BY THE BOARD OF DIRECTORS OF PGMI IF ANY OF
THE CONDITIONS SET FORTH IN SECTION 7.01 SHALL NOT HAVE BEEN SATISFIED BY THE
CLOSING DATE.
(D)
BY THE BOARD OF DIRECTORS OF PGMI IF THIS
AGREEMENT AND PLAN OF REORGANIZATION IS NOT DULY APPROVED BY THE STOCKHOLDERS OF
PGMI FOLLOWING A VOTE OF THE STOCKHOLDERS OF PGMI.
(E)
BY EITHER OF THE BOARDS OF DIRECTORS OF
HAPS OR PGMI IF THE CLOSING DATE IS NOT ON OR BEFORE NOVEMBER 30, 2005, OR SUCH
LATER DATE AS HAPS AND PGMI MAY MUTUALLY AGREE (EXCEPT THAT A PARTY SEEKING TO
TERMINATE THIS AGREEMENT PURSUANT TO THIS CLAUSE MAY NOT DO SO IF THE FAILURE TO
CONSUMMATE THE EXCHANGE CONTEMPLATED BY THIS AGREEMENT BY SUCH DATE SHALL BE DUE
TO THE ACTION OR FAILURE TO ACT OF THE PARTY SEEKING TO TERMINATE THE AGREEMENT
IN BREACH OF SUCH PARTY'S OBLIGATIONS UNDER THIS AGREEMENT).
10.02
TERMINATION OF OBLIGATIONS AND WAIVER OF CONDITIONS; PAYMENT OF
EXPENSES.
IN THE EVENT THIS AGREEMENT AND THE ACQUISITION ARE TERMINATED AND
ABANDONED PURSUANT TO THIS ARTICLE 10 HEREOF, THIS AGREEMENT SHALL BECOME VOID
AND OF NO FORCE AND EFFECT AND THERE SHALL BE NO LIABILITY ON THE PART OF ANY OF
THE PARTIES HERETO, OR THEIR RESPECTIVE DIRECTORS, OFFICERS, SHAREHOLDERS OR
CONTROLLING PERSONS TO EACH OTHER.
FOR THE COSTS AND EXPENSES INCIDENT TO ITS
NEGOTIATION AND PREPARATION OF THIS AGREEMENT AND ANY OF THE DOCUMENTS
EVIDENCING THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING FEES, EXPENSES AND
DISBURSEMENTS OF COUNSEL, HAPS SHAREHOLDERS SHALL BEAR THE EXPENSES INCURRED BY
HAPS, AND PGMI SHAREHOLDERS SHALL BEAR THE EXPENSES INCURRED BY PGMI.
ARTICLE 11
EXCHANGE OF SHARES
11.01
EXCHANGE OF SHARES.
AT THE EFFECTIVE TIME, HAPS SHALL ISSUE A
LETTER TO THE TRANSFER AGENT OF HAPS WITH A COPY OF THE RESOLUTION OF THE BOARD
OF DIRECTORS OF HAPS AUTHORIZING AND DIRECTING THE ISSUANCE OF HAPS SHARES AS
SET FORTH ON EXHIBIT A TO THIS AGREEMENT.
18
11.02
HOLDING PERIOD AND INVESTMENT INTENT. THE SHAREHOLDERS AGREE NOT TO
SELL ANY SHARE OF HAPS CLASS E STOCK THEY ACQUIRE PURSUANT TO THIS AGREEMENT
UNTIL THE DATE OF CONVERSION OF SUCH PREFERRED STOCK INTO COMMON STOCK. THE
SHAREHOLDERS FURTHER REPRESENT AND WARRANT THAT SUCH SHARES BEING ACQUIRED
PURSUANT TO THIS AGREEMENT ARE BEING ACQUIRED FOR HIS OR ITS OWN ACCOUNT AS
APPLICABLE, AND NOT WITH A VIEW TO THE PUBLIC RESALE OR DISTRIBUTION OF SUCH
SHARES AND FURTHER ACKNOWLEDGE THAT THE SHARES BEING ISSUED HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT AND ARE "RESTRICTED SECURITIES" AS THAT TERM
IS DEFINED IN RULE 144 PROMULGATED UNDER THE SECURITIES ACT AND MUST BE HELD
INDEFINITELY UNLESS THEY ARE SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OR
AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
11.03
RESTRICTIONS ON SHARES ISSUED TO PGMI.
DUE TO THE FACT THAT THE
SHAREHOLDERS WILL RECEIVE SHARES OF HAPS CLASS E STOCK IN CONNECTION WITH THE
ACQUISITION WHICH HAVE NOT BEEN REGISTERED UNDER THE 1933 ACT BY VIRTUE OF THE
EXEMPTION PROVIDED IN SECTION