SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (this "Agreement") is made as of the 30th
day of April, 2000, by and among Transformation Processing, Inc., a Nevada
corporation ("TPI"), and the holders of TPI's debentures and warrants listed on
the signature page hereof (the "Shareholders").
W I T N E S S E T H:
WHEREAS, the Board of Directors of TPI has determined that it is in the
best interests of TPI to exchange the debentures held by the Shareholders for
common stock of TPI in connection with a reorganization of TPI and the
acquisition of xXxxxxxxxxx.xxx, Inc.; and
WHEREAS, the Shareholders own all of the issued and outstanding
debentures and warrants of TPI (the "Converted Shares") and desire to exchange
their Converted Shares for shares of TPI.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and certain other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto covenant
and agree as follows:
ARTICLE 1.
PURCHASE OF SHARES
1.2. Exchange. Upon the terms and subject to the conditions set forth in this
Agreement, at the Closing provided for in Section 1.2 hereof, each Shareholder
shall sell, assign, transfer, convey and deliver to TPI, and TPI shall purchase
all right, title and interest in and to all of such Shareholders Converted
Shares and rights of others. In consideration for the Converted Shares so
acquired by TPI, TPI shall issued and deliver 602,550 shares of common stock,
$.025 par value, of TPI ("TPI Common Stock") in exchange for each Converted
Share transferred to TPI pursuant to this Agreement as soon as practicable
following the satisfaction or permissible waiver of the conditions set forth in
Articles 5 and 6 (the exchange of shares of TPI Common Stock for Converted
Shares being referred to herein as the "Exchange").
1.2. Closing. Consummation of the transactions contemplated by this Agreement
(the "Closing"), shall take place at the offices of Snow Xxxxxx Xxxxxx P.C., 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, commencing at 10: a.m., local time as
soon as practicable after the last to be fulfilled or waived of the conditions
set forth in Articles 5 and 6, or at such other place, time and date a shall be
fixed by mutual agreement among TPI and the Shareholders. The day on which the
Closing shall occur shall be referred to herein as the "Closing Date". Each
party will use its reasonable best efforts to cause to be prepared, executed and
delivered the documents to be delivered pursuant to Articles 5 and 6 and all
other appropriate and customary documents as any party or its counsel may
reasonably request for the purpose of consummating the transactions contemplated
by this Agreement. All actions taken at the Closing shall be deemed to have been
taken simultaneously at the time the last of any such actions is taken or
completed.
ARTICLE 2.
EXCHANGE OF SHARES
2.1. Exchange of Shares. Immediately after the satisfaction or permissible
waiver of the conditions set forth in Articles 5 and 6 at the Closing, each of
the Converted Shares that are sold and transferred to TPI pursuant to this
Agreement shall be exchanged for 602,550 (such number being referred to herein
as the "Exchange Ratio") shares of TPI Common Stock.
2.2. Fractional Shares. No scrip or fractional shares of TPI Common Stock shall
be issued in the Exchange. All fractional shares of TPI Common Stock to which a
Shareholder would otherwise be entitled at the Closing Date pursuant to this
Agreement shall be rounded up t the nearest whole share of TPI Common Stock.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
3.1. Shareholders. Each Shareholder hereby severally represents and warrants
that, except as otherwise set forth in the Shareholder Disclosure Schedule
(herein so called) attached hereto:
3.1.1. Ownership. Such Shareholder has good and valid title to the Converted
Shares described on the Shareholder Disclosure Schedule to be sold by such
Shareholder hereunder on the Closing Date, free and clear of all liens,
encumbrances, equities or claims, and upon deliver of such shares and payment
therefor pursuant hereto, good and valid title to such shares will pass to TPI
free and clear of all liens, encumbrances, equities or claims of any nature
whatsoever.
3.1.2. Authority. Such Shareholder has full right, power and authority to
enter into this Agreement.
3.1.3. Conflicts. The execution, delivery and performance of this Agreement by
such Shareholder and the consummation by such Shareholder of the transactions
contemplated hereby will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which such Shareholder as a party or by which such Shareholder is bound or to
which any of the property or assets of such Shareholder is subject nor will such
actions result in any violation of any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over such
Shareholder or the property or assets of such Shareholder.
3.1.4. Consents. No consent, approval, authorization or order of, or filing or
registration with, any court or governmental agency or body having jurisdiction
over such Shareholder or the property or assets of such Shareholder is required
for the execution, delivery and performance of this Agreement by such
Shareholder and the consummation by such Shareholder of the transactions
contemplated hereby; and
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF TPI
TPI hereby represents and warrants that, except as otherwise set forth in the
TPI Disclosure Schedule (herein so called) attached hereto:
4.1. Organization and Good Standing. TPI is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation. TPI
has no subsidiaries and no equity, profit sharing, participation or other
ownership interest (including any general partnership interest) in any
corporation, partnership, limited partnership or other entity.
4.2. Foreign Qualification. TPI is duly qualified or licensed to do business and
is in good standing as a foreign corporation in every jurisdiction where the
failure so to qualify would have a material adverse effect on (a) the current
business, operations, assets, financial condition or prospect of TPI or (b) the
validity or enforceability of, or the ability of TPI to perform its obligations
under, this Agreement (an "TPI Material Adverse Effect").
4.3. Corporate Power and Authority. TPI has the corporate power and authority
and all material licenses and permits to own, lese and operate its properties
and assets and to carry on its business as currently being conducted. TPI has
the corporate power and authority to execute and deliver this Agreement and to
perform its obligations under this Agreement and to consummate the Exchange. The
execution, delivery and performance by TPI of this Agreement has been duly
authorized by all necessary corporate action.
4.4. Absence of Restrictions and Conflicts. The execution, delivery and
performance of this Agreement and the consummation of the Exchange and the
fulfillment of and compliance with the terms and conditions of this Agreement do
not and will not, with the passing of time or the giving of notice or both,
violate or conflict with, constitute a breach of or default under, result in the
loss of any material benefit under, or permit the acceleration of ay obligation
under, (i) any term or provision of the Certificate of Incorporation or Bylaws
of TPI, (ii) any TPI Material Contract (as defined in Section 4.10 below), (iii)
any judgment, decree or order of any court or governmental authority or agency
to which TPI is a party or by which TPI or any of is properties is bound, or
(iv) any statute, law, regulation or rule applicable to TPI other than such
violations, conflicts, breaches or default as would not have a TPI Material
Adverse Effect. Except for compliance with the applicable requirements of the
Securities Act, the Exchange Act and applicable state securities laws, no
consent, approval, order or authorization of, or registration, declaration or
filing with, any governmental agency or public or regulatory unit, agency, body
or authority with respect to TPI is required in connection with the execution,
delivery or performance of this Agreement by TPI or the consummation of the
transactions contemplated thereby.
4.5. Capitalization of TPI
(a) The authorized stock of TPI consists of 50,000,000 shares of TPI
Common Stock, $.025 par value and 5,000,000, shares of Preferred Stock, $.001
par value. As of the date of this Agreement, approximately 4,241,470 shares of
TPI Common Stock and no shares of Preferred Stock are issued and outstanding.
All such shares of stock have been duly authorized and have been validly issued
and are fully paid and non-assessable. No shares of TPI Securities are subject
to outstanding convertible debt securities, other than Converted Shares with a
face amount of $1.907,500 and 905,018 warrants. Other than as set forth I this
Section 3.3, there are no options, warrants, calls, rights, commitments or
agreements of any character to which TPI is a party or by which it is bound,
obligating TPI to issue, deliver, sell, repurchase or redeem, or cause to be
issued, delivered, sold, repurchased or redeemed, any shares of the capital
stock of TPI or obligating TPI to grant, extend or enter into any such option,
warrant, call, right, commitment or agreement.
(b) The TPI Common Stock, when issued in accordance with the terms and
provisions of this Agreement, will be duly authorized, validly issued, fully
paid and non-assessable.
4.6. No Material Undisclosed Liabilities. There are no liabilities or
obligations of TPI of any nature, whether absolute, accrued, contingent, or
otherwise, that would have a Material Adverse Effect.
4.7. Tax Returns, Taxes. TPI (a) has duly filed all U.S. federal and material
state, county, local and foreign tax returns and reports required to be filed by
it, including those with respect to income, payroll, property, withholding,
social security, unemployment, franchise, excise and sales taxes and all such
returns and reports are correct in all material respects; (b) has either paid in
fully all taxes that have become due as reflected on any return or report and
any interest and penalties with respect hereto or have fully accrued on its
books or have established adequate reserves for all taxes payable but not yet
due; and (c) has made cash deposits with appropriate governmental authorities
representing estimated payments of taxes, including income taxes and employee
withholding tax obligations. No extension or waiver of any statute of
limitations or time within which to file any return has been granted to or
requested by TPI with respect to any tax. No unsatisfied deficiency, delinquency
or default for any tax, assessment or governmental charge has been claimed,
proposed or assessed against TPI, nor has TPI received notice of any such
deficiency, delinquency or default. TPI has no material tax liabilities other
than those arising in the ordinary course of business since the date hereof.
4.8. Material Contracts. TPI has no TPI Material Contracts. As used herein, the
term "TPI Material Contracts" shall mean all (i) employee benefit plans, stock
option agreements and employment, consulting or similar contracts, (ii)
contracts that involve remaining aggregate payments by TPI in excess of $1,000
(or equivalent based on applicable exchange rate) or which has a remaining term
in excess of one year, (iii) insurance policies and (iv) contracts that, if
terminated, would have an TPI Material Adverse Effect.
4.9. Litigation and Government Claims. There is no pending suit, claim, action
or litigation, or administrative, arbitration or other proceeding or
governmental investigation or inquiry against TPI to which its businesses or
assets are subject that would, severally or in the aggregate, reasonably be
expected to resulting a TPI Material Adverse Effect. To the knowledge of TPI,
there are no such proceedings threatened or contemplated that would, severally
or in the aggregate, have a TPI Material Adverse Effect. TPI is not subject to
any judgment, decree, injunction, rule or order of any court, or, to the
knowledge of TPI, any governmental restriction applicable to TPI that is
reasonably likely to have a TPI Material Adverse Effect.
4.10. Compliance with Laws. TPI has all material authorizations approvals,
licenses and order to carry on its businesses as it is now being conducted, to
own or hold under lease the properties or assets it owns or holds under lease
and to perform all of its obligations under the agreements to which it is a
party, except for instances that would not have a TPI Material Adverse Effect.
TPI has been and is, to the knowledge of TPI, in compliance with all applicable
laws, regulations and administrative orders of any country, state or
municipality or any subdivision of any thereof to which its businesses,
ownership of assets and its employment labor or its use or occupancy of
properties or any part thereof are subject, the violation of which would have a
TPI Medical Adverse Effect.
4.11. Employment Agreements. The TPI Disclosure Schedule sets forth a complete
and accurate list of all material employee benefit or compensation plans,
agreements and arrangements to which TPI is a party, including without
limitation (i) all severance, employment, consulting or similar contracts, (ii)
all material agreements and contracts with "change of control" provisions or
similar provisions and (iii) all indemnification agreements or arrangements with
directors or officers.
4.12. Intellectual Property. TPI owns or has valid, binding and enforceable
rights to use all material patents, trademarks, trade names, service marks,
service names, copyrights, applications therefor and licenses or other rights in
respect thereof ("PTI Intellectual Property") used or held for use in connection
with the business of TPI, without any known conflict with the rights of others,
except for such conflicts as do not have a TPI Material Adverse Effect. TPI has
not received any notice from any other person pertaining to or challenging the
right of TPI to use any TPI Intellectual Property or any trade secrets,
proprietary information, inventions, know-how, processes and procedures owned or
used or licensed to TPI, except with respect to rights the loss of which,
individually or in the aggregate, would not have a TPI Material Adverse Effect.
The TPI Intellectual Property represents all of the proprietary rights necessary
to operate TPI's business.
ARTICLE 5.
CONDITIONS PRCEDENT TO OBLIGATIONS OF THE SHAREOLDERS
Except as may be waived by a Shareholder as to such Shareholder only, the
obligations of each Shareholder to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction on or before the Closing
Date of each of the following conditions:
5.1. Compliance. TPI shall have, or shall have caused to be, satisfied or
complied with and performed in all material respects all terms, covenants and
conditions of this Agreement to be complied with or performed by TPI on or
before the Closing Date.
5.2. Representations and Warranties. All of the representations and warranties
made by TPI in this Agreement shall be true and correct in all material respects
at and as of the Closing Date with the same force and effect as if such
representations and warranties had been made at and as of the Closing Date,
except for changes permitted or contemplated by this Agreement; provided,
however, that notwithstanding anything herein to the contrary, this Section 6.2
shall be deemed to have been satisfied even if such representations or warrants
are not true and correct, unless the failure of any of the representations or
warranties to be so true and correct would have or would be reasonably likely to
have an TPI Material Adverse Effect.
5.3. Material Adverse Changes. There shall have occurred no TPI Material Adverse
Effect other than any such change that affects both TPI and Adaptive U.K in a
substantially similar manner.
5.4. Assignment Agreement. TPI shall have executed and delivered to Adaptive
U.K. the Assignment Agreement.
5.5. Secretary's Certificate. TPI shall have delivered to each Shareholder a
certificate of the Secretary of TPI certifying as to its Certificate of
Incorporation, Bylaws and the resolutions attached thereto and any other
corporate proceedings relating to the authorization, execution and delivery of
this Agreement and the transactions contemplated hereby.
5.6. TPI Share Certificates. TPI shall have delivered to each Shareholder one or
more certificates representing the shares of TPI Common Stock to be exchanged
for such Shareholder's Converted Shares.
5.7. Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be satisfactory to
the Shareholders and their counsel, and the Shareholders and their counsel shall
have received all such counterpart originals or certified or other copies of
such documents as they may reasonably request.
ARTICLE 6.
CONDITIONS PRECEDENT TO OBLIGATIONS OF TPI
Except as may be waived by TPI, the obligations of TPI to consummate the
transactions contemplated by this Agreement shall be subject to the
satisfaction, on or before the Closing Date, of each of the following
conditions:
6.1. Compliance. Each Shareholder shall have, or shall have caused to be,
satisfied or complied with and performed in all material respects all terms,
covenants, and conditions of this Agreement to be complied with or performed by
him, her or it on or before the Closing Date.
6.2. Representations and Warranties. All of the representations and warranties
made by each Shareholder in this Agreement shall be true and correct in all
material respects at and as of the Closing Date with the same force and effect
as if such representations and warranties had been made at and as of the Closing
Date, except for changes permitted or contemplated by this Agreement; provided,
however, that notwithstanding anything herein to the contrary, this Section 7.2
shall be deemed to have been satisfied even if such representations or
warranties are not true and correct, unless the failure of any of the
representations or warranties to be so true and correct would be reasonably
likely to have a Material Adverse Effect.
6.3. Converted Share Certificates. Each Shareholder shall have delivered to TPI
one or more certificates representing the Converted Shares to be exchanged for
TPI Common Stock.
6.4. Exchange by All Shareholders. All of the Shareholders shall have exchanged
their Converted Shares for shares of TPI Common Stock as contemplated by this
Agreement.
6.5. Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be satisfactory to
TPI and its counsel, and TPI and its counsel shall have received all such
counterpart originals or certified or other copies of such documents as they may
reasonably request.
ARTICLE 7.
MISCELLANEOUS
7.1. Termination. Subject to Section 7.3, this Agreement and the transactions
contemplated hereby and the provisions herein may be terminated at any time on
or before the Closing Date.
(a) by mutual consent of TPI and all of the Shareholders;
(b) by TPI or any Shareholder if the transactions contemplated by this
Agreement have not been consummated by ________________, 2000 or as may be
extended hereunder (the "Termination Date"), unless such failure of consummation
is due to the failure of the terminating party to perform or observe the
covenants, agreements, and conditions hereof to be performed or observed by him,
her or it at or before the Closing Date; provided, that the non-breaching
party's cause of action resulting from such failure to perform or to observe the
covenants, agreements and conditions hereof shall not be terminated; and
(c) by TPI or any Shareholder if the transactions contemplated hereby
violate any non-appealable final order, decree, or judgment of any court or
governmental body or agency having competent jurisdiction.
7.2. Entire Agreement. This Agreement and the exhibits hereto contain the
complete agreement among the parties with respect to the transactions
contemplated hereby and supersede all prior agreements and understandings among
the parties with respect to such transactions. Section and other headings are
for reference purposes only and shall not affect the interpretation or
construction of this Agreement. The parties hereto have not made any
representation or warranty except as expressly set forth in this Agreement or in
any certificate or schedule delivered pursuant hereto. The obligations of any
party under any agreement executed pursuant to this Agreement shall not be
affected by this section.
7.3. Survival of Provisions. The representations and warranties of each party
contained herein or in any exhibit, certificate, document or instrument
delivered pursuant to this Agreement shall not survive the Closing. The
covenants and agreements of Section 7.3 shall survive the Closing. The covenants
and agreements of Section 7.3, 7.6 and 7.8 shall survive the termination of this
Agreement in accordance with Section 7.1.
7.4. Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original, and
such counterparts together shall constitute only one original.
7.5. Notices. All notices, demands, requests, or other communications that may
be or are required to be given, served, or sent by any party to any other party
pursuant to this Agreement shall be in writing and shall be sent by facsimile
transmission, next-day courier or mailed by first-class, registered or certified
mail, return receipt requested, postage prepaid, or transmitted by hand
delivery, addressed as follows:
(i) If to any Shareholder:
Thomson Kernaghan & Co.
Attn: Xxxx Xxxxxxxxx
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Telephone: (000) 000-0000
Fax: (000) 000-0000
(ii) If to TPI:
Thomson Kernaghan & Co.
Attn: Xxxxx Xxxxxx
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Telephone: (000) 000-0000
Fax: 9416) 860-6352
with a Copy (which shall not constitute notice) to:
Snow Xxxxxx Xxxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
Each party may designate by notice in writing a new address to which any notice,
demand, request, or communication may thereafter be so given, served, or sent.
Each notice, demand, request, or communication that is mailed, delivered, or
transmitted in the manner described above shall deemed sufficiently given,
served, sent, and received for all purposes at such time as it is delivered to
the addressee (with the return receipt, the delivery receipt or the affidavit of
messenger being deemed conclusive evidence of such delivery) or at such time as
delivery is refused by the addressee upon presentation.
7.6. Successors; Assignments. This Agreement and the rights, interests, and
obligations hereunder shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned, by operation of law or otherwise, by any of the parties hereto without
the prior written consent of the other.
7.7. Governing Law; Venue. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York (except the choice of law
rules thereof). Venue of any action brought to enforce or interpret this
Agreement shall be commenced and maintained in a federal court sitting in New
York County, New York. The parties irrevocably consent to jurisdiction and venue
in such courts for such purposes.
7.8. Waiver and Other Action. This Agreement may be amended, modified, or
supplemented by a written instrument executed by the parties against which
enforcement of the amendment, modification or supplement is sought.
7.9. Severability. If any provision of this Agreement is held to be illegal,
invalid, or unenforceable, such provision shall be fully severable, and this
Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision were never a part hereof; the remaining provisions
hereof shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision of by its severance; and in lie of
such illegal, invalid, or unenforceable provision, there shall be added
automatically as part of this Agreement, a provision as similar in terms to such
illegal, invalid, or unenforceable provision as may be possible and be legal,
valid, and enforceable.
7.10. Enforcement. Each Shareholder acknowledges that, due to the unique nature
of his Converted Shares, the Breach of this Agreement by such Shareholder will
cause TPI irreparable damage, and therefore, TPI may enforce its rights under
this Agreement by equitable relief, including injunction and specific
performance, in addition to other remedies it may have at law or in equity.
7.11. Jurisdiction. The parties hereto hereby consent to the exclusive
jurisdiction of the Supreme Court of the State of New York and the United States
District Court for the Southern District of New York with respect to any
disputes, claims, controversies or other actions or proceedings arising under
this Agreement and agree that venue for any such action shall lie in New York
County. The parties hereto herby waive any and all right to commence any action
or proceeding before any other court or judicial body on in any other venue with
respect to the subject matter hereof.
7.12. Service of Process. Each Shareholder hereby agrees that service of process
in any action or proceeding brought under this Agreement shall be made upon
Thomson Kernaghan & Co., Attn: Xxxx Xxxxxxxxx, 000 Xxx Xxxxxx, Xxxxxxx, Xxxxxxx
X0X 0X0, and each of them hereby appoints Xxxx Xxxxxxxxx as its authorized agent
to accept such service of process and agrees that neither his failure to receive
a copy of such service nor the failure of such authorized agent to give him
notice of any such service shall impair or affect the validity of such service
or of any judgment rendered in any action or proceedings based thereon.
INWITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
TRANSFORMATION PROCESSING, INC.
By:
----------------------
Xxxx Xxxxxxx
President
----------------------
Name: Thomson Kernaghan & Co, Ltd, as agent
WRITTEN CONSENT OF
THE STOCKHOLDERS OF
TRANSFORMATION PROCESSING, INC., IN LIEU
OF MEETING
The undersigned, being holders of a majority of the shares of
Transformation Processing, Inc., a Nevada corporation (the "Corporation"),
hereby consent, pursuant to Section 78.320 of the General Corporation Law of the
State of Nevada, to the adoption of the following resolutions and to the taking
of the actions therein described and direct that this consent be filed with the
minutes and proceedings of the stockholders of the Corporation:
NOW, THEREFORE, BE IT RESOLVED, the officers and directors are
authorized and instructed to file a Certificate of Amendment to the
Certificate of Incorporation with the Secretary of State of the State
of Nevada changing the name of the Corporation to xXxxxxxxxxx.xxx,
Inc.; and it us further
RESOLVED, that the officers of the Corporation be, and each of them
hereby is, authorized and empowered, acting on behalf of the
Corporation, to make, execute, acknowledge, verify, issue and deliver
all such applications, documents, instruments and certifications, with
or without the corporate seal of the Corporation affixed thereto and
attested by the Secretary or any Assistant Secretary of the Corporation
or unattested, and to do or cause to be done all such acts and things,
and to take all such steps, and to make al such payments and
remittances as may be in each case, in the opinion of the officer
taking such action (such opinion to be conclusively evidenced by the
taking of such action by such officer), be necessary or desirable in
order to carry out the full intent and purposes of the preceding
resolution.
IN WITNESS WHEREOF, the undersigned, representing the holder of a
majority of the issued and outstanding shares of the Corporation, has
hereunto set his hands on the 10th day of May, 2000
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Thomson Kernaghan & Co, Ltd
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CALP II LP
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Dominian Capital Fund
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Fetu Holdings, Ltd.
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Sovereign Parners, Ltd.
