Actions at the Closing.
At the Closing, (i) HouseRaising will deliver to Technology the various
certificates, instruments, and documents referred to herein, (ii) Technology
will deliver to HouseRaising the various certificates, instruments, and
documents referred to herein, and (iii) Technology and HouseRaising will file
with the Secretary of State of the State of North Carolina Certificates of
Merger.
1.05 Effect of the Merger.
(i) General. The Merger shall become effective at the time (the "Effective
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Time") that Technology and HouseRaising file the Certificates of Merger with the
Secretary of State of the State of North Carolina. The Merger shall have the
effect set forth in the North Carolina Business Corporation Act. Technology may,
at any time after the Effective Time, take any action (including executing and
delivering any document) in the name and on behalf of either Technology or
HouseRaising in order to carry out and effectuate the transactions contemplated
by this Agreement.
(ii) Certificate of Incorporation. The Certificate of Incorporation of
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Technology in effect at and as of the Effective Time will remain the Certificate
of Incorporation of the Surviving Corporation without any modification or
amendment resulting solely as a result of the Merger or this Agreement, except
for an amendment to the Certificate of Incorporation of Technology to change the
corporate name of Technology to "HouseRaising, Inc." Technology hereby agrees
to take all steps which may be necessary to change its name as aforesaid and to
change its ticker symbol, such steps to be taken as promptly as practicable
after the execution of this Agreement.
(iii) Bylaws. The Bylaws of Technology in effect at and as of the Effective Time
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will remain the Bylaws of the Surviving Corporation without any modification or
amendment solely as a result of the Merger.
(iv) Conversion of HouseRaising Shares. At and as of the Effective Time, each
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share of HouseRaising Class "A" common stock and each share of HouseRaising
Class "B" common stock (each being referred to herein as a "HouseRaising common
share")(other than any Dissenting Share) shall be converted into 1.0 shares of
common stock of Technology and .036645 shares of Class A Voting Convertible
Preferred Stock ("Class A Convertible Preferred") of Technology (the ratios of
1.0 common shares and .036645 Class A Convertible Preferred of Technology to one
HouseRaising common share are referred to herein as the "Conversion Ratios").
The Conversion Ratios shall be subject to equitable adjustment in the event of
any stock split, stock dividend, reverse stock split, or other change in the
number of HouseRaising common shares outstanding. No HouseRaising common share
shall be deemed to be outstanding or to have any rights other than those set
forth above after the Effective Time.
(v) Issuance of Technology Common and Preferred. In the aggregate, 27,288,732
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shares of Technology common stock which shall represent a minimum of 51% of the
outstanding shares of common stock of Technology and 1,000,000 shares of
Technology Class A Convertible Preferred will be issued to the HouseRaising
Stockholders at and as of the Effective Time. The relative rights, preferences
and terms and conditions of the shares of the Technology preferred voting stock
are set forth in Exhibit A hereto.
1.06 Closing Procedure.
(i) At closing, Technology will deliver to the HouseRaising Stockholders stock
certificates representing the number of shares of Technology common stock and
Class A Convertible Preferred to which each of them is entitled issued in each
HouseRaising Shareholders respective name. Each HouseRaising Shareholder shall
deliver certificates endorsed in blank or accompanied by stock powers executed
in blank, representing the HouseRaising shares of common stock to be
surrendered, with all signatures medallion guaranteed and with all necessary
transfer taxes and other revenue stamps affixed and acquired at the HouseRaising
Stockholders' expense.
(ii) At the Closing and from time to time thereafter, the Parties hereto shall
execute such additional instruments and take such other action as the other
party may reasonably request in order to facilitate the transactions
contemplated herein.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES OF TECHNOLOGY
As an inducement to, and to obtain the reliance of HouseRaising, Technology
represents, promises and warrants as follows:
2.01 Organization.
Technology is, and will be at Closing, a corporation duly organized, validly
existing, and in good standing under the laws of the State of North Carolina and
has the corporate power and is and will be duly authorized, qualified,
franchised, and licensed under all applicable laws, regulations, ordinances, and
orders of public authorities to own all of its properties and assets and to
carry on its business in all material respects as it is now being conducted, and
there are no other jurisdictions in which it is not so qualified in which the
character and location of the assets owned by it or the nature of the material
business transacted by it requires qualification, except where failure to do so
would not have a material adverse effect on its business, operations,
properties, assets or condition. The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof will not, violate any provision of
Technology's Articles of Incorporation or Bylaws, or other agreement to which it
is a party or by which it is bound.
2.02 Approval of Agreement.
Technology has full power, authority, and legal right and has taken, or will
take, all action required by law, its Articles of Incorporation, Bylaws, and
otherwise to execute and deliver this Agreement and to consummate the
transactions herein contemplated. The board of directors of Technology has
authorized and approved the execution, delivery, and performance of this
Agreement and the transactions contemplated hereby are subject to the approval
of the Technology shareholders and compliance with state and federal law.
Technology shareholders will not have dissenters rights with respect to any of
the transactions contemplated herein.
2.03 Capitalization.
The authorized capitalization of Technology consists of 100,000,000 shares of
common stock, $0.001 par value, of which 1,347,893 shares are issued and
outstanding prior to issuance of shares as set forth in Article I of this
Agreement. There are 5,000,000 shares of preferred stock authorized, having
such terms, conditions, relative rights and preferences as may be determined by
the Board of directors from time to time when issued, and no shares of preferred
stock are issued and outstanding prior to the issuance of shares as set forth in
Article I of this Agreement. There are, and at the Closing, there will be no
outstanding subscriptions, options, warrants, convertible securities, calls,
rights, commitments or agreements calling for or requiring issuance or transfer,
sale or other disposition of any shares of capital stock of the Company or
calling for or requiring the issuance of any securities or rights convertible
into or exchangeable (including on a contingent basis) for shares of capital
stock. All of the outstanding shares of Technology are duly authorized, validly
issued, fully paid and non-assessable and not issued in violation of the
preemptive or other right of any person. There are no dividends due, to be paid
or in arrears with respect to any of the capital stock of Company.
2.04 Financial Statements.
(i) Included in Schedule 2.04 are the audited balance sheet of Technology as of
December 31, 2002, and the related statements of operations, stockholders'
equity (deficit), and cash flows for the fiscal year ended December 31, 2002,
including the notes thereto, and related statements of operations for the
quarters then ended (collectively the "Financial Statements") and the
accompanying auditor's report and representations by the Chief Financial Officer
of Technology to the effect that such financial statements contain all
adjustments (all of which are normal recurring adjustments) necessary to present
fairly the results of operations and financial position for the periods and as
of the dates indicated.
(ii) The financial statements of Technology delivered pursuant to Section
2.04(i) have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved as explained in
the notes to such financial statements. The Technology financial statements
present fairly, in all material respects, as of the closing date, the financial
position of Technology. Technology will not have, as of the Closing Date, any
liabilities, obligations or claims against it (absolute or contingent)
in excess of $200,000, and all assets reflected therein present fairly the
assets of Technology in accordance with generally accepted accounting
principles.
(iii) Technology has filed or will file as the Closing Date its tax returns
required to be filed for its two most recent fiscal years and will pay all taxes
due thereon. All such returns and reports are accurate and correct in all
material respects. Technology has no liabilities with respect to the payment of
any federal, state, county, local, or other taxes (including any deficiencies,
interest, or penalties) accrued for or applicable to the period ended on the
closing date and all such dates and years and periods prior thereto and for
which Technology may at said date have been liable in its own right or as
transferee of the assets of, or as successor to, any other corporation or
entity, except for taxes accrued but not yet due and payable, and to the best
knowledge of Technology, no deficiency assessment or proposed adjustment of any
such tax return is pending, proposed or contemplated. None of such income tax
returns has been examined or is currently being examined by the Internal Revenue
Service and no deficiency assessment or proposed adjustment of any such return
is pending, proposed or contemplated. Technology has not made any election
pursuant to the provisions of any applicable tax laws (other than elections that
relate solely to methods of accounting, depreciation, or amortization) that
would have a material adverse affect on Technology, its financial condition, its
business as presently conducted or proposed to be conducted, or any of its
respective properties or material assets. There are no outstanding agreements
or waivers extending the statutory period of limitation applicable to any tax
return of Technology.
2.05 Information.
The information concerning Technology set forth in this Agreement is complete
and accurate in all respects and does not contain any untrue statement of a fact
or omit to state a fact required to make the statements made, in light of the
circumstances under which they were made, not misleading. Technology shall
cause the schedules delivered by it pursuant hereto and the instruments
delivered to HouseRaising hereunder to be updated after the date hereof up to
and including the Closing Date.
2.06 Absence of Certain Changes or Events.
Except as set forth in this Agreement or the schedules hereto, since the date of
the most recent Technology balance sheet described in Section 2.04 and included
in the information referred to in Section 2.06:
(a) There has not been: (i) any adverse change in the business, operations,
properties, level of inventory, assets, or condition of Technology; or (ii) any
damage, destruction, or loss to Technology (whether or not covered by insurance)
adversely affecting the business, operations, properties, assets, or conditions
of Technology;
(b) Technology has not: (i) amended its Articles of Incorporation or Bylaws;
(ii) declared or made, or agreed to declare or make, any
payment of dividends or distributions of any assets of any kind whatsoever to
stockholders or purchased or redeemed, or agreed to purchase or redeem, any of
its capital stock; (iii) waived any rights of value which in the aggregate are
extraordinary or material considering the business of Technology; (iv) made any
material change in its method of management, operation, or accounting; (v)
entered into any other material transactions; (vi) made any accrual or
arrangement for or payment of bonuses or special compensation of any kind or any
severance or termination pay to any present or former officer or employee; (vii)
increased the rate of compensation payable or to become payable by it to any of
its officers or directors or any of its employees whose monthly compensation
exceeds $1,000; or (viii) made any increase in any profit-sharing, bonus,
deferred compensation, insurance, pension, retirement, or other employee benefit
plan, payment, or arrangement made to, for, or with its officers, directors, or
employees;
(c) Technology has not: (i) granted or agreed to grant any options, warrants,
or other rights for its stocks, bonds, or other corporate securities calling for
the issuance thereof; (ii) borrowed or agreed to borrow any funds or incurred,
or become subject to, any material obligation or liability (absolute or
contingent) except liabilities incurred in the ordinary course of business;
(iii) paid any material obligation or liability (absolute or contingent) other
than current liabilities reflected in or shown on the most recent Technology
balance sheet and current liabilities incurred since that date in the ordinary
course of business; (iv) sold or transferred, or agreed to sell or transfer, any
of its material assets, properties, or rights (except assets, properties, or
rights not used or useful in its business which, in the aggregate have a value
of less than $5,000 or canceled, or agreed to cancel, any debts or claims
(except debts and claims which in the aggregate are of a value of less than
$5,000); (v) made or permitted any amendment or termination of any contract,
agreement, or license to which it is a party if such amendment or termination is
material, considering the business of Technology ; or (vi) issued, delivered, or
agreed to issue or deliver any stock, bonds, or other corporate securities
including debentures (whether authorized and unissued or held as treasury
stock); and
(d) Technology has not become subject to any law, order, investigation,
inquiry, grievance or regulation which materially and adversely affects, or in
the future would be reasonably expected to adversely affect, the business,
operations, properties, assets, or condition of Technology.
2.07 Litigation and Proceedings.
There are no material actions, suits, claims, or administrative or other
proceedings pending, asserted or unasserted, threatened by or against Technology
or adversely affecting Technology or its properties, at law or in equity, before
any court or other governmental agency or instrumentality, domestic or foreign,
or before any arbitrator of any kind. Technology is not in default of any
judgment, order, writ, injunction, decree, award, rule, or regulation of any
court, arbitrator, or governmental agency or instrumentality.
2.08 Compliance With Laws.
Technology and its officers and directors have complied with all federal, state,
county and local laws, ordinances, regulations, inspections, orders, judgments,
injunctions, awards or decrees applicable to it or its business, including
federal and state securities laws. Technology and its officers, directors and
beneficial owners are not under investigation by any federal, state, county or
local authorities, including the Commission. Technology and its officers,
directors and beneficial owners have not received notification from any federal,
state, county, or local authorities, including the Commission, that it or any
of its officers or directors will be the subject of a legal action or that the
Commission's Division of Enforcement will be recommending to the Commission that
a Federal District Court or Commission administrative action or any other action
be filed or taken against Technology and its officers, directors and beneficial
owners.
2.09 Securities and Exchange Commission Compliance of Technology.
Technology has a class of securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended ("Exchange Act") and has complied in
all respects with Rule 14(a) and 14(c) of the Exchange Act, and with Sections 13
and 15(d) of the Exchange Act, and Technology, its management and beneficial
owners have complied in all respects with Sections 13(d) and 16(a) of the
Exchange Act.
2.10 Material Contract Defaults.
Technology is not in default under the terms of any outstanding contract,
agreement, lease, or other commitment, and there is no event of default or other
event which, with notice or lapse of time or both, would constitute a default in
any respect under any such contract, agreement, lease, or other commitment.
2.11 No Conflict With Other Instruments.
The execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in the breach of any term or
provision of, or constitute an event of default under, any material indenture,
mortgage, deed of trust, or other material contract, agreement, or instrument to
which Technology is a party or to which any of its properties or operations are
subject.
2.12 Subsidiary.
Technology does not and has never owned, beneficially or of record, any equity
securities in any other entity. Technology does not have a predecessor as that
term is defined under generally accepted accounting principles or Regulation S-X
promulgated by the Securities and Exchange Commission.
2.13 Technology Schedules and Documents.
Technology will deliver to HouseRaising the following schedules and
documents within ten days prior to the date of closing, which are collectively
referred to as the "Technology Schedules" and which consist of the following
separate schedules dated as of the date of execution of this Agreement, all
certified by a duly authorized officer of Technology as complete, true, and
accurate:
(a) A schedule including copies of the Articles of Incorporation and Bylaws of
Technology in effect as of the date of this Agreement;
(b) A schedule containing copies of resolutions adopted by the board of
directors of Technology approving this Agreement and the transactions herein
contemplated;
(c) A schedule setting forth a description of any material adverse change in
the business, operations, property, inventory, assets, or condition of
Technology since the most recent Technology balance sheet, required to be
provided pursuant to Section 2.04 hereof;
(d) A schedule setting forth the financial statements required pursuant to
Section 2.04(a) hereof;
(e) A schedule setting forth any other information, together with any required
copies of documents, required to be disclosed in the Technology Schedules by
Sections 2.01 through 2.12; and
(f) Legal opinions in a form acceptable to HouseRaising that Technology has
complied with applicable securities laws pertaining to this Agreement.
Technology shall cause the Technology Schedules and the instruments delivered to
HouseRaising hereunder to be updated after the date hereof up to and including a
specified date not more than three business days prior to the Closing Date.
Such updated Technology Schedules, certified in the same manner as the original
Technology Schedules, shall be delivered prior to and as a condition precedent
to the obligation of HouseRaising to close.
2.14 Quotation on the OTC Bulletin Board.
Technology's Common Stock is quoted on the OTC Bulletin Board under the symbol
"TLGY" and Technology will retain such quotation on the OTC Bulletin Board until
the Closing of the transactions contemplated herein.
2.15 Delivery of Shareholder List.
Upon execution of this agreement, Technology shall deliver a certified
shareholder list from its transfer agent setting forth the name of each
Technology shareholder, the number of shares held by each, dated as of a date
within five days of closing and whether such shares held are restricted
securities. In connection therewith, Technology represents that none of its
shareholders are nominees for any other person.
ARTICLE III
REPRESENTATIONS, COVENANTS, WARRANTIES OF HOUSERAISING, ETC.
As an inducement to, and to obtain the reliance of Technology, HouseRaising and
the HouseRaising Stockholders, jointly and severally, represent and warrant as
follows:
3.01 Organization.
HouseRaising is, and will be on the Closing Date, a corporation duly
organized, validly existing, and in good standing under the laws of Delaware and
has the corporate power and is and will be duly authorized, qualified,
franchised, and licensed under all applicable laws, regulations, ordinances, and
orders of public authorities to own all of its properties and assets and to
carry on its business in all material respects as it is now being conducted, and
there are no other jurisdictions in which it is not so qualified in which the
character and location of the assets owned by it or the nature of the material
business transacted by it requires qualification, except where failure to do so
would not have a material adverse effect on its business, operations,
properties, assets or condition of HouseRaising. The execution and delivery of
this Agreement does not, and the consummation of the transactions contemplated
by this Agreement in accordance with the terms hereof will not, violate any
provision of HouseRaising's Articles of Incorporation or Bylaws, or other
material agreement to which it is a party or by which it is bound.
3.02 Approval of Agreement.
HouseRaising has full power, authority, and legal right and has taken, or will
take, all action required by law, its Articles of Incorporation, Bylaws, or
otherwise to execute and deliver this Agreement and to consummate the
transactions herein contemplated. The board of directors of HouseRaising has
authorized and approved the execution, delivery, and performance of this
Agreement and the transactions contemplated hereby, subject to the approval of
the HouseRaising Stockholders and compliance with state and federal corporate
and securities laws.
3.03 Capitalization.
The authorized capitalization of HouseRaising consists of 90,000,000 shares of
Class "A" common stock, par value $.001, and 10,000,000 shares of Class "B"
common stock, par value $.001, of which as of the date hereof, 16,980,000 shares
of Class "A" common stock and 10,000,000 shares of Class "B" common stock are
issued and outstanding to the HouseRaising Shareholders set forth on the
signature page hereof. All issued and outstanding HouseRaising common shares
are validly issued, fully paid, and nonassessable and not issued in violation of
the preemptive or other right of any person. There are no dividends or other
amounts due or payable with respect to any of the shares of capital stock of
HouseRaising.
3.04 Financial Statements.
(a) Included in Schedule 3.04 are the unaudited balance sheets of HouseRaising
as of December 31, 2002 and the related statements of operations, cash flows,
and stockholders' equity for the period from inception to December 31, 2002
including the notes thereto and representations by the Chief Operating Officer
of HouseRaising to the effect that such financial statements contain all
adjustments (all of which are normal recurring adjustments) necessary to present
fairly the results of operations and financial position for the periods and as
of the dates indicated.
(b) The unaudited financial statements delivered pursuant to Section 3.04(a)
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved. The financial statements
of HouseRaising present fairly, as of their respective dates, the financial
position of HouseRaising. HouseRaising did not have, as of the date of any such
balance sheets, except as and to the extent reflected or reserved against
therein, any liabilities or obligations (absolute or contingent) which should be
reflected in any financial statements or the notes thereto prepared in
accordance with generally accepted accounting principles, and all assets
reflected therein present fairly the assets of HouseRaising, in accordance with
generally accepted accounting principles. The statements of revenue and expenses
and cash flows present fairly the financial position and result of operations of
HouseRaising as of their respective dates and for the respective periods covered
thereby.
3.05 Outstanding Warrants and Options.
HouseRaising has no issued warrants or options, calls, or commitments of any
nature relating to the authorized and unissued HouseRaising common stock.
3.06 Information.
The information concerning HouseRaising set forth in this Agreement and in the
schedules delivered by HouseRaising pursuant hereto is complete and accurate in
all material respects and does not contain any untrue statement of a material
fact or omit to state a material fact required to make the statements made, in
light of the circumstances under which they were made, not misleading.
HouseRaising shall cause the schedules delivered by HouseRaising pursuant to
this Agreement to Technology to be updated after the date hereof up to and
including the Closing Date.
3.07 Absence of Certain Changes or Events.
Except as set forth in this Agreement, since the date of the most recent
HouseRaising balance sheet described in Section 3.04 and included in the
information referred to in Section 3.06:
(a) There has not been: (i) any material adverse change in the business,
operations, properties, level of inventory, assets, or condition of
HouseRaising; or (ii) any damage, destruction, or loss to HouseRaising
materially and adversely affecting the business, operations, properties, assets,
or conditions of HouseRaising;
(b) HouseRaising has not: (i) amended its Articles of Incorporation or Bylaws;
(ii) declared or made, or agreed to declare or make, any payment of dividends or
distributions of any assets of any kind whatsoever to stockholders or purchased
or redeemed, or agreed to purchase or redeem, any of its capital stock; (iii)
waived any rights of value which in the aggregate are extraordinary and material
considering the business of HouseRaising; (iv) made any material change in its
method of accounting; (v) entered into any other material transactions other
than those contemplated by this Agreement; (vi) made any material accrual or
material arrangement for or payment of bonuses or special compensation of any
kind or any severance or termination pay to any present or former officer or
employee; or (vii) made any material increase in any profit-sharing, bonus,
deferred compensation, insurance, pension, retirement, or other employee benefit
plan, payment, or arrangement made to, for, or with their officers, directors,
or employees;
(c) HouseRaising has not (i) granted or agreed to grant any options, warrants,
or other rights for its stocks, bonds, or other corporate securities calling for
the issuance thereof, except as previously disclosed to Technology, (ii)
borrowed or agreed to borrow any funds or incurred, or become subject to, any
material obligation or liability (absolute or contingent) except liabilities
incurred in the ordinary course of business; (iii) paid any material obligation
or liability (absolute or contingent) other than current liabilities reflected
in or shown on the most recent HouseRaising balance sheet and current
liabilities incurred since that date in the ordinary course of business; (iv)
sold or transferred, or agreed to sell or transfer, any of its material assets,
properties, or rights, or agreed to cancel any material debts or claims; (v)
made or permitted any amendment or termination of any contract, agreement, or
license to which it is a party if such amendment or termination is material,
considering the business of HouseRaising; or (vi) issued, delivered, or agreed
to issue or deliver any stock, bonds, or other corporate securities including
debentures (whether authorized and unissued or held as treasury stock); and
(d) To the best knowledge of HouseRaising, it has not become subject to any law
or regulation which materially and adversely affects, or in the future would be
reasonably expected to adversely affect, the business, operations, properties,
assets, or condition of HouseRaising.
3.08 Title and Related Matters.
Except as provided herein or disclosed in the most recent HouseRaising balance
sheet and the notes thereto, HouseRaising has good and marketable title to all
of its properties, inventory, interests in properties, technology, whether
patented or unpatented, and assets, all of which are described in Schedule 3.08
and are reflected in the most recent HouseRaising balance sheet or acquired
after that date (except properties, interests in properties, and assets sold or
otherwise disposed of since such date in the ordinary course of business), free
and clear of all mortgages, liens, pledges, charges, or encumbrances, except (i)
statutory liens, mortgages, loans or claims not yet delinquent; and (ii) such
imperfections of title and easements as do not, and will not, materially detract
from, or interfere with, the present or proposed use of the properties subject
thereto or affected thereby or otherwise materially impair present business
operations on such properties. To the best knowledge of HouseRaising, its
technology does not infringe on the copyright, patent, trade secret, know-how,
or other proprietary right of any other person or entity and comprises all such
rights necessary to permit the operation of the business of HouseRaising as now
being conducted or as contemplated.
3.09 Litigation and Proceedings.
There are no material actions, suits, or proceedings pending or, to the
knowledge of HouseRaising, threatened by or against HouseRaising or adversely
affecting HouseRaising, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind. HouseRaising does not have any knowledge of any default
on its part with respect to any judgment, order, writ, injunction, decree,
award, rule, or regulation of any court, arbitrator, or governmental agency or
instrumentality.
3.10 Material Contract Defaults.
HouseRaising is not in default in any material respect under the terms of any
outstanding contract, agreement, lease, or other commitment which is material to
the business, operations, properties, assets, or condition of HouseRaising, and
there is no event of default or other event which, with notice or lapse of time
or both, would constitute a default in any material respect under any such
contract, agreement, lease, or other commitment in respect of which HouseRaising
has not taken adequate steps to prevent such a default from occurring.
3.11 No Conflict With Other Instruments.
The execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in the breach of any term or
provision of, or constitute an event of default under, any material indenture,
mortgage, deed of trust or other material contract, agreement, or instrument to
which HouseRaising is a party or to which any of its properties or operations
are subject.
3.12 Governmental Authorizations.
HouseRaising has all licenses, franchises, permits, and other governmental
authorizations that are legally required to enable it to conduct its business in
all material respects as conducted on the date of this Agreement. Except for
compliance with federal and state law, as hereinafter provided, no
authorization, approval, consent, or order of, or registration, declaration, or
filing with, any court or other governmental body is required in connection with
the execution and delivery by HouseRaising of this Agreement and the
consummation by HouseRaising of the transactions contemplated hereby.
3.13 Compliance With Laws and Regulations.
HouseRaising has complied with all applicable statutes and regulations of any
federal, state, or other governmental entity or agency thereof having
jurisdiction over HouseRaising, except to the extent that noncompliance would
not materially and adversely affect the business, operations, properties,
assets, or condition of HouseRaising or except to the extent that noncompliance
would not result in the occurrence of any material liability for HouseRaising.
To the best knowledge of HouseRaising, the consummation of this transaction will
comply with all applicable statutes and regulations, subject to the preparation
and filing of any forms required by state and federal security laws.
3.14 Subsidiaries.
HouseRaising directly or indirectly owns, beneficially and of record, equity
securities in HouseRaising Management, LLC and HouseRaisingUSA, LLC.
3.15 HouseRaising Schedules.
HouseRaising has delivered to Technology the following schedules, which are
collectively referred to as the "HouseRaising Schedules" and which consist of
the following separate schedules dated as of the date of execution of this
Agreement, all certified by the Chief Executive Officer of HouseRaising as
complete, true, and accurate:
(a) A schedule including copies of the Articles of Incorporation and Bylaws of
HouseRaising and all amendments thereto in effect as of the date of this
Agreement;
(b) A schedule containing copies of resolutions adopted by the board of
directors of HouseRaising approving this Agreement and the transactions herein
contemplated as referred to in Section 3.02;
(c) A schedule setting forth a description of any material adverse change in
the business, operations, property, inventory, assets, or condition of
HouseRaising since the most recent HouseRaising balance sheet, required to be
provided pursuant to Section 3.04 hereof;
(d) A schedule setting forth the financial statements required pursuant to
Section 3.04 (a) hereof; and
(e) A schedule setting forth any other information, together with any required
copies of documents, required to be disclosed in the HouseRaising Schedules by
Sections 3.01 through 3.14.
ARTICLE IV
CONDITIONS PRECEDENT TO OBLIGATIONS OF HOUSERAISING
The obligations of HouseRaising under this Agreement are subject to the
satisfaction or waiver, at or before the Closing Date, of the following
conditions:
4.01 Shareholder Approval.
Technology shall obtain the written consent of a majority of its shareholders,
to approve the transactions contemplated by this Agreement including the merger
with HouseRaising and the issuance of Technology common stock and Class A
Convertible Preferred in exchange for all of the issued and outstanding
HouseRaising common shares.
4.02 Accuracy of Representations.
The representations and warranties made by Technology in this Agreement were
true when made and shall be true at the Closing Date with the same force and
effect as if such representations and warranties were made at and as of the
Closing Date, and Technology shall have performed or complied with all covenants
and conditions required by this Agreement to be performed or complied with by
Technology prior to or at the Closing. HouseRaising shall be furnished with
certificates, signed by duly authorized officers of Technology and dated the
Closing Date, to the foregoing effect.
4.03 Officer's Certificates.
HouseRaising shall have been furnished with certificates dated the Closing Date
and signed by the duly authorized Chief Executive Officer of Technology to the
effect that to such officer's best knowledge no litigation, proceeding,
investigation, or inquiry is pending or, to the best knowledge of Technology
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement. Furthermore,
based on certificates of good standing, representations of government agencies,
and Technology's own documents and information, the certificate shall represent,
to the best knowledge of the officer, that:
(a) This Agreement has been duly approved by Technology's board of directors
and has been duly executed and delivered in the name and on behalf of Technology
by its duly authorized officers pursuant to, and in compliance with, authority
granted by the board of directors of Technology pursuant to a majority consent;
(b) There have been no adverse changes in Technology up to and including the
date of the certificate;
(c) All conditions required by this Agreement have been met, satisfied, or
performed by Technology;
(d) All authorizations, consents, approvals, registrations, reports, schedules
and/or filings with any governmental body including the Securities and Exchange
Commission, agency, or court have been obtained or will be obtained by
Technology and all of the documents obtained by Technology are in full force and
effect or, if not required to have been obtained, will be in full force and
effect by such time as may be required; and
(e) There is no claim action, suit, proceeding, inquiry, or investigation at
law or in equity by any public board or body pending or threatened against
Technology, wherein an unfavorable decision, ruling, or finding could have an
adverse effect on the financial condition of Technology, the operation of
Technology, or the merger contemplated herein, or any agreement or instrument by
which Technology is bound or in any way contests the existence of Technology.
4.04 No Material Adverse Change.
Prior to the Closing Date, there shall not have occurred any adverse change in
the financial condition, business, or operations of Technology, nor shall any
event have occurred which, with the lapse of time or the giving of notice, may
cause or create any adverse change in the financial condition, business, or
operations of Technology.
4.05 Good Standing.
HouseRaising shall have received a certificate of good standing from the
appropriate authority, dated as of the date within five days prior to the
Closing Date, certifying that Technology is in good standing as a corporation in
the State of North Carolina.
4.06 Technology Indebtedness.
Technology's accounts payable and notes payable to vendors, lessors,
subcontractors, governmental entities and other creditors shall not exceed
$200,000.
4.07 Technology's board of directors and officers.
Effective as of the closing, the current board of directors of Technology shall
have resigned and the board of directors of HouseRaising shall have been
appointed as the board of directors of Technology, and the current Officers of
Technology shall have resigned and the officers of HouseRaising shall have been
appointed to their designated positions at Technology.
4.08 Litigation, etc.
Technology shall not have any litigation, claims or disputes, whether pending or
threatened, that could lead to claims against it totaling more than $200,000
(including those items referred to in Section 4.06 above).
4.09 Other Items.
HouseRaising shall have received from Technology such other documents, legal
opinions, certificates, or instruments relating to the transactions contemplated
hereby as HouseRaising may request.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF TECHNOLOGY
The obligations of Technology under this Agreement are subject to the
satisfaction or waiver, at or before the Closing Date, of the following
conditions:
5.01 Shareholder Approval.
Technology shall obtain, through a majority written consent of its shareholders,
action whereby the shareholders of Technology authorize and approve this
Agreement and the transactions contemplated hereby.
If Technology is unable to obtain shareholder approval, Technology is under no
further obligation to proceed with the transactions contemplated under this
Agreement.
5.02 HouseRaising Stockholders.
The HouseRaising Stockholders shall approve this Agreement and the merger with
Technology contemplated by this Agreement.
5.03 Accuracy of Representations.
The representations and warranties made by HouseRaising and the HouseRaising
Stockholders in this Agreement were true when made and shall be true at the
Closing Date with the same force and affect as if such representations and
warranties were made at and as of the Closing Date (except for changes therein
permitted by this Agreement), and HouseRaising shall have performed or complied
with all covenants and conditions required by this Agreement to be performed or
complied with by HouseRaising prior to or at the Closing. Technology shall be
furnished with a certificate, signed by a duly authorized officer of
HouseRaising and dated the Closing Date, to the foregoing effect.
5.04 Officer's Certificates.
Technology shall have been furnished with certificates dated the Closing Date
and signed by the duly authorized Chief Operating Officer of HouseRaising to the
effect that no litigation, proceeding, investigation, or inquiry is pending or,
to the best knowledge of HouseRaising, threatened, which might result in an
action to enjoin or prevent the consummation of the transactions contemplated by
this Agreement. Furthermore, based on certificates of good standing,
representations of government agencies and HouseRaising's own documents, the
certificate shall represent, to the best knowledge of the officer, that:
(a) This agreement has been duly approved by HouseRaising's board of directors
and stockholders and has been duly executed and delivered in the name and on
behalf of HouseRaising by its duly authorized officers pursuant to, and in
compliance with, authority granted by the board of directors of HouseRaising
pursuant to a unanimous consent of its board of directors and a majority vote of
its stockholders;
(b) Except as provided or permitted herein, there have been no material adverse
changes in HouseRaising up to and including the date of the certificate;
(c) All material conditions required by this Agreement have been met,
satisfied, or performed by HouseRaising;
(d) All authorizations, consents, approvals, registrations, and/or filings with
any governmental body, agency, or court required in connection with the
execution and delivery of the documents by HouseRaising have been obtained and
are in full force and effect or, if not required to have been obtained will be
in full force and effect by such time as may be required; and
(e) There is no material action, suit, proceeding, inquiry, or investigation at
law or in equity by any public board or body pending or threatened against
HouseRaising, wherein an unfavorable decision, ruling, or finding would have a
material adverse affect on the financial condition of HouseRaising, the
operation of HouseRaising, or the merger contemplated herein, or any material
agreement or instrument by which HouseRaising is bound or would in any way
contest the existence of HouseRaising.
5.05 No Material Adverse Change.
Prior to the Closing Date, there shall not have occurred any material adverse
change in the financial condition, business or operations of HouseRaising, nor
shall any event have occurred which, with the lapse of time or the giving of
notice, may cause or create any material adverse change in the financial
condition, business, or operations of HouseRaising.
5.06 Issuance of Free Trading Shares to Kyzers.
The new board of directors of Technology shall have caused Technology to issue
as promptly as practicable 100,000 "free trading" shares of common stock to
▇▇▇▇▇ ▇▇▇▇▇ as payment for consulting services, and such board of directors
hereby agrees to issue and register such shares pursuant to a Registration
Statement on Form S-8.
5.07 Completion of Due Diligence Investigation.
Technology shall have completed its due diligence investigation of HouseRaising
and its subsidiaries, and such investigation shall be satisfactory to Technology
in all material respects.
5.08 Good Standing.
Technology shall have received a certificate of good standing (or its local
equivalent) from the appropriate authority, dated as of a date within five days
prior to the Closing Date, certifying that HouseRaising is in good standing as a
corporation in the State of Delaware.
5.09 Other Items.
Technology shall have received such further documents, certificates, or
instruments relating to the transactions contemplated hereby as Technology may
reasonably request.
ARTICLE VI
SPECIAL COVENANTS
6.01 Activities of Technology and HouseRaising
(a) From and after the date of this Agreement until the Closing Date and except
as set forth in the respective schedules to be delivered by Technology and
HouseRaising pursuant hereto or as permitted or contemplated by this Agreement,
Technology and HouseRaising will each:
(i) Carry on its business in substantially the same manner as it has
heretofore;
(ii) Maintain in full force and effect insurance comparable in amount and in
scope of coverage to that now maintained by it;
(iii) Perform in all material respects all of its obligations under material
contracts, leases, and instruments relating to or affecting its assets,
properties, and business;
(iv) Use its best efforts to maintain and preserve its business organization
intact, to retain its key employees, and to maintain its relationships with its
material suppliers and customers;
(v) Duly and timely file for all taxable periods ending on or prior to the
Closing Date all tax returns required to be filed by or on behalf of such entity
or for which such entity may be held responsible and shall pay, or cause to pay,
all taxes required to be shown as due and payable on such returns, as well as
all installments of tax due and payable during the period commencing on the date
of this Agreement and ending on the Closing Date; and
(vi) Fully comply with and perform in all material respects all obligations and
duties imposed on it by all federal and state laws and all rules, regulations,
and orders imposed by federal or state governmental authorities.
(b) From and after the date of this Agreement and except as provided herein
until the Closing Date, Technology and HouseRaising will each not:
(i) Make any change in its Articles of Incorporation or Bylaws;
(ii) Enter into or amend any material contract, agreement, or other instrument
of any of the types described in such party's schedules, except that a party may
enter into or amend any contract, agreement, or other instrument in the ordinary
course of business; and
(iii) Enter into any agreement for the sale of HouseRaising or Technology
securities without the prior written approval of the other party.
6.02 Access to Properties and Records.
Until the Closing Date, HouseRaising and Technology will afford to the other
party's officers and authorized representatives and attorneys full access to the
properties, books, and records of the other party in order that each party may
have full opportunity to make such reasonable investigation as it shall desire
to make of the affairs of HouseRaising or Technology and will furnish the other
party with such additional financial and other information as to the business
and properties of
HouseRaising or Technology as each party shall from time to time reasonably
request.
6.03 Indemnification by HouseRaising and the HouseRaising Stockholders.
(a) HouseRaising will indemnify and hold harmless Technology and its directors
and officers, and each person, if any, who controls Technology within the
meaning of the Securities Act from and against any and all losses, claims,
damages, expenses, liabilities, or other actions to which any of them may become
subject under applicable law (including the Securities Act and the Securities
Exchange Act) and will reimburse them for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any claims or
actions, whether or not resulting in liability, insofar as such losses, claims,
damages, expenses, liabilities, or actions arise out of or are based upon: (i)
any untrue statement or alleged untrue statement of a material fact contained in
any of the representations, covenants and warranties set forth herein; or (ii)
the breach of any covenant or agreement set forth herein. The indemnity set
forth herein shall survive the consummation of the transactions herein for a
period of one year.
(b) The HouseRaising Stockholders will indemnify and hold harmless Technology
and its directors and officers, and each person, if any, who controls Technology
within the meaning of the Securities Act from and against any and all losses,
claims, damages, expenses, liabilities, or other actions to which any of them
may become subject under applicable law (including the Securities Act and the
Securities Exchange Act) and will reimburse them for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
claims or actions, whether or not resulting in liability, insofar as such
losses, claims, damages, expenses, liabilities, or actions arise out of or are
based upon: (i) any untrue statement or alleged untrue statement of a material
fact contained in any of the representations, covenants and warranties set forth
herein; or (ii) the breach of any covenant or agreement set forth herein. The
indemnity set forth herein shall survive the consummation of the transactions
herein for a period of one year.
6.04 Indemnification by Technology.
Technology will indemnify and hold harmless HouseRaising, the HouseRaising
Stockholders, HouseRaising's directors and officers, and each person, if any,
who controls HouseRaising within the meaning of the Securities Act from and
against any and all losses, claims, damages, expenses, liabilities, or actions
to which any of them may become subject under applicable law (including the
Securities Act and the Securities Exchange Act) and will reimburse them for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any claims or actions, whether or not resulting in
liability, insofar as such losses, claims, damages, expenses, liabilities, or
actions arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any application or statement filed
with a governmental body or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein,
or necessary in order to make the statements therein not misleading, but only
insofar as any such statement or omission was made in reliance upon and in
conformity with information furnished in writing by Technology expressly for use
therein. The indemnity agreement contained in this Section 6.04 shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of HouseRaising and shall survive the consummation of the
transactions contemplated by this Agreement for a period of one year.
6.05 The Merger and Issuance of Technology Stock.
Technology and HouseRaising understand and agree that the consummation of this
Agreement, including the issuance of the Technology common stock and Class A
Convertible Preferred to the HouseRaising Stockholders as contemplated hereby,
constitutes the offer and sale of securities under the Securities Act and
applicable state statutes. Technology and HouseRaising agree that such
transactions shall be consummated in reliance on exemptions from the
registration requirements of such statutes that depend, among other items, on
the circumstances under which such securities are acquired.
(a) In order to provide documentation for reliance upon exemptions from the
registration requirements for such transactions, the signing of this Agreement
and the delivery of appropriate separate representations shall constitute the
Parties acceptance of, and concurrence in, the following representations and
warranties:
(i) The Technology Shareholders acknowledge that neither the Securities and
Exchange Commission nor the securities commission of any state or other federal
agency has made any determination as to the merits of acquiring Technology
common stock or Class A Convertible Preferred, and that this transaction
involves certain risks;
(ii) The HouseRaising Stockholders have received and read the Agreement and
understand the risks related to the consummation of the transactions herein
contemplated;
(iii) HouseRaising Stockholders have such knowledge and experience in business
and financial matters that they are capable of evaluating Technology's business;
(iv) The HouseRaising Stockholders have been provided with copies of all
materials and information requested by them or their representatives, including
any information requested to verify any information furnished (to the extent
such information is available or can be obtained without unreasonable effort or
expense), and the Parties have been provided the opportunity for direct
communication regarding the transactions contemplated hereby;
(v) All information which the HouseRaising Stockholders have provided to
Technology or its representatives concerning their suitability and intent to
hold shares in Technology following the transactions contemplated hereby is
complete, accurate, and correct;
(vi) The HouseRaising Stockholders understand that the Technology common stock
or Class A Convertible Preferred has not been registered, but is being acquired
by reason of a specific exemption under the Securities Act as well as under
certain state statutes for transactions not involving any public offering; and
(vii) The HouseRaising Stockholders acknowledge that the shares of Technology
common stock and Class A Convertible Preferred must be held and may not be sold,
transferred, or otherwise disposed of for value unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available. The certificates representing the shares shall bear the following
restrictive legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND ARE
"RESTRICTED SECURITIES" WITHIN THE MEANING OF RULE 144 PROMULGATED UNDER THE
SECURITIES ACT. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
SOLD OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE SECURITIES ACT.
(b) In connection with the transaction contemplated by this Agreement,
Technology shall file, with its counsel, such notices, applications, reports, or
other instruments as may be deemed necessary or appropriate in an effort to
document reliance on such exemptions, and the appropriate regulatory authority
in the states where the Technology shareholders reside unless an exemption
requiring no filing is available in such jurisdictions, all to the extent and in
the manner as may be deemed by such Parties to be appropriate.
(c) In order to more fully document reliance on the exemptions as provided
herein, Technology shall execute and deliver to HouseRaising, at or prior to the
Closing, such further letters of representation, acknowledgment, suitability, or
the like as the HouseRaising Stockholders and their respective counsel may
request in connection with the transactions contemplated herein, including but
not limited to reliance on exemptions from registration under applicable
securities laws.
(d) (i) The HouseRaising Stockholders have read this Agreement and understand
the risks related to the consummation of the transactions herein contemplated;
(ii) The HouseRaising Stockholders and their representatives have such knowledge
and experience in business and financial matters that they are capable of
evaluating the merits of an investment in Technology's common stock and Class A
Convertible Preferred;
(iii) The HouseRaising Stockholders and their representatives have been provided
with copies of all materials and information requested by them or their
representatives, including any information requested to verify any information
furnished (to the extent such information is available or can be obtained
without unreasonable effort or expense), and the Parties have been provided the
opportunity for direct communication regarding the transactions contemplated
hereby;
(iv) All information which the HouseRaising Stockholders have provided to
Technology concerning their suitability and the transactions contemplated hereby
is complete, accurate, and correct;
(v) The HouseRaising Stockholders represent and warrant to Technology that they
are all "accredited investors" as such term is defined under the Securities Act;
and
(vi) The HouseRaising Stockholders understand and acknowledge that the shares of
Technology to be acquired have not been registered under the Securities Act of
1933 and are being offered and sold in reliance upon exemptions from
registration.
6.06 Technology Liabilities.
Immediately prior to the Closing Date, Technology shall have no assets and no
liabilities, except for no more than $200,000 in accounts payable and notes
payable as set forth in section 4.06.
6.07 Securities Filings.
Prior to the date of closing, Technology shall be responsible for the
preparation and filing of a Schedule 14C with the Securities and Exchange
Commission and Technology shall timely make all such filings as a result of the
transactions contemplated in this Agreement.
6.08 Sales of Securities under Rule 144, If Applicable.
(a) Technology will use its best efforts to at all times satisfy the current
public information requirements of Rule 144 promulgated under the Securities
Act.
(b) Upon being informed in writing by any person holding restricted stock of
Technology as of the date of this Agreement that such person intends to sell any
shares under Rule 144 promulgated under the Securities Act (including any Rule
adopted in substitution or replacement thereof), Technology will certify in
writing to such person that it is in compliance with the Rule 144 current public
information requirement to enable such person to sell such person's restricted
stock under Rule 144, and as may be applicable under the circumstances.
(c) If any certificate representing any such restricted stock is presented to
Technology's transfer agent for registration or transfer in connection with any
sales theretofore made under Rule 144, provided such certificate is duly
endorsed for transfer by the appropriate person(s) or accompanied by a separate
stock power duly executed by the appropriate person(s) in each case with
reasonable assurances that such endorsements are genuine and effective, and is
accompanied by an opinion of counsel satisfactory to Technology and its counsel
that such transfer has complied with the requirements of Rule 144, as
the case may be, Technology will promptly instruct its transfer agent to allow
such transfer and to issue one or more new certificates representing such shares
to the transferee and, if appropriate under the provisions of Rule 144, as the
case may be, free of any stop transfer order or restrictive legend.
(d) The shareholders of Technology as of the date of this Agreement, as well as
those receiving Technology common stock and Class A Convertible Preferred
pursuant to this Agreement, are intended third-party beneficiaries of this
Section 6.08.
6.09 Technology Capitalization.
For a period of eighteen months from the Closing Date, Technology will not
engage in any reverse split of its issued and outstanding common stock without
the prior written approval of the holders of a majority in interest of the
issued and outstanding Technology Common Stock on the date of this Agreement.
ARTICLE VII
MISCELLANEOUS
7.01 Brokers.
No broker's or finder's fee will be paid in connection with the transaction
contemplated by this Agreement.
7.02 No Representation Regarding Tax Treatment.
No representation or warranty is being made by any party to any other party
regarding the treatment of this transaction for federal or state income
taxation. Each party has relied exclusively on its own legal, accounting, and
other tax adviser regarding the treatment of this transaction for federal and
state income taxes and on no representation, warranty, or assurance from any
other party or such other party's legal, accounting, or other adviser.
7.03 Governing Law.
This Agreement shall be governed by, enforced and construed under and in
accordance with the laws of the State of North Carolina without giving effect to
principles of conflicts of law thereunder. All controversies, disputes or
claims arising out of or relating to this Agreement shall be resolved by binding
arbitration. The arbitration shall be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. Each
arbitrator shall possess such experience in, and knowledge of, the subject area
of the controversy or claim so as to qualify as an "expert" with respect to such
subject matter. The prevailing party shall be entitled to receive its
reasonable attorney's fees and all costs relating to the arbitration. Any award
rendered by arbitration shall be final and binding on the Parties, and judgment
thereon may be entered in any court of competent jurisdiction.
7.04 Notices.
Any notices or other communications required or permitted hereunder shall be
sufficiently given if personally delivered, if sent by facsimile or telecopy
transmission or other electronic communication confirmed by registered or
certified mail, postage prepaid, or if sent by prepaid overnight courier
addressed as follows:
If to Technology, to:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
If to HouseRaising, to:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices, hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered or sent by facsimile or
telecopy transmission or other electronic communication, or one day after the
date so sent by overnight courier.
7.05 Attorney's Fees.
In the event that any party institutes any action or suit to enforce this
Agreement or to secure relief from any default hereunder or breach hereof, the
breaching party or parties shall reimburse the non-breaching party or parties
for all costs, including reasonable attorneys' fees, incurred in connection
therewith and in enforcing or collecting any judgment rendered therein.
7.06 Schedules; Knowledge.
Whenever, in any section of this Agreement, reference is made to information set
forth in the schedules provided by Technology or HouseRaising, such reference is
to information specifically set forth in such schedules and clearly marked to
identify the section of this Agreement to which the information relates.
Whenever any representation is made to the "knowledge" of any party, it shall be
deemed to be a representation that no officer or director of such party, after
reasonable investigation, has any knowledge of such matters.
7.07 Entire Agreement.
This Agreement represents the entire agreement between the Parties relating to
the subject matter hereof. All previous agreements between the Parties, whether
written or oral, have been merged into this Agreement. This Agreement alone
fully and completely expresses the agreement of the Parties relating to the
subject matter hereof. There are no other courses of dealing, understandings,
agreements, representations, or warranties, written or oral, except as set forth
herein.
7.08 Survival, Termination.
The representations, warranties, and covenants of the respective Parties shall
survive the Closing Date and the consummation of the transactions herein
contemplated for a period of one year from the Closing Date, unless otherwise
provided herein.
7.09 Counterparts.
This Agreement may be executed in multiple counterparts, each of which shall be
deemed an original and all of which taken together shall be but a single
instrument.
7.10 Amendment or Waiver.
Every right and remedy provided herein shall be cumulative with every other
right and remedy, whether conferred herein, at law, or in equity, and such
remedies may be enforced concurrently, and no waiver by any party of the
performance of any obligation by the other shall be construed as a waiver of the
same or any other default then, theretofore, or thereafter occurring or
existing. At any time prior to the Closing Date, this Agreement may be amended
by a writing signed by all Parties hereto, with respect to any of the terms
contained herein, and any term or condition of this Agreement may be waived or
the time for performance thereof may be extended by a writing signed by the
party or parties for whose benefit the provision is intended.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the date first above written.
TECHNOLOGY, INC. HOUSERAISING, INC.
By: /s/▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------- -------------------------
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President President
HOUSERAISING STOCKHOLDERS:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
(In Her Individual Capacity)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
(In Her Individual Capacity)
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Grantor
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AFF CONSULTING, INC.
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
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(In His Individual Capacity)
▇▇▇▇▇ LIMUD, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
CONG. ▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: President
EXHIBIT A
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Technology Connections, Inc. intends to take Board of Directors action to
authorize a new series of so-called "blank check" preferred stock and issue
1,000,000 shares of such preferred stock at or about the Effective Time of the
Merger. This new class of preferred stock will be known as Class A Voting
Convertible Preferred Stock and will have the preferences, limitations and
relative rights set forth below:
(1)Designation and Rank. The series of Preferred Stock shall be designated the
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"Class A Voting Convertible Preferred Stock" ("Class A Convertible Preferred")
and shall consist of 1,000,000 shares. The Class A Convertible Preferred and
any other series of Preferred Stock authorized by the Board of Directors of this
Corporation are hereinafter referred to as "Preferred Stock" or "Preferred."
The Class A Convertible Preferred shall be senior to the common stock and all
other shares of Preferred Stock that may be later authorized.
(2)No Right to Dividend. The holders of the Class A Convertible Preferred shall
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not be entitled to receive any dividend.
(3)Conversion into Common Stock.
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(a) Right to Convert. Each share of Class A Convertible Preferred shall be
convertible, at the option of the holder thereof, at any time after five
(5) years from the date of issuance (the "Conversion Date") into ten (10)
shares of fully paid and non-assessable shares of Common Stock (the
"Conversion Ratio").
(b) Mechanics of Conversion. Before any holder shall be entitled to convert, he
shall surrender the certificate or certificates representing Class A
Convertible Preferred to be converted, duly endorsed or accompanied by
proper instruments of transfer, at the office of the Corporation or of any
transfer agent, and shall give written notice to the Corporation at such
office that he elects to convert the same. The Corporation shall, as soon
as practicable thereafter, issue a certificate or certificates for the
number of shares of Common Stock to which the holder shall be entitled. The
Corporation shall, as soon as practicable after delivery of such
certificates, or such agreement and indemnification in the case of a lost,
stolen or destroyed certificate, issue and deliver to such holder of Class
A Convertible Preferred a certificate or certificates for the number of
shares of Common Stock to which such holder is entitled as aforesaid and a
check payable to the holder in the amount of any cash amounts payable as
the result of a conversion into fractional shares of Common Stock. Such
conversion shall be deemed to have been made immediately prior to the close
of business on the date of such surrender of the shares of Class A
Convertible Preferred to be converted.
(c) Adjustments to Conversion Ratio.
(1)Merger or Reorganization. In case of any consolidation or merger of the
Corporation as a result of which holders of Common Stock become
entitled to receive other stock or securities or property, or in case of any
conveyance of all or substantially all of the assets of the
Corporation to another corporation, the Corporation shall mail to each holder of
Class A Convertible Preferred at least thirty (30) days prior to the
consummation of such event a notice thereof, and each such holder shall have the
option to either (i) convert such holder's shares of Class A Convertible
Preferred into shares of Common Stock pursuant to this Section 3 and thereafter
receive the number of shares of stock or other securities or property to which a
holder of the number of shares of Common Stock of the Corporation deliverable
upon conversion of such Class A Convertible Preferred would have been entitled
upon such consolidation, merger or conveyance, or (ii) exercise such holder's
rights pursuant to Section 4(a). Unless otherwise set forth by the Board of
Directors, the Conversion Ratio shall not be affected by a stock dividend or
subdivision (stock split) on the Common Stock of the Corporation, or a stock
combination (reverse stock split) or stock consolidation by reclassification of
the Common Stock. However, once the Class A Convertible Preferred has been
converted to Common Stock, it shall be subject to all corporate actions that
affect or modify the common stock.
(d) No Impairment. The Corporation will not, by amendment of its Articles of
Incorporation, this Certificate of Designation or through any
reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Corporation, but will at all times in good faith
assist in the carrying out of all the provisions of this Section 4 and in
the taking of all such action as may be necessary or appropriate in order
to protect the Conversion Rights of the holders of the Class A Convertible
Preferred against impairment.
(e) Certificate as to Adjustments. Upon the occurrence of each adjustment or
readjustment of the Conversion Ratio of the Class A Convertible Preferred
pursuant to this Section 3, the Corporation at its expense shall promptly
compute such adjustment or readjustment in accordance with the terms hereof
and furnish to each holder of Class A Convertible Preferred a certificate
setting forth such adjustment or readjustment and the calculation on which
such adjustment or readjustment is based. The Corporation shall, upon the
written request at any time of any holder of Class A Convertible Preferred,
furnish or cause to be furnished to such holder a like certificate setting
forth (i) such adjustments and readjustments, (ii) the Conversion Ratio for
the Class A Convertible Preferred at the time in effect and (iii) the
number of shares of Common Stock and the amount, if any, of other property
which at the time would be received upon the conversion of the Class A
Convertible Preferred.
(f) Notices of Record Date. In the event of any taking by the Corporation of a
record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to
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receive any dividend (other than a cash dividend which is the same as cash
dividends paid in previous quarters) or other distribution, the Corporation
shall mail to each holder of Class A Convertible Preferred at least ten
(10) days prior to the date specified herein, a notice specifying the date
on which any such record is to be taken for the purpose of such dividend or
distribution.
(g) Common Stock Reserved. The Corporation shall reserve and keep available out
of its authorized but unissued Common Stock such number of shares of Common
Stock as shall from time to time be sufficient to effect conversion of the
Class A Convertible Preferred.
(4)Liquidation Preference. (a) In the event of any liquidation, dissolution or
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winding up of the Corporation, whether voluntary or involuntary (a
"Liquidation"), the assets of the Corporation available for distribution to its
stockholders shall be distributed as follows:
(1) The holders of the Class A Convertible Preferred shall be entitled to
receive, prior to the holders of the other series of Preferred Stock and
prior and in preference to any distribution of the assets or surplus funds
of the Corporation to the holders of any other shares of stock of the
corporation by reason of their ownership of such stock, an amount equal to
$1.00 per share with respect to each share of Class A Convertible
Preferred.
(2) If upon occurrence of a Liquidation the assets and funds thus distributed
among the holders of the Class A Convertible Preferred shall be
insufficient to permit the payment to such holders of the full preferential
amount, then the entire assets and funds of the Corporation legally
available for distribution shall be distributed among the holders of the
Class A Convertible Preferred ratably in proportion to the full amounts to
which they would otherwise be respectively entitled.
(3) After payment of the full amounts to the holders of Class A Convertible
Preferred as set forth above in (1), any remaining assets of the
Corporation shall be distributed pro rata to the holders of the Preferred
Stock and Common Stock (in the case of the Preferred Stock, on an "as
converted" basis into Common Stock).
(b) If any of the assets of the Corporation are to be distributed other than in
cash under this Section 4, then the board of directors of the Corporation shall
promptly engage independent competent appraisers to determine the value of the
assets to be distributed to the holders of Preferred Stock or Common Stock. The
Corporation shall, upon receipt of such appraiser's valuation, give prompt
written notice to each holder of shares of Preferred Stock or Common Stock of
the appraiser's valuation.
(5)Voting Rights. Except as otherwise required by law, the holders of Class A
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Convertible Preferred shall be entitled to notice of any stockholders' meeting
and to vote as a single class (and not together with the common stockholders as
one combined class) to approve any
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merger, sale of assets, combination or reorganization involving the Corporation,
or other fundamental corporate transaction involving the Corporation, with the
holders of Class A Convertible Preferred having one vote per share of such stock
owned. On all other matters, the Class A Convertible Preferred shall vote with
the common stockholders as one combined class, with the holders of Class A
Convertible Preferred having ten (10) votes per share of such stock owned.
(6)Covenants. (a) In addition to any other rights provided by law, the
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Corporation shall not, without first obtaining the affirmative vote or written
consent of the holders of a majority of the outstanding shares of Class A
Convertible Preferred, do any of the following:
(1) Take any action which would either alter, change or affect the rights,
preferences, privileges or restrictions of the Class A Convertible
Preferred or increase the number of shares of such series authorized hereby
or designate any other series of Preferred Stock;
(2) increase the size of any equity incentive plan(s) or arrangements;
(3) make fundamental changes to the business of the Corporation;
(4) make any changes to the terms of the Class A Convertible Preferred or to
the Corporation's Articles of Incorporation or Bylaws, including by
designation of any stock;
(5) create any new class of shares having preferences over or being on a parity
with the Class A Convertible Preferred as to dividends or assets, unless
the purpose of creation of such class is, and the proceeds to be derived
from the sale and issuance thereof are to be used for, the retirement of
all Class A Convertible Preferred then outstanding;
(6) accrue any indebtedness in excess of $20,000,000;
(7) make any change in the size or number of authorized directors;
(8) repurchase any of the Corporation's Common Stock;
(9) sell, convey or otherwise dispose of, or create or incur any mortgage,
lien, charge or encumbrance on or security interest in or pledge of, or
sell and leaseback, all or substantially all of the property or business of
the Corporation or more than 50% of the stock of the Corporation;
(10) make any payment of dividends or other distributions or any redemption or
repurchase of common stock or options or warrants to purchase common stock
of the Corporation; or
(11) make any sale of additional Preferred Stock.
(7)Reissuance. No share or shares of Class A Convertible Preferred acquired by
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the Corporation by reason of conversion or otherwise shall
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be reissued as Class A Convertible Preferred, and all such shares thereafter
shall be returned to the status of undesignated and unissued shares of Class A
Preferred Stock of the Corporation.
(8)Directors. The holders of Class A Convertible Preferred and Common Stock
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voting together as one combined class shall be entitled to elect the directors
comprising the Board of Directors (and to fill any vacancies with respect
thereto).