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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

Agreement and Plan of Merger

AGREEMENT AND PLAN OF MERGER AND REORGANIZATION | Document Parties: ECP ACQUISITION, INC | RAPTOR PHARMACEUTICALS CORP | TORREYPINES THERAPEUTICS, INC You are currently viewing:
This Agreement and Plan of Merger involves

ECP ACQUISITION, INC | RAPTOR PHARMACEUTICALS CORP | TORREYPINES THERAPEUTICS, INC

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Title: AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
Governing Law: Delaware     Date: 7/28/2009
Industry: Major Drugs     Law Firm: Cooley Godward;Paul Hastings     Sector: Healthcare

AGREEMENT AND PLAN OF MERGER AND REORGANIZATION, Parties: ecp acquisition  inc , raptor pharmaceuticals corp , torreypines therapeutics  inc
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Exhibit 2.1

 

 

 

 

AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

 

among:

 

TORREYPINES THERAPEUTICS, INC.,

a Delaware corporation;

 

 

ECP ACQUISITION, INC.,

a Delaware corporation; and

 

 

RAPTOR PHARMACEUTICALS CORP. ,

a Delaware corporation

 

 

 

___________________________

Dated as of July 27, 2009

___________________________

 

 

LEGAL_US_W # 62319343.5

 

TABLE OF CONTENTS

Page

 

 

 

SECTION 1

DESCRIPTION OF TRANSACTION

2

 

1.1

Merger of Merger Sub with and into Raptor

2

 

1.2

Effect of the Merger

2

 

1.3

Closing; Effective Time

2

 

1.4

Certificate of Incorporation and Bylaws; Directors and Officers

2

 

1.5

Conversion of Shares

3

 

1.6

Stock Options; Warrants

4

 

1.7

Closing of Raptor’s Transfer Books

6

 

1.8

Exchange of Certificates

6

 

1.9

Tax Consequences

7

 

1.10

Appraisal Rights

7

 

1.11

Further Action

8

SECTION 2

REPRESENTATIONS AND WARRANTIES OF TPT

8

 

2.1

Organization and Good Standing

8

 

2.2

Authority; No Conflict

9

 

2.3

Capitalization

10

 

2.4

SEC Reports

12

 

2.5

Financial Statements

13

 

2.6

Property; Sufficiency of Assets

14

 

2.7

Real Property; Equipment; Leasehold

14

 

2.8

Proprietary Rights

14

 

2.9

No Undisclosed Liabilities

17

 

2.10

Taxes

17

 

2.11

Employee Benefits

20

 

2.12

Compliance with Legal Requirements; Governmental Authorizations

23

 

2.13

Environmental Matters

25

 

2.14

Legal Proceedings

26

 

2.15

Absence of Certain Changes and Events

27

 

2.16

Contracts; No Defaults

28

 

2.17

Insurance

31

 

2.18

Labor Matters

31

 

2.19

Interests of Officers and Directors

32

 

2.20

Rights Plan; DGCL Section 203

32

 

2.21

Brokers; Fees and Expenses

33

 

2.22

Trading on NASDAQ

33

 

2.23

Valid Issuance

33

 

2.24

Disclosure

33

 

2.25

TPT Action

33

SECTION 3

REPRESENTATIONS AND WARRANTIES OF RAPTOR

34

 

3.1

Organization and Good Standing

34

 

3.2

Authority; No Conflict

34

 

3.3

Capitalization

36

 

3.4

SEC Reports

37

 

 

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TABLE OF CONTENTS

(continued)

Page

 

 

 

 

3.5

Financial Statements

38

 

3.6

Proprietary Rights

39

 

3.7

No Undisclosed Liabilities

41

 

3.8

Taxes

41

 

3.9

Compliance with Legal Requirements; Governmental Authorizations

42

 

3.10

Legal Proceedings

43

 

3.11

Absence of Certain Changes and Events

44

 

3.12

Contracts; No Defaults

44

 

3.13

Raptor Action

45

 

3.14

Rights Plan

45

 

3.15

Disclosure

45

SECTION 4

CERTAIN PRE-CLOSING COVENANTS

45

 

4.1

Access and Investigation

45

 

4.2

Operation of TPT’s Business

46

 

4.3

Operation of Raptor’s Business

50

 

4.4

No Control of the TPT Corporations’ Business

51

 

4.5

No Solicitation

51

 

4.6

Registration Statement; Prospectus/Joint Proxy Statement

53

 

4.7

TPT Stockholders’ Meeting

53

 

4.8

Raptor Stockholders’ Meeting

54

 

4.9

Regulatory Approvals

55

 

4.10

Disclosure

56

 

4.11

Tax Matters

57

 

4.12

Resignation of Officers and Directors

57

 

4.13

Listing

57

 

4.14

Rule 16b-3

58

 

4.15

Employment; Employee Benefits

58

 

4.16

State Takeover Laws

58

 

4.17

Board of Directors; Officers

58

 

4.18

Charter Amendments

58

 

4.19

Indemnification of Officers and Directors

58

SECTION 5

CONDITIONS PRECEDENT TO OBLIGATIONS OF RAPTOR

59

 

5.1

Accuracy of Representations and Warranties

60

 

5.2

Performance of Covenants

60

 

5.3

Effectiveness of Form S-4 Registration Statement

60

 

5.4

Stockholder Approval

60

 

5.5

Dissenters’ Rights

60

 

5.6

Listing

61

 

5.7

No Material Adverse Effect

61

 

5.8

Consents

61

 

5.9

No Restraints

61

 

5.10

No Litigation

61

 

 

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TABLE OF CONTENTS

(continued)

Page

 

 

 

 

5.11

Tax Opinion

61

 

5.12

Cash and Cash Equivalents

61

 

5.13

Resignations

62

 

5.14

Ancillary Agreements and Deliveries

62

 

5.15

Releases

62

SECTION 6

CONDITIONS PRECEDENT TO OBLIGATIONS OF TPT

62

 

6.1

Representations and Warranties

62

 

6.2

Performance of Covenants

62

 

6.3

Effectiveness of Form S-4 Registration Statement

62

 

6.4

Stockholder Approval

63

 

6.5

Listing

63

 

6.6

No Material Adverse Effect

63

 

6.7

Consents

63

 

6.8

No Restraints

63

 

6.9

No Litigation

63

 

6.10

Tax Opinion

63

 

6.11

Ancillary Agreements and Deliveries

64

SECTION 7

TERMINATION

64

 

7.1

Termination

64

 

7.2

Effect of Termination

65

 

7.3

Expenses

66

SECTION 8

MISCELLANEOUS PROVISIONS

67

 

8.1

Amendment

67

 

8.2

Remedies Cumulative; Waiver

67

 

8.3

No Survival

67

 

8.4

Entire Agreement

68

 

8.5

Execution of Agreement; Counterparts; Electronic Signatures

68

 

8.6

Governing Law

68

 

8.7

Consent to Jurisdiction; Venue

68

 

8.8

WAIVER OF JURY TRIAL

68

 

8.9

Disclosure Schedules

69

 

8.10

Attorneys’ Fees

69

 

8.11

Assignments and Successors

69

 

8.12

No Third Party Rights

69

 

8.13

Notices

70

 

8.14

Cooperation; Further Assurances

71

 

8.15

Construction; Usage

71

 

8.16

Enforcement of Agreement

72

 

8.17

Severability

72

 

8.18

Time of Essence

72

 

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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION is made and entered into as of July 27, 2009, by and among RAPTOR PHARMACEUTICALS CORP. , a Delaware corporation (“ Raptor ”), TORREYPINES THERAPEUTICS, INC., a Delaware corporation (“ TPT ”), and ECP ACQUISITION, INC. , a Delaware corporation and a wholly owned subsidiary of TPT (“ Merger Sub ”). Capitalized terms used in this Agreement are defined in Exhibit A .

RECITALS

A.            Raptor, TPT and Merger Sub intend to effect a merger of Merger Sub with and into Raptor in accordance with the Delaware General Corporation Law (the “ DGCL ”) and this Agreement (the “ Merger ”). Upon consummation of the Merger, Merger Sub will cease to exist, and Raptor will become a wholly owned subsidiary of TPT.

B.            It is intended that the Merger qualify as a tax-free reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “ Code ”).

C.            The respective boards of directors of Raptor, TPT and Merger Sub have each adopted a resolution approving and declaring the advisability of this Agreement, the Merger and each of the other Contemplated Transactions, as applicable.

D.            As a condition and inducement to Raptor’s, TPT’s and Merger Sub’s willingness to enter into this Agreement and to consummate the Merger, concurrently with the execution and delivery of this Agreement, directors and executive officers of TPT and Raptor, respectively, who own TPT Common Stock and Raptor Common Stock, respectively, are executing voting agreements in favor of Raptor and TPT, respectively (the “ Voting Agreements ”) whereby such TPT stockholders and Raptor stockholders have agreed to vote their shares of TPT Common Stock and Raptor Common Stock, as applicable, in accordance therewith, respectively, each in the manner and subject to the other terms and conditions set forth therein.

E.            Each of Evelyn Graham, Craig Johnson and Paul Schneider, respectively, have executed and delivered amended and restated employment agreements with TPTX, Inc., a Delaware corporation and wholly-owned subsidiary of TPT (the “ Employment Agreements ”), the forms of which are attached hereto as Exhibits B , C and D , respectively, such Employment Agreements to become effective as of the Effective Date.

 

 

 

 

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AGREEMENT

The parties to this Agreement, intending to be legally bound, agree as follows:

SECTION 1

 

DESCRIPTION OF TRANSACTION

1.1           Merger of Merger Sub with and into Raptor . Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time, Merger Sub shall be merged with and into Raptor, and the separate existence of Merger Sub shall cease. Following the Effective Time, Raptor shall continue as the surviving corporation (the “ Surviving Corporation ”).

1.2           Effect of the Merger . The Merger shall have the effects set forth in this Agreement and in the applicable provisions of the DGCL.

1.3           Closing; Effective Time . The consummation of the Merger (the “ Closing ”) shall take place at the offices of Paul, Hastings, Janofsky & Walker LLP, 515 S. Flower St., 25th Flr., Los Angeles, California 90071, at 10:00 a.m. on a date to be agreed upon in writing by TPT and Raptor (the “ Closing Date ”), which shall be no later than the third Business Day after the satisfaction or waiver of the last to be satisfied or waived of the conditions set forth in Sections 5 and 6 (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions). Subject to the provisions of this Agreement, a certificate of merger satisfying the applicable requirements of the DGCL (the “ Certificate of Merger ”) shall be duly executed by Raptor and, simultaneously with or as soon as practicable following the Closing, filed with the Secretary of State of the State of Delaware (the “ Secretary of State ”). The Merger shall become effective upon the later of: (a) the date and time of the filing of the Certificate of Merger with the Secretary of State, or (b) such later date and time as may be specified in the Certificate of Merger with the Consent of the Parties. The date and time the Merger becomes effective is referred to in this Agreement as the “ Effective Time .”

1.4           Certificate of Incorporation and Bylaws; Directors and Officers . At the Effective Time:

(a)          the certificate of incorporation of Raptor shall be amended as a result of the Merger to contain terms and conditions acceptable to Raptor, in its sole and absolute discretion, subject to the requirements of Section 4.18 of this Agreement, and, as so amended, shall be the certificate of incorporation of the Surviving Corporation from and after the Effective Time, until thereafter changed or amended as provided therein or by applicable Legal Requirement;

(b)          the bylaws of Raptor shall be amended to contain terms and conditions acceptable to Raptor, in its sole and absolute discretion, subject to the requirements of Section 4.19 of this Agreement, and, as so amended, shall be the bylaws of the Surviving Corporation from and after the Effective Time, until thereafter changed or amended as provided therein or by applicable Legal Requirement;

 

 

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(c)          the certificate of incorporation of TPT shall be amended and restated immediately prior to the Merger so as to (i) accomplish the Reverse Stock Split, (ii) change the name of TPT to Raptor Pharmaceutical Corp. or such other name as Raptor shall determine and (iii) to contain such other terms and conditions as are acceptable to Raptor, in its sole and absolute discretion, subject to the requirements of Section 4.18 of this Agreement, and as so amended, shall be the certificate of incorporation of TPT from and after the Effective Time, until thereafter changed or amended as provided therein or by applicable Legal Requirement (the “ TPT Charter Amendment ”); and

(d)          the directors and officers of TPT and the Surviving Corporation immediately after the Effective Time shall be the respective individuals who are directors and officers of Raptor immediately prior to the Effective Time.

 

1.5

Conversion of Shares .

(a)          At the Effective Time, by virtue of the Merger and without any further action on the part of Raptor, TPT, Merger Sub or any stockholder of Raptor, TPT or Merger Sub:

(i)           each share of Raptor Common Stock then held by Raptor or any wholly owned Subsidiary of Raptor (or held in Raptor’s treasury) shall be canceled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor;

(ii)          each share of Raptor Common Stock then held by TPT, Merger Sub or any wholly-owned Subsidiary of TPT shall be canceled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor; and

(iii)        subject to Sections 1.5(b) and 1.5(c), each share of Raptor Common Stock outstanding immediately prior to the Effective Time (excluding shares to be cancelled pursuant to Sections 1.5(a)(i) and 1.5(a)(ii) and excluding Dissenting Shares) shall be converted solely into the right to receive shares of TPT Common Stock equal to the Exchange Ratio; and

(iv)         each share of the common stock, $0.0001 par value per share, of Merger Sub then outstanding shall be converted into one share of common stock of the Surviving Corporation.

(b)          If, between the date of this Agreement and the Effective Time, the outstanding shares of TPT Common Stock or Raptor Common Stock are changed into a different number or class of shares by reason of any stock split, stock dividend, reverse stock split (including, without limitation, the Reverse Stock Split), reclassification, recapitalization or other similar transaction or event, then the Exchange Ratio and the inputs thereto shall be appropriately adjusted to provide the holders of Raptor Common Stock, Raptor Stock Options and Raptor Warrants and TPT Common Stock, TPT Restricted Stock Units, TPT Stock Options and TPT Warrants the same economic effect as contemplated by this Agreement prior to such event. No fractional shares of TPT Common Stock shall be issued in connection with the Reverse Stock Split, and no certificates or scrip for any such fractional shares shall be issued. Any holder of TPT Common Stock who would otherwise be entitled to receive a fraction of a share of TPT Common Stock (after aggregating all fractional shares of TPT Common Stock

 

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issuable to such holder) shall, in lieu of such fraction of a share and upon surrender of such holder’s certificate representing such fractional shares of TPT Common Stock, be paid in cash the dollar amount (provided to the nearest whole cent), without interest, determined by multiplying such fraction by the closing price of a share of TPT Common Stock on the NASDAQ Global Market or the NASDAQ Capital Market, as applicable, on the date immediately preceding the effective date of the Reverse Stock Split.

(c)          No fractional shares of TPT Common Stock shall be issued in connection with the Merger, and no certificates or scrip for any such fractional shares shall be issued. Any holder of Raptor Common Stock who would otherwise be entitled to receive a fraction of a share of TPT Common Stock (after aggregating all fractional shares of TPT Common Stock issuable to such holder) shall, in lieu of such fraction of a share and, upon surrender of such holder’s Raptor Stock Certificate(s), be paid in cash the dollar amount (rounded to the nearest whole cent), without interest, determined by multiplying such fraction by the closing price of a share of TPT Common Stock on the NASDAQ Global Market or the NASDAQ Capital Market, as applicable, on the Closing Date.

(d)          If any shares of Raptor Common Stock outstanding immediately prior to the Effective Time are unvested or are subject to a repurchase option, risk of forfeiture or other condition under any applicable restricted stock purchase agreement or other agreement with Raptor, then the shares of TPT Common Stock issued in exchange for such shares of Raptor Common Stock will also be unvested and subject to the same repurchase option, risk of forfeiture or other condition, and the certificates representing such shares of TPT Common Stock shall accordingly be marked with appropriate legends.

 

1.6

Stock Options; Warrants .

(a)          Subject to Section 1.6(d), at the Effective Time, each Raptor Stock Option that is outstanding and unexercised immediately prior to the Effective Time, whether or not vested, shall be converted into and become an option to purchase TPT Common Stock, and TPT shall assume each such Raptor Stock Option in accordance with the terms (as in effect as of the date of this Agreement) of the Raptor Stock Option Plan under which such Raptor Stock Option was issued and the terms of the stock option agreement by which such Raptor Stock Option is evidenced. All rights with respect to Raptor Common Stock under Raptor Stock Options assumed by TPT shall thereupon be converted into rights with respect to TPT Common Stock. Accordingly, from and after the Effective Time: (i) each Raptor Stock Option assumed by TPT may be exercised solely for shares of TPT Common Stock; (ii) the number of shares of TPT Common Stock subject to each Raptor Stock Option assumed by TPT shall be determined by multiplying (A) the number of shares of Raptor Common Stock that were subject to such Raptor Stock Option, as in effect immediately prior to the Effective Time by (B) the Exchange Ratio and rounding the resulting number down to the nearest whole number of shares of TPT Common Stock; (iii) the per share exercise price for the TPT Common Stock issuable upon exercise of each Raptor Stock Option assumed by TPT shall be determined by dividing (A) the per share exercise price of Raptor Common Stock subject to such Raptor Stock Option, as in effect immediately prior to the Effective Time, by (B) the Exchange Ratio and rounding the resulting exercise price up to the nearest whole cent; and (iv) any restriction on the exercise of any Raptor Stock Option assumed by TPT shall continue in full force and effect and the term, exercisability,

 

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vesting schedule and other provisions of such Raptor Stock Option shall otherwise remain unchanged; provided , however , that: (A) to the extent provided under the terms of a Raptor Stock Option, such Raptor Stock Option assumed by TPT in accordance with this Section 1.6(a) shall, in accordance with its terms, be subject to further adjustment as appropriate to reflect any stock split, division or subdivision of shares, stock dividend, reverse stock split (including, without limitation, the Reverse Stock Split), consolidation of shares, reclassification, recapitalization or other similar transaction with respect to TPT Common Stock occurring after the date of this Agreement; and (B) TPT’s board of directors or a committee thereof shall succeed to the authority and responsibility of Raptor’s board of directors or any committee thereof with respect to each Raptor Stock Option assumed by TPT. Notwithstanding anything to the contrary in this Section 1.6(a), the conversion of each Raptor Stock Option (regardless of whether such option qualifies as an “incentive stock option” within the meaning of Section 422 of the Code) into an option to purchase shares of TPT Common Stock shall be made in a manner consistent with Treasury Regulation Section 1.424-1, such that the conversion of a Raptor Stock Option shall not constitute a “modification” of such Raptor Stock Option for purposes of Section 409A or Section 424 of the Code.

(b)          TPT shall file with the SEC, no later than 60 days after the Effective Time, a registration statement on Form S-8, if available for use by TPT, relating to the shares of TPT Common Stock issuable with respect to Raptor Stock Options assumed by TPT in accordance with Section 1.6(a).

(c)          Subject to Section 1.6(d), at the Effective Time, each Raptor Warrant that is outstanding and unexercised immediately prior to the Effective Time, shall become converted into and become a warrant to purchase TPT Common Stock and TPT shall assume each such Raptor Warrant in accordance with its terms. All rights with respect to Raptor Common Stock under Raptor Warrants assumed by TPT shall thereupon be converted into rights with respect to TPT Common Stock. Accordingly, from and after the Effective Time: (i) each Raptor Warrant assumed by TPT may be exercised solely for shares of TPT Common Stock; (ii) the number of shares of TPT Common Stock subject to each Raptor Warrant assumed by TPT shall be determined by multiplying (A) the number of shares of Raptor Common Stock issuable upon exercise of the Raptor Warrant immediately prior to the Effective Time by (B) the Exchange Ratio and rounding the resulting number down to the nearest whole number of shares of TPT Common Stock; (iii) the per share exercise price for the TPT Common Stock issuable upon exercise of each Raptor Warrant assumed by TPT shall be determined by dividing the effective per share exercise price of Raptor Common Stock that are subject to such Raptor Warrant, as in effect immediately prior to the Effective Time, by the Exchange Ratio and rounding the resulting exercise price up to the nearest whole cent; and (iv) any restriction on any Raptor Warrant assumed by TPT shall continue in full force and effect and the term and other provisions of such Raptor Warrant shall otherwise remain unchanged; provided , however , that to the extent provided under the terms of a Raptor Warrant, such Raptor Warrant assumed by TPT in accordance with this Section 1.6(c) shall, in accordance with its terms, be subject to further adjustment as appropriate to reflect any stock split, division or subdivision of shares, stock dividend, reverse stock split (including, without limitation, the Reverse Stock Split), consolidation of shares, reclassification, recapitalization or other similar transaction with respect to TPT Common Stock occurring after the date of this Agreement.

 

 

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(d)          Prior to the Effective Time, Raptor shall take all actions that may be necessary (under the Raptor Stock Option Plan, the Raptor Warrants and otherwise) to effectuate the provisions of this Section 1.6 and to ensure that, from and after the Effective Time, holders of Raptor Stock Options and Raptor Warrants have no rights with respect thereto other than those specifically provided in this Section 1.6.

1.7           Closing of Raptor’s Transfer Books . At the Effective Time: (a) all holders of certificates representing shares of Raptor Common Stock that were outstanding immediately prior to the Effective Time shall cease to have any rights as stockholders of Raptor other than the right to receive shares of TPT Common Stock (and cash in lieu of any fractional share of TPT Common Stock) as contemplated by Section 1.5; and (b) the stock transfer books of Raptor shall be closed with respect to all shares of Raptor Common Stock outstanding immediately prior to the Effective Time. No further transfer of any such shares of Raptor Common Stock shall be made on such stock transfer books after the Effective Time. If, after the Effective Time, a valid certificate previously representing any shares of Raptor Common Stock (a “ Raptor Stock Certificate ”) is presented to the Exchange Agent or to the Surviving Corporation or TPT, such Raptor Stock Certificate shall be canceled and shall be exchanged as provided in Section 1.8.

 

1.8

Exchange of Certificates .

(a)          On or prior to the Closing Date, Raptor and TPT shall together select a reputable bank, transfer agent or trust company to act as exchange agent in the Merger (the “ Exchange Agent ”). Promptly after the Effective Time, TPT shall deposit with the Exchange Agent (i) certificates representing the shares of TPT Common Stock issuable pursuant to Section 1.5 and (ii) cash sufficient to make payments in lieu of fractional shares in accordance with Section 1.5(c). The shares of TPT Common Stock and cash amounts so deposited with the Exchange Agent, together with any dividends or distributions received by the Exchange Agent with respect to such shares, are referred to collectively as the “ Exchange Fund .”

(b)          As soon as reasonably practicable after the Effective Time, the Exchange Agent will mail to the record holders of Raptor Stock Certificates (i) a letter of transmittal in customary form and containing such provisions as Raptor may reasonably specify (including a provision confirming that delivery of Raptor Stock Certificates shall be effected, and risk of loss and title to such Raptor Stock Certificates shall pass, only upon delivery of such Raptor Stock Certificates to the Exchange Agent), and (ii) instructions for use in effecting the surrender of Raptor Stock Certificates in exchange for certificates representing TPT Common Stock. Upon surrender of a Raptor Stock Certificate to the Exchange Agent for exchange, together with a duly executed letter of transmittal and such other documents as may be reasonably required by the Exchange Agent or Raptor, (A) the holder of such Raptor Stock Certificate shall be entitled to receive in exchange therefor a certificate representing the number of whole shares of TPT Common Stock that such holder has the right to receive pursuant to the provisions of Section 1.5 (and cash in lieu of any fractional share of TPT Common Stock), and (B) the Raptor Stock Certificate so surrendered shall be canceled. Until surrendered as contemplated by this Section 1.8, each Raptor Stock Certificate shall be deemed, from and after the Effective Time, to represent only the right to receive shares of TPT Common Stock (and cash in lieu of any fractional share of TPT Common Stock) as contemplated by this Section 1. If any Raptor Stock Certificate shall have been lost, stolen or destroyed, Raptor or the Exchange Agent may, in its

 

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discretion and as a condition precedent to the issuance of any certificate representing TPT Common Stock, require the owner of such lost, stolen or destroyed Raptor Stock Certificate to provide an appropriate affidavit and to deliver a bond (in such sum as Raptor or the Exchange Agent may reasonably direct) as indemnity against any claim that may be made against the Exchange Agent, Raptor or the Surviving Corporation with respect to such Raptor Stock Certificate.

(c)          No dividends or other distributions declared or made with respect to TPT Common Stock with a record date after the Effective Time shall be paid to the holder of any un-surrendered Raptor Stock Certificate with respect to the shares of TPT Common Stock that such holder has the right to receive in the Merger until such holder surrenders such Raptor Stock Certificate in accordance with this Section 1.8 (at which time such holder shall be entitled, subject to the effect of applicable escheat or similar laws, to receive all such dividends and distributions, without interest).

(d)          Any portion of the Exchange Fund that remains undistributed to holders of Raptor Stock Certificates as of the date 180 days after the Effective Time shall be delivered to TPT upon demand, and any holders of Raptor Stock Certificates who have not theretofore surrendered their Raptor Stock Certificates in accordance with this Section 1.8 shall thereafter look only to TPT for satisfaction of their claims for TPT Common Stock, cash in lieu of fractional shares of TPT Common Stock and any dividends or distributions with respect to TPT Common Stock.

(e)          Each of the Exchange Agent, Raptor, TPT and the Surviving Corporation shall be entitled to deduct and withhold from any consideration payable or otherwise deliverable pursuant to this Agreement to any holder or former holder of Raptor Common Stock such amounts as may be required to be deducted or withheld therefrom under the Code or any provision of state, local or foreign tax law or under any other applicable Legal Requirement. To the extent such amounts are so deducted or withheld, such amounts shall be treated for all purposes under this Agreement as having been paid to the Person to whom such amounts would otherwise have been paid.

(f)           No Merger Party shall be liable to any holder or former holder of Raptor Common Stock or to any other Person with respect to any shares of TPT Common Stock or Raptor Common Stock (or dividends or distributions with respect thereto) or for any cash amounts, properly delivered to any public official pursuant to any applicable abandoned property law, escheat law or similar Legal Requirement.

1.9           Tax Consequences . For federal income tax purposes, the Merger is intended to constitute a reorganization within the meaning of Section 368(a) of the Code. The parties to this Agreement hereby adopt this Agreement as a “plan of reorganization” within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations.

 

1.10

Appraisal Rights .

(a)          Notwithstanding anything to the contrary contained in this Agreement, any shares of Raptor Common Stock that, as of immediately prior to the Effective Time, are held by

 

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holders who have as of such time exercised and perfected appraisal rights under Section 262 of the DGCL with respect to such shares (collectively, the “ Dissenting Shares ”) shall not be converted into or represent the right to receive shares of TPT Common Stock in accordance with Section 1.5(a)(iii), or cash in lieu of fractional shares in accordance with Section 1.5(c), attributable to such Dissenting Shares, and the holder or holders of such Dissenting Shares shall be entitled only to such rights as may be granted to such holder or holders pursuant to Section 262 of the DGCL; provided , however , that if such appraisal rights shall not be perfected or the holders of such Dissenting Shares shall otherwise lose their appraisal rights with respect to such Dissenting Shares, then, as of the later of the Effective Time or the time of the failure to perfect such status or the loss of such rights, such Dissenting Shares shall automatically be converted into and shall represent only the right to receive (upon the surrender of such holder’s Raptor Stock Certificate(s) in accordance with Section 1.8) shares of TPT Common Stock in accordance with Section 1.5(a)(iii) and cash in lieu of fractional shares in accordance with Section 1.5(c).

(b)          Raptor shall give TPT prompt notice of any written demand received by Raptor prior to the Effective Time to require Raptor to purchase shares of Raptor Common Stock pursuant to Section 262 of the DGCL, withdrawals of such demands and any other instruments served on Raptor and any material correspondence received by Raptor in connection with such demands.

1.11        Further Action . If, at any time after the Effective Time, any further action is determined by TPT to be necessary or desirable to carry out the purposes of this Agreement or to vest the Surviving Corporation with full right, title and possession of and to all rights and property of Merger Sub and Raptor, the officers and directors of the Surviving Corporation shall be fully authorized (in the name of Raptor, Merger Sub and otherwise) to take such action.

SECTION 2

 

REPRESENTATIONS AND WARRANTIES OF TPT

Each of TPT and Merger Sub represents and warrants to Raptor as follows except as set forth in the TPT Disclosure Schedule:

 

2.1

Organization and Good Standing .

(a)          The TPT Corporations are corporations or other Entities duly organized, validly existing, and in good standing under the laws of their respective jurisdictions of incorporation or organization, with full corporate power or other Entity authority to conduct their respective businesses as now being conducted, to own or use the respective properties and assets that they purport to own or use, and to perform all their respective obligations under TPT Corporation Contracts. Each of the TPT Corporations is duly qualified to do business as a foreign corporation or other Entity and is in good standing under the laws of each state or other jurisdiction in which either the ownership or use of the properties owned or used by it, or the nature of the activities conducted by it, requires such qualification, except where the failure to be so qualified could not reasonably be expected, individually or in the aggregate, to result in a TPT Material Adverse Effect.

 

 

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(b)          Part 2.1(b) of the TPT Disclosure Schedule lists all TPT Corporations and indicates as to each the type of Entity, its jurisdiction of organization and, except in the case of TPT, its stockholders or other equity holders. Part 2.1(b) of the TPT Disclosure Schedule lists, and TPT has delivered to Raptor copies of, the certificate or articles of incorporation, by-laws and other organizational documents (collectively, “ Organizational Documents ”) of each of the TPT Subsidiaries, as currently in effect.

 

2.2

Authority; No Conflict .

(a)          TPT has all necessary corporate power and authority to execute and deliver this Agreement and the other agreements referred to in this Agreement, to perform its obligations hereunder and thereunder and to consummate the Merger and the other transactions contemplated hereby and thereby (collectively, and including the execution, delivery and performance by certain stockholders of the Voting Agreements, the “ Contemplated Transactions ”), subject to obtaining the Required TPT Stockholder Vote and the filing of the Certificate of Merger required by the DGCL. The execution and delivery of this Agreement by TPT and the consummation by TPT of the Contemplated Transactions have been duly and validly authorized by all necessary corporate action and no other corporate proceedings on the part of TPT are necessary to authorize this Agreement or to consummate the Contemplated Transactions (other than the approval of the issuance of the TPT Common Stock to be issued in the Merger, the filing of the TPT Charter Amendment and the election of the persons identified on Part 4.17 of the TPT Disclosure Schedule to the TPT board of directors immediately after the Effective Time by the holders of a majority of the outstanding shares of TPT Common Stock (the “ Required TPT Stockholder Vote ”) and the filing of appropriate merger documents as required by the DGCL). The board of directors of TPT has unanimously approved this Agreement, declared it to be advisable and subject to Section 4.7(c) resolved to recommend to the stockholders of TPT that they vote in favor of the adoption of this Agreement in accordance with the DGCL. The board of directors of TPT has unanimously rescinded its approval of a plan of liquidation and dissolution for TPT and has unanimously approved the cancellation of the meeting of its stockholders that it previously called and adjourned to approve such plan. This Agreement has been duly and validly executed and delivered by TPT and constitutes the legal, valid and binding obligations of TPT, enforceable against TPT in accordance with its terms, subject to: (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors; and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.

(b)          Except as set forth in Part 2.2(b) of the TPT Disclosure Schedule and subject to obtaining the Required TPT Stockholder Vote and filing of the Certificate of Merger required by the DGCL, neither the execution and delivery of this Agreement nor the consummation of any of the Contemplated Transactions do or will, directly or indirectly (with or without notice or lapse of time or both), (i) contravene, conflict with, or result in a violation of (A) any provision of the Organizational Documents of any of the TPT Corporations, or (B) any resolution adopted by the board of directors or the stockholders of any of the TPT Corporations; (ii) contravene, conflict with, or result in a violation of, or give any Governmental Body or other Person the right to challenge any of the Contemplated Transactions or to exercise any remedy or obtain any relief under, any Legal Requirement or any Order to which any of the TPT Corporations, or any of the assets owned or used by any of the TPT Corporations, is or may be

 

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subject; (iii) contravene, conflict with, or result in a violation of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate, or modify, any Governmental Authorization that is held by any of the TPT Corporations, or that otherwise relates to the business of, or any of the assets owned or used by, any of the TPT Corporations; (iv) cause any of the TPT Corporations to become subject to, or to become liable for the payment of, any Tax; (v) cause any of the assets owned by any of the TPT Corporations to be reassessed or revalued by any Taxing Authority or other Governmental Body; (vi) contravene, conflict with, or result in a violation or breach of any provision of, or give any Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate, or modify, or create or give rise to any rights to or in any third Person to any payment of royalties or license fees, any rights to data or return of data or records, or to a right to terminate or amend any TPT Corporation Contract, including, without limitation, any license agreement, distribution agreement, development agreement, clinical trial agreement or other Contract affecting the rights of any TPT Corporation or its respective Affiliates or any of any TPT Corporation’s products, whether to use, manufacture, develop, distribute, or market any of such products currently in clinical trial, development or otherwise; (vii) require a Consent from any Person, including, without limitation, any licensor of any product being developed by any TPT Corporation or any of its respective Affiliates, or which is the subject of any clinical trial or other investigational or developmental or clinical trial program by any TPT Corporation or any of its respective Affiliates; or (viii) result in the imposition or creation of any Encumbrance upon or with respect to any of the assets owned or used by any of the TPT Corporations, except, in the case of clauses (ii), (iii), (iv), (v), (vi), (vii) and (viii), for any such conflicts, violations, breaches, defaults or other occurrences that would not prevent or delay consummation of the Merger in any material respect, or otherwise prevent TPT from performing its obligations under this Agreement in any material respect, and could not reasonably be expected to, individually or in the aggregate, result in a TPT Material Adverse Effect.

(c)          The execution and delivery of this Agreement by TPT do not, and the performance of this Agreement and the consummation of the Contemplated Transactions by TPT will not, require any Consent of, or filing with or notification to, any Governmental Body, except (i) for (A) applicable requirements, if any, of the Exchange Act, the Securities Act and state securities or “blue sky” laws (“ Blue Sky Laws ”), (B) the filing of the TPT Charter Amendment, (C) the filing of a Certificate of Merger as required by the DGCL, and (D) applicable requirements of NASDAQ and (ii) where failure to obtain such Consents, or to make such filings or notifications, would not prevent or delay consummation of the Merger in any material respect, or otherwise prevent TPT from performing its obligations under this Agreement in any material respect, and could not reasonably be expected to, individually or in the aggregate, result in a TPT Material Adverse Effect.

 

2.3

Capitalization .

(a)          The authorized capital stock of TPT consists of 150,000,000 shares of TPT Common Stock and 15,000,000 shares of TPT Preferred Stock. As of the date hereof, (i) 15,999,058 shares of TPT Common Stock are issued and outstanding, all of which have been duly authorized and validly issued, and are fully paid and nonassessable, (ii) 2,761,952 shares of TPT Common Stock are reserved for issuance upon the exercise of outstanding stock options

 

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granted pursuant to the TPT Stock Plan (the “ TPT Stock Options ”), (iii) zero shares of TPT Common Stock are reserved for issuance upon the settlement of outstanding restricted stock units granted pursuant to the TPT Stock Plan (the “ TPT Restricted Stock Units ”), (iv) 1,657,614 shares of TPT Common Stock are reserved for issuance upon exercise of warrants of TPT (the “TPT Warrants ”), (v) zero shares of TPT Common Stock are held in the treasury of TPT, (vi) 855,116 shares of TPT Common Stock are reserved for issuance pursuant to TPT Stock Options not yet granted, and (vii) 100,000 shares of TPT Preferred Stock (designated Series A Preferred Stock, par value $0.001 per share) are reserved for issuance upon exercise of the Rights issued pursuant to the Rights Agreement dated May 13, 2005 between TPT and American Stock Transfer & Trust Company (replacing The Nevada Agency and Trust Company), as Rights Agent, as amended (the “ TPT Rights Agreement ”). No shares of TPT Preferred Stock are outstanding. There are not any bonds, debentures, notes or other indebtedness or, except as described in the immediately preceding sentence, securities of TPT having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of TPT may vote. Except as set forth in the second sentence of this Section 2.3, as of the date hereof, no shares of capital stock or other voting securities of TPT are issued, reserved for issuance or outstanding and no shares of capital stock or other voting securities of TPT will be issued or become outstanding after the date hereof other than upon exercise of the TPT Stock Options and the TPT Warrants outstanding as of the date hereof.

(b)          Except as set forth in this Section 2.3 or in Part 2.3 of the TPT Disclosure Schedule or in the Voting Agreements, there are no options, stock appreciation rights, warrants or other rights, Contracts, arrangements or commitments of any character (collectively, “ Options ”) relating to the issued or unissued capital stock of any of the TPT Corporations, or obligating any of the TPT Corporations to issue, grant or sell any shares of capital stock of, or other equity interests in, or securities convertible into equity interests in, TPT or any of its Subsidiaries. Since January 1, 2009, TPT has not issued any shares of its capital stock or Options in respect thereof, except upon the conversion of the securities or the exercise or settlement, as applicable, of the TPT Stock Options, the TPT Warrants and the TPT Restricted Stock Units.

(c)          All shares of TPT Common Stock subject to issuance as described above on or before the Closing will, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, be duly authorized, validly issued, fully paid and nonassessable. None of the TPT Corporations has any Contract or other obligation to repurchase, redeem or otherwise acquire any shares of TPT Common Stock or any capital stock of any of TPT’s Subsidiaries, or make any investment (in the form of a loan, capital contribution or otherwise) in any of TPT’s Subsidiaries or any other Person. Each outstanding share of capital stock of each of TPT’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and each such share is owned by TPT or another TPT Corporation and is free and clear of all Encumbrances. None of the outstanding equity securities or other securities of any of the TPT Corporations was issued in violation of the Securities Act or any other Legal Requirement. None of the TPT Corporations owns, or has any Contract or other obligation to acquire, any equity securities or other securities of any Person (other than Subsidiaries of TPT) or any direct or indirect equity or ownership interest in any other business. None of the TPT Corporations is or has ever been a general partner of any general or limited partnership.

 

2.4

SEC Reports .

 

 

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(a)          Except as set forth on Part 2.4-1 of the TPT Disclosure Schedule, TPT has on a timely basis filed all forms, reports and documents required to be filed by it with the SEC since October 4, 2006 (such documents, as supplemented or amended since the time of filing, the “ TPT SEC Reports ”). The TPT SEC Reports (i) were or will be prepared in accordance with the requirements of the Securities Act and the Exchange Act, as the case may be, and, to the extent then applicable, SOX, including in each case, the rules and regulations thereunder and (ii) except to the extent that information contained in any TPT SEC Reports has been revised, modified or superseded (prior to the date of this Agreement) by a later filed TPT SEC Report, did not at the time they were filed with the SEC, or will not at the time they are filed with the SEC, 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 made therein, in the light of the circumstances under which they were made, not misleading. No Subsidiary of TPT is or has been required to file any form, report, registration statement or other document with the SEC. TPT maintains disclosure controls and procedures required by Rule 13a-15 or 15d-15 under the Exchange Act; and such controls and procedures are designed to ensure that all material information concerning TPT and its Subsidiaries is made known on a timely basis to the individuals responsible for the preparation of TPT’s filings with the SEC and other public disclosure documents. Except as set forth on Part 2.4-2 of the TPT Disclosure Schedule, to TPT’s Knowledge, each director and executive officer of TPT has filed with the SEC on a timely basis all statements required by Section 16(a) of the Exchange Act and the rules and regulations thereunder since October 4, 2006. As used in this Section 2.4, the term “file” shall be broadly construed to include any manner in which a document or information is furnished, supplied or otherwise made available to the SEC. With respect to TPT’s Annual Reports on Form 10-K for each fiscal year of TPT beginning on or after October 4, 2006 and TPT’s Quarterly Reports on Form 10-Q for each of the first three fiscal quarters in each of such fiscal years of TPT, all certifications and statements with respect thereto and required by Rules 13a-14 and 15d-14 under the Exchange Act and Sections 302 and 906 of SOX, and the rules and regulations of the SEC promulgated thereunder, complied with such rules and regulations and the statements contained in such certifications statements were true and correct as of the date of the filing thereof.

(b)          Since October 4, 2006, neither TPT nor any of its Subsidiaries or, to TPT’s Knowledge, any Representative of TPT or any of its Subsidiaries has received or has otherwise had or obtained knowledge of any complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of TPT or any of its Subsidiaries or their internal control over financial reporting, including any complaint, allegation, assertion or claim that TPT or any of its Subsidiaries has engaged in questionable accounting or auditing practices.

(c)          The TPT Corporations have implemented and maintain a system of internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) sufficient to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including, without limitation, that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the

 

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existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as set forth in Part 2.4(c) of the TPT Disclosure Schedule, since October 4, 2006, (A) there have not been any changes in the TPT Corporations’ internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the TPT Corporations’ internal control over financial reporting; (B) all significant deficiencies and material weaknesses in the design or operation of the TPT Corporations’ internal control over financial reporting which are reasonably likely to adversely affect the TPT Corporations’ ability to record, process, summarize and report financial information have been disclosed to TPT’s outside auditors and the audit committee of TPT’s board of directors, and (C) there has not been any fraud, whether or not material, that involves management or other employees who have a significant role in the TPT Corporations’ internal control over financial reporting. Part 2.4(c) of the TPT Disclosure Schedule lists, and TPT has made available to Raptor copies of, all reports and other documents concerning internal control filed with the SEC or delivered to TPT by its auditors since October 4, 2006. TPT has made available to Raptor copies of all policies, manuals and other documents promulgating such disclosure controls and procedures.

(d)          TPT is, and since October 4, 2006 has been, in compliance with the applicable provisions of SOX and the applicable listing and corporate governance rules and regulations of NASDAQ.

 

2.5

Financial Statements .

(a)          The financial statements and notes contained or incorporated by reference in the TPT SEC Reports (i) complied as to form in all material respects with the published rules and regulations of the SEC (including Regulation S-X) as of the date of the filing of such reports; (ii) were prepared in accordance with GAAP (except as may be indicated in the notes to such financial statements or, in the case of unaudited financial statements, as permitted by Form 10-Q of the SEC, and except that the unaudited financial statements may not contain footnotes to the extent permitted by Regulation S-X and are subject to normal and recurring year-end adjustments that will not, individually or in the aggregate, be material in amount), and (iii) fairly present in all material respects the consolidated financial position of the TPT Corporations as of the respective dates thereof and the consolidated results of operations, changes in stockholders’ equity and cash flows of the TPT Corporations as at the respective dates of and for the periods referred to in such financial statements. The financial statements referred to in this Section 2.5 reflect the consistent application of such accounting principles throughout the periods involved, except as disclosed in the notes to such financial statements. No financial statements of any Person other than TPT and its Subsidiaries are required by GAAP to be included in the consolidated financial statements of TPT.

(b)          Part 2.5(b) of the TPT Disclosure Schedule lists, and TPT has delivered to Raptor copies of, the documents creating or governing, all of TPT’s Off-Balance Sheet Arrangements.

(c)          Part 2.5(c) of the TPT Disclosure Schedule contains a description of all non-audit services performed by TPT’s auditors for the TPT Corporations since the beginning of the immediately preceding fiscal year of TPT and the fees paid for such services. All such non-audit services have been approved as required by Section 202 of SOX.

 

 

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2.6           Property; Sufficiency of Assets . The TPT Corporations (a) have good and valid title to all property material to the business of the TPT Corporations and reflected in the latest audited financial statements included in the TPT SEC Reports as being owned by the TPT Corporations or acquired after the date thereof (except for property sold or otherwise disposed of in the ordinary course of business since the date thereof), free and clear of all Encumbrances except (i) statutory Encumbrances securing payments not yet due and (ii) such imperfections or irregularities of title or Encumbrances as do not affect the use of the properties or assets subject thereto or affected thereby or otherwise materially impair business operations at such properties, in either case in such a manner as to have a TPT Material Adverse Effect, and (b) are collectively the lessee of all property material to the business of the TPT Corporations and reflected as leased in the latest audited financial statements included in the TPT SEC Reports (or on the books and records of TPT as of the date thereof) or acquired after the date thereof (except for leases that have expired by their terms) and are in possession of the properties purported to be leased thereunder, and each such lease is valid and in full force and effect without default thereunder by the lessee or the lessor, other than defaults that would not have a TPT Material Adverse Effect.

2.7           Real Property; Equipment; Leasehold . Except as set forth in Part 2.7-1 of the TPT Disclosure Schedule, none of the TPT Corporations own any real property or any interest in real property. Part 2.7-2 of the TPT Disclosure Schedule contains a true, complete and accurate list of all the TPT Corporations’ real property leases. With respect to such real property leases: (a) such TPT Corporation’s possession and quiet enjoyment of real property under such lease has not been materially disturbed, (b) such TPT Corporation is not, and to the Knowledge of TPT, no other party to such lease is, in breach of such lease, (c) to the Knowledge of TPT, there are no disputes with respect to such lease and (d) other than such TPT Corporation, there is no other Person in possession of the real property under such lease.

 

2.8

Proprietary Rights .

(a)           Registered IP . Part 2.8(a) of the TPT Disclosure Schedule contains a complete and accurate list of all Registered IP owned or purported to be owned by or filed in the name of any TPT Corporation, which list identifies (i) the jurisdiction in which each item of Registered IP has been registered or filed, and (ii) any item of Registered IP that is jointly owned with any other Person.

(b)           Third Party IP and Inbound Licenses . Part 2.8(b) of the TPT Disclosure Schedule contains a complete and accurate list of all Intellectual Property Rights or Intellectual Property licensed to any TPT Corporation (other than non-customized, executable code, internal use software licenses for software that is not incorporated into, or used directly in the development, manufacturing, or distribution of, any TPT Corporation’(s) products or services and that is generally available on standard terms for less than $2,000), and the corresponding Contracts in which such Intellectual Property Rights or Intellectual Property is licensed to any TPT Corporation (all of which are deemed to be TPT Material Contracts for purposes of Section 2.16).

(c)           Outbound Licenses . Part 2.8(c) of the TPT Disclosure Schedule contains a complete and accurate list of all Contracts currently in effect in which any Person has been granted any license under, or otherwise transferred or conveyed any right or interest in, any TPT

 

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IP. No TPT Corporation is bound by, and no TPT IP is subject to, any Contract containing any covenant or other provision that in any way limits or restricts the ability of any TPT Corporation to use, exploit, assert, or enforce the TPT IP anywhere in the world which limitations or restrictions would reasonably be expected to have a TPT Material Adverse Effect.

(d)           Demand Letters . Part 2.8(d) of the TPT Disclosure Schedule contains a complete and accurate list (and TPT has provided true, complete and accurate copies to Raptor) of all letters and other written or electronic communications or correspondence since October 4, 2006 between any TPT Corporation or any of their respective Representatives and any other Person regarding any actual, alleged, possible, potential, or suspected infringement or misappropriation of TPT IP, along with a brief description of the current status of each such matter.

(e)           Ownership Free and Clear . The TPT Corporations exclusively own all right, title, and interest to and in the TPT IP (other than Intellectual Property Rights exclusively licensed to any TPT Corporation, as identified in Part 2.8(b) of the TPT Disclosure Schedule) free and clear of any Encumbrances (other than non-exclusive licenses granted pursuant to the license agreements listed in Part 2.8(c) of the TPT Disclosure Schedule).

(f)            Valid and Enforceable . To TPT’s Knowledge all TPT IP is valid, subsisting, and enforceable. Without limiting the generality of the foregoing:

(i)           Each U.S. patent application and U.S. patent owned by any TPT Corporation was filed within one year of a printed publication, public use, or offer for sale of each invention described in the U.S. patent application or U.S. patent. Each foreign patent application and foreign patent owned by any TPT Corporation was filed or claims priority to a patent application filed prior to each invention described in the foreign patent application or foreign patent being made available to the public. No trademark or trade name owned, used, or applied for by any TPT Corporation conflicts or interferes with any trademark or trade name owned, used, or applied for by any other Person. TPT has no Knowledge with respect to and is not aware of any other basis for a claim that any of the TPT IP is invalid or unenforceable.

(ii)          All TPT IP that is Registered IP is in compliance with all formal Legal Requirements and all filings, payments, and other actions required to be made or taken to maintain such Registered IP in full force and effect have been made by the applicable deadline. Part 2.8(f)(ii) of the TPT Disclosure Schedule contains a complete and accurate list of all actions, filings, and payments that must be taken or made within ninety (90) days after the Closing Date in order to maintain such Registered IP in full force and effect.

(iii)         No Legal Proceeding (including any interference, opposition, reissue, or reexamination proceeding) is pending or, to TPT’s Knowledge, threatened, and since October 4, 2006 there has been no Legal Proceeding, in which the scope, validity, or enforceability of any TPT IP is being, has been, or could reasonably be expected to be contested or challenged.

 

 

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(g)           Trade Secrets . Each TPT Corporation has taken all reasonable steps to maintain the confidentiality of and otherwise protect and enforce its respective rights in its respective Trade Secrets.

(h)           Employees and Contractors . All employees and contractors of any TPT Corporation who were involved in the creation or development of the TPT IP have signed agreements containing intellectual property assignments and confidentiality provisions. No past or present shareholder, officer, director, or employee of any TPT Corporation has any claim, right, or interest to or in any TPT IP.

(i)            Chain of Title . TPT has properly recorded assignments from all named inventors for all patents and patent applications included in the Registered IP owned or purported to be owned by any TPT Corporation.

(j)            Impairment of Goodwill . The goodwill associated with or inherent in the each TPT Corporation’s respective trademarks (both registered and unregistered) has not been impaired.

(k)           Infringement of TPT IP by Third Parties . To TPT’s Knowledge, no Person has infringed, misappropriated, or otherwise violated, and no Person is currently infringing, misappropriating, or otherwise violating, any TPT IP.

(l)            Government Rights . No government funding or personnel were used, directly or indirectly, to develop or create, in whole or in part, any TPT IP.

(m)          Effects of This Transaction . Neither the execution or delivery of this Agreement nor the performance of this Agreement and the consummation of the Contemplated Transactions will, with or without notice or lapse of time, result in, or give any other Person the right or option to cause or declare, (i) a loss of, or Encumbrance or restriction on, any TPT IP or any license to Intellectual Property or Intellectual Property Rights held by any TPT Corporation; (ii) a breach of any license agreement listed or required to be listed in Part 2.9(b) of the TPT Disclosure Schedule; (iii) the release or delivery of any TPT IP to any other Person; or (iv) the grant, assignment, or transfer to any other Person of any license or other right or interest under, to, or in any of the TPT IP.

(n)           No Infringement of Third Party IP Rights . To TPT’s Knowledge no TPT Corporation has ever infringed, misappropriated, or otherwise violated the Intellectual Property Rights of any other Person, which infringement or misappropriation would reasonably be expected to have a TPT Material Adverse Effect. Without limiting the generality of the foregoing, to TPT’s Knowledge no product, information, or service ever manufactured, produced, distributed, published, used, provided, or sold by or on behalf of any TPT Corporation, and no Intellectual Property ever owned, used, or developed by any TPT Corporation, has infringed, misappropriated, or otherwise violated the Intellectual Property Rights of any other Person, which infringement or misappropriation would reasonably be expected to have a TPT Material Adverse Effect.

(o)           Pending, Threatened, or Possible IP Infringement Claims . There are no pending or to TPT’s Knowledge threatened infringement, misappropriation, or similar claims or

 

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Legal Proceedings against any TPT Corporation or against any other Person who would be entitled to indemnification by any TPT Corporation for such claim or Legal Proceeding. No TPT Corporation has ever received any notice or other communication (in writing or otherwise) of any actual, alleged, possible, potential, or suspected infringement or misappropriation of any other Person’s Intellectual Property Rights by any TPT Corporation or by any product or service developed, manufactured, distributed, provided, or sold by or on behalf of any TPT Corporation.

(p)           Other Infringement Liability . Except as may be set forth in the TPT Contracts listed on Parts 2.8(b) and (c) of the TPT Disclosure Schedule, no TPT Corporation is bound by any Contract, or any commitment or promise, to indemnify any other Person for intellectual property infringement, misappropriation, or similar claims (other than the express infringement indemnities included in standard form sales or license agreements entered into by any TPT Corporation in the ordinary course of business). No TPT Corporation has assumed from any other Person any existing or potential liability for infringement, misappropriation, or violation of Intellectual Property Rights.

(q)           Infringement Claims Relating to Third Party IP Licensed to TPT . To TPT’s Knowledge there are no pending or threatened claims or proceedings involving Intellectual Property or Intellectual Property Rights licensed to any TPT Corporation that could reasonably be expected to adversely affect the use or exploitation thereof by any TPT Corporation or the manufacturing, distribution, or sale of any products or services currently being developed, offered, manufactured, distributed, or sold by any TPT Corporation.

(r)            Sufficiency . To TPT’s Knowledge, each TPT Corporation owns or otherwise has all Intellectual Property Rights needed to conduct their respective businesses as currently conducted or planned to be conducted.

(s)           Employee Issues . No current employee of any TPT Corporation is subject to any Contract restricting him or her from performing his or her duties for any TPT Corporation.

2.9           No Undisclosed Liabilities . Except as set forth in Part 2.9 of the TPT Disclosure Schedule, the TPT Corporations have no liabilities or obligations of any nature (whether absolute, accrued, contingent, determined, determinable, choate, inchoate or otherwise), except for (a) liabilities or obligations reflected or reserved against in the TPT Balance Sheet, or (b) current liabilities incurred in the ordinary course of business, consistent with past practice, since the date of the TPT Balance Sheet that, individually or in the aggregate, would not have a TPT Material Adverse Effect.

 

2.10

Taxes .

(a)           Jurisdiction . Part 2.10(a) of the TPT Disclosure Schedule contains a true, correct and complete list of all jurisdictions (whether foreign or domestic) in which each of the TPT Corporations does or is required to file Tax Returns. No claim has ever been made in writing by a Governmental Body in a jurisdiction where the TPT Corporations do not file Tax Returns that they are or may be subject to taxation or to a requirement to file Tax Returns in that jurisdiction.

 

 

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(b)           Timely Filing of Tax Returns . The TPT Corporations have filed or caused to be filed all Tax Returns that are or were required to be filed by or with respect to any of them, either separately or as a member of a group of corporations, pursuant to applicable Legal Requirements. All Tax Returns filed by (or that include on a consolidated basis) any of the TPT Corporations were (and, as to Tax Returns not filed as of the date hereof, will be) in all respects true, complete and correct and filed on a timely basis.

(c)           Payment of Taxes . The TPT Corporations have, within the time and in the manner prescribed by law, paid (and until Closing will pay within the time and in the manner prescribed by law) all Taxes that are due and payable.

(d)           Withholding Taxes . Each of the TPT Corporations have complied (and until the Closing will comply) with all applicable Legal Requirements relating to the payment and withholding of Taxes (including, but not limited to, withholding and reporting requirements under the Code or Sections 1441 through 1464, 3401 through 3406, 6041 and 6049 of the Code, and similar provisions under any other laws) and have, within the times and in the manner prescribed by law, withheld from employee wages and paid over to proper Governmental Bodies all amounts required.

(e)           Audits . Except as set forth in Part 2.10(e) of the TPT Disclosure Schedule, no Tax Return of any of the TPT Corporations is under audit or examination by any Taxing Authority, and no written notice of such an audit or examination has been received by any of the TPT Corporations and, the TPT Corporations have no Knowledge of any threatened audits, investigations or claims for or relating to Taxes, and there are no matters under discussion with any Taxing Authority with respect to Taxes. Except as set forth in Part 2.10(e) of the TPT Disclosure Schedule, no issues relating to Taxes were raised in writing by the relevant Taxing Authority during any presently pending audit or examination. Part 2.10(e) of the TPT Disclosure Schedule lists, and TPT has delivered to Raptor copies of, all examiner’s or auditor’s reports, notices of proposed adjustments or similar commissions received by any of the TPT Corporations from any Taxing Authority since October 4, 2006. The U.S. Federal Income Tax Returns of the TPT Corporations consolidated in such returns have been examined by and settled with the Internal Revenue Service for all years, or all years are otherwise closed, through the taxable year ended December 31, 2005.

(f)            Tax Reserves . The charges, accruals, and reserves with respect to Taxes on the respective books of each of the TPT Corporations are adequate (and until Closing will continue to be adequate) to pay all Taxes not yet due and payable and have been determined in accordance with GAAP. No differences exist between the amounts of the book basis and the tax basis of assets (net of liabilities) that are not accounted for on any accrual on the books of the TPT Corporations for federal income tax purposes. Except as disclosed in Part 2.10(f) of the TPT Disclosure Schedule, there exists no proposed assessment of Taxes against any of the TPT Corporations.

(g)           Tax Liens . No Encumbrance for Taxes exists with respect to any assets or properties of any of the TPT Corporations, nor will any such Encumbrance exist at Closing except for statutory liens for Taxes not yet due.

 

 

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(h)           Tax Sharing Agreements . Part 2.10(h) of the TPT Disclosure Schedule lists, and TPT has delivered to Raptor copies of, any Tax sharing agreement, Tax allocation agreement, Tax indemnity obligation or similar written or unwritten agreement, arrangement, understanding or practice with respect to Taxes that is in effect (including any advance pricing agreement, Closing Agreement or other agreement relating to Taxes with any Taxing Authority) to which any of the TPT Corporations is a party or by which any of the TPT Corporations is bound. No such agreements shall be modified or terminated prior to Closing without the Consent of Raptor.

(i)            Extensions of Time for Filing Tax Returns . None of the TPT Corporations has requested any extension of time within which to file any Tax Return, which Tax Return has not since been filed.

(j)            Waiver of Statutes of Limitations . None of the TPT Corporations has executed any outstanding waivers or comparable consents regarding the application of the statute of limitations with respect to any Taxes or Tax Returns.

(k)           Powers of Attorney . No power of attorney currently in force has been granted by any of the TPT Corporations concerning any Taxes or Tax Return.

(l)            Tax Rulings . None of the TPT Corporations has received or been the subject of a Tax Ruling or a request for Tax Ruling. None of the TPT Corporations has entered into a Closing Agreement with any Governmental Body that would have a continuing effect after the Closing Date.

(m)          Availability of Tax Returns . Part 2.10(m) of the TPT Disclosure Schedule lists, and TPT has made available to Raptor true, complete and accurate copies of all material Tax Returns, and any amendments thereto, filed by or on behalf of, or which include, any of the TPT Corporations, for the years ended December 31, 2006, 2007 and 2008.

(n)           Opinions of Counsel . Part 2.10(n) of the TPT Disclosure Schedule lists, and TPT has provided to Raptor true, complete and accurate copies of all opinions of counsel, whether inside or outside counsel, and all opinions of accountants or other tax advisors, which have been received by any of the TPT Corporations with respect to Taxes.

(o)           Intercompany Transactions . None of the TPT Corporations has engaged in any transactions with Affiliates which would require the recognition of income by any of the TPT Corporations with respect to such transaction for any period ending on or after the Closing Date.

(p)           Real Property Transfer Tax . Except as set forth in Part 2.10(p) of the TPT Disclosure Schedule, none of the TPT Corporations owns any interest in real estate as a result of which ownership the Merger or any related Contemplated Transaction would be subject to any realty transfer Tax or similar Tax.

(q)           Section 162(m) . The disallowance of a deduction under Section 162(m) of the Code for employee remuneration would not reasonably be expected to apply to any amount

 

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paid or payable by any of the TPT Corporations under any TPT Corporation Contract, Benefit Plan, program, arrangement or understanding currently in effect.

(r)            Section 280G . None of the TPT Corporations is a party to any agreement, contract or arrangement that has resulted or would reasonably be expected to result, separately or in the aggregate, in the payment of a “parachute payment” within the meaning of Section 280G of the Code.

(s)            Qualification as a Reorganization . None of the TPT Corporations has taken any action, nor to TPT’s Knowledge is there any fact or circumstance, that could reasonably be expected to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code.

(t)            Section 355 Representation . None of the TPT Corporations has constituted either a “distributing corporation” or a “controlled corporation” in a distribution of stock qualifying for tax free treatment under Section 355 of the Code (i) in the two years prior to the date of this Agreement or (ii) in a distribution which could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in connection with the Merger.

 

2.11

Employee Benefits .

(a)          Except as required under this Agreement, since December 31, 2008, there has not been (i) any adoption or amendment of any Benefit Plan, or (ii) any adoption of, or amendment to, or change in employee participation or coverage under, any Benefit Plan that would increase the expense of maintaining such Benefit Plan above the level of the expense incurred in respect thereof for the fiscal year ended on December 31, 2008. Except as expressly contemplated hereby, neither the execution and delivery of this Agreement nor the consummation of the Contemplated Transactions will (either alone or in conjunction with any other event) result in, cause the accelerated vesting or delivery of, or increase the amount or value of, any payment or benefit to any employee of any TPT Corporation and all Benefit Plans permit continuation by TPT upon consummation of the Contemplated Transactions without the Consent of any participant.

(b)          For purposes of this Agreement, the following definitions apply: “ Controlled Group Liability ” means any and all liabilities under (i) Title IV of ERISA, (ii) section 302 of ERISA, (iii) sections 412, 430 and 4971 of the Code, (iv) the continuation coverage requirements of section 601 et seq. of ERISA and section 4980B of the Code, and (v) corresponding or similar provisions of foreign laws or regulations, and “ ERISA Affiliate ” means, with respect to any Entity, trade or business, any other Entity, trade or business that is a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001 (b)(1) of ERISA that includes the first Entity, trade or business, or that is a member of the same “controlled group” as the first Entity, trade or business pursuant to Section 4001(a)(14) of ERISA.

(c)          Part 2.11(c) of the TPT Disclosure Schedule includes a true, correct and complete list of all Benefit Plans.

 

 

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(d)          With respect to each Benefit Plan, TPT has delivered to Raptor a true, correct and complete copy of: (i) each writing constituting a part of such Benefit Plan, including without limitation all plan documents, benefit schedules, trust agreements, and insurance contracts and other funding vehicles; (ii) the three most recent Annual Report (Form 5500 Series) and accompanying schedules, if any; (iii) the current summary plan description and any summaries of material modifications, if any; (iv) the most recent annual financial report, if any; (v) the most recent actuarial report, if any; (vi) the most recent determination letter from the IRS, if any, (vii) all contracts relating to each Benefit Plan, including administrative service agreements and group insurance contracts; (viii) all minutes from all fiduciary and administrative committee meetings during the past three years for all Benefit Plans that are employee pension benefit plans within the meaning of ERISA Section 2; and (ix) all correspondence to or from any governmental Entity relating to any Benefit Plan. Except as specifically provided in the foregoing documents delivered to Raptor, there are no amendments to any Benefit Plan or any new Benefit Plan that have been adopted or approved nor has TPT undertaken to make any such amendments or adopt or approve any new Benefit Plan since December 31, 2008.

(e)          Part 2.11(e) of the TPT Disclosure Schedule identifies each Benefit Plan that is intended to be a “qualified plan” within the meaning of Section 401(a) of the Code (“ Qualified Plans ”). The Internal Revenue Service has issued a favorable determination letter, or opinion letter, with respect to each Qualified Plan that has not been revoked, and, there are no existing circumstances nor any events that have occurred that could reasonably be expected to adversely affect the qualified status of any Qualified Plan or the related trust. No Benefit Plan is intended to meet the requirements of Code Section 501(c)(9).

(f)           All contributions required to be made to any Benefit Plan by applicable Legal Requirements or by any plan document or other contractual undertaking, and all premiums due or payable with respect to insurance policies funding any Benefit Plan, for any period through the date hereof have been timely made or paid in full or, to the extent not required to be made or paid on or before the date hereof, have been fully reflected on the financial statements contained in the TPT SEC Reports.

(g)          Each Benefit Plan has been maintained and administered in compliance with its terms and in all respects with the applicable requirements of ERISA, the Code and any other applicable Legal Requirements. There is not now, nor to TPT’s Knowledge, do any circumstances exist that could give rise to, any requirement for the posting of security with respect to a Benefit Plan or the imposition of any Encumbrance on the assets of the any TPT Corporation under ERISA or the Code. No prohibited transaction has occurred with respect to any Benefit Plan. None of the TPT Corporations has, nor to TPT’s Knowledge has any other Person, engaged in any transaction with respect to any Benefit Plan that could reasonably be expected to subject any of the TPT Corporations to any Tax or penalty (civil or otherwise) imposed by ERISA, the Code or other applicable law or any participant to any Tax or penalty (civil or otherwise) imposed by ERISA, the Code or other applicable law (other than ordinary income tax in the normal course). All amendments required to be adopted before the effective dates for any qualified Benefit Plan to continue to be qualified have been or will be duly and timely adopted. Each Benefit Plan can be amended, terminated or otherwise discontinued after the Closing in accordance with its terms, without liability to Raptor, the Surviving Corporation or any of the TPT Corporations (other than ordinary administration expenses).

 

 

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(h)          No Benefit Plan is subject to Title IV or Section 302 of ERISA or Section 412, 430, or 4971 of the Code. All liabilities in connection with the termination of any Benefit Plan that was sponsored, maintained or contributed to by any TPT Corporation, or with respect to which any of them had any liability, at any time have been fully satisfied.

(i)           No Benefit Plan is a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA or a plan that has two or more contributing sponsors at least two of whom are not under common control, within the meaning of Section 4063 of ERISA and the TPT Corporations have no liabilities with respect to any such plan.

(j)           There does not now exist, nor do any circumstances exist that could result in, any Controlled Group Liability that would be a liability of any TPT Corporation, Raptor or the Surviving Corporation following the Closing. Without limiting the generality of the foregoing, neither any TPT Corporation nor any ERISA Affiliate of any TPT Corporation has engaged in any transaction described in Section 4069 or Section 4204 of ERISA.

(k)          No TPT Corporation has any liability for life, health, medical or other welfare benefits to former employees or beneficiaries or dependents thereof, except for health continuation coverage as required by Section 4980B of the Code or Part 6 of Title I of ERISA and similar state laws and at no expense to any TPT Corporation. With respect to each Benefit Plan that is an employee welfare benefit plan (within the meaning of Section 3(1) of ERISA), all claims under such Benefit Plan are (i) insured pursuant to a contract of insurance whereby the insurance company bears any risk of loss with respect to such claims, (ii) covered under a contract with a health maintenance organization (an “HMO”) pursuant to which the HMO bears the liability for claims or (iii) reflected as a liability or accrued for on the financial statements. Each individual who has elected and is currently entitled to COBRA continuation coverage and each individual who is entitled to elect COBRA continuation coverage is listed in Part 2.11(k)-1 of the TPT Disclosure Schedule. Part 2.11(k)-2 of the TPT Disclosure Schedule sets forth the date and type of the qualifying event for each person listed on such Schedule. Each individual who has elected COBRA continuation coverage has been charged the maximum COBRA premium permitted by COBRA and the TPT Corporations and the Benefit Plans have no obligation to charge any participant a lesser amount.

(l)           All stock options or share appreciation rights granted by any of the TPT Corporations were granted using an exercise price or a base price, as the case may be, of not less than the fair market value of the underlying shares in accordance with applicable guidance under Section 409A of the Code on the date of grant, and are not otherwise subject to the requirements of Section 409A of the Code. None of the TPT Corporations is subject to any agreement or contract that would require it to “gross up” or otherwise compensate any current or former employee, officer, director, or other service provider because of the imposition of any income, excise, or other tax on a payment or benefit provided to such person.

(m)         No Benefit Plan is subject to the laws other than those of the United States. No individual who was classified by any of the TPT Corporations as an independent contractor is or has ever been eligible to participate in any Benefit Plans.

 

 

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(n)          There are no pending or, to TPT’s Knowledge, threatened claims (other than claims for benefits in the ordinary course), lawsuits or arbitrations which have been asserted or instituted against the Benefit Plans, any fiduciaries thereof with respect to their duties to the Benefit Plans or the assets of any of the trusts under any of the Benefit Plans which could result in any liability of any TPT Corporation or any Benefit Plan.

(o)          Part 2.11(o) of the TPT Disclosure Schedule contains a true, complete and accurate list as of the date of this Agreement of all loans and advances made by any of the TPT Corporations to any employee, director, consultant or independent contract, other than routine travel and expense advances made to employees in the ordinary course of business. No TPT Corporation has, since October 1, 2002, extended or maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the form of a personal loan to or for any director or executive officer (or equivalent thereof) of TPT. Part 2.11(o) of the TPT Disclosure Schedule identifies any extension of credit maintained by the TPT Corporations to which the second sentence of Section 13(k)(1) of the Exchange Act applies.

 

2.12

Compliance with Legal Requirements; Governmental Authorizations .

(a)          Except as set forth in Part 2.12(a) of the TPT Disclosure Schedule, the TPT Corporations are, and at all times since October 4, 2006 have been, in material compliance with each Legal Requirement that is or was applicable to any of them or to the conduct or operation of their business or the ownership or use of any of their assets, including, without limitation, any regulation issued under any such Legal Requirement; no event has occurred or circumstance exists that (with or without notice or lapse of time or both) (i) may constitute or result in a material violation by any of the TPT Corporations of, or a substantial failure on the part of any of the TPT Corporations to comply with, any Legal Requirement, or (ii) may give rise to any obligation on the part of any of the TPT Corporations to undertake, or to bear all or any portion of the cost of, any substantial remedial action of any nature; and none of the TPT Corporations has received, at any time since October 4, 2006, any notice or other communication (whether oral or written) from any Governmental Body or any other Person regarding (x) any actual, alleged, possible, or potential violation of, or failure to comply with, any Legal Requirement, (y) any actual, alleged, possible, or potential obligation on the part of any of the TPT Corporations to undertake, or to bear all or any portion of the cost of, any remedial action of any nature, or (z) any investigation with respect to any such Legal Requirement, including Legal Requirements of the United States Food and Drug Administration (the “ FDA ”), the European Medicines Agency (“ EMEA ”) and other comparable Governmental Bodies.

(b)          The TPT Corporations have all material Governmental Authorizations required to conduct their respective businesses as now being conducted. Such Governmental Authorizations are valid and in full force and effect, and the TPT Corporations and Persons acting in concert with and on behalf of the TPT Corporations are in compliance in all material respects with all such Governmental Authorizations. TPT has provided to Raptor a true, accurate and complete copy of all such material Governmental Authorizations from the FDA and the EMEA.

(c)          The TPT Corporations and, to TPT’s Knowledge, Persons acting in concert with and on behalf of any TPT Corporation:

 

 

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(i)           have not used in any capacity the services of any individual or Entity debarred, excluded, or disqualified under 21 U.S.C. Section 335a, 42 U.S.C. Section 1320a-7, 21 C.F.R. Section 312.70, or any similar laws, rules or regulations; and

(ii)          have not been convicted of any crime or engaged in any conduct that has resulted, or would reasonably be expected to result, in debarment, exclusion, or disqualification under 21 U.S.C. Section 335a, 42 U.S.C. Section 1320a-7, 21 C.F.R. Section 312.70, or any similar laws, rules regulations.

(d)          None of the TPT Corporations, and (to the Knowledge of TPT) no Representative of any TPT Corporation with respect to any matter relating to any of the TPT Corporations, has: (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns or violated any provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iii) made any other unlawful payment.

(e)          No product or product candidate manufactured, tested, distributed, held or marketed by or on behalf of any of the TPT Corporations has been recalled, withdrawn, suspended or discontinued (whether voluntarily or otherwise) since October 4, 2006. At no time since October 4, 2006, has any of the TPT Corporations received notice that any Governmental Body or institutional review board or comparable body has commenced, or threatened to initiate, any proceeding seeking the recall, market withdrawal, suspension or withdrawal of approval, or seizure of any such product or product candidate; the imposition of material sales, marketing or production restriction on any product or product candidate; or the suspension, termination or other restriction of preclinical or clinical research by or on behalf of any of the TPT Corporations, including any action regarding any investigator participating in any such research, nor is any such proceeding pending. TPT has, prior to the execution of this Agreement, provided to Raptor all information about serious adverse drug experiences since October 4, 2006 obtained or otherwise received by any of the TPT Corporations from any source, in the United States or outside the United States, including information derived from clinical investigations prior to any market authorization approvals, commercial marketing experience, postmarketing clinical investigations, postmarketing surveillance studies or registries, reports in the scientific literature, and unpublished scientific papers relating to any product or product candidate manufactured, tested, distributed, held or marketed by any of the TPT Corporations or any of their licensors or licensees in the possession of any of the TPT Corporations (or to which any of them has access), except for any adverse drug experiences that would not, or would not reasonably be expected to, individually or in the aggregate, have a TPT Material Adverse Effect.

(f)           None of the TPT Corporations, or, to TPT’s Knowledge, Persons acting in concert with or on behalf of any TPT Corporation, or, to TPT’s Knowledge, any officers, employees or agents of the same has with respect to any product that is manufactured, tested, distributed, held or marketed by or on behalf of any of any TPT Corporation made an untrue statement of a material fact or fraudulent statement to the FDA, the EMEA or any other Governmental Body, failed to disclose a material fact required to be disclosed to the FDA, the EMEA or any other Governmental Body, or committed an act, made a statement, or failed to make a statement that, at the time such disclosure was made, would reasonably be expected to

 

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provide a basis for the FDA to invoke its policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities” set forth in 56 Fed. Reg. 46191 (September 10, 1991) or for the EMEA or any other Governmental Body to invoke any similar policy.

(g)          All preclinical safety pharmacology and toxicology studies and all clinical studies relating to product or product candidates, conducted by or on behalf of any TPT Corporation have been, or are being, conducted in compliance with the applicable requirements of the FDA’s Good Laboratory Practice and Good Clinical Practice requirements, including regulations under 21 C.F.R. Parts 50, 54, 56, 58, 312 and applicable guidance documents, as amended from time to time, the Animal Welfare Act, and all applicable similar requirements in other jurisdictions, and all requirements relating to protection of human subjects.

(h)          TPT (or another TPT Corporation) and its Affiliates have filed with the FDA, the EMEA, any other Governmental Authority, and any institutional review board or comparable body, all filings, reports, responses, required notices, supplemental applications, and annual or other reports, responses to requests for information or other submissions required by applicable Legal Requirement, or requested by FDA, EMEA or any other Governmental Body having jurisdiction over any TPT Corporation or their respective businesses and/or clinical trials and applications, including but not limited to all reports of clinical trials, reports of adverse consequences or adverse reactions, and similar reports regarding the conduct of and results of clinical trials, each investigational new drug application or any comparable foreign regulatory application, including any such report related to the manufacture, testing, study, or sale of any product or product candidate, as applicable.

(i)           TPT (or another TPT Corporation) and its Affiliates have maintained and currently maintain all records, documents, reports and other information required under FDA guidance to support any IND, NDA or ANDA applications for each product under development or undergoing clinical trial, including without limitation, all records, documents and other information related to Good Laboratory Practice, Good Clinical Practice, or Good Manufacturing Practice for each such product or proposed product; all records relating to the qualification and selection of clinical investigators; all records related to the qualification and selection of, and informed Consent given by, each participant in any trial; and all clinical reports or records and analysis of clinical trial results.

(j)           TPT (or another TPT Corporation) and its Affiliates have manufactured all products used in clinical trials in accordance with Good Manufacturing Practice, and have maintained all records regarding purity, concentration, and shelf life, allocation of product to investigators, and recovery or destruction of outdated or unused clinical trial product.

 

2.13

Environmental Matters .

(a)          Each of the TPT Corporations: (i) is and has been in compliance in all material respects with, and has not been and is not in material violation of or subject to any material liability under, any applicable Environmental Requirements; and (ii) possesses all permits and other Environmental Authorizations, and is in compliance with the terms and conditions thereof.

 

 

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(b)          None of the TPT Corporations has received any notice or other communication (in writing or otherwise), whether from a Governmental Body, citizens group, TPT Representative or otherwise, that alleges that any of the TPT Corporations is not or might not be in compliance with any Environmental Requirement or Environmental Authorization, and, to the Knowledge of TPT, there are no circumstances that may prevent or interfere with the compliance by any of the TPT Corporations with any Environmental Requirement or Environmental Authorization in the future.

(c)          To the Knowledge of TPT: (i) all property that is or was leased to, controlled by or used by any of the TPT Corporations, and all surface water, groundwater and soil associated with or adjacent to such property, is free of any Materials of Environmental Concern or material environmental contamination of any nature; (ii) none of the property that is or was leased to, controlled by or used by any of the TPT Corporations contains any underground storage tanks, asbestos, equipment using PCBs or underground injection wells; and (iii) none of the property that is or was leased to, controlled by or used by any of the TPT Corporations contains any septic tanks in which process wastewater or any Materials of Environmental Concern have been Released.

(d)          For purposes of this Agreement: (i) “Environmental Requirement” means any federal, state, local or foreign Legal Requirement, Order, writ, injunction, directive, authorization, judgment, decree, grant, franchise, Contract or other governmental restriction and requirement, whether judicial or administrative, relating to pollution or protection of human health and safety, natural resources or the Environment (including ambient air, surface water, ground water, land surface or subsurface strata), including any Legal Requirement relating to emissions, discharges, releases or threatened releases of Materials of Environmental Concern, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of Environmental Concern; (ii) “Environmental Authorization” means any Governmental Authorization required under applicable Environmental Requirements; (iii) “Materials of Environmental Concern” include chemicals, pollutants, contaminants, wastes, toxic substances, petroleum and petroleum products and any other substance that is now or hereafter regulated by any Environmental Requirement or that is otherwise a danger to health, reproduction or the Environment; and (iv) “Release” means any spilling, leaking, emitting, discharging, depositing, escaping, leaching, dumping or other releasing into the Environment, whether intentional or unintentional.

 

2.14

Legal Proceedings .

(a)          Except as set forth in Part 2.14 of the TPT Disclosure Schedule, there is no pending Legal Proceeding (i) that has been commenced by or against any of the TPT Corporations or that otherwise relates to or may affect the business of, or any of the assets owned or used by, any of the TPT Corporations, except for such Legal Proceedings as could not reasonably be expected to, individually or in the aggregate, result in a TPT Material Adverse Effect, (ii) that challenges, or that may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the Contemplated Transactions, or (iii) against any director or officer of any of the TPT Corporations pursuant to Section 8A or 20(b) of the Securities Act or Section 21(d) or 21C of the Exchange Act.

 

 

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(b)          To TPT’s Knowledge, (i) no Legal Proceeding that if pending would be required to be disclosed under the preceding paragraph has been threatened, and (ii) no event has occurred or circumstance exists that may give rise to or serve as a basis for the commencement of any such Legal Proceeding.

2.15        Absence of Certain Changes and Events . Except as set forth in Part 2.15 of the TPT Disclosure Schedule or as otherwise expressly contemplated by this Agreement, since the date of the TPT Balance Sheet, the TPT Corporations have conducted their businesses only in the ordinary course of business, consistent with past practices and there has not been any TPT Material Adverse Effect, and no event has occurred or circumstance exists that may result in a TPT Material Adverse Effect, any action or event of the type described in Section 4.2 or:

(a)          any material loss, damage or destruction to, or any material interruption in the use of, any of the assets of any of the TPT Corporations (whether or not covered by insurance) that has had or could reasonably be expected to have a TPT Material Adverse Effect;

(b)          (i) any declaration, accrual, set aside or payment of any dividend or any other distribution in respect of any shares of capital stock of any TPT Corporation, or (ii) any repurchase, redemption or other acquisition by any TPT Corporation of any shares of capital stock or other securities;

(c)          any sale, issuance or grant, or authorization of the issuance of, (i) any capital stock or other security of any TPT Corporation (except for TPT Common Stock issued upon the valid exercise of outstanding TPT Stock Options, TPT Warrants, or the valid settlement of outstanding TPT Restricted Stock Units), (ii) any option, warrant or right to acquire any capital stock or any other security of any TPT Corporation (except for TPT Stock Options, TPT Warrants, and TPT Restricted Stock Units described in Section 2.3), or (iii) any instrument convertible into or exchangeable for any capital stock or other security of any TPT Corporation;

(d)          any amendment or waiver of any of the rights of any TPT Corporation under, or acceleration of vesting under, (i) any provision of the TPT Stock Plan, (ii) any provision of any Contract evidencing any outstanding TPT Stock Option, TPT Warrant, or TPT Restricted Stock Unit, or (iii) any restricted stock purchase agreement;

(e)          any amendment to any Organizational Document of any of the TPT Corporations, any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction involving any TPT Corporation;

(f)           any creation of any Subsidiary, other than Merger Sub, of any TPT Corporation or acquisition by any TPT Corporation of any equity interest or other interest in any other Person;

(g)          any capital expenditure by any TPT Corporation which, when added to all other capital expenditures made on behalf of the TPT Corporations since the date of the TPT Balance Sheet, exceeds $25,000 in the aggregate;

 

 

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(h)          except in the ordinary course of business and consistent with past practice, any action by any TPT Corporation to (i) enter into or suffer any of the assets owned or used by it to become bound by any TPT Material Contract, or (ii) amend or terminate, or waive any material right or remedy under any TPT Material Contract;

(i)           any (i) acquisition, lease or license by any TPT Corporation of any material right or other material asset from any other Person, (ii) sale or other disposal or lease or license by any TPT Corporation of any material right or other material asset to any other Person, or (iii) waiver or relinquishment by any TPT Corporation of any right, except for rights or other assets acquired, leased, licensed or disposed of in the ordinary course of business and consistent with past practices;

(j)           any write-off as uncollectible of, or establishment of any extraordinary reserve with respect to, any account receivable or other indebtedness of any TPT Corporation;

(k)          any pledge of any assets of or sufferance of any of the assets of any TPT Corporation to become subject to any Encumbrance, except for pledges of immaterial assets made in the ordinary course of business and consistent with past practices;

(l)           any (i) loan by any TPT Corporation to any Person, or (ii) incurrence or guarantee by any TPT Corporation of any indebtedness for borrowed money;

(m)         any (i) adoption, establishment, entry into or amendment by any TPT Corporation of any Benefit Plan or (ii) payment of any bonus or any profit sharing or similar payment to, or material increase in the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of the directors, officers or employees of any TPT Corporation;

(n)          any change of the methods of accounting or accounting practices of any TPT Corporation in any material respect;

 

(o)

any material Tax election by any TPT Corporation;

(p)          any commencement or settlement of any Legal Proceeding by any TPT Corporation; or

(q)          any agreement or commitment to take any of the actions referred to in clauses (b) through (p) above.

 

2.16

Contracts; No Defaults .

(a)          Part 2.16(a) of the TPT Disclosure Schedule lists, and, except to the extent filed in full without redaction as an exhibit to a TPT SEC Report, TPT has delivered to Raptor copies of, each TPT Corporation Contract and other instrument or document currently in effect or pursuant to which TPT has continuing obligations (including any amendment to any of the following):

 

 

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(i)           described in any paragraphs of Item 601(b) of Regulation S-K of the SEC;

 

(ii)

with any director, officer or Affiliate of TPT;

(iii)         evidencing, governing or relating to indebtedness for borrowed money;

(iv)         not entered into in the ordinary course of business that involves expenditures or receipts in excess of $25,000;

(v)          currently in effect that in any way purports to restrict the business activity of any TPT Corporation or any of its Affiliates, or to limit the freedom of any TPT Corporation or any of its Affiliates to engage in any line of business or to compete with any Person or in any geographic area or to hire or retain any Person;

(vi)         relating to the employment of, or the performance of services by, any employee or consultant not terminable by TPT or its Subsidiaries on ninety (90) days notice without liability, or pursuant to which any of the TPT Corporations is or may become obligated to make any severance, termination or similar payment to any current or former employee or director, or pursuant to which any of the TPT Corporations is or may become obligated to make any bonus or similar payment (other than payments constituting base salary) in excess of $5,000 to any current or former employee or director;

(vii)       relating to the acquisition, transfer, development, sharing or licensing of any TPT IP (except for any Contract pursuant to which (1) any Intellectual Property is licensed to any TPT Corporation under any third party software license generally available to the public, or (2) any Intellectual Property is licensed by any of the TPT Corporations to any Person on a nonexclusive basis);

(viii)      providing for indemnification of any officer, director, employee or agent;

(ix)         currently in force (A) relating to the acquisition, issuance, voting, registration, sale or transfer of any securities, (B) providing any Person with any preemptive right, right of participation, right of maintenance or any similar right with respect to any securities, or (C) providing any of the TPT Corporations with any right of first refusal with respect to, or right to repurchase or redeem, any securities, except for Contracts evidencing TPT Stock Options, TPT Warrants or TPT Restricted Stock Units;

(x)          incorporating or relating to any guaranty, any warranty or any indemnity or similar obligation not entered into in the ordinary course of business, except for Contracts substantially identical to the standard forms of end user licenses previously delivered by TPT to Raptor;

 

(xi)

relating to any currency hedging;

 

 

(xii)

containing “standstill” or similar provisions;

 

 

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(xiii)       (A) to which any Governmental Body is a party or under which any Governmental Body has any rights or obligations, or (B) directly or indirectly benefiting any Governmental Body (including any subcontract or other Contract between any TPT Corporation and any contractor or subcontractor to any Governmental Body);

(xiv)      requiring that any of the TPT Corporations give any notice or provide any information to any Person prior to considering or accepting any Acquisition Proposal or similar proposal, or prior to entering into any discussions, agreement, arrangement or understanding relating to any Acquisition Transaction or similar transaction;

(xv)        contemplating or involving the payment or delivery of cash or other consideration in an amount or having a value in excess of $25,000 in the aggregate, or contemplating or involving the performance of services after the date of this Agreement having a value in excess of $25,000 in the aggregate;

 

(xvi)

required to be listed on Part 2.7-2 of the TPT Disclosure Schedule;

(xvii)     that could reasonably be expected to have a material effect on the business, condition, capitalization, assets, liabilities, operations or financial performance of any of the TPT Corporations or on any of the Contemplated Transactions; and

(xviii)    any other Contract, if a breach of such Contract could reasonably be expected to have a TPT Material Adverse Effect.

Each of the foregoing is a “ TPT Material Contract .”

(b)          Each TPT Material Contract is valid and in full force and effect, and is enforceable in accordance with its terms, subject to: (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors; and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.

(c)          Except as set forth in Part 2.16(c) of the TPT Disclosure Schedule: (i) none of the TPT Corporations has violated or breached, or committed any default under, any TPT Material Contract, except for violations, breaches and defaults that have not had and would not reasonably be expected to have a TPT Material Adverse Effect; and, to the TPT’s Knowledge, no other Person has violated or breached, or committed any default under, any TPT Material Contract, except for violations, breaches and defaults that have not had and would not reasonably be expected to have a TPT Material Adverse Effect; (ii) to the TPT’s Knowledge, no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) will or would reasonably be expected to, (A) result in a violation or breach of any of the provisions of any TPT Material Contract, (B) give any Person the right to declare a default or exercise any remedy under any TPT Material Contract, (C) give any Person the right to accelerate the maturity or performance of any TPT Material Contract, or (D) give any Person the right to cancel, terminate or modify any TPT Material Contract, except in each such case for defaults, acceleration rights, termination rights and other rights that have not had and would not reasonably be expected to have a TPT Material Adverse Effect; and (iii) since October 4, 2006, none of the TPT Corporations has received any notice or other communication regarding any actual or possible violation or breach of, or default under, any TPT Corporation Contract, except

 

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in each such case for defaults, acceleration rights, termination rights and other rights that have not had and would not reasonably be expected to have a TPT Material Adverse Effect.

2.17        Insurance . Part 2.17 of the TPT Disclosure Schedule sets forth a true, correct and complete list of all insurance policies and fidelity bonds for the current policy year relating to any TPT Corporation (and to any predecessor corporation thereof, including, without limitation Axonyx Inc.), and its respective employees, officers and directors. All such insurance policies and fidelity bonds shall continue in full force and effect at and after the Effective Time with such limits and coverage as is currently in effect without the Consent of any Person or further action by any Merger Party hereto. Each TPT Corporation maintains, and has maintained, without interruption during its existence, policies of insurance covering such risk and events, including, without limitation, personal injury, property damage and general liability, in amounts that are adequate, in light of prevailing industry practices, for its business and operations, including, without limitation, amounts that are intended to cover the Lawsuits and all Costs associated therewith. None of the TPT Corporations has received notice of termination or cancellation of any such policy. None of the TPT Corporations has reached or exceeded its policy limits for any insurance policy in effect at any time during the past five (5) years. All premiums required to be paid with respect thereto covering all periods up to and including the Effective Time have been or will be paid in a timely fashion and there has been no lapse in coverage under such policies or failure of payment that will cause coverage to lapse during any period for which any TPT Corporation has conducted its operations. None of the TPT Corporations has any material obligation for retrospective premiums for any period prior to the Effective Time. All such policies are in full force and effect and will remain in full force and effect up to and including the Effective Time, and, where applicable, at or after the Effective Time, unless replaced with comparable insurance policies having comparable or more favorable terms and conditions. No insurer has put any TPT Corporation on notice that coverage will be denied with respect to any claim submitted to such insurer by any TPT Corporation (including any predecessor corporation thereof, including, without limitation Axonyx Inc.). There are no material claims by any TPT Corporation pending under any of such policies or bonds as to which coverage has been questioned, denied or disputed by the underwriters of such policies or bonds or in respect of which such underwriters have reserved their rights.

2.18        Labor Matters . Except as disclosed in the TPT SEC Reports, (i) none of the TPT Corporations is a party to, or bound by, any collective bargaining agreement, contract or other agreement or understanding with a labor union or labor organization; (ii) none of the TPT Corporations is the subject of any Legal Proceeding asserting that any of the TPT Corporations has committed an unfair labor practice or seeking to compel it to bargain with any labor organization as to wages or conditions of employment; (iii) there is no strike, work stoppage or other labor dispute involving any of the TPT Corporations pending or, to TPT’s Knowledge, threatened; (iv) no complaint, charge or Legal Proceeding by or before any Governmental Body brought by or on behalf of any employee, prospective employee, former employee, retiree, labor organization or other representative of its employees is pending or, to TPT’s Knowledge, threatened against any of the TPT Corporations; (v) no grievance is pending or, to TPT’s Knowledge, threatened against any of the TPT Corporations; and (vi) none of the TPT Corporations is a party to, or otherwise bound by, any Consent decree with, or citation by, any Governmental Body relating to employees or employment practices. No labor organization or group of employees of any TPT Corporation has made a pending demand for recognition or

 

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certification, and there are no representation or certification proceedings or petitions seeking a representation proceeding presently pending or threatened to be brought or filed, with the National Labor Relations Board or any other labor relations tribunal or authority. Each of the TPT Corporations has complied with the Worker Adjustment and Retraining Notification Act and any similar state law, such as California Labor Code Section 1400, et seq. The TPT Corporations have not implemented any employee layoffs, hours reductions, or employment terminations that, standing alone or when aggregated with other past or future layoffs, hours reductions, or employment terminations could implicate the WARN Act or any similar state law, such as California Labor Code Section 1400, et. seq. Each of the TPT Corporations has been and is in material compliance with all applicable Legal Requirements respecting employment and employment practices, terms and conditions of employment, including, without limitation, wages and hours, labor relations, employment discrimination, disability rights or benefits, equal opportunity, plant closure or mass layoff issues, affirmative action, leaves of absence, occupational health and safety, workers compensation and unemployment insurance. None of the current or former independent contractors of the TPT Corporations was improperly classified as a non-employee and no current or former employees classified as “exempt” from overtime requirements were improperly classified as exempt. The TPT Corporations do not have any material unsatisfied obligations to any past or present employees or qualified beneficiaries pursuant to COBRA, HIPAA, or any state law governing health care coverage extension or continuation other than the payment of benefits in the ordinary course of business. Part 2.18 of the TPT Disclosure Schedule accurately identifies each former employee of any of the TPT Corporations who is receiving or is scheduled to receive (or whose spouse or other dependent is receiving or is scheduled to receive) any benefits (whether from any of the TPT Corporations or otherwise) relating to such former employee’s employment with any of the TPT Corporations; and such Schedule accurately describes such benefits. The TPT Corporations have maintained worker’s compensation coverage as required by applicable state law through the purchase of insurance and not by self-insurance or otherwise

2.19        Interests of Officers and Directors . None of the officers or directors of any of the TPT Corporations or any of their respective Affiliates (other than the TPT Corporations), or any “associate” (as such term is defined in Rule 14a-1 under the Exchange Act) of any such offer or director, has any interest in any property, real or personal, tangible or intangible, used in or pertaining to the business of the TPT Corporations, or in any supplier, distributor or customer of the TPT Corporations, or any other relationship, contract, agreement, arrangement or understanding with the TPT Corporations, except as disclosed in the TPT SEC Reports and except for the normal rights of a stockholder and rights under the Plans and the TPT Stock Options, the TPT Warrants and the TPT Restricted Stock Units.

2.20        Rights Plan; DGCL Section 203 . TPT has amended the TPT Rights Agreement and taken all other action necessary or appropriate so that the execution and delivery of this Agreement by the Parties hereto, and the consummation by TPT of the Merger and the Contemplated Transactions, do not and will not cause Raptor or any of its stockholders, Subsidiaries or Affiliates to be within the definition of “Acquiring Person” under the TPT Rights Agreement. TPT has taken all appropriate actions so that the restrictions on business combinations contained in Section 203 of the DGCL will not apply to Raptor with respect to or as a result of the Contemplated Transactions.

 

 

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2.21        Brokers; Fees and Expenses . Except for the Expenses incurred by TPT, no broker, finder, investment banker or other Person (other than the TPT Financial Advisor) is entitled to any brokerage, finder’s or other fee or commission in connection with the Merger and the Contemplated Transactions based upon arrangements made by or on behalf of any TPT Corporation.

2.22        Trading on NASDAQ . As of the date of this Agreement, shares of TPT Common Stock are listed for trading on the NASDAQ Global Market and trading in TPT Common Stock on the NASDAQ Global Market has not been suspended.

2.23        Valid Issuance . The TPT Common Stock to be issued in the Merger will, when issued in accordance with the provisions of this Agreement, be validly issued, fully paid and nonassessable. The TPT Common Stock described in the preceding sentence will be issued in compliance with all federal securities laws and all applicable Blue Sky Laws.

2.24        TPT Budget . Part 2.24 of the TPT Disclosure Schedule sets forth the projected spending estimate of the TPT Corporations from September 1, 2009 through February 28, 2010 pursuant to the Employment Agreements (or such agreements they supersede).

2.25        Disclosure . None of the information supplied or to be supplied by or on behalf of TPT for inclusion or incorporation by reference in the Form S-4 Registration Statement will, at the time the Form S-4 Registration Statement is filed with the SEC or at the time it becomes effective under the Securities Act, 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, in the light of the circumstances under which they are made, not misleading. None of the information supplied or to be supplied by or on behalf of TPT for inclusion or incorporation by reference in the Prospectus/Joint Proxy Statement will, at the time the Prospectus/Joint Proxy Statement is mailed to the stockholders of TPT or at the time of the TPT Stockholders’ Meeting, 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, in the light of the circumstances under which they are made, not misleading. The Prospectus


 
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