INVESTMENT AGREEMENT
THIS INVESTMENT AGREEMENT (this “Agreement”) dated as of March 12, 2015, is entered into between and among
TETRIDYN SOLUTIONS, INC.
, a Nevada corporation (“
TetriDyn
”), Antoinette Knapp Hempstead, an individual residing in Salt Lake City, Utah, on behalf of herself and the estate of her late husband, David W. Hempstead (the “
Hempsteads
”), and JPF VENTURE GROUP, INC., a Delaware corporation (“
JPF
”), on the following:
Premises
A. TetriDyn and OCEAN THERMAL ENERGY CORPORATION, a Delaware corporation (“
OTE
”), entered into that certain AGREEMENT AND PLAN OF MERGER (“
Merger Agreement
”), dated as of even date hereof, providing for TetriDyn’s acquisition of OTE through the merger of a wholly owned subsidiary of TetriDyn with and into OTE, which shall be the surviving corporation, in exchange for a controlling block of common stock in TetriDyn (the “
Merger
”), for the purpose of making OTE a wholly owned subsidiary of TetriDyn.
B. The completion of the Merger and the consummation of the Merger Agreement and the transactions contemplated therein is subject to certain conditions as set forth in the Merger Agreement, including the issuance by the California Department of Corporations (the “
Department
”) of a permit (the “
Permit
”) pursuant to Section 25142 of the California Corporations Code to provide an exemption from the securities registration and prospectus delivery requirements pursuant thereto and pursuant to Section 3(a)(10) of the Securities Act. It is impossible to assure that a permit will be issued or, if so, when.
C. Pending the issuance of the Permit and the closing of the Merger (the “Merger Closing”), TetriDyn desires to initiate an updated technical and commercialization review of its intellectual properties with a view toward possible broadened marketing introduction, address the potential resolution or restructuring of legacy obligations, move toward bringing TetriDyn into current compliance with its reporting obligations under the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”) and in general advance its business activities while it prepares, files, and pursues to determination its application for the Permit. OTE supports this effort of TetriDyn to undertake the foregoing.
D. Unless and until the Permit is issued, OTE and TetriDyn want to preserve their independent corporate status and operations. Accordingly, OTE consents that an affiliate of a principal stockholder of OTE, JPF, may invest in TetriDyn in accordance with the terms of this Agreement to provide TetriDyn with the management and financial resources to proceed pending the completion or termination of the Merger, and would not proceed with the Merger Agreement without JPF’s investment and TetriDyn’s covenants as set forth in this Agreement.
E. JPF desires to enter into this Agreement to facilitate the Merger and the combination of the business operations of TetriDyn and OTE, of which JPF is an affiliate of a principal stockholder.
NOW, THEREFORE, upon the foregoing premises, which are incorporated herein by reference, and for and in consideration of the mutual promises and covenants set forth in the Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1.
Purchase and Sale of Stock.
(a) Subject to the terms and conditions of this Agreement, JPF agrees to purchase at the Investment Closing (as defined below), and TetriDyn agrees to issue and sell to JPF at the Investment Closing: (i) 29,372,277 shares of common stock, par value $0.001 per share (the “JPF Stock”) for the aggregate purchase price of One Hundred Thousand Dollars ($100,000) (equivalent to a purchase price of $0.003405 per share) (the “
Purchase Price
”) payable at the Investment Closing, such JPF Stock representing a 55% ownership by JPF of all issued and outstanding TetriDyn capital stock, based on 24,031,863 shares of common stock issued and outstanding the date hereof immediately preceding the sale to JPF pursuant hereto, resulting in 53,404,140 shares issued and outstanding after the sale to JPF pursuant hereto; and (ii) a warrant (the “
Warrant
”) for the purchase price of One Dollar ($1.00), such Warrant exercisable to purchase 1,033,585 shares of common stock of TetriDyn (the “
Warrant Shares
”) at a per share price of $0.003 per share for a period of three (3) years commencing on the Merger Closing, as more fully set forth in the Warrant to Purchase Common Stock in the form attached hereto as
Exhibit C
and incorporated herein by this reference.
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(b) The purchase and sale of the JPF Stock and the Warrant shall take place by wire transfer of funds constituting the Purchase Price and concurrent electronic or other delivery of the agreements and other documents described in subsections (c), (d), (e) and (f), below (the “
Investment Closing
”).
(c) At the Investment Closing, TetriDyn shall deliver to JPF the Warrant and a certificate representing the JPF Stock being purchased thereby against payment of the Purchase Price therefor by wire transfer to a newly-established TetriDyn corporate bank account at Bank of America, Centerville Road, Lancaster, Pennsylvania 17601 (the “
New Account
”). The New Account shall provide that all checks and other disbursements out of the New Account shall require the signature approval of at least one (1) of the JPF Designees (defined below).
(d) At the Investment Closing but subject to the consummation of the sale and purchase provided above, the board of directors of TetriDyn shall deliver their written unanimous consent accepting the resignations, sequentially, of Orville Hendrickson and Larry Ybarrondo as directors and appointing in their stead, as designees of JPF, Jeremy P. Feakins and one (1) other designee of JPF as members of the board of directors of TetriDyn (each, a “
JPF Designee
”), all in such manner as may be appropriate to change the composition of the board of directors without a stockholder vote. Antoinette Knapp Hempstead (“Hempstead”) shall remain an officer of TetriDyn and a member of the TetriDyn board of directors at and as of the Investment Closing;
provided
,
however
, that Hempstead shall at the Investment Closing execute and deliver to counsel for OTE her resignations as President and any other officer titles held and as a director with instructions that the same shall be deemed delivered and effective upon either (a) the Merger
Closing, or (b) in the event OTE determines not to consummate the Merger, for any reason or no reason at all, as indicated by written communication by OTE to TetriDyn.
(e) At the Investment Closing, the Hempsteads shall assign, transfer, and convey to JPF all of the obligations of TetriDyn to the Hempsteads as set forth on
Exhibit A
attached hereto and incorporated herein by reference and as evidenced by a formal Assignment substantially in the form of
Exhibit B
attached hereto and incorporated herein by reference.
(f) At the Investment Closing, all 1,200,000 shares of Series A Preferred Stock (“
Preferred Stock
”) owned by Antoinette Knapp Hempstead and the estate of David W. Hempstead shall have been contributed back to TetriDyn, such Preferred Stock shall be cancelled by TetriDyn, and TetriDyn shall have approved and filed with the Nevada Secretary of State an amendment to TetriDyn’s articles of incorporation withdrawing the designation of rights, privileges, and preferences authorizing the Preferred Stock.
2.
Representations and Warranties of TetriDyn
. As an inducement to JPF to complete the investment under this Agreement, TetriDyn hereby incorporates by reference the representations and warranties set forth in Article III of the Merger Agreement and hereby expressly makes the same representations and warranties set forth in such Article III to JPF, as if such warranties and representations and warranties were set forth fully herein on the date hereof and at the Investment Closing.
3.
Representations of JPF
. JPF hereby represents and warrants as follows:
(a)
JPF has had sufficient interactions with management of TetriDyn and has been provided with sufficient supporting documentation, including items such as financial statements, financial projections, and a business case summary, which JPF has read and understands, in order to make an informed investment decision. JPF is basing its decision to invest solely on the information provided and has not relied on any other representations made by TetriDyn or any of its affiliates.
(b)
JPF understands that an investment in the JPF Stock and the Warrant is speculative and involves numerous significant risks, the occurrence of any one of which could result in the loss of its entire investment. JPF is fully cognizant of and understands all of the risks relating to a purchase of the JPF Stock and the Warrant, including those risks set forth in Section 4 below under “Risk and Other Investment Factors.”
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(c)
JPF understands that TetriDyn will need to raise additional capital, which will be dilutive to all Stockholders and would reduce JPF’s percentage ownership in TetriDyn.
(d)
JPF understands that in order to attract and retain strategic new members of the management team, TetriDyn may issue equity or options beyond what has been reserved in the employee option pool, which would be dilutive to all Stockholders and would reduce JPF’s percentage ownership in TetriDyn.
(e)
JPF’s overall commitment to investments that are not readily marketable is not disproportionate to its individual net worth, and its investment in the JPF Stock and the Warrant will not cause its overall commitment to become excessive.
(f)
JPF has adequate means of providing for its financial requirements, both current and anticipated, and has no need for liquidity in an investment in the JPF Stock and the Warrant.
(g)
JPF was at no time solicited by any leaflet, public promotional meeting, circular, newspaper or magazine article, internet contact, radio or television advertisement, or any other form of general advertising or solicitation in connection with the offer, sale, or purchase of the JPF Stock or the Warrant through this Agreement.
(h)
JPF can bear and is willing to accept the economic risk of losing its entire investment.
(i)
JPF is acquiring the JPF Stock and the Warrant for its own account and for investment purposes only and has no present intention, agreement, or arrangement for the distribution, transfer, assignment, resale, or subdivision of the JPF Stock or the Warrant, either currently or after the passage of a fixed or determinable period or on the occurrence or nonoccurrence of any predetermined event or circumstance.
(j)
JPF has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the JPF Stock and the Warrant; and JPF has the ability to protect its own interests in connection with this investment.
(k)
JPF is an “accredited investor” as defined under Rule 501 of Regulation D of the Securities Act.
(l)
JPF understands the offering has not been registered under the Securities Act and applicable state or other securities laws, that the each of the JPF Stock, the Warrant and the Warrant Shares is subject to significant restrictions on transfer under such securities laws, and that JPF cannot sell, distribute, or otherwise transfer any of the JPF Stock, the Warrant or the Warrant Shares unless the same is registered under the Securities Act and applicable state or other securities laws or unless an exemption from registration is available. JPF may, therefore, be required to hold the JPF Stock, the Warrant and the Warrant Shares for an indefinite period.
(m)
JPF acknowledges that neither the United States Securities and Exchange Commission nor the securities commission of any state or other federal agency has made any determination as to the merits of purchasing the JPF Stock or the Warrant.
(n)
All information that JPF has provided to TetriDyn or its agents or representatives concerning JPF’s suitability to invest in TetriDyn is complete, accurate, and correct as of the date of the signature on the last page of this Agreement, including information concerning JPF’s corporate financial affairs, business position, and the knowledge and experience of JPF and its advisers.
4.
Additional Information
. JPF acknowledges that it has previously been advised of the opportunity to review all of the pertinent facts concerning TetriDyn and to obtain any additional information that it may request, to the extent TetriDyn possesses or can obtain such information without unreasonable effort and expense. JPF has been provided with all materials and information requested by him or its representatives, including any information requested to verify any information furnished, and JPF has been provided the opportunity for direct communication with TetriDyn and its representatives regarding the purchase made hereby.
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5.
Representations Regarding Exemptions and Restrictions on Transfer
.
(a) In connection with JPF’s acquisition of the JPF Stock and the Warrant, JPF represents that the JPF Stock and the Warrant are being acquired without a view to, or for resale in connection with, any distribution of the JPF Stock, the Warrant or the Warrant Shares or any interest therein without registration or other compliance under the Securities Act and that JPF has no direct or indirect participation in any such undertaking or in the underwriting of such an undertaking.
(b) JPF acknowledges that the JPF Stock, the Warrant and the Warrant Shares must be held and may not be sold, transferred, or otherwise disposed of for value unless subsequently registered under the Securities Act or an exemption from such registration is available; TetriDyn is under no obligation to register the JPF Stock, the Warrant or the Warrant Shares under the Securities Act or under Section 12 of the Exchange Act, except as expressly agreed to in writing by TetriDyn; no assurance is given that the exemption provided by Rule 144 under the Securities Act or any other exemption will be available; and the certificates representing the JPF Stock and the Warrant Shares will bear a legend so restricting the sale of such shares.
(c) JPF understands that the JPF Stock, the Warrant and the Warrant Shares have not been registered, but are being acquired by reason of a specific exemption under the Securities Act as well as under certain state statutes for transactions by an issuer not involving any public offering and that any disposition of the JPF Stock, the Warrant or the Warrant Shares may, under certain circumstances, be inconsistent with this exemption and may make JPF an “underwriter” within the meaning of the Securities Act.
(d) JPF understands that the resale of the JPF Stock, the Warrant and the Warrant Shares must be effected in reliance on exemptions from registration under the Securities Act and applicable state securities laws. JPF understands that such an exemption may not be available and, in such case, JPF would not be able to resell the JPF Stock, the Warrant or the Warrant Shares held.
6.
Risk and Other Investment Factors
. Investing in JPF Stock and the Warrant involves a high degree of risk. Notwithstanding the continuing efforts by TetriDyn’s directors and others, and although it has maintained operations and efforts to commercialize its business activities, to date it has been unable to do so which makes it difficult for it or any potential investor to exhaustively catalog and understand all risk factors, which itself may prove to be a significant risk. TetriDyn cannot assure that all material factors, risks, uncertainties, or pitfalls have been considered.
7.
Additional Covenants of JPF
. JPF shall cause TetriDyn to utilize the Purchase Price in part, and complete the following:
(a) TetriDyn will promptly, but in any event within 10 days after the Investment Closing, and upon its receipt of invoices or other supporting documentation therefor, pay to:
(i) the applicable credit card creditor approximately $33,200, plus accrued interest, due on the personal credit cards of TetriDyn’s current president, Antoinette Knapp Hempstead, for business expenses of TetriDyn, as set forth in TetriDyn
Schedule 4.07
to the Merger Agreement;
(ii) reimburse Antoinette Knapp Hempstead for her actual payments to Southeast Idaho Council of Governments, Inc. (“SICOG”) and the Eastern Idaho Development Corp. (“EIDC”) as guarantor of payments due from TetriDyn on loans from such creditors after March 1, 2015; and
(iii) Kruse Landa Maycock and Ricks, LLC, the sum of $15,000 for professional services rendered and costs advanced, with the balance of $26,587 as of January 31, 2015, plus additional amounts billed until the Merger Closing, payable by TetriDyn in installments of $5,000 per month commencing within 30 days after such closing, until paid, with the unpaid balance accelerated and payable immediately from its first equity financing exceeding $1.0 million or completion of funding for the Baha Mar property.
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(b) Commencing on the Investment Closing, TetriDyn shall timely pay the amounts, not to exceed $2,600 in arrears and $1,300 per month commencing in April 2015 arranged by Antoinette Knapp Hempstead to cure the default on the loans from SICOG and EIDC. TetriDyn will promptly, but in any event within 30 days after the Investment Closing, seek to restructure the indebtedness to SICOG and EIDC as set forth in TetriDyn
Schedule 4.07
to the Merger Agreement by paying an initial amount and restructuring the payment of the balance on terms acceptable to TetriDyn, effective on the Merger Closing. To facilitate such restructuring, JPF will provide its accommodation guarantee of TetriDyn’s obligations to such creditors, effective on the closing of the Merger.
(c) TetriDyn shall authorize and pursue to completion at the earliest practicable date audited financial statements for TetriDyn for the years ended December 31, 2012, 2013, and 2014; audited financial statements for OTE for the year ended December 31, 2014, in each case with an unqualified opinion thereon by a firm of independent certified public accounts; and pro forma financial statements providing the required information to be included in Periodic Reports required to be filed by TetriDyn. Parallel with the completion of the foregoing financial statements, TetriDyn will prepare or cause to be prepared all other Periodic Reports required to be completed in order for TetriDyn to become current in filing its Periodic Reports at the earliest practicable date.
(d) TetriDyn shall promptly make available to the new directors and officers of TetriDyn and their consultants and other advisers the proprietary information, technical data, trade secrets or know-how, including research, product plans, products, methodologies, services, customer lists and customers, markets, software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances or other business information, whether in writing, orally or by drawings or observation of parts or equipment (the “Information”), all with a view toward enabling such new directors and officers to evaluate on behalf of TetriDyn the success of current marketing efforts and operational experience to optimize commercialization of TetriDyn’s products marketed under the “Silver Key” name to healthcare markets.
8.
Cancellation of JPF Stock
. At the Merger Closing pursuant to the Merger Agreement, JPF shall deliver to TetriDyn for cancellation all of the shares of JPF Stock purchased by JPF pursuant to this Agreement, and TetriDyn shall promptly upon such delivery cancel such shares of JPF Stock and return them to the status of authorized but unissued shares. TetriDyn agrees to indemnify and pay, on a gross-up basis, any tax obligation incurred by JPF as a result of its acquisition and subsequent return for cancellation of the JPF Stock.
9.
Governing Law
. The validity, construction, and performance of this Agreement, and any claims, actions, suits, litigation, proceedings, arbitrations, or investigations arising out of or relating to this Agreement, shall be governed by the laws of the state of Delaware, without giving effect to any choice or conflict of law provision or rule (whether the state of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. Each party hereby consents to service of process by overnight courier by a recognized national courier service at the address to which notices are to be given.
10.
Attorneys’ Fees
. If any claim, action, suit, litigation, proceeding, arbitration, or investigation is commenced by either party concerning this Agreement, the nonprevailing party shall immediately, but in any event within 30 days after being incurred or the determination of the identity of prevailing party, which is later, pay to the prevailing party reasonable attorneys’ fees and costs and expenses, including those of appeal and not limited to taxable costs, incurred by the prevailing party, in addition to all other remedies to which the prevailing party may be entitled. If a claim, action, suit, litigation, proceeding, arbitration, or investigation asserted by a third party against either party arises from an action or omission by the other, the party responsible for the action or omission shall be the nonprevailing party and the other party shall be the prevailing party for purposes of the foregoing sentence.
11.
Waiver and Amendment
. This Agreement may be amended, supplemented, modified, and/or rescinded only through an express written instrument signed by all parties or their respective successors and permitted assigns. Any party may specifically and expressly waive in writing any portion of this Agreement or any breach hereof, but only to the extent such provision is for the benefit of the waiving party, and no such waiver shall constitute a further or continuing waiver of any preceding or succeeding breach of the same or any other provision. The consent by one party to any act for which such consent was required shall not be deemed to imply consent or waiver of the necessity of obtaining such consent for the same or similar acts in the future, and no forbearance by a party to seek a remedy for noncompliance or breach by another party shall be construed as a waiver of any right or remedy respecting such noncompliance or breach.
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12.
Assignment
. Neither this Agreement nor any interest herein shall be assignable (voluntarily, involuntarily, or by judicial process, operation of law, or otherwise), in whole or in part, by any party without the prior written consent of all other parties.
13.
Successors and Assigns
. Each of the terms, provisions, and obligations of this Agreement shall be binding upon, shall inure to the benefit of, and shall be enforceable by the parties and their respective legal representatives, successors, and permitted assigns.
14.
Notices
. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been given or made as of the date so delivered, if personally delivered; as of the date so sent, if sent by electronic mail and receipt is acknowledged by the recipient; one day after the date so sent, if delivered by overnight courier service; or three days after the date so mailed, if mailed by certified mail, return receipt requested, addressed as follows:
If to JPF, to: JPF Venture Group, Inc.
800 South Queen Street
Lancaster, Pennsylvania 17603
Email:
jeremy@jpfeakins.com
with a copy to: John P. Cleary
Procopio Cory Hargreaves & Savitch LLP
12544 High Bluff Drive, Suite 300
San Diego, CA 92130
Email:
John.cleary@procopio.com
If to TetriDyn or Hempsteads: Antoinette Hempstead
6759 S Valence Lane
West Jordan, UT 84084
Email: toni.hempstead@gmail.com
with a copy to: James R. Kruse
Kruse Landa Maycock & Ricks, LLC
136 East South Temple, 21
st
Floor
Salt Lake City, UT 84111
Email:
jkruse@klmrlaw.com
Each party, by notice duly given in accordance herewith, may specify a different address for the giving of any notice hereunder.
15.
No Finder’s Fees
. Each party represents that it neither is nor will be obligated for any finder’s fee or commission in connection with this transaction. JPF agrees to indemnify and to hold harmless the TetriDyn from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which JPF or any of its officers, employees, or representatives is responsible. TetriDyn agrees to indemnify and hold harmless JPF from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which TetriDyn or any of its officers, employees or representatives is responsible.
16.
Cumulative Remedies
. No remedy made available hereunder by any of the provisions of this Agreement is intended to be exclusive of any other remedy, and each and every remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law, in equity, by statute, or otherwise.
17.
Warranty of Authority
. Each of the individuals signing this Agreement on behalf of a party hereto warrants and represents that such individual is duly authorized and empowered to enter into this Agreement and bind such party hereto.
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18.
Counterparts; Form of Signature
. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute a single agreement. Counterpart signatures of this Agreement that are manually signed and delivered by facsimile transmission, by a uniquely marked computer-generated signature, or by other electronic methods, shall be deemed to constitute signed original counterparts hereof and shall bind the parties signing and delivering in such manner and shall be the same as the delivery of an original.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and year first above written.
JPF VENTURE GROUP, INC.
By: /s/ Jeremy P. Feakins
Name: Jeremy P. Feakins
Its: Chief Executive Officer
TETRIDYN SOLUTIONS, INC.
By: /s/ Antoinette Knapp Hempstead
Name: Antoinette Knapp Hempstead
Its: President
Antoinette Knapp Hempstead
By: Antoinette Knapp Hempstead
On behalf of herself and the estate of her late husband, David W. Hempstead
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EXHIBIT A
OBLIGATIONS OF TETRIDYN TO THE HEMPSTEADS
|
Promissory Notes:*
|
|
|
Hempstead Loan #1
|
$ 50,000
|
|
Hempstead Loan #2
|
50,000
|
|
Hempstead Loan #3
|
50,000
|
|
Hempstead Loan #4
|
25,000
|
|
Hempstead Loan #5
|
25,000
|
|
Hempstead Loan #6
|
25,000
|
|
Hempstead Loan #7
|
25,000
|
|
Hempstead Loan #8
|
25,000
|
|
Hempstead Loan #9
|
25,000
|
|
Hempstead Loan #10
|
15,000
|
|
Hempstead Loan #11
|
5,000
|
|
Hempstead Loan #12
|
246
|
|
|
$320,246.00
|
|
As reflected on TetriDyn’s balance sheet as of 12/31/14:
|
|
|
Hempstead loan interest to December 31, 2014
|
74,134
|
|
Payroll liabilities
|
213,436
|
|
|
287,570
|
|
|
|
|
Total
|
$607,816
|
_______________
* The listed promissory notes, including accrued interest, have been consolidated into a single Consolidated Promissory Note dated as of December 31, 2014, bearing interest at 6% per annum, a copy of which is attached to the Assignment as Appendix I.
A-1
EXHIBIT B
ASSIGNMENT
FOR $10.00 AND OTHER GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy of which are hereby acknowledged, ANTOINETTE KNAPP HEMPSTEAD, an individual residing in Salt Lake County, Utah, on behalf of herself and the estate of her late husband, DAVID W. HEMPSTEAD, and each of them (“
Assignors
”), hereby assign, convey, set over, and transfer unto JPF VENTURE GROUP, INC., a Delaware corporation (“
Assignee
”), all of the right, title, and interest of Assignors in and to the obligations to Assignors from TetriDyn Solutions, Inc., a Nevada corporation (the “Company”), evidenced by that certain Consolidated Promissory Note dated December 31, 2014, a true and correct copy of which is attached hereto and incorporated herein by this reference as Appendix I, including all interest accrued and unpaid thereon, and open account payroll liabilities aggregating $213,436 as of December 31, 2014, as reflected on the Company’s balance sheet as of such date, to have and to hold such obligations payable to Assignors unto Assignee forever, with the full power and authority to sue for and collect the same, in the name, place, and stead of Assignors or otherwise.
The within assignment is made without warranty or representation, except against claims arising by, through, or under Assignors.
DATED this 12th day of March, 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
Antoinette Knapp Hempstead, an individual
|
|
|
|
|
|
|
|
|
ESTATE OF DAVID W. HEMPSTEAD
|
|
|
|
|
|
|
|
|
|
|
|
By: Antoinette Knapp Hempstead
Personal Representative of the Estate
|
|
B-1
Appendix I to Assignment
CONSOLIDATED PROMISSORY NOTE
|
$394,350
|
Salt Lake City, Utah
|
December 31, 2014
|
FOR VALUE RECEIVED, the undersigned, TetriDyn Solutions, Inc. (“
Maker
”), a Nevada corporation whose mailing address and principal office is ______________________________________, USA, hereby promises to pay to David and Antoinette Hempstead (jointly “
Payee
”), whose mailing address is 6759 S Valence Lane, West Jordan, Utah 84084, the principal sum of THREE HUNDRED TWENTY THOUSAND, TWO HUNDRED FORTY DOLLARS AND NO CENTS ($320,246), plus accrued but unpaid interest as of the date hereof of SEVENTY FOUR THOUSAND, ONE HUNDRED THIRTY FOUR DOLLARS AND NO CENTS ($74,134), for an aggregate of THREE HUNDRED NINETY FOUR THOUSAND, THREE HUNDRED EIGHTY DOLLARS AND NO CENTS ($394,380) as of the date hereof, in lawful money of the United States of America for payment of private debts, together with interest (calculated on the basis of the actual number of days elapsed but computed as if each year consisted of 360 days) on the unpaid principal balance from time to time outstanding at a rate, except as otherwise provided in this Note, of six percent (6%) per annum.
1.
Payments
. All unpaid principal and all accrued and unpaid interest shall be due and payable within 90 days after demand.
2.
Time and Place of Payment
. If any payment falls due on a day that is considered a legal holiday in the state of Delaware, Maker shall be entitled to delay such payment until the next succeeding regular business day, but interest shall continue to accrue until the payment is in fact made. Each payment or prepayment hereon must be paid at the office of Payee set forth above or at such other place as the Payee or other holder hereof may, from time to time, designate in writing.
3.
Prepayment
. Maker reserves the right and privilege of prepaying this Note in whole or in part, at any time or from time to time, upon 30 days’ written notice, without premium, charge, or penalty. Prepayments on this Note shall be applied first to accrued and unpaid interest to the date of such prepayment, next to expenses for which Payee is due to be reimbursed under the terms of this Note, and then to the unpaid principal balance hereof.
4.
Conversion
. Subject to and in compliance with the provisions contained herein, the holder of this Note is entitled, at such holder’s option, at any time prior to maturity, or in the case this Note or some portion hereof shall have been called for prepayment prior to such date, then in respect of this Note or such portion hereof, until and including, but not after, the close of business within 30 days after the date of notice of prepayment, to convert this Note (or any portion of the principal amount hereof or accrued and unpaid interest hereon) into fully paid and nonassessable shares (calculated as to each conversion to the nearest share) of common stock, par value $0.0001 per share, of Maker (the “Shares”) at the rate of one share for each $0.025 of principal amount of this Note, by surrender of this Note, duly endorsed (if so required by Maker) or assigned to Maker or in blank, to Maker at its offices, accompanied by written notice to Maker, in the form set forth below, that the holder hereof elects to convert this Note or, if less than the entire principal amount hereof is to be converted, the portion thereof to be converted. On conversion, no adjustment for interest is to be made, but if any holder surrenders this Note for conversion between the record date for the payment of an installment of interest and the next interest payment date, the holder of such Note when surrendered for conversion shall be entitled to payment of the interest thereon from the last preceding record date for interest through the date of conversion which the registered holder is entitled to receive on such conversion date. No fractions of Shares will be issued on conversion, but instead of any fractional interest, Maker will pay cash adjustments as provided herein. The exercise price shall be appropriately adjusted in the event of any stock splits, reverse split, merger, consolidation, conversion, or any similar change in Maker’s common stock. The conversion price and number of shares issuable on conversion of this Note shall be appropriately adjusted in the event of any split, reverse-split, conversion, or similar change in Maker’s common stock.
B-2
5.
Default
.
(a) Without notice or demand (which are hereby waived), the entire unpaid principal balance of, and all accrued interest on, this Note shall immediately become due and payable at the option of the holder hereof upon the occurrence of one or more of the following events of default (“
Events of Default
”):
(i) the failure or refusal of Maker to pay principal of or interest on this Note within 10 days of when the same becomes due in accordance with the terms hereof;
(ii) the failure or refusal of Maker punctually and properly to perform, observe, and comply with any covenant or agreement contained herein, and such failure or refusal continues for a period of 30 days after Maker has (or, with the exercise of reasonable investigation, should have) notice hereof;
(iii) Maker shall: (1) voluntarily seek, consent to, or acquiesce in the benefit or benefits of any Debtor Relief Law (defined hereinafter); or (2) become a party to (or be made the subject of) any proceeding provided for by any Debtor Relief Law, other than as a creditor or claimant, that could suspend or otherwise adversely affect the Rights (defined hereinafter) of Payee granted herein (unless, in the event such proceeding is involuntary, the petition instituting same is dismissed within 60 days of the filing of same). “
Debtor Relief Law
” means the Bankruptcy Code of the United States of America and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments, or similar Laws from time to time in effect affecting the Rights of creditors generally. “
Rights
” means rights, remedies, powers, and privileges. “
Laws
” means all applicable statutes, laws, ordinances, regulations, orders, writs, injunctions, or decrees of any state, commonwealth, nation, territory, possession, county, parish, municipality, or Tribunal. “
Tribunal
” means any court or governmental department, commission, board, bureau, agency, or instrumentality of the United States or of any state, commonwealth, nation, territory, possession, county, parish, or municipality, whether now or hereafter constituted and/or existing;
(iv) the failure to have discharged within a period of 30 days after the commencement thereof any attachment, sequestration, or similar proceeding against any of the assets of Maker, or the loss, theft, or destruction of, or occurrence of substantial damage to, a material part of the assets of Maker,
except
to the extent adequately covered by insurance; and
(v) Maker fails to pay any money judgment against it at least 10 days prior to the date on which any of Maker’s assets may be lawfully sold to satisfy such judgment.
(b) If any one or more of the Events of Default specified above shall have happened, the holder of this Note may, at the holder’s option: (i) declare the entire unpaid balance of principal of and accrued interest on this Note to be immediately due and payable without notice or demand; (ii) offset against this Note any sum or sums owed by the holder hereof to Maker; (iii) reduce any claim to judgment; (iv) foreclose all liens and security interests securing payment thereof or any part thereof; and (v) proceed to protect and enforce its rights either by suit in equity and/or by action of law or by other appropriate proceedings, whether for the specific performance of any covenant or agreement contained in this Note, or in aid of the exercise granted by this Note of any right, or to enforce any other legal or equitable right or remedy of the holder of this Note.
6.
Cumulative Rights
. No delay on the part of the holder of this Note in the exercise of any power or right or single partial exercise of any such power or right under this Note, or under any other instrument executed pursuant hereto, shall operate as a waiver thereof. Enforcement by the holder of this Note of any security for the payment hereof shall not constitute any election by it of remedies so as to preclude the exercise of any other remedy available to it.
B-3
7.
Collection Costs
. If this Note is placed in the hands of an attorney for collection, or if it is collected through any legal proceeding at law or in equity or in bankruptcy, receivership, or other court proceedings, Maker agrees to pay all costs of collection, including court costs and reasonable attorney’s fees of the Payee.
8.
Waiver
. Maker, and each surety, endorser, guarantor, and other party liable for the payment of any sums of money payable on this Note, jointly and severally waive presentment and demand for payment, protest, and notice of protest and nonpayment, or other notice of default,
except
as specified herein, and agree that their liability on this Note shall not be affected by any renewal or extension in the time of payment hereof or in any indulgences, or by any partial payment, any release, or change in any security for the payment of this Note, before or after maturity, regardless of the number of such renewals, extensions, indulgences, releases, or changes.
9.
Notices
. Any notice, demand, request, or other communication permitted or required under this Note shall be in writing and shall be deemed to have been given as of the date so delivered, if personally served; as of the date so sent, if transmitted by facsimile and receipt is confirmed by the facsimile operator of the recipient; as of the date so sent, if sent by electronic mail and receipt is acknowledged by the recipient; one day after the date so sent, if delivered by overnight courier service; or three days after the date so mailed, if mailed by certified mail, return receipt requested, addressed to Maker at its address on the first page.
10.
Successor and Assigns
. All of the covenants, stipulations, promises, and agreements in this Note contained by or on behalf of Maker shall bind its successors and assigns, whether so expressed or not;
provided
,
however
, that neither Maker nor Payee may, without the prior written consent of the other, assign any rights, powers, duties, or obligations under this Note.
11.
Headings
. The headings of the sections of this Note are inserted for convenience only and shall not be deemed to constitute a part hereof.
12.
Applicable Law
. This Note is being executed and delivered, and is intended to be performed, in the state of Delaware, and the substantive laws of such state shall govern the validity, construction, enforcement, and interpretation of this Note,
except
insofar as federal laws shall have application.
13.
Consolidated Note
. This Note consolidates the obligations evidenced by the following referenced promissory notes, which are hereby cancelled and deemed null and void and merged with and into this instrument:
|
Hempstead Loan #1
|
$ 50,000
|
|
Hempstead Loan #2
|
50,000
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|
Hempstead Loan #3
|
50,000
|
|
Hempstead Loan #4
|
25,000
|
|
Hempstead Loan #5
|
25,000
|
|
Hempstead Loan #6
|
25,000
|
|
Hempstead Loan #7
|
25,000
|
|
Hempstead Loan #8
|
25,000
|
|
Hempstead Loan #9
|
25,000
|
|
Hempstead Loan #10
|
15,000
|
|
Hempstead Loan #11
|
5,000
|
|
Hempstead Loan #12
|
246
|
|
|
$320,246.00
|
14.
Security
. This Note is unsecured.
B-4
EXECUTED effective the year and date first above written.
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TETRIDYN SOLUTIONS, INC.
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By:
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Orville Hendrickson, Director
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By:
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Larry Ybarrondo, Director
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B-5
EXHIBIT C
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON ITS EXERCISE HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “
ACT
”), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS (I) PURSUANT TO REGISTRATION UNDER THE ACT OR (II) IN COMPLIANCE WITH AN EXEMPTION THEREFROM AND ACCOMPANIED, IF REQUESTED BY THE COMPANY, WITH AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH TRANSFER IS BEING MADE IN COMPLIANCE WITH AN EXEMPTION THEREFROM (UNLESS SUCH TRANSFER IS TO AN AFFILIATE OF THE HOLDER).
WARRANT TO PURCHASE COMMON STOCK
FOR VALUE RECEIVED, TETRIDYN SOLUTIONS, INC., a Nevada corporation (the “
Company
”), hereby grants to JPF VENTURE GROUP, INC., a Delaware corporation (“
Holder
”), the right to purchase 1,033,585 shares of the Common Stock of the Company, which equals 1% of the Company’s fully-diluted capital stock of the Company immediately after the closing of the merger (the “
Merger
”) by and between the Company and Ocean Thermal Energy Corporation pursuant to that certain Agreement and Plan of Merger dated of even date herewith (the “
Merger Agreement
”) (including for purposes of such calculation, the shares issuable upon exercise of this Warrant) (“
Shares
”). The Shares are calculated based upon a contemplated 1-for-4.6972 reverse stock split of the Company’s stock prior to the closing of the Merger (the “Reverse Split”). If the Reverse Split does not occur or is based on a different split ratio, the Shares shall be adjusted to reflect 1% of the fully-diluted capital stock of the Company immediately after the closing of the Merger.
The exercise price per Share (the “
Purchase Price
”) of the warrants granted hereby shall equal $0.003. The Purchase Price and the number of Shares purchasable hereunder are subject to adjustment as provided in Section 3 of this Warrant. This Warrant may be exercised at any time and from time to time after the consummation of the Merger and prior to the three (3) year anniversary of the date hereof (the “
Expiration Date
”). This Warrant shall expire and be of no further force or effect at the earlier of (i) the termination of the Merger as set forth in Article VII of the Merger Agreement, (ii) the time when it has been exercised, or (iii) or 5:00 p.m., New York time, on the Expiration Date.
1.
Exercise of Warrant
. This Warrant may be exercised in whole or in part, at any time and from time to time by the Holder prior to the Expiration Date by surrendering this Warrant, together with a Notice of Exercise in the form appearing at the end hereof properly completed and duly executed by the Holder or on behalf of the Holder by the Holder’s duly authorized representative, to the Company at its principal executive office (or at the office of the agency maintained for such purpose). The Warrants may be exercised at any time prior to expiration by providing ten (10) day notice to the Company.
In the event of an exercise of this Warrant, certificates for the Shares purchased pursuant to such exercise shall be delivered to the Holder within ten (10) days of receipt of such notice and, unless this Warrant has been fully exercised or has expired, a new Warrant representing the portion of the Shares, if any, with respect to which this Warrant shall not then have been exercised shall also be issued to the Holder within such ten day period. Upon receipt by the Company of this Warrant and such Notice of Exercise, together with the applicable aggregate Purchase Price, the Holder shall be deemed to be the holder of record of the Shares purchased pursuant to such exercise, notwithstanding that certificates representing such Shares shall not then be actually delivered to the Holder or that such Shares are not then set forth on the stock transfer book of the Company.
C-1
2.
Net Exercise
. In lieu of cash exercising this Warrant, the Holder may elect to receive shares equal to the value of this Warrant (or the portion thereof being canceled) by surrender of this Warrant to the Company together with notice of such election, in which event the Company shall issue to the Holder hereof a number of Shares computed using the following formula:
Where:
X -- The number of Shares to be issued to the Holder.
Y -- The number of Shares purchasable under this Warrant.
A -- The fair market value of one Share.
B -- The Purchase Price (as adjusted to the date of such calculations).
For purposes of this Section 2, the fair market value of a Share shall mean the average of the closing bid and asked prices of Shares quoted in the over-the-counter market in which the Shares are traded or the closing price quoted on any exchange on which the Shares are listed, whichever is applicable, as published in the Western Edition of The Wall Street Journal for the ten (10) trading days prior to the date of determination of fair market value (or such shorter period of time during which such stock was traded over-the-counter or on such exchange). If the Shares are not traded on the over-the-counter market or on an exchange, the fair market value shall be the price per Share that the Company could obtain from a willing buyer for Shares sold by the Company from authorized but unissued Shares, as such prices shall be determined in good faith by the Company’s Board of Directors.
a.
Stock Dividends - Split Ups. If, after the date hereof, the number of outstanding shares of Common Stock is increased by a stock dividend payable in shares of Common Stock, or by a split up of shares of Common Stock, or other similar event, then, on the effective date of such stock dividend, split up or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be increased in proportion to such increase in outstanding shares of Common Stock. No fractional shares will be issued.
b.
Aggregation of Shares. If after the date hereof, the number of outstanding shares of Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be decreased in proportion to such decrease in outstanding shares of Common Stock. No fractional shares shall be issued.
c.
Adjustments in Exercise Price. Whenever the number of shares of Common Stock purchasable upon the exercise of the Warrants is adjusted as described above, the Purchase Price shall be adjusted (to the nearest cent) by multiplying such Purchase Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of shares of Common Stock purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter.
d.
Replacement of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding shares of Common Stock (other than a change covered by adjustments described above or that solely affects the par value of such shares of Common Stock), or in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding shares of Common Stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Holder shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the shares of Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the Holder would have received if such Holder had exercised his, her or its Warrant(s) immediately prior to such event; and if any reclassification also results in a change in shares of Common Stock covered by stock dividends, stock splits or an aggregation of shares, then such adjustment shall be made as described above. The provisions relating to the adjustments in exercise price shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other transfers.
C-2
e.
Notices of Changes in Warrant. Upon every adjustment of the Purchase Price or the number of shares issuable upon exercise of a Warrant, the Company shall give written notice thereof to the Holder, which notice shall state the Purchase Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Upon the occurrence of any event specified above, then, in any such event, the Company shall give written notice to each Holder, at the last address set forth for such holder in the warrant register, of the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.
a. No Impairment. The Company will not, by amendment of its charter as in effect on the date hereof or through any reorganization, recapitalization, transfer of all or a substantial portion of its assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed under this Warrant by the Company, but will at all times in good faith assist in carrying out all the provisions of this Warrant and in taking all such action as may be necessary or appropriate in order to protect the rights of the Holder of the Warrant against impairment. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any shares of Common Stock obtainable upon the exercise of this Warrant and (b) take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant.
b. Reservation of Shares. So long as the Warrant shall remain outstanding, the Company shall at all times reserve and keep available, free from preemptive rights, out of its authorized capital stock, for the purpose of issuance upon exercise of the Warrant, the full number of shares of Common Stock then issuable upon exercise of the Warrant. If the Common Stock shall be listed on any national stock exchange, the Company at its expense shall include in its listing application all of the shares of Common Stock issuable upon exercise of the Warrant at any time, including as a result of adjustments in the outstanding Common Stock or otherwise.
c. Validity of Shares. All shares of Common Stock issuable upon exercise of this Warrant will be duly and validly issued, fully paid and non-assessable and will be free of restrictions on transfer, other than restrictions on transfer under applicable state and federal securities laws, and will be free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified herein). The Company shall take all such actions as may be necessary to ensure that all such shares of Common Stock may be so issued without violation of any applicable law or governmental regulation or any requirements of any domestic stock exchange upon which shares of Common Stock may be listed (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance).
d. Notice of Certain Events. If at any time, (1) the Company shall declare any dividend or distribution payable to the holders of its Common Stock, (2) the Company shall offer for subscription pro rata to the holders of Common Stock any additional shares of capital stock of any class or any other rights, (3) there shall be any recapitalization of the Company or consolidation or merger of the Company with, or sale of all or substantially all of its assets to, another corporation or business organization, or, if sooner, promptly following any agreement to do any of the foregoing, or (4) there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company, then, in any one or more of such cases, the Company shall give the registered Holder of this Warrant ten days’ prior written notice (or such other time period set forth in the Company’s Articles of Incorporation).
5.
Legend
. Each certificate for Shares issued upon the exercise of the Warrant, each certificate issued upon the direct or indirect transfer of any Shares and each Warrant issued upon direct or indirect transfer or in substitution for any Warrant shall be stamped or otherwise imprinted with legends in substantially the form set forth on the face of this Warrant.
C-3
6.
Ownership of Warrants
. The Company may treat the person in whose name any Warrant is registered on the register kept at the principal executive office of the Company (or at the office of the agency maintained for such purpose) as the owner and holder thereof for all purposes, notwithstanding any notice to the contrary. Subject to the preceding sentence, a Warrant, if properly assigned, may be exercised by a new holder without a new warrant first having been issued.
7.
Replacement of Warrants
. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of any Warrant and, in the case of any such mutilation, upon surrender of such Warrant for cancellation at the principal executive office of the Company (or at the office of the agency maintained for such purpose), the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor and dated the date hereof.
8.
Remedies
. In the event of a breach by the Company of any of its obligations under this Warrant, the Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of its breach of any of the provisions of this Warrant.
9.
No Liabilities or Rights as a Stockholder.
Nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Until the exercise of this Warrant, the Holder shall not have nor exercise any rights by virtue hereof as a stockholder of the Company. Notwithstanding the foregoing, in the event (a) the Company effects a split of the Common Stock by means of a stock dividend and the Purchase Price of and the number of Shares are adjusted as of the date of the distribution of the dividend (rather than as of the record date for such dividend), and (b) the Holder exercises this Warrant between the record date and the distribution date for such stock dividend, the Holder shall be entitled to receive, on the distribution date, the stock dividend with respect to the shares of Common Stock acquired upon such exercise, notwithstanding the fact that such shares were not outstanding as of the close of business on the record date for such stock dividend.
10.
Permits and Taxes
. The Company shall, at its own expense, apply for and obtain any and all permits, approvals, authorizations, licenses and orders that may be necessary for the Company lawfully to issue the Shares on exercise of this Warrant. On exercise of this Warrant, the Company shall pay any and all issuance taxes that may be payable in respect of any issuance or delivery of the Shares. The Company shall not, however, be required to pay, and Holder shall pay, any tax that may be payable in respect of any transfer involved in the issuance and delivery of the Shares in a name other than that of Holder, and no such issuance and delivery shall be made unless and until the person requesting such issuance shall have paid to the Company the amount of any such tax or shall have established to the Company’s reasonable satisfaction that such tax has been paid.
12.
Acquisition for Own Account
. The Holder is acquiring this Warrant with its own funds, for its own account, not as a nominee or agent. The Holder is purchasing or will purchase this Warrant for investment for an indefinite period and not with a view to any sale or distribution thereof, by public or private sale or other disposition.
13.
Section Headings
. The section headings in this Warrant are for convenience of reference only and shall not constitute a part hereof.
14.
Amendments or Waivers
. This Warrant and any term hereof may be changed, waived, discharged, or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge, or termination is sought.
15.
Counterparts
. This Warrant may be executed in two or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument.
C-4
16.
Severability
. The provisions of this Warrant will be deemed severable and the invalidity or unenforceability of any provision hereof will not affect the validity or enforceability of the other provisions hereof; provided that if any provision of this Warrant, as applied to any party or to any circumstance, is adjudged by a court or other governmental body not to be enforceable in accordance with its terms, the parties agree that the court or governmental body making such determination will have the power to modify the provision in a manner consistent with its objectives such that it is enforceable, and/or to delete specific words or phrases, and in its reduced form, such provision will then be enforceable and will be enforced.
17.
Successors and Assigns
. This Warrant shall be binding upon and inure to the benefit of the Holder and its assigns, and shall be binding upon any entity succeeding to the Company by consolidation, merger, or acquisition of all or substantially all of the Company’s assets. The Company may not assign this Warrant or any rights or obligations hereunder without the prior written consent of the Holder. Holder may assign this Warrant without the Company’s prior written consent.
18.
Transfer
. Subject to the restrictions on transfer set forth on the face of this Warrant, this Warrant and all rights hereunder may be transferred, in whole or in part, upon surrender of this Warrant with a properly executed assignment at the principal executive office of the Company.
19.
Governing Law
. This Warrant and the performance of the transactions and obligations of the parties hereunder shall be construed and enforced in accordance with and governed by the laws, other than the conflict of laws rules, of the State of Delaware.
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TETRIDYN SOLUTIONS, INC.
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By:
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Name: Antoinette Knapp Hempstead
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Its: President
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Acknowledged and Agreed:
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JPF VENTURE GROUP, INC.
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By:
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Name: Jeremy P. Feakins
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Its: Chief Executive Officer
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C-5
(To be completed and signed only on
an exercise of the Warrant.)
TO: TetriDyn Solutions, Inc.
RE: [Specify Holder’s Warrant] (the “Warrant”)
|
1.
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The undersigned hereby elects to purchase _________ shares of ____________ pursuant to the terms of the attached Warrant.
|
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2.
|
Method of Exercise (Please initial the applicable blank):
|
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___
|
The undersigned elects to exercise the attached Warrant by means of a cash payment, and tenders herewith payment in full for the purchase price of the shares being purchased, together with all applicable transfer taxes, if any.
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___
|
The undersigned elects to exercise the attached Warrant by means of the net exercise provisions of Section 2 of the Warrant.
|
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3.
|
The undersigned hereby requests that the certificates for the Shares issuable upon this exercise of the Warrant be issued in the name(s) and delivered to the address(es) as follows:
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______________________________________________________________________________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________________________________________________________________________
Dated: ________________________________
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Signature of Holder
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Print Name of Holder
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C-6
AGREEMENT AND PLAN OF MERGER
between
TETRIDYN SOLUTIONS, INC.
and
OCEAN THERMAL ENERGY CORPORATION
March 12, 2015
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ARTICLE I—THE MERGER
|
2
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Section 1.01
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The Merger.
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2
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Section 1.02
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Restrictions on New TetriDyn Stock.
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2
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Section 1.03
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Closing; Closing Date; Effective Time.
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3
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Section 1.04
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Effect of the Merger.
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3
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Section 1.05
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Change of TetriDyn Name and Recapitalization
|
3
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ARTICLE II—CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
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3
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Section 2.01
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Merger Consideration; Conversion and Cancellation of Securities.
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3
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Section 2.02
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Exchange and Surrender of Certificates.
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4
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ARTICLE III—REPRESENTATIONS, COVENANTS, AND WARRANTIES OF OTE
|
6
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Section 3.01
|
Organization and Qualifications.
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6
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Section 3.02
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Charter Documents.
|
6
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Section 3.03
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Capitalization.
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6
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Section 3.04
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Authority.
|
7
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Section 3.05
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No Conflict: Required Filings and Consents.
|
7
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Section 3.06
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Permits; Compliance.
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8
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Section 3.07
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Financial Statements.
|
8
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Section 3.08
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Absence of Certain Changes or Events.
|
8
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Section 3.09
|
Absence of Litigation.
|
9
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Section 3.10
|
Tax Matters.
|
9
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Section 3.11
|
Taxes
|
9
|
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Section 3.12
|
Vote Required.
|
10
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Section 3.13
|
Brokers.
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10
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Section 3.14
|
Information Supplied.
|
10
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Section 3.15
|
Employee Benefit Plans; Labor Matters.
|
10
|
|
Section 3.16
|
Employee Relations
|
11
|
|
Section 3.17
|
Certain Business Practices.
|
11
|
|
Section 3.18
|
Environmental Matters.
|
12
|
|
Section 3.19
|
Insurance.
|
12
|
|
Section 3.20
|
Certain Contracts and Restrictions.
|
12
|
|
Section 3.21
|
Properties.
|
12
|
|
Section 3.22
|
Easements.
|
12
|
|
Section 3.23
|
Futures Trading and Fixed Price Exposure.
|
12
|
|
Section 3.24
|
Intellectual Property.
|
13
|
|
Section 3.25
|
Transactions with Affiliates.
|
13
|
|
Section 3.26
|
Compliance with Securities Laws.
|
14
|
|
Section 3.27
|
Disclosure Controls
|
14
|
|
Section 3.28
|
Off Balance Sheet Arrangements
|
14
|
|
Section 3.29
|
Forward-Looking Statement
|
14
|
|
Section 3.30
|
No Improper Practices
|
14
|
|
Section 3.31
|
OFAC
|
14
|
|
Section 3.32
|
Minute Book.
|
15
|
|
|
|
|
|
ARTICLE IV—REPRESENTATIONS, COVENANTS, AND WARRANTIES OF TETRIDYN
|
15
|
|
Section 4.01
|
Organization and Qualifications.
|
15
|
|
Section 4.02
|
Articles and Bylaws.
|
15
|
|
Section 4.03
|
Capitalization.
|
15
|
|
Section 4.04
|
Authority.
|
16
|
|
Section 4.05
|
No Conflict: Required Filings and Consents.
|
17
|
ii
|
Section 4.06
|
Permits; Compliance.
|
17
|
|
Section 4.07
|
Reports; Financial Statements.
|
17
|
|
Section 4.08
|
Absence of Certain Changes or Events.
|
18
|
|
Section 4.09
|
Absence of Litigation.
|
18
|
|
Section 4.10
|
Tax Matters.
|
19
|
|
Section 4.11
|
Taxes.
|
19
|
|
Section 4.12
|
No Vote Required.
|
20
|
|
Section 4.13
|
Brokers.
|
20
|
|
Section 4.14
|
Information Supplied.
|
20
|
|
Section 4.15
|
Employee Benefit Plans; Labor Matters.
|
20
|
|
Section 4.16
|
Employee Relations
|
21
|
|
Section 4.17
|
Certain Business Practices.
|
21
|
|
Section 4.18
|
Environmental Matters.
|
21
|
|
Section 4.19
|
Insurance.
|
21
|
|
Section 4.20
|
Certain Contracts and Restrictions.
|
22
|
|
Section 4.21
|
Properties.
|
22
|
|
Section 4.22
|
Easements.
|
22
|
|
Section 4.23
|
Futures Trading and Fixed Price Exposure.
|
22
|
|
Section 4.24
|
Intellectual Property.
|
22
|
|
Section 4.25
|
Transactions with Affiliates.
|
23
|
|
Section 4.26
|
Compliance with Securities Laws.
|
23
|
|
Section 4.27
|
Disclosure Controls.
|
23
|
|
Section 4.28
|
Off Balance Sheet Arrangements.
|
24
|
|
Section 4.29
|
Forward-Looking Statement.
|
24
|
|
Section 4.30
|
No Improper Practices
|
24
|
|
Section 4.31
|
OFAC
|
24
|
|
Section 4.32
|
Minute Book
|
24
|
|
|
|
|
|
ARTICLE V—ADDITIONAL AGREEMENTS
|
24
|
|
Section 5.01
|
California Corporations Code Section 25142 “Fairness” Permit
|
24
|
|
Section 5.02
|
Approvals of Stockholders
|
25
|
|
Section 5.03
|
Access and Information.
|
25
|
|
Section 5.04
|
Other State Securities Laws.
|
26
|
|
Section 5.05
|
Appropriate Action; Consents; Filings.
|
26
|
|
Section 5.06
|
Acquisition of New TetriDyn Stock.
|
27
|
|
Section 5.07
|
Limitations on Resale of New TetriDyn Stock Following Possible Public Offering.
|
29
|
|
Section 5.08
|
No Representation or Opinions Regarding Certain Legal Matters
|
29
|
|
Section 5.09
|
Public Announcements
|
29
|
|
Section 5.10
|
Board of Directors and Officers.
|
30
|
|
Section 5.11
|
[Reserved]
|
30
|
|
Section 5.12
|
Post-Closing Matters
|
30
|
|
|
|
|
|
ARTICLE VI—CLOSING CONDITIONS
|
31
|
|
Section 6.01
|
Third-Party Conditions to Obligations of the Parties under this Agreement.
|
31
|
|
Section 6.02
|
Additional Conditions to Obligations of the Parties.
|
31
|
|
Section 6.03
|
TetriDyn Recapitalization
|
32
|
|
|
|
|
|
ARTICLE VII—TERMINATION, AMENDMENT AND WAIVER
|
32
|
|
Section 7.01
|
Termination
|
32
|
|
Section 7.02
|
Effect of Termination.
|
33
|
|
Section 7.03
|
Amendment
|
33
|
|
Section 7.04
|
Waiver
|
33
|
|
Section 7.05
|
Fees, Expenses and Other Payments
|
33
|
iii
|
ARTICLE VIII—GENERAL PROVISIONS
|
33
|
|
Section 8.01
|
Effectiveness of Representations, Warranties and Agreements; Survival.
|
33
|
|
Section 8.02
|
Notices.
|
34
|
|
Section 8.03
|
Certain Definitions.
|
34
|
|
Section 8.04
|
Interpretation.
|
35
|
|
Section 8.05
|
Entire Agreement.
|
36
|
|
Section 8.06
|
Assignment.
|
36
|
|
Section 8.07
|
Parties in Interest.
|
36
|
|
Section 8.08
|
Failure or Indulgence Not Waiver; Remedies Cumulative.
|
36
|
|
Section 8.09
|
Governing Law.
|
36
|
|
Section 8.10
|
Counterparts.
|
37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXHIBITS
|
|
|
|
|
|
|
|
Exhibit A
|
Form of Certificate of Merger
|
|
|
Exhibit B
|
Management of TetriDyn and the Surviving Corporation
|
|
iv
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (“
Agreement
”), dated as of March 12, 2015, is entered into by and between
TETRIDYN SOLUTIONS, INC.
, a Nevada corporation (“
TetriDyn
”), and OCEAN THERMAL ENERGY CORPORATION, a Delaware corporation (“
OTE
”). TetriDyn and OTE are sometimes hereinafter together referred to as the “
Parties
.”
RECITALS
A. OTE is developing deep-water hydrothermal technologies to provide renewable energy and drinkable water. OTE’s Sea Water Air Conditioning (“
SWAC
”) technology takes advantage of the difference between cold deep water and warmer surface water to produce hydrothermal energy without requiring fossil fuels. OTE has recently broken ground on a SWAC project at the upscale Baha Mar Resort in the Bahamas. This project, believed to be the first large-scale seawater air conditioning system in the Bahamas, is scheduled to be completed and in service by January 2016. OTE is intrigued with the commercial potential of proprietary technologies being developed by TetriDyn as a potential for future business diversification. Further, OTE recognizes that TetriDyn’s status as a company subject to the periodic reporting requirements pursuant to Section 15(d) of the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), may enhance access to the capital markets to fund future projects.
B. Despite the efforts of TetriDyn’s directors and others to sustain its business after the unexpected death on April 26, 2013, of David Hempstead, its co-founder and chief executive officer, TetriDyn has been unable to launch full-scale commercialization of its most promising products and services. Notwithstanding the disruption of TetriDyn’s business activities, it continues to believe that its business information technology, which combines systems engineering methodologies, strategic planning, and system integration, remains valuable and innovative. Specifically, TetriDyn believes that its revenue recovery services, optimized business processes, and maintenance technology are likely to have applications in terms of increasing efficiency in other industries beyond the realm of healthcare, including service industries. TetriDyn believes that it would benefit from obtaining the entrepreneurial skills of OTE’s management, which may enhance the possibility of commercialization of TetriDyn’s intellectual properties, and the business diversification that OTE’s business provides.
C. The Parties desire to combine as set forth in this Agreement in order to achieve the business goals of each.
D. In order to effect the combination of the Parties, TetriDyn shall organize a new, wholly owned subsidiary (“
MergerCo
”) under the laws of the state of Delaware that, upon the terms and subject to the conditions of this Agreement and in accordance with the laws governing corporations under the Delaware General Corporation Law (“
Delaware Law
”), shall merge with and into OTE (the “
Merger
”) for the purpose of making OTE a wholly owned subsidiary of TetriDyn (the “
Surviving Corporation
”). In order to effect the Merger, at the Closing TetriDyn shall effect recapitalization that consists of a 4.6972-to-one reverse split of its 24,031,863 shares of issued and outstanding common stock (“
Post-Split Stock
”) and the increase of its authorized common stock to 200,000,000 shares, par value $0.0001 (collectively, the “
Recapitalization
”). Pursuant to the terms of the Merger, the shares of common stock (the “
OTE Stock
”) issued and outstanding or existing immediately prior to the Effective Time (as defined herein) of the Merger will be converted at the Effective Time into the right to receive newly issued shares of Post-Split Stock (“
New TetriDyn Stock
”), subject to certain restrictions on transfer as hereinafter provided and subject to the rights of the holders of certain of such shares of OTE Stock to exercise their rights as dissenters to seek an appraisal of the fair value thereof as provided under Delaware Law (each, a “
Dissenting OTE Stockholder
”). The number of shares of New TetriDyn Stock issued to the stockholders OTE, including shares that would have been issuable to Dissenting OTE Stockholders (as defined) had they not dissented, together with the number of shares issuable on the exercise of outstanding warrants, the conversion of outstanding bonds, and the payment of stock purchase subscriptions for the purchase of OTE Stock, shall constitute, on a fully diluted basis, 95% of the number of shares of common stock of TetriDyn to be outstanding after giving effect only to the Merger. The shares of common stock of TetriDyn, par value $0.001 per share (“
TetriDyn Stock
”), issued and outstanding immediately prior to the Effective Time will remain issued and outstanding. The shares of preferred stock of TetriDyn, par value $0.001 per share (“
TetriDyn Preferred Stock
”), issued and outstanding immediately prior to the execution of this Agreement are being surrendered to TetriDyn for cancellation at the date hereof pursuant to a separate agreement.
1
E. The board of directors of each of the Parties has determined that the Merger is consistent with and in furtherance of the long-term business strategies of each of them and is fair to, and in the best interests of, each of them and each of their respective stockholders; has approved and adopted this Agreement, the issuance of New TetriDyn Stock, and the other transactions contemplated hereby; and has recommended approval of this Agreement and the contemplated transactions by the appropriate Party’s stockholders when such approval is required by law.
F. For federal income tax purposes, it is understood that the Merger has been structured to qualify as a so-called “tax-free reorganization” under the provisions of Sections 368(a)1(A) and 368(a)(2)(E) of the United States Internal Revenue Code of 1986, as amended (the “
Code
”), and that each Party will take all actions reasonably necessary to so qualify the Merger, although neither Party has obtained or will be required to obtain or provide an opinion of counsel to the foregoing effect.
G. Prior to obtaining required regulatory approvals satisfying or waiving other conditions precedent, and consummating the Merger, it is in the best interests of OTE that TetriDyn initiate an updated technical and commercialization review of its intellectual properties with a view to possible broadened market introduction, address the potential resolution or restructuring of legacy obligations, and move towards bringing its SEC reports current and, in general, advancing its business activities. Inasmuch as OTE and TetriDyn cannot complete the Merger as contemplated by this Agreement until certain conditions are satisfied and required regulatory approvals obtained, OTE and TetriDyn desire that an affiliate of one of OTE’s principal shareholders, JPF Venture Group, Inc. (“
JPF
”), invest in TetriDyn prior to the consummation of the Merger in order to provide TetriDyn with management and financial resources that can be applied to the foregoing goals, all as more particularly set forth in the certain Investment Agreement of even date (the “
Investment Agreement
”), by and between TetriDyn, JPF and Antoinette Knapp Hempstead, an individual, on behalf of herself and the estate of her late husband, David W. Hempstead.
H. Certain terms used in this Agreement are defined in section 8.03 hereof.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, the respective representations, warranties, covenants, and agreements set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and confirmed, the Parties agree as follows:
ARTICLE I
THE MERGER
Section 1.01 The Merger
Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with Delaware Law, at the Effective Time, MergerCo shall be merged with and into OTE, the separate corporate existence of MergerCo shall cease, OTE shall continue as the Surviving Corporation of the Merger, and the OTE Stock issued and outstanding or existing immediately prior to the Effective Time of the Merger shall be converted at the Effective Time into the right to receive shares of New TetriDyn Stock as herein provided.
Section 1.02 Restrictions on New TetriDyn Stock
Transfer of the shares of New TetriDyn Stock issuable in the Merger in accordance with this Agreement will be subject to certain restrictions: (a) under the Securities Act of 1933, as amended (the “
Securities Act
”), and Regulation D promulgated by the U.S. Securities and Exchange Commission (the “
SEC
”) thereunder, as more particularly set forth in section 5.06; (b) under certain applicable state securities laws; and (c) for a period immediately following the Merger and completion of a possible public offering of TetriDyn Stock as more particularly set forth in section 5.07.
2
Section 1.03 Closing; Closing Date; Effective Time
Unless this Agreement shall have been terminated pursuant to section 7.01, the consummation of the Merger and the closing of the transactions contemplated by this Agreement (the “
Closing
”) shall take place by the exchange of documents electronically, by facsimile, or by overnight courier by a recognized national courier service as soon as practicable (but in any event within two business days) after the satisfaction or, if permissible, waiver of the conditions set forth in Article VI, or at such other date, time, and place as TetriDyn and OTE may agree. The date on which the Closing takes place is referred to herein as the “
Closing Date
.” As promptly as practicable following the Closing Date, the Parties shall cause the Merger to be consummated by filing the Certificate of Merger, in the form of
Exhibit A
attached hereto, with the Delaware Secretary of State (the date and time of the filing, or such later date or time agreed upon by TetriDyn and OTE and set forth therein, being the “
Effective Time
”).
Section 1.04 Effect of the Merger
At the Effective Time, to the full extent provided under Delaware Law, OTE, as the Surviving Corporation of the Merger with MergerCo, shall possess all the rights, privileges, powers, and franchises of a public as well as of a private nature, and be subject to all the restrictions, disabilities, and duties of each of the merged entities. All rights, privileges, powers, and franchises of each of the merged entities, and all property (real, personal, and mixed) and all debts due to either of the merged entities on whatever account, as well as stock subscriptions and all other things in action belonging to each of the merged entities, shall be vested in OTE, as the Surviving Corporation. All property, rights, privileges, powers, and franchises, and all and every other interest shall be thereafter as effectively the property of the Surviving Corporation as they were of the respective corporation, and the title to any real estate vested by deed or otherwise, in either constituent entity, shall not revert or be in any way impaired; but all rights of creditors and all liens upon any property of either constituent entity shall be preserved unimpaired, and all debts, liabilities, and duties of the constituent entities shall thenceforth attach to the Surviving Corporation and may be enforced against it to the same extent as if said debts, liabilities, and duties had been incurred or contracted by it.
Section 1.05 Change of TetriDyn Name and Recapitalization
In connection with the consummation of the Merger and upon the consent of the holders of a majority of the outstanding common of TetriDyn as provided in this Agreement, immediately following the Closing, TetriDyn shall file with the Nevada Secretary of State an amendment to its articles of incorporation changing its name to “Ocean Thermal Energy Corporation” or such other name as may be available and acceptable to the Parties and effecting the Recapitalization.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 2.01 Merger Consideration; Conversion and Cancellation of Securities
At the Effective Time, by virtue of the Merger and without any action on the part of TetriDyn, OTE, or MergerCo or their respective stockholders:
(a) Subject to the other provisions of this Article II, each share of OTE Stock issued and outstanding immediately prior to the Effective Time (excluding any OTE Stock described in section 2.01(c) of this Agreement and shares held by Dissenting OTE Stockholders) shall be converted into the right to receive one (1) (the “
Exchange Ratio
”) share of New TetriDyn Stock. Notwithstanding the foregoing, if between the date of this Agreement and the Effective Time the outstanding shares of TetriDyn Stock or OTE Stock shall have been changed into a different number of shares or a different class, by reason of any stock dividend, subdivision, reclassification, conversion, recapitalization, split, combination, exchange of shares, or sale of additional shares, the Exchange Ratio shall be correspondingly adjusted to reflect such stock dividend, subdivision, reclassification, conversion, recapitalization, split, combination, exchange, or sale of shares.
3
(b) Subject to the other provisions of this Article II, persons having subscribed to purchase shares of OTE Stock, as identified in
Schedules 3.03(b)(i)-(v)
, if any, upon the payment of the consideration of the purchase price for their shares of OTE Stock as set forth in their subscription agreement, shall be issued New TetriDyn Stock in accordance with such subscription agreements, appropriately adjusted to give effect to the Exchange Ratio or adjusted Exchange Ratio, as applicable.
(c) Subject to the other provisions of this Article II, the former holders of warrants to purchase OTE Stock, as identified in
Schedule 3.03(c)
of the OTE Schedules, at the Effective Time, shall be granted warrants to purchase the number of shares of New TetriDyn Stock at the exercise prices and during the warrant terms set forth opposite their respective names on
Schedule 3.03(c)
, appropriately adjusted to give effect to the Exchange Ratio or adjusted Exchange Ratio, as applicable. Such new warrants containing substantially identical terms as the existing warrants shall be delivered to the holders of existing warrants as quickly as practicable after the Effective Time against delivery to TetriDyn of the existing warrants for cancellation. Pending the issuance of the new warrants, the existing warrants outstanding at the Effective Time shall thereafter represent the right to purchase that whole number of shares of New TetriDyn Stock at an exercise price determined in accordance with the provisions of section 2.01(a) hereof.
(d) Notwithstanding any provision of this Agreement to the contrary, each share of OTE Stock held in the treasury of OTE and each share of OTE Stock owned by OTE or any direct or indirect wholly owned subsidiary of OTE immediately prior to the Effective Time shall be canceled and extinguished without any conversion thereof, and no payment shall be made with respect thereto.
(e) Subject to the provisions of this Article II, each certificate evidencing OTE Stock at the Effective Time (other than OTE Stock described in section 2.01(b) of this Agreement or shares held by a Dissenting OTE Stockholder) (the “
Converted Shares
” or “
Converted Share Certificates
”) shall thereafter represent the right to receive, subject to section 2.02(f) of this Agreement, that whole number of shares of New TetriDyn Stock determined pursuant to section 2.01(a) hereof. The holders of Converted Share Certificates shall cease to have any rights respecting such Converted Shares except as otherwise provided herein or by law. Converted Share Certificates shall be exchanged for certificates evidencing whole shares of New TetriDyn Stock upon the surrender of such Converted Share Certificates in accordance with the provisions of section 2.02 of this Agreement, without interest. No fractional shares of New TetriDyn Stock shall be issued in connection with the Merger and, in lieu thereof, the number of shares issuable to any registered stockholder of record of OTE shall be rounded upward to the nearest whole share.
(f) Notwithstanding anything in this Agreement to the contrary, any issued and outstanding shares of OTE Stock held by a Dissenting OTE Stockholder who has not voted in favor of nor consented to the Merger and who complies with all the provisions of Delaware Law concerning the right of holders of such stock to dissent from the Merger and require appraisal of his shares, shall not be converted as described in this section 2.01 but shall become, at the Effective Time, by virtue of the Merger and without any further action, the right to receive such consideration as may be determined to be due to such Dissenting OTE Stockholder in accordance with Delaware Law;
provided, however,
that shares of OTE Stock outstanding immediately prior to the Effective Time and held by a Dissenting OTE Stockholder, who shall, after the Effective Time, withdraw his demand for appraisal or lose his right of appraisal, in either case pursuant to Delaware Law, shall be deemed to be converted as of the Effective Time into the right to receive New TetriDyn Stock.
Section 2.02 Exchange and Surrender of Certificates
(a) As of the Effective Time, TetriDyn shall deposit, or shall cause to be deposited with Interwest Transfer Company, Inc., 1981 Murray Holiday Road, Suite 100, P.O. Box 17136, Salt Lake City, UT 84117 (the “
Exchange Agent
”), for the benefit of the holders of shares of OTE Stock for exchange in accordance with this Article II, the certificates representing shares of New TetriDyn Stock issuable in the Merger.
4
(b) As soon as reasonably practicable after the Effective Time, the Exchange Agent shall mail to each holder of record of shares of OTE Stock a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Converted Share Certificates shall pass, only upon delivery of the Converted Share Certificates to the Exchange Agent, and which shall be in such form and have such other provisions as TetriDyn may reasonably specify) and instructions for use in effecting the surrender of the Converted Share Certificates in exchange for certificates representing shares of New TetriDyn Stock issuable pursuant to section 2.01. Upon surrender of a Converted Share Certificate to the Exchange Agent, together with the duly executed letter of transmittal, the holder of a Converted Share Certificate shall be entitled to receive in exchange therefor a certificate representing that number of whole shares of New TetriDyn Stock that such holder has the right to receive pursuant to the provisions of this Article II. In the event of a transfer of ownership of OTE Stock that is not registered in OTE’s transfer records, a certificate representing the proper number of shares of New TetriDyn Stock may be issued to a transferee if the Converted Share Certificate representing such OTE Stock is presented to the Exchange Agent, accompanied by all documents required to evidence and effect such transfer and by evidence that any applicable stock transfer taxes have been paid. Until surrendered as contemplated by this section 2.02, each Converted Share Certificate shall be deemed at any time after the Effective Time to represent only the New TetriDyn Stock into which the Converted Shares represented by such Converted Share Certificate would be converted as provided in this Article II.
(c) After the Effective Time, there shall be no further registration of transfers of OTE Stock. If, after the Effective Time, certificates representing shares of OTE Stock are presented to TetriDyn or the Exchange Agent, they shall be exchanged for the New TetriDyn Stock provided for in this Agreement in accordance with the procedures set forth herein.
(d) Any portion of the New TetriDyn Stock made available to the Exchange Agent pursuant to this section 2.02 that remains unclaimed by the holders of shares of OTE Stock one year after the Effective Time shall be returned to TetriDyn, upon demand, and any holder who has not exchanged his Converted Shares of OTE Stock in accordance with this section 2.02 prior to that time shall thereafter look only to TetriDyn for exchange of the New TetriDyn Stock for his shares of OTE Stock. Notwithstanding the foregoing, TetriDyn shall not be liable to any owner of OTE Stock for any amount paid to a public official pursuant to applicable abandoned property, escheat, or similar Laws (as defined herein).
(e) No dividends, interest, or other distributions respecting shares of New TetriDyn Stock shall be paid to the holder of any unsurrendered Converted Share Certificates unless and until such Converted Share Certificates are surrendered as provided in this section 2.02. Upon surrender, TetriDyn shall pay or cause the Exchange Agent to pay, without interest, all dividends and other distributions payable for such shares of New TetriDyn Stock on a date, and for a record date, after the Effective Time.
(f) No certificates evidencing fractional shares of New TetriDyn Stock shall be issued upon the surrender for exchange of Converted Share Certificates. In lieu of any fractional interests, TetriDyn shall issue to each holder of record of a Converted Share Certificate, upon surrender of such certificate for exchange pursuant to this Article II, a whole share of New TetriDyn Stock.
(g) TetriDyn shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any former holder of OTE Stock all amounts TetriDyn (or any affiliate thereof) is required to deduct and withhold respecting the making of such payment under the Code or any provision of state, local, or foreign tax law. To the extent that amounts are so withheld by TetriDyn, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the former holder of the OTE Stock for which such deduction and withholding was made. In the event the amount withheld is insufficient to satisfy the withholding obligations of TetriDyn, (or any affiliate thereof), such former stockholder shall reimburse TetriDyn (or such affiliate), at its request, the amount of any such insufficiency.
5
ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF OTE
OTE hereby represents, covenants, and warrants to TetriDyn, such representations, covenants, and warranties to be made as of the date hereof and at and as of the Closing Date, to survive the Closing, and to continue in accordance with the terms hereof (except as otherwise expressly set forth in section 8.01), as set forth in this Article III and as limited, qualified by, or except as otherwise set forth in the written disclosure schedules to this Agreement supplementally provided by OTE to TetriDyn (the “
OTE Schedules
”).
Section 3.01 Organization and Qualifications
OTE and each of its subsidiaries: (a) is a corporation or limited liability company duly organized, validly existing, and in good standing under the Laws of its state of organization; (b) has all requisite power and authority to own, lease, and operate its properties and assets and to carry on its business as it is now being conducted; and (c) is duly qualified and in good standing to do business in each jurisdiction in which the nature of the business conducted by it or the ownership or leasing of its properties makes such qualification necessary, other than where the failure to be so duly qualified and in good standing would not have an OTE Material Adverse Effect. The term “
OTE Material Adverse Effect
,” as used in this Agreement, shall mean any change or effect that, individually or when taken together with all such other changes or effects, would be reasonably likely to be materially adverse to the assets, liabilities, financial condition, results of operations, or current or future business of OTE.
Schedule 3.01
of the OTE Schedules contains a list of each OTE subsidiary and its jurisdiction of organization and existence. When used herein, the term OTE includes each of its subsidiaries set forth on
Schedule 3.01
. Except as set forth on
Schedule 3.01
, OTE does not own an equity interest in any other corporation, partnership, joint venture arrangement, or other business entity that is material to the assets, liabilities, financial condition, results of operations, or current or future business of OTE. Except as set forth in
Schedule 3.01
, OTE does not have any predecessor, as that term is defined under generally accepted accounting principles.
Section 3.02 Charter Documents
Included in
Schedule 3.02
of the OTE Schedules are complete and correct copies of OTE’s certificate of incorporation and bylaws, as presently in effect. OTE is not in violation of any of the provisions of its certificate of incorporation or its bylaws.
Section 3.03 Capitalization
(a) The authorized capital stock of OTE consists of 200,000,000 shares of common stock and 20,000,000 shares of preferred stock, par value $0.0001 per share, of which 78,745,287 shares of common stock are issued and outstanding, 18,324,360 shares of common stock are reserved for issuance on the exercise of outstanding warrants, 139,000 shares of common stock are reserved for issuance on the conversion of outstanding bonds, for a total of 97,208,647 shares of common stock issued and outstanding and reserved for issuance on a fully diluted basis. No other shares of capital stock are reserved for issuance on the exercise of any other call, commitment, right, or other contractual arrangements to which OTE is a party or by which it is bound. Except as described in this section 3.03 or
Schedule 3.03(a)
of the OTE Schedules, no shares of capital stock of OTE are reserved for any purpose. Each of the outstanding shares of capital stock of OTE is duly authorized, validly issued, and fully paid and nonassessable and has not been issued in violation of (nor are any of the authorized shares of capital stock of OTE subject to) any preemptive or similar rights created by statute, the certificate of incorporation or bylaws of OTE, or any agreement to which OTE is a party or bound, and such outstanding shares owned by OTE are owned free and clear of all security interests, liens, claims, pledges, agreements, limitations on OTE’s voting rights, charges, or other encumbrances of any nature whatsoever.
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(b)
(i) Except as set forth in
Schedule 3.03(b)(i)
of the OTE Schedules, there are no options, warrants, or other rights (including registration rights), agreements, arrangements, or commitments of any character to which OTE is a party relating to the issued or unissued capital stock of OTE or obligating OTE to grant, issue, or sell any shares of the capital stock of OTE.
(ii) Except as set forth in
Schedule 3.03(b)(ii)
of the OTE Schedules, there are no obligations, contingent or otherwise, of OTE to: (1) repurchase, redeem, or otherwise acquire any shares of OTE Stock or other capital stock of OTE; or (2) provide material funds to, make any material investment in (in the form of a loan, capital contribution, or otherwise), or provide any guarantee respecting the obligations of any other person.
(iii) Except for its subsidiaries listed in
Schedule 3.01
and as described in
Schedule 3.03(b)(iii)
of the OTE Schedules, OTE: (1) does not directly or indirectly own; (2) has not agreed to purchase or otherwise acquire; or (3) does not hold any interest convertible into or exchangeable or exercisable for 5% or more of the capital stock of any corporation, partnership, joint venture, or other business association or entity.
(iv) Except as set forth in
Schedule 3.03(b)(iv)
of the OTE Schedules, there are no agreements, arrangements, or commitments of any character (contingent or otherwise) pursuant to which any person is or may be entitled to receive any payment based on the revenues or earnings, or calculated in accordance therewith, of OTE.
(v) Except as set forth in
Schedule 3.03(b)(v)
of the OTE Schedules, there are no voting trusts, proxies, or other agreements or understandings to which OTE is a party or by which OTE is bound respecting the voting of any shares of capital stock of OTE.
(c) OTE has made available to TetriDyn complete and correct copies (if any) of: (i) each stock option, stock award, or other benefit plan (collectively, the “
OTE Option Plans
”) and the forms of options issued pursuant to any OTE Option Plan, including all amendments thereto; and (ii) all options and warrants that are not in the form specified under clause (i) above.
Schedule 3.03(c)
of the OTE Schedules sets forth a complete and correct list of all outstanding warrants and options, restricted stock, or any other stock awards (the “
OTE Stock Awards
”) granted under the OTE Option Plans or otherwise, setting forth as of the date hereof: (x) the number and type of OTE Stock Awards; (xi) the exercise price of each outstanding stock option or warrant; and (xii) the number of stock options and warrants presently exercisable.
Section 3.04 Authority
OTE has all requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated hereby (subject to, respecting the Merger, the adoption of this Agreement by the stockholders of OTE as described in section 3.12 hereof). The execution and delivery of this Agreement by OTE and the consummation by OTE of the transactions contemplated hereby have been duly authorized by all necessary corporate action, and no other corporate proceedings on the part of OTE are necessary to authorize this Agreement or to consummate the transactions contemplated hereby (subject to, respecting the Merger, the approval thereof by the stockholders of OTE as described in section 3.12). This Agreement has been duly executed and delivered by OTE and, assuming the due authorization, execution, and delivery thereof by TetriDyn, constitutes the legal, valid, and binding obligation of OTE, enforceable against OTE in accordance with its terms, except that: (a) such enforcement may be subject to applicable bankruptcy, insolvency, or other similar Laws, now or hereafter in effect affecting creditors’ rights generally; and (b) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
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Section 3.05 No Conflict: Required Filings and Consents
(a) Except as set forth in
Schedule 3.05
of the OTE Schedules, the execution and delivery of this Agreement by OTE does not, and the consummation of the transaction contemplated hereby will not: (i) conflict with or violate OTE’s certificate of incorporation or bylaws, in each case as amended or restated; (ii) conflict with or violate any federal, state, foreign, or local law, statute, ordinance, rule, regulation, order, judgment, or decree (collectively, “
Laws
”) applicable to OTE or by which any of its properties is bound or subject; or (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration, or cancellation of, or result in the creation of a lien or encumbrance on any of the properties or assets of OTE pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise, or other instrument or obligation to which OTE is a party or by which OTE or any of its properties is bound or subject;
except
for any such conflicts or violations described in clause (ii) or breaches, defaults, events, rights of termination, amendment, acceleration or cancellation, payment obligations, or liens or encumbrances described in clause (iii) that would not have an OTE Material Adverse Effect.
(b) The execution and delivery of this Agreement by OTE does not, and consummation of the transactions contemplated hereby will not, require OTE to obtain any consent, license, permit, approval, waiver, authorization or order of, or to make any filing with or notification to, any governmental or regulatory authority, domestic or foreign (collectively, “
Governmental Entities
”), except for filing appropriate merger documents as required by applicable state Laws and when the failure to obtain such consents, licenses, permits, approvals, waivers, authorizations or orders, or to make such filings or notifications, would not, either individually or in the aggregate, materially interfere with OTE’s performance of its obligations under this Agreement and would not have an OTE Material Adverse Effect.
Section 3.06 Permits; Compliance
Each of OTE and each subsidiary, to OTE’s knowledge, any third-party operator of any of OTE’s or any subsidiary’s properties, is in possession of all material franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals, and orders necessary to own, lease, and operate its properties and to carry on its business in all material respects as it is now being conducted or as presently foreseeable (collectively, the “
OTE Permits
”), and there is no action, proceeding, or investigation pending or, to OTE’s knowledge, threatened regarding suspension or cancellation of any of the OTE Permits, except when the failure to possess, or the suspension or cancellation of, such OTE Permits would not have an OTE Material Adverse Effect. Except as set forth in
Schedule 3.06
of the OTE Schedules, OTE has not received from any Governmental Entity any written notification respecting possible conflicts, defaults, or violations of Laws, except for written notices relating to possible conflicts, defaults, or violations that would not have an OTE Material Adverse Effect.
Section 3.07 Financial Statements
Included in
Schedule 3.07
of the OTE Schedules is OTE’s unaudited consolidated balance sheets as of September 30, 2014 (“
OTE’s Current Balance Sheet
”), and the related consolidated statements of operations, changes in stockholders’ equity (deficiency), and cash flows for the nine months ended September 30, 2014, including the notes thereto. Such schedule also includes OTE’s audited consolidated balance sheets as of December 31, 2013 and 2012, and the related consolidated statements of operations, changes in stockholders’ equity (deficiency), and cash flows for the years ended December 31, 2013 and 2012, including the notes thereto and the report thereon of Liggett, Vogt & Webb, P.A. Certified Public Accountants. OTE’s Current Balance Sheet and the related consolidated statements of operations, changes in stockholders’ equity (deficiency), and cash flows for the nine months ended September 30, 2014, together with the notes thereto, contain all adjustments (all of which are normal recurring adjustments) necessary to present fairly OTE’s results of operations and financial position for the periods and as of the dates indicated. All such audited and unaudited financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods involved (except: (a) to the extent required by changes in generally accepted accounting principles; and (b) as may be indicated in the notes thereto) and fairly present OTE’s financial position as of the respective dates thereof and the result of operations and cash flows for the periods indicated, except that any unaudited interim financial statements were or will be subject to normal and recurring year-end adjustments.
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Section 3.08 Absence of Certain Changes or Events
Except as contemplated by this Agreement or as set forth in
Schedule 3.08
of the OTE Schedules, since the date of OTE’s Current Balance Sheet, OTE has conducted its business in the ordinary course of business consistent with past practice. Since the date of OTE’s Current Balance Sheet, there has not been: (a) any event, change, or effect (including the occurrence of any liabilities of any nature, whether or not accrued, contingent, or otherwise) having or, which would be reasonably likely to have, individually or in the aggregate, an OTE Material Adverse Effect; (b) any declaration, setting aside, or payment of any dividend or other distribution (whether in cash, stock, or property) respecting the equity interests of OTE or any redemption, purchase, or other acquisition by OTE of any of OTE’s capital stock; (c) any revaluation by OTE of its assets, including the writing down of the value of inventory or the writing down or off of notes or accounts receivable, other than in the ordinary course of business and consistent with past practices; (d) any change by OTE in accounting principles or methods, except insofar as may be required by a change in generally accepted accounting principles; (e) a fundamental change in the nature of OTE’s business; (f) any arrangement for the disposition of any material property or assets of OTE; (g) any accrual or arrangement for or payment of bonuses or special compensation of any kind or any severance or termination pay to any present or former officer, employee, or shareholder; (h) any increase in any profit sharing, bonus, deferred compensation, insurance, pension, retirement, or other employee benefit plan, payment, or arrangement made to, for, or with its officers, directors, or employees; or (i) an OTE Material Adverse Effect.
Section 3.09 Absence of Litigation
Except as set forth in
Schedule 3.09
of the OTE Schedules, there is no claim, suit, litigation, proceeding, arbitration, or, to OTE’s knowledge, investigation of any kind, at law or in equity (including actions or proceedings seeking injunctive relief), pending or threatened against OTE or any of its properties (except for claims, actions, suits, litigation, proceedings, arbitrations, or investigations that would not have an OTE Material Adverse Effect), and OTE is not subject to any continuing order of, consent decree, settlement agreement, or other similar written agreement with, or to OTE’s knowledge, continuing investigation by, any Governmental Entity, or any judgment, order, writ, injunction, decree or award of any Government Entity or arbitrator, including cease-and-desist or other orders, except for matters that would not have an OTE Material Adverse Effect.
Section 3.10 Tax Matters
Neither OTE nor, to OTE’s knowledge, any of its affiliates has taken or agreed to take any action that would prevent the Merger from constituting a tax-free reorganization qualifying under the provisions of Section 368(a) of the Code, all as more particularly set forth in a separate letter of representation in form and substance reasonably acceptable to TetriDyn to be delivered by OTE to TetriDyn at the Closing and which is incorporated herein by reference.
Section 3.11 Taxes
(a) Except as disclosed on
Schedule 3.11(a) of the OTE Schedules
, OTE has made available to TetriDyn complete copies of: (i) all returns and information statements respecting any Taxes of OTE (“
OTE Returns
”) for all periods since the formation of OTE open under the statute of limitations for assessments; and (ii) examination reports and statements of deficiencies assessed by OTE. OTE does not do business or derive income from any state, local, territorial, or foreign taxing jurisdiction so as to be subject to Taxes or return filing requirements other than those OTE Returns described in the preceding sentence. Except as disclosed on
Schedule 3.11(a)
or to the extent that the applicable statute of limitations has expired, all OTE Returns required to be filed by or on behalf of OTE have been duly filed on a timely basis with the appropriate governmental authorities and are true, correct, and complete, and all Taxes for all periods covered by such OTE Returns, or respecting any period prior to the Effective Time, have been duly paid in full or a provision for the payment thereof has been made in accordance with generally accepted accounting principles and is reflected on OTE’s Current Balance Sheet. All OTE Returns are accurate and correct in all material respects. OTE has no liabilities respecting the payment of any Taxes (including any deficiencies, interest, or penalties) accrued for or applicable to the period ended on the date of OTE’s Current Balance Sheet, except as reflected therein, and all such dates and years and periods prior thereto and for which OTE may at said date have been liable in its own right or as transferee of the assets of, or as successor to, any other corporation or other entity, except for taxes accrued but not yet due and payable. OTE has not elected at any time pursuant to the Code to be treated as an S corporation pursuant to Section 1362(a) of the Code or a collapsed corporation pursuant to Section 341(f) of the Code, nor has OTE made any other elections pursuant to the Code (other than elections that relate solely to methods of accounting, depreciation, or amortization) that would have an OTE Material Adverse Effect. There are no outstanding agreements or waivers extending the statutory period of limitation applicable to any OTE Return.
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(b) OTE has complied in all respects with all applicable Laws relating to the payment and withholding of Taxes (including any estimated Taxes and the withholding of Taxes pursuant to Sections 1441 and 1442 of the Code or similar provisions under any foreign Laws) and has, within the time and the manner prescribed by law, withheld from employee wages and paid over all amounts withheld under applicable Laws, except when noncompliance would not have an OTE Material Adverse Effect. There are no liens on any of OTE’s assets respecting Taxes other than for Taxes not yet due and payable. There is no material dispute or claim concerning any liabilities for Taxes of OTE either raised or reasonably expected to be raised by any taxing authority.
(c) Except as disclosed in
Schedule 3.11(c)
of the OTE Schedules: (i) there is no audit of any OTE Returns by a governmental or taxing authority in process, pending, or threatened (formally or informally), and OTE has no knowledge of any potential audit; (ii) except to the extent that the applicable statute of limitations has expired and except as to matters that have been resolved, no deficiencies exist or have been asserted (either formally or informally) or are expected to be asserted respecting Taxes of OTE, and no notice (either formally or informally) has been received by OTE that it has not filed an OTE Return or paid Taxes required to be filed or paid by it; (iii OTE is not a party to any pending action or proceeding for assessment or collection of Taxes, nor has an action or proceeding been asserted or threatened (either formally or informally) against it or any of its assets, except to the extent that the applicable statute of limitations has expired and except as to matters that have been resolved; (iv) no waiver or extension of any statute of limitations is in effect respecting Taxes of OTE or OTE Returns; (v) no action has been taken that would have the effect of deferring any liability for Taxes for OTE from any period prior to the Effective Time to any period after the Effective Time; (vi) there are no requests for rulings, subpoenas, or requests for information pending respecting the Taxes of OTE; (vii) no power of attorney has been granted by OTE respecting any matter relating to Taxes; (viii) OTE has never been included in an affiliated group of corporations, within the meaning of Section 1504 of the Code; (ix) OTE is not (nor has it ever been) a party to any tax-sharing agreement between affiliated corporations; and (x) the amount of liability for unpaid Taxes of OTE for all periods ending on or before the Effective Time will not, in the aggregate, materially exceed the amount of the liability accruals for Taxes reflected on OTE’s Current Balance Sheet.
Section 3.12 Vote Required
The only vote of the holders of any class or series of OTE capital stock necessary to approve the Merger is the affirmative vote of the holders of a majority of the OTE Stock outstanding.
Section 3.13 Brokers
Except as set forth in
Schedule 3.13
of the OTE Schedules, no broker, finder, or investment banker is entitled to any brokerage, finder’s, or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of OTE. Prior to the date of this Agreement, OTE has made available to TetriDyn complete and correct copies of all agreements referenced in
Schedule 3.13
pursuant to which any such firm will be entitled to any payment related to the transactions contemplated by this Agreement.
Section 3.14 Information Supplied
Without limiting any of the representations and warranties contained herein, no representation or warranty of OTE and no statement by OTE or other information contained in or documents referred to in the OTE Schedules, as of the date of such representation, warranty, statement, or document, contains or contained any untrue statement of material fact or, at the date thereof, omits or omitted to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which such statements are or were made, not misleading.
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Section 3.15 Employee Benefit Plans; Labor Matters
(a) OTE is not bound by or subject to (and none of its operations is bound by or subject to) any written or oral, express or implied, contract, commitment, or arrangement with any labor union, and no labor union has requested or, to OTE’s knowledge, has sought to represent any of OTE’s employees, representatives, or agents. There is no strike or other labor dispute involving OTE pending or, to OTE’s knowledge, threatened that could have an OTE Material Adverse Effect, nor is OTE aware of any labor organization activity involving its employees. OTE is not aware that any officer or key employee, or that any group of key employees, intends to terminate employment with OTE, nor does OTE have a present intention to terminate the employment of any of the foregoing. The employment of each officer and employee of OTE, to the best of OTE’s knowledge, is terminable at OTE’s will.
(b) Except as set forth in
Schedule 3.15(b)
of the OTE Schedules, OTE does not maintain, and has not contributed during the past five years to, any employee benefit plan (as such term is defined in The Employee Retirement Income Security Act of 1974 (“
ERISA
”), Section 3(s), or for which OTE or any member of its ERISA group would incur liability under Sections 4065, 4069, 4212(c), or 4204 of ERISA, and any other retirement, pension, stock option, stock application rights, profit sharing, incentive compensation, deferred compensation, savings, thrift, vacation pay, severance pay, or other employee compensation or benefit plan, agreement, practice, or arrangement, whether written or unwritten, whether or not legally binding (collectively, the “
OTE Benefit Plans
”). As of the date of this Agreement, except as would not have an OTE Material Adverse Effect, the material OTE Benefit Plans maintained by OTE or any member of its ERISA Group, or respecting which OTE has or may have a liability, are in substantial compliance with applicable Laws, including ERISA and the Code.
Schedule 3.15(b
) sets forth a list of all OTE Benefit Plans, true and complete copies of which have been furnished to TetriDyn. With respect to the OTE Benefit Plans, no event has occurred, and to OTE’s knowledge, there exists no condition or set of circumstances, in connection with which OTE or any member of its ERISA group could be subject to any liability under the terms of the OTE Benefit Plans, ERISA, the Code, or any other applicable Law that would have an OTE Material Adverse Effect.
(c) Except as otherwise set forth on
Schedule 3.15(c)
of the OTE Schedules, neither OTE nor any member of its ERISA group contributes or has an obligation to contribute to, has not within five years prior to the date of this Agreement contributed or had an obligation to contribute to, or has any secondary liability under ERISA Section 4204 to, a multiemployer plan within the meaning of Section 3(37) of ERISA.
(d) Neither OTE nor any member of its ERISA group is or has ever been a party to any collective bargaining or other labor union contracts. No collective bargaining agreement is being negotiated by OTE. There is no pending or threatened labor dispute, strike, or work stoppage against OTE or any of its subsidiaries that may interfere with OTE’s business activities. None of OTE or any of its representatives or employees has committed any unfair labor practices in connection with the operation of OTE’s business, and there is no pending or threatened charge or complaint against OTE by the National Labor Relations Board or any comparable state agency.
(e) With respect to each OTE Benefit Plan that is a “group health plan” within the meaning of Section 5000(b) of the Code, each such OTE Benefit Plan complies, and has complied, with the requirements of Part 6 of Title I of ERISA and Sections 4980B and 5000 of the Code, except when the failure to so comply would not have an OTE Material Adverse Effect.
Section 3.16 Employee Relations
OTE has complied in all material respects with all applicable Laws that relate to prices, wages, hours, harassment, disabled access, discrimination employment, and collective bargaining and to the operation of its business, and OTE is not liable for any arrears of wages or taxes or penalties for failure to comply with any of the foregoing. OTE believes that its relations with its employees are satisfactory.
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Section 3.17 Certain Business Practices
Neither OTE nor any of its directors, officers, agents, or employees on OTE’s behalf has used any funds for unlawful contributions, gifts, entertainment, or other unlawful expenses relating to political activity; made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns; violated any provision of the Foreign Corrupt Practices Act of 1977, as amended; or made any other unlawful payment.
Section 3.18 Environmental Matters
Except as set forth in
Schedule 3.18
of the OTE Schedules: (a) during the period of OTE’s ownership, use, or other occupancy of the properties of OTE, OTE has not used, generated, manufactured, stored, treated, disposed of, or released any hazardous waste or substance on, under, or about any of the properties, except in compliance with environmental Laws; and (b) OTE has no knowledge of, or reason to believe that there has been: (i) any use, generation, manufacture, storage, treatment, disposal, release, or threatened release of any hazardous waste or substance by any prior owners or occupants of any of the properties, except in compliance with environmental Laws; or (ii) any actual or threatened litigation or claims of any kind against OTE or any other person for whose conduct it is or may be liable by any person relating to such matters.
Section 3.19 Insurance
OTE is currently insured, and during each of the past three calendar years has been insured, for reasonable amounts against such risks as companies similarly situated would, in accordance with good business practice, customarily be insured.
Section 3.20 Certain Contracts and Restrictions
Other than agreements, contracts, or commitments listed elsewhere in the OTE Schedules,
Schedule 3.20
of the OTE Schedules lists, as of the date hereof, each agreement, contract, or commitment (including any amendments thereto) to which OTE is a party or by which OTE is bound involving consideration during the next 12 months in excess of $1,000,000 or that is otherwise material to the assets, liabilities, financial condition, results of operations, or current or future business of OTE, taken as a whole. As of the date of this Agreement and except as indicated on the OTE Schedules, OTE has fully complied with all material terms and conditions of all agreements, contracts, and commitments that will be listed in the OTE Schedules, and all such agreements, contracts, and commitments are in full force and effect. All such agreements, contracts, and commitments are not subject to any memorandum or other written document or understanding permitting cancellation, and OTE has no knowledge of any defaults thereunder or any cancellations or modifications thereof.
Section 3.21 Properties
Except for liens arising in the ordinary course of business after the date hereof and properties and assets disposed of in the ordinary course of business after the date of OTE’s Current Balance Sheet, OTE has good and marketable title free and clear of all liens, the existence of which would have an OTE Material Adverse Effect, to all material properties and assets, whether tangible or intangible, real, personal, or mixed, reflected in OTE’s Current Balance Sheet as being owned by OTE as of the date thereof or purported to be owned on the date hereof. All buildings, fixtures, equipment, and other property and assets that are material to its business held under leases by OTE are held under valid instruments enforceable by OTE in accordance with their respective terms. Substantially all of OTE’s equipment in regular use has been well maintained and is in good and serviceable condition, reasonable wear and tear excepted.
Section 3.22 Easements
OTE’s business has been operated in a manner that does not violate the material terms of any easements, rights of way, permits, servitude, licenses, and similar rights relating to real property used by OTE in its business (collectively, “
OTE Easements
”) except for violations that have not resulted and will not result in an OTE Material Adverse Effect. All material OTE Easements are valid and enforceable and grant the rights purported to be granted thereby and all rights necessary thereunder for the current operation of such business.
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Section 3.23 Futures Trading and Fixed Price Exposure
OTE is not presently engaged in any futures or options trading nor is it a party to any price, interest rate, or currency swaps, hedges, futures, or other derivative instruments.
Section 3.24 Intellectual Property
(a)
Schedule 3.24(a)
of the OTE Schedules lists all the registered patents, trademarks, service marks, copyrights, trade names, and applications for any of the foregoing owned by OTE as of the date of this Agreement (the “
OTE Registered Intellectual Property
”). OTE has good and marketable title to the OTE Registered Intellectual Property and has good and marketable title to, or valid licenses or rights to use, all patents, copyrights, trademarks, trade names, brand names, proprietary and other technical information, technology and software (collectively, “
OTE Intellectual Property
”) used in the operation of its business as presently conducted, free from any liens and free from any requirement of any past, present, or future royalty payments, license fees, charges, or other payments or conditions or restrictions, whatsoever, except as set forth on
Schedule 3.24(a)
. Immediately after the Effective Time, the Surviving Corporation will own or will have the right to use all OTE Intellectual Property free from liens and on the same terms and conditions as in effect prior to the Effective Time.
(b) To the best of its knowledge, OTE has not infringed and is not infringing upon, and for the past three years has not engaged and is not engaging in, any unauthorized use or misappropriation of any patents, copyrights, trademarks, trade names, brand names, proprietary and other technical information, technology and software owned by or belonging to any other person. Except as set forth in
Schedule 3.24(b)
of the OTE Schedules, there are no claims or proceedings pending or, to OTE’s knowledge, threatened against OTE asserting that OTE is infringing or engaging in the unauthorized use or misappropriation of any intellectual property of any other person.
(c) OTE is not aware of prior art respecting any of the patents owned or licensed by it that was not disclosed to the U.S. Patent and Trademark Office (or to any comparable foreign authority, if necessary) in connection with applications for such patents. OTE is not aware of any fact or event making any one or more claims of any of such patents invalid or unenforceable, and OTE has not engaged in any conduct, or omitted to perform any necessary act, the result of which would be to invalidate any of such patents or adversely affect any of their enforceability.
(d)
Schedule 3.24(d)
of the OTE Schedules sets forth all agreements and arrangements pursuant to which: (i) OTE has licensed OTE Intellectual Property to, or the use of OTE Intellectual Property in other areas permitted (through nonassertion, settlement, or similar agreements or otherwise) by, any other person; and (ii) OTE has had OTE Intellectual Property licensed to it, or has otherwise been permitted to use OTE Intellectual Property (through nonassertion, settlement, or similar agreements or otherwise). All of the agreements or arrangements to the extent set forth on
Schedule 3.24(d)
: (x) are in full force and effect in accordance with their terms and OTE is not aware that any default exists thereunder by OTE or by any other party thereto; (xi) are free and clear of liens; (xii) do not contain any change of control or other terms or conditions that will become applicable or inapplicable as a result of the consummation of the Merger and the transactions contemplated by this Agreement. OTE has delivered to TetriDyn true and complete copies of all agreements and arrangements set forth on
Schedule 3.24(d)
. There are no royalties, license fees, charges, or other amounts payable by, or on behalf of, OTE for any OTE Intellectual Property other than as set forth on
Schedule 3.24(d)
.
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Section 3.25 Transactions with Affiliates
Schedule 3.25
of the OTE Schedules sets forth a description of every material contract, agreement, or arrangement between OTE and any person who is or has ever been an officer or director of OTE, or person of record or known by OTE to have beneficial ownership of 10% or more of the issued and outstanding OTE Stock, and which is to be performed, in whole or in part, after the date hereof or was entered into within three years before the date hereof. In all of such circumstances, the contract, agreement, or arrangement was for a bona fide business purpose of OTE, and the amount paid or received, whether in cash, services, or kind, is, has been during the full term thereof, and is required to be during the unexpired portion of the term thereof, no less favorable to OTE than terms available from otherwise unrelated parties in arm’s-length transactions. Except as disclosed in
Schedule 3.25
or otherwise disclosed herein, no officer or director of OTE or 10% shareholder of OTE has, or has had during the preceding three years, any interest, directly or indirectly, in any material transaction with OTE.
Schedule 3.25
also includes a description of any commitment by OTE, whether written or oral, to lend any funds to, borrow any money from, or enter into any other material transaction with, any affiliated person.
Section 3.26 Compliance with Securities Laws
All of the securities offered and sold by OTE or any predecessor within three years prior to the date of this Agreement were issued in transactions exempt from registration under the Securities Act and applicable state securities Laws.
Section 3.27 Disclosure Controls
OTE maintains systems of internal accounting controls sufficient to provide reasonable assurance that: (a) transactions are executed in accordance with management’s general or specific authorizations; (b) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (c) access to assets is permitted only in accordance with management’s general or specific authorization; and (d) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken respecting any differences.
Section 3.28 Off Balance Sheet Arrangements
There are no transactions, arrangements, and other relationships between and/or among OTE or, to OTE’s knowledge, any of its affiliates and any unconsolidated entity, including any structural finance, special purpose, or limited purpose entity (each, an “
Off Balance Sheet Transaction
”) that would reasonably be expected to affect materially OTE’s liquidity or the availability of, or requirements for, its capital resources.
Section 3.29 Forward-Looking Statement
No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) (a “
Forward Looking Statement
”) contained in OTE Schedules has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.
Section 3.30 No Improper Practices
Except as set forth in
Schedule 3.30
of the OTE Schedules
:
(a) neither OTE nor, to OTE’s knowledge, any director, officer, agent, employee, or other person associated with or acting on behalf of OTE has, in the past three years: made any unlawful contributions to any candidate for any political office (or failed fully to disclose any contribution in violation of law); made any contribution or other payment to any official of, or candidate for, any federal, state, municipal, or foreign office or other person charged with similar public or quasi-public duty in violation of any law or of the character required; (b) following the Closing, TetriDyn will not be required by the Exchange Act to disclose any contributions or payments in any periodic report (“
Periodic Report
”) required to be filed pursuant to Section 13 or 15(d) thereunder; (c) no relationship, direct or indirect, exists between or among OTE or, to OTE’s knowledge any affiliate, on the one hand, and the directors, officers, and stockholders of OTE, on the other hand, that TetriDyn is required, or will be required, by the Exchange Act to describe in any Periodic Report following the Closing; and (d) there are no material outstanding loans or advances or material guarantees of indebtedness by OTE to, or for the benefit of, any of its officers or directors or any of the members of the families of any of them that TetriDyn is required, or will be required, by the Exchange Act to describe in any Periodic Report following the Closing.
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Section 3.31 OFAC
Neither OTE nor, to OTE’s knowledge, any director, officer, agent, employee, or other affiliate of OTE or any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“
OFAC
”).
Section 3.32 Minute Book
OTE’s minute book contains, and will contain at the Closing Date, a materially complete record of all meetings, consents, or other actions of its board of directors and shareholders for the period from inception through the date hereof and accurately reflects the substance of all transactions referred to in such minutes in all material respects.
ARTICLE IV
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF TETRIDYN
TetriDyn hereby represents, covenants, and warrants to OTE, such representations, covenants, and warranties to be made as of the date hereof and at and as of the Closing Date and to survive the Closing and continue in accordance with the terms hereof (except as otherwise expressly set forth in section 8.01), as set forth in this Article IV and as limited or qualified by the related disclosure schedules (the “
TetriDyn Schedules
”) supplementally provided by TetriDyn to OTE.
Section 4.01 Organization and Qualifications
Each of TetriDyn and its subsidiary is a corporation duly organized, validly existing, and in good standing under the Laws of its state of incorporation; has all requisite corporate power and authority to own, lease, and operate its properties and assets and to carry on its business as it is now being conducted; and is duly qualified and in good standing to do business in each jurisdiction in which the nature of the business conducted by it or the ownership or leasing of its properties makes such qualification necessary, other than where the failure to be so duly qualified and in good standing would not have a TetriDyn Material Adverse Effect. The term “
TetriDyn Material Adverse Effect
” as used in this Agreement shall mean any change or effect that, individually or when taken together with all such other changes or effects, would be reasonably likely to be materially adverse to the assets, liabilities, financial condition, results of operations, or current or future business of TetriDyn. When used herein, the term TetriDyn includes its subsidiary as set forth on
Schedule 4.01
of the TetriDyn Schedules. Except as set forth in
Schedule 4.01
, TetriDyn does not own an equity interest in any other corporation, partnership, joint venture arrangement, or other business entity that is material to the assets, liabilities, financial condition, results of operations, or current or future business of TetriDyn. Except as set forth in its Periodic Reports, TetriDyn does not have any predecessor, as that term is defined under generally accepted accounting principles.
Section 4.02 Articles and Bylaws
Included in
Schedule 4.02
of the TetriDyn Schedules are complete and correct copies of TetriDyn’s articles of incorporation and bylaws, as presently in effect. TetriDyn is not in violation of any of the provisions of its articles of incorporation or bylaws.
Section 4.03 Capitalization
(a) The authorized capital stock of TetriDyn consists of: (i) 5,000,000 shares of preferred stock, par value $0.001 per share, of which 1,200,000 shares have been designated as Series A Preferred Stock and are issued and outstanding but are to be surrendered for cancellation contemporaneously with the execution of this Agreement and the related designation withdrawn; and (ii) 100,000,000 shares of TetriDyn Common Stock, par value $0.001 per share, of which 24,031,863 shares are issued and outstanding, 29,372,278 are reserved for issuance pursuant to the Investment Agreement of even date, and none are reserved for future issuance on the exercise of outstanding options, warrants, the conversion of other securities, or the exercise of any other call, commitment, right, or other contractual arrangements to which TetriDyn is a party or by which it is bound, for a total of 53,404,140 shares issued and issuable on a fully diluted
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basis, excluding shares issuable on the conversion of outstanding promissory notes due David and Antoinette Hempstead that are being acquired by JPF in connection with the Investment Agreement. Except as described in this section 4.03 or
Schedule 4.03(a)
of the TetriDyn Schedules, no shares of capital stock of TetriDyn are reserved for any purpose. All of the outstanding shares of capital stock of TetriDyn are duly authorized, validly issued, and fully paid and nonassessable, and have not been issued in violation of (nor are any of the authorized shares of capital stock of TetriDyn subject to) any preemptive or similar rights created by statute, TetriDyn’s articles of incorporation or bylaws, or any agreement to which TetriDyn is a party or bound, and such outstanding shares owned by TetriDyn are owned free and clear of all security interests, liens, claims, pledges, agreements, limitations on TetriDyn’s voting rights, charges, or other encumbrances of any nature whatsoever.
(b)
(i) Except as set forth in
Schedule 4.03(b)(i)
of the TetriDyn Schedules, there are no options, warrants, or other rights (including registration rights), agreements, arrangements, or commitments of any character to which TetriDyn is a party relating to the issued or unissued capital stock of TetriDyn or obligating TetriDyn to grant, issue, or sell any shares of the capital stock of TetriDyn.
(ii) Except as set forth in
Schedule 4.03(b)(ii)
, there are no obligations, contingent or otherwise, of TetriDyn to: (1) repurchase, redeem, or otherwise acquire any shares of TetriDyn Stock or other capital stock of TetriDyn; or (2) provide material funds to, make any material investment in (in the form of a loan, capital contribution, or otherwise), or provide any guarantee respecting the obligations of any other person.
(iii) Except as described in
Schedule 4.03(b)(iii)
, TetriDyn does not directly or indirectly own, has not agreed to purchase or otherwise acquire, or does not hold any interest convertible into, or exchangeable or exercisable for, 5% or more of the capital stock of any corporation, partnership, joint venture, or other business association or entity.
(iv) Except as set forth in
Schedule 4.03(b)(iv)
, there are no agreements, arrangements, or commitments of any character (contingent or otherwise) pursuant to which any person is or may be entitled to receive any payment based on TetriDyn’s revenues or earnings or calculated in accordance therewith.
(v) Except as set forth in
Schedule 4.03(b)(v)
, there are no voting trusts, proxies, or other agreements or understandings to which TetriDyn is a party or by which TetriDyn is bound respecting the voting of any shares of capital stock of TetriDyn.
(c) TetriDyn has made available to OTE complete and correct copies of: (i) each stock option, stock award, or other benefit plans (collectively, the “
TetriDyn Option Plans
”) and the forms of options issued pursuant to any TetriDyn Option Plan, including all amendments thereto; and (ii) all options and warrants that are not in the form specified under clause (i) above.
Schedule 4.03(c)
of the TetriDyn Schedules sets forth a complete and correct list of all outstanding warrants and options, restricted stock, or any other stock awards (the “
TetriDyn Stock Awards
”) granted under the TetriDyn Option Plans or otherwise, setting forth as of the date hereof: (x) the number and type of TetriDyn Stock Awards; (xi) the exercise price of each outstanding stock option or warrant; and (xii) the number of stock options and warrants presently exercisable.
(d) The shares of New TetriDyn Stock to be issued pursuant to this Agreement have been duly authorized, and upon issuance in accordance with the terms of this Agreement will be, validly issued, fully paid and nonassessable, and not issued in violation of any preemptive or similar rights created by statute, TetriDyn’s articles of incorporation and bylaws, or any agreement to which TetriDyn is a party or bound.
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Section 4.04 Authority
TetriDyn has all requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by TetriDyn and the consummation by TetriDyn of the transactions contemplated hereby have been duly authorized by all necessary corporate action and no other corporate proceedings on the part of TetriDyn are necessary to authorize this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by TetriDyn and, assuming the due authorization, execution and delivery thereof by OTE, constitutes the legal, valid, and binding obligation of TetriDyn, enforceable against TetriDyn in accordance with its terms, except that: (a) such enforcement may be subject to applicable bankruptcy, insolvency, or other similar Laws, now or hereafter in effect, affecting creditors’ rights generally; and (b) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
Section 4.05 No Conflict; Required Filings and Consents
(a) Except as set forth in
Schedule 4.05(a)
of the TetriDyn Schedules, the execution and delivery of this Agreement by TetriDyn does not, and the consummation of the transaction contemplated hereby will not: (i) conflict with or violate TetriDyn’s articles of incorporation or bylaws, in each case as amended or restated; (ii) conflict with or violate any Laws applicable to TetriDyn or by which any of its properties is bound or subject; or (iii) result in any breach of, constitute a default (or an event that with notice or lapse of time or both would become a default) under, give to others any rights of termination, amendment, acceleration, or cancellation of, or result in the creation of a lien or encumbrance on any of the properties or assets of TetriDyn pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise, or other instrument or obligation to which TetriDyn is a party or by which TetriDyn or any of its properties is bound or subject, except for any such conflicts or violations described in clause (ii) or breaches, defaults, events, rights of termination, amendment, acceleration or cancellation, payment obligations, or liens or encumbrances described in clause (iii) that would not have a TetriDyn Material Adverse Effect.
(b) The execution and delivery of this Agreement by TetriDyn does not, and consummation of the transactions contemplated hereby will not, require TetriDyn to obtain any consent, license, permit, approval, waiver, authorization or order of, or to make any filing with or notification to, any Governmental Entities, except for: (i) complying with certain federal and state securities Laws as provided in Article V hereof; and (ii) filing appropriate merger documents as required by applicable state Laws and when the failure to obtain such consents, licenses, permits, approvals, waivers, authorizations, or orders, or to make such filings or notifications, would not, either individually or in the aggregate, materially interfere with TetriDyn’s performance of its obligations under this Agreement and would not have a TetriDyn Material Adverse Effect.
Section 4.06 Permits; Compliance
TetriDyn and, to TetriDyn’s knowledge, each third-party operator of any of TetriDyn’s properties is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals, and orders necessary to own, lease, and operate its properties and to carry on its business in all material respects as it is now being conducted or as presently foreseeable (collectively, the “
TetriDyn Permits
”), and there is no action, proceeding, or investigation pending or, to TetriDyn’s knowledge, threatened regarding suspension or cancellation of any of the TetriDyn Permits, except when the failure to possess or the suspension or cancellation of such TetriDyn Permits would not have a TetriDyn Material Adverse Effect. Except as set forth in
Schedule 4.06
of the TetriDyn Schedules, TetriDyn has not received from any Governmental Entity any written notification respecting possible conflicts, defaults, or violations of Laws, except for written notices relating to possible conflicts, defaults, or violations that would not have a TetriDyn Material Adverse Effect.
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Section 4.07 Reports; Financial Statements
(a) TetriDyn filed its quarterly report on Form 10-Q for the quarter ended June 30, 2012, on August 20, 2012. During the three years preceding such filing, TetriDyn had filed all forms, reports, statements, and other documents required to be filed with the SEC, including all quarterly reports on Form 10-Q, all annual reports on Form 10-K, all current reports on Form 8-K, and all other reports, schedules, registration statements, or other documents (collectively referred to as the “
TetriDyn SEC Reports
”), except when the failure to file any such forms, reports, statements, or other documents would not have a TetriDyn Material Adverse Effect. The TetriDyn SEC Reports were prepared in accordance with the requirements of applicable law (including the Securities Act and the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such TetriDyn SEC Reports) and did not at the time they were filed contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. A copy of the SEC docket showing the TetriDyn SEC Reports, linked to the actual filings, is available at http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000827099&owner=exclude&count=40&hidefilings=0. TetriDyn is subject to the periodic reporting requirements of Section 15(d) of the Exchange Act and has no class of equity securities registered under Section 12 of the Exchange Act.
(b) Included in
Schedule 4.07
of the TetriDyn Schedules are the unaudited balance sheet of TetriDyn as of December 31, 2014 (“
TetriDyn’s Current Balance Sheet
”), together with certain adjustments, on a pro forma basis, to reflect certain actions and agreements to be effected in accordance with this Agreement and separate agreements related to or affecting TetriDyn entered into and to be consummated contemporaneously herewith and of which the parties have knowledge.
Schedule 4.
07 also includes the Annual Report on Form 10-K for the year ended December 31, 2011, which contains the audited consolidated balance sheets of TetriDyn as of December 31, 2011, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the years ended December 31, 2011 and 2010, including the notes thereto and the report of Webb & Company, P.A., certified public accountants, thereon. TetriDyn’s Current Balance Sheet does not include note disclosures that are required under generally accepted accounting principles, but contains all adjustments (all of which are normal recurring adjustments) necessary to present fairly the results of operations and financial position of TetriDyn for the periods and as of the dates indicated. Except for the absence of note disclosures respecting TetriDyn’s Current Balance Sheet, all such audited and unaudited financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods involved (except: (a) to the extent required by changes in generally accepted accounting principles; and (b) as may be indicated in the notes thereto) and fairly present the financial position of TetriDyn as of the respective dates thereof and the result of operations and cash flows for the periods indicated (including reasonable estimates of normal and recurring year-end adjustments), except that any unaudited interim financial statements were or will be subject to normal and recurring year-end adjustments.
Section 4.08 Absence of Certain Changes or Events
Except as contemplated by this Agreement or as set forth in
Schedule 4.08
of the TetriDyn Schedules, since the date of TetriDyn’s Current Balance Sheet, TetriDyn has conducted its business in the ordinary course of business consistent with past practice. Since the date of TetriDyn’s Current Balance Sheet, there has not been: (a) any event, change, or effect (including the occurrence of any liabilities of any nature, whether or not accrued, contingent or otherwise) having or that would be reasonably likely to have, individually or in the aggregate, a TetriDyn Material Adverse Effect; (b) any declaration, setting aside, or payment of any dividend or other distribution (whether in cash, stock, or property) respecting the equity interests of TetriDyn or any redemption, purchase, or other acquisition by TetriDyn of any of TetriDyn’s capital stock; (c) any revaluation by TetriDyn of its assets, including the writing down of the value of inventory or the writing down or off of notes or accounts receivable, other than in the ordinary course of business and consistent with past practices; (d) any change by TetriDyn in accounting principles or methods, except insofar as may be required by a change in generally accepted accounting principles; (e) a fundamental change in the nature of TetriDyn’s business; (f) any arrangement for the disposition of any material property or assets of TetriDyn; (g) any accrual, arrangement for, or payment of bonuses or special compensation of any kind or any severance or termination pay to any present or former officer, employee, or shareholder; (h) any increase in any profit sharing, bonus, deferred compensation, insurance, pension, retirement, or other employee benefit plan, payment or arrangement made to, for, or with its officers, directors, or employees; or (i) a TetriDyn Material Adverse Effect.
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Section 4.09 Absence of Litigation
Except as set forth in
Schedule 4.09
of the TetriDyn Schedules, there is no claim, suit, litigation, proceeding, arbitration, or to TetriDyn’s knowledge, investigation of any kind, at law or in equity (including actions or proceedings seeking injunctive relief), pending or threatened against TetriDyn or any of its properties (except for claims, actions, suits, litigation, proceedings, arbitrations, or investigations that would not have a TetriDyn Material Adverse Effect), and TetriDyn is not subject to any continuing order of, consent decree, settlement agreement, or other similar written agreement with, or to TetriDyn’s knowledge, continuing investigation by, any Governmental Entity, or any judgment, order, writ, injunction, decree, or award of any Government Entity or arbitrator, including cease-and-desist or other orders, except for matters that would not have a TetriDyn Material Adverse Effect.
Section 4.10 Tax Matters
Neither TetriDyn nor, to TetriDyn’s knowledge, any of its affiliates has taken or agreed to take any action that would prevent the Merger from constituting a tax-free reorganization qualifying under the provisions of Section 368(a) of the Code, all as more particularly set forth in a separate letter of representation in form and substance reasonably satisfactory to OTE to be delivered by TetriDyn to OTE at the Closing and which is incorporated herein by reference.
Section 4.11 Taxes
(a) Except as disclosed on
Schedule 4.11(a)
of the TetriDyn Schedules, TetriDyn has made available to OTE complete copies of: (i) all returns and information statements respecting any Taxes of TetriDyn (“
TetriDyn Returns
”) for all periods since the formation of TetriDyn open under the statute of limitations for assessments; and (ii) examination reports and statements of deficiencies assessed by TetriDyn. TetriDyn does not do business or derive income from any state, local, territorial, or foreign taxing jurisdiction so as to be subject to Taxes or return filing requirements, other than those TetriDyn Returns described in the preceding sentence. Except as disclosed on
Schedule 4.11(a)
or to the extent that the applicable statute of limitations has expired, all TetriDyn Returns required to be filed by or on behalf of TetriDyn have been duly filed on a timely basis with the appropriate governmental authorities and are true, correct, and complete, and all Taxes for all periods covered by such TetriDyn Returns or respecting any period prior to the Effective Time, have been duly paid in full or a provision for the payment thereof has been made in accordance with generally accepted accounting principles and is reflected on TetriDyn’s Current Balance Sheet. All TetriDyn Returns are accurate and correct in all material respects. TetriDyn has no liabilities respecting the payment of any Taxes (including any deficiencies, interest, or penalties) accrued for or applicable to the period ended on the date of TetriDyn’s Current Balance Sheet, except as reflected therein, and all such dates and years and periods prior thereto and for which TetriDyn may at said date have been liable in its own right or as transferee of the assets of, or as successor to, any other corporation or other entity, except for taxes accrued but not yet due and payable. TetriDyn has not elected at any time pursuant to the Code to be treated as an S corporation pursuant to Section 1362(a) of the Code or a collapsed corporation pursuant to Section 341(f) of the Code, nor has TetriDyn made any other elections pursuant to the Code (other than elections that relate solely to methods of accounting, depreciation, or amortization) that would have a TetriDyn Material Adverse Effect. There are no outstanding agreements or waivers extending the statutory period of limitation applicable to any TetriDyn Return.
(b) TetriDyn has complied in all respects with all applicable Laws relating to the payment and withholding of Taxes (including any estimated Taxes and the withholding of Taxes pursuant to Sections 1441 and 1442 of the Code or similar provisions under any foreign Laws) and has, within the time and the manner prescribed by law, withheld from employee wages and paid over all amounts withheld under applicable Laws. There are no liens on any of the assets of TetriDyn respecting Taxes other than for Taxes not yet due and payable. There is no material dispute or claim concerning any liabilities for Taxes of TetriDyn either raised or reasonably expected to be raised by any taxing authority.
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(c) Except as disclosed in
Schedule 4.11(c)
of the TetriDyn Schedules: (i) there is no audit of any TetriDyn Returns by a governmental or taxing authority in process, pending, or threatened (formally or informally), and TetriDyn has no knowledge of any such potential audit; (ii) except to the extent that the applicable statute of limitations has expired and except as to matters that have been resolved, no deficiencies exist or have been asserted (either formally or informally) or are expected to be asserted respecting Taxes of TetriDyn, and no notice (either formally or informally) has been received by TetriDyn that it has not filed a TetriDyn Return or paid Taxes required to be filed or paid by it; (iii) TetriDyn is not a party to any pending action or proceeding for assessment or collection of Taxes, nor has such an action or proceeding been asserted or threatened (either formally or informally) against it or any of its assets, except to the extent that the applicable statute of limitations has expired and except as to matters that have been resolved; (iv) no waiver or extension of any statute of limitations is in effect respecting Taxes of TetriDyn or TetriDyn Returns; (v) no action has been taken that would have the effect of deferring any liability for Taxes for TetriDyn from any period prior to the Effective Time to any period after the Effective Time; (vi) there are no requests for rulings, subpoenas, or requests for information pending respecting the Taxes of TetriDyn; (vii) no power of attorney has been granted by TetriDyn respecting any matter relating to Taxes; (viii) TetriDyn has never been included in an affiliated group of corporations within the meaning of Section 1504 of the Code; (ix) TetriDyn is not (nor has it ever been) a party to any tax-sharing agreement between affiliated corporations; and (x) the amount of liability for unpaid Taxes of TetriDyn for all periods ending on or before the Effective Time will not, in the aggregate, materially exceed the amount of the liability accruals for Taxes reflected on TetriDyn’s Current Balance Sheet.
Section 4.12 No Vote Required
No vote of the holders of any class or series of TetriDyn capital stock is necessary to approve the Merger by MergerCo.
Section 4.13 Brokers
Except as set forth in
Schedule 4.13
of the TetriDyn Schedules, no broker, finder, or investment banker is entitled to any brokerage, finder’s, or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of TetriDyn. Prior to the date of this Agreement, TetriDyn has made available to OTE complete and correct copies of all agreements referenced in
Schedule 4.13
pursuant to which any such firm will be entitled to any payment related to the transactions contemplated by this Agreement.
Section 4.14 Information Supplied
Without limiting any of the representations and warranties contained herein, no representation or warranty of TetriDyn and no statement by TetriDyn or other information contained in or documents referred to in the TetriDyn Schedules, as of the date of such representation, warranty, statement, or document, contains or contained any untrue statement of material fact or, at the date thereof, omits or omitted to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which such statements are or were made, not misleading.
Section 4.15 Employee Benefit Plans; Labor Matters
(a) TetriDyn is not bound by or subject to (and none of its operations is bound by or subject to) any written or oral, express or implied, contract, commitment, or arrangement with any labor union, and no labor union has requested or, to TetriDyn’s knowledge, has sought to represent any of TetriDyn’s employees, representatives, or agents. There is no strike or other labor dispute involving TetriDyn pending or, to TetriDyn’s knowledge, threatened that could have a TetriDyn Material Adverse Effect, nor is TetriDyn aware of any labor organization activity involving its employees. TetriDyn is not aware that any officer or key employee, or that any group of key employees, intends to terminate their employment with TetriDyn, nor does TetriDyn have a present intention to terminate the employment of any of the foregoing. The employment of each officer and employee of TetriDyn, to the best of TetriDyn’s knowledge, is terminable at TetriDyn’s will.
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(b) Except as set forth in
Schedule 4.15(b)
of the TetriDyn Schedules, TetriDyn does not maintain and has not contributed during the past five years to any employee benefit plan (as such term is defined in ERISA Section 3(s) or respecting which TetriDyn or any member of its ERISA group would incur liability under Sections 4065, 4069, 4212(c), or 4204 of ERISA, and any other retirement, pension, stock option, stock application rights, profit sharing, incentive compensation, deferred compensation, savings, thrift, vacation pay, severance pay, or other employee compensation or benefit plan, agreement, practice or arrangement, whether written or unwritten, whether or not legally binding (collectively, the “
TetriDyn Benefit Plans
”). As of the date of this Agreement, except as would not have a TetriDyn Material Adverse Effect, the material TetriDyn Benefit Plans maintained by TetriDyn or any member of its ERISA group, or respecting which TetriDyn has or may have a liability, are in substantial compliance with applicable Laws, including ERISA and the Code.
Schedule 4.15(b)
sets forth a list of all TetriDyn Benefit Plans, true and complete copies of which have been furnished to OTE. With respect to the TetriDyn Benefit Plans, no event has occurred, and to TetriDyn’s knowledge, there exists no condition or set of circumstances, in connection with which TetriDyn or any member of its ERISA group could be subject to any liability under the terms of such TetriDyn Benefit Plans, ERISA, the Code, or any other applicable Law that would have a TetriDyn Material Adverse Effect.
(c) Except as otherwise set forth on
Schedule 4.15(c)
of the TetriDyn Schedules, neither TetriDyn nor any member of its ERISA group contributes or has an obligation to contribute to, and has not within five years prior to the date of this Agreement contributed or had an obligation to contribute to or has any secondary liability under ERISA Section 4204 to, a multiemployer plan within the meaning of Section 3(37) of ERISA.
(d) Neither TetriDyn nor any member of its ERISA group is or has ever been a party to any collective bargaining or other labor union contracts. No collective bargaining agreement is being negotiated by TetriDyn. There is no pending or threatened labor dispute, strike, or work stoppage against TetriDyn or any of its subsidiaries that may interfere with TetriDyn’s business activities. None of TetriDyn or any of its representatives or employees has committed any unfair labor practices in connection with the operation of TetriDyn’s business, and there is no pending or threatened charge or complaint against TetriDyn by the National Labor Relations Board or any comparable state agency.
(e) With respect to each TetriDyn Benefit Plan that is a “group health plan” within the meaning of Section 5000(b) of the Code, each such TetriDyn Benefit Plan complies and has complied with the requirements of Part 6 of Title I of ERISA and Sections 4980B and 5000 of the Code, except when the failure to so comply would not have a TetriDyn Material Adverse Effect.
Section 4.16 Employee Relations
TetriDyn has complied in all material respects with all applicable Laws that relate to prices, wages, hours, harassment, disabled access, discrimination employment, and collective bargaining and to the operation of its business and is not liable for any arrears of wages or any taxes or penalties for failure to comply with any of the foregoing. TetriDyn believes that its relations with its employees are satisfactory.
Section 4.17 Certain Business Practices
Neither TetriDyn nor any of its TetriDyn’s directors, officers, agents, or employees on its behalf has used any funds for unlawful contributions, gifts, entertainment, or other unlawful expenses relating to political activity; made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns; violated any provision of the Foreign Corrupt Practices Act of 1977, as amended; or made any other unlawful payment.
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Section 4.18 Environmental Matters
Except as set forth in
Schedule 4.18
of the TetriDyn Schedules: (a) during the period of TetriDyn’s ownership, use, or other occupancy of the properties of TetriDyn, it has not used, generated, manufactured, stored, treated, disposed of, or released any hazardous waste or substance on, under, or about any of the properties, except in compliance with environmental Laws; and (b) TetriDyn has no knowledge of, or reason to believe that there has been: (i) any use, generation, manufacture, storage, treatment, disposal, release, or threatened release of any hazardous waste or substance by any prior owners or occupants of any of the properties, except in compliance with environmental Laws; or (ii) any actual or threatened litigation or claims of any kind against TetriDyn or any other person for whose conduct it is or may be liable by any person relating to such matters.
Section 4.19 Insurance
TetriDyn is not currently insured.
Section 4.20 Certain Contracts and Restrictions
Other than agreements, contracts, or commitments listed elsewhere in the TetriDyn Schedules,
Schedule 4.20
of the TetriDyn Schedules lists, as of the date hereof, each agreement, contract, or commitment (including any amendments thereto) to which TetriDyn is a party or by which TetriDyn is bound involving consideration during the next 12 months in excess of $10,000 or that is otherwise material to the assets, liabilities, financial condition, results of operations or current or future business of TetriDyn, taken as a whole. As of the date of this Agreement and except as indicated on the TetriDyn Schedules, TetriDyn has fully complied with all material terms and conditions of all agreements, contracts, and commitments that will be listed in the TetriDyn Schedules, and all such agreements, contracts, and commitments are in full force and effect. All such agreements, contracts, and commitments are not subject to any memorandum or other written document or understanding permitting cancellation, and TetriDyn has no knowledge of any defaults thereunder or any cancellations or modifications thereof.
Section 4.21 Properties
Except for liens arising in the ordinary course of business after the date hereof and properties and assets disposed of in the ordinary course of business after the date of TetriDyn’s Current Balance Sheet, TetriDyn has good and marketable title free and clear of all liens, the existence of which would have a TetriDyn Material Adverse Effect, to all material properties and assets, whether tangible or intangible, real, personal, or mixed, reflected in TetriDyn’s Current Balance Sheet as being owned by TetriDyn as of the date thereof or purported to be owned on the date hereof. All buildings, fixtures, equipment, and other property and assets that are material to its business held under leases by TetriDyn are held under valid instruments enforceable by TetriDyn in accordance with their respective terms. Substantially all of TetriDyn’s equipment in regular use has been well maintained and is in good and serviceable condition, reasonable wear and tear excepted.
Section 4.22 Easements
TetriDyn’s business has been operated in a manner that does not violate the material terms of any easements, rights of way, permits, servitude, licenses, and similar rights relating to real property used by TetriDyn in its business (collectively, “
TetriDyn Easements
”) except for violations that have not resulted and will not result in a TetriDyn Material Adverse Effect. All material TetriDyn Easements are valid and enforceable and grant the rights purported to be granted thereby and all rights necessary thereunder for the current operation of such business.
Section 4.23 Futures Trading and Fixed Price Exposure
TetriDyn is not presently engaged in any futures or options trading nor is it a party to any price, interest rate, or currency swaps, hedges, futures, or other derivative instruments.
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Section 4.24 Intellectual Property
(a)
Schedule 4.24(a)
of the TetriDyn Schedules lists all the registered patents, trademarks, service marks, copyrights, trade names, and applications for any of the foregoing owned by TetriDyn as of the date of this Agreement (the “
TetriDyn Registered Intellectual Property
”). TetriDyn has good and marketable title to the TetriDyn Registered Intellectual Property and has good and marketable title to, or valid licenses or rights to use, all patents, copyrights, trademarks, trade names, brand names, proprietary and other technical information, technology, and software (collectively, “
TetriDyn Intellectual Property
”) used in the operation of its business as presently conducted, free from any liens and free from any requirement of any past, present, or future royalty payments, license fees, charges or other payments, or conditions or restrictions, whatsoever, except as set forth on
Schedule 4.24(a)
. Immediately after the Effective Time, the Surviving Corporation will own or will have the right to use all TetriDyn Intellectual Property free from liens.
(b) To the best of its knowledge, TetriDyn has not infringed and is not infringing upon, and has not engaged and is not engaging in, any unauthorized use or misappropriation of any patents, copyrights, trademarks, trade names, brand names, proprietary and other technical information, technology, and software owned by or belonging to any other person. Except as set forth in
Schedule 4.24(b)
of the TetriDyn Schedules, there are no claims or proceedings pending or, to TetriDyn’s knowledge, threatened against TetriDyn asserting that TetriDyn is infringing or engaging in the unauthorized use or misappropriation of any intellectual property of any other person.
(c) TetriDyn is not aware of prior art respecting any of the patents owned or licensed by it that was not disclosed to the U.S. Patent and Trademark Office (or to any comparable foreign authority, if necessary) in connection with applications for such patents. TetriDyn is not aware of any fact or event making any one or more claims of any of such patents invalid or unenforceable, and TetriDyn has not engaged in any conduct or omitted to perform any necessary act, the result of which would be to invalidate any of such patents or adversely affect any of their enforceability.
(d)
Schedule 4.24(d)
of the TetriDyn Schedules sets forth all agreements and arrangements pursuant to which: (i) TetriDyn has licensed TetriDyn Intellectual Property to, or the use of TetriDyn Intellectual Property in other areas permitted (through nonassertion, settlement, or similar agreements or otherwise) by, any other person; and (ii) TetriDyn has had TetriDyn Intellectual Property licensed to it, or has otherwise been permitted to use TetriDyn Intellectual Property (through nonassertion, settlement, or similar agreements or otherwise). All of the agreements or arrangements to the extent set forth on
Schedule 4.24(d):
(x) are in full force and effect in accordance with their terms and TetriDyn is not aware that any default exists thereunder by TetriDyn or by any other party thereto; (xi) are free and clear of liens; (xii) do not contain any change of control or other terms or conditions that will become applicable or inapplicable as a result of the consummation of the Merger and the transactions contemplated by this Agreement. TetriDyn has delivered to OTE true and complete copies of all agreements and arrangements set forth on
Schedule 4.24(d)
. There are no royalties, license fees, charges, or other amounts payable by, or on behalf of, TetriDyn for of any TetriDyn Intellectual Property other than as set forth on
Schedule 4.24(d)
.
Section 4.25 Transactions with Affiliates
Schedule 4.25
of the TetriDyn Schedules sets forth a description of every material contract, agreement, or arrangement between TetriDyn and any person who is or has ever been an officer or director of TetriDyn, or person of record or known by TetriDyn to have beneficial ownership of 10% or more of the issued and outstanding TetriDyn Stock, and which is to be performed, in whole or in part, after the date hereof or was entered into within three years before the date hereof. In all of such circumstances, the contract, agreement, or arrangement was for a bona fide business purpose of TetriDyn, and the amount paid or received, whether in cash, services, or kind is, has been during the full term thereof, and is required to be during the unexpired portion of the term thereof, no less favorable to TetriDyn than terms available from otherwise unrelated parties in arm’s-length transactions. Except as disclosed in
Schedule 4.25
or otherwise disclosed herein, no officer or director of TetriDyn or 10% shareholder of TetriDyn has, or has had during the preceding three years, any interest, directly or indirectly, in any material transaction with TetriDyn.
Schedule 4.25
also includes a description of any commitment by TetriDyn, whether written or oral, to lend any funds to, borrow any money from, or enter into any other material transaction with any such affiliated person.
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Section 4.26 Compliance with Securities Laws
All of the securities offered and sold by TetriDyn within three years prior to the date of this Agreement were issued in transactions exempt from registration under the Securities Act and applicable state securities Laws.
Section 4.27 Disclosure Controls
TetriDyn maintains systems of internal accounting controls sufficient to provide reasonable assurance that: (a) transactions are executed in accordance with management’s general or specific authorizations; (b) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (c) access to assets is permitted only in accordance with management’s general or specific authorization; and (d) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken respecting any differences.
Section 4.28 Off Balance Sheet Arrangements
There are no off balance sheet transactions that would reasonably be expected to affect materially TetriDyn’s liquidity or the availability of or requirements for its capital resources.
Section 4.29 Forward-Looking Statement
No Forward Looking Statement contained in TetriDyn Schedules or Periodic Reports has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.
Section 4.30 No Improper Practices
Except as set forth in
Schedule 4.30
of the TetriDyn Schedules: (a) neither TetriDyn nor, to TetriDyn’s knowledge, any director, officer, agent, employee or other person associated with or acting on TetriDyn’s behalf has, in the past three years, made any unlawful contributions to any candidate for any political office (or failed fully to disclose any contribution in violation of law); made any contribution or other payment to any official of, or candidate for, any federal, state, municipal, or foreign office or other person charged with similar public or quasi-public duty in violation of any law or of the character required; (b) following the Closing, TetriDyn will not be required by the Exchange Act to disclose any contributions or payments in any Periodic Report required to be filed pursuant to Section 13 or 15(d) thereunder; (c) no relationship, direct or indirect, exists between or among TetriDyn or, to TetriDyn’s knowledge any affiliate, on the one hand, and the directors, officers, and stockholders of TetriDyn, on the other hand, that TetriDyn is required, or will be required, by the Exchange Act to describe in any Periodic Report following the Closing; and (d) there are no material outstanding loans or advances or material guarantees of indebtedness by TetriDyn to, or for the benefit of, any of its officers or directors or any of the members of the families of any of them that TetriDyn is required, or will be required, by the Exchange Act to describe in any Periodic Report following the Closing.
Section 4.31 OFAC
Neither TetriDyn nor, to TetriDyn’s knowledge, any director, officer, agent, employee or other affiliate of TetriDyn or any of its subsidiaries is currently subject to any U.S. sanctions administered by OFAC.
Section 4.32 Minute Book
TetriDyn’s minute book contains, and will contain at the Closing Date, a complete record of all meetings, consents, or other actions of its board of directors and shareholders for the period from inception through the date hereof and accurately reflects the substance of all transactions referred to in such minutes in all material respects.
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ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.01 California Corporations Code Section 25142 “Fairness” Permit
As soon as practicable following the execution and delivery of this Agreement, but in any event within 30 days following such date, TetriDyn shall, with the collaboration of OTE, prepare and file with the California Department of Corporations (the “
Department
”) an application pursuant to Section 25142 of the California Corporations Code to submit the Merger and the transactions contemplated by this Agreement for approval by the commissioner of such Department of the fairness of the terms and conditions of the issuance of New TetriDyn Stock and the exchange of such New TetriDyn Stock for the OTE Stock outstanding and issuable on the exercise of outstanding warrants, the conversion of outstanding bonds, and the payment of stock purchase subscriptions for the purchase of OTE Stock (if any). The Parties shall prosecute such application with diligence and dispatch in order to obtain the requested approval and determination of the fairness of the terms of the Merger and the transactions contemplated by this Agreement at the earliest practicable date in order to obtain a valid and binding permit pursuant to Section 25142 of the California Corporations Code (the “
Permit
”) to provide an exemption from the securities registration and prospectus delivery requirements pursuant thereto and pursuant to Section 3(a)(10) of the Securities Act.
Section 5.02 Approvals of Stockholders
(a) As soon as practicable following the execution and delivery of this Agreement and the issuance of the Permit from the Department as contemplated by section 5.01, but in any event within 10 days following such date, OTE shall submit to its stockholders for approval by majority written consent the proposal to approve the Merger, this Agreement, and the transactions contemplated by this Agreement in accordance with the applicable provisions of Delaware Law and all applicable federal and state securities Laws. OTE shall solicit such majority written consents in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder and preemption from the registration or qualification requirements (other than notice filing and fee provisions) of applicable state Laws under the National Securities Markets Improvement Act of 1996.
(b) As soon as practicable following the execution and delivery of this Agreement, but in any event within 30 days following such date, TetriDyn shall submit to its stockholders for approval by majority written consent the proposal to approve the Merger, this Agreement, the Recapitalization, the election of directors as provided in this Agreement, the change of the name of TetriDyn as contemplated by this Agreement, and the transactions contemplated hereby in accordance with the applicable provisions of the Laws of the jurisdiction under which it is incorporated and all applicable federal and state securities Laws.
Section 5.03 Access and Information
(a) TetriDyn shall: (i) afford OTE and its officers, directors, employees, accountants, consultants, legal counsel, agents, and other representatives (collectively, the “
OTE Representatives
”) reasonable access at reasonable times, upon reasonable prior notice, to the officers, directors, employees, agents, properties, offices, and other facilities of TetriDyn and to the books and records thereof; and (ii) furnish promptly to OTE and the OTE Representatives such information concerning the business, properties, contracts, records, and personnel of TetriDyn (including financial, operating, and other data and information) as may be reasonably requested, from time to time, by OTE and the OTE Representatives.
(b) OTE shall: (i) afford to TetriDyn and its officers, directors, employees, accountants, consultants, legal counsel, agents, and other representatives (collectively, the “
TetriDyn Representatives
”), reasonable access at reasonable times, upon reasonable prior notice, to the officers, directors, employees, accountants, agents, properties, offices, and other facilities of OTE (including any subsidiary) and to the books and records thereof; and (ii) furnish promptly to TetriDyn and the TetriDyn Representatives such information concerning the business, properties, contracts, records, and personnel of OTE (including any subsidiary) (including financial, operating, and other data and information) as may be reasonably requested, from time to time, by TetriDyn and the TetriDyn Representatives.
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(c) Notwithstanding the foregoing provisions of this section, no Party shall be required to grant access or furnish information to the other Party to the extent that such access to or the furnishing of such information is prohibited by Law. No investigation by the Parties made heretofore or hereafter shall affect the representations and warranties of the Parties that are herein contained, and each such representation and warranty shall survive such investigation.
(d) The information received pursuant to this section shall be deemed to be “
Confidential Information
.” Each Party agrees that it will treat in confidence all documents, materials, and other Confidential Information that it shall have obtained regarding the other Party during the course of the negotiations leading to the consummation of the transactions contemplated hereby (whether obtained before or after the date of this Agreement), the investigation provided for herein, and the preparation of this Agreement and other related documents. Such documents, materials, and other Confidential Information shall not be communicated to any third person (other than to such Party’s respective counsel, accountants, financial advisers, or lenders) and shall not be used for any purpose to the detriment of the other Party. No Party shall use any Confidential Information in any manner whatsoever except solely for the purpose of evaluating a possible business relationship with the other Party. No Party and no OTE Representative or TetriDyn Representative will, during the term of this Agreement or at any time during the two years thereafter, irrespective of the time, manner, or cause of termination of this Agreement, use, disclose, copy, or assist any other person in the use, disclosure, or copying of any documents, materials, or other Confidential Information of the other Party.
Section 5.04 Other State Securities Laws
(a) TetriDyn shall prepare and file such other notices or applications as TetriDyn may deem appropriate under applicable state securities Laws in connection with the transactions contemplated by this Agreement. OTE and TetriDyn shall take any action required to be taken under any applicable federal or state securities Laws in connection with the issuance of shares of New TetriDyn Stock in the Merger. OTE shall furnish to TetriDyn all information concerning OTE and the holders of its capital stock as TetriDyn may reasonably request in connection with such actions. All documents that TetriDyn is responsible for filing with the SEC or any state authority in connection with the transactions contemplated herein shall comply as to form in all material respects with the applicable requirements of the Securities Act and the rules and regulations thereunder, the Exchange Act and the rules and regulations thereunder, and state securities Laws and applicable state Laws.
(b) The information supplied by TetriDyn for inclusion in the notices or other filings in accordance with this section shall not, at the time filed, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading. If at any time prior to the Effective Time any event or circumstance relating to TetriDyn or any of its affiliates, or its or their respective officers or directors, is discovered by TetriDyn that should be set forth in a supplement or amendment to any notices or other filings in accordance with section 5.04(a), TetriDyn shall promptly inform OTE thereof in writing.
(c) The information supplied by OTE for inclusion in the notices or other filings in accordance with section 5.04(a) shall not, at the time filed, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading. If at any time prior to the Effective Time any event or circumstance relating to OTE or any of its affiliates, or to its respective officers, directors, partners, or managers is discovered by OTE that should be set forth in a supplement or amendment to the notices or other filings in accordance with section 5.04(a), OTE shall promptly inform TetriDyn thereof in writing.
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Section 5.05 Appropriate Action; Consents; Filings
(a) OTE and TetriDyn shall use, and shall cause each of their respective subsidiaries to use, all reasonable efforts to: (i) take, or cause to be taken, all appropriate action, and do, or cause to be done, all things necessary, proper, or advisable under applicable Laws or otherwise to consummate and make effective the transactions contemplated by this Agreement; (ii) obtain from any Governmental Entities any consents, licenses, permits, waivers, approvals, authorizations, or orders required to be obtained or made by OTE or TetriDyn or any subsidiary in connection with the authorization, execution, and delivery of this Agreement and the consummation of the transactions contemplated hereby, including the Merger; (iii) make all necessary filings, and thereafter make any other required submissions, respecting this Agreement and the Merger required under: (1) the Securities Act and the Exchange Act, and the rules and regulations thereunder, and any other applicable federal or state securities Laws; and (2) any other applicable Law;
provided
that, OTE and TetriDyn shall cooperate with each other in connection with the making of all such filings, including providing copies of all such documents to the other Party and its advisers prior to such filings and, if requested, shall accept all reasonable additions, deletions, or changes suggested in connection therewith. OTE and TetriDyn shall furnish all information required for any application or other filing to be made pursuant to the rules and regulations of any applicable Law in connection with the transactions contemplated by this Agreement.
(b) OTE and TetriDyn agree to cooperate respecting, to cause each of their respective subsidiaries to cooperate respecting, and to use all reasonable efforts vigorously to contest and resist any action, including legislative, administrative, or judicial action, and to have vacated, lifted, reversed, or overturned any decree, judgment, injunction, or other order (whether temporary, preliminary, or permanent) (an “
Order
”) of any Governmental Entity that is in effect and that restricts, prevents, or prohibits the consummation of the Merger or any other transactions contemplated by this Agreement, including by vigorously pursuing all available avenues of administrative and judicial appeal and legislative action. OTE and TetriDyn also agree to take all actions, including the disposition of assets or the withdrawal from doing business in particular jurisdictions, required by regulatory authorities as a condition to the granting of any approvals required in order to permit the consummation of the Merger or as may be required to avoid, lift, vacate, or reverse any legislative or judicial action that would otherwise cause any condition to Closing not to be satisfied;
provided
,
however
, that in no event shall OTE be required to take any action that would or could reasonably be expected to have an OTE Material Adverse Effect, and TetriDyn shall not be required to take any action that would or could reasonably be expected to have a TetriDyn Material Adverse Effect.
(c)
(i) OTE and TetriDyn shall give any notices to third parties, and use and cause their respective subsidiaries to use all reasonable efforts to obtain any third-party consents: (1) necessary, proper, or advisable to consummate the transactions contemplated by this Agreement; (2) otherwise required under any contracts, licenses, leases, or other agreements in connection with the consummation of the transactions contemplated hereby; or (3) required to prevent a material adverse effect affecting either of their respective business and operations from occurring prior to the Effective Time or a TetriDyn Material Adverse Effect from occurring after the Effective Time.
(ii) OTE and TetriDyn shall use and cause their respective subsidiaries to use all reasonable efforts to obtain release of any guarantees by any owner of TetriDyn of any third-party indebtedness or obligation that will not be paid, discharged, or otherwise satisfied at the Effective Time, excluding the obligations to SICOG and EIDC as set forth in subsection 5.12(c).
(iii) In the event that any Party shall fail to obtain any third-party consent described in subsection (c)(ii) above, such Party shall use all reasonable efforts, and shall take any such actions reasonably requested by any other Party, to limit the adverse effect upon OTE and TetriDyn, and their respective subsidiaries and their respective businesses, resulting or that could reasonably be expected to result after the Effective Time, from the failure to obtain such consent.
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(d) OTE and TetriDyn shall promptly notify the other of: (i) any material change in its current or future business, assets, liabilities, financial condition, or results of operations; (ii) any complaints, investigations, or hearings (or communications indicating that the same may be contemplated) of any Governmental Entities respecting its business or the transactions contemplated hereby; (iii) the institution or the threat of material litigation involving it or any of its subsidiaries; or (iv) any event or condition that might reasonably be expected to cause any of its representations, warranties, covenants, or agreements set forth herein not to be true and correct at the Effective Time. As used in the preceding sentence, “material litigation” means any case, arbitration, or adversary proceeding or other matter that is material to the business and operations of the subject entity, if in existence on the date hereof, or for which the legal fees and other costs to TetriDyn might reasonably be expected to exceed $10,000 over the life of the matter or to OTE (or any subsidiary) might reasonably be expected to exceed $10,000 over the life of the matter.
Section 5.06 Acquisition of New TetriDyn Stock
The consummation of this Agreement and the transactions contemplated herein, including the issuance of the New TetriDyn Stock to the stockholders of OTE as contemplated hereby, constitutes the offer and sale of securities under the Securities Act and applicable state securities Laws. Such transactions shall be consummated in reliance on in reliance on the exemption from registration under Section 3(a)(10) of the Securities Act, as clarified in Staff Legal Bulletin No. 3A (June 18, 2008).
(a) In order to provide documentation for reliance upon exemptions from the registration and prospectus delivery requirements for such transactions, the approval of the Merger and this Agreement by the stockholders of OTE, and the acceptance and receipt of the New TetriDyn Stock, in tendering their OTE securities for exchange into New OTE Stock pursuant to the Merger, each OTE Stockholder will be required to acknowledge and represent in writing his acceptance of, and concurrence in, each stockholder of OTE shall make the following representations and warranties:
(i) Each acknowledges that neither the SEC nor the securities commission of any state or other federal agency has made any determination as to the merits of acquiring the New TetriDyn Stock, and that the transactions contemplated herein involve certain risks.
(ii) Each has received and read this Agreement and has had access to the related schedules and exhibits and understands the risks related to the consummation of the transactions herein contemplated.
(iii) Each has such knowledge and experience in business and financial matters that such stockholder is capable of evaluating the Merger and TetriDyn and its proposed business operations.
(iv) Each has been provided with a copy of this Agreement, plus all materials and information requested by his or her representative, including any information requested to verify any information furnished (to the extent such information is available or can be obtained without unreasonable effort or expense), and each has been provided the opportunity for direct communication with TetriDyn and the TetriDyn Representatives regarding the transactions contemplated hereby.
(v) All information that each has provided to TetriDyn or the TetriDyn Representatives concerning such stockholder’s suitability to hold shares in TetriDyn following the transactions contemplated hereby is complete, accurate, and correct.
(vi) Each has not offered or sold any interest in this Agreement and has no present intention of dividing the New TetriDyn Stock to be received or the rights under this Agreement with others or of reselling or otherwise disposing of any portion of such stock or rights, either currently or after the passage of a fixed or determinable period of time or on the occurrence or nonoccurrence of any predetermined event or circumstance.
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(vii) Each received notice of, and had the opportunity to participate in, the proceedings before the Department as set forth in section 5.01.
(viii) Each is able to bear the economic risks of this investment, and consequently, without limiting the generality of the foregoing, is able to hold the New TetriDyn Stock to be received for an indefinite period.
(ix) Each understands that the New TetriDyn Stock has not been registered, but is being acquired by reason of a specific exemption under the Securities Act as well as under certain state securities Laws for the issuance of securities in exchange for one or more bona fide outstanding securities, claims, or property interests when the terms and conditions of such issuance and exchange are approved, after a hearing upon the fairness of such terms and conditions at which all persons to whom it is proposed to issue securities in such exchange shall have the right to appear, by a duly authorized governmental authority such as the Department, as well as corresponding provisions of the securities Laws of other states.
(b) Each Party acknowledges that no legal opinion or other assurance will be required or given to the effect that the transactions contemplated hereby are in fact exempt from registration or qualification.
Section 5.07 Limitations on Resale of New TetriDyn Stock Following Possible Public Offering
In order to facilitate the possibility of a public offering of TetriDyn Stock, the New TetriDyn Stock issuable in accordance with this Agreement shall be subject to the restrictions set forth in this section.
(a) The New TetriDyn Stock issuable in accordance with this Agreement cannot be resold: (i) until at least 180 days after the Effective Time; and (ii) during a period commencing on the date of filing by TetriDyn of a registration statement under the Securities Act for a firm commitment underwritten public offering for cash by TetriDyn of TetriDyn Stock or securities convertible into or exercisable or exchangeable for TetriDyn Stock and continuing until the earlier of abandonment of the proposed public offering or 180 days following the date of the last closing in the public offering (the “
Restricted Period
”). Holders of such New TetriDyn Stock will cooperate with TetriDyn in providing reasonable written assurances respecting the foregoing to the underwriter of any such public offering.
(b) During the Restricted Period, holders of New TetriDyn Stock may not directly or indirectly sell, offer to sell, contract to sell (including any short sale), grant any option to purchase, or otherwise transfer or dispose of (other than to donees who agree to be similarly bound) shares of New TetriDyn Stock received in connection with this Agreement at any time during such period except securities included in such registration.
(c) In order to enforce the covenant set forth in this section 5.07, TetriDyn shall have the right to impose stop-transfer instructions respecting such shares of New TetriDyn Stock, which shall be binding on any holder or assignee (and the shares or securities of every other person subject to the foregoing restriction), until the end of such Restricted Period.
Section 5.08 No Representation or Opinions Regarding Certain Legal Matters
(a) Except for the representations and warranties set forth in section 3.10 and section 4.10, no representation or warranty is being made or legal opinion given by any Party to any other regarding the treatment of this transaction for federal or state income taxation. Although this transaction has been structured in an effort to qualify for treatment under Section 368(a)(1)(A) and Section 368(a)(2)(E) of the Code, there is no assurance that any part of this transaction in fact meets the requirements for such qualification. Each Party has relied exclusively on its own legal, accounting, and other tax advisers regarding the treatment of this transaction for federal and state income taxes and on no representation, warranty, or assurance from any other Party or such other Party’s legal, accounting, or other advisers.
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(b) Notwithstanding the covenants respecting reliance on an exemption from registration under the Securities Act and limited preemption under applicable state Laws set forth in this Article V, each Party acknowledges that it has relied exclusively on its own legal advisers regarding the availability of such exemption and preemption and on no representation, warranty, or assurance from any other Party or such other Party’s legal advisers. Inasmuch as the basis for relying on exemptions is factual, depending on the conduct of the Parties and their representatives in connection with the Merger and soliciting stockholder consents, the Parties will not receive a legal opinion to the effect that this Merger and the issuance of New TetriDyn Stock are exempt or preempted from registration under any federal or state law. Instead, the Parties will rely on the operative facts as documented by them as their basis for such exemptions.
Section 5.09 Public Announcements
Neither Party shall issue any press release or otherwise make any public statements respecting the Merger without the approval of the other Party. The press release announcing the execution and delivery of this Agreement shall be a joint press release of OTE and TetriDyn.
Section 5.10 Board of Directors and Officers
The Parties anticipate that the persons identified on
Exhibit B
shall become the directors of TetriDyn and the Surviving Corporation, as indicated. At the Closing, the persons elected as directors of TetriDyn pursuant to majority stockholder written consent shall take office, with each director to serve until his successor is elected and qualified. The continuing management of TetriDyn and the Surviving Corporation, subject to further discretion of the reorganized board of directors, shall be also as set forth on
Exhibit B
attached hereto and incorporated herein by reference.
Section 5.11 [Reserved]
Section 5.12 Post-Closing Matters
The covenants and agreements set forth in this section 5.12 shall survive the Closing, notwithstanding any other contrary provision of this Agreement:
(a) TetriDyn shall file with the Nevada Secretary of State of Nevada an amendment to its articles of incorporation changing its name in accordance with the terms of this Agreement.
(b) To the extent not previously completed, TetriDyn will promptly, but in any event within 30 days after the Closing, seek to restructure the indebtedness to the Southeast Idaho Council of Governments, Inc. (SICOG), and Eastern Idaho Development Corp (EIDC) as set forth in TetriDyn
Schedule 4.
07. To facilitate such restructuring, OTE shall cause a principal stockholder, JPF Venture Group, Inc., to provide its accommodation guarantee of TetriDyn’s obligations to such creditors.
(c) To the extent not previously completed, TetriDyn will promptly, but in any event within 10 days after the Closing and upon receipt of invoices or other supporting documentation therefor, pay to:
(i) the applicable credit card creditor approximately $33,200, plus accrued interest, due on the personal credit cards of TetriDyn’s current president, Antoinette Knapp Hempstead, for business expenses of TetriDyn, as set forth in TetriDyn
Schedule 4.07
;
(ii) reimburse Antoinette Knapp Hempstead for her actual payments to SICOG and EIDC as guarantor of payments due from TetriDyn on loans from such creditors after March 1, 2015; and
(iii) Kruse Landa Maycock and Ricks, LLC, the sum of $15,000 for professional services rendered and costs advanced, with the balance of $26,587 as of January 31, 2015, plus additional amounts billed until the Closing, payable by TetriDyn in installments of $5,000 per month commencing within 30 days after such closing, until paid, with the unpaid balance accelerated and payable immediately from its first equity financing exceeding $1.0 million or completion of funding for the Baha Mar property.
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(d) All of the issued and outstanding shares of TetriDyn Preferred Stock returned to TetriDyn at the execution of this Agreement shall have been cancelled.
(e) All of the issued and outstanding shares of TetriDyn common stock issued pursuant to the Investment Agreement returned by JPF to TetriDyn at the Closing shall be cancelled.
(f) TetriDyn shall authorize and pursue to completion at the earliest practicable date audited financial statements for TetriDyn for the years ended December 31, 2012, 2013, and 2014; audited financial statements for OTE for the year ended December 31, 2014, in each case with an unqualified opinion thereon by a firm of independent certified public accounts; and pro forma financial statements providing the required information to be included in Periodic Reports required to be filed by TetriDyn. Parallel with the completion of the foregoing financial statements, TetriDyn will prepare or cause to be prepared all other Periodic Reports required to be completed in order for TetriDyn to become current in filing its Periodic Reports at the earliest practicable date.
(g) Promptly following the completion and filing of its Periodic Reports required to become current, TetriDyn shall take such steps as shall reasonably be required to make its common stock eligible for quotation on the OTCBB, with a trading symbol selected by TetriDyn to reflect its name following the Merger.
ARTICLE VI
CLOSING CONDITIONS
Section 6.01 Third-Party Conditions to Obligations of the Parties under this Agreement
The respective obligations of the Parties to effect the Merger and the other transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing Date of the following conditions, any or all of which may be waived in writing by the Parties hereto, in whole or in part, to the extent permitted by applicable Law:
(a) The Department shall have issued the Permit approving the fairness of the transaction in accordance with section 5.01 of this Agreement and Section 25142 of the California Corporations Code.
(b) As required under applicable Delaware Law, this Agreement and the Merger shall have been approved and adopted by the requisite vote of the stockholders of OTE and MergerCo.
(c) No Governmental Entity or federal or state court of competent jurisdiction shall have enacted, issued, promulgated, enforced, or entered any statute, rule, regulation, executive order, decree, injunction, or other order (whether temporary, preliminary, or permanent) that is in effect and which has the effect of making the Merger illegal or otherwise prohibiting consummation of the Merger.
Section 6.02 Additional Conditions to Obligations of the Parties
The obligations of each Party to effect the Merger and the other transactions contemplated hereby are also subject to the satisfaction at or prior to the Closing Date of the following conditions, any or all of which may be waived in writing by the other Party, in whole or in part, to the extent permitted by applicable Law:
(a) OTE shall have received written consents of the holders of a majority of its issued and outstanding OTE Stock in accordance with section 5.02(a) of this Agreement, and TetriDyn shall have received written consents of the holders of a majority of the issued and outstanding TetriDyn Stock and the holders of a majority of the TetriDyn stock held by TetriDyn stockholder not having any affiliation with OTE, in accordance with section 5.02(b) of this Agreement.
(b) The holders of less than 3% of the issued and outstanding OTE Stock shall have perfected their rights as Dissenting OTE Stockholders in accordance with Delaware Law and section 2.01(e) of this Agreement.
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(b) Each of the representations and warranties of the other Party contained in this Agreement shall be true and correct as of the Closing Date as though made on and as of the Closing Date (except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date). Each Party shall have received a certificate of the president and the chief financial officer or substantially equivalent authority of the other Party, dated the Closing Date, to such effect.
(c) Each Party shall have performed or complied with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing Date. Each Party shall have received a certificate of the president and the chief financial officer or substantially equivalent authority of the other Party, dated the Closing Date, to such effect.
(d) Since the date of this Agreement, there shall have been no change, occurrence, or circumstance in the current or future business, assets, liabilities, financial condition, or results of operations of the other Party having or reasonably likely to have, individually or in the aggregate, a TetriDyn Material Adverse Effect or OTE Adverse Effect, as the case may be. Each Party shall have received a certificate of the president and the chief financial officer or substantially equivalent authority of the other Party, dated the Closing Date, to such effect.
(e) There shall not have been any action taken, or any statute, rule, regulation, or order enacted, entered, enforced, or deemed applicable to the Merger, by any Governmental Entity in connection with the grant of a regulatory approval necessary, in the reasonable business judgment of either Party, to the continuing operation of the current or future business of TetriDyn or that imposes any condition or restriction upon the other Party, its business or operations that, in the reasonable business judgment of such Party, would be materially burdensome in the context of the transactions contemplated by this Agreement.
(f) The number of shares of OTE Stock for which valid notices of intention to demand payment pursuant to the applicable provisions of Delaware Law have been provided and remain outstanding immediately prior to the effectiveness of the Merger does not exceed that number of shares that, if converted in accordance with the terms of this Agreement, would constitute more than 2% of the total number of shares of New TetriDyn Stock issuable at the Effective Time.
Section 6.03 TetriDyn Recapitalization
In order to effect the Merger, immediately preceding the Closing TetriDyn shall effect the Recapitalization that consists of a 4.6972-to-one reverse split of its 24,031,863 shares of issued and outstanding common stock and the increase of its authorized common stock to 200,000,000 shares, par value $0.001 (the “
Reverse Split
”). As a result of the Reverse Split, each record holder of less than 5 shares of TetriDyn Common Stock immediately prior to the Reverse Split (the “
Minority Stockholders
”), will receive from TetriDyn, cash in the amount of $0.03 per share of TetriDyn Common Stock held by them, without interest, for each share of TetriDyn Common Stock held by such stockholders immediately prior to the Reverse Split, and such Minority Stockholders will no longer be stockholders of TetriDyn. No fractional shares will be issued in connection with the Reverse Split. TetriDyn stockholders who otherwise would be entitled to receive fractional shares because they hold a number of pre-Reverse Split TetriDyn shares not evenly divisible by 4.6972 will have the number of post-Reverse Split TetriDyn shares to which they are entitled rounded up to the next whole number of TetriDyn shares. No TetriDyn stockholders will receive cash in lieu of fractional shares.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.01 Termination
This Agreement may be terminated at any time prior to the Effective Time, whether before or after approval of this Agreement and the Merger by the stockholders of OTE in such case where approval is required:
(a) by mutual consent of OTE and TetriDyn;
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(b) by either Party, upon a material breach of any representation, warranty, covenant, or agreement on the part of the other Party set forth in this Agreement such that the conditions set forth in section 6.02(a) or section 6.02(b) of this Agreement, as the case may be, would be incapable of being satisfied by May 31, 2015 (or as otherwise extended as described in subsection (d) of this section 7.01);
provided
that, in any case, a willful breach shall be deemed to cause such condition as to be incapable of being satisfied for purposes of this section 7.01(b);
(c) by either Party, if there shall be any Order that is final and nonappealable preventing the consummation of the Merger, except if the Party relying on such Order to terminate this Agreement has not complied with its obligations under section 5.05(b) of this Agreement; or
(d) by either Party, if: (i) JPF shall have not paid for its subscription for shares of TetriDyn Stock in accordance with the Investment Agreement by March 18, 2015; (ii) the Department shall not have issued the Permit by May 15, 2015; or (iii) notwithstanding the Department having issued the Permit, the Merger shall not have been consummated within 20 days thereafter;
provided
,
however
, that this Agreement may be extended by written notice of either Party to the other to a date not later than May 15, 2015, if the Merger shall not have been consummated as a direct result of such notifying Party having failed by May 15, 2015, to receive all required regulatory approvals or consents respecting the Merger.
The right of the Parties to terminate this Agreement pursuant to this section 7.01 shall remain operative and in full force and effect regardless of any investigation made by or on behalf of either Party, any person controlling such Party, or any of its officers, directors, managers, partners, representatives, or agents, whether prior to or after the execution of this Agreement.
Section 7.02 Effect of Termination
Except as provided in section 7.05 or section 8.01 of this Agreement, in the event of the termination of this Agreement pursuant to section 7.01, this Agreement shall forthwith become void, there shall be no liability on the part of one Party to the other Party to consummate the transaction contemplated by this Agreement, and all rights and obligations of either Party shall cease, except that nothing herein shall relieve any Party of any liability for any breach of such Party’s covenants or agreements contained in this Agreement or any willful breach of such Party’s representations or warranties contained in this Agreement.
Section 7.03 Amendment
This Agreement may be amended by the Parties by action taken by or on behalf of their respective boards of directors, general partner(s), manager(s), or other governing body at any time prior to the Effective Time;
provided, however,
that, after approval of the Merger by the stockholders of a Party, no amendment that under applicable Law may not be made without the approval of the stockholders of such Party may be made without such approval. This Agreement may not be amended except by an instrument in writing signed by both Parties.
Section 7.04 Waiver
At any time prior to the Effective Time, either Party may extend the time for the performance of any of the obligations or other acts of the other Party, waive any inaccuracies in the representations and warranties of the other Party contained herein or in any document delivered pursuant hereto, and waive compliance by the other Party with any of the agreements or conditions contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by Parties.
Section 7.05 Fees, Expenses, and Other Payments
(a) In the event the Merger is not consummated, all Expenses (as defined in subsection 7.05(b)) incurred by the Parties shall be borne solely and entirely by the Party that has incurred such Expenses.
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(b) “
Expenses
” as used in this section 7.05 shall include all out-of-pocket expenses (including all fees and expenses of counsel, accountants, investment bankers, experts, and consultants to a Party and its affiliates) incurred by a Party or on its behalf in connection with or related to the authorization, preparation, negotiation, execution, and performance of this Agreement, the preparation, printing, filing, and mailing of communications to stockholders, the solicitation of approvals of stockholders, and all other matters related to the consummation of the transactions contemplated hereby.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.01 Effectiveness of Representations, Warranties, and Agreements; Survival
Prior to the execution of this Agreement, each Party has made available to the other Party the opportunity to review any disclosures made pursuant to this Agreement and other information available in accordance with the provisions of section 5.03. Each Party has been afforded the opportunity to engage its own attorneys, accountants, and other advisers to assist in the review of such schedules and other information and has made its own decision respecting the extent to which such Party has engaged such attorneys, accountants, and other advisers. The representations, warranties, and agreements of each Party shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the other Party, any person controlling such Party, or any of its officers, directors, managers, partners, representatives, attorneys, accountants, or agents, whether prior to or after the execution of this Agreement.
Section 8.02 Notices
Any notice, demand, request, or other communication permitted or required under this Agreement shall be in writing and shall be deemed to have been given as of the date so delivered, if personally delivered; as of the date so sent, if sent by electronic mail and receipt is acknowledged by the recipient; one day after the date so sent, if delivered by overnight courier service; or three days after the date so mailed, if mailed by certified mail, return receipt requested, addressed as follows:
(a) If to OTE, to: Ocean Thermal Energy Corporation
800 South Queen Street
Lancaster, Pennsylvania 17603
Attn: Jeremy P. Feakins
Email: Jeremy.Feakins@otecorporation.com
with a copy to: Procopio Cory Hargreaves & Savitch LLP
12544 High Bluff Drive, Suite 300
San Diego, California 92130
Attn: John P. Cleary
Email: john.cleary@procopio.com
(b) If to TetriDyn, to: TetriDyn Solutions, Inc.
c/o Antoinette Hempstead
6759 S Valence Lane
West Jordan, UT 84084
E-mail: toni.hempstead@gmail.com
with a copy to: Kruse Landa Maycock & Ricks, LLC
136 East South Temple Street, Suite 2100
Salt Lake City, Utah 84111
Attn: James R. Kruse
Email jkruse@klmrlaw.com
Notwithstanding the foregoing, service of legal process or other similar communications shall not be given by electronic mail and will not be deemed duly given under this Agreement if delivered by such means. Each Party, by notice duly given in accordance herewith, may specify a different address for the giving of any notice hereunder.
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Section 8.03 Certain Definitions
For the purposes of this Agreement:
(a) the term “
affiliate
” means a person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the first mentioned person;
(b) a person shall be deemed a “
beneficial owner
” of or to have “
beneficial ownership
” of TetriDyn Stock or OTE Stock, as the case may be, in accordance with the interpretation of the term “
beneficial ownership
” as defined in Rule 13d-3 under the Exchange Act, as in effect on the date hereof;
provided
that, a person shall be deemed to be the beneficial owner of, and to have beneficial ownership of, TetriDyn Stock or OTE Stock, as the case may be, that such person or any affiliate of such person has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement, or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise;
(c) the term “day” means any calendar day, and the term “
business day
” means any day other than a day on which banks in the state of Delaware are authorized or obligated to be closed;
(d) the term “
control
” (including the terms “
controlled
,” “
controlled by
,” and “
under common control with
”) means the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the management or policies of a person, whether through the ownership of stock or as trustee or executor, by contract or credit arrangement, or otherwise;
(e) the terms “
hazardous waste
,” “
hazardous substance
,” “
disposal
,” “
release
,” and “
threatened release
,” as used in this Agreement, shall have the same meanings set forth in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq., the Superfund Amendments and Reauthorization Act of 1986, Pub. L. no. 99-499, the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 49 U.S.C. Section 6901, et seq., or other applicable state or federal Laws, rules, or regulations adopted pursuant to any of the foregoing.
(f) the terms “
knowledge
” or “
known
” shall mean, respecting any matter in question, if an executive officer or equivalent person of TetriDyn or OTE, as the case may be, has actual knowledge of such matter or should have known such matter after reasonable investigation;
(g) the term “
person
” means an individual, corporation, partnership, limited liability company, association, trust, unincorporated organization, other entity, or group (as defined in Section 13(d) of the Exchange Act);
(h) the terms “
subsidiary
” or “
subsidiaries
” of TetriDyn or OTE, means any corporation, partnership, limited liability company, joint venture, or other legal entity of which TetriDyn or OTE, as the case may be (either alone or through or together with any other subsidiary), owns, directly or indirectly, currently or in the past, 50% or more of the stock or other equity interests, the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such corporation or other legal entity; and
(i) the term “
Taxes
” shall mean all taxes, however, denominated, including any interest, penalties, or other additions to tax that may become payable in respect thereof, imposed by any federal, territorial, state, local, or foreign government or any agency or political subdivision of any such government, including, without limiting the generality of the foregoing, all income or profit taxes, payroll and employee withholding taxes, unemployment insurance, social security taxes, sales and use taxes, ad valorem taxes, excise taxes, franchise taxes, gross receipts taxes, business license taxes, occupation taxes, real and personal property taxes, stamp taxes, environmental taxes, transfer taxes, workers’ compensation, Pension Benefit Guaranty Corporation premiums and other governmental charges, and other obligations of the same or of a similar nature to any of the foregoing, required to be paid, withheld, or collected.
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Section 8.04 Interpretation
The language in all parts of this Agreement shall be in all cases construed simply according to its fair meaning and not strictly for or against any Party. Section headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. Except when the context clearly requires to the contrary: (a) all references in this Agreement to designated “sections” are to the designated sections and other subdivisions of this Agreement; (b) instances of gender or entity-specific usage (e.g., “his,” “her,” “its,” or “individual”) shall not be interpreted to preclude the application of any provision of this Agreement to any individual of any gender or entity; (c) the word “or” shall not be applied in its exclusive sense, unless the context otherwise requires; (d) ”including” shall mean that the items listed are illustrative, without any implication that all or even most of the components are mentioned; (e) references to Laws, regulations, and other governmental rules (collectively, “rules”), as well as to contracts, agreements, and other instruments (collectively, “instruments”), shall mean such rules and instruments as in effect at the time of determination (taking into account any amendments thereto effective at such time without regard to whether such amendments were enacted or adopted after the effective date) and shall include all successor rules and instruments thereto; (f) references to “$,” “cash,” or “dollars” shall mean the lawful currency of the United States; (g) unless otherwise indicated, periods within which a payment is to be made or any other action is to be taken hereunder shall be calculated excluding the day on which the period commences and including the day on which the period ends; (h) references to “federal” shall be to Laws, agencies, or other attributes of the United States (and not to any state or locality thereof); (i) the meaning of the terms “domestic” and “foreign” shall be determined by reference to the United States; (j) if any day specified in this Agreement for any notice, action, or event is not a business day, then the due date for such notice, action, or event shall be extended to the next succeeding business day; (k) references to “days” shall mean calendar days; references to “business days” shall mean all days other than Saturdays, Sundays, and days that are legal holidays in the state of Delaware; (l) references to monthly or annual anniversaries shall be to the actual calendar months or years at issue (without taking into account the actual number of days in any such month or year); (m) days, business days, and times of day shall be determined by reference to local time in Delaware; (n) the English language version of this Agreement and all documents or instruments delivered by any Party hereto to the other shall govern all questions of interpretation relating to this Agreement, notwithstanding that this Agreement may have been translated into, and executed in, other languages; (o) whenever in this Agreement a person or group is permitted or required to make a decision in its “discretion” or under a grant of similar authority or latitude, such person or group shall be entitled to consider only such interests and factors as it deems appropriate, in the exercise of reasonable discretion, exercised in good faith; and (p) whenever in this Agreement a person or group is permitted or required to make a decision in its “good faith” or under another express standard, the person shall act under such express standard and shall not be subject to any other or different standard imposed by this Agreement or other applicable law.
Section 8.05 Entire Agreement
This Agreement (together with any Exhibits) constitutes the entire agreement of the Parties and supersedes all prior negotiations, courses of dealing, agreements, undertakings, and understandings, both written and oral, between the Parties respecting the subject matter hereof.
Section 8.06 Assignment
This Agreement shall not be assigned by agreement, operation of law, or otherwise.
Section 8.07 Parties in Interest
This Agreement shall be binding upon and inure solely to the benefit of the Parties, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit, or remedy of any nature whatsoever under or by reason of this Agreement.
Section 8.08 Failure or Indulgence Not Waiver; Remedies Cumulative
No failure or delay on the part of any Party in the exercise of any right hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty, or agreement herein, nor shall any single or partial exercise of any such right preclude other or further exercise thereof or of any other right. All rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.
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Section 8.09 Governing Law
This Agreement shall be governed by, enforced, and construed under and in accordance with the Laws of the United States of America and, respecting matters of state law, with the Laws of:
(a) the state of Delaware as applicable to OTE and MergerCo. respecting matters governing corporations organized under the Laws of such state;
(b) the state of Nevada as applicable to TetriDyn respecting matters governing corporations organized under the Laws of such state; and
(c) otherwise, the Laws of the state of Delaware.
In each case without giving effect to any choice or conflict of Law provision or rule (whether of the state of the particular state or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the state specified.
Section 8.10 Counterparts
This Agreement may be executed in multiple counterparts, and by the Parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF
, the Parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers, thereunto duly authorized.
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TETRIDYN SOLUTIONS, INC.
By: /s/ Antoinette Knapp Hempstead
Antoinette Knapp Hempstead
President
OCEAN THERMAL ENERGY CORPORATION
By: /s/ Jeremy P. Feakins
Jeremy P. Feakins
President
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