SHARE EXCHANGE AGREEMENT
by and among
TEXXON, INC.
TELEPLUS, INC.
AND
THE SHAREHOLDERS OF
TELEPLUS, INC.
THIS SHARE EXCHANGE AGREEMENT (this "Agreement'), dated this _____ day
of March, 2006, is made and entered into by and among:
TEXXON, INC., an Oklahoma corporation having its principal business
office located at 0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000
(hereinafter sometimes referred to as "Texxon");
TELEPLUS, INC., a California corporation having its principal business
office located at 00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx
00000 (hereinafter sometimes referred to as "TelePlus");
XXX XXXXXX (hereinafter sometimes referred to as "Hansel"), a
shareholder and Chief Executive Officer of Texxon.
AND
XXXXXX XXXXXXX, XXXXXX XXXXXXXX, TELENOVA, LTD., HUMAX WEST, INC.,
XXXXXXX XXXXXXX, XXXXXXX XXXXXXXXX AND XXXXXX XXXXXXX (hereinafter jointly and
severally sometimes referred to as "SHAREHOLDERS"), each of whom is a
shareholder of TelePlus.
WITNESSETH THAT:
WHEREAS, Texxon desires to acquire from SHAREHOLDERS all of the issued
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and outstanding capital stock of TelePlus, so as to constitute TelePlus as a
wholly-owned subsidiary of Texxon, in exchange for shares of the Common Stock of
Texxon in a transaction qualifying as a tax-free reorganization;
WHEREAS, Texxon, by its Certificate of Incorporation which was issued
on February 9, 1988, is authorized to issue 10,000,000 shares of Preferred Stock
having a par value of $.01 per share, of which no shares have been designated as
a series and no shares are presently issued and outstanding, and 80,000,000
shares of Common Stock having a par value of $.01 per share, of which 46,482,159
shares are to be issued and outstanding as of Closing;
WHEREAS, TelePlus, by its Articles of Incorporation is authorized to
issue 10,000,000 shares of capital stock having no par value per share, Common
Stock, of which 9,302,780 shares are issued and outstanding;
NOW THEREFORE, the constituent corporations, in consideration of the
mutual covenants, agreements and provisions hereinafter contained do hereby
prescribe the terms and conditions of their reorganization and the mode of
carrying the same into effect, as follows:
ARTICLE I
THE REORGANIZATION/EXCHANGE
1. PLAN OF REORGANIZATION. SHAREHOLDERS are the owners of all of the
issued and outstanding capital stock of TelePlus, which on the date of this
Agreement consists of 9,302,780 shares of Common Stock. It is the intention of
the parties that all of such issued and outstanding Common Stock of TelePlus,
plus all shares of Common Stock of TelePlus which may be issued by Teleplus
after the date of this Agreement to a date not later than five (5) days prior to
the the Closing Date be acquired by Texxon in exchange solely for its voting
stock in a reorganization qualifying under ss.368(a)(1)(B) of the Internal
Revenue Code of 1986, as amended.
2. CONDITIONS PRECEDENT TO CLOSING. The obligatons of the parties to
consummate the transactions contemplated by this Agreement are expressly
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conditioned upon and subject to the satisfaction of each and every term and
condition set forth herein. Prior to Closing, Texxon shall accomplish the
following and shall deliver to the SHAREHOLDERS documents evidencing, to the
reasonable satisfaction of TelePlus and its counsel:
(i) Secure a rescission of the proposed transaction with V3Global, Inc.
and take all such action, including without limitation, filing of a Current
Report on Form 8-K with the United States Securities and Exchange Commission
(hereinafter referred to as the "SEC") and such documents as may be necessary or
desirable to give effect to such rescission with no liability to Texxon, its
successors, assigns and affiliates;
(ii) Re-domesticate as a Nevada corporation, by merging the current
Oklahoma corporation into a Nevada corporation organized solely for the purpose
of such re-domestication;
(iii) Amend the Nevada Articles of Incorporation so as to authorize the
corporation to issue 160,000,000 shares of capital stock having a par value of
$.001 per share, divided into 10,000,000 shares of undesignated preferred stock
and 150,000,000 shares of Common Stock;
(iv) Amend the contract between Texxon and Stock Communications Group,
Inc ("SCG") to provide (a) that no more than 7,000,000 shares of Texxon'x Common
Stock may be issued in any calendar quarter, beginning with the first quarter of
2006, upon the exercise of the common stock purchase warrants issued pursuant to
such contract and obtain the consent of each of SCG's assignees to such
amendment and (b) that such contract will terminate upon exercise of all of such
common stock purchase warrants with no further obligation or liability of
Texxon;
(v) Have secured a cancellation of the commitments to issue so-called
"Class A Convertible Preferred Stock" and any commitments to issue any
additional shares of Common Stock, with no further obligation or liability of
Texxon, excepting only for the issuance of Warrants in consideration for such
cancellation which, upon full exercise, would result in the issuance of
2,500,000 additional shares of Common Stock; and
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(vi) Have issued and outstanding as of Closing no more than 33,482,159
shares of Common Stock with only 2,500,000 shares of Common Stock reserved for
issuance pursuant to the Warants referenced in subparagraph (v) of this
Paragraph 2 and up to 13,000,000 shares of Common Stock issued or reserved for
issuance pursuant to the common stock purchase warrants referred to in
subparagraph (iv) of this Paragraph 2. Texxon and the SHAREHOLDERS agree that at
Closing all shares of TelePlus Common Stock then issued and outstanding shall be
exchanged with Texxon for 81,000,000 shares of the Common Stock of Texxon to be
immediately issued. The Texxon shares will, at Closing, be delivered to the
individual SHAREHOLDERS in exchange for their TelePlus shares ratably in
proportion to the number of shares of TelePlus held by each of them, as
certified by TelePlus to Texxon not later than 5 days prior to the Closing.
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3. DELIVERY OF SHARES. At the Closing, the SHAREHOLDERS shall deliver
certificates for all of the issued and outstanding shares of TelePlus duly
endorsed with signatures Medallion guaranteed so as to make Texxon the sole
owner thereof, free and clear of all claims and encumbrances. Simultaneously at
the Closing, Texxon shall issue and deliver to the SHAREHOLDERS certificates
representing all of the 81,000,000 Texxon shares to be issued in exchange for
the TelePlus shares, in such names, denominations and amounts as SHAREHOLDERS
shall have requested. In the alternative, Texxon may deliver to SHAREHOLDERS
duly executed instructions to its Transfer Agent for the immediate issuance of
such shares.
4. INVESTMENT REPRESENTATIONS. Each SHAREHOLDER, severally and not
jointly, acknowledges, agrees and represents that:
(a) He has been advised that none of the shares of Texxon being
acquired hereunder have been registered under the Securities Act of 1933 (the
"1933 Act").
(b) All of the shares of Texxon being acquired hereunder are being,
and will be, acquired and held for investment, not for resale or distribution to
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the public and not for the purpose of effecting or causing to be effected a
public offering of such securities and, further, that none of such securities
will be sold, transferred, assigned or disposed of except to, or in trust for
the benefit of, members of a shareholder's immediate family or their personal
representatives, devisees, and legatees, or in accordance with the 1933 Act and
the Rules and Regulations of the SEC (the "Rules and Regulations") promulgated
thereunder.
(c) He has been advised and is aware of the fact, that by reason of
the foregoing investment representations and restrictions upon transfer: (i) the
shares of the Texxon stock must be held indefinitely unless they are
subsequently registered under the 1933 Act or an exemption from such
registration is available; (ii) if Rule 144 of the Rules and Regulations is
applicable to any future routine sales of any such securities, such sales can be
made only in limited amounts in accordance with the terms and conditions of that
Rule; (iii) in the case of securities to which that Rule is not applicable,
compliance with some applicable disclosure exemption, if any be available, will
be required; (iv) all of the Texxon shares will bear a legend restricting
transfer thereof; and (v) the Transfer Agent of Texxon's Common Stock will be
given "stop-transfer" instructions so as to prevent any illegal transfer of such
shares.
(d) He has relied upon his own investigation into Texxon and its
financial condition, and the warranties and representations made by Texxon
herein, for purposes of deciding to enter into and close this Agreement and to
accept shares of Texxon in exchange for shares of TelePlus. Except for the
expressed representations and warranties herein, he has not relied upon any
other oral or written representation made by Texxon or any of its officers or
directors or representatives of Texxon and that no representation, or statements
shall survive the Closing with the sole exception of the representations and
warranties contained in this Agreement.
5. Closing.
(a) Closing shall take place at the offices of counsel for TelePlus,
SEC Law Firm, 00000 Xxx Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx
00000, on the last to occur of the following:
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(i) the fifth business day after completion by Texxon of the
conditions precedent as set forth in Paragraph 2 above; or
(ii) the availability of TelePlus' audited financial statements so as
to permit Texxon to file a timely Current Report on Form 8-K
concerning the consummation of the transactions contemplated by this
Agreement containing such.
(b) In addition to the share certificates or Transfer Agent instructions to be
delivered to Texxon pursuant to Paragraph 3 above, within five (5) business days
prior to Closing, TelePlus shall deliver or cause to be delivered to Texxon the
following documents:
(1) Certified copy of the Minutes of the Meeting of the Board of
Directors of TelePlus ratifying and approving this Agreement and
the Closing thereof;
(2) Certificate of good standing reflecting that TelePlus is a
corporation in good standing in the state of its incorporation;
(3) Audited Financial Statements for TelePlus, or such portions
thereof as required in order for Texxon, post-Closing, to file
the required Current Report on Form 8-K with the SEC, together
with a certificate executed by the President/CEO and
Treasurer/CFO of TelePlus certifying that to the best of their
knowledge and belief, the financial statements are accurate and
complete; and
(4) Any and all other documents which may be reasonably requested by
Texxon to effect and close this transaction.
(c) In addition to the share certificates or Transfer Agent
instructions to be delivered to SHAREHOLDERS pursuant to Paragraph 3
above, within five (5) business days prior to Closing, Texxon shall
deliver to SHAREHOLDERS the following documents:
(1) Certified resolutions of the Board of Directors of Texxon
ratifying this Agreement and the Closing thereof and expressly
authorizing the issuance of shares as required by this Agreement;
(2) A certificate of good standing of Texxon reflecting that Texxon
is in good standing under the laws of the state of its
incorporation;
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(3) Copies of all reports filed by Texxon with the SEC, including all
reports on Forms 10-K, 10-Q, and 8-K of Texxon during the period
from December 31, 2004 to the date of Closing;
(4) Any and all other documents as may be reasonably required by the
SHAREHOLDERS to close this Agreement;
(5) Subject to the receipt from each of Xxxxxxxx Xxxxxx and Xxxxxx
Xxxxxxx of written assurances that they are receiving no consideration
in connection with the transactions contemplated by this Agreement
other than the Texxon shares to be issued in exchange for the TelePlus
shares on consummation of the transaction contemplated by this
Agreement, an opinion letter from Texxon's counsel in form
satisfactory to SHAREHOLDERS that this transaction qualifies as a tax
free transaction under section 368(a)(1)(B);
(6) Opinion letter from counsel to Texxon's reasonably satisfactory to
TelPlus and its counsel,, in form and substance satisfactory to
TelePlus and it counsel that the Form S-8 filed with the SEC on
September 13, 2005 was legally proper and effective to register the
shares of the Common Stock of Texxon covered thereby at the time it
was filed, and as to all such other federal and state securities
matters, including the registration of other shares of the Common
Stock of Texxon, as TelePlus shall reasonably request;
(7) A certificate executed by the President and by the Chief Financial
Officer of Texxon, dated the closing date, certifiying that the
representations and warranties of Texxon set forth herein are true,
correct and complete on and as of the date of such certificate as if
the same were made on such date; and
(8) Copies of the resolutions of the shareholders of Texxon,
authorizing the re-domestication of Texxon as a Nevada corporation,
certified by the Secretary of Texxon;
(9) Certified copies of the Information Statement filed by Texxon with
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the SEC and distributed to the shareholders of Texxon in respect of
the transactions contemplated by this Agreement.
6. OFFICERS AND DIRECTORS. It is the intent of the parties that after
the Closing, Texxon shall have a Board of Directors consisting only of the three
(3) members of the Board of Directors designated by TelePlus no later than five
(5) business days prior to the Closing. Effective on and as of the Closing the
existing Board of Directors of Texxon shall resign with the Board appointing the
three (3) TelePlus nominees as directors to fill the vacancies.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
OF
TEXXON
Texxon, intending Teleplus and SHAREHOLDERS to rely thereon,
represents, warrants and agrees that, except as set forth on the Disclosure
Schedule to be delivered by Texxon to Teleplus no later than 35 days after the
date of this Agreement (hereinafter referred to as the "Texxon Disclosure
Schedule") as follows:
1. (a) Texxon is, as of the date of this Agreement, a validly existing
corporation in good standing, duly organized pursuant to the laws of the State
of Oklahoma, with all legal and corporate authority and power to conduct its
business as now being conducted and to own its properties and to the best of its
knowledge it possesses all necessary permits and licenses required in connection
with the conduct of its business. Each subsidiary of Texxon is listed on the
Texxon Disclosure Schedule. Each Texxon subsidiary is, as of the date of this
Agreement, and will be, as of the Closing, a validly existing corporation in
good standing, duly organized pursuant to the laws of its jurisdiction of
incorporation, with all legal and corporate authority and power to conduct its
business as now being conducted and to own its properties and to the best of
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Texxon's knowledge such subsidiary possesses all necessary permits and licenses
required in connection with the conduct of its business.
(b) As of Closing, Texxon will be a validly existing
corporation in good standing, duly organized pursuant to the laws of the State
of Nevada, with all legal and corporate authority and power to conduct its
business as now being conducted and to own its properties and to the best of its
knowledge it possesses all necessary permits and licenses required in connection
with the conduct of its business.
2. The conduct of Texxon's present business, including those of any
subsidiaries, is to the best of its knowledge in full compliance with all
applicable, federal, state and local governmental statutes, rules, regulations,
ordinances and decrees.
3. Pursuant to its Nevada Articles of Incorporation, as amended,
following re-domestication, at Closing Texxon will be authorized to issue
10,000,000 shares of Preferred Stock having a par value of $.001 per share, of
which no shares will have been designated as a series and no shares will be
issued and outstanding, and 150,000,000 shares of Common Stock having a par
value of $.001 per share, of which 33,482,159 shares will be issued and
outstanding and all such shares shall be duly authorized, validly issued, fully
paid and non-assessable and shall have been issued in full compliance with all
applicable federal and state securities laws, rules and regulations. There shall
be no other authorized or outstanding securities of any class or of any kind or
character of the corporation and, except as reflected in this Agreement, there
will be no outstanding subscriptions, options, warrants or other agreements or
commitments obligating the corporation, to issue or to sell any additional
shares of Texxon's stock or any options or rights with respect thereto, or any
securities convertible into any shares of stock of any class, except only for
the 2,500,000 shares reserved for the exercise of certain warrants issued and
outstanding to Xxx Xxxxxx (1,000,000), Xxxxxx Xxxxxxxxx (500,000) and Xxxxxxx
Xxxxxxx (1,000,000) and up to 13,000,000 shares of Common Stock issued or
reserved for issuance pursuant to the common stock purchase warrants referred to
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in subparagraph (iv) of Article 1, Paragraph 2 of this Agreement.
4. Upon issuance of the Common Stock of Texxon to SHAREHOLDERS, at the
Closing SHAREHOLDERS will become the owners of at least 62% of Texxon's capital
stock then issued and outstanding, on a fully diluted basis.
5. The execution and delivery of this Agreement, the consummation of
the transactions herein contemplated and compliance with the terms of this
Agreement will not result in a breach of any of the terms or provisions of, or
constitute a default under: the Articles of Incorporation or By-Laws of Texxon;
any indenture, other agreement or instrument to which the corporation is a party
or by which it or its assets are bound; or any applicable regulation, judgment,
order or decree of any governmental instrumentality or court, domestic or
foreign, having jurisdiction over the corporation, its securities or its
properties.
6. At Closing Texxon will not be a party to any written or oral
agreement which grants an option or right of first refusal or other arrangement
to acquire any of the stock or to any agreement that affects the voting rights
of any of the stock, nor has the company made any commitment of any kind
relating to the issuance of shares of any of its stock, whether by subscription,
right of conversion, option or otherwise other than (a) the common stock
purchase warrants issued to SCG as referenced in Article I, Paragraph 2,
subparagraph (iv) above and (b) the 2,500,000 shares reserved for the exercise
of certain warrants issued and outstanding to Xxx Xxxxxx (1,000,000), Xxxxxx
Xxxxxxxxx (500,000) and Xxxxxxx Xxxxxxx (1,000,000).
7. Texxon is not a party to any agreement or understanding for the
sale or exchange of inventory or services for consideration or at a discount in
excess of normal discount for quantity or cash payment.
8. Texxon has filed with the appropriate governmental agencies all tax
returns and tax reports required to be filed in correct form; all federal, state
and local income, franchise, sales, use, occupation or other taxes due have been
fully paid or adequately reserved for; to the extent that tax liabilities have
accrued, but have not become payable, they are adequately reflected as
liabilities on the books of the company; and Texxon is not a party to any action
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or proceeding by any governmental authority for assessment or collection of
taxes, nor has any claim for assessments been asserted against Texxon; and
Texxon is not a party to any action or proceeding by any governmental authority
for assessment or collection of taxes, nor has any claim for assessments been
asserted against Texxon.
9. There are presently no contingent liabilities, factual
circumstances, threatened or pending litigation, contractually assumed
obligations or unasserted possible claims which are known to Texxon, which might
result in a material adverse change in the future financial condition or
operations of Texxon or any of its subsidiaries other than as reflected in
Texxon's Form 10-Q for the quarter ended September 30, 2005. Texxon has received
no comment letters, or other communications of similar import, from the SEC
which have not been fully addressed and resolved. Each filing made by Texxon
with the SEC was legally proper when made and was accurate and complete when
filed.
10. The execution, delivery and performance of this Agreement and the
transactions contemplated hereby do not require the consent, authority or
approval of any other person or entity except such as have been obtained.
11. No transactions have been entered into either by or on behalf of
Texxon or any subsidiaries, other than in the ordinary course of business nor
have any acts been performed (including within the definition of the term
"performed" the failure to perform any required acts) which would adversely
affect the goodwill of Texxon.
12. The entering into of this Agreement and the performance thereof
has been duly and validly authorized by all required corporate action and does
not require any consents other than such as have been unconditionally obtained.
13. The Form 10-K for the fiscal year ended December 31, 2004 and
Forms 10-Q for the fiscal quarters ended March 31, 2005, June 30, 2005 and
September 30, 2005 were accurate when filed and:
(a) Except as set forth in the financial statements of Texxon dated
September 30, 2005 and included as part of the Texxon Disclosure Schedule,
Texxon is the owner, free and clear of any liens, pledges, or encumbrances, of
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all of the property and assets set forth in Texxon's balance sheet for its
period ended September 20, 2005 (the "Balance Sheet");
(b) Texxon has no liabilities or obligations except those disclosed in
the financial statements of Texxon as of September 30, 2005 except those set
forth on the Texxon Disclosure Schedule and Texxon does not have any knowledge
of facts which would require the setting up of additional reserves with respect
thereto;
(c) Texxon and its subsidiaries are not in default under or in breach
of the provisions of any debt, security, mortgage, indebtedness, material
contract, or agreement to which they are a party or by which it is bound which
default or breach would materially adversely effect its business or properties
or condition, financial or otherwise, or would result in the creation of a lien
or charge upon any of the properties or assets of Texxon and its subsidiaries;
(d) There exists no event, current condition, or act which with the
giving of notice of the lapse of time or the happening of any other event or
condition would become a default under or breach of any such debt, security,
mortgage, indebtedness, or material contract, or would result in the creation of
a lien or charge upon the properties or assets of Texxon as reflected in the
Balance Sheet. None of the terms of any debt, security, mortgage indebtedness or
other material contract or any other contract or agreement would prevent the
consummation of the Closing of this Agreement; and
(e) No waiver, indulgence or postponement of any of the obligations of
Texxon have been granted by any obligee;
14. No adverse material change in the business or consolidated
financial position since September 30, 2005 has occurred and no event, condition
or state of facts which materially and adversely affects, or threatens to
materially and adversely affect, the business or results of operations or
financial condition of Texxon and its subsidiaries.
15. There are no loans, accrued obligations, liabilities, claims, or
contractual obligations owed by Texxon and/or any subsidiaries to any of its
Officers, Directors, or Stockholders.
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16. The shares of Texxon being issued to SHAREHOLDERS hereby are duly
and validly authorized, issued and outstanding and are fully paid and
nonassessable. There are no agreements between Texxon and its subsidiaries and
any other individual or entity which would prevent or affect the consummation of
the transaction provided for in this Agreement.
17. The corporate record book of Texxon is complete and contains all
amendments to the Articles, Bylaws, and all Minutes of meetings of Directors and
Shareholders.
18. The representations and warranties made by Texxon in this
Agreement and all exhibits and schedules hereto contain no untrue statements of
material facts and do not omit to state a material fact necessary to make the
statements contained herein not misleading. Notwithstanding any investigation
that may be made by SHAREHOLDERS, all representations and warranties of Texxon
made in this Agreement shall be deemed to have been made at the Closing and
shall survive the Closing of this Agreement.
The foregoing representations, warranties and agreements shall be true
and correct as of the effective date of the reorganization and the Closing date.
Such representations, warranties and agreements shall survive the reorganization
until one (1) year from the date of Closing. None of such representations,
warranties and agreements contain, or shall contain as of the effective date of
the reorganization, any false or misleading statement of a material fact or
omit, as of the effective date of the reorganization, to state any material fact
necessary in order to make the representations, warranties and agreements not
misleading.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
OF
TELEPLUS
TelePlus, intending Texxon to rely thereon represents, warrants and
agrees agrees that, except as set forth on the Disclosure Schedule to be
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delivered by TelePlus to Texxon no later than 35 days after the date of this
Agreement (hereinafter referred to as the "TelePlus Disclosure Schedule") as
follows:
1. TelePlus is, as of the date of this Agreement, a validly existing
corporation in good standing, duly organized pursuant to the laws of the State
of California with all legal and corporate authority and power to conduct its
business as now being conducted and to own its properties and it possesses all
necessary permits and licenses required in connection with the conduct of its
business. . Each subsidiary of TelePlus is listed on the TelePlus Disclosure
Schedule. Each TelePlus subsidiary is, as of the date of this Agreement, and
will be, as of the Closing, a validly existing corporation in good standing,
duly organized pursuant to the laws of its jurisdiction of incorporation, with
all legal and corporate authority and power to conduct its business as now being
conducted and to own its properties and to the best of TelePlus's knowledge such
subsidiary possesses all necessary permits and licenses required in connection
with the conduct of its business.
2. The conduct of TelePlus's business, including that of any
subsidiaries, is to the best of SHAREHOLDERS' knowledge in full compliance with
all applicable, federal, state and local governmental statutes, rules,
regulations, ordinances and decrees.
3. Pursuant to its Articles of Incorporation TelePlus is authorized to
issue 15,000,000 shares of Common Stock, of which 9,302,789 shares are issued
and outstanding on the date of this Agreement. There are no other authorized or
outstanding securities of any class or of any kind or character of the
corporation and there are no outstanding subscriptions, options, warrants or
other agreements or commitments obligating the corporation, to issue or to sell
any additional shares of TelePlus's stock or any options or rights with respect
thereto, or any securities convertible into any shares of stock of any class.
4. The execution and delivery of this Agreement, the consummation of
the transactions herein contemplated and compliance with the terms of this
Agreement will not result in a breach of any of the terms or provisions of, or
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constitute a default under, the Articles of Incorporation or By-Laws of
TelePlus; any indenture, other agreement or instrument to which the corporation
is a party or by which it or its assets are bound; or any applicable regulation,
judgment, order or decree of any governmental instrumentality or court, domestic
or foreign, having jurisdiction over the corporation, its securities or its
properties.
5. At Closing TelePlus will not be a party to any written or oral
agreement which grants an option or right of first refusal or other arrangement
to acquire any of the stock or to any agreement that affects the voting rights
of any of the stock, nor has the company made any commitment of any kind
relating to the issuance of shares of any of its stock, whether by subscription,
right of conversion, option or otherwise.
6. At Closing, TelePlus will not be a party to any agreement or
understanding for the sale or exchange of inventory or services for
consideration other than cash or at a discount in excess of normal discount for
quantity or cash payment.
7. TelePlus has filed with the appropriate governmental agencies all
tax returns and tax reports required to be filed in correct form; all federal,
state and local income, franchise, sales, use, occupation or other taxes due
have been fully paid or adequately reserved for; to the extent that tax
liabilities have accrued, but have not become payable, they are adequately
reflected as liabilities on the books of the company; and TelePlus is not a
party to any action or proceeding by any governmental authority for assessment
or collection of taxes, nor has any claim for assessments been asserted against
TelePlus.
8. There are presently no contingent liabilities, factual
circumstances, threatened or pending litigation, contractually assumed
obligations or unasserted possible claims which are known to TelePlus, which
might result in a material adverse change in the future financial condition or
operations of TelePlus.
9. The execution, delivery and performance of this Agreement and the
transactions contemplated hereby do not require the consent, authority or
approval of any other person or entity except such as have been obtained.
10. The audited financial statements for TelePlus as of December 31,
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2003 and, December 31, 2004 and the unaudited financial statements as of
September 30, 2005, to be furnished to to Texxon prior to Closing will be true
and complete, prepared in conformity with generally accepted accounting
principles consistently applied during the periods, and presents fairly the
financial position, results of operations, and changes in financial position, of
TelePlus. TelePlus represents that:
(a) Except as set forth in the financial statements of TelePlus, dated
September 30, 2005, TelePlus is the owner, free and clear of any liens, pledges,
or encumbrances, of all of the property and assets set forth in the TelePlus
Balance Sheet;
(b) TelePlus has no liabilities or obligations except those disclosed
in the financial statements of TelePlus, at September 30, 2005 except those set
forth on other Exhibits to this Agreement and TelePlus does not have any
knowledge of facts which would require the setting up of additional reserves
with respect thereto;
(c) TelePlus is not in default under or in breach of the provisions of
any debt, security, mortgage, indebtedness, material contract, or agreement to
which it is a party or by which it is bound which default or breach would
materially adversely effect its business or properties or condition, financial
or otherwise, or would result in the creation of a lien or charge upon any of
the properties or assets of TelePlus;
(d) No waiver, indulgence or postponement of any of the obligations of
TelePlus have been granted by any obligee;
(e) There exists no event, current condition, or act which with the
giving of notice of the lapse of time or the happening of any other event or
condition would become a default under or breach of any such debt, security,
mortgage, indebtedness, or material contract, or would result in the creation of
a lien or charge upon the properties or assets of TelePlus as reflected in the
Balance Sheet. None of the terms of any debt, security, mortgage indebtedness or
other material contract or any other contract or agreement would prevent the
consummation of the Closing of this Agreement.
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11. No adverse material change in the business or consolidated
financial position since September 30, 2005 will have occurred and no event,
condition or state of facts which materially and adversely affects, or threatens
to materially and adversely affect, the business or results of operations or
financial condition of TelePlus and any of its subsidiaries.
12. There are no loans, accrued obligations, liabilities, claims, or
contractual obligations owed by TelePlus to any of its Officers, Directors, or
Stockholders.
13. There is no suit, action, or legal, administrative, arbitration or
other proceeding or governmental investigation, or any change in the zoning,
building, or licensing ordinances affecting the real property or any significant
leasehold interests of TelePlus and its subsidiaries, pending or threatened,
which might affect the business, financial condition, or earnings of TelePlus
and any subsidiaries.
14. The shares of TelePlus being acquired by Texxon from SHAREHOLDERS
hereby are duly and validly authorized, issued and outstanding and are fully
paid and nonassessable. To the best knowledge of TelePlus there are no
agreements between any of the SHAREHOLDERS and any other individual or entity
which would prevent or affect the consummation of the transaction provided for
in this Agreement.
15. This Agreement and all Exhibits to this Agreement and all
documents delivered to Texxon by TelePlus at the Closing in connection with this
transaction are true and correct. The representations and warranties made by
TelePlus in this Agreement contain no untrue statements of material facts and do
not omit to state a material fact necessary to make the statements contained
herein not misleading. Notwithstanding any investigation that may be made by
Texxon, all representations and warranties of TelePlus made in this Agreement
shall be deemed to have been made both at the time of the execution of this
Agreement and at the Closing and shall survive the Closing of this Agreement.
The foregoing representations, warranties and agreements and those
contained in Article I, Paragraph 4 above shall be true and correct as of the
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effective date of the reorganization. Such representations, warranties and
agreements shall survive the reorganization until one (1) year from the date of
Closing. None of such representations, warranties and agreements contain, or
shall contain as of the effective date of the reorganization, any false or
misleading statement of a material fact or omit, as of the effective date of the
reorganization, to state any material fact necessary in order to make the
representations, warranties and agreements not misleading.
ARTICLE IV
CONDUCT OF TEXXON
AFTER CLOSING
1. Texxon represents and warrants that, after the reorganization, it
shall:
(a) promptly and timely file a Current Report on Form 8-K to disclose
the reorganization;
(b) promptly and timely make amendment of any manual listing to
reflect the reorganization so as to maintain the "manual
exemption";
(c) promptly and timely file all materials required to maintain the
OTCBB listing; and
(d) promptly and timely direct its Transfer Agent to issues
certificates representing shares of Texxon's Common Stock upon
exercise of (i) the common stock purchase warrants referenced in
Article I, Xxxxxxxxx 0, xxxxxxxxxxxx (xx) of this Agreement and
(ii) the Warrants referenced in Article I, Xxxxxxxxx 0,
xxxxxxxxxxxx (x) of this Agreement.
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ARTICLE V
INDEMNIFICATION
1. OBLIGATIONS OF THE PARTIES.
(a) Xxx Xxxxxx agrees to indemnify and hold harmless TelePlus
and each Shareholder and their respective directors, officers, employees,
affiliates and agents from and against any and all Losses, asserted against,
resulting to, imposed upon or incurred or suffered by, any of them, directly or
indirectly, as a result of, or based upon or arising from, any inaccuracy in or
breach or nonfulfillment of any of the representations, warranties or covenants
or agreements made by Texxon in or pursuant to this Agreement.
(b) Xxxxxx Xxxxxxx agrees to indemnify and hold harmless
Texxon and its directors, officers, employees, affiliates and agents from and
against any and all Losses, asserted against, resulting to, imposed upon or
incurred or suffered by, any of them, directly or indirectly, as a result of, or
based upon or arising from, any inaccuracy in or breach or nonfulfillment of any
of the representations, warranties or covenants or agreements made by TelePlus
in or pursuant to this Agreement.
(c) Each Shareholder, severally and not jointly, agrees to
indemnify and hold harmless TelePlus, Texxon and each other Shareholder and
their respective directors, officers, employees, affiliates and agents from and
against any and all Losses, asserted against, resulting to, imposed upon or
incurred or suffered by, any of them, directly or indirectly, as a result of, or
based upon or arising from, any inaccuracy in or breach or nonfulfillment of any
of the representations, warranties or covenants or agreements made by such
Shareholder in or pursuant to this Agreement.
2. PROCEDURE
(a) Losses for or against which any party is entitled to
indemnification pursuant to this Article V resulting from the assertion of
liability by third parties are "Third Party Claims." Any party seeking
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indemnification (an "Indemnified Party") with respect to Third Party Claims
shall give notice to the party required to provide indemnification (the
"Indemnifying Party") within 30 days of becoming aware of any such Third Party
Claim. The Indemnifying Party will promptly assume the defense thereof with
experienced counsel satisfactory to the Indemnified Party. Notwithstanding the
foregoing, the rights of any Indemnified Party to be indemnified in respect of
Third Party Claims shall not be adversely affected by the Indemnified Party's
failure to give notice unless (and then only to the extent that) the
Indemnifying Party is materially prejudiced thereby.
(b) If the Indemnifying Party, within 20 days after receipt of
a notice of a Third Party Claim, fails to assume the defense of such Indemnified
Party against such Third Party Claim, the Indemnified Party shall have the right
to undertake the defense, compromise or settlement of the Third Party Claim on
behalf of and for the account and risk of the Indemnifying Party; provided,
however that no such settlement of a Third Party Claim shall be effective unless
the Indemnified Party shall give the Indemnifying Party 14 days prior written
notice of the terms and conditions of such settlement, and the Indemnifying
Party shall not have given notice to the Indemnified Party of its objection in
writing to the terms of such settlement within seven days of its receipt of such
notice.
(c) Notwithstanding anything in this Article V to the
contrary, (i) if the Indemnified Party reasonably believes that a Third Party
Claim may materially and adversely affect the business or operations of the
Indemnified Party, other than as a result of money damages or other money
payments, such person shall have the right to defend, compromise or settle such
Third Party Claim, and (ii) the Indemnifying Party shall not, without the
written consent of the Indemnified Party, settle or compromise any Third Party
Claim or consent to entry of any judgment in respect thereof unless such
settlement, compromise or consent includes as an unconditional term thereof the
giving by the claimant or the plaintiff to the Indemnified Party a release from
all liability in respect of such Third Party Claim; provided, however that no
such settlement of a Third Party Claim shall be effective unless the Indemnified
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Party shall give the Indemnifying Party 14 days prior written notice of the
terms and conditions of such settlement, and the Indemnifying Party shall not
have given notice to the Indemnified Party of its objection in writing to the
terms of such settlement within seven days of its receipt of such notice.
.. (b) Notwithstanding anything to the contrary in this Article V,
this Section relates only to the procedure for indemnifiable claims that are
Third Party Claims. Nothing herein shall be deemed to limit any indemnifiable
claim that is not a Third Party Claim.
3 Survival. This Article shall survive any termination of this
Agreement. Any matter as to which a claim has been asserted by notice to the
other party that is pending or unresolved at the end of any limitation period
shall continue to be covered by this Article until such matter is finally
terminated or otherwise resolved (subject to applicable statutes of limitations)
by the parties and settled under this Agreement and any amounts payable
hereunder are finally determined and paid.
ARTICLE VI
MISCELLANEOUS
1. NOTICES. All notices to a party shall be deemed given when mailed
by registered or certified mail to the address set forth below or such other
address as may be substituted therefor by notice:
TO SHAREHOLDERS: Xxxxxx Xxxxxxx
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
With a copy to: Xxxxx Xxx Xxxxxx, Esq.
SEC Law Firm
00000 Xxx Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
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To Texxon: Xxx Xxxxxx
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxx 00000
With a copy to: Xxxxxxx X. Xxx, Esq.
X.X. Xxx 0000 Xxxxx, Xxx Xxxxxx
00000
2. INTEGRATION. This Agreement is the entire Agreement among the
parties and supersedes all prior agreement(s) among the parties with respect
thereto except as herein specified. There are no representations, warranties or
other agreements except as expressed in this Agreement. No alteration,
modification, or waiver of term or condition hereof shall be binding unless in
writing and signed by all parties.
3. AMENDMENTS. This Agreement may be amended only with the written
approval of the party to be charged therewith; provided, however, that no such
amendment may be made that would cause a breach of any warranty or
representation herein.
4. NO ASSIGNMENT. This agreement may not be assigned by any party or
by operation of law or otherwise.
5. CONSTRUCTION. Whenever required by the context hereof: the
masculine gender shall be deemed to include the feminine and neuter; and the
singular member shall be deemed to include the plural. Time is expressly
declared to be of the essence of this Agreement. This Agreement shall be deemed
to have been mutually prepared by all parties and shall not be construed against
any particular party as the draftsman.
6. INTERPRETATION. It is the intent of the parties that this Agreement
shall be construed and interpreted, and that all questions arising hereunder
shall be determined in accordance with the provisions of the laws of the State
of California without regard to conflict of laws principles.
7. BINDING EFFECT. This Agreement shall be binding upon and shall
inure to the benefit of the parties and their successors and assigns.
8. ARBITRATION. Any controversy, claim or dispute arising out of or
resulting from this Agreement, or the breach thereof, that cannot be resolved by
22
negotiation, shall be resolved by arbitration, to be held in Los Angeles,
California, in accordance with the rules and regulations of the American
Arbitration Association, except that the provisions for discovery shall be as
set forth in the Rules of Civil Procedure then in effect in California. Failure
of a party to participate or cooperate shall constitute grounds for default
judgment. The arbitrator shall award legal fees and costs to the prevailing
party. The decision of the arbitrator shall in each case, including awards and
the allocation of costs, be final and binding upon the parties. Judgment upon
the award rendered by the arbitrator may be entered in any Court having
jurisdiction thereof.
9. COUNTERPARTS. This Agreement may be executed in two or more
counterparts and by facsimile, any one of which shall be deemed to be an
original.
10. BROKERS' OR FINDERS' FEES. No agent, broker, person, or firm
acting on behalf of either party or under the authority of any of them is or
will be entitled to any commission or broker's or finder's fee or financial
advisory fee in connection with any of the transactions contemplated herein.
11. EXHIBITS. All Exhibits and Schedules described herein which are
not attached to the Agreement at execution shall be attached within three
calendar days thereafter, unless a different time for delivery is provided for
herein. Each such Exhibit and Schedule shall not be of any force or effect until
the same shall have been approved by the party receiving the same.and shall bear
the signature of the party submitting same.
12. PRESS RELEASES. Each party hereto agrees that it will not issue or
cause the issuance of any press release or other information in the nature of a
press release relating to this Agreement or the transactions contemplated hereby
without the other party's prior written consent, unless a party is required, in
the opinion of counsel to such party. to make information concerning this
Agreement and the transactions contemplated hereby publicly available, but only
to the extent the same is legally required.
13. INSPECTION RIGHTS. Each party hereto agrees that it shall permit
the other parties hereto access upon reasonable notice and during regular
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business hours as often as may be reasonably requested, to conduct diligence in
connection with the transactions contemplated by this Agreement. All expenses of
the requesting party associated with any such diligence shall be borne by the
party conducting the same. All information acquired as part of the conduct of
such diligence shall be maintained by the receiving party in confidence. No
party hereto shall have any duty or obligation to consummate the transactions
contemplated by this Agreement unless such diligence shall have been completed
to the satisfaction of such party in the sole and absolute discretion of such
party.
IN WITNESS WHEREOF, and intending to be legally bound, the parties
have hereunto set their hands and seals the day and year first above written.
TEXXON, INC.
By: /s/ Xxx Xxxxxx
---------------
Its: President and CEO
TELEPLUS, INC.
By: /s/ Xxxxxx Xxxxxxx
------------------
Its: CEO
SHAREHOLDERS:
/s/ Xxxxxx Xxxxxxx
-------------------
XXXXXX XXXXXXX
TELENOVA LTD.
By: /s/ Xxxxxx Xxxxxxx
------------------
Its: Representative
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HUMAX WEST, INC
By: /s/ Koka Hayashi
----------------
Its: President
/s/ Xxxxxxx Xxxxxxx
-----------------------
XXXXXXX XXXXXXX
/s/ Xxxxxx Xxxxxxxx
-----------------------
XXXXXX XXXXXXXX
/s/ Xxxxxxx Xxxxxxxxx
-----------------------
XXXXXXX XXXXXXXXX
/s/ Xxxxxx Xxxxxxxxx
-----------------------
XXXXXX XXXXXXXXX
/s/ Xxx Xxxxxx
-----------------------
XXX XXXXXX
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