Exhibit 10.5
STOCK PURCHASE AGREEMENT
------------------------
THIS STOCK PURCHASE AGREEMENT is entered into effective as of March 6,
2000, by and among TSET, Inc., a Nevada corporation ("TSET"); Atomic Soccer USA,
Ltd., a Wisconsin corporation ("ASUSA"); ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, an individual; ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, an individual; ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, an individual; ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
an individual; and Atomic Millennium Partners, LLC, a Wisconsin limited
liability corporation (▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, and Atomic Millennium Partners, LLC are
hereinafter collectively referred to as the "Stockholders"), and is acknowledged
and agreed by certain employees of ASUSA (the "Employees").
WHEREAS, on December 9, 1999, TSET and ASUSA entered into a letter of
Intent for the purpose of, among other things, setting forth the main terms
pursuant to which TSET would acquire all of the shares of ASUSA, and other
elements of the relationship of the parties;
WHEREAS, the Stockholders are the owners of all of the issued and
outstanding capital stock of ASUSA; and
WHEREAS, the Stockholders wish to sell, and TSET wishes to purchase,
all of the issued and outstanding capital stock of ASUSA, upon the terms and
subject to the conditions set forth herein.
NOW, THEREFORE, for and in consideration of the premises and mutual
covenants, promises, representations, and warranties set forth herein, and for
other good and valuable consideration, the sufficiency, delivery, and receipt of
which are hereby acknowledged, the parties hereto agrees as follows:
1. PURCHASE AND SALE OF SHARES. Upon the terms and subject to the
conditions set forth herein, the Stockholders each agree to sell to TSET, and
TSET agrees to purchase from each of the Stockholders, all of the ASUSA shares
owned by each Stockholder which are hereby represented and warranted by each
Stockholder as of the date of this Agreement to consist of the following
(collectively, the "Atomic Shares"):
NAME CLASS A VOTING SHARES CLASS B NON-VOTING SHARES
---- --------------------- -------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 18.8125 253.125
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ 29.945 489.5625
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 15.13 210.9375
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 13.7625 185.625
Atomic Millennium Partners, LLC 10.1 135.0
TOTALS 87.75 1,274.25
------ ----- --------
The Atomic Shares shall be sold to and purchased by TSET free and clear of any
and all liens, claims, encumbrances, sureties, restrictions of any kind
whatsoever on their free transferability, options, or rights of any third
parties, including preemptive rights or claims of any nature whatsoever as well
as all rights attaching thereto.
2. CONSIDERATION FOR THE ATOMIC SHARES; EXCHANGE OF SHARES. (a) The
aggregate consideration to be paid for the Atomic Shares by TSET shall be
1,000,000 "investment" shares of the common stock of TSET, par value $0.001 per
share (the "TSET Shares"), to be allocated on a pro rata basis among the
Stockholders and the Employees as follows:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 196,660 TSET Shares
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ 380,355 TSET Shares
▇▇▇▇ ▇▇▇▇▇▇▇▇ 163,883 TSET Shares
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 144,217 TSET Shares
Atomic Millennium Partners, LLC 104,885 TSET Shares
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 3,500 TSET Shares
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 3,500 TSET Shares
▇▇▇▇▇▇▇ ▇▇▇ 2,000 TSET Shares
▇▇▇▇▇▇ ▇▇▇▇▇ 500 TSET Shares
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 500 TSET Shares
The TSET Shares shall be the sole compensation for the Atomic Shares of the
Stockholders.
(b) Simultaneously with the execution and delivery of this
Agreement by the parties:
(i) each of the Stockholders shall deliver to TSET
certificates representing all of the Atomic Shares owned by them, accompanied by
appropriate stock powers endorsed in blank, and shall cause the Atomic Shares to
be registered in TSET's name on ASUSA's share registry and perform any and all
other actions required by applicable law to evidence TSET's ownership of the
Atomic Shares; and
(ii) TSET shall deliver to each of the Stockholders
certificates representing the number of TSET Shares to be acquired by them, and
shall cause the TSET Shares to be registered in the names of each of the
Stockholders on TSET's share registry and perform any and all other actions
required by applicable law to evidence ownership of the TSET Shares by each
Stockholder.
Immediately following the exchange of shares contemplated in this Subsection
(b), TSET shall own 100% of ASUSA's shares and ASUSA shall be wholly-owned
subsidiary of TSET.
(c) The Stockholders understand and acknowledge that the TSET
Shares shall be subject to, and the Stockholders agree to at all times observe
and comply with, any and all conditions, limitations, and restrictions noted on
the certificates representing the TSET Shares, in addition to any other
restrictions set forth in applicable federal and state securities laws. Any
taxes, levies, or other charges assessed against, or in connection with the
acquisition of, the TSET Shares by each Stockholder pursuant to this Section 2
shall be for the account of, and shall be borne solely by, each such
Stockholder.
2
(d) Any compensation or finder's fee payable by ASUSA or the
Stockholders (or any of them) to any person relating to the transactions
contemplated by this Agreement shall be paid out of the TSET Shares to be
received by them, the parties agreeing that TSET shall have no financial or
other responsibility whatsoever for payment of any such compensation.
3. MANAGEMENT. (a) Following TSET's acquisition of the Atomic Shares.
ASUSA's board of directors shall be comprised of the following individuals:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (serving as chairman of the board of directors
and representing TSET)
Such directors shall serve in accordance with ASUSA's bylaws and applicable law.
In the event of any tie concerning any matter brought before ASUSA's board of
directors for a vote, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as chairman of the board of directors,
shall have the tie-breaking vote.
(b) Following TSET's acquisition of the Atomic Shares, ASUSA's
officers and executive management shall be comprised as follows:
▇▇▇▇ ▇▇▇▇▇▇▇▇ President
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ Vice-president
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Secretary and Treasurer
(c) The parties agree that the primary responsibility for ASUSA's
day-to-day management, business development, finances and the administration
thereof, budgets (capital, operations, and others), and the conduct of the
Corporate Business (as defined in Section 4 hereof), shall belong to ASUSA's
board of directors, but with such consultations and determinations as are
consistent with TSET's ownership of ASUSA. In carrying out such responsibilities
and conducting all elements of the Corporate Business, ASUSA's board of
directors shall at all times conduct themselves according to the highest
fiduciary standards of good faith and sound business judgment, exerting their
individual and collective best efforts to pursue the Corporate Business, seeking
to advance the best interests of ASUSA, complying with all laws, rules, and
regulations applicable to the Corporate Business, and keeping available to ASUSA
the services of its directors, officers, and key employees. The Corporate
Business shall be conducted by ASUSA's board of directors in the regular and
ordinary course in substantially the manner heretofore conducted. The directors
and officers of ASUSA, individually and collectively, shall dedicate their full
time attention and efforts to the conduct of the Corporate Business, except as
may be otherwise permitted by ASUSA's board of directors.
(d) The parties acknowledge that they are unable to anticipate
and provide herein for every situation and contingency which may arise during
the conduct of the Corporate Business. Accordingly, the parties agree that
principles of good faith and fair dealing will govern their conduct at all times
and that best efforts will be exerted to amicably and expeditiously resolve any
dispute arising hereafter, all with a view to seeking to advance ASUSA's best
interests and maximize the value of ASUSA's business enterprise.
3
4. THE CORPORATE BUSINESS. The parties understand and acknowledge that
the "Corporate Business" of ASUSA is the distribution of soccer uniform under
the "Atomic" brand label and basketball, volleyball, lacrosse, and hockey
uniforms under the "▇▇▇▇" brand label, primarily through independent sales
representatives. TSET intends that the Corporate Business shall be conducted in
substantially the same manner as conducted prior to TSET's acquisition of the
Atomic Shares, and that the Corporate Business shall also include the pursuit of
such other activities as ASUSA's board of directors may determine from time to
time including, without limitation, recruitment of additional distributors for
the "Atomic" and "▇▇▇▇" brand labels and expansion of the geographical
territories in which ASUSA's products are marketed, distributed, and sold;
potential acquisition of additional sports apparel and equipment
distributorships and expansion of ASUSA's current product lines to achieve a
greater diversity; protect ASUSA's trademarks, tradenames, label names, and
other valuable rights; and such other activities as may enhance the value and
name recognition of the "Atomic" and "▇▇▇▇" labels, all with a view to advance
ASUSA's best interests and maximize ASUSA's profitability and success for the
benefit of TSET. In addition, as soon as practicable TSET intends to give
favorable consideration to the acquisition of ASUSA's maquiladora cut-and-sew
facility (Atomic S.A. de C.V.) in Ensenada, Mexico.
5. CONTRIBUTIONS BY TSET: CLAW-BACK. (a)(i) TSET shall assist and
support ASUSA's capital-raising efforts and shall provide and make available to
ASUSA working capital in the aggregate amount of up to $1,000,000.00 (the
"Initial Funding") over the 12-month period next following the execution and
delivery of this Agreement (the "Funding Period"). ASUSA hereby acknowledges
that TSET has, prior to the date of this Agreement, provided and ASUSA has
received a portion of the Initial Funding in the amount of $125,125.00. To the
extent required, TSET shall use its own shares in order to arrange for, procure,
and ensure availability of the Initial Funding; provided, however, that TSET's
obligation to provide the Initial Funding shall not be construed as or
constitute any assumption of any obligation regarding any indebtedness,
operating expenses, or other financial liabilities of ASUSA or the Stockholders
including, without limitation, those financial obligations owed to ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ or ▇▇▇▇ ▇▇▇ as described in Exhibit 5 attached hereto and made a part
hereof for all purposes. Provision of the Initial Funding shall be the sole
financial obligation owed by TSET to ASUSA; provided, however, that TSET may
elect, but is not obligated, to provide to ASUSA funding in addition to the
Initial Funding in appropriate cases to be determined by TSET in its sole and
absolute discretion. Within 10 days of the execution and delivery of this
Agreement, ASUSA's board of directors shall establish an operating budget,
including provision for, among other things, the prudent expenditure and
conservation of funds for working capital over the Funding Period while
achieving the overall goals of the Corporate Business.
(ii) TSET acknowledges that ASUSA currently has
outstanding a $500,000 revolving line of credit, and that the guaranty thereof
provided by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ must be replaced on or before June 30, 2000 (the
"Replacement Date"). TSET hereby agrees to exert its best efforts to retire or
renew such line of credit with replacement guaranties on or before the
Replacement Date.
(b)(i) The parties acknowledge that TSET's undertaking to provide
the Initial Funding is a significant inducement to ASUSA and the Stockholders to
enter into this Agreement and consummate the transactions contemplated herein,
and that on or before the lapse of the Funding Period TSET shall have provided
4
to ASUSA the entire amount of the Initial Funding. In the event TSET provides
less than all of the Initial Funding by or before the lapse of the Funding
Period, ASUSA shall provide written notice to TSET that an event of default has
occurred hereunder (the "Default Notice"). If TSET fails to provide the unpaid
portion of the Initial Funding to ASUSA within 45 days of TSET's receipt of the
Default Notice (the "Cure Period"), the number of Atomic Shares owned by TSET
shall be reduced to reflect the proportionate value of the Initial Funding
provided by TSET to ASUSA, with the number of the Atomic Shares deducted from
TSET's holding to be transferred to and distributed among the Stockholders on a
pro rata basis (the "Share Adjustment"). The Share Adjustment shall occur within
10 days following lapse of the Cure Period if TSET fails during the Cure Period
to provide the unpaid portion of the Initial Funding.
(ii) If TSET fails to provide any Initial Funding
prior to the lapse of the Funding Period and the resulting Cure Period, this
Agreement shall be terminated and deemed null and void and the Atomic Shares
shall be assigned, transferred, and conveyed by TSET to the Stockholders, as
they may direct in writing to TSET.
(c) If TSET fails to provide any Initial Funding prior to the
lapse of the Funding Period and the resulting Cure Period, the sole remedy of
ASUSA and the Stockholders shall be:
(i) the Share Adjustment (in case of the events
described in Subsection (b)(i) above); and
(ii) the termination of this Agreement and assignment,
transfer, and conveyance to ASUSA and the Stockholders of the Atomic Shares (in
case of the events described in Subsection (b)(ii) above).
No party shall have any liability to the other for monetary damages of any
description whatsoever including, without limitation, incidental, consequential,
or punitive damages.
6. OPTIONS AND OTHER PROGRAMS. TSET intends to adopt for itself, and
intends that ASUSA adopt, stock option, incentive, profit-sharing, savings, and
other similar programs (the "Programs"), as soon as practicable after the date
hereof. The terms and conditions of participation, contribution, matching,
vesting, and other elements of the Programs shall be established by the
respective boards of directors of TSET and ASUSA. ASUSA's directors, executive
management, and key employees (collectively, "management") shall be entitled to
participate in Programs adopted by TSET, subject to any conditions or
restrictions imposed on such participation by TSET's board of directors. As an
additional inducement to management and to ensure participation by management in
the future success of ASUSA, TSET, as sole stockholder of ASUSA, hereby agrees
to reserve up to 20% of ASUSA's authorized capital stock to be used in Programs
to be adopted by ASUSA's board of directors and consents to the full
participation of management therein, subject to the terms for such participation
established by ASUSA's board of directors; provided, however, that the final
terms of the Programs adopted by ASUSA's board of directors shall be subject to
TSET's prior written consent, which consent shall not be unreasonably withheld,
conditioned, or delayed.
5
7. FUTURE EVENTS. At an appropriate and mutually agreed time in the
future, TSET intends to give due and good faith consideration to effecting a
transaction pursuant to which ASUSA may become a publicly-owned entity (the
"Reconstitutive Decision"); provided, however, that a decision to retain ASUSA
as a wholly- or majority-owned subsidiary of TSET or effect a transaction
pursuant to which ASUSA's ownership materially changes but remains privately
held shall not be deemed a breach of this Section 7. In the event of any
Reconstitutive Decision, TSET (or its nominees) shall retain not less than a
non-dilutible 20% ownership interest in ASUSA.
8. REPRESENTATIONS AND WARRANTIES OF ASUSA AND THE STOCKHOLDERS.
ASUSA and each of the Stockholders, jointly and severally, hereby represent and
warrant to TSET as follows:
(a) CORPORATE ORGANIZATION. ASUSA is duly organized, validly
existing, and in good standing under the laws of the State of Wisconsin and has
all requisite power, authorizations, consents, and approvals necessary to own or
lease its assets and carry on its business as currently being conducted, and to
consummate the transactions contemplated herein. ASUSA is duly licensed or
qualified and in good standing in all jurisdictions in which the character of
the properties owned or leased by it or the nature of its business requires it
to be so licensed or qualified. Complete and correct copies of all constitutive
documents of ASUSA have been delivered to TSET. ASUSA's minute books or other
similar records contain an accurate record of all meetings and other corporate
action of its stockholders and board of directors (and any committees thereof).
(b) NO DEFAULTS OR BREACHES. Except as disclosed in Exhibit 8(b)
attached hereto and made a part hereof for all purposes, neither the execution
of this Agreement nor the performance of its obligations hereunder and
thereunder does or will:
(i) conflict with or violate any provision of ASUSA's
constituent documents;
(ii) violate, conflict with, or result in the breach
or termination of, or constitute a default, event of default (or an event which
with notice, lapse of time, or both, would constitute a default or event of
default), under the terms of any
(A) contract, agreement, commitments, or other
binding undertakings, whether or not reduced to writing (collectively,
"Contracts"), or
(B) permits, authorizations, approvals,
registrations, or licenses granted by or obtained from any governmental,
administrative, or regulatory authority (collectively, "Permits"),
to which ASUSA or any of the Stockholders is a party or by which ASUSA or any of
the Stockholders or any of their respective or collective securities,
properties, or businesses are bound;
(iii) constitute a violation by ASUSA or any of the
Stockholders of any
6
(A) laws, rules, or regulations of any
governmental, administrative, or regulatory authority (collectively, "Laws"), or
(B) judgments, orders, rulings, or awards of any
court, arbitrator, or other judicial authority or any governmental,
administrative, or regulatory authority (collectively, "Judgments"); or
(iv) result in the creation of any lien, claim, or
encumbrance (collectively, "Liens" upon ASUSA, the Atomic Shares, or any of the
Stockholders.
(c) ACTIONS AND PROCEEDING. Except as disclosed in Exhibit 8(c-i)
attached hereto and made a part hereof for all purposes, there are no actions,
suits, claims, or legal, administrative, arbitration, or other alternative
dispute resolution proceedings or investigations (collectively, "Proceedings",
(whether or not the defense thereof or liability with respect thereto is covered
by policies of insurance) pending or, to the best knowledge of ASUSA and any of
the Stockholders, threatened, to which ASUSA or any of the Stockholders is our
would be a party, including, without limitation, any Proceeding which could
reasonably be expected to restrain, prevent, or prohibit ASUSA or any of the
Stockholders from consummating the transactions contemplated herein, or to
obtain damages or other relief in connection with, this Agreement or any of the
transactions contemplated herein. Except as disclosed in Exhibit 8(c-2) attached
hereto and made a part hereof for all purposes, there is no Judgment outstanding
against ASUSA or any Stockholder.
(d) NO BROKERS. Except as disclosed in Exhibit 8(d) attached
hereto and made a part hereof for all purposes, all negotiations relating to
this Agreement and the transactions contemplated herein have been carried on
without the intervention of any party acting in behalf of ASUSA or any of the
Stockholders in such manner as to give rise to any valid claim against ASUSA or
any of the Stockholders, individually or collectively, for any broker's or
finder's fee or similar compensation (whether payable in cash, Atomic Shares,
any interest in ASUSA, or otherwise) in connection therewith. No basis exists
whatsoever for any such broker's or finder's fee or similar compensation to be
payable by TSET.
(e) AUTHORITY. ASUSA has all necessary corporate power and
authority, and each of the Stockholders have the power, legal capacity, and
authority, to execute, deliver, and perform its obligations hereunder; and the
execution, delivery, and performance by ASUSA and each of the Stockholders of
this Agreement has been duly authorized by all necessary corporate action on its
part or is within the authority of the person executing and delivering the sane,
and is within the authority of each of the Stockholders. This Agreement
constitutes the legal, valid, and binding obligations of ASUSA and each of the
Stockholders, enforceable against any and all of them in accordance with the
terms thereof, except as may be limited by applicable bankruptcy, insolvency,
reorganization, or other similar laws affecting creditors' rights and general
principles of equity.
(f) TAXES AND TAX RETURNS. Except as disclosed in Exhibit 8(f-1)
attached hereto and made a part hereof for all purposes:
7
(i) ASUSA has filed all tax returns and reports
of all Taxes (as hereinafter defined) required to be filed by it and has timely
given and delivered all Tax notices, accounts, and information required to be
given by it with respect to Taxes for which ASUSA may be liable. All information
provided in such returns, reports, notices, accounts, and information was, when
filed or given, complete and accurate. All Taxes required to be paid by ASUSA
that were due and payable prior to the date of this Agreement have been paid in
full, except for such taxes as are being contested in good faith by appropriate
proceedings and for which adequate reserves are being maintained. Adequate
provisions in accordance with generally accepted accounting principles
consistently applied have been made in ASUSA's financial statements for the
payment of all Taxes for which ASUSA may be liable for the periods covered
thereby that were not yet due and payable as of the date thereof, regardless of
whether the liability for such Taxes is disputed;
(ii) There are no pending or, to the best knowledge
of ASUSA and each Stockholder, threatened, audits or investigations relating to
any Taxes for which ASUSA may become directly or indirectly liable. No
deficiencies for any Taxes have been proposed, asserted, or assessed against
ASUSA and no state of facts exists or has existed that would constitute grounds
for the assessment of a Tax liability against ASUSA. There are no agreements in
effect to extend the period of limitations for the assessment or collection of
any Taxes for which ASUSA may become liable and no requests for any such
agreements are pending;
(iii) Except as disclosed in Exhibit 8(f-2) attached
hereto and made a part hereof for all purposes, ASUSA has withheld from its
employees and timely paid to the appropriate authority proper and accurate
amounts for all periods through the date hereof in compliance with all Tax
withholding provisions of all applicable federal, state, and local laws;
(iv) All copies of all returns and reports of all
Taxes filed by ASUSA on or prior to the date of this Agreement, provided or made
available to TSET by ASUSA, are complete and accurate; and
(v) ASUSA has neither elected, nor otherwise been
granted, any preferential tax treatment or made any sort of commitment vis-a-vis
any Tax authorities, whether in connection with a reorganization or otherwise.
As used in this Subsection (f), the terms "Tax" shall mean (A) all taxes,
assessments, levies, imposts, duties, fees, withholdings, or other similar
mandatory charges, including, without limitation, income taxes, franchise taxes,
transfer taxes or fees, sales taxes, excise taxes, ad valorem taxes, withholding
taxes, minimum taxes, estimated taxes, and social charges or contributions; and
(B) any interest, penalties, or additions to tax imposed on a Tax described in
clause (A) above, imposed by an national, regional, local, or foreign government
or subdivision or agency thereof.
(g) CONSENTS. Except as disclosed in Exhibit 8(g) attached hereto
and made a part hereof for all purposes, no authorizations, approvals, or
8
consents of, and no filings or registrations with, any governmental agency or
authority are necessary for the execution, delivery, and performance by ASUSA
and each of the Stockholders of this Agreement or for the validity or
enforceability hereof.
(h) SUFFICIENCY OF INFORMATION No material statement,
information, or exhibit disclosed or otherwise furnished to TSET by ASUSA or any
of the Stockholders in connection with the negotiations among the parties or any
representations upon which TSET may have relied, contains any material
misstatement of fact or omits to state a material fact or any fact necessary to
make the statement made not misleading.
(i) COMPLIANCE WITH LAW. ASUSA and each of the
Stockholders shall at all times hereunder comply with all conditions,
restrictions, and limitations applicable to the TSET Shares and the provisions
of all federal and state securities laws applicable to the ownership and
transfer thereof.
(j) COMPENSATION MATTERS. Except as disclosed in Exhibit 8(j)
attached hereto and made a part hereof for all purposes, no oral or written
compensation arrangement or agreement exists, and no shares or units (or
warrants or options to acquire the same), or revenue interests, or royalties
have been granted, orally or in writing, or are owned by, ASUSA's board of
directors, employees, or any Stockholder.
(k) INTELLECTUAL PROPERTY. (i) Exhibit 8(k-1) attached hereto and
made a part hereof for all purposes sets forth an accurate and complete list of
the following:
(A) all registered or unregistered trademarks,
trademark applications, servicemarks, servicemark applications, assumed names,
trade names, and brand label names used or held by ASUSA in connection with its
operations and intended conduct of the Corporate Business (collectively,
"Trademarks"), indicating for each Trademark whether it is owned or licensed
from a third party and whether the Trademark is licensed to any third party; and
(B) all patents registered or applied for by
ASUSA or licensed from a third party, indicating for each such patent whether it
is owned or licensed from a third party and whether such patent is licensed to
any third party.
(ii) The Trademarks and patents listed in Exhibit
8(k-1) have been duly registered or filed with the appropriate trademark and
patent authority for each of the jurisdictions indicated in Exhibit 8(k-1), and
such registrations have been properly maintained and renewed in accordance with
all applicable legal requirements.
(iii) There are no adverse claims or demands of any
person pertaining to any of the Trademarks or patents listed in Exhibit 8(k-1)
and there is no valid basis for any such claim.
(iv) Except as disclosed in Exhibit 8(k-1), ASUSA has
the sole and exclusive right to use the Trademarks, patents, copyrights (and
applications therefor), technology, know-how, processes, and trade secrets
(collectively, and including the Trademarks, the "Intellectual Property Rights"
required for or incident to the conduct of the Corporate Business, in the
jurisdictions in which the Corporate Business has been or will be conducted or
9
where ASUSA's products are distributed, and the consummation of the transactions
contemplated in this Agreement will not alter or impair any such rights.
(v) The use or other exploitation by ASUSA of the
Intellectual Property Rights used or held by ASUSA in connection with its
operations and the conduct of the Corporate Business does not infringe on or
dilute the rights of any other person.
(vi) Except as disclosed in Exhibit 8(k-2) attached
hereto and made a part hereof for all purposes, neither ASUSA nor any of the
Stockholders are aware of any infringements or illicit uses of the Intellectual
Property Rights used or held by ASUSA in connection with its operations or the
conduct of the Corporate Business
(l) OWNERSHIP OF ATOMIC SHARES. Except as disclosed in Exhibit
8(1) attached hereto and made a part hereof for all purposes, each Stockholder
holds full title to, and is duly registered as the owner of, the Atomic Shares
to be transferred by such Stockholder pursuant to this Agreement, free and clear
of any and all Liens.
(m) SUBSIDIARIES. Exhibit 8(m), attached hereto and made a part
hereof for all purposes, sets forth an accurate and complete list of each
company, partnership, or other business entity of which 10% or more of the
outstanding share capital or other equity interest is owned, directly or
indirectly, by ASUSA (in any case, a "Subsidiary"), indicating the jurisdiction
of incorporation, capital structure, and the nature and level of ownership in
such Subsidiary and any other stockholder thereof. Each Subsidiary is a
corporation duly organized, validly existing, and in good standing under the
laws of its jurisdiction of incorporation and has full power and authority to
own, lease, and operate the assets held or used by it and to conduct its
business as currently conducted. Each Subsidiary is duly licensed or qualified
and in good standing in all jurisdictions in which the character of the
properties owned or leased by it or the nature of its business requires it to be
so licensed or qualified. Complete and correct copies of all constitutive
documents of each Subsidiary have been delivered to TSET. The minute books or
other similar records of each Subsidiary contain an accurate record of all
meetings and other corporate action of its stockholders and board of directors
(and any committees thereof).
(n) TITLE TO PROPERTY: CONDITION; SUFFICIENCY. (i) ASUSA has:
(A) with respect to all real estate owned by it,
good and marketable fee simple title, and
(B) with respect to all real estate which is
leased by it, valid and subsisting leasehold estates, in each instance free
and clear of any and all liens, claims, and encumbrances, other than "Permitted
Encumbrances," and
(C) with respect to all of the other assets
owned by it, good title free and clear of any and all Liens, other than
Permitted Encumbrances.
As used in this Subsection (n), the term "Permitted Encumbrances" shall mean
any Liens that are immaterial, individually and in the aggregate, to the assets
to which they relate and do not interfere with the full use and enjoyment of
such assets.
10
(ii) The properties and other assets owned or leased
by ASUSA constitute all properties and other assets necessary for the conduct of
the businesses and activities conducted by ASUSA.
(o) FINANCIAL STATEMENTS. (i) Complete and correct copies of
the audited and consolidated financial statements (i.e., balance sheet and
profit and loss statement) of ASUSA since inception are attached hereto as
Exhibit 8(o) and made a part hereof for all purposes (collectively, the
"Financial Statements").
(ii) The Financial Statements give a true and accurate
account of the consolidated financial condition, assets and liabilities of ASUSA
as of the dates thereof, and the results of operations and changes in financial
condition for the periods then ended. Except as otherwise disclosed in Exhibit
8(o), the Financial Statements have been prepared in accordance with generally
accepted accounting principles, consistently applied. Any Interim Financial
Statements (herein so called) will, when prepared, give a true and accurate
account of the financial condition, assets and liabilities of ASUSA at the date
thereof and the results of its operations and changes in financial position for
the period to which the Interim Financial Statements apply and will be prepared
in accordance with generally accepted accounting principles, consistently
applied.
(iii) As of December 31, 1999, ASUSA had no liabilities
or obligations of any nature, whether known or unknown, accrued, absolute,
contingent, or otherwise, and whether due or to become due (collectively,
"Liabilities" which were either (A) required by generally accepted accounting
principles to be reflected in financial statements, or (B) individually or in
the aggregate material to ASUSA's financial condition, and that, in either case,
were not reflected or expressly reserved against in the audited consolidated
balance sheet included in the Financial Statements or specifically disclosed or
provided for in the notes thereto. Since December 31, 1999, ASUSA has not
incurred any Liability except Liabilities that (X) were incurred in the usual
and ordinary course of business consistent with past practice, and (Y) are not,
individually or in the aggregate, material to ASUSA's financial condition.
(iv) Since January 1, 2000, ASUSA has conducted its
businesses only in the ordinary and usual course in substantially the same
manner as theretofore conducted, has not undergone or suffered any change in its
condition (financial or otherwise), income, properties, Liabilities, operations,
or prospects which has been, in any individual case or in the aggregate,
materially adverse to ASUSA, and has not taken any of the following actions:
(A) amended any of its constitutive documents;
(B) acquired by merger, consolidation, purchase
of' stock or assets or otherwise, any corporation, partnership, association, or
other business organization or division thereof;
(C) altered its outstanding capital stock or
equity interests or declared, set aside, made, or paid any dividends or other
distributions in respect of its capital stock or equity interests (in cash or
otherwise), or purchased or redeemed any shares of its capital stock or equity
interests;
11
(D) issued or sold (or agreed to issue or sell)
any of its capital stock or equity interests or any options, warrants, or other
rights to purchase any such stock or interests or securities convertible into or
exchangeable for such stock or interests;
(E) not incurred, other than in the ordinary
course of business consistent with past practice, any indebtedness for borrowed
money (including through the issuance of debt securities) or varied the terms of
any existing indebtedness or guaranty or otherwise become liable for any
Liabilities of any third party;
(F) mortgaged, pledged, or subjected to any
lien, claim, or encumbrance any of its properties other than in the ordinary
course of business consistent with past practice;
(G) discharged or satisfied any material lien,
claim, or encumbrance or paid or satisfied any material obligation or Liability
(fixed or contingent) or compromised, settled, or otherwise adjusted any
material claim or litigation;
(H) acquired or disposed of any substantial
assets or rights, other than in the ordinary course of business or entered into
any contract whose term exceeds one year or is unlimited and which may not be
terminated by ASUSA on less than three months' notice without payment of any
penalty;
(I) made any changes in its accounting
procedures or practices;
(J) granted to any director, officer,
consultant, or employee any increase or modification of compensation or
benefits, or any severance or termination pay, or made any loan to or entered
into any employment agreement or arrangement with any such person;
(K) adopted, entered into, amended in any
material respect, announced any intention to adopt or terminate, any policies,
procedures, employee benefit plans, programs, or arrangements of general
applicability;
(L) directly or indirectly, other than with
respect to negotiating and entering into this Agreement, (1) solicited,
initiated, or encouraged any inquiries, discussions, or proposals from any other
person relating to a possible acquisition of all or any part of the Atomic
Shares or assets of ASUSA, (2) continued, solicited, encouraged, or entered into
negotiations or discussions relating to any such possible acquisition, (3)
furnished to any other person any information (not already in the public domain)
relating to ASUSA, or (4) entered into or consummated any agreement or
understanding providing for any such acquisition; or
(M) entered into any oral or written commitments
or understandings to take any of the foregoing actions.
(p) OUTSTANDING COMMITMENTS. (i) Exhibit 8(p) attached hereto and
made a part hereof for all purposes contains an accurate list of all Contracts
(but excluding orders placed in the ordinary course of business consistent with
12
past practice by ASUSA's customers or suppliers) to which ASUSA is a party or by
which any of its assets or operations are bound or affected and which:
(A) involve the obligation (including contingent
obligations) by or to ASUSA to pay amounts of $2,500.00 or more,
(B) are Contracts whose term exceeds one year
or is unlimited (with the exception of labor agreements) and which may not be
terminated by ASUSA on less than three months' notice without payment of any
penalty or premium,
(C) are Contracts under whose terms ASUSA is
bound to refrain from carrying out or to restrict certain activities, or to
refrain from competing with any third party,
(D) are Contracts with any Stockholder,
director, officer, or employee of ASUSA, or any relative or affiliate of any
such person, or
(E) were not entered into in the ordinary course
of ASUSA's business.
(ii) All Contracts listed in Exhibit 8(p) are valid,
binding, and enforceable by ASUSA in accordance with their respective terms and
ASUSA is not in default under any of such Contracts. No other party to any of
such Contracts is in default thereunder nor does there exist any event or
condition, which upon giving of notice or the lapse of time or both, would (A)
constitute a default or event of default thereunder or (B) entitle any other
party thereto to terminate such Contract.
(iii) None of the Contracts to which ASUSA is a party
or a beneficiary violates any provision of any applicable Law or Judgment. All
Contracts between ASUSA, on the one hand, and its suppliers, customers,
distributors, agents, or licensees on the other hand, have been concluded under
normal market conditions, without any preferential conditions or exceptional
discounts, in accordance with normal commercial practice.
(q) EMPLOYMENT MATTERS. (i) Exhibit 8(q-1) attached hereto and
made a part hereof for all purposes sets forth all of the collective rules
applicable to ASUSA's employees (the "Collective Rules" including, without
limitation, applicable collective bargaining agreements and company agreements;
any exceptional agreements concluded with employee representatives; the
remuneration system, including premiums, bonuses, commissions, and advantages in
kind; profit-sharing, incentive, and company savings plans; retirement or health
insurance plans pursuant to which employees are entitled to receive advantages
in addition to those provided for by law or applicable collective bargaining
agreements; and any regional, local, or individual company or establishment
practices which provide for advantages which exceed those provided for by law or
applicable collective bargaining agreements.
(ii) Exhibit 8(q-2) attached hereto and made a part
hereof for all purposes sets forth all consulting, employment, severance,
termination, or compensation Contracts of ASUSA with any Stockholder or former
stockholder or with any current director, officer, consultant, or with any
individual employee or manager pursuant to which such employee or manager
13
receives benefits which exceed those provided for by law or the applicable
Collective Rules including, without limitation, increased severance pay,
extended notice periods, advantages in kind, or pensions (the "Employment
Agreements"). None of the Employment Agreements provides for payments measured
by the value of any equity security of or interest in ASUSA or in connection
with any change in control of ASUSA and no amount will become due to any
employee, consultant, officer, or director of ASUSA under the Collective Rules
or any Employment Agreement solely as a result of the transactions contemplated
in this Agreement.
(iii) Exhibit 8(q-3) attached hereto and made a part
hereof for all purposes sets forth all obligations of ASUSA to employee
representative organizations which exceed those provided for by law or in the
applicable Collective Rules.
(iv) ASUSA is now and has in the past been in
compliance with all provisions of applicable labor and social security laws, the
Collective Rules, and the Employment Agreements and all payments due thereunder
from ASUSA have been made when due and all amounts properly accrued as
Liabilities of ASUSA which have not been paid have been properly recorded on
ASUSA's books.
(v) Since inception, there have occurred no strikes,
slow downs, work stoppages, or other similar labor actions by any group of
ASUSA's employees. Except as set forth in Exhibit 8(q-3), no Proceeding arising
out of any labor grievance under any Law, the Collective Rules, or any
Employment Agreement is pending or, to the best knowledge of ASUSA and each
Stockholder, threatened.
(vi) ASUSA has not made any commitment to any public
agency, labor organization, employees' representatives, or any other party,
relating to the numbers of ASUSA's employees or to future collective dismissals.
(r) ENVIRONMENTAL, HEALTH, AND SAFETY. (i) ASUSA has obtained
and been in compliance with all terms and conditions of any and all Permits
which are required under, and has complied with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules, and timetables which are contained in, all Laws and Judgments
relating to public health and safety, worker health and safety, and pollution or
protection of the environment, including Laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants, or chemical,
industrial, hazardous, or toxic materials or wastes into ambient air, surface
water, ground water, or lands, or otherwise relating to the testing,
characterization, classification, manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes.
All such Permits are valid and in full force and effect for the conduct of
ASUSA's business as such business are presently conducted, and where applicable,
timely renewal applications have been submitted for all such Permits. No
Proceeding has been filed or commenced against ASUSA alleging any failure to
comply with any such Laws, Judgments, or Permits.
(ii) ASUSA has no Liability (and there is no past or
present fact, status, condition, activity, occurrence, action, or failure to act
14
related to the past or present operations, properties, or facilities of ASUSA
that forms or reasonably could form the basis for the imposition of any
Liability):
(A) under any Law relating to protection of
human health or safety or concerning employee or worker health and safety or
relating generally to the environment,
(B) for damage to any site, location, natural
resources, or body of water (surface or subsurface) or for failure to report or
clean up any discharges of any substance, or
(C) for any illness of or personal injury to any
of its employees or any third party.
(s) INSURANCE. Exhibit 8(s) attached hereto and made a part
hereof for all purposes sets forth a complete list and brief description
(specifying the insurer, the coverage and policy number or covering note number
with respect to binders) of all policies, binders, or Contracts to which ASUSA
is a party or by which any of its assets are covered, of property, fire,
liability, product liability, workmen's compensation, vehicular, crime,
fiduciary, builders' risk, title, and other insurance or Contracts in the nature
of insurance (collectively, the "Insurance Contracts"). The Insurance Contracts
listed on Exhibit 8(s) are in full force and effect in accordance with their
respective terms and will remain in full force and effect hereafter. ASUSA has
not received any notice that it is in default with respect to any provision of
any Insurance Contracts. ASUSA has not provided inaccurate, incomplete, or
misleading information in connection with any Insurance Contract or failed to
give any notice or present any claim thereunder in due and timely fashion or as
required by any such Insurance Contract so as to jeopardize full recovery
thereunder.
(t) COMPLIANCE WITH LEGAL REGUIREMENTS. (i) ASUSA and each
Stockholder is currently conducting, and has in the past conducted, its
respective businesses in compliance with all applicable Laws, Judgments, and
Permits.
(ii) ASUSA possesses, and upon consummation of the
transactions contemplated in this Agreement will continue to possess all Permits
necessary to conduct its operations as they are currently being conducted and
all such Permits are and will remain in full force and effect. No Proceeding to
modify, suspend, terminate, or otherwise limit any such Permit is pending or, to
the best knowledge of ASUSA and each Stockholder, threatened.
(iii) Neither ASUSA nor any Stockholder has received
any notice in any form (including any citations, notices of violations,
complaints, consent orders, or inspection reports) which would indicate that
such party was not at the time of such notice or is not currently in compliance
with all such applicable Laws, Judgments, and Permits.
(u) CAPITALIZATION. ASUSA's capitalization is as set forth in
Section 1 hereof, and the Stockholders listed are the only stockholders of ASUSA
and have sole right to own the Atomic Shares shown opposite their respective
names. No other person has any right or expectancy to own any Atomic Shares,
whether through option, purchase, grant, or other means by which any right or
expectancy of ownership could arise or become vested in any such person.
15
The representations and warranties contained in this Section 8 shall survive the
execution and delivery of this Agreement without limitation as to time
9. REPRESENTATIONS AND WARRANTIES OF TSET. TSET hereby represents
and warrants to ASUSA and the Stockholders as follows:
(a) TSET is duly organized, validly existing,
and in good standing under the laws of the State of Nevada and has all requisite
power, authorizations, consents, and approvals necessary to own its assets and
carry on its business as now being conducted, and to consummate the transactions
contemplated herein.
(b) Neither the execution of this Agreement nor
the performance of its obligations hereunder and thereunder does or will
conflict with or violate any provision of TSET's articles of incorporation or
bylaws; violate, conflict with, or result in the breach or termination of, or
constitute a default, event of default (or an event which with notice, lapse of
time, or both, would constitute a default or event of default), under the terms
of any material agreement to which TSET is a party or by which TSET or its
securities, properties, or businesses are bound; or constitute a violation by
TSET of any laws or judgments (other than any violation, conflict, breach, or
default that would not prevent TSET from consummating the transactions
contemplated herein or otherwise performing its obligations thereunder).
(c) There is no proceeding (whether or not the
defense thereof or liability with respect thereto is covered by policies of
insurance) pending or, to TSET's best knowledge, threatened, against TSET which
could reasonably be expected to prevent TSET from consummating the transactions
contemplated herein.
(d) TSET has all necessary corporate power and
authority to execute, deliver, and perform its obligations hereunder; and the
execution, delivery, and performance by TSET of this Agreement to which it is a
party has been duly authorized by all necessary corporate action on its part or
is within the authority of the person execution and delivering the same. This
Agreement constitutes the legal, valid, and binding obligations of TSET,
enforceable against it in accordance with the terms thereof, except as may be
limited by applicable bankruptcy, insolvency, reorganization, or other similar
laws affecting creditors' rights and general principles of equity.
10. DISTRIBUTION OF PROFITS. The parties agree that, as the sole
stockholder of ASUSA, all profits resulting from the conduct of the Corporate
Business shall belong to TSET, and that TSET shall be entitled to distribution
thereof from ASUSA on a regular basis. The directors of ASUSA agree to vote in
favor of such distributions as requested from time to time by TSET. TSET hereby
covenants that it shall, in connection with any request for such distribution,
ensure that sufficient cash remains allocated to ASUSA to provide for reasonable
operating and working capital needs for the continuation and advancement of the
Corporate Business, funding of Programs relating to profit-sharing or other
benefits plans according to the terns thereof, plus reasonable reserves for
contingencies or extraordinary items. In connection with any request by TSET for
a cash distribution, TSET and ASUSA's board of directors shall consult to
determine ASUSA's reasonable cash needs, as provided above.
16
11. ARBITRATION. (a) In the event of any default or dispute between,
breach by, or other controversy involving, the parties hereto regarding the
subject matter of this Agreement (in any case, a "Dispute"), the parties shall
exert their respective good faith best efforts to amicably resolve and settle
the same. Toward this end, the parties shall consult and negotiate with each
other in good faith and understanding their mutual best interests to reach a
just and equitable solution reasonably satisfactory to them. In the event the
Dispute cannot be amicably resolved and settled through good faith negotiations,
the parties agree to submit the Dispute to arbitration rather than litigation.
(b) All arbitration proceedings instituted by
the parties hereunder shall take place in Clackamas County, Oregon and shall be
governed by the rules of the American arbitration Association (the "AAA"
applicable to contracts of this type. If the parties to the Dispute cannot agree
on the appointment of an arbitrator, the parties agree that the AAA shall
appoint an independent arbitrator, whose decision shall be final and binding
upon the parties and not subject to appeal to any court or government agency or
authority, and shall be enforceable in any court of competent jurisdiction;
provided, however, that the arbitrator shall not award or require the payment
of, and the parties shall not seek, incidental, consequential, or punitive
damages except in cases of bad faith breach of this Agreement, gross negligence,
or willful misconduct. The parties shall not seek to delay or prevent the
implementation of any decision of the arbitrator. The prevailing party in any
arbitration brought hereunder shall be entitled to recover reasonable attorney's
fees and related costs and expenses of the arbitration.
(c) The parties each acknowledge that their
agreement to resolve Disputes through arbitration constitutes a waiver of their
right to resolve Disputes in any court, and that in arbitration proceedings the
parties may not be entitled to all of the rights that would otherwise be
available to them in court proceedings.
12. INDEMNIFICATION. (a) From and after the date of this Agreement,
ASUSA and each Stockholder jointly and severally agree to pay and to indemnify
fully, hold harmless, and defend TSET and its directors, officers, employees,
agents, representatives, attorneys, successors, and assigns from and against any
and all Liabilities, damages, penalties, Judgments, assessments, losses, fines,
charges, costs, and expenses (including, but not limited to, reasonable
attorney's fees and the costs and expenses of litigating any claims)
(collectively, "Damages") incurred by any of them arising out of, relating to,
or based upon:
(i) any inaccuracy or breach of any
representation or warranty of ASUSA or any Stockholder set forth in Section 8
hereof or elsewhere herein; and
(ii) any breach of any covenant or agreement of
ASUSA or any Stockholder contained in this Agreement.
TSET's right to be indemnified hereunder shall not be limited or affected by any
investigation conducted or notice or knowledge obtained by or on behalf of TSET.
(b) In the event that (A) any claim, demand, or
Proceeding is asserted or instituted by any party other than the parties hereto
and their affiliates which could give rise to Damages for which TSET intends to
17
seek indemnification from ASUSA or the Stockholders hereunder (a "Third Party
Claim" or (B) TSET intends to make a claim to be indemnified by ASUSA or the
Stockholders hereunder which does not involve a Third Party Claim (a "Direct
Claim"), TSET shall promptly, within 21 days of the date on which it first
becomes aware of the existence of such claim, send written notice to ASUSA and
the Stockholders specifying the nature of such claim or demand and the amount
(or a good faith estimate of such amount, which estimate shall not be conclusive
of any final amount of such claim and demand) (a "Claim Notice"); provided,
however, that failure to provide a Claim Notice shall not constitute any waiver
or relinquishment of TSET's rights to indemnification hereunder.
(c) In the event of a Third Party Claim, ASUSA and the
Stockholders may participate, at their own expense, in the defense thereof with
legal counsel of their own choice reasonably acceptable to TSET. Unless ASUSA
and the Stockholders shall have agreed in writing that any and all Damages to
TSET are fully covered by the indemnities provided herein, no Third Party Claim
may be settled without TSET's prior written consent, which consent shall not be
unreasonably withheld, conditioned, or delayed.
(d) In the event of a Direct Claim, unless ASUSA and
the Stockholders notify TSET within 30 days after receipt of a Claim Notice that
they dispute such Direct Claim, the amount of such Direct Claim shall be
conclusively deemed a liability of ASUSA and the Stockholders and shall be paid
to TSET no later than 10 days following lapse of such 30-day period.
13. GENERAL PROVISIONS.
(a) INTEGRATION AND AMENDMENT. This Agreement
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supercedes all prior agreements and understandings with
respect hereto and thereto. No other agreement, whether oral or written, shall
be used to modify or contradict the provisions hereof unless the same is in
writing, signed by the parties, and states that it is intended to amend the
provisions of this Agreement.
(b) COUNTERPARTS. This Agreement may be executed
in multiple counterparts (and by facsimile signature, to be followed by manual
signature), each of which shall be deemed an original, and all of which shall be
deemed to constitute a single agreement, document, instrument, or certificate,
as the case may be.
(c) BINDING EFFECT. This Agreement shall be
binding upon and inure to the benefit of the heirs, successors,
and permitted assigns of the parties hereto.
(d) WAIVER. No failure by any party to this
Agreement to exercise, no delay in exercising, and no course of dealing with
respect to, any right, power, or privilege hereunder or any other document,
instrument, or certificate relating hereto, shall operate as a waiver or any
relinquishment for the future thereof; and no single or partial exercise of any
right, power, or privilege hereunder or any other document, instrument, or
certificate relating hereto shall preclude any other or further exercise thereof
or the exercise of any other right, power, or privilege.
18
(e) SEVERABILITY. If any provision (or portion
thereof) of this Agreement is adjudged illegal or unenforceable by a court of
competent jurisdiction, the remaining provisions shall nevertheless continue in
full force and effect. In any such case, the provision deemed illegal or
unenforceable shall be remade or interpreted by the parties in a manner that
such provision shall be enforceable to preserve, to the maximum extent possible,
the original intention and meaning thereof.
(f) NOTICES. All notices or other communications
given or made hereunder shall be in writing and may be delivered personally, by
express, registered, or certified mail (return receipt requested), by special
courier, or by facsimile transmission (to be followed by delivery of a written
original notice in the most expeditious manner possible, as aforesaid), all
postage, fees, and charges prepaid, to TSET, ASUSA or any of the Stockholders,
as the case may be, to the following addresses (which may be changed by the
parties from time to time upon written notice given as aforesaid):
TO TSET: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ 111
------- ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇.▇▇▇.▇▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman and Chief Executive Officer
TO ASUSA: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
--------- ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: 608. 226.9982
Fax: 608. 226.9670
Email: ▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
TO ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------- ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇.▇▇▇.▇▇▇▇
TO ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇: Calle ▇▇▇▇▇▇ 132 Col ▇▇▇▇▇▇
----------------------- Ensenada, BC Mexico
Tel: ▇▇.▇▇▇.▇▇▇▇▇
TO ▇▇▇▇▇ ▇▇▇▇▇▇▇▇: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
------------------ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇.▇▇▇.▇▇▇▇
TO ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇: ▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇
--------------------- ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇.▇▇▇.▇▇▇▇
19
TO ATOMIC MILLENIUM PARTNERS: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
----------------------------- ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇
Tel: ▇▇▇.▇▇▇.▇▇▇▇
Notices hereunder shall be deemed given when delivered in person, upon
confirmation of successful transmission when sent by telex or facsimile (to be
followed by delivery by express or regular mail), or 5 days after being mailed
by express, registered, or certified mail (return receipt requested), postage
prepaid.
(g) COSTS. EXPENSES, AND TAXES. Each party shall bear
its own costs, expenses, and taxes incurred or associated with the transactions
contemplated herein.
(h) GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Oregon, exclusive of
its conflicts of laws principles.
[SIGNATURES APPEAR ON NEXT PAGE]
20
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement effective as of the date first written above.
TSET, Inc.
By:
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman and Chief Executive Officer
ATOMIC SOCCER USA, LTD.
By:
--------------------------------------
Name:
-------------------------------
Title:
-------------------------------
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, individually
-------------------------------------
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, individually
-------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, individually
-------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, individually
ATOMIC MILLENNIUM PARTNERS, LLC
By:
--------------------------------------
Name:
-------------------------------
Authorized Signatory:
21
ACKNOWLEDGED AND AGREED:
-------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, individually
-------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, individually
-------------------------------------
▇▇▇▇▇▇▇ ▇▇▇, individually
-------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇, individually
-------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, individually
22
LIST OF EXHIBITS
EXHIBIT 5 -- FINANCIAL OBLIGATIONS OWED BY ASUSA TO ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ AND ▇▇▇▇ ▇▇▇
EXHIBIT 8(B) -- DEFAULTS AND BREACHES
EXHIBIT 8(C-1) -- LITIGATION
EXHIBIT 8(C-2) -- JUDGMENTS
EXHIBIT 8(D) -- FINDERS AND BROKERS
EXHIBIT 8I(1) -- TAXES
EXHIBIT 8(F-2) -- TAX WITHHOLDINGS
EXHIBIT 8 (G) -- CONSENTS AND APPROVALS
EXHIBIT 8(J) -- COMPENSATION OR OTHER AGREEMENTS IN FAVOR OF
MANAGEMENT, EMPLOYEES, OR STOCKHOLDERS
EXHIBIT 8(1) -- INTELLECTUAL PROPERTY
EXHIBIT 8(K-2) -- ENCUMBRANCES, LIENS, OR SUPERIOR CLAIMS UPON THE
INTELLECTUAL PROPERTY RIGHTS AND THE TECHNOLOGY;
INFRINGEMENTS
EXHIBIT 8(T) -- LIENS UPON THE ATOMIC SHARES OWNED BY THE
STOCKHOLDERS
EXHIBIT 8(M) -- SUBSIDIARIES
EXHIBIT 8(O) -- FINANCIAL STATEMENTS
EXHIBIT 8(P) -- OUTSTANDING COMMITMENTS
EXHIBIT 8(Q-1) -- COLLECTIVE RULES
EXHIBIT 8(Q-2) -- EMPLOYMENT AGREEMENTS
EXHIBIT 8(Q-3) -- OBLIGATIONS TO EMPLOYEE REPRESENTATIVE
ORGANIZATIONS; HISTORY OF LABOR ACTIONS
EXHIBIT 8(S) -- INSURANCE
22