Document:

exv10w1

 

Exhibit 10.1

June 27, 2006

Board of Directors

TBX Resources, Inc.

3030 LBJ Freeway, Suite 1320, LB47

Dallas, Texas 75234

This letter is to explain our understanding of the arrangements for the services we are to perform
for TBX Resources, Inc. (the “Company”) for the year ending November 30, 2006. We ask that you
either confirm or amend this understanding.

We will perform an audit of the Company’s consolidated financial statements as of and for the year
ended November 30, 2006, which will be prepared in accordance with U.S. generally accepted
accounting principles. The objective of an audit of financial statements is to express an opinion
on those statements.

We will also review the Company’s unaudited interim financial information during the quarterly
periods ended May 31, 2006, August 31, 2006, February 28, 2007, May 31, 2007 and August 31, 2007
before the Company files its Form 10-QSBs.

During the course of our engagement, we anticipate the Company may request other accounting and
auditing services. Those services which are described in Exhibit A will be pre-approved by the
audit committee upon execution of this arrangement letter.

As the Company is aware, the Securities and Exchange Commission (“SEC”) has issued a rule as
required under Section 404 of the Sarbanes-Oxley Act. Upon its effective date, this rule will
require management to issue an annual report that will include its assessment of the Company’s
internal controls over financial reporting. The rule includes a requirement that the Company’s
auditor attest to and report on management’s assessment. This arrangement letter does not include
our fees to consult with management regarding the requirements of Section 404 and the related rules
or to perform the attestation in accordance with standards established by the Public Company
Accounting Oversight Board. However, the consultation services which are described in Exhibit A,
may be requested by management, and will be pre-approved by the audit committee upon execution of
this arrangement letter.

We will conduct our audit of the consolidated financial statements in accordance with auditing and
related professional practice standards established by the Public Company Accounting Oversight
Board (PCAOB). Those standards require that we plan and perform the audit to obtain reasonable,
rather than absolute, assurance about whether the financial statements are free of material
misstatement, whether caused by error or fraud. Accordingly, a material misstatement may remain
undetected. Also, an audit is not designed to detect errors or fraud that are immaterial to the
consolidated financial statements.

 

 

TBX Resources, Inc.

June 27, 2006

Page 5

An audit of financial statements also includes obtaining an understanding of internal control
sufficient to plan the audit and to determine the nature, timing and extent of audit procedures to
be performed. An audit is not designed to provide assurance on internal control or to identify
significant deficiencies or material weaknesses.

We will communicate all significant deficiencies and material weaknesses that we identify during
our audit to both management and the audit committee in writing prior to issuing our report on the
consolidated financial statements. In the event that we determine audit committee oversight to be
ineffective and further determine that such ineffectiveness constitutes a significant deficiency or
a material weakness, we will communicate our conclusion in writing directly to the board of
directors.

We will also communicate any (a) fraud involving senior management and other fraud that causes a
material misstatement of the financial statements, (b) illegal acts that come to our attention
(unless they are clearly inconsequential), (c) disagreements with management and other serious
difficulties encountered in performing our audits and (d) various matters related to the entity’s
accounting policies and financial statements to the audit committee prior to the issuance of our
reports on the consolidated financial statements.

Management is responsible for the consolidated financial statements, including adjusting the
consolidated financial statements to correct material misstatements, and for making all financial
records and related information available to us. Management is also responsible for providing us
with a written management representation letter confirming certain representations made during the
course of our audit of the consolidated financial statements and affirming to us that it believes
the effects of any uncorrected misstatements aggregated by us during the current engagement and
pertaining to the latest period presented are immaterial, both individually and in the aggregate,
to the financial statements taken as a whole.

Management is responsible for establishing and maintaining effective internal control over
financial reporting and for informing us of all significant deficiencies and material weaknesses in
the design or operation of such controls of which it has knowledge.

Management is responsible for identifying and ensuring that the entity complies with laws and
regulations applicable to its activities, and for informing us of any known material violations of
such laws or regulations. In addition, management is responsible for the design and implementation
of programs and controls to prevent and detect fraud, and for informing us about all known or
suspected fraud affecting the entity involving (a) management, (b) employees who have significant
roles in internal control and (c) others where the fraud could have a material effect on the
financial statements. Management is also responsible for informing us of its knowledge of any
allegations of fraud or suspected fraud affecting the entity received in communications from
employees, former employees, analysts, regulators, short sellers or others.

The audit committee is responsible for informing us of its views about the risks of fraud within
the entity, and its knowledge of any fraud or suspected fraud affecting the entity.

 

 

TBX Resources, Inc.

June 27, 2006

Page 6

If circumstances arise relating to the condition of the Company’s records, the availability of
sufficient, competent evidential matter, or indications of a significant risk of undetected
material misstatements or material weaknesses which, in our professional judgment, prevent us from
completing the audits or forming an opinion, we retain the unilateral right to take any course of
action permitted by professional standards, including declining to express an opinion or issue a
report, or withdrawal from the engagement.

Our acceptance of this engagement is subject to our satisfactorily completing our normal engagement
acceptance procedures, including communication with and review of the working papers of your
previous auditors (accountants). We will notify the Company promptly if we become aware of
anything during our acceptance procedures or the communication or review that results in our not
being able to continue this engagement.

From time to time and depending upon the circumstances, we may use third-party service providers to
assist us in providing professional services to you. In such circumstances, it may be necessary
for us to disclose confidential client information to them. We enter into confidentiality
agreements with all third-party service providers and we are satisfied that they have appropriate
procedures in place to prevent the unauthorized release of your confidential information to others.

During the course of our engagement, we may accumulate records containing data that should be
reflected in the Company’s books and records. The Company will determine that all such data, if
necessary, will be so reflected. Accordingly, the Company will not expect us to maintain copies of
such records in our possession.

The timely and accurate completion of the items on the client information request list is an
essential condition to our completion of the audit and issuance of our report.

We will also conduct our review of the Company’s interim financial information in accordance with
the professional practice standards established by the Public Company Accounting Oversight Board
(PCAOB). Those standards require that we plan and perform the review to obtain a basis for
communicating whether we are aware of any material modifications that should be made to the interim
financial information for it to conform with U.S. generally accepted accounting principles. The
review will consist primarily of performing analytical procedures and making inquiries of persons
responsible for financial and accounting matters. It is substantially less in scope than an audit
conducted in accordance with the auditing standards of the PCAOB, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole. Accordingly, we will
not express an opinion on the interim financial information. We will advise management when our
procedures are completed.

Our fees are based upon the time required by the individuals assigned to the engagement, plus
expenses. Interim billings will be submitted as work progresses and as expenses are incurred.
Billings are due upon submission. The fee estimates below will be subject to adjustments based on
unanticipated changes in the scope of our work and/or the incomplete or untimely receipt by us of
the information on the client participation list. All other provisions of this letter will survive
any fee adjustment.

 

 

TBX Resources, Inc.

June 27, 2006

Page 7

Our fee estimate, excluding expenses, is as follows:

	 	 	 	 	 
	Audit of the November 30, 2006 consolidated financial statements
	 	$	35,000 - $40,000	 
	Quarterly reviews (per quarter)
	 	$	7,000 - $7,500	 
	Other services that may be requested (see Exhibit A)
	 	 	 	 

In the event we are requested or authorized by the Company or are required by government
regulation, subpoena or other legal process to produce our documents or our personnel as witnesses
with respect to our engagements for the Company, the Company will, so long as we are not a party to
the proceeding in which the information is sought, reimburse us for our professional time and
expenses, as well as the fees and expenses of our counsel, incurred in responding to such requests.

We understand that the Company intends to include our report in its Form 10-KSB to be filed with
the SEC and make reference to us in such documents as its Independent Registered Public Accounting
Firm. The Company agrees to provide us with printer’s proofs or masters of all such documents for
our review and approval before printing and with a copy of the final reproduced material for our
approval before it is filed or distributed. The Company also agrees to obtain our permission prior
to including our reports or making reference to us in any other document used in a public or
private offering of equity or debt securities. The Company agrees to promptly supply us with any
comment letter or other communication received from the SEC relating to the consolidated financial
statements or other information with which our report has been associated and to provide us with a
copy of the Company’s proposed response for our review before such response is submitted.

The Securities and Exchange Commission requires electronic filing of certain information in
connection with its Electronic Data Gathering, Analysis and Retrieval (EDGAR) system. The Company
agrees that before filing any document with which we are associated, in electronic format with the
SEC or others, the Company will provide us with a printed copy of the information it proposes to
file. We will provide the Company with a signed copy of our report(s), consent(s) and/or other
relevant document after completing our review. These manually signed documents will authorize the
use of our name prior to any electronic transmission by you. For our files, the Company will
provide to us a complete copy of the document as accepted by EDGAR or others.

Without informing us prior to such solicitation, the Company will not solicit for employment or for
a position on its Board of Directors any current or former partner or professional employee of HEIN
& ASSOCIATES LLP, if such partner or professional employee has been involved in the performance of
any service for the Company at any time during the two years preceding the date of such
solicitation.

Our professional practice is subject to a peer review, under which another accounting firm reviews
selected engagements every three years to determine that we are appropriately applying professional
standards and practices. If your engagement is selected as part of our peer review, you grant
permission to the accounting firm conducting our peer review, including any oversight persons, to
review your reports and records contained in our working papers for purposes of performing the
review.

As part of our engagement we may propose standard, adjusting, or correcting journal entries to your
consolidated financial statements. You are responsible for reviewing the entries and understanding
the nature of any proposed entries and the impact they have on the consolidated financial
statements. Further,

 

 

TBX Resources, Inc.

June 27, 2006

Page 8

you are responsible for designating a qualified management-level individual to be responsible and
accountable for overseeing these services.

This letter constitutes the complete and exclusive statement of agreement between HEIN & ASSOCIATES
LLP and TBX Resources, Inc., superseding all proposals, oral or written, and all other
communication, with respect to the terms of the engagement between the parties.

If this letter defines the arrangements as the Company understands them, please sign and date the
enclosed copy and return it to us.

Sincerely,

/s/ Hein & Associates LLP

HEIN & ASSOCIATES LLP

Confirmed on behalf of TBX Resources, Inc.:

Tim Burroughs, President, Chief Executive Officer and Chairman of the Board of Directors

 

 

 

TBX Resources, Inc.

Arrangement Letter Exhibit A

November 30, 2006

SARBANES-OXLEY 404 COMPLIANCE:

TBX Resources, Inc. (the “Company”) has begun the task of documenting internal controls and
developing a plan to assess the effectiveness of its internal controls to comply with rule 404 of
The Sarbanes-Oxley Act of 2002. The Company has requested that HEIN & ASSOCIATES LLP assist it in
the following areas:

	 	•	 	Participate in the planning phase of the SOX 404 engagement to provide guidance and
direction about the nature and extent of documentation required and related matters. Our
role would entail advice and consent and would not entail preparing documents, recommending
specific internal controls, or advising how the Company should proceed with the
documentation of internal controls.
	 
	 	•	 	Periodically meet with the Company and its representative, to the extent applicable, to
review and discuss the progress of the project and other related matters.
	 
	 	•	 	Review internal control documentation prepared by the Company and/or its SOX provider,
to the extent applicable, throughout the documentation phase of the engagement for adequacy
and completeness.
	 
	 	•	 	Provide general guidance on the extent, nature and scope of internal control testing
expected that HEIN & ASSOCIATES LLP anticipates performing as a part of our attest
engagement.
	 
	 	•	 	Advise the Company on Best Practices.
	 
	 	•	 	Other related matters

Our fees for these services will be billed at our standard hourly billing rates, plus any expenses
incurred in connection with the performance of these services.

FINANCIAL REPORTING SERVICES:

For the year ending November 30, 2006 and during 2007, we anticipate the Company may request a
variety of services in the normal course of business. The following is a listing of those
services:

	 	•	 	Consultation and research in connection with accounting and auditing issues relating to
transactions that have occurred and proposed transactions the Company is contemplating.
	 
	 	•	 	Consultation and research on financial reporting matters impacting the Company, both for
incurred and proposed transactions.
	 
	 	•	 	Review of registration statements and other filings with the SEC, including consents and
comfort letters that may be required to be issued in connection with such registration
statements.
	 
	 	•	 	Review of private placement documents for the purpose of raising capital for the
Company, including consents and comfort letters that may be issued in connection with such
private placements.

We would not presently anticipate that feeexv4w1

 

AMENDMENT NO. 3

TO

RIGHTS AGREEMENT

     This AMENDMENT NO. 3 TO RIGHTS AGREEMENT (this “Amendment”) is entered into as of June 29,
2006, between RSA Security Inc. (formerly Security Dynamics Technologies, Inc.), a Delaware
corporation (the “Company”), and Computershare Trust Company, N.A. (formerly EquiServe Trust
Company, N.A.) (the “Rights Agent”). Capitalized terms not otherwise defined herein shall have the
meanings given them in the Rights Agreement dated as of July 20, 1999, as amended, between the
parties hereto (the “Rights Agreement”).

RECITALS

     WHEREAS, the Company proposes to enter into an Agreement and Plan of Merger immediately
following the execution and delivery hereof (as it may be amended from time to time, the “Merger
Agreement”) among EMC Corporation, a Massachusetts corporation (“Buyer”), Entrust Merger
Corporation, a Delaware corporation and wholly owned subsidiary of Buyer (“Merger Sub”), and the
Company, providing for the merger (the “Merger”) of the Company with and into Merger Sub, with the
Company continuing as the surviving corporation;

     WHEREAS, the Board of Directors of the Company has approved, authorized and adopted the Merger
Agreement and the transactions contemplated thereby;

     WHEREAS, the Board of Directors of the Company has determined, in connection with the
execution of the Merger Agreement, that it is desirable to amend the Rights Agreement to exempt the
Merger Agreement, the execution thereof and the transactions contemplated thereby, including,
without limitation, the Merger, from the application of the Rights Agreement as set forth in this
Amendment;

     WHEREAS, no Person has as of the time immediately prior to this Amendment become an Acquiring
Person and no Distribution Date has occurred;

     WHEREAS, Section 27 of the Rights Agreement provides that, prior to the Distribution Date, the
Board of Directors of the Company may, and the Company and the Rights Agent shall if the Board of
Directors of the Company so directs, supplement or amend any provision of the Rights Agreement
without the approval of any holders of certificates representing shares of Common Stock of the
Company;

     WHEREAS, pursuant to the terms of the Rights Agreement and in accordance with Section 27
thereof, the Board of Directors of the Company has directed that the Rights Agreement should be
amended and supplemented as set forth in this Amendment prior to the execution of the Merger
Agreement.

     NOW THEREFORE, in consideration of the premises and the mutual agreements herein set forth,
the parties hereby agree as follows:

1

 

     1. Section 1(a) of the Rights Agreement is hereby amended to add the following paragraph of
the of Section 1(a):

     “In addition, notwithstanding anything in this Agreement to the contrary, none
of EMC Corporation, a Massachusetts corporation (“Buyer”), Entrust Merger
Corporation, a Delaware corporation and a wholly owned subsidiary of Buyer (“Merger
Sub”) or any of their Affiliates or Associates shall be an “Acquiring Person” solely
by reason of: (1) the approval, adoption, execution or delivery of the Agreement and
Plan of Merger (as it may be amended and supplemented, the “Merger Agreement”) among
the Company, Buyer and Merger Sub, pursuant to which Merger Sub shall be merged with
and into the Company, and the Company shall continue as the surviving corporation
and as a wholly owned subsidiary of the Buyer (the “Merger”), or (2) the
consummation of the Merger or any of the other transactions contemplated by the
Merger Agreement.”

     2. Section 7(a) of the Rights Agreement is hereby amended and restated in its entirety to read
as follows:

     “Subject to Section 7(e) hereof, the registered holder of any Rights Certificate may exercise
the Rights evidenced thereby (except as otherwise provided herein including, without limitation,
the restrictions on exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23
hereof) in whole or in part at any time after the Distribution Date upon surrender of the Rights
Certificate, with the form of election to purchase and the certificate on the reverse side thereof
duly executed, to the Rights Agent at the office of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price with respect to the total number of shares of
Common Stock (or other shares, securities, cash or other assets, as the case may be) as to which
such surrendered Rights are then exercisable, at or prior to the earliest of (i) the time
immediately prior to the Effective Time (as such term is defined in the Merger Agreement), (ii) the
Final Expiration Date, (iii) the time at which the Rights are redeemed as provided in Section 23
hereof (the “Redemption Date”) and (iv) the time at which the Rights are exchanged as provided in
Section 24 hereof (the earliest of (i), (ii), (iii) and (iv) being herein referred to as the
“Expiration Date”).”

     3. Section 1(w) of the Rights Agreement is hereby amended to add the following at the end
thereof immediately prior to the period:

     ”; provided, however, that, notwithstanding anything in this Agreement to the contrary, a
Section 11(a)(ii) Event shall be deemed not to have occurred solely as a result of (x) the
approval, adoption, execution or delivery of the Merger Agreement or (y) the consummation of the
Merger or any of the other transactions contemplated by the Merger Agreement.”

     4. Section 1(y) of the Rights Agreement is hereby amended to add the following at the end
thereof immediately prior to the period:

     ”; provided, however, that, notwithstanding anything in this Agreement to the contrary, a
Section 13 Event shall be deemed not to have occurred solely as a result of (x) the approval,

2

 

adoption, execution or delivery of the Merger Agreement or (y) the consummation of the Merger or
any of the other transactions contemplated by the Merger Agreement.”

     5. Section 21 of the Rights Agreement is hereby amended to insert the following sentence
immediately following the first sentence of Section 21:

     “In the event the transfer agency relationship in effect between the Company and the Rights
Agent terminates, the Rights Agent will be deemed to resign automatically on the effective date of
such termination; and any required notice will be sent by the Company.”

     6. The Rights Agreement is hereby amended to add the following new Section 35:

     “Section 35. FORCE MAJEURE. Notwithstanding anything to the contrary contained herein,
Rights Agent shall not be liable for any delays or failures in performance resulting from acts
beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage
of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss
of data due to power failures or mechanical difficulties with information storage or retrieval
systems, labor difficulties, war, or civil unrest.”

     7. This Amendment shall become effective as of the date first written above.

     8. Except as amended hereby, the Rights Agreement shall remain unchanged and shall remain in
full force and effect.

     9. This Amendment may be executed in any number of counterparts, each of which shall be an
original, but all of which together shall constitute one instrument.

     10. This Amendment shall be governed by, and construed in accordance with, the laws of the
Commonwealth of Massachusetts (without giving effect to any conflict of laws principles that would
cause the application of the laws of any other jurisdiction).

     11. The officer of the Company executing this Amendment, being an appropriate officer of the
Company and authorized to do so by resolution of the Board of Directors of the Company duly adopted
and approved at a meeting held on June 29, 2006, hereby certifies to the Rights Agent that this
Amendment is in compliance with Section 27 of the Rights Agreement.

[The remainder of this page has been intentionally left blank.]

3

 

     IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective
duly authorized representatives as of the date first above written.

	 	 	 	 	 
	 	 	RSA SECURITY INC.
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Arthur W. Coviello, Jr.
	 

	 	 	 	 
	 	 	Name: Arthur W. Coviello, Jr.
	 	 	Title: President and Chief Executive Officer
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	COMPUTERSHARE TRUST COMPANY, N.A.
	 
	 	 	 	 
	 	 	(FORMERLY EQUISERVE TRUST
	 	 	COMPANY, N.A.)
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Dennis V. Moccia
	 

	 	 	 	 
	 	 	Name: Dennis V. Moccia
	 	 	Title: Managing Director

4

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