_______________
AGREEMENT
AMONG
GO CALL, INC.,
OMNI ADVANTAGE CANADA LIMITED
AND
GO PHONE, INC.
_______________
February 20, 1998
TABLE OF CONTENTS
PAGE
----
1. Definitions................................................... 1
2. Basic Transaction............................................. 5
(a) The Amalgamation..................................... 5
(b) The Closing.......................................... 5
(c) Effect of Amalgamation............................... 5
3. Representations and Warranties of the Parent.................. 6
(a) Organization of the Parent........................... 6
(b) Authorization of Transaction......................... 7
(c) Capitalization....................................... 7
(d) Subsidiaries......................................... 7
(e) Non-Contravention.................................... 8
(f) Brokers' Fees........................................ 8
(g) Title to Assets...................................... 8
(h) Financial Statements................................. 8
(i) Events Subsequent to Most Recent
Fiscal Year End.................................... 8
(j) Undisclosed Liabilities.............................. 11
(k) Related Party Transactions........................... 11
(l) Legal Compliance..................................... 11
(m) Litigation........................................... 11
(n) Tax Matters.......................................... 11
(o) Real Property........................................ 13
(p) Intellectual Property................................ 13
(q) Tangible Assets...................................... 13
(r) Contracts............................................ 13
(s) Powers of Attorney................................... 13
(t) Employees............................................ 13
(u) Shareholder Approval................................. 13
(v) Corporate Shell. . . . . . . . . . . . . . . . ...... 13
(w) Disclosure........................................... 13
4. Representations and Warranties of Go.......................... 14
(a) Organization of Go................................... 14
(b) Authorization of Transaction......................... 14
(c) Shareholder Approval................................. 14
(d) No Other Representations............................. 14
ii
5. Representations and Warranties Concerning Newco............... 14
6. Conditions to Obligation to Close............................. 14
(a) Conditions to Obligation of Go....................... 14
(b) Conditions to Obligation of the Parent
and Newco.......................................... 15
(c) Change of Officers and Directors of the Parents...... 16
7. Remedies For Breaches of This Agreement....................... 16
(a) Survival of Representations and Warranties........... 16
(b) Indemnification Provisions for Benefit
of Go.............................................. 16
(c) Indemnification Provisions for Benefit
of the Parent...................................... 16
(d) Matters Involving Third Parties...................... 17
(e) Determination of Adverse Consequences................ 18
(f) Other Indemnification Provisions..................... 18
(g) Limitation on Indemnification........................ 18
8. Miscellaneous................................................. 19
(a) Press Releases and Public Announcements.............. 19
(b) No Third-Party Beneficiaries......................... 19
(c) Expenses............................................. 19
(d) Construction......................................... 19
(e) Specific Performance................................. 20
(f) Severability......................................... 20
(g) Counterparts......................................... 20
(h) Benefit.............................................. 20
(i) Notices and Addresses................................ 20
(j) Attorney's Fees...................................... 21
(k) Oral Evidence........................................ 21
(l) Governing Law........................................ 21
(m) Section or Paragraph Headings........................ 22
iii
AGREEMENT
THIS AGREEMENT (the "Agreement") entered into as of this 20th day of
February, 1998, by and among Go Call, Inc. a Delaware corporation (the
"Parent"), Go Phone, Inc., an Ontario corporation ("Go") and Omni Advantage
Canada Limited, an Ontario corporation ("Newco"). The Parent, Go and Newco are
referred to collectively herein as the "Parties."
WHEREAS, the Parent owns 100% of the outstanding capital stock of
Newco;
WHEREAS, the Parent wishes to amalgamate Newco into Go as provided by
Ontario law in exchange for 100% of common stock ("Common Stock") of Go; and
WHEREAS, this Agreement provides for various rights and
responsibilities.
NOW, THEREFORE, in consideration of the mutual promises made herein,
the Parties adopt this plan of merger and agree as follows:
1. Definitions.
"Adverse Consequences" means all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands,
injunctions, judgments, orders, decrees, rulings, damages, dues,
penalties, fines, costs, amounts paid in settlement, Liabilities, as
defined, obligations, Taxes, as defined, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and
expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act of 1934.
"Amalgamation" has the meaning set forth in Section 2(a).
"Amalgamation Consideration" has the meaning set forth in
Section 2(c)(iv).
"Basis" means any past or present fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence,
event, incident, action, failure to act, or transaction that forms or
could form the basis for any specified consequence.
"Closing" has the meaning set forth in Section 2(b) below.
"Closing Date" has the meaning set forth in Section 2(b)
below.
"Code" means the Internal Revenue Code of 1986, as amended.
1
"Common Stock" means the common stock, $.001 par value, of the
Parent.
"Effective Time" has the meaning as set forth Section 2(c)(i).
"Employee Benefit Plan" means any (a) non-qualified deferred
compensation or retirement plan or arrangement which is an Employee
Pension Benefit Plan, as defined, (b) qualified defined contribution
retirement plan or arrangement which is an Employee Pension Benefit
Plan, (c) qualified defined benefit retirement plan or arrangement
which is an Employee Pension Benefit Plan (including any multi-employer
Plan), or (d) Employee Welfare Benefit Plan, as defined, or material
fringe benefit plan or program.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Family Member" means any spouse, child, parent, father or
mother-in-law, brother or sister, brother or sister-in-law, nephew or
niece, and any corporation, partnership, joint venture, limited
liability company, association, trust, joint stock company,
unincorporated organization, or entity in which such a Person has any
ownership interest in (excluding any public company in which a Person
owns less than 5% of the outstanding shares of common stock).
"Financial Statements" has the meaning set forth in Section
3(h) below.
"GAAP" means United States generally accepted accounting
principles as in effect from time to time.
"Go" has the meaning set forth in the preface above.
"Go's Financial Statements" has the meaning set forth in
Section 4(h).
"Go Shares" means the common stock, $.001 par value of Go.
"Indemnified Party" has the meaning set forth in Section
9(d)(i) below.
"Indemnifying Party" has the meaning set forth in Section
9(d)(i) below.
"Intellectual Property" means (a) all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent
disclosures, together with all re-issuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations
thereof, (b) all trademarks, services marks, trade dress, logos, trade
names, and corporate names, together with all translations, adaptions,
derivations, and combinations thereof and including all goodwill
associated therewith, and all applications, registrations, and renewals
2
in connection therewith, (c) all copyrightable works, all copyrights,
and all applications, registrations, and renewals in connection
therewith, (d) all mask works and all applications, registrations, and
renewals in connection therewith, (e) all trade secrets and
confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and
production processes and techniques, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost
information, and business and marketing plans and proposals), (f) all
computer software (including data and related documentation, (g) all
other proprietary rights, and (h) all copies and tangible embodiments
thereof (in whatever form or medium).
"Investigation" means any preliminary or other inquiry or any
informal or formal investigation being conducted by any federal, state,
or local government including any administrative agency.
"Knowledge" means actual knowledge after reasonable
investigation.
"Liabilities" means any liability (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, and whether
due or to become due), including any liability for Taxes, as defined.
"Most Recent Balance Sheet" means the balance sheet contained
within the Most Recent Financial Statements, as defined.
"Most Recent Financial Statements" has the meaning set forth
in Section 3(h) below.
"Most Recent Fiscal Period End" has the meaning set forth in
Section 3(h) below.
"Most Recent Fiscal Year End" has the meaning set forth in
Section 3(h) below.
"Newco" has the meaning set forth in the preface above.
"Ordinary Course of Business" means the ordinary course of
business consistent with past custom and practice (including with
respect to quantity and frequency).
"Parent" has the meaning set forth in the preface above and
includes Omni Advantage, Inc., a Louisiana corporation.
"Parties" has the meaning set forth in the preface above.
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"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization, or a
governmental entity (or any department, agency, or political
subdivision thereof).
"Securities Act" means the Securities Act of 1933, as amended.
"SEC" shall mean the Securities and Exchange Commission.
"Security Interest" means any mortgage, pledge, lien,
encumbrance, charge, or other security interest, other than (a)
mechanic's, materialmen's, and similar liens, (b) liens for Taxes, as
defined, not yet due and payable or for Taxes, as defined, that the
taxpayer is contesting in good faith through appropriate proceedings,
(c) purchase money liens and liens securing rental payments under
capital lease arrangements, and (d) other liens arising in the Ordinary
Course of Business and not incurred in connection with the borrowing of
money.
"Surviving Corporation" has the meaning set forth in Section
2(a) below.
"Tax" means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes
under Section 59A of the Code), customs duties, capital stock,
franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for
refund, or information or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Third Party Claim" has the meaning set forth in Section 9(d)
below.
2. Basic Transaction.
(a) THE AMALGAMATION. On and subject to the terms and
conditions of this Agreement, Newco shall amalgamate with Go (the
"Amalgamation") at the Effective Time, as defined. Go shall be the
corporation surviving the Amalgamation (the "Surviving Corporation").
(b) THE CLOSING. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of
Xxxxxxx Xxxxxx, P.A., 000 X.X. Xxxxxxx Xxx, Xxxxx 000, Xxxxx Xxxx
Xxxxx, Xxxxxxx, 00000, at 9:30 a.m., local time, on the ___ day of
February, 1998, subject to the satisfaction or waiver of all conditions
to the obligation of the Parties to consummate the transactions
4
contemplated hereby (other than conditions with respect to actions, the
respective Parties will take at the Closing itself), or such other date
as the Parties may mutually determine (the "Closing Date"). At the
Closing, (i) Newco shall deliver to Go the various certificates,
instruments and documents referred to in this Agreement, (ii) the
Parent shall deliver to Go the various certificates, instruments and
documents referred to in this Agreement including certificates
representing shares of Common Stock of the Parent, (iii) Go shall
deliver to Newco and the Parent the various certificates, instruments,
and documents referred to in this Agreement, and (iv) Newco and Go
shall file with the Director under the Business Corporations Act of
Ontario the Articles of Amalgamation in the form attached hereto as
Exhibit A (the "Articles of Amalgamation").
(c) EFFECT OF AMALGAMATION.
(i) GENERAL. The Amalgamation shall become effective
at the time (the "Effective Time") that Go and Newco file the
Articles of Amalgamation with the Director under the Business
Corporations Act of Ontario. The Amalgamation shall have the
effect set forth under Ontario law. The Surviving Corporation
may, at any time after the Effective Time, take any action
(including executing and delivering any documents) in the name
and on behalf of either the Surviving Corporation or Newco in
order to carry out and effectuate the transactions
contemplated by the Agreement.
(ii) DIRECTORS AND OFFICERS. The directors and
officers of the Surviving Corporation at and as of the
Effective Time shall be as disclosed on Schedule 2(c)(iii)
hereof.
(iii) CONVERSION OF GO SHARES. At and as of the
Effective Time, each Go Share shall be converted into the
right to receive one share of Common Stock for each Go Share
or an aggregate of 5,906,175 shares of Common Stock (the
"Amalgamation Consideration"). At or after the Closing, the
Parent shall deliver to the former Go shareholders the shares
of Common Stock of the Parent to which they are entitled at
such time or times as the former Go shareholders deliver their
certificates for Go Shares to the Parent duly endorsed with
signature guarantees or other such guarantees that may be
required by the Parent's transfer agent.
(iv) RESTRICTIONS ON THE PARENT'S COMMON STOCK. The
Common Stock of the Parent comprising the Amalgamation
Consideration is being issued to Go shareholders who are not
U.S. Persons as defined by Regulation S under the Securities
Act and to a limited number of U.S. Persons in reliance upon
exemption from registration pursuant to Section 4(2) of the
Securities Act and Rule 506 thereunder. In order to obtain
their shares of the Parent's Common Stock, such persons or
their duly authorized agents or attorneys will be required to
sign such customary documentation as the Parent's counsel
5
deems reasonably necessary in order to ensure that the offers
and sales are exempt from registration under the Securities
Act pursuant to Regulation S or Section 4(2) and Rule 506. The
names, addresses and number of shares of the Parent to be
issued to Go shareholders is reflected on Schedule 2(c)(iv).
3. Representations and Warranties of the Parent. The Parent represents
and warrants to Go and its shareholders that the statements contained in this
Section 3 are correct and complete as of the date of this Agreement and shall be
correct and complete as of the Closing Date.
(a) ORGANIZATION OF THE PARENT. The Parent is a corporation
duly organized, validly existing, and in good standing under the laws
of the jurisdiction of its incorporation. The Parent is duly authorized
to conduct business and is in good standing under the laws of each
jurisdiction where such qualification is required except where the
failure to so qualify would not have a material adverse effect upon the
Parent. The Parent has full corporate power and authority to carry on
the business in which it is engaged in and to own and use the
properties owned and used by it. Schedule 3(a) lists the directors and
officers of the Parent. The Parent has delivered to Go correct and
complete copies of the charter and bylaws of the Parent. The minute
books (containing the records and meetings of the shareholders, the
board of directors, and any committees of the board of directors), the
stock certificate books and the stock record books of the Parent are
correct and complete. The Parent is not in default under or in
violation of any material provision of its charter or bylaws.
(b) AUTHORIZATION OF TRANSACTION. The Parent has the full
power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. Subject to execution, delivery and
authorization of the other Parties, this Agreement constitutes the
valid and legally binding obligation of the Parent, enforceable in
accordance with its terms and conditions. The Parent need not give any
notice to, make any filing with, or obtain any authorization, consent,
or approval of any government or governmental agency in order to
consummate the transactions contemplated by this Agreement.
(c) CAPITALIZATION.
(i) The authorized capital stock of the Parent
consists of 20,000,000 shares of Common Stock, $.001 par value
of which 2,250,000 shares are outstanding. All of the issued
and outstanding shares are validly issued and are fully paid,
non-assessable and free of preemptive rights.
(ii) There are (A) no outstanding subscriptions,
options, calls, contracts, commitments, understandings,
restrictions, arrangements, rights or warrants, including any
right of conversion or exchange under any outstanding
security, instrument or other agreement and also including any
6
rights plan or other anti-takeover agreement, obligating
Parent to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of the capital stock of
the Parent or obligating Parent to grant, extend or enter into
any agreement or commitment, and (B) no voting trusts, proxies
or other agreements or understandings to which the Parent is a
party or is bound with respect to the voting of any shares of
capital stock of the Parent. The Common Stock of the Parent
issued to the Go shareholders will be as of the Closing duly
authorized, validly issued, fully paid and non-assessable and
free of preemptive rights and liens or Security Interests.
(d) SUBSIDIARIES. Except as disclosed on Schedule 3(d), the
Parent has no Subsidiaries and does not own any interest in any
corporation, partnership, joint venture, limited liability company,
association, trust or entity.
(e) NON-CONTRAVENTION. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions
contemplated hereby, will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court
to which the Parent is subject or, (ii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or
cancel, or require any notice under, any agreement, contract, lease,
license, instrument, or other arrangement to which the Parent is a
party or by which it is bound or to which any of its assets is subject.
(f) BROKERS' FEES. The Parent has no Liability or obligation
to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which Go
could become liable or obligated.
(g) TITLE TO ASSETS. The Parent has good and marketable title
to, or a valid leasehold interest in, the properties and assets used by
it, located on its premises, shown on the Most Recent Balance Sheet or
acquired after the date thereof and, except as shown on Schedule 3(g),
are free and clear of all Security Interests, except for properties and
assets disposed of in the Ordinary Course of Business since the date of
the Most Recent Balance Sheet. Schedule 3(g) also includes a list of
all assets owned and leased by the Parent with the designation as which
assets are leased.
(h) FINANCIAL STATEMENTS. Attached hereto as Exhibit B are the
following financial statements of the Parent (collectively the
"Financial Statements"): audited balance sheets and statements of
income, changes in shareholders' equity, and cash flow as of and for
the period ended September 30, 1997 (the "Most Recent Fiscal Period
End"). The Financial Statements (including the notes thereto) have been
prepared in accordance with GAAP applied on a consistent basis through
the periods covered thereby, present fairly the financial condition of
the Parent as of such dates and the results of operations of the Parent
for such periods, are materially correct and complete, and are
consistent with the books and records of the Parent (which books and
records are materially correct and complete).
7
(i) EVENTS SUBSEQUENT TO MOST RECENT FISCAL PERIOD END. Since
the Most Recent Fiscal Period End, there has not been any material
adverse change in the business, financial condition, operations,
results of operations or future prospects of the Parent. Without
limiting the generality of the foregoing, except as provided to the
contrary in this Agreement since that date:
(i) the Parent has not sold, leased, transferred, or
assigned any of its assets, tangible or intangible, other than
for a fair consideration in the Ordinary Course of Business;
(ii) except as otherwise disclosed in this Agreement,
the Parent has not entered into any agreement, contract,
lease, or license (or series of related agreements, contracts,
leases, and licenses);
(iii) except as listed elsewhere herein, no party
(including Target) has accelerated, terminated, modified, or
canceled any agreement, contract, lease or license (or series
of related agreements, contracts, leases, and licenses) to
which the Parent is a party or by which it is bound;
(iv) the Parent has not imposed any Security Interest
upon any of its assets, tangible or intangible, except as
listed elsewhere herein;
(v) except as listed elsewhere herein, the Parent has
not made any capital expenditure (or series of related capital
expenditures);
(vi) the Parent has not made any capital investment
in, any loan to, or any acquisition of the securities or
assets of, any other Person (or series of related capital
investments, loans, and acquisitions);
(vii) the Parent has not issued any note, debenture,
bond, or other debt security or created, incurred, assumed, or
guaranteed any indebtedness for borrowed money or capitalized
lease obligation;
(viii) the Parent has not delayed or postponed the
payment of accounts payable and other Liabilities;
(ix) the Parent has not canceled, compromised,
waived, or released any right or claim (or series of related
rights and claims);
(x) the Parent has not granted any license or
sub-license of any rights under or with respect to any
Intellectual Property;
8
(xi) there has been no change made or authorized in
the charter or bylaws of the Parent except for the change of
domicile merger;
(xii) the Parent has not issued, sold, or otherwise
disposed of any shares of capital stock, or granted any
options, warrants, or other rights to purchase or obtain
(including upon conversion, exchange, or exercise) any shares
of capital stock;
(xiii) the Parent has not declared, set aside, or
paid any dividend or made any distribution with respect to
shares of capital stock (whether in cash or in kind) or
redeemed, purchased, or otherwise acquired any hares of
capital stock;
(xiv) the Parent has not experienced any damage,
destruction, or loss (whether or not covered by insurance) to
its property;
(xv) the Parent has not made any loan to, or entered
into any other transaction with, any of its employees;
(xvi) except as disclosed elsewhere herein, the
Parent has not entered into any employment contract, written
or oral, or modified the terms of any existing such contract
or agreement or entered into any collective bargaining
agreement;
(xvii) the Parent has not granted any increase in the
base compensation of any of its directors, officers or Family
Members or any employee;
(xviii) the Parent has not adopted, amended,
modified, or terminated any bonus, profit-sharing, incentive,
severance, or other plan, contract, or commitment for the
benefit of any of its directors, officers, or Family Members
(or taken any such action with respect to any other Employee
Benefit Plan);
(xix) the Parent has not made any other change in
employment terms for any of its directors and officers;
(xx) the Parent has not made or pledged to make any
charitable or other capital contribution;
(xxi) there has not been any other occurrence, event,
incident, action, failure to act, or transaction involving the
Parent;
(xxii) the Parent has not terminated or amended any
insurance policies nor has any insurance company done so with
regard to a policy paid for by the Parent; and
9
(xxiii) the Parent is not committed to any of the
foregoing.
(j) UNDISCLOSED LIABILITIES. The Parent does not have any
Liabilities (and there is no Basis for any present or future action,
suit, proceeding, hearing, investigation, charge, complaint, claim, or
demand against it giving rise to any Liability).
(k) RELATED PARTY TRANSACTIONS. Since October 1, 1997, the
Parent has not entered into any transactions or engaged in any business
with any director or officer of the Parent or any Family Member.
(l) LEGAL COMPLIANCE. The Parent, its directors, officers and
Affiliates have complied with all applicable laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees,
rulings, and charges thereunder) of federal, state, local, and foreign
governments (and all agencies thereof), and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand,
or notice has been filed or commenced against any of them alleging any
failure so to comply. Nor has the Parent, its directors, officers and
Affiliates received any oral or written notice from any other Person
regarding any of the foregoing.
(m) LITIGATION. Except as disclosed on Schedule 3(m), the
Parent is not (i) subject to any outstanding injunction, judgment,
order, decree, ruling, or charge, and (ii) to the Knowledge of any of
the officers and directors of the Parent is not a party to any action,
suit, proceeding, hearing or investigation of, in, or before any court
or quasi-judicial or administrative agency of any federal, state,
provincial, local or foreign jurisdiction or before any arbitrator, nor
has any threat been made concerning the filing of any of the foregoing.
(n) TAX MATTERS.
(i) Except as disclosed on Schedule (n)(i), the
Parent has filed all Tax Returns that it was required to file.
All such Tax Returns were correct and complete in all material
respects. All Taxes owed by the Parent (whether or not shown
on any Tax Return) have been paid. the Parent currently is not
the beneficiary of any extension of time within which to file
any Tax Return. No claim has ever been made by an authority in
a jurisdiction where the Parent does not file Tax Returns that
it is or may be subject to taxation by that jurisdiction.
There are no Security Interests on any of the assets of the
Parent that arose in connection with any failure (or alleged
failure) to pay any Tax.
(ii) the Parent has withheld and paid all Taxes
required to have been withheld and, except as may not yet be
required in the Ordinary Course of Business, has paid in
connection with amounts paid or owing to any employee,
independent contractor, creditor, shareholder, or other third
party.
10
(iii) Neither the Parent or any director, officer (or
employee responsible for Tax matters) of Parent expects any
authority to assess any additional Taxes for any period for
which Tax Returns have been filed. There is no dispute or
claim concerning any Tax Liability of Parent either (A)
claimed or raised by any authority in writing, or (B) as to
which the directors and officers (and employees responsible
for Tax matters) of the Parent has Knowledge based upon
personal contact with any agent of such authority. Schedule
3(m)(iii) lists all federal, state, local, and foreign income
Tax Returns filed with respect the Parent for taxable periods
ended on or after December 31, 1994, indicates those Tax
Returns that have been audited, and indicates those Tax
Returns that currently are the subject of audit. The Parent
has delivered to Go correct and complete copies of all
federal, state and local income Tax Returns, examination
reports, and statements of deficiencies assessed against or
agreed to by the Parent since December 31, 1994.
(iv) The Parent has not waived any statute of
limitations in respect of Taxes or agreed to any extension of
time with respect to a Tax assessment or deficiency.
(v) The Parent has not made any payments, is not
obligated to make any payments, and is not a party to any
agreement that under certain circumstances could obligate it
to make any payments that will not be deductible under Code
Section 280G. the Parent has not been a United States real
property holding corporation within the meaning of Code
Section 897(c)(2) during the applicable period specified in
Code Section 897(c)(1)(A)(ii). the Parent has disclosed on its
federal income Tax Returns all positions taken therein that
could give rise to a substantial understatement of federal
income Tax within the meaning of Code Section 6662. the Parent
is not a party to any Tax allocation or sharing agreement. the
Parent (A) has not been a member of an Affiliated Group filing
a consolidated federal income Tax Return, or (B) has no
Liability for the Taxes of any Person (other than the Parent)
under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or
successor, by contract, or otherwise.
(vi) Schedule 3(n)(vi) sets forth as of the most
recent practicable date the basis of the Parent in its assets.
(o) REAL PROPERTY. The Parent does not own or lease any direct
or indirect interest in real property;
(p) INTELLECTUAL PROPERTY. The Parent does not own any
Intellectual Property.
(q) TANGIBLE ASSETS. The Parent does not own or lease any
buildings, machinery, equipment, or other tangible assets necessary for
the conduct of its business as presently conducted and as presently
proposed to be conducted.
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(r) CONTRACTS. Except as listed on Schedule 3(r), the Parent
is not a party to any oral or written contracts or agreements.
(s) POWERS OF ATTORNEY. There are no outstanding powers of
attorney executed on behalf of the Parent.
(t) EMPLOYEES. To the Knowledge of the Parent and its
directors and officers, the Parent has never had any employees.
(u) SHAREHOLDER APPROVAL. The shareholders of the Parent do
not have to approve the Amalgamation. As the shareholder of Newco, the
Parent has authorized Newco to enter into the Amalgamation with Go. The
Parent shall not revoke its vote or consent in favor of the
Amalgamation.
(v) CORPORATE SHELL. The Parent is a corporate shell, has no
assets or liabilities and has never engaged in any business.
(w) DISCLOSURE. The representations and warranties contained
in this Section 3 do not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements and information contained in this Section 3 not misleading.
4. Representations and Warranties of Go. Go represents and warrants to
the Parent that the statements contained in this Section 4 are to its Knowledge
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date.
(a) ORGANIZATION OF GO. Go is a corporation duly organized,
validly existing, and in good standing under the laws of the
jurisdiction of its incorporation. Go is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction
where such qualification is required except where the failure to so
qualify would not have a material adverse effect upon Go.
(b) AUTHORIZATION OF TRANSACTION. Go has the full power and
authority to execute and deliver this Agreement and to perform its
obligations hereunder. Subject to execution, delivery and authorization
of the other Parties hereto, this Agreement constitutes the valid and
legally binding obligation of Go.
(c) SHAREHOLDER APPROVAL. The shareholders of Go have approved
the Amalgamation by the required vote necessary under the laws of the
province of Ontario.
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(d) NO OTHER REPRESENTATIONS. Go shall not be deemed to have
made to the Parent any representation or warranty other than as is
expressly made in Sections 4(a) through (c).
5. Representations and Warranties Concerning Newco. The Parent
represents and warrants to Go that the Parent has caused Newco to be organized
shortly prior to the date of this Agreement and that Newco has no assets and has
not engaged in any business transaction or incurred any liabilities except for
organizational costs. The Parent has caused Newco to issue 100 shares of its
common stock to the Parent in exchange for 5,906,175 shares of Common Stock of
the Parent. The Parent has not caused Newco to issue any additional securities.
6. Conditions to Obligation to Close.
(a) CONDITIONS TO OBLIGATION OF GO. The obligation of Go to
consummate the transactions to be performed by each in connection with
the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in
Section 3 above shall be true and correct in all material
respects at and as of the Closing Date;
(ii) no action, suit, or proceeding shall be pending
or threatened before any court or quasi-judicial or
administrative agency of any federal, state, provincial,
local, or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement, (B) cause any of
the transactions contemplated by this Agreement to be
rescinded following consummation, (C) affect adversely the
right of Go shareholders to own the Parent's Common Stock and
to control the Parent, or (D) affect adversely the right of Go
to own its assets and to operate its business (and no such
injunction, judgment, order, decree, ruling, or charge shall
be in effect);
(iii) The Parent shall have delivered to Go a
certificate to the effect that each of the conditions
specified above in Section 6(a)(i)-(ii) is satisfied in all
respects;
(iv) Go shall have received from counsel to the
Parent an opinion in form and substance as set forth in
Exhibit D attached hereto, addressed to Go, and dated as of
the Closing Date;
(v) the Parent shall have reincorporated under the
laws of the State of Delaware under the name Go Call, Inc. or
such other name as shall have been requested by Go;
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(vi) the Parent shall have received all necessary
consents and approval to commence trading on the NASD OTC
Bulletin Board; and
(vii) Xxxxxxx Xxxxxx, Esq. certifies in writing that
his firm's fees and expenses for services rendered to the
Parent or Newco are not the legal responsibility of such
corporations.
Go may waive any condition specified in this Section 7(a) if it
executes a writing so stating at or prior to the Closing.
(b) CONDITIONS TO OBLIGATION OF THE PARENT AND NEWCO. The
obligation of the Parent and Newco to consummate the transactions to be
performed by them in connection with the Closing is subject to
satisfaction of the following conditions:
(i) the representations and warranties set forth in
Section 4 above shall be true and correct in all material
respects at and as of the Closing Date, and
(ii) no action, suit, or proceeding shall be pending
or threatened before any court or quasi-judicial or
administrative agency of any federal, state, provincial,
local, or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement or (B) cause any
of the transactions contemplated by this Agreement to be
rescinded following consummation (and no such injunction,
judgment, order, decree, ruling, or charge shall be in
effect);
(c) CHANGE OF OFFICERS AND DIRECTORS OF THE PARENT. At the
Closing, the present officers and directors of the Parent shall have
resigned and appointed Xxxxxxx Xxxx and such other persons he may
designate to the board of directors of the Parent and appointed Xxxxxxx
Xxxx as the president treasurer and secretary of the Parent.
7. Remedies For Breaches of This Agreement.
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of the Parties contained in this
Agreement shall survive the Closing hereunder and continue in full
force and effect for a period of two years (subject to any applicable
statutes of limitations).
(b) INDEMNIFICATION PROVISIONS FOR BENEFIT OF GO.
(i) In the event the Parent breaches (or in the event
any third party alleges facts that, if true, would mean the
Parent has breached) any of its representations, warranties,
and covenants contained herein and provided that Go make a
written claim for indemnification against and Parent pursuant
to Section 7(d)(i) below, then the Parent agrees to indemnify
Go from and against the entirety of any Adverse Consequences
Go may suffer through and after the date of the claim for
indemnification resulting from, arising out of, relating to,
in the nature of, or caused by the breach (or the alleged
breach).
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(ii) the Parent agrees to indemnify Go from and
against the entirety of any Adverse Consequences Go may suffer
resulting from, arising out of, relating to, in the nature of,
or caused by any claim for Taxes due as the result of the
operation of the Parent's business through the date of the
Amalgamation.
(c) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE PARENT. In
the event that Go breaches (or in the event any third party alleges
facts that, if true, would mean that Go has breached) any of its
representations, warranties, and covenants contained herein, and
provided that the Parent makes a claim for indemnification against Go
pursuant to Section 7(d)(i) below, then Go agrees to indemnify the
Parent from and against the entirety of any Adverse Consequences the
Parent may suffer through and after the date of the claim for
indemnification caused proximately by the breach (or the alleged
breach).
(d) MATTERS INVOLVING THIRD PARTIES.
(i) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third
Party Claim") which may give rise to a claim for
indemnification against any other Party (the "Indemnifying
Party") under this Section 7, then the Indemnified Party shall
promptly notify each Indemnifying Party thereof in writing;
provided, however, that no delay on the part of the
Indemnified Party in notifying any Indemnifying Party shall
relieve the Indemnifying Party from any obligation hereunder
unless (and then solely to the extent) the Indemnified Party
thereby is prejudiced.
(ii) Any Indemnifying Party shall have the right to
defend the Indemnified Party against the Third Party Claim
with counsel of its choice satisfactory to the Indemnified
Party so long as (A) the Indemnifying Party notifies the
Indemnified Party in writing within 10 days after the
Indemnified Party has given notice of the Third Party Claim
that the Indemnifying Party shall indemnify the Indemnified
Party from and against the entirety of any Adverse
Consequences the Indemnified Party may suffer as provided in
Section 7(b)(i) or Section 7(c)(ii) above, as may be
applicable, (B) the Indemnifying Party provides the
Indemnified Party with evidence acceptable to the Indemnified
Party that the Indemnifying Party shall have the financial
resources to defend against the Third Party Claim and fulfill
its indemnification obligations hereunder, (C) the Third Party
Claim involves only money damages and does not seek an
injunction or other equitable relief, (D) settlement of, or an
adverse judgment with respect to, the Third Party Claim is
not, in the good faith judgment of the Indemnified Party,
likely to establish a precedential custom or practice
materially adverse to the continuing business interests of the
Indemnified Party, and (E) the Indemnifying Party conducts the
defense of the Third Party Claim actively and diligently.
15
(iii) So long as the Indemnifying Party is conducting
the defense of the Third Party Claim in accordance with
Section 7(d)(i) above, (A) the Indemnified Party may retain
separate co-counsel at its sole cost and expense and
participate in the defense of the Third Party Claim, (B) the
Indemnified Party shall not consent to the entry of any
judgment or enter into any settlement with respect to the
Third Party Claim without the prior written consent of the
Indemnifying Party (not to be withheld unreasonably), and (C)
the Indemnifying Party shall not consent to the entry of any
judgment or enter into any settlement with respect to the
Third Party Claim without the prior written consent of the
Indemnified Party (not to be withheld unreasonably).
(iv) In the event any of the conditions in Section
7(d)(ii) above is or becomes unsatisfied, however, (A) the
Indemnified Party may defend against, and consent to the entry
of any judgment or enter into any settlement with respect to,
the Third Party Claim in any manner it may deem appropriate
(and the Indemnified Parties need not consult with, or obtain
any consent from, any Indemnifying Parties in connection
therewith), (B) the Indemnifying Parties shall reimburse the
Indemnified Party promptly and periodically for the costs of
defending against the Third Party Claim (including reasonable
attorneys' fees and expenses), and (C) the Indemnifying
Parties shall remain responsible for any Adverse Consequences
the Indemnified Party may suffer resulting from, arising out
of, relating to, in the nature of, or caused by the Third
Party Claim to the fullest extent provided in this Section 7.
(e) DETERMINATION OF ADVERSE CONSEQUENCES. The Parties shall
take into account the time cost of money (using the CitiBank N.A.
publicly announced prime rate as the discount rate) in determining
Adverse Consequences for purposes of this Section 7.
(f) OTHER INDEMNIFICATION PROVISIONS. The foregoing
indemnification provisions are in addition to, and not in derogation
of, any statutory, equitable, or common law remedy any Party may have
for breach of representation, warranty, or covenant.
(g) LIMITATION ON INDEMNIFICATION. All of the indemnification
provisions set forth in this Section 7 including the contractual
provisions and the other remedies provided for in Section 7(f) above
are subject to the limitation that neither Go on one hand nor the
Parent on the other hand shall have any obligation to indemnify the
other Parties unless and until the other Parties have suffered Adverse
Consequences from any individual breaches in the amount of $10,000 or
more or an aggregate of $25,000 or more. Provided, however, none of the
Parties shall have any Liability for any Adverse Consequences less than
an aggregate of $50,000 arising from or relating to any matter the
facts of which such Parties did not know and could not have in the
exercise of reasonable diligence known. After any of the foregoing
aggregate thresholds are reached, the Indemnifying Party shall be
obligated to indemnify the Indemnified Party from and against all such
Adverse Consequences relating back to the first dollar.
16
8. Miscellaneous.
(a) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall
issue any press release, make any public announcement or otherwise
disclose any information relating to the subject matter of this
Agreement prior to the Closing without the prior written approval of
the other Parties. The Parties may also make disclosure to attorneys,
accountants and financial advisors acting on their respective behalf.
(b) NO THIRD-PARTY BENEFICIARIES. This Agreement shall not
confer any rights or remedies upon any Person other than the Parties
and their respective successors and permitted assigns and upon the Go
shareholders.
(c) EXPENSES. Each of the Parties to this transaction shall
bear his or its own costs and expenses (including legal fees and
expenses) incurred in connection with this Agreement and the
transactions contemplated hereby except to the extent this Agreement
provides otherwise. The Parent's legal fees and costs shall be paid by
a third party.
(d) CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity
or question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the Parties and no presumption or
burden of proof shall arise favoring or disfavoring any Party by virtue
of the authorship of any of the provisions of this Agreement. Any
reference to any federal, state, provincial, local, or foreign statute
or law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. The word
"including" shall mean including without limitation. The Parties intend
that each representation, warranty, and covenant contained herein shall
have independent significance. If any Party has breached any
representation, warranty, or covenant contained herein in any respect,
the fact that there exists another representation, warranty, or
covenant relating to the same subject matter (regardless of the
relative levels of specificity) which the Party has not breached shall
not detract from or mitigate the fact that the Party is in breach of
the first representation, warranty, or covenant.
(e) SPECIFIC PERFORMANCE. Each of the Parties acknowledges and
agrees that the other Parties would be damaged irreparably in the event
any of the provisions of this Agreement are not performed in accordance
with their specific terms or otherwise are breached. Accordingly, each
of the Parties agrees that the other Parties shall be entitled, without
17
the necessity of pleading or proving irreparable harm or lack of an
adequate remedy at law, to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any
action instituted in any court of the United States or any state
thereof having jurisdiction over the Parties and the matter in addition
to any other remedy to which they may be entitled, at law or in equity.
(f) SEVERABILITY. In the event any parts of this Agreement are
found to be void, the remaining provisions of this Agreement shall
nevertheless be binding with the same effect as though the void parts
were deleted.
(g) COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument. The
execution of this Agreement may be by actual or facsimile signature.
(h) BENEFIT. This Agreement shall be binding upon and inure to
the benefit of the Parties hereto and their legal representatives,
successors and assigns and to the benefit of the Go shareholders.
(i) NOTICES AND ADDRESSES. All notices, offers, acceptance and
any other acts under this Agreement (except payment) shall be in
writing, and shall be sufficiently given if delivered to the addressees
in person, by Federal Express or similar receipted delivery, by
facsimile delivery or, if mailed, postage prepaid, by certified mail,
return receipt requested, as follows:
Go: Xx. Xxxxxxx Xxxx
Go Phone, Inc.
00 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx X0X0X0
Facsimile: (000) 000-0000
with a copy to: Xxxxxxx X. Xxxxxx, Esquire
Xxxxxxx Xxxxxx, P.A.
000 X.X. Xxxxxxx Xxx
Xxxxx 000
Xxxxx Xxxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
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Parent: Hershey Xxxx, President
Omni Advantage, Inc.
000 Xxxxx Xxxxx Xxxxx
Xxxx & Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
with a copy to: Xxxxxxx Xxxxxx, Esq.
Nangle, Cooper, Xxxxxxx &
Xxxxxxx, L.L.C.
0000 Xxxxxxxxxx Xxxxx
000 X. Xxxxxxx
Xx. Xxxxx, XX 00000
Facsimile: (000) 000-0000
or to such other address as any of them, by notice to the other may
designate from time to time. The transmission confirmation receipt from
the sender's facsimile machine shall be conclusive evidence of
successful facsimile delivery. Time shall be counted to, or from, as
the case may be, the delivery in person or by mailing.
(j) ATTORNEY'S FEES. In the event that there is any
controversy or claim arising out of or relating to this Agreement, or
to the interpretation, breach or enforcement thereof, and any action or
proceeding is commenced to enforce the provisions of this Agreement,
the prevailing Parties shall be entitled to an award by the court or
arbitrator, as appropriate, of reasonable attorney's fees, costs and
expenses.
(k) ORAL EVIDENCE. This Agreement constitutes the entire
Agreement between the Parties and supersedes all prior oral and written
agreements between the parties hereto with respect to the subject
matter hereof. Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally, except by a statement
in writing signed by the party or parties against which enforcement or
the change, waiver discharge or termination is sought.
(l) GOVERNING LAW. This Agreement and any dispute,
disagreement, or issue of construction or interpretation arising
hereunder whether relating to its execution, its validity, the
obligations provided herein or performance shall be governed or
interpreted according to the internal laws of the State of Delaware
without regard to choice of law considerations.
(m) SECTION OR PARAGRAPH HEADINGS. Section headings herein
have been inserted for reference only and shall not be deemed to limit
or otherwise affect, in any matter, or be deemed to interpret in whole
or in part any of the terms or provisions of this Agreement.
19
IN WITNESS WHEREOF, the Parties hereto have set their hand and seals as
of the date first above written.
WITNESSES: GO PHONE, INC.
_______________
By: /S/ Xxxxxxx Xxxx,
----------------------------
_______________ Xxxxxxx Xxxx, President
OMNI ADVANTAGE CANADA LIMITED
_______________
By: /S/ HERSHEY XXXX,
----------------------------
_______________ Hershey Xxxx, President
GO CALL, INC.
_______________
By: /S/ HERSHEY XXXX,
----------------------------
_______________ Director
