SHARE PURCHASE AND SALE AGREEMENT
by and among
GREENSPACE CAPITAL, L.L.C.,
ACUTUS CAPITAL, L.L.C.,
GREENWORKS CORPORATION
and TELCO-TECHNOLOGY, INC.
September 24, 2004
V.9-24-04
SHARE PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made as of the 24th day of September, 2004
AMONG:
TELCO-TECHNOLOGY, INC., a corporation formed pursuant to the laws of the
State of Delaware and having an office for business located at 68
Skyview Terrace, Clifton, New Jersey 07013 ("TTXI")
GREENWORKS CORPORATION, a company formed pursuant to the laws of the
State of Delaware and having an office for business located at 411
Hackensack Ave, Hackensack, New Jersey 07601 ("GreenWorks")
AND: GREENSPACE CAPITAL, L.L.C., a New Jersey limited liability company,
having an address of PO Box 284, Mount Arlington, New Jersey 07856, and
ACUTUS CAPITAL, L.L.C., a New Jersey limited liability company having an
address of 411 Hackensack Ave, Hackensack, New Jersey 07601 (collectively,
the "GreenWorks Shareholders")
WHEREAS:
A. The GreenWorks Shareholders own 100% of the presently issued and
outstanding GreenWorks Shares;
B. GreenWorks owns 100% of the presently issued and outstanding shares of
capital stock of ENVIRO-SCIENCES (OF DELAWARE), INC., a Delaware corporation
("ESI");
C. TTXI is a reporting company whose common stock is quoted on the OTC
Bulletin Board; and
D. The respective Boards of Directors of TTXI, GreenWorks and the GreenWorks
Shareholders deem it advisable and in the best interests of TTXI and
GreenWorks that GreenWorks become a wholly-owned subsidiary of TTXI (the
"Acquisition") pursuant to this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises
and the mutual covenants, agreements, representations and warranties contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
Definitions
1.1 In this Agreement the following terms will have the following meanings:
(a) "Acquisition" means the Acquisition, at the Closing, of GreenWorks
by TTXI pursuant to this Agreement;
(b) "Acquisition Consideration" means the Acquisition Shares and the
Demand Note, taken together;
(c) "Acquisition Shares" means the 1,000,000 fully paid and non-
assessable shares of TTXI Series A Convertible Preferred Stock to be issued to
the GreenWorks Shareholders at Closing pursuant to the terms of the
Acquisition, issued pursuant to the form of Certificate of Designation
attached hereto as Exhibit 1.1(b);
(d) "Agreement" means this share purchase agreement among TTXI,
GreenWorks, and the GreenWorks Shareholders;
(e) "Closing" means the completion, on the Closing Date, of the
transactions contemplated hereby in accordance with Article 9 hereof;
(f) "Closing Date" has the meaning set forth in Section 9.1 of this
Agreement;
(g) "Demand Note(s)" means two (2) promissory notes of TTXI made payable
to the GreenWorks Shareholders, respectively, in the aggregate principal
amount of Two Hundred Thousand Dollars ($200,000);
(h) "TTXI Accounts Payable and Liabilities" means all accounts payable
and liabilities of TTXI, on a consolidated basis, due and owing or otherwise
constituting a binding obligation of TTXI and its subsidiaries (other than a
TTXI Material Contract) as of the date hereof;
(i) "TTXI Accounts Receivable" means all accounts receivable and other
debts owing to TTXI, on a consolidated basis, as of the date hereof;
(j) "TTXI Assets" means the undertaking and all the property and assets
of the TTXI Business of every kind and description wheresoever situated
including, without limitation, TTXI Equipment, TTXI Inventory, TTXI Material
Contracts, TTXI Accounts Receivable, TTXI Cash, TTXI Intangible Assets and
TTXI Goodwill;
(k) "TTXI Business" means all aspects of any business conducted by
TTXI and its subsidiaries;
(l) "TTXI Cash" means all cash on hand or on deposit to the credit of
TTXI and its subsidiaries on the Closing Date;
(m) "TTXI Common Shares" means the shares of common capital stock of
TTXI;
(n) "TTXI Debt to Related Parties" means the debts owed by TTXI to any
affiliate, director or officer of TTXI;
(o) "TTXI Equipment" means all machinery, equipment, furniture, and
furnishings used in the TTXI Business;
(p) "TTXI Financial Statements" means, collectively, the audited
consolidated financial statements of TTXI for the fiscal year ended December
31, 2003, and the unaudited consolidated financial statements of TTXI for the
six month period ended June 30, 2004;
(q) "TTXI Goodwill" means the goodwill of the TTXI Business including the
right to all corporate, operating and trade names associated with the TTXI
Business, or any variations of such names as part of or in connection with the
TTXI Business, all books and records and other information relating to the
TTXI Business, all necessary licenses and authorizations and any other rights
used in connection with the TTXI Business;
(r) "TTXI Intangible Assets" means all of the intangible assets of TTXI
and its subsidiaries, including, without limitation, TTXI Goodwill, all trade-
marks, logos, copyrights, designs, and other intellectual and industrial
property of TTXI and its subsidiaries;
(s) "TTXI Inventory" means all inventory and supplies of the TTXI
Business as of the date hereof;
(t) "TTXI Material Contracts" means the burden and benefit of and the
right, title and interest of TTXI and its subsidiaries in, to and under all
trade and non-trade contracts, engagements or commitments, whether written or
oral, to which TTXI or its subsidiaries are entitled whereunder TTXI or its
subsidiaries are obligated to pay or entitled to receive the sum of $10,000
or more including, without limitation, any pension plans, profit sharing
plans, bonus plans, loan agreements, security agreements, indemnities and
guarantees, any agreements with employees, lessees, licensees, managers,
accountants, suppliers, agents, distributors, officers, directors, attorneys
or others which cannot be terminated without liability on not more than one
month's notice;
(u) "Place of Closing" means the offices of Dunn Lambert, L.L.C., or
such other place as TTXI, the GreenWorks Shareholders and GreenWorks may
mutually agree upon;
(v) "GreenWorks Accounts Payable and Liabilities" means all accounts
payable and liabilities of GreenWorks and ESI, due and owing or otherwise
constituting a binding obligation of GreenWorks and ESI (other than a
GreenWorks or ESI Material Contract) as of the date hereof;
(w) "GreenWorks Accounts Receivable" means all accounts receivable and
other debts owing to GreenWorks or ESI, as of the date hereof;
(x) "GreenWorks Assets" means all the property and assets of the
GreenWorks Business of every kind and description wheresoever situated
including, without limitation, GreenWorks Equipment, GreenWorks Inventory,
GreenWorks Material Contracts, GreenWorks Accounts Receivable, GreenWorks
Cash, GreenWorks Intangible Assets and GreenWorks Goodwill;
(y) "GreenWorks Business" means all aspects of any business conducted
by GreenWorks or ESI;
(z) "GreenWorks Cash" means all cash on hand or on deposit to the credit
of GreenWorks or ESI as of the date hereof;
(aa) "GreenWorks Debt to Related Parties" means the debts owed by
GreenWorks or ESI to the GreenWorks Shareholders or to any family member
thereof, or to any affiliate, director or officer of GreenWorks, ESI or the
GreenWorks Shareholders;
(bb) "GreenWorks Equipment" means all machinery, equipment, furniture,
and furnishings used in the GreenWorks Business;
(cc) "GreenWorks Financial Statements" means, collectively, the audited
consolidated financial statements of GreenWorks and ESI for the two fiscal
years ended December 31, 2003, and the unaudited consolidated financial
statements of GreenWorks for the six month period ended June 30, 2004, all of
which are to be prepared and delivered at the time or times required by
regulations of the Securities and Exchange Commission;
(dd) "GreenWorks Goodwill" means the goodwill of the GreenWorks
Business together with the exclusive right of TTXI to represent itself as
carrying on the GreenWorks Business in succession of GreenWorks subject to
the terms hereof, and the right to use any words indicating that the GreenWorks
Business is so carried on including the right to use the name "GreenWorks" or
"The GreenWorks Company" or any variation thereof as part of the name of or
in connection with the GreenWorks Business or any part thereof carried on or
to be carried on by GreenWorks, the right to all corporate, operating and
trade names associated with the GreenWorks Business, or any variations of such
names as part of or in connection with the GreenWorks Business, all telephone
listings and telephone advertising contracts, all lists of customers, books
and records and other information relating to the GreenWorks Business, all
necessary licenses and authorizations and any other rights used in connection
with the GreenWorks Business;
(ee) "GreenWorks Intangible Assets" means all of the intangible assets
of GreenWorks, including, without limitation, GreenWorks Goodwill, all
trademarks, logos, copyrights, designs, and other intellectual and industrial
property of GreenWorks and its subsidiaries;
(ff) "GreenWorks Inventory" means all inventory and supplies of the
GreenWorks Business as of the date hereof;
(gg) "GreenWorks Material Contracts" means the burden and benefit of
and the right, title and interest of GreenWorks or ESI in, to and under all
trade and non-trade contracts, engagements or commitments, whether written or
oral, to which GreenWorks or ESI is entitled in connection with the GreenWorks
Business whereunder GreenWorks is obligated to pay or entitled to receive the
sum of $10,000 or more including, without limitation, any pension plans,
profit sharing plans, bonus plans, loan agreements, security agreements,
indemnities and guarantees, any agreements with employees, lessees, licensees,
managers, accountants, suppliers, agents, distributors, officers, directors,
attorneys or others which cannot be terminated without liability on not more
than one month's notice;
(hh) "GreenWorks Related Party Debts" means the debts owed by the
GreenWorks Shareholders or by any family member thereof, or by any affiliate,
director or officer of GreenWorks or the GreenWorks Shareholders, to
GreenWorks; and
(ii) "GreenWorks Shares" means the shares of capital stock of GreenWorks.
Any other terms defined within the text of this Agreement will have the
meanings so ascribed to them.
Captions and Section Numbers
1.2 The headings and section references in this Agreement are for convenience
of reference only and do not form a part of this Agreement and are not
intended to interpret, define or limit the scope, extent or intent of this
Agreement or any provision thereof.
Section References and Schedules
1.3 Any reference to a particular "Article", "section", "paragraph",
"clause" or other subdivision is to the particular Article, section, clause
or other subdivision of this Agreement and any reference to a Schedule by
letter will mean the appropriate Schedule attached to this Agreement and by
such reference the appropriate Schedule is incorporated into and made part of
this Agreement.
Severability of Clauses
1.4 If any part of this Agreement is declared or held to be invalid for any
reason, such invalidity will not affect the validity of the remainder which
will continue in full force and effect and be construed as if this Agreement
had been executed without the invalid portion, and it is hereby declared the
intention of the parties that this Agreement would have been executed without
reference to any portion which may, for any reason, be hereafter declared or
held to be invalid.
ARTICLE 2
THE ACQUISITION
Sale of Shares
2.1 The Greenworks Shareholders hereby agree to sell to TTXI the GreenWorks
Shares in exchange for the Acquisition Consideration on the Closing Date and
to transfer to TTXI on the Closing Date a 100% undivided interest in and to
the GreenWorks Shares free from all liens, mortgages, charges, pledges,
encumbrances or other burdens with all rights now or thereafter attached
thereto.
Allocation of Consideration
2.2 The Acquisition Shares shall be allocated to the GreenWorks Shareholders
on the basis of one Acquisition Share for each one GreenWorks Share held by a
GreenWorks Shareholder, and the principal amount of the Demand Notes shall be
allocated between the GreenWorks Shareholders in the same proportions.
Adherence with Applicable Securities Laws
2.2 The GreenWorks Shareholders agree that they are acquiring the Acquisition
Shares for investment purposes and will not offer, sell or otherwise transfer,
pledge or hypothecate any of the Acquisition Shares issued to them (other
than pursuant to an effective Registration Statement under the Securities Act
of 1933, as amended) directly or indirectly unless:
(a) the sale is to TTXI;
(b) the sale is made pursuant to the exemption from registration
under the Securities Act of 1933, as amended, provided by Rule 144
thereunder; or
(c) the Acquisition Shares are sold in a transaction that does not
require registration under the Securities Act of 1933, as amended,
or any applicable United States state laws and regulations governing
the offer and sale of securities, and the vendor has furnished to
TTXI an opinion of counsel to that effect or such other written
opinion as may be reasonably required by TTXI.
The GreenWorks Shareholders acknowledge that the certificates
representing the Acquisition Shares shall bear the following legend:
NO SALE, OFFER TO SELL, OR TRANSFER OF THE SHARES REPRESENTED BY
THIS CERTIFICATE SHALL BE MADE UNLESS A REGISTRATION STATEMENT
UNDER THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED, IN RESPECT
OF SUCH SHARES IS THEN IN EFFECT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SAID ACT IS THEN IN FACT APPLICABLE
TO SAID SHARES.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF TTXI
Representations and Warranties
3.1 TTXI hereby represents and warrants to GreenWorks and the GreenWorks
Shareholders, with the intent that GreenWorks and the GreenWorks Shareholders
will rely thereon in entering into this Agreement and in approving and
completing the transactions contemplated hereby, that:
TTXI - Corporate Status and Capacity
(a) Incorporation. TTXI is a corporation duly incorporated and validly
subsisting under the laws of the State of Delaware, and is in good standing
with the office of the Secretary of State for the State of Delaware;
(b) Carrying on Business. TTXI conducts the business described in its
filings with the Securities and Exchange Commission and does not conduct any
other business. TTXI is duly authorized to carry on such business, in good
standing in Delaware and such other jurisdictions where the nature of its
business requires it to be so authorized (such certificates of authority and
good standing are included herewith in Exhibit 3.1(b)), except where the
failure to be so authorized would not have a Material Adverse Effect. The
nature of the TTXI Business does not require TTXI to register or otherwise be
qualified to carry on business in any other jurisdictions;
(c) Corporate Capacity. TTXI has the corporate power, capacity and
authority to own the TTXI Assets and to enter into and complete this
Agreement;
(d) Reporting Status; Listing. TTXI is required to file reports with
the Securities and Exchange Commission pursuant to the Securities Exchange
Act of 1934, the TTXI Common Shares are quoted on the NASD "Bulletin Board",
and all reports required to be filed by TTXI with the Securities and Exchange
Commission or NASD have been timely filed (the "Public Reports");
TTXI - Capitalization
(e) Authorized Capital. The authorized capital of TTXI consists of
200,000,000 TTXI Common Shares, $0.001 par value and 20,000,000 shares of
preferred stock, $0.001 par value, of which 28,974,944 TTXI Common Shares,
and no shares of preferred stock, are presently issued and outstanding;
(f) No Option, Warrant or Other Right. No person, firm or corporation
has any agreement, option, warrant, preemptive right or any other right
capable of becoming an agreement, option, warrant or right for the acquisition
of TTXI Common Shares or Preferred Stock, or for the purchase, subscription or
issuance of any of the unissued shares in the capital of TTXI, except as
disclosed in the Public Reports;
(g) Compliant Issuance. All of the issued capital stock of TTXI has been
issued in compliance with all federal and state securities laws;
TTXI - Records and Financial Statements
(h) Charter Documents. The charter documents of TTXI have not been
altered since its incorporation, except as filed with the Secretary of State
of Delaware;
(i) Corporate Minute Books. The corporate minute books of TTXI are
complete and each of the minutes contained therein accurately reflect the
actions that were taken at a duly called and held meeting or by consent
without a meeting. All actions by TTXI which required director or shareholder
approval are reflected on the corporate minute books of TTXI. TTXI is not in
violation or breach of, or in default with respect to, any term of its
Certificate of Incorporation (or other charter documents) or by-laws, any
statute, rule or regulation or judgment, order or decree of any court or
governmental authority, or any contract, agreement or other instrument to
which TTXI is a party or by which TTXI or its properties or assets may be
bound.
(j) TTXI Financial Statements. The TTXI Financial Statements present
fairly, in all material respects, the assets and liabilities (whether accrued,
absolute, contingent or otherwise) of TTXI, on a consolidated basis, as of
the respective dates thereof, and the sales and earnings of the TTXI Business
during the periods covered
thereby, in all material respects and have been
prepared in
accordance with generally accepted accounting principles
consistently applied;
(k) TTXI Accounts Payable and Liabilities. There are no liabilities,
contingent, disputed or otherwise, of TTXI which are not disclosed in Exhibit
3.1(k) hereto, and TTXI has not guaranteed or agreed to guarantee any debt,
liability or other obligation of any person, firm or corporation;
(l) TTXI Accounts Receivable. All the TTXI Accounts Receivable result
from bona fide business transactions and services actually rendered without,
to the knowledge and belief of TTXI, any basis for a claim by the obligor for
set-off or counterclaim;
(m) Disclosed Liabilities. Except as set forth in the TTXI Financial
Statements or as disclosed in a disclosure schedule hereto, TTXI has no
liabilities which would be required by GAAP to be set forth on a balance
sheet of TTXI;
(n) No Debt to Related Parties. Except as disclosed in Public Reports,
TTXI is not, and on Closing will not be, indebted to any affiliate, director
or officer of TTXI;
(o) No Related Party Debt to TTXI. No director or officer or affiliate
of TTXI is now indebted to or under any financial obligation to TTXI on any
account whatsoever, except for advances on account of travel and other
expenses;
(p) No Dividends. No dividends or other distributions on any shares in
the capital of TTXI have been made, declared or authorized since the date of
TTXI Financial Statements;
(q) No Payments. No payments of any kind have been made or authorized
since the date of the TTXI Financial Statements to or on behalf of officers,
directors, shareholders or employees of TTXI or under any management
agreements with TTXI, except payments made in the ordinary course of business
and at the regular rates of salary or other remuneration payable to them;
(r) No Pension Plans. There are no pension, profit sharing, group
insurance or similar plans or other deferred compensation plans affecting
TTXI;
(s) No Adverse Events. Since the date of the TTXI Financial Statements
(i) there has not been any material adverse change in the
consolidated financial position or condition of TTXI, its
liabilities or the TTXI Assets or any damage, loss or other
change in circumstances materially affecting TTXI, the TTXI
Business or the TTXI Assets or TTXI's right to carry on the
TTXI Business, other than changes in the ordinary course of
business,
(ii) there has not been any damage, destruction, loss or other
event (whether or not covered by insurance) materially and adversely
affecting TTXI, the TTXI Business or the TTXI
Assets,
(iii) there has not been any material increase in the compensation
payable or to become payable by TTXI to any of TTXI's officers,
employees or agents or any bonus, payment or arrangement made to or
with any of them,
(iv) the TTXI Business has been and continues to be carried on in the
ordinary course,
(v) TTXI has not waived or surrendered any right of material value,
and
(vi) TTXI has not discharged or satisfied or paid any lien or
encumbrance or obligation or liability other than current liabilities
in the ordinary course of business.
TTXI - Income Tax Matters
(t) Tax Returns. All tax returns and reports of TTXI required by law
to be filed have been filed and are true, complete and correct, and any taxes
payable in accordance with any return filed by TTXI or in accordance with any
notice of assessment or reassessment issued by any taxing authority have been
so paid;
(u) Current Taxes. Adequate provisions have been made for taxes payable
for the current period for which tax returns are not yet required to be filed
and there are no agreements, waivers, or other arrangements providing for an
extension of time with respect to the filing of any tax return by, or payment
of, any tax, governmental charge or deficiency by TTXI. TTXI is not aware of
any contingent tax liabilities or any grounds which would prompt a reassess-
ment including aggressive treatment of income and expenses in filing earlier
tax returns;
(v) No Liens. No tax liens have been filed with respect to the assets of
TTXI and no claims have been asserted in writing with respect to any taxes of
TTXI.
(w) Accruals. All taxes required to be accrued have been accrued or
reserved on the books and records of TTXI in accordance with generally accepted
accounting principles. TTXI has complied with all applicable laws, rules and
regulations related to the payment and withholding of taxes and has duly and
timely withheld from employees' salaries, wages and other compensation and
have paid over the appropriate taxing authorities all amounts required to be
so withheld and paid over for all periods under all applicable laws;
(x) Assessment. No written agreement or other document extending the
period of assessment or collection of any taxes, and no power of attorney
with respect to any such taxes has been executed or filed with the IRS or any
other taxing authority;
(y) No Deficiencies. Neither the IRS nor any other taxing authority is
as of the date of this Agreement asserting in writing against TTXI any
deficiency or claim for additional taxes or any adjustment of taxes
TTXI - Applicable Laws and Legal Matters
(z) Licenses. TTXI holds all licenses and permits as may be requisite
for carrying on the TTXI Business in the manner in which it has heretofore
been carried on, which licenses and permits have been maintained and continue
to be in good standing except where the failure to obtain or maintain such
licenses or permits would not have a material adverse effect on the TTXI
Business;
(aa) Applicable Laws. TTXI has not been charged with or received notice
of breach of any laws, ordinances, statutes, regulations, by-laws, orders or
decrees to which it is subject or which apply to the violation of which would
have a material adverse effect on the TTXI, and to TTXI's knowledge, TTXI is
not in breach of any laws, ordinances, statutes, regulations, bylaws, orders
or decrees;
(bb) Pending or Threatened Litigation. There is no litigation or
administrative or governmental proceedings pending or threatened against,
claimed or relating to TTXI, the TTXI Business, or any of the TTXI Assets nor
does TTXI have any knowledge of any deliberate act or omission of TTXI that
would form any material basis for any such action or proceeding (all pending
or threatened litigation or claims or governmental proceedings are disclosed
in the schedule attached hereto as Exhibit 3.1(bb));
(cc) No Bankruptcy. TTXI has not made any voluntary assignment or
proposal under applicable laws relating to insolvency and bankruptcy and no
bankruptcy petition has been filed or presented against TTXI and no order has
been made or a resolution passed for the winding-up, dissolution or
liquidation of TTXI;
(dd) Labor Matters. TTXI is not a party to any collective agreement
relating to the TTXI Business with any labor union or other association of
employees and no part of the TTXI Business has been certified as a unit
appropriate for collective bargaining or, to the knowledge of TTXI, has made
any attempt in that regard;
(ee) Finder's Fees. TTXI is not a party to any agreement which provides
for the payment of finder's fees, brokerage fees, commissions or other fees
or amounts which are or may become payable to any third party in connection
with the execution and delivery of this Agreement and the transactions
contemplated herein;
Execution and Performance of Agreement
(ff) Authorization and Enforceability. The execution and delivery of this
Agreement, and the completion of the transactions contemplated hereby, have
been duly and validly authorized by all necessary corporate action on the
part of TTXI. No consent or other action of the TTXI shareholders is
required in connection with the execution and delivery of the Agreement or
the consummation of the transactions contemplated hereby;
(gg) No Violation or Breach. Other than with respect to matters for
which waivers will be obtained prior to the Closing Date, the execution and
performance of this Agreement will not:
(i) violate the charter documents of TTXI or result in any breach
of, or default under, any loan agreement, mortgage, deed of trust,
or any other agreement to which TTXI is a party,
(ii) give any person any right to terminate or cancel any agreement
including, without limitation, the TTXI Material Contracts, or any
right or rights enjoyed by TTXI ,
(iii) result in any alteration of TTXI's obligations under any
agreement to which TTXI is a party including, without limitation,
the TTXI Material Contracts,
(iv) result in the creation or imposition of any lien, encumbrance
or restriction of any nature whatsoever in favor of a third party
upon or against TTXI or the TTXI Assets,
(v) result in the imposition of any tax liability on TTXI, or
(vi) violate any court order or decree to which TTXI is subject;
The TTXI Assets - Ownership and Condition
(hh) Business Assets. The TTXI Assets comprise all of the property and
assets of the TTXI Business, and no other person, firm or corporation owns
any assets used by TTXI in operating the TTXI Business, whether under a lease,
rental agreement or other
arrangement;
(ii) Title. TTXI is the legal and beneficial owner of the TTXI Assets,
free and clear of all mortgages, liens, charges, pledges, security interests,
encumbrances or other claims of any kind whatsoever, save and except as
disclosed in the Public Reports;
(jj) No Compensation on Termination. There are no agreements, commitments
or understandings relating to severance pay or separation allowances on
termination of employment of any employee of TTXI. TTXI is not obliged to pay
benefits or share profits with any employee after termination of employment
except as required by law;
TTXI Assets - TTXI Equipment
(kk) TTXI Equipment. The TTXI Equipment has been maintained in a manner
consistent with that of a reasonably prudent owner and such equipment is
in good working condition;
TTXI Assets - TTXI Goodwill and Other Assets
(ll) TTXI Goodwill. TTXI does not carry on the TTXI Business under any
other business or trade names. TTXI does not have any knowledge of any
infringement by TTXI or its subsidiaries of any patent, trademarks, copyright
or trade secret;
The TTXI Business
(mm) Maintenance of Business. Since the date of the TTXI Financial
Statements, TTXI has not entered into any material agreement or commitment
except in the ordinary course and except as disclosed herein;
TTXI - Acquisition Shares
(nn) Acquisition Shares. The Acquisition Shares when delivered to the
GreenWorks Shareholders pursuant to the Acquisition shall be validly issued
and outstanding as fully paid and non-assessable shares and the Acquisition
Shares shall be transferable upon the books of TTXI, in all cases subject to
the provisions and restrictions of all applicable securities laws.
TTXI - No Subsidiaries
(oo) No Subsidiaries. TTXI does not own directly or indirectly any
interest in any corporation, partnership, limited liability company or other
entity of any kind.
Non-Merger and Survival
3.2 The representations and warranties of TTXI contained herein will be
true at and as of Closing in all material respects as though such
representations and warranties were made as of such time. Notwithstanding
the completion of the transactions contemplated hereby, the waiver of any
condition contained herein (unless such waiver expressly releases a party from
any such representation or warranty) or any investigation made by GreenWorks
or the GreenWorks Shareholders; the representations and warranties of TTXI
shall survive the Closing and shall be enforceable against Donalson Capital
Corporation ("DCC") pursuant to that certain Share Purchase Agreement referred
to in Section 6.1(g) of this Agreement.
Indemnity and Survival
3.3 TTXI agrees to indemnify and save harmless GreenWorks and the GreenWorks
Shareholders from and against any and all claims, demands, actions, suits,
proceedings, assessments, judgments, damages, costs, losses and expenses (a
"Claim"), whether relating to any third parties or the parties hereto,
including any payment made in good faith in settlement of any Claim (subject
to the right of TTXI to defend any such Claim), resulting from (a) the breach
by TTXI of any representation, warranty or covenant made under this Agreement,
or from any misrepresentation in or omission from any certificate or other
instrument furnished or to be furnished by TTXI, DM or DCC to GreenWorks or
the GreenWorks Shareholders hereunder; or (b) any Claim by China Toll Roads
Holdings Limited relating to the letter of intent
described in Section
4.1(b) below. These indemnities shall survive the Closing.
ARTICLE 4
COVENANTS OF TTXI
Covenants
4.1 TTXI covenants and agrees with GreenWorks and the GreenWorks Shareholders
that it will:
(a) Conduct of Business. Until the Closing, conduct the TTXI Business
diligently and in the ordinary course consistent with the manner in which the
TTXI Business generally has been operated up to the date of execution of this
Agreement;
(b) Preservation of Business. Until the Closing, use its best efforts
to preserve the TTXI Business (including without limitation its corporate
status and good standing, and good standing with the SEC and the NASD) and
the TTXI Assets and, without limitation, preserve for GreenWorks, TTXI's
relationship with any third party having business relations with it;
(i) Exception; Cancellation or Expiration of Letter of Intent.
TTXI shall cancel or shall have confirmed the expiration or other
termination of its letter of intent with China Toll
Roads Holdings Limited ("CTRHL"), directing such cancellation or
confirmation in writing to CTRHL, and TTXI shall publicly disclose
said cancellation, expiration or other termination in an appropriate
press release prior to the execution hereof (copies of such notice
of cancellation, expiration or other termination and press
release shall be attached hereto as Exhibit 4.1(b)(i));
(c) Access. Until the Closing, give GreenWorks, the GreenWorks
Shareholders, and their representatives full access to all of the properties,
books, contracts, commitments and records of TTXI, and furnish to GreenWorks,
the GreenWorks Shareholders and their representatives all such information as
they may reasonably request;
(d) Procure Consents. Until the Closing, take all reasonable steps
required to obtain, prior to Closing, any and all third party consents
required to permit the Acquisition and to preserve and maintain the TTXI
Assets notwithstanding the change in control of GreenWorks arising from the
Acquisition;
(e) Filing of Form 14f1 and Form 8-K. Immediately upon signing of the
Agreement, the parties shall cooperate with one another and complete the
preparation of and TTXI shall (i) file with the Securities and Exchange
Commission and mail to the shareholders of TTXI a report on Form 14f1
disclosing the impending change in control of TTXI, and (ii) file a Form 8-K
with the Securities and Exchange Commission disclosing the terms of this
Agreement;
(f) Additional Due Diligence. Between the signing of this Agreement and
the Closing, TTXI shall provide GreenWorks and the GreenWorks Shareholders
with such additional information regarding recent operations of TTXI as they
may reasonably request; and
(g) Schedules and Exhibits. Between the signing of this Agreement and
the Closing, TTXI shall deliver any schedules or exhibits required to be
delivered by TTXI upon the signing of this Agreement, but not yet delivered
as of the date hereof.
Authorization
4.2 TTXI hereby agrees to authorize and direct any and all federal, state,
municipal, foreign and international governments and regulatory authorities
having jurisdiction respecting TTXI to release any and all information in
their possession respecting TTXI to the GreenWorks Shareholders. TTXI shall
promptly execute and deliver to the GreenWorks Shareholders any and all consents
to the release of information and specific authorizations which the GreenWorks
Shareholders reasonably requires to gain access to any and all such information.
Survival
4.3 The covenants set forth in this Article shall survive the Closing for
the benefit of GreenWorks and the GreenWorks Shareholders.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF
THE GREENWORKS SHAREHOLDERS
Representations and Warranties
5.1 The GreenWorks Shareholders hereby jointly and severally represent and
warrant in all material respects to TTXI, with the intent that it will rely
thereon in entering into this Agreement and in approving and completing the
transactions contemplated hereby, that:
Company Status and Capacity
(a) Formation. Each of GreenWorks, ESI and the GreenWorks Shareholders
is a company duly formed and validly subsisting under the laws of the States
of Delaware and/or New Jersey;
(b) Carrying on Business. GreenWorks and ESI carry on the GreenWorks
Business primarily in New Jersey and, except as set forth in Exhibit 5.1(b),
do not carry on any material business activity in any other jurisdiction.
GreenWorks and ESI are duly authorized to carry on the GreenWorks Business in
New Jersey and such other jurisdictions as are listed on Exhibit 5.1(b). The
nature of the GreenWorks Business does not require GreenWorks or ESI to
register or otherwise be qualified to carry on business in any other
jurisdiction except where the failure to be so qualified would not have a
Material Adverse Effect;
(c) Legal Capacity. GreenWorks and ESI have the legal power, capacity
and authority to own GreenWorks Assets, to carry on the GreenWorks Business
and to enter into and complete this Agreement. Each of the GreenWorks
Shareholders has the legal power, capacity and authority to enter into and
complete this Agreement;
GreenWorks - Capitalization
(d) Authorized Capital. The authorized capital of GreenWorks consists of
100,000,000 GreenWorks Common Shares, $0.01 par value and 10,000,000 shares of
blank check preferred stock, $0.01 par value. The authorized capital of ESI
consists of 100,000,000 shares of common stock, $0.01 par value and 10,000,000
shares of blank check preferred stock, $0.01 par value;
(e) Ownership of GreenWorks and ESI Shares. The issued and outstanding
share capital of GreenWorks will on Closing consist of 1,000,000 shares of
common stock (being the GreenWorks Shares), which shares on Closing shall be
validly issued and outstanding as fully paid and non-assessable shares. The
GreenWorks Shareholders will be at Closing the registered and beneficial owners
of the GreenWorks Shares. The GreenWorks Shares owned by the GreenWorks
Shareholders will on Closing be free and clear of any and all liens, charges,
pledges, encumbrances, restrictions on transfer and adverse claims whatsoever.
The issued and outstanding share capital of ESI will on Closing consist of
1,000,000 shares of common stock, which shares on Closing shall be validly
issued and outstanding as fully paid and non-assessable shares. GreenWorks
will be at Closing the registered and beneficial owners of the issued and
outstanding ESI capital stock. The ESI capital stock owned by GreenWorks will
on Closing be free and clear of any and all liens, charges, pledges,
encumbrances, restrictions on transfer and adverse claims whatsoever;
(f) No Option, Warrant or Other Right. No person, firm or corporation
has any agreement, option, warrant, preemptive right or any other right
capable of becoming an agreement, option, warrant or right for the acquisition
of GreenWorks Shares held by the GreenWorks Shareholders or for the purchase,
subscription or issuance of any of the unissued shares in the capital of
GreenWorks. No person, firm or corporation has any agreement, option, warrant,
preemptive right or any other right capable of becoming an agreement, option,
warrant or right for the acquisition of ESI shares held by GreenWorks
or for the purchase, subscription or issuance of any of the unissued shares
in the capital of ESI;
(g) No Restrictions. There are no restrictions on the transfer, sale or
other disposition of GreenWorks Shares contained in the charter documents of
GreenWorks or under any agreement;
GreenWorks - Records and Financial Statements
(h) Charter Documents. Except for the filing of a Certificate of
Correction of the Certificate of Incorporation of GreenWorks, the charter
documents of GreenWorks and ESI have not been altered since their respective
dates of incorporation;
(i) Minute Books. The minute books of GreenWorks and ESI are complete
and each of the minutes contained therein accurately reflect the actions that
were taken at a duly called and held meeting or by consent without a meeting.
All actions by GreenWorks or ESI which required director or shareholder
approval are reflected on the corporate minute books of GreenWorks and ESI.
Neither GreenWorks
nor ESI is in violation or breach of, or in default with
respect to, any term of its Certificate of Incorporation (or other charter
documents) or by-laws.
(j) GreenWorks Financial Statements. The GreenWorks Financial Statements
will present fairly, in all material respects, the assets and liabilities
(whether accrued, absolute, contingent or otherwise) of GreenWorks and ESI
as of the date thereof, and the
sales and earnings of the GreenWorks
Business during the periods covered thereby, in all material respects, and
will be prepared in substantial accordance with generally accepted accounting
principles consistently applied;
(k) GreenWorks Accounts Payable and Liabilities. There are no material
liabilities, contingent or otherwise, of GreenWorks which will not be reflected
in the GreenWorks Financial Statements, except those incurred in the ordinary
course of business and GreenWorks has not guaranteed or agreed to guarantee
any debt, liability or other obligation of any person, firm or corporation;
(l) GreenWorks Accounts Receivable. Any GreenWorks Accounts Receivable
result from bona fide business transactions and services actually rendered
without, to the knowledge and belief of the GreenWorks Shareholders, any
claim by the obligor for set-off or counterclaim;
(m) No Debt to Related Parties. Except as will be disclosed in the
GreenWorks Financial Statements, GreenWorks is not and on Closing will not be,
indebted to the GreenWorks Shareholders nor to any family member thereof, nor
to any affiliate, director or officer of GreenWorks or the GreenWorks
Shareholders except accounts payable on account of bona fide business
transactions of GreenWorks incurred in normal course of GreenWorks Business,
including employment agreements with the GreenWorks Shareholders, none of
which are more than 60 days in arrears;
(n) No Related Party Debt to GreenWorks. Except as will be set forth in
the GreenWorks Financial Statements, no GreenWorks Shareholder nor any
director, officer or affiliate of GreenWorks is now indebted to or under
any financial obligation to GreenWorks on any account whatsoever, except for
advances on account of travel and other expenses;
(o) No Dividends. No dividends or other distributions on any shares in
the capital of GreenWorks have been made, declared or authorized;
(p) No Payments. No payments of any kind have been made or authorized
to or on behalf of the GreenWorks Shareholders or to or on behalf of officers,
directors, shareholders or employees of GreenWorks or under any management
agreements with GreenWorks, except payments made in the ordinary course of
business and at the regular rates of salary or other remuneration payable to
them;
(q) No Pension Plans. There are no pension, profit sharing, group
insurance or similar plans or other deferred compensation plans affecting
GreenWorks, except as will be set forth in the GreenWorks Financial Statements;
(r) No Adverse Events. Since June 30, 2004:
(i) there has not been any material adverse change in the
consolidated financial position or condition of GreenWorks
or ESI, their liabilities or the GreenWorks Assets or any damage,
loss or other change in circumstances materially affecting
GreenWorks, ESI, the GreenWorks Business or the GreenWorks Assets
or GreenWorks's right to carry on the GreenWorks Business, other
than changes in the ordinary course of business,
(ii) there has not been any damage, destruction, loss or other
event (whether or not covered by insurance) materially and adversely
affecting GreenWorks, the GreenWorks Business or the GreenWorks
Assets,
(iii) there has not been any material increase in the compensation
payable or to become payable by GreenWorks to the GreenWorks
Shareholders or to any of GreenWorks's officers, employees or agents
or any bonus or payment made to or with any of them,
(iv) the GreenWorks Business has been and continues to be carried on
in the ordinary course,
(v) Neither GreenWorks nor ESI have not waived or surrendered any
right of material value,
(vi) Neither GreenWorks nor ESI has discharged or satisfied or paid
any lien or encumbrance or obligation or liability other than current
liabilities in the ordinary course of business.
GreenWorks - Income Tax Matters
(s) Tax Returns. All tax returns and reports of GreenWorks or ESI
required by law to be filed will be filed and will be true, complete and
correct, and any taxes payable in accordance with any return filed by
GreenWorks or ESI or in accordance with any notice of assessment or
reassessment issued by any taxing authority will be so paid;
(t) Current Taxes. Adequate provisions will be made for taxes payable
for the current period for which tax returns are not yet required to be filed
and there are no agreements, waivers, or other arrangements providing for an
extension of time with respect to the filing of any tax return by, or payment
of, any tax, governmental charge or deficiency by GreenWorks or ESI. Neither
GreenWorks nor ESI is aware of any contingent tax liabilities or
any grounds which would prompt a reassessment including aggressive treatment
of income and expenses in filing earlier tax returns;
GreenWorks - Applicable Laws and Legal Matters
(u) Licenses. GreenWorks and ESI hold all licenses and permits as may be
requisite for carrying on the GreenWorks Business in the manner in which it
has heretofore been carried on, which licenses and permits have been
maintained and continue to be in good standing except where the failure to
obtain or maintain such licenses or permits would not have a material adverse
effect on the GreenWorks Business;
(v) Applicable Laws. Neither GreenWorks nor ESI has been charged with or
received notice of breach of any laws, ordinances, statutes,
regulations, by-
laws, orders or decrees to which they are subject or which applies to them the
violation of which would have a material adverse effect on the GreenWorks
Business, and, to the knowledge of the GreenWorks Shareholders, neither
GreenWorks nor ESI is not in breach of any laws, ordinances, statutes,
regulations, by-laws, orders or decrees the contravention of which would
result in a material adverse impact on the GreenWorks Business;
(w) Pending or Threatened Litigation. There is no material litigation or
administrative or governmental proceeding pending or threatened against or
relating to GreenWorks, ESI, the GreenWorks Business, or any of the GreenWorks
Assets, nor do the GreenWorks Shareholders have any knowledge of any deliberate
act or omission of GreenWorks or ESI that would form any material basis for
any such action or proceeding;
(x) No Bankruptcy. Neither GreenWorks nor ESI has made any voluntary
assignment or proposal under applicable laws relating to insolvency and
bankruptcy and no bankruptcy petition has been filed or presented against
GreenWorks or ESI and no order has been made or a resolution passed for the
winding-up, dissolution or liquidation of GreenWorks or ESI;
(y) Labor Matters. Neither GreenWorks nor ESI is not party to any
collective agreement relating to the GreenWorks Business with any labor union
or other association of employees and no part of the GreenWorks Business has
been certified as a unit appropriate for collective bargaining or, to the
knowledge of the GreenWorks Shareholders, has made any attempt in that regard;
(z) Finder's Fees. Neither GreenWorks nor ESI is a party to any agreement
which provides for the payment of finder's fees, brokerage fees, commissions
or other fees or amounts which are or may become payable to any third party in
connection with the execution and delivery of this Agreement and the
transactions contemplated herein;
Execution and Performance of Agreement
(aa) Authorization and Enforceability. The execution and delivery of this
Agreement, and the completion of the transactions contemplated hereby, have
been duly and validly authorized by all necessary corporate action on the part
of GreenWorks and the GreenWorks Shareholders;
(bb) No Violation or Breach. The execution and performance of this
Agreement will not
(i) violate the charter documents of GreenWorks or result in any
breach of, or default under, any loan agreement, mortgage, deed of
trust, or any other agreement to which GreenWorks is a party,
(ii) give any person any right to terminate or cancel any agreement
including, without limitation, GreenWorks Material Contracts, or any
right or rights enjoyed by GreenWorks,
(iii) result in any alteration of GreenWorks's obligations under any
agreement to which GreenWorks is a party including, without
limitation, the GreenWorks Material Contracts,
(iv) result in the creation or imposition of any lien, encumbrance or
restriction of any nature whatsoever in favor of a third party upon or
against the GreenWorks Assets,
(v) result in the imposition of any tax liability to GreenWorks
relating to GreenWorks Assets or the GreenWorks Shares, or
(vi) violate any court order or decree to which either GreenWorks is
subject;
GreenWorks Assets - Ownership and Condition
(cc) Business Assets. The GreenWorks Assets, comprise all of the property
and assets of the GreenWorks Business, and neither the GreenWorks Shareholders
nor any other person, firm or corporation owns any assets used by GreenWorks
in operating the GreenWorks Business, whether under a lease, rental agreement
or other arrangement;
(dd) Title. GreenWorks or ESI is the legal and beneficial owner of the
GreenWorks Assets, free and clear of all mortgages, liens, charges, pledges,
security interests, encumbrances or other claims whatsoever;
(ee) No Option. No person, firm or corporation has any agreement or option
or a right capable of becoming an agreement for the purchase of any of the
GreenWorks Assets;
(ff) No Default. There has not been any default in any material obligation
of GreenWorks or ESI or any other party to be performed under any of GreenWorks
Material Contracts, each of which is in good standing and in full force and
effect and unamended, and
neither GreenWorks nor ESI is aware of any default
in the
obligations of any other party to any of the GreenWorks Material
Contracts;
(gg) No Compensation on Termination. There are no agreements, commitments
or understandings relating to severance pay or separation allowances on
termination of employment of any employee of GreenWorks or ESI. Neither
GreenWorks nor ESI is obliged to pay benefits or share profits with any
employee after termination of employment except as required by law;
GreenWorks Assets - GreenWorks Equipment
(hh) GreenWorks Equipment. The GreenWorks Equipment has been maintained
in a manner consistent with that of a reasonably prudent owner and such
equipment is in good working condition;
GreenWorks Assets - Infringement
(ii) GreenWorks Goodwill. The GreenWorks Shareholders do not have any
knowledge of any infringement by GreenWorks or ESI of any patent, trademark,
copyright or trade secret;
The Business of GreenWorks
(jj) Maintenance of Business. The GreenWorks Business has been carried on
in the ordinary course and GreenWorks has not entered into any material
agreement or commitment except in the ordinary course; and
(kk) Subsidiaries. Except for ESI, GreenWorks does not own any subsidiaries
and does not otherwise own, directly or indirectly, any shares or interest in
any other corporation, partnership, joint venture or firm.
Non-Merger and Survival
5.2 The representations and warranties of the GreenWorks Shareholders contained
herein will be true at and as of Closing in all material respects as though
such representations and warranties were made as of such time. Notwithstanding
the completion of the transactions contemplated hereby, the waiver of any
condition contained herein (unless such waiver expressly releases a party from
any such representation or warranty) or any investigation made by TTXI, the
representations and warranties of the GreenWorks Shareholders shall survive the
Closing.
Indemnity
5.3 The GreenWorks Shareholders agree to indemnify and save harmless TTXI
from and against any and all claims, demands, actions, suits, proceedings,
assessments, judgments, damages, costs, losses and expenses, including any
payment made in good faith in settlement of any claim (subject to the right of
the GreenWorks Shareholders to defend any such claim), resulting from the
breach by any of them of any representation or warranty of such party made
under this Agreement or from any misrepresentation in or omission from any
certificate or other instrument furnished or to be furnished by GreenWorks or
the GreenWorks Shareholders to TTXI hereunder.
5.4 The copy of the Acquisition Agreement dated as of June 3, 2004 (the "ESI
Asset Purchase Agreement") between Enviro-Sciences, Inc. ("Enviro-Sciences")
and ESI, previously delivered to TTXI and attached hereto as Exhibit 5.4 is a
true, correct and complete [redacted] copy. The GreenWorks Shareholders
represent that they shall use their best efforts to complete the transactions
contemplated thereby as soon as reasonably practicable. To the best
knowledge of each of the GreenWorks Shareholders, no material representation
or warranty by Enviro-Sciences, Inc. nor any statement or certificate furnished
or to be furnished by Enviro-Sciences pursuant thereto or in connection with
the transactions contemplated thereby contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements contained therein not false or misleading.
In addition, there are no facts or circumstances known to the GreenWorks
Shareholders which, either along or in the aggregate, have a reasonable
likelihood of preventing any of the transactions contemplated by the ESI
Asset Purchase Agreement from being completed.
ARTICLE 6
COVENANTS OF GREENWORKS AND THE GREENWORKS SHAREHOLDERS
Covenants
6.1 GreenWorks and the GreenWorks Shareholders covenant and agree with TTXI
that they will:
(a) Conduct of Business. Until the Closing, conduct the GreenWorks
Business diligently and in the ordinary course consistent with the manner in
which the GreenWorks Business generally has been operated up to the date of
execution of this Agreement;
(b) Preservation of Business. Until the Closing, use their best efforts
to preserve the GreenWorks Business and the GreenWorks Assets and, without
limitation, preserve for TTXI GreenWorks's relationships with their suppliers,
customers and others having business relations with them;
(c) Access. Until the Closing, give TTXI and its representatives full
access to all of the properties, books, contracts, commitments and records of
GreenWorks relating to GreenWorks, ESI, the GreenWorks Business and the
GreenWorks Assets, and furnish to TTXI and its representatives all such
information as they may reasonably request;
(d) Procure Consents. Until the Closing, take all reasonable steps required
to obtain, prior to Closing, any and all third party consents required to
permit the Acquisition and to preserve and maintain the GreenWorks
Assets, including the GreenWorks Material Contracts, notwithstanding the
change in control of GreenWorks arising from the Acquisition;
(e) Reporting and Internal Controls. From and after the Closing, the
GreenWorks Shareholders shall forthwith take all required actions to implement
internal controls on the business of GreenWorks to ensure that GreenWorks and
TTXI comply with Section 13(b)(2) of the Securities and Exchange Act of 1934;
(f) Delivery of GreenWorks Financial Statements. Within 75 days from the
Closing Date (or 64 days if the Closing Date occurs after August 23, 2004),
GreenWorks shall deliver the GreenWorks Financial Statements, including a
signed audit report thereon, to TTXI;
(g) Sale of DCC and DM Shares. Contemporaneously with the Closing hereof,
TTXI shall cause DCC to sell 8,065,376 shares of TTXI common stock owned by
DCC and shall cause DM to sell 6,002,500 shares of TTXI common stock owned by
DM, pursuant to the terms
and conditions of the Share Purchase Agreement
(attached hereto as Exhibit 6.1(g)), to be executed upon and performed
immediately subsequent to the Closing hereof;
(h) 1934 Act Reports. From and after the Closing Date, take all such
steps as are necessary to discharge all reporting obligations imposed upon them
by the Securities Exchange Act of 1934; and
(i) Schedules and Exhibits. Between the signing of this Agreement and the
Closing, GreenWorks and the GreenWorks Shareholders shall deliver any schedules
or exhibits required to be delivered by them upon the signing of this Agreement
but not yet delivered as of the date hereof.
Authorization
6.2 GreenWorks hereby agrees to authorize and direct any and all federal,
state, municipal, foreign and international governments and regulatory
authorities having jurisdiction respecting GreenWorks to release any and all
information in their possession respecting GreenWorks to TTXI. GreenWorks
shall promptly execute and deliver to TTXI any and all consents to the
release of information and specific authorizations which TTXI reasonably
require to gain access to any and all such information.
Survival
6.3 The covenants set forth in this Article shall survive the Closing for the
benefit of TTXI.
ARTICLE 7
CONDITIONS PRECEDENT
Conditions Precedent in favor of TTXI
7.1 TTXI's obligations to carry out the transactions contemplated hereby are
subject to the fulfillment of each of the following conditions precedent on or
before the Closing:
(a) all documents or copies of documents required to be executed and
delivered to TTXI hereunder will have been so executed and delivered;
(b) all of the terms, covenants and conditions of this Agreement to be
complied with or performed by GreenWorks or the GreenWorks Shareholders at
or prior to the Closing will have been complied with or performed;
(c) title to the GreenWorks Shares held by the GreenWorks Shareholders and
to the GreenWorks Assets will be free and clear of all mortgages, liens,
charges, pledges, security interests, encumbrances or other claims
whatsoever, save and except as disclosed herein, and the GreenWorks Shares
shall be duly transferred to TTXI;
(d) subject to Article 8 hereof, there will not have occurred
(i) any material adverse change in the financial position or condition
of GreenWorks, its liabilities or the GreenWorks Assets or any damage,
loss or other change in circumstances materially and adversely
affecting GreenWorks, the GreenWorks Business or the GreenWorks Assets
or GreenWorks's right to carry on the GreenWorks Business, other than
changes in the ordinary course of business, none of which has been
materially adverse, or
(ii) any damage, destruction, loss or other event, including changes to
any laws or statutes applicable to GreenWorks or the GreenWorks
Business (whether or not covered by insurance) materially and adversely
affecting GreenWorks, the GreenWorks Business or the GreenWorks Assets;
(e) the transactions contemplated hereby shall have been approved by all
other regulatory authorities having jurisdiction over the subject matter hereof,
if any; and
(f) The closing of the transactions contemplated by the ESI Asset
Purchase Agreement shall have occurred.
Waiver by TTXI
7.2 The conditions precedent set out in the preceding section are inserted
for the exclusive benefit of TTXI and any such condition may be waived in
whole or in part by TTXI at or prior to the Closing by delivering to GreenWorks
a written waiver to that effect signed by TTXI. In the event that the
conditions precedent set out in the preceding section are not satisfied on or
before the Closing, TTXI shall be released from all obligations under this
Agreement.
Conditions Precedent in Favor of GreenWorks and the GreenWorks Shareholders
7.3 The obligations of GreenWorks and the GreenWorks Shareholders to carry
out the transactions contemplated hereby are subject to the fulfillment of each
of the following conditions precedent on or before the Closing:
(a) all documents or copies of documents required to be executed and
delivered to GreenWorks hereunder will have been so executed and delivered;
(b) all of the terms, covenants and conditions of this Agreement to be
complied with or performed by TTXI at or prior to the Closing will have been
complied with or performed;
(c) TTXI will have delivered (i) the Acquisition Shares to be issued
pursuant to the terms of the Acquisition to the GreenWorks Shareholders at
the Closing and the Acquisition Shares will be registered on the books of TTXI
in the name of the GreenWorks Shareholders at the time of Closing, and
(ii) the Demand Notes to the GreenWorks Shareholders in the aggregate principal
amount of Two Hundred Thousand Dollars ($200,000), allocated as set forth in
Section 2.2 above.
(d) title to the Acquisition Shares will be free and clear of all
mortgages, liens, charges, pledges, security interests, encumbrances or other
claims whatsoever;
(e) GreenWorks and the GreenWorks Shareholders shall have completed a due
diligence review of TTXI to the sole satisfaction of GreenWorks and the
GreenWorks Shareholders;
(f) subject to Article 8 hereof, there will not have occurred
(i) any material adverse change in the financial position or condition
of TTXI, its subsidiaries, their liabilities or the TTXI Assets or any
damage, loss or other change in circumstances materially and
adversely affecting TTXI, the TTXI Business or the TTXI Assets or
TTXI's right to carry on the TTXI Business, other than changes in the
ordinary course of business, none of which has been materially adverse,
or
(ii) any damage, destruction, loss or other event, including changes to
any laws or statutes applicable to TTXI or the TTXI Business (whether
or not covered by insurance) materially and adversely affecting TTXI,
its subsidiaries, the TTXI Business or the TTXI Assets;
(g) the transactions contemplated hereby shall have been approved by all
other regulatory authorities having jurisdiction over the subject matter
hereof, if any; and
(h) The closing of the transactions contemplated by the ESI Asset
Purchase Agreement shall have occurred.
Waiver by GreenWorks and the GreenWorks Shareholders
7.4 The conditions precedent set out in the preceding section are inserted
for the exclusive benefit of GreenWorks and the GreenWorks Shareholders and
any such condition may be waived in whole or in part by GreenWorks or the
GreenWorks Shareholders at or prior to the Closing by delivering to TTXI a
written waiver to that effect signed by GreenWorks and the GreenWorks
Shareholders. In the event that the conditions precedent set out in the
preceding section are not satisfied on or before the Closing, GreenWorks and
the GreenWorks Shareholders shall be released from all obligations under this
Agreement.
Nature of Conditions Precedent
7.5 The conditions precedent set forth in this Article are conditions of
completion of the transactions contemplated by this Agreement and are not
conditions precedent to the existence of a binding agreement. Each party
acknowledges receipt of the sum of $1.00 and other good and valuable
consideration as separate and distinct consideration for agreeing to the
conditions of precedent in favor of the other party or parties set forth in
this Article.
Termination
7.6 Notwithstanding any provision herein to the contrary, if the Closing
does not occur on or before October 15, 2004, this Agreement will be at an
end and will have no further force or effect, unless otherwise agreed upon by
the parties in writing.
Confidentiality
7.7 Notwithstanding any provision herein to the contrary, the parties hereto
agree that the existence and terms of this Agreement and the ESI Asset
Purchase Agreement are confidential and that if this Agreement is terminated
pursuant to the preceding section the parties agree to return to one another
any and all financial, technical and business documents delivered to the other
party or parties in connection with the negotiation and execution of this
Agreement and shall keep the terms of this Agreement, the ESI Asset Purchase
Agreement and all information and documents received from GreenWorks and TTXI
and the contents thereof confidential and not utilize nor reveal or release
same, provided, however, that TTXI will be required to issue a news release
regarding the execution and consummation of this Agreement and file a Current
Report on Form 8-K with the Securities and Exchange Commission respecting the
proposed Acquisition contemplated hereby together with such other documents as
are required to maintain the currency of TTXI's filings with the Securities
and Exchange Commission.
ARTICLE 8
RISK
Material Change in the Business of GreenWorks
8.1 If any material loss or damage to the GreenWorks Business occurs prior
to Closing and such loss or damage, in TTXI's reasonable opinion, cannot be
substantially repaired or replaced within sixty (60) days, TTXI shall, within
two (2) days following any such loss or damage, by notice in writing to
GreenWorks, at its option, either:
(a) terminate this Agreement, in which case no party will be under any
further obligation to any other party; or
(b) elect to complete the Acquisition and the other transactions
contemplated hereby, in which case the proceeds and the rights to
receive the proceeds of all insurance covering such loss or damage
will, as a condition precedent to TTXI's obligations to carry out
the transactions contemplated hereby, be vested in GreenWorks or
otherwise adequately secured to the satisfaction of TTXI on or
before the Closing Date.
Material Change in the TTXI Business
8.2 If any material loss or damage to the TTXI Business occurs prior to
Closing and such loss or damage, in GreenWorks's reasonable opinion, cannot
be substantially repaired or replaced within sixty (60) days, GreenWorks shall,
within two (2) days following any such loss or damage, by notice in writing to
TTXI, at its option, either:
(a) terminate this Agreement, in which case no party will be under
any further obligation to any other party; or
(b) elect to complete the Acquisition and the other transactions
contemplated hereby, in which case the proceeds and the rights to
receive the proceeds of all insurance covering such loss or damage
will, as a condition precedent to GreenWorks's obligations to
carry out the transactions contemplated hereby, be vested in TTXI or
otherwise adequately secured to the satisfaction of GreenWorks on or
before the Closing Date.
ARTICLE 9
CLOSING
Closing
9.1 The Acquisition and the other transactions contemplated by this Agreement
will be closed at 10:00 a.m. the date immediately following the date which is
ten (10) days after the date of mailing to the TTXI shareholders of record of
a report on Form 14f1 disclosing the impending change of control of TTXI, or
such other date as TTXI, the GreenWorks Shareholders and GreenWorks shall
mutually agree upon (the "Closing Date"), at the Place of Closing in accordance
with the closing procedure set out in this Article.
Documents to be Delivered by GreenWorks
9.2 On or before the Closing, GreenWorks and the GreenWorks Shareholders will
deliver or cause to be delivered to TTXI:
(a) the original or certified copies of the charter documents of GreenWorks
and all corporate records documents and instruments of GreenWorks, the
corporate seal of GreenWorks and all books and accounts of GreenWorks;
(b) all reasonable consents or approvals required to be obtained by
GreenWorks for the purposes of completing the Acquisition and preserving
and maintaining the interests of GreenWorks under any and all GreenWorks
Material Contracts and in relation to GreenWorks Assets;
(c) certified copies of such resolutions of the shareholders and directors
of GreenWorks as are required to be passed to authorize the execution,
delivery and implementation of this Agreement;
(d) an acknowledgement from GreenWorks and the GreenWorks Shareholders of
the satisfaction of the conditions precedent set forth in section 7.3
hereof;
(e) the certificates or other evidence of ownership of the GreenWorks
Shares, together with such other documents or instruments required to
effect transfer of ownership of the GreenWorks Shares to TTXI;
(f) any and all documents reasonably requested by counsel to TTXI in
connection with the ESI Asset Purchase Agreement and the closing
thereunder; and
(g) such other documents as TTXI may reasonably require to give effect
to the terms and intention of this Agreement.
Documents to be Delivered by TTXI
9.3 On or before the Closing, TTXI shall deliver or cause to be delivered to
GreenWorks and the GreenWorks Shareholders:
(a) an original or certified copies of the charter documents of TTXI and
all corporate records, documents and instruments of TTXI, the corporate seal
of TTXI and accounts of TTXI;
(b) all reasonable consents or approvals required to be obtained by TTXI
for the purposes of completing the Acquisition and preserving and
maintaining the interests of TTXI under any and all TTXI Material Contracts
and in relation to the TTXI Assets;
(c) share certificates representing the Acquisition Shares duly registered
in the names of the GreenWorks Shareholders;
(d) Demand Notes made payable to the GreenWorks Shareholders in the
aggregate principal amount of Two Hundred Thousand Dollars ($200,000);
(e) certified copies of such resolutions of the directors of TTXI as are
required to be passed to authorize the execution, delivery and implementation
of this Agreement;
(f) a certified copy of a resolution of the directors of TTXI dated as of
the Closing Date appointing the nominees of GreenWorks as officers of TTXI,
appointing the nominees of the GreenWorks Shareholders to the board of
directors of TTXI, and accepting the resignation of DM as a director and
officer of TTXI;
(g) resignation of all other current directors and officers of TTXI;
(h) an acknowledgement from TTXI of the satisfaction of the conditions
precedent set forth in section 7.1 hereof; and
(i) such other documents as GreenWorks may reasonably require to give
effect to the terms and intention of this Agreement.
ARTICLE 10
POST-CLOSING MATTERS
Contemporaneous Matters
Immediately subsequent to the Closing hereof, TTXI, GreenWorks and the
GreenWorks Shareholders, as the case may be, shall execute, deliver and fully
discharge its obligations under the Share Purchase Agreement (attached hereto
as Exhibit 6.1(g)).
Subsequent Matters
Forthwith after the Closing, TTXI, GreenWorks and the GreenWorks
Shareholders, as the case may be, agree to use all their best efforts to:
(a) issue a news release reporting the Closing;
(b) not more than seventy five (75) days following the Closing, file an
amended Form 8-K which includes the audited financial statements of GreenWorks
as well as pro forma financial information of GreenWorks and TTXI as required
by Item 310 of Regulation SB as promulgated by the Securities and Exchange
Commission; and
(c) file reports on Forms 13D and 3 with the Securities and Exchange
Commission disclosing the acquisition of the Acquisition Shares by the
GreenWorks Shareholders.
ARTICLE 11
GENERAL PROVISIONS
Notice
11.1 Any notice required or permitted to be given by any party will be deemed
to be given when in writing and delivered to the address for notice of the
intended recipient by personal delivery, prepaid single certified or registered
mail, or telecopier. Any notice delivered by mail shall be deemed to have been
received on the fourth business day after and excluding the date of mailing,
except in the event of a disruption in regular postal service in which event
such notice shall be deemed to be delivered on the actual date of receipt.
Any notice delivered personally or by telecopier shall be deemed to have been
received on the actual date of delivery.
Addresses for Service
11.2 The address for service of notice of each of the parties hereto is as
follows:
(a) TTXI:
Telco-Technology, Inc.
68 Skyview Terrace
Clifton, New Jersey 07013
Attn: Donald McKelvey, Chairman
Phone: (973) 523-0835
Telecopier: (973) 523-0835
with copies to:
David M. Kaye, Esq.
Danzig, Kaye, Cooper & Fiore
30A Vreeland Road
Florham Park, New Jersey 07932
Phone: (973) 443-0600
Telecopier: (973) 443-0609
(b) GreenWorks or the GreenWorks Shareholders:
411 Hackensack Plaza
Hackensack, New Jersey 07601
Attn: James L. Sonageri
Phone: (201) 646-1000
Telecopier: (201) 646-1084
with copies to:
Richard Lambert, Esq.
Dunn Lambert, L.L.C.
80 East State Route 4
Paramus, New Jersey 07652
Phone: 201-291-0700
Telecopier: 201-291-0140
and,
Robert Brantl, Esq.
322 4th Street
Brooklyn, New York 11215
Phone: (718) 768-6045
Change of Address
11.3 Any party may, by notice to the other parties change its address for
notice to some other address in North America and will so change its address
for notice whenever the existing address or notice ceases to be adequate for
delivery by hand. A post office box may not be used as an address for service.
Further Assurances
11.4 Each of the parties will execute and deliver such further and other
documents and do and perform such further and other acts as any other party
may reasonably require to carry out and give effect to the terms and intention
of this Agreement.
Expenses
11.5 Each of the parties hereto shall pay its own fees and expenses
(including the fees of any attorneys, accountants, or others engaged by such
party) in connection with this Agreement and the transactions contemplated
hereby whether or not the transactions contemplated hereby are consummated.
Entire Agreement
11.6 The provisions contained herein constitute the entire agreement among
GreenWorks, the GreenWorks Shareholders and TTXI respecting the subject matter
hereof and supersede all previous communications, representations and
agreements, whether verbal or written, among GreenWorks, the GreenWorks
Shareholders and TTXI with respect to the subject matter hereof.
Enurement
11.7 This Agreement will enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators,
successors and permitted assigns.
Assignment
11.8 This Agreement is not assignable without the prior written consent of
the parties hereto.
Counterparts
11.9 This Agreement may be executed in counterparts, each of which when
executed by any party will be deemed to be an original and all of which
counterparts will together constitute one and the same Agreement. Delivery of
executed copies of this Agreement by telecopier will constitute proper
delivery, provided that originally executed counterparts are delivered to the
parties within a reasonable time thereafter.
Applicable Law
11.10 This Agreement shall be governed by the laws of the State of New Jersey
and the United States of America (regardless of the laws that might be
applicable under principles of conflicts of law or international law) as to
all matters including, but not limited to, matters of validity, construction,
effect and performance.
Consent to Jurisdiction.
11.11 The parties hereto hereby submit and consent to the exclusive venue
and jurisdiction of the Superior Court of the State of New Jersey, County of
Bergen, in respect of the interpretation and enforcement of the provisions of
this Agreement, and hereby waive and agree not to assert as a defense in any
action, suit or proceeding for the interpretation or enforcement of this
Agreement, that it is not subject thereto or that such action, suit or
proceeding may not be brought or is not maintainable in said courts or that
this Agreement may not be enforced in or by said courts or that its property
is exempt or immune from execution, that the suit, action or proceeding is
brought in an inconvenient forum, or that the venue of the suit, action or
proceeding is improper. The parties agree that service of process may be
made in any manner permitted by the laws of the State of New Jersey or the
federal laws of the United States in any such action, suit or proceeding
against any party with respect to this Agreement, and TTXI and the GreenWorks
Shareholder hereby irrevocably designate and appoint Richard Lambert, Esq.,
as their respective authorized agents upon which process may be served in any
such action, suit or proceeding, it being understood that such appointment
and designation shall become effective without any further action on the part
of the parties. Service of process upon such authorized agent shall be deemed
in every respect, effective service of process upon a party and shall remain
effective until any party shall appoint another agent for service or process
acceptable to the other Party. The parties agree that final judgment (with
all right of appeal having expired or been waived) against it in any such
action, suit or proceeding shall be conclusive and that the other party is
entitled to enforce such judgment in any other jurisdiction by suit on the
judgment, a certified copy of which shall be conclusive evidence of the fact
and amount of indebtedness arising from such judgment.
Exchange Act Reports and Rule 144
11.12 The GreenWorks Shareholders shall cause TTXI to continue to file in a
timely manner all required reports pursuant to the Securities Exchange Act of
1934 as amended. Additionally, the GreenWorks Shareholders shall cause TTXI
to promptly comply with any request of any current stockholder of TTXI to
sell any shares of the TTXI Common Shares pursuant to Rule 144 subject to the
receipt of appropriate paperwork. In addition to the foregoing, the parties
agree that any time commencing three months after Closing, DCC shall be
entitled to execute and deliver to TTXI a standard Rule 144(k) representation
letter in such form as attached hereto as Exhibit 11.12 (the "Representation
Letter") covering all of the DCC Remaining Shares, as such term is defined in
the Share Purchase Agreement (attached hereto as Exhibit 6.1(g)), and will
deliver to TTXI the stock certificates representing the DCC Remaining Shares.
Upon receipt of such Representation Letter and the aforesaid stock certificates,
TTXI and the GreenWorks Shareholders will, without any cost to DCC, cause the
TTXI transfer agent to deliver to DCC as soon as possible (but no later than
five business days after receipt of the Representation Letter and stock
certificates) stock certificates in such denominations as requested by DCC
(the "Replacement Certificates"). Each of the Replacement Certificates shall
be issued by TTXI as free trading without any legends thereon and without any
"stop transfer" noted with respect thereto.
IN WITNESS WHEREOF the parties have executed this Agreement effective as of
the day and year first above written.
TELCO-TECHNOLOGY, INC.
By: /s/Donald McKelvey
-----------------------------------
Donald McKelvey, Chairman and CEO
GREENSPACE CAPITAL, L.L.C.
By: /s/Kevin Kreisler
-----------------------------------
Kevin Kreisler, Member
ACUTUS CAPITAL, L.L.C.
By: /s/James Sonageri
-----------------------------------
James Sonageri, Member
GREENWORKS CORPORATION
By: /s/James Grainer
-----------------------------------
James Grainer, President
SCHEDULE OF EXHIBITS
1.1(b) Certificate of Designation and TTXI Board Resolution for Issuance of
Acquisition Shares
3.1(b) TTXI Certificates of Good Standing and Authority
3.1(k) Schedule of TTXI Liabilities
3.1(bb) Schedule of TTXI Pending or Threatened Litigation or Governmental
Proceedings
4.1(b)(i) Copies of TTXI Cancellation or Confirmation of Expiration and/or
other Termination of TTXI Letter of Intent with CTRHL, and Related
Press Release
5.1(b) Schedule of Exceptions Regarding Corporate Qualifications/
Certificates of Authority
6.1(g) Share Purchase Agreement by and among TTXI and the GreenWorks
Shareholders and Donalson Capital Corporation and Don McKelvey
EXHIBIT 6.1(G)
SHARE PURCHASE AGREEMENT
THIS AGREEMENT is made as of the ____ day of October, 2004
AMONG:
DONALD MCKELVEY, an individual residing at 68 Skyview Terrace, Clifton, New
Jersey 07013 ("McKelvey")
AND:
DONALSON CAPITAL CORPORATION, a company formed pursuant to the laws of the
State of New Jersey and having an office for business located at 68 Skyview
Terrace, Clifton, New Jersey 07013 ("DCC") (McKelvey and DCC being hereinafter
collectively referred to as "Sellers")
AND:
TELCO-TECHNOLOGY, INC., a corporation formed pursuant to the laws of the
State of Delaware and having an office for business located at 68 Skyview
Terrace, Clifton, New Jersey 07013 ("TTXI")
AND:
GREENSPACE CAPITAL, L.L.C., a New Jersey limited liability company
("Greenspace"), and ACUTUS CAPITAL, L.L.C., a New Jersey limited liability
company ("Acutus") (Greenspace and Acutus being hereafter collectively
referred to as "Purchasers") with offices located at PO Box 284, Mount
Arlington, New Jersey 07856 and 411
Hackensack Ave, Hackensack New Jersey
07601, respectively
WHEREAS:
A. McKelvey is the owner and holder of record of 6,002,500 shares of
common stock of TTXI;
B. DCC is the owner and holder of record of 8,500,000 shares of common
stock of TTXI;
C. DCC desires to assume and guarantee the payment of certain accounts
payable and liabilities of TTXI existing as of the date hereof, as set forth
in Section 2.1 below; and
D. The Purchasers desire to purchase 6,002,500 shares of TTXI common stock
from McKelvey and 8,065,376 shares of TTXI common stock from DCC
(hereinafter referred to as the "Sellers' Stock"), and McKelvey and DCC desire
to sell, or cause to be sold, all said shares of stock upon the terms and
subject to the conditions hereinafter set forth.
E. The 434,624 shares of TTXI common stock to be retained by DCC as a result
of these transactions comprise a portion of the 500,000 shares of TTXI issued
to DCC on March 9, 2001, previously represented by stock certificate
no. 1504 of TTXI.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises
and the mutual covenants, agreements, representations and warranties contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE OF SELLERS' STOCK
Purchase and Sale
1.1 Subject to the terms and conditions hereinafter set forth, at the closing
of the transaction contemplated hereby, Sellers shall sell, convey and
transfer, or cause to be sold, conveyed and transferred, the Sellers' Stock,
and deliver to the Purchasers certificates representing such stock, and the
Purchasers shall purchase the Sellers' Stock in consideration of the purchase
price set forth herein. The certificates representing Sellers' Stock shall be
duly endorsed for transfer or accompanied by appropriate stock transfer
powers duly executed in blank, in either case with medallion signature
guarantees in the customary fashion.
Purchase Price
1.2 The Purchasers shall at the Closing pay the aggregate sum of TWO
HUNDRED THOUSAND DOLLARS ($200,000) in immediately available funds on a pro
rated basis to Sellers for the purchase of the Sellers' Stock.
ARTICLE 2
ASSUMPTION OF LIABILITIES
Assumption
2.1 DCC shall assume and guarantee the payment of all of the accounts
payable and liabilities of TTXI existing as of the date hereof on a
consolidated basis or otherwise constituting a binding obligation of TTXI
in excess of the Listed Liabilities. For the purposes hereof, the "Listed
Liabilities" are only those accounts payable and liabilities listed on
Schedule 2.1 attached hereto and hereby made a part hereof.
Notwithstanding anything herein to the contrary, DCC shall have no more than
ONE HUNDRED EIGHTY THOUSAND DOLLARS ($180,000) hereunder for any
accounts payable and liabilities in excess of the Listed Liabilities.
ARTICLE 3
RIGHTS AND RESTRICTIONS
Adjustment
3.1 GreenWorks Merger. DCC's remaining ownership upon the Closing hereof of
434,624 shares of TTXI common stock (the "DCC Remainder Shares") represents
one point five (1.5) percent of the issued and outstanding common stock in
TTXI. The DCC Remainder Shares shall be subject to adjustment, such that
the percentage of TTXI issued and outstanding
common stock held by DCC at
closing (one point five (1.5) percent) shall remain constant until, and only
until, December 31, 2005. If between the Closing and December 31, 2005, TTXI
issues any additional shares of common stock, then, upon each occurrence
thereof, DCC shall be issued such additional shares (the "DCC Additional
Shares") of common stock so that the sum of DCC Remainder Shares held by DCC
at Closing and the sum of any and all DCC Additional Shares issued hereunder
shall equal one point five (1.5) percent of the then issued and outstanding
common stock of TTXI. Notwithstanding the foregoing, in the event that all
of the Series A Preferred Stock of TTXI held by the Purchasers as of the
Closing has not been converted into shares of common stock on or prior to
December 31, 2005, then DCC shall be issued such number of DCC
Additional Shares which would be required to be issued if all of the Series
A Preferred Stock owned by the Purchasers had in fact been converted into
TTXI common stock. Any DCC Additional Shares due hereunder shall be delivered
to DCC as soon as practicable after the occurrence of the event which requires
the issuance of the DCC
Additional Shares, but no later than five (5)
business days thereafter.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers hereby jointly and severally represent and warrant to the
Purchasers as follows:
4.1 Ownership. Each of the Sellers is the sole owner, of record and
beneficially, of the number of shares of the common capital stock of TTXI set
forth opposite his name above. All such shares are owned by the Sellers,
free and clear of any and all liens, pledges, claims, options, charges, or
other encumbrances; and upon delivery thereof and payment therefor as herein
contemplated, Sellers shall convey to the Purchasers, good and marketable
title thereto, free and clear of any
liens, pledges, claims, options,
charges, or other encumbrances.
4.2 Organization and Good Standing. Each of the Sellers represents and
warrants that he has not taken any action which would adversely affect TTXI's
status as a corporation duly organized, validly existing and in good standing
under the laws of State of Delaware.
4.3 Options and Warrants. Each of the Sellers represents and warrants that
he has taken no action to grant to any third party any option or other
rights to acquire the Sellers' Stock.
4.4 Authority and Compliance. This Agreement has been duly executed and
delivered by the Sellers, and each of the Sellers has the full, absolute and
unrestricted power, authority and capacity to execute and deliver this
Agreement and to consummate and perform the transactions contemplated hereby.
This Agreement constitutes the legal, valid and binding obligation of each of
the Sellers, enforceable against him in accordance with its terms. Neither
the execution and delivery of this Agreement by the Sellers nor the
consummation and performance of the transactions contemplated hereby in
accordance with the terms hereof (A) requires the approval or consent of, or
notice to, any governmental authority or other third party, or (B) will
conflict with or result in the breach or default under any agreement or
instrument to which either of the Sellers is a party or by which he (or his
property) is bound.
4.5 Assets and Properties. Neither of the Sellers has taken any action
that would adversely affect TTXI's title to, and right of possession of, all
assets and properties reflected on its balance sheet, or acquired by TTXI
subsequent to the date of the balance sheet. No personal property utilized
in or reasonably necessary to the operations or business of TTXI have been
removed by the Sellers from TTXI's premises.
4.6 Legal Proceedings, Etc. Except as set forth in Schedule 4.6 attached
hereto, (i) there is no dispute, claim, action, suit, proceeding, arbitration
or investigation, either administrative or judicial, pending or threatened by
or against or affecting TTXI or its business operations, or any of its assets
or properties, whether or not covered by insurance, before or by any court or
governmental authority, or before any arbitrator of any kind, and (ii) TTXI
is not subject to or in default with respect to any indictment, order,
injunction, decree or award of any court, arbitrator or governmental agency.
4.7 Fair Consideration. Each of the Sellers is familiar with TTXI, its
assets, liabilities, fiscal affairs, operations and values, and he is fully
satisfied that theconsideration to be paid to him for the Sellers' stock
is fair and reasonable, and he is not relying upon any representations and
warranties as to the adequacy of the consideration to be paid to him.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
The Purchasers hereby jointly and severally represent and warrant to the
Sellers as follows:
5.1 Legal Proceedings, etc. To the best of the knowledge of the Purchasers,
there is no claim, action, suit, proceeding, arbitration or investigation,
either administrative or judicial, pending or threatened by or against or
affecting the Purchasers which would call into question the validity or
legality of the transactions contemplated hereby.
5.2 Authority and Compliance. This Agreement has been duly executed and
delivered by the Purchasers, and the Purchasers have the full, absolute and
unrestricted power, authority and capacity to execute and deliver this
Agreement and perform the transactions contemplated hereby. This Agreement
constitutes the legal, valid and binding obligation of the Purchasers,
enforceable against each of them in accordance with its terms. The execution,
delivery and performance of this Agreement by the Purchasers will not conflict
with or result in the breach or violation of any term or provision of, or
constitute a default under
any mortgage, note or other agreement or
instrument to which the Purchasers are a party or by which Purchasers are
bound.
5.3 No Intent to Distribute. Each of the Purchasers is acquiring the Sellers'
stock for investment purposes only and not with a view to the sale or
distribution of any thereof, within the meaning of Section 4(2) of the
Securities Act of 1933.
5.4 Broker's or Finder's Fee. Neither of the Purchasers has taken any action
which could in any way obligate the Sellers to pay any broker's or finder's
fee by reason of the transactions herein contemplated.
ARTICLE 6
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASERS
The obligation of the Purchasers to proceed with the Closing shall be
subject to the fulfillment of the obligations herein contained, the delivery
of documents herein referred to, and the fulfillment of the conditions set
forth below, the fulfillment of any of which the Purchasers may waive in
writing:
6.1 Representations and Warranties. The representations and warranties of
the Sellers which are contained in Article 4 of this Agreement shall be true
in all material respects as of the Closing as though such representations and
warranties were made as of the Closing.
6.2 Covenants and Agreements. The Sellers shall have performed and complied
in all material respects with all covenants and agreements
required by this
Agreement to be performed or complied with by them prior to or at the date of
Closing.
6.3 Sellers' Certificate. The Sellers shall have delivered to the Purchasers
a certificate, in form and substance satisfactory to the Purchasers, dated
the date of Closing, certifying to the fulfillment of the conditions specified
in Sections 6.1 and 6.2 hereinabove.
6.4 Approval of Counsel. All actions, proceedings, agreements and documents
required to carry out the transactions contemplated by this Agreement and
incidental thereto and all other related legal matters shall have been
resolved satisfactorily to and approved by Richard J. Lambert, Esq. counsel
to the Purchasers, in his reasonable discretion, and such counsel shall have
been furnished with such copies (certified, if requested) of all such actions,
proceedings, instruments, agreements
and documents as he shall have
reasonably requested.
ARTICLE 7
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS
The obligation of the Sellers to proceed with the Closing shall be
subject to
the fulfillment of the obligations herein contained, the delivery
of documents herein referred to, and the fulfillment of the conditions set
forth below, the fulfillment of any of which the Sellers may waive in writing:
7.1 Representations and Warranties. The representations and warranties of
the Purchasers which are contained in Article 5 of this Agreement, shall be
true in all material respects as of the Closing as through such representations
and warranties were made as of the Closing.
7.2 Covenants and Agreements. The Purchasers shall have performed and
complied in all material respects with all covenants and agreements required
by this Agreement to be performed or complied with by them prior to or at the
date of Closing.
7.3 Officer's Certificate. Each of the Purchasers shall have delivered to
the Sellers a certificate, in form and substance satisfactory to the Sellers,
dated the date of Closing, certifying, in such detail as the Sellers may
reasonably request, to the fulfillment of the conditions specified in Section
7.1 and 7.2 hereinabove.
7.4 Approval of Counsel. All actions, proceedings, instruments, agreements
and documents required to carry out the transactions contemplated by this
Agreement and incidental thereto and all other related legal matters
shall have been resolved satisfactorily to and approved by Danzig, Kaye,
Cooper, Fiore & Kay, L.L.P., counsel to the Sellers, in their reasonable
discretion, and such counsel shall have been furnished with such copies
(certified, if requested) of all such actions,
proceedings, instruments,
agreements and documents as they have reasonably requested.
ARTICLE 8
THE CLOSING
8.1 Time, Date and Place. The closing hereunder (the "Closing") shall take
place at 10:00 a.m. on ___________, 2004 (the "Closing Date"), and shall be
conducted at the offices of Dunn Lambert, L.L.C., The Atrium, East 80 Route 4,
Paramus, New Jersey 07652.
8.2 Documents to be Delivered by the Purchasers at the Closing. At the
Closing hereunder, the Purchasers shall deliver to the Sellers:
(a) The sum of Two Hundred Thousand Dollars ($200,000) by cashier's check
or wire transfer of funds;
(b) A duly executed certificate in the form described in Section 7.3 above.
8.3 Documents to be Delivered by the Seller. At the Closing hereunder, the
Sellers shall deliver to the Purchasers:
(a) Stock certificates representing all of the shares of Sellers' Stock
to be purchased and sold hereunder, together with duly executed stock
powers;
(b) A duly executed certificate in the form described in Section 6.3
above.
8.4 Further Actions. The parties further agree to deliver, each to the other,
after the Closing, any further documents or evidence of title and to give such
undertakings that may reasonably be required to effectuate this Agreement and
to carry out the intent and purpose hereof.
ARTICLE 9
INDEMNIFICATION
9.1 Indemnification by the Purchasers. The Purchasers shall indemnify the
Sellers and hold them harmless from and against any and all loss, cost,
liability and expense, including attorneys' fees and costs of suit, which the
Sellers may incur as a result of any damage or deficiency resulting from any
misrepresentation, breach of warranty, or nonfulfillment of any agreement on
the part of the Purchasers under this Agreement, or for any material
misrepresentation in or omissions from any other instrument furnished or to
be furnished to the Sellers under this Agreement.
9.2 Indemnification by the Sellers. DCC shall indemnify the Purchasers and
hold them harmless from and against any and all loss, cost, liability and
expense, including attorneys' fees and costs of suit, which they may incur as
a result of (i) any damage or deficiency resulting from any misrepresentation,
breach of warranty or nonfulfillment of any agreement on the part of the
Sellers under this Agreement, or (ii) any damage or deficiency resulting from
any misrepresentation, breach of warranty or nonfulfillment of any agreement on
the part of TTXI under that certain Share Purchase and Sale Agreement dated
today by and among TTXI, Purchasers and GreenWorks (the "TTXI GreenWorks
Agreement"), or (iii) any claim, demand or action, whether based in tort,
statute or otherwise (a "Claim"), by a creditor of TTXI with respect to any
liabilities of TTXI existing as of the date hereof in excess of the Listed
Liabilities; and (iv) any Claim by China Toll Roads Holdings Limited relating
to that certain letter of intent described in Section 4.1(b) of the TTXI-
GreenWorks Agreement. Notwithstanding anything herein to the contrary, the
indemnification to be provided by DCC hereunder shall not exceed ONE HUNDRED
EIGHTY FIVE THOUSAND DOLLARS ($185,000) in aggregate.
9.3 Claims for Indemnification. Whenever any claim of indemnification shall
arise in favor of a party (the "indemnified party") under this Article 9, the
indemnified party shall notify the other party or parties (the "indemnifying
party") in writing by personal delivery or certified mail, return receipt
requested, within thirty (30) days after the indemnified party has actual
knowledge of the facts constituting the basis for such a claim. Such notice
shall specify all facts known to the indemnified party giving rise to such
indemnification right and the amount or an estimate of the amount of the
liability arising therefrom. The right to indemnification hereunder and the
amount or the estimated amount thereof, as set forth in such notice, shall be
deemed agreed to by the indemnifying party unless, within thirty (30) days
after the receipt of such notice, the indemnified party is notified in writing
that the indemnifying party disputes the right to indemnification as set
forth or estimated in such notice. The obligations of the Purchasers and DCC
to indemnify under this Article 9 shall expire six (6) years from the Closing
Date.
9.4 Third Party Claims. If the facts giving rise to any such indemnification
right shall involve any actual or threatened claim or demand by any third
party against the indemnified party or any possible claim by the indemnified
party against any third party, such claim by or against a third party shall be
referred to as a "Third-Party Claim". If the indemnifying party gives the
indemnified party an agreement in writing, in form and substance satisfactory
to counsel to the indemnified party, agreeing to indemnify and save the
indemnified party harmless from all costs and liability arising from any Third-
Party Claim, the indemnifying party may, at its or their own expense, undertake
full responsibility for the defense or prosecution of such Third-Party Claim
and may contest or settle it on such terms as it or they may choose,
except that no settlement of any action involving claims other than for money
damages may be made without the prior written consent of the indemnified party
(such consent not to be unreasonably withheld). If by reason of any Third-
Party Claim, a lien, attachment, garnishment or execution is placed upon any
asset thereof, or any of the property or assets of the indemnified party, then
the indemnifying party if it or they desire to exercise their rights to defend
or prosecute such suit, shall furnish a satisfactory indemnity bond to obtain
the prompt release of such lien, attachment, garnishment or execution.
9.5 Cooperation. The parties to this Agreement shall execute such powers of
attorney as may be necessary or appropriate to permit participation of counsel
selected by any party hereto and, as may reasonably be related to any such
claim or action, shall provide access to the counsel, accountants and other
representatives of the other party during normal business hours to all
properties, personnel, books, tax records, contracts, commitments and all
other business records of such other party and will furnish to such other party
copies of all such documents as may reasonably be requested (certified, if
requested).
9.6 Post-Closing Adjustments. If Purchasers shall be entitled to
indemnification pursuant to the provisions of this Agreement, including,
without limitation, indemnification based upon a claimed breach by DCC of
Section 2.1 hereof, Purchasers shall be entitled to an immediate right of
set-off against any monies or property owed by Purchasers to DCC before
seeking direct recovery from DCC. Such right of set-off shall be exercised,
if at all, only in accordance with the following procedure:
(a) In the event that Purchasers assert that they are entitled to
indemnification pursuant to Article 9 hereof (other than a Third-Party Claim
which Sellers shall have undertaken to defend or prosecute in accordance with
Section 9.4 hereof), then Purchasers shall be entitled, in their discretion,
to set-off against monies or property owed by Purchasers a sum or value
reasonably sufficient to cover the amount asserted by Purchasers to be subject
to indemnification. In such event, Purchasers shall mail or deliver to DCC a
written notice (the "Set-Off Notice') of such claim specifying in reasonable
detail the nature and basis of such claim and the amount thereof and shall
promptly respond to any reasonable request for additional information regarding
such claim.
(b) If, within fifteen (15) days after receipt of the Set-Off Notice, DCC
responds with a notice of objection to the Set-Off Notice (the notice of
objection being hereinafter referred to as the "Objection Notice"), then all
parties shall negotiate in good faith to resolve the indemnification claim.
(c) If the parties fail to resolve the indemnification claim within
fifteen (15) days after the Purchasers' receipt of the Objection Notice, then
they shall submit to arbitration, pursuant to the Commercial Rules of the
American Arbitration Association, in northern New Jersey, and the arbitration
determination shall be final and binding upon the parties hereto. In the event
that either party's position is substantially confirmed as a result of the
arbitration proceedings, then the other party shall pay the prevailing party's
costs and expenses of arbitration, including reasonable attorneys' fees and
disbursements, within thirty (30) days of the arbitration award. The issue
of "substantial confirmation" of a party's position shall be an arbitrable
issue in the arbitration proceedings.
(d) If, after setting off Purchasers' claims, a deficiency results,
Purchasers shall be entitled to recover the amount of such deficiency directly
from DCC. The amount of any deficiencies determined in such arbitration
proceeding to be payable to Purchasers by DCC shall be paid in cash or by bank
cashier's or a certified check made payable to the order of Purchasers
within fifteen (15) days following written demand therefor.
ARTICLE 10
MISCELLANEOUS
10.1 Entire Agreement; Modification. This Agreement with the exhibits hereto
and other documents referred to herein, constitutes the entire understanding
and contains all representations and warranties of the parties hereto relative
to the subject matter hereof. This Agreement may be amended only by a written
instrument executed on behalf of the Purchasers and by the Sellers.
10.2 Governing Law. All questions relating to the validity, interpretation or
performance of this Agreement shall be determined in accordance with the law
of the State of New Jersey.
10.3 Notices. Any notice or communication of any party hereto to another shall
be deemed to be duly given if and when sent by certified mail, return receipt
requested, to the parties at the addresses set forth below. All notices or
communications shall be effective upon receipt thereof.
Sellers:
Donald McKelvey
68 Skyview Terrace
Clifton, New Jersey 07013
Donalson Capital Corporation
68 Skyview Terrace
Clifton, New Jersey 07013
With copies to:
Danzig Kaye Cooper Fiore & Kay, LLP
30A Vreeland Road
Florham Park, New Jersey 07932
Attention: David M. Kaye, Esq.
Purchasers:
Greenspace Capital, L.L.C.
P.O. Box 284
Mount Arlington, New Jersey 07856
Acutus Capital, L.L.C.
411 Hackensack Avenue
Hackensack, New Jersey 07601
With copies to:
Dunn Lambert, L.L.C.
The Atrium
East 80 Route 4
Paramus, New Jersey 07652
Attention: Richard J. Lambert, Esq.
Robert Brantl, Esq.
322 Fourth Street
Brooklyn, New York 11215
11.4 Counterparts. This Agreement may be executed in several counterparts,
each of which when so executed and delivered shall be deemed an original yet
all of which together shall constitute but one and the same instrument.
11.5 Headings. The article and section headings in this Agreement are for
convenience of reference only and shall not be deemed to alter or affect any
provisions thereof.
11.6 Non-Assignability. This Agreement shall not be assignable by either
party hereto without the prior written consent of the other party. Nothing in
this Agreement, expressed or implied, is intended to confer upon any person,
other than the parties hereto and their successors, any right or remedy under
or by reason of this Agreement.
11.7 Expenses. The parties hereto shall be responsible for their respective
costs and expenses, including attorneys' fees, incurred with respect to the
transactions which are the subject of this Agreement.
11.8 Attorneys' Fees. In the event a dispute arises between any of the parties
hereto under this Agreement or any of the ancillary agreements to be executed
at Closing, which dispute results in litigation, the prevailing party in any
such litigation shall be entitled to have his or its attorneys' fees and costs
paid by the other party or parties to such litigation.
11.9 Gender. Throughout this Agreement the masculine shall include the feminine
and neuter gender and vice versa and the singular shall include the plural and
vice versa, unless the context of this Agreement indicates otherwise.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date and year first above written.
ATTEST: TELCO-TECHNOLOGY, INC.
_________________________ By:____________________________
James Grainer, Secretary James Grainer, President
WITNESS: THE PURCHASERS:
GREENSPACE CAPITAL, L.L.C.
_________________________ By: __________________________
Kevin Kreisler, Member
ACUTUS CAPITAL, L.L.C.
_________________________ By:__________________________
James L. Sonageri, Member
WITNESS: THE SELLERS:
________________________ __________________________
Donald McKelvey
DONALSON CAPITAL CORPORATION
By:____________________________
Donald McKelvey, President