EXHIBIT 10.1
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AGREEMENT AND PLAN OF REORGANIZATION
by and between
ONECLASS SYNERGY CORPORATION,
A Delaware corporation
And
AMERICAN BOARDSPORTS COMPANY, INC.
A California corporation
Effective as of August 11, 2001
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, made and entered into this
twenty fourth day of July 2001, by and between OneClass Synergy Corporation, a
Delaware corporation ("OneClass") with its principal place of business located
at 0000 XX Xxxxxxx 0, Xxxxxxxx, X.X. 00000 and American Boardsports Company,
Inc., a California corporation ("ABCI"), with its principal place of business
located at 0000 Xxxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxx, XX 00000 ("ABCI").
PREMISES
WHEREAS, this Agreement provides for the merger of ABCI into OneClass,
and in connection therewith, the conversion of the outstanding common stock of
ABCI into shares of common voting stock of OneClass, all for the purpose of
effecting a tax-free reorganization pursuant to sections 354 and 368(a) of the
Internal Revenue Code of 1986, as amended; and
WHEREAS, the boards of directors and shareholders of ABCI and OneClass
have determined, subject to the terms and conditions set forth in this
Agreement, that the merger contemplated hereby is desirable and in the best
interests of their respective corporations. This Agreement is being entered into
for the purpose of setting forth the terms and conditions of the proposed
merger.
AGREEMENT
NOW, THEREFORE, on the stated premises and for and in consideration of
the mutual covenants and agreements hereinafter set forth and the mutual
benefits to the parties to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS AND WARRANTIES OF
ABCI
As an inducement to and to obtain the reliance of OneClass, ABCI
represents and warrants as follows:
SECTION 1.1 ORGANIZATION. ABCI is a corporation duly organized, validly
existing, and in good standing under the laws of the State of California and has
the corporate power and is duly authorized, qualified, franchised and licensed
under all applicable laws, regulations, ordinances and orders of public
authorities to own all of its properties and assets and to carry on its business
in all material respects as it is now being conducted, including qualification
to do business as a foreign corporation in the jurisdiction in which the
character and location of the assets owned by it or the nature of the business
transacted by it requires qualification. Included in the ABCI
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Schedules (as hereinafter defined) are complete and correct copies of the
articles of incorporation, bylaws and amendments thereto of ABCI as in effect on
the date hereof. The execution and delivery of this Agreement does not and the
consummation of the transactions contemplated by this Agreement in accordance
with the terms hereof will not violate any provision of ABCI's articles of
incorporation or bylaws. ABCI has full power, authority and legal right and has
taken all action required by law, its articles of incorporation, its bylaws or
otherwise to authorize the execution and delivery of this Agreement.
SECTION 1.2 CAPITALIZATION. ABCI's total authorized capital consists of
20,000,000 Common Shares, no par value per share. As of the date of Closing, as
defined hereinbelow, there will be no more than 10,863,333 Common Shares issued
and outstanding, including but not limited 800,000 common shares reserved for
issuance pursuant to outstanding convertible notes in an aggregate amount of
approximately $1.2 million, which shares are held by no more than 35
"non-accredited" persons, as that term is defined under the Securities Act of
1933, as amended (the "Securities Act"). All issued and outstanding shares are
legally issued, fully paid and nonassessable and are not issued in violation of
the preemptive or other rights of any person. ABCI has no other securities,
warrants or options authorized or issued.
SECTION 1.3 SUBSIDIARIES AND PREDECESSOR CORPORATIONS. Except as
otherwise set forth in the ABCI Schedules, ABCI does not have any subsidiaries
and does not own, beneficially or of record, any shares of any other
corporation.
SECTION 1.4 FINANCIAL STATEMENTS. Included in the ABCI Schedules is an
audited financial statement, including a balance sheet, statement of operations,
shareholder equity and cash flows and notes thereto, dated as of March 31, 2001.
Relevant thereto:
(a) the ABCI balance sheets present fairly as of their date the
financial condition of ABCI. ABCI does not have, as of the date of such balance
sheets, except as noted and to the extent reflected or reserved against therein,
any liabilities or obligations (absolute or contingent) which should be
reflected in a balance sheet or the notes thereto and all assets reflected
therein are properly reported and present fairly the value of the assets of
ABCI, in accordance with generally accepted accounting principles;
(b) ABCI has no liabilities with respect to the payment of any federal,
state, county, local or other taxes (including any deficiencies, interest or
penalties), except for taxes accrued but not yet due and payable;
(c) ABCI has filed all state, federal and local income tax returns
required to be filed by it from inception to the date hereof, if any;
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(d) The books and records, financial and others, of ABCI are in all
material respects complete and correct and have been maintained in accordance
with good business accounting practices; and
(e) except as and to the extent disclosed in the most recent ABCI
balance sheet and the ABCI Schedules, ABCI has no material contingent
liabilities, direct or indirect, matured or unmatured.
SECTION 1.5 INFORMATION. The information concerning ABCI set forth in
this Agreement and in the ABCI Schedules is complete and accurate in all
material respects and does not contain any untrue statement of a material fact
or omit to state a material fact required to make the statements made, in light
of the circumstances under which they were made, not misleading.
SECTION 1.6 OPTIONS AND WARRANTS/SHARES RESERVED FOR ISSUANCE. Other
than as disclosed to OneClass by ABCI, or as otherwise included in the ABCI
Schedules, there are no existing options, warrants, calls or commitments of any
character to which ABCI is a party and by which it is bound.
SECTION 1.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth
in this Agreement, the ABCI Schedules, or as otherwise disclosed to OneClass,
since March 31, 2001:
(a) there has not been: (i) any material adverse change in the
business, operations, properties, assets or condition of ABCI; or (ii) any
damage, destruction or loss to ABCI (whether or not covered by insurance)
materially and adversely affecting the business, operations, properties, assets
or condition of ABCI;
(b) ABCI has not: (i) amended its articles of incorporation or bylaws;
(ii) declared or made, or agreed to declare or make, any payment of dividends or
distributions of any assets of any kind whatsoever to stockholders or purchased
or redeemed or agreed to purchase or redeem any of its capital stock; (iii)
waived any rights of value which in the aggregate are extraordinary or material
considering the business of ABCI; (iv) made any material change in its method of
management, operation or accounting; (v) entered into any other material
transaction; (vi) made any accrual or arrangement for or payment of bonuses or
special compensation of any kind or any severance or termination pay to any
present or former officer or employee; (vii) increased the rate of compensation
payable or to become payable by it to any of its officers or directors or any of
its employees whose monthly compensation exceeds $5,000; or (viii) made any
increase in any profit sharing, bonus, deferred compensation, insurance,
pension, retirement or other employee benefit plan, payment or arrangement made
to, for, or with its officers, directors or employees;
(c) ABCI has not: (i) granted or agreed to grant any options, warrants
or other rights for its stocks, bonds or other
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corporate securities calling for the issuance thereof; (ii) borrowed or agreed
to borrow any funds or incurred or become subject to, any material obligation or
liability (absolute or contingent) except liabilities incurred in the ordinary
course of business; (iii) paid any material obligation or liability (absolute or
contingent) other than current liabilities reflected in or shown on the most
recent ABCI balance sheet and current liabilities incurred since that date in
the ordinary course of business; (iv) sold or transferred, or agreed to sell or
transfer, any of its assets, properties or rights (except assets, properties or
rights not used or useful in its business which, in the aggregate have a value
of less than $10,000); (v) made or permitted any amendment or termination of any
contract, agreement or license to which it is a party if such amendment or
termination is material, considering the business of ABCI; or (vi) issued,
delivered or agreed to issue or deliver any stock, bonds or other corporate
securities, including debentures (whether authorized and unissued or held as
treasury stock); and
(d) to the best knowledge of ABCI, it has not become subject to any law
or regulation that materially and adversely affects, or in the future may
adversely affect, the business, operations, properties, assets or condition of
ABCI.
SECTION 1.8 TITLE AND RELATED MATTERS. Except as disclosed by ABCI to
OneClass relating to that certain foreclosure litigation involving ABCI's
acquisition of 4117 Ltd., ABCI has good and marketable title to and is the sole
and exclusive owner of all of its properties, inventory, interests in properties
and assets, real and personal (collectively, the "Assets") which are reflected
in the most recent ABCI audited balance sheet and the ABCI Schedules or acquired
after that date (except properties, interests in properties and assets sold or
otherwise disposed of since such date in the ordinary course of business), free
and clear of all liens, pledges, charges or encumbrances except: (a) statutory
liens or claims not yet delinquent; (b) such imperfections of title and
easements as do not and will not, materially detract from or interfere with the
present or proposed use of the properties subject thereto or affected thereby or
otherwise materially impair present business operations on such properties; and
(c) as described in the ABCI Schedules. Except as set forth in the ABCI
Schedules, ABCI owns free and clear of any liens, claims, encumbrances, royalty
interests or other restrictions or limitations of any nature whatsoever and all
procedures, techniques, marketing plans, business plans, methods of management
or other information utilized in connection with ABCI's business. Except as set
forth in the ABCI Schedules, no third party has any right to, and ABCI has not
received any notice of infringement of or conflict with asserted rights of
others with respect to any product, technology, data, trade secrets, know-how,
proprietary techniques, trademarks, service marks, trade names or copyrights
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a materially adverse affect on the business,
operations, financial conditions
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or income of ABCI or any material portion of its properties, assets or rights.
SECTION 1.9 LITIGATION AND PROCEEDINGS. Except for that matter referred
to in Section 1.8 above, to the best of ABCI's knowledge and belief, there are
no actions, suits, proceedings or investigations pending or threatened by or
against ABCI or affecting ABCI or its properties, at law or in equity, before
any court or other governmental agency or instrumentality, domestic or foreign
or before any arbitrator of any kind that would have a material adverse affect
on the business, operations, financial condition or income of ABCI. ABCI does
not have any knowledge of any default on its part with respect to any judgment,
order, writ, injunction, decree, award, rule or regulation of any court,
arbitrator or governmental agency or instrumentality or of any circumstances
which, after reasonable investigation, would result in the discovery of such a
default.
SECTION 1.10 CONTRACTS.
(a) Except as included or described in the ABCI Schedules, there are no
material contracts, agreements, franchises, license agreements or other
commitments to which ABCI is a party or by which it or any of its assets,
products, technology or properties are bound;
(b) Except as included or described in the ABCI Schedules or reflected
in the most recent ABCI balance sheet, ABCI is not a party to any oral or
written: (i) contract for the employment of any officer or employee which is not
terminable on thirty (30) days or less notice; (ii) profit sharing, bonus,
deferred compensation, stock option, severance pay, pension benefit or
retirement plan, agreement or arrangement covered by Title IV of the Employee
Retirement Income Security Act, as amended; (iii) agreement, contract or
indenture relating to the borrowing of money; (iv) guaranty of any obligation,
other than one on which ABCI is a primary obligor, for collection and other
guaranties of obligations, which, in the aggregate do not exceed more than one
year or providing for payments in excess of $10,000 in the aggregate; (v)
consulting or other similar contracts with an unexpired term of more than one
year or providing for payments in excess of $10,000 in the aggregate; (vi)
collective bargaining agreements; (vii) agreement with any present or former
officer or director of ABCI; or (viii) contract, agreement or other commitment
involving payments by it of more than $10,000 in the aggregate; and
(c) To ABCI's knowledge, all contracts, agreements, franchises, license
agreements and other commitments to which ABCI is a party or by which its
properties are bound and which are material to the operations of ABCI taken as a
whole, are valid and enforceable by ABCI in all respects, except as limited by
bankruptcy and insolvency laws and by other laws affecting the rights of
creditors generally.
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SECTION 1.11 MATERIAL CONTRACT DEFAULTS. Except as set forth herein or
in the ABCI Schedules, to the best of ABCI's knowledge and belief, ABCI is not
in default in any material respect under the terms of any outstanding contract,
agreement, lease or other commitment which is material to the business,
operations, properties, assets or condition of ABCI, and there is no event of
default in any material respect under any such contract, agreement, lease or
other commitment in respect of which ABCI has not taken adequate steps to
prevent such a default from occurring.
SECTION 1.12 NO CONFLICT WITH OTHER INSTRUMENTS. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which ABCI is a
party or to which any of its properties or operations are subject.
SECTION 1.13 GOVERNMENTAL AUTHORIZATIONS. To the best of ABCI's
knowledge, ABCI has all licenses, franchises, permits or other governmental
authorizations legally required to enable ABCI to conduct its business in all
material respects as conducted on the date hereof. Except for compliance with
federal and state securities and corporation laws, as hereinafter provided, no
authorization, approval, consent or order of, or registration, declaration or
filing with, any court or other governmental body is required in connection with
the execution and delivery by ABCI of this Agreement and the consummation by
ABCI of the transactions contemplated hereby.
SECTION 1.14 COMPLIANCE WITH LAWS AND REGULATIONS. To the best of
ABCI's knowledge, except as disclosed in the ABCI Schedules, ABCI has complied
with all applicable statutes and regulations of any federal, state or other
governmental entity or agency thereof, except to the extent that noncompliance
would not materially and adversely affect the business, operations, properties,
assets or condition of ABCI or would not result in ABCI's incurring any material
liability.
SECTION 1.15 INSURANCE. All of the insurable properties of ABCI are
insured for ABCI's benefit in accordance with the insurance policies disclosed
in the ABCI Schedules under valid and enforceable policies issued by insurers of
recognized responsibility. Such policy or policies containing substantially
equivalent coverage will be outstanding and in full force at the Closing Date.
SECTION 1.16 APPROVAL OF AGREEMENT. The board of directors and
shareholders of ABCI have authorized the execution and delivery of this
Agreement by ABCI and have approved the transactions contemplated hereby.
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SECTION 1.17 MATERIAL TRANSACTIONS OR AFFILIATIONS. Except as disclosed
herein and in the ABCI Schedules, there exists no material contract, agreement
or arrangement between ABCI and any predecessor and any person who was at the
time of such contract, agreement or arrangement an officer, director or person
owning of record, or known by ABCI to own beneficially, ten percent (10%) or
more of the issued and outstanding ABCI Common Shares and which is to be
performed in whole or in part after the date hereof. In all of such
transactions, the amount paid or received, whether in cash, in services or in
kind, has been during the full term thereof, and is required to be during the
unexpired portion of the term thereof, no less favorable to ABCI than terms
available from otherwise unrelated parties in arms length transactions. There
are no commitments by ABCI, whether written or oral, to lend any funds to,
borrow any money from or enter into any other material transactions with, any
such affiliated person.
SECTION 1.18 LABOR RELATIONS. ABCI has never had a work stoppage
resulting from labor problems. To the best knowledge of ABCI, no union or other
collective bargaining organization is organizing or attempting to organize any
employee of ABCI.
SECTION 1.19 PREVIOUS SALES OF SECURITIES. Since inception, ABCI has
sold ABCI Common Shares to investors in reliance upon applicable exemptions from
the registration requirements under the laws of the United States, the state of
California and such other states in the United States where such sales have
occurred. All such sales were made in accordance with the laws of the United
States and those states where such securities were sold.
SECTION 1.20 ABCI SCHEDULES. Upon execution hereof, ABCI will deliver
to OneClass the following schedules, which are collectively referred to as the
"ABCI Schedules" and which consist of separate schedules dated as of the date of
this Agreement and instruments and data as of such date, all certified by the
chief executive officer of ABCI as complete, true and correct in all material
respects:
(a) copies of the articles of incorporation, bylaws and all minutes of
shareholders' and directors' meetings of ABCI;
(b) the financial statements of ABCI referenced hereinabove in Section
1.4;
(c) a list indicating the name and address of the stockholders of ABCI,
together with the number of shares owned by them;
(d) copies of all licenses, permits and other governmental
authorizations, requests or applications therefor, pursuant to which ABCI
carries on or proposes to carry on its business (except those which in the
aggregate, are immaterial to the present or proposed business of ABCI);
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(e) a list of every debt, mortgage, security interest, pledge, lien,
encumbrance or claim of any nature whatsoever in excess of $10,000 as may affect
ABCI, its properties or assets;
(f) a list of all executive employees of ABCI, including current
compensation, with notation as to job description and whether or not such
employee is subject to a written contract;
(g) a description of all real and personal property owned by ABCI,
together with a description of every mortgage, deed of trust, pledge, lien,
agreement, encumbrance, claim or equity interest of any nature whatsoever in
such real and personal property;
(h) copies of all material contracts, leases, agreements or other
instruments to which ABCI is a party or by which it or its properties are bound;
(i) the name and location of each bank or other institution with which
ABCI has an account or safety deposit box and the names of all persons
authorized to draw thereon or having access thereto;
(j) a list of all patent applications, copyrights, trademarks, service
marks and trade names that are pertinent in any manner whatsoever to the
development, testing, registration, assembly, manufacture, use or sale of any
products or services used in the business of ABCI and in which either ABCI or
ABCI's stockholders has or previously had any direct or indirect, equitable or
legal right or interest;
(k) a copy of all material documentation relating to the sale of ABCI
Common Shares by ABCI to its present stockholders;
(l) a list of insurance policies referred to in Section 1.15;
(m) a description of any material adverse change in the business
operations, property, inventory, assets or condition of ABCI since the most
recent ABCI balance sheet required to be provided pursuant to Section 1.7;
(n) any other information, together with any required copies of
documents required to be disclosed in the ABCI Schedules by Sections 1.1 through
1.19.
ABCI shall cause the ABCI Schedules and the instruments and data
delivered to OneClass hereunder to be updated after the date hereof up to and
including the Closing Date, as hereinafter defined.
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ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
OF ONECLASS
As an inducement to, and to obtain the reliance of ABCI, OneClass
represents and warrants as follows:
SECTION 2.1 ORGANIZATION. OneClass is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the corporate power and is duly authorized, qualified, franchised and
licensed under all applicable laws, regulations, ordinances and orders of public
authorities to own all of its properties and assets and to carry on its business
in all material respects as it are now being conducted, including qualification
to do business as a foreign corporation in the states in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification. Included in the OneClass Schedules (as hereinafter
defined) are complete and correct copies of the articles of incorporation, and
bylaws of OneClass as in effect on the date hereof. The execution and delivery
of this Agreement does not and the consummation of the transactions contemplated
by this Agreement in accordance with the terms hereof will not, violate any
provision of OneClass's articles of incorporation or bylaws. OneClass has taken
all action required by law, its articles of incorporation, its bylaws or
otherwise to authorize the execution and delivery of this Agreement. OneClass
has full power, authority and legal right and has taken all action required by
law, its articles of incorporation, bylaws or otherwise to consummate the
transactions herein contemplate.
SECTION 2.2 CAPITALIZATION. The authorized capitalization of OneClass
consists of 50,000,000 shares of Common Stock, $0.0001 par value per share and
10,000,000 shares of Preferred Stock, $0.001 par value per share. As of the date
hereof there are 17,236,411 common shares of OneClass issued and outstanding.
There are no preferred shares issued or outstanding. Simultaneous with the
Closing Date, as defined hereinbelow, the Board of Directors of OneClass shall
undertake a reverse split of the OneClass issued and outstanding Common Stock,
whereby one (1) share of Common Stock shall be issued in exchange for every
39.24688 shares of Common Stock presently issued and outstanding, in order to
establish the number of issued and outstanding common shares to be 439,179. As
of the Closing Date, as defined herein, there will be no more than 439,179
common shares issued and outstanding (the "OneClass Common Shares") held by the
then existing securities holders of OneClass. All issued and outstanding
OneClass Common Shares have been legally issued, fully paid and are
nonassessable. There are no preferred shares issued or outstanding. All issued
and outstanding OneClass Common Shares have been legally issued, fully paid and
are nonassessable.
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SECTION 2.3 SUBSIDIARIES. OneClass has no subsidiary companies.
SECTION 2.4 FINANCIAL STATEMENTS.
(a) Included in the OneClass Schedules are the audited financial
statements of OneClass for the years ended December 31, 2000 and 1999 and the
related statements of operations, stockholders' equity and cash flows for the
periods then ended, as well as its unaudited financial statements for the three
month period ended March 31, 2001, which are included in the schedules
identified in Section 2.18(c).
(b) All such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved. The OneClass balance sheets presents fairly as of their
respective dates the financial condition of OneClass. All assets and liabilities
reflected therein are properly reported and present fairly the value of the
assets and liabilities of OneClass, in accordance with generally accepted
accounting principles. The statements of operations, stockholders' equity and
changes in financial position reflect fairly the information required to be set
forth therein by generally accepted accounting principles.
(c) The books and records, financial and others, of OneClass are in all
material respects complete and correct and have been maintained in accordance
with good business accounting practices.
(d) OneClass has no liabilities with respect to the payment of any
federal, state, county, local or other taxes (including any deficiencies,
interest or penalties).
SECTION 2.5 INFORMATION. The information concerning OneClass as set
forth in this Agreement and in the OneClass Schedules is complete and accurate
in all material respects and does not contain any untrue statement of a material
fact or omit to state a material fact required to make the statements made, in
light of the circumstances under which they were made, not misleading.
SECTION 2.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as described
herein or in the OneClass Schedules, since March 31, 2001:
(a) OneClass has not: (i) amended its articles of incorporation or
bylaws; (ii) waived any rights of value which in the aggregate are extraordinary
or material considering the business of OneClass; (iii) made any material change
in its method of management, operation or accounting; or (iv) made any accrual
or arrangement for or payment of bonuses or special compensation of any kind or
any severance or termination pay to any present or former officer or employee;
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(b) OneClass has not: (i) granted or agreed to grant any options,
warrants or other rights for its stocks, bonds or other corporate securities
calling for the issuance thereof, which option, warrant or other right has not
been cancelled as of the Closing Date; or (ii) borrowed or agreed to borrow any
funds or incurred or become subject to, any material obligation or liability
(absolute or contingent) except liabilities incurred in the ordinary course of
business; and
(c) to the best knowledge of OneClass, it has not become subject to any
law or regulation, which materially and adversely affects, or in the future may
adversely affect, the business, operations, properties, assets or condition of
OneClass.
SECTION 2.7 TITLE AND RELATED MATTERS. Except as referenced in the
OneClass financial statements included herewith, or as otherwise disclosure to
ABCI, OneClass has good and marketable title to and is the sole and exclusive
owner of all of its properties, inventory, interests in properties and assets,
real and personal (collectively, the "Assets") which are reflected in the most
recent OneClass balance sheet and the OneClass Schedules or acquired after that
date (except properties, interests in properties and assets sold or otherwise
disposed of since such date in the ordinary course of business), free and clear
of all liens, pledges, charges or encumbrances except: (a) statutory liens or
claims not yet delinquent; (b) such imperfections of title and easements as do
not and will not, materially detract from or interfere with the present or
proposed use of the properties subject thereto or affected thereby or otherwise
materially impair present business operations on such properties; and (c) as
described in the OneClass Schedules. Except as set forth in the OneClass
Schedules, OneClass owns free and clear of any liens, claims, encumbrances,
royalty interests or other restrictions or limitations of any nature whatsoever
and all procedures, techniques, marketing plans, business plans, methods of
management or other information utilized in connection with it's business.
Except as set forth in the OneClass Schedules, no third party has any right to,
and OneClass has not received any notice of infringement of or conflict with
asserted rights of others with respect to any product, technology, data, trade
secrets, know-how, proprietary techniques, trademarks, service marks, trade
names or copyrights which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a materially adverse affect
on the business, operations, financial conditions or income of OneClass or any
material portion of its properties, assets or rights.
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SECTION 2.8 LITIGATION AND PROCEEDINGS. Except as indicated in the
OneClass Schedules, there are no other actions, suits or proceedings pending or,
to the best of OneClass's knowledge and belief, threatened by or against or
affecting OneClass, at law or in equity, before any court or other governmental
agency or instrumentality, domestic or foreign, or before any arbitrator of any
kind that would have a material adverse effect on the business, operations,
financial condition, income or business prospects of OneClass. OneClass does not
have any knowledge of any default on its part with respect to any judgment,
order, writ, injunction, decree, award, rule or regulation of any court,
arbitrator or governmental agency or instrumentality.
SECTION 2.9 CONTRACTS. Except as disclosed to ABCI, as of the date
hereof:
(a) There are no material contracts, agreements, franchises, license
agreements, or other commitments to which OneClass is a party or by which it or
any of its properties are bound;
(b) OneClass is not a party to any contract, agreement, commitment or
instrument or subject to any charter or other corporate restriction or any
judgment, order, writ, injunction, decree or award which materially and
adversely affects, or in the future may (as far as OneClass can now foresee)
materially and adversely affect, the business, operations, properties, assets or
conditions of OneClass; and
(c) OneClass is not a party to any material oral or written: (i)
contract for the employment of any officer or employee; (ii) profit sharing,
bonus, deferred compensation, stock option, severance pay, pension, benefit or
retirement plan, agreement or arrangement covered by Title IV of the Employee
Retirement Income Security Act, as amended; (iii) agreement, contract or
indenture relating to the borrowing of money; (iv) guaranty of any obligation
for the borrowing of money or otherwise, excluding endorsements made for
collection and other guaranties of obligations, which, in the aggregate exceeds
$1,000; (v) consulting or other similar contract with an unexpired term of more
than one year or providing for payments in excess of $10,000 in the aggregate;
(vi) collective bargaining agreement; (vii) agreement with any present or former
officer or director of OneClass; or (viii) contract, agreement, or other
commitment involving payments by it of more than $10,000 in the aggregate.
SECTION 2.10 NO CONFLICT WITH OTHER INSTRUMENTS. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which OneClass
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is a party or to which any of its properties or operations are subject.
SECTION 2.11 MATERIAL CONTRACT DEFAULTS. To the best of OneClass's
knowledge and belief, OneClass is not in default in any material respect under
the terms of any outstanding contract, agreement, lease or other commitment
which is material to the business, operations, properties, assets or condition
of OneClass, and there is no event of default in any material respect under any
such contract, agreement, lease or other commitment in respect of which OneClass
has not taken adequate steps to prevent such a default from occurring.
SECTION 2.12 GOVERNMENTAL AUTHORIZATIONS. To the best of OneClass's
knowledge, OneClass has all licenses, franchises, permits and other governmental
authorizations that are legally required to enable it to conduct its business
operations in all material respects as conducted on the date hereof. Except for
compliance with federal and state securities or corporation laws, no
authorization, approval, consent or order of, or registration, declaration or
filing with, any court or other governmental body is required in connection with
the execution and delivery by OneClass of the transactions contemplated hereby.
SECTION 2.13 COMPLIANCE WITH LAWS AND REGULATIONS. To the best of
OneClass's knowledge and belief, OneClass has complied with all applicable
statutes and regulations of any federal, state or other governmental entity or
agency thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets or condition of
OneClass or would not result in OneClass's incurring any material liability.
SECTION 2.14 INSURANCE. OneClass has no insurable properties and no
insurance policies will be in effect at the Closing Date, as hereinafter
defined.
SECTION 2.15 APPROVAL OF AGREEMENT. The board of directors and
shareholders of OneClass has authorized the execution and delivery of this
Agreement by OneClass and have approved the transactions contemplated hereby.
SECTION 2.16 MATERIAL TRANSACTIONS OR AFFILIATIONS. As of the Closing
Date there will exist no material contract, agreement or arrangement between
OneClass and any person who was at the time of such contract, agreement or
arrangement an officer, director or person owning of record, or known by
OneClass to own beneficially, ten percent (10%) or more of the issued and
outstanding common stock of OneClass and which is to be performed in whole or in
part after the date hereof. OneClass has no commitment, whether written or oral,
to lend any funds to, borrow any money from or enter into any other material
transactions with, any such affiliated person.
14
SECTION 2.17 LABOR RELATIONS. OneClass has never had a work stoppage
resulting from labor problems. OneClass has no employees other than its officers
and directors.
SECTION 2.18. 34 ACT FILINGS. As of the Closing Date, OneClass shall be
current in, and in compliance with all requirements of, all filings required to
be tendered to the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended. Said filings contain all of the information
required pursuant to the Securities Exchange Act of 1934, as amended and, to the
best knowledge of OneClass, do not fail to state any material facts which were
required to be so stated.
SECTION 2.19 ONECLASS SCHEDULES. Upon execution hereof, OneClass shall
deliver to ABCI the following schedules, which are collectively referred to as
the "OneClass Schedules" which are dated the date of this Agreement, all
certified by an officer of OneClass to be complete, true and accurate:
(a) complete and correct copies of the articles of incorporation and
bylaws of OneClass as in effect as of the date of this Agreement;
(b) copies of all financial statements of OneClass identified in
Section 2.4(a);
(c) the description of any material adverse change in the business,
operations, property, assets, or condition of OneClass since March 31, 2001
required to be provided pursuant to Section 2.6; and
(d) any other information, together with any required copies of
documents, required to be disclosed in the OneClass Schedules by Sections 2.1
through 2.17.
OneClass shall cause the OneClass Schedules and the instruments to be
delivered to ABCI hereunder to be updated after the date hereof up to and
including the Closing Date.
ARTICLE III
MERGER
SECTION 3.1 ISSUANCE OF ONECLASS COMMON SHARES.
(a) At Closing, OneClass shall cause to be issued an aggregate of
900,000 shares of its common stock in favor of OCS Advisory Group Partnership
("OCS"), in order to establish the number of issued and outstanding shares of
OneClass common stock to be 1,339,179 shares. In addition, at closing OneClass
shall cause to be issued to Xxxxxxx Vax that number of shares of its common
stock valued at $.75 per share to retire all outstanding debt of OneClass to
Xxxxxxx Vax.
15
(b) In exchange for all of the ABCI Common Shares tendered pursuant to
Section 3.1, OneClass shall issue no less than an aggregate of 10,863,333
"restricted" OneClass common shares to the ABCI shareholders on a pro rata
basis, so that the ABCI shareholders will own approximately 85% of the surviving
company's issued stock including all outstanding obligations of ABCI to issue
shares of the surviving corporation. In addition, to the extent the surviving
corporation is required to issue stock in exchange for outstanding liabilities
of OneClass, the surviving corporation agrees to issue that number of additional
shares required to maintain the position of ABCI at 85%.
(c) No fractional OneClass Common Shares shall be issued pursuant to
this Section 3.2. In lieu of such fractional shares, all shares to be issued
shall be rounded up or down to the nearest whole share.
SECTION 3.2 EVENTS PRIOR TO CLOSING. Upon execution hereof or as soon
thereafter as practical, management of OneClass and ABCI shall execute,
acknowledge and deliver (or shall cause to be executed, acknowledged and
delivered) any and all certificates, opinions, financial statements, schedules,
agreements, resolutions, rulings or other instruments required by this Agreement
to be so delivered, together with such other items as may be reasonably
requested by the parties hereto and their respective legal counsel in order to
effectuate or evidence the transactions contemplated hereby, subject only to the
conditions to Closing referenced hereinbelow.
SECTION 3.3 CLOSING. The closing ("Closing" or the "Closing Date") of
the transaction contemplated by this Agreement shall be as of the date in which
all of the conditions included in Sections 3.1 and 3.2 hereinabove and those
additional conditions contained in Section 3.8 below and Article V hereinbelow
have been satisfied by the respective party and all documentation referenced
herein is delivered to the respective party herein, unless a different date is
mutually agreed to in writing by the parties hereto.
SECTION 3.4 EFFECTIVE DATE. The Effective Date of the transaction
proposed herein shall be the record date of the OneClass reverse stock split.
SECTION 3.5 TERMINATION.
(a) This Agreement may be terminated by the board of directors of
either OneClass or ABCI at any time prior to the Closing Date if:
(i) there shall be any action or proceeding before any court
or any governmental body which shall seek to restrain, prohibit or
invalidate the transactions contemplated by this Agreement and which,
in the judgment of such board of directors, made in good faith
16
and based on the advice of its legal counsel, makes it inadvisable to
proceed with the merger contemplated by this Agreement; or
(ii) any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval is required to
consummate such transactions; or
(iii) the conditions described in Section 6.6 below have not
been satisfied in full.
In the event of termination pursuant to this paragraph (a) of this
Section 3.5, no obligation, right, or liability shall arise hereunder and each
party shall bear all of the expenses incurred by it in connection with the
negotiation, drafting and execution of this Agreement and the transactions
herein contemplated.
(b) This Agreement may be terminated at any time prior to the Closing
Date by action of the board of directors of OneClass if ABCI shall fail to
comply in any material respect with any of its covenants or agreements contained
in this Agreement or if any of the representations or warranties of ABCI
contained herein shall be inaccurate in any material respect, which
noncompliance or inaccuracy is not cured after 20 days' written notice thereof
is given to ABCI. If this Agreement is terminated pursuant to this paragraph (b)
of this Section 3.5, this Agreement shall be of no further force or effect and
no obligation, right or liability shall arise hereunder.
(c) This Agreement may be terminated at any time prior to the Closing
Date by action of the board of directors of ABCI if OneClass shall fail to
comply in any material respect with any of its covenants or agreements contained
in this Agreement or if any of the representations or warranties of OneClass
contained herein shall be inaccurate in any material respect, which
noncompliance or inaccuracy is not cured after 20 days written notice thereof is
given to OneClass. If this Agreement is terminated pursuant to this paragraph
(c) of Section 3.5, this Agreement shall be of no further force or effect and no
obligation, right or liability shall arise hereunder.
SECTION 3.6 DIRECTORS OF ONECLASS. Upon the Closing, the present
members of OneClass's Board of Directors shall tender their resignations
seriatim so that the following persons are appointed directors of OneClass in
accordance with procedures set forth in the OneClass bylaws: Xxx Xxxxxx, Xxxxxx
Xxxx, Xxx Xxxxxxxx and Xxxxxx XxXxxxx (who shall be appointed Chairman of the
Board of Directors). Each director shall hold office until his successor shall
have been duly elected and shall have qualified or until his earlier death,
resignation or removal.
SECTION 3.8 OFFICERS OF ONECLASS. Upon the Closing, the present
officers of OneClass shall tender their resignations and
17
simultaneous therewith, the following person shall be elected as officer of
OneClass in accordance with procedures set forth in the OneClass bylaws:
NAME OFFICE
---- ------
Xxx Xxxxxx President, Secretary
Xxxxxx XxXxxxx CEO
ARTICLE IV
SPECIAL COVENANTS
SECTION 4.1 ACCESS TO PROPERTIES AND RECORDS. OneClass and ABCI will
each afford to the officers and authorized representatives of the other full
access to the properties, books and records of OneClass and ABCI, as the case
may be, in order that each may have full opportunity to make such reasonable
investigation as it shall desire to make of the affairs of the other and each
will furnish the other with such additional financial and operating data and
other information as to the business and properties of OneClass and ABCI, as the
case may be, as the other shall from time to time reasonably request.
SECTION 4.2 AVAILABILITY OF RULE 144. Each of the parties acknowledge
that the stock of OneClass to be issued pursuant to this Agreement will be
"restricted securities," as that term is defined in Rule 144 promulgated
pursuant to the Securities Act. OneClass is under no obligation to register such
shares under the Securities Act, or otherwise. Notwithstanding the foregoing,
however, following the Closing Date, OneClass will use its best efforts to: (a)
make publicly available on a regular basis not less than semi-annually, business
and financial information regarding OneClass so as to make available to the
shareholders of OneClass the provisions of Rule 144 pursuant to subparagraph
(c)(2) thereof; and (b) within ten (10) days of any written request of any
stockholder of OneClass, OneClass will provide to such stockholder written
confirmation of compliance with such of the foregoing subparagraph as may then
be applicable. The stockholders of OneClass holding restricted securities of
OneClass as of the date of this Agreement and their respective heirs,
administrators, personal representatives, successors and assigns, are intended
third party beneficiaries of the provisions set forth herein. The covenants set
forth in this Section 4.2 shall survive the Closing and the consummation of the
transactions herein contemplated.
SECTION 4.3 INFORMATION FOR ONECLASS PUBLIC REPORTS. ABCI will furnish
OneClass with all information concerning ABCI and the ABCI Stockholders,
including all financial statements, required for inclusion in any registration
statement or public report intended to be filed by OneClass pursuant to the
Securities Act, the Securities Exchange Act of 1934, as amended, or any other
18
applicable federal or state law. ABCI covenants that all information so
furnished for either such registration statement or other public release by
OneClass, including the financial statements described in Section 1.4, shall be
true and correct in all material respects without omission of any material fact
required to make the information stated therein not misleading.
SECTION 4.4 SPECIAL COVENANTS AND REPRESENTATIONS REGARDING THE
ONECLASS COMMON SHARES TO BE ISSUED IN THE MERGER. The consummation of this
Agreement, including the issuance of the OneClass Common Shares to the
stockholders of ABCI as contemplated hereby, constitutes the offer and sale of
securities under the Securities Act, and applicable state statutes. Such
transaction shall be consummated in reliance on exemptions from the registration
and prospectus delivery requirements of such statutes that depend, INTER ALIA,
upon the circumstances under which the ABCI stockholders acquire such
securities. In connection with reliance upon exemptions from the registration
and prospectus delivery requirements for such transactions, at the Closing, ABCI
shall cause to be delivered, and the ABCI stockholders shall deliver to
OneClass, the investment letter referenced in Section 3.1.
SECTION 4.5 THIRD PARTY CONSENTS. OneClass and ABCI agree to cooperate
with each other in order to obtain any required third party consents to this
Agreement and the transactions herein contemplated.
SECTION 4.6 ACTIONS PRIOR TO CLOSING.
(a) From and after the date of this Agreement until the Closing Date
and except as set forth in the OneClass or ABCI Schedules or as permitted or
contemplated by this Agreement, OneClass and ABCI will each use its best efforts
to:
(i) carry on its business in substantially the same manner as
it has heretofore;
(ii) maintain and keep its properties in states of good repair
and condition as at present, except for depreciation due to ordinary
wear and tear and damage due to casualty;
(iii) maintain in full force and effect insurance comparable
in amount and in scope of coverage to that now maintained by it;
(iv) perform in all material respects all of its obligations
under material contracts, leases and instruments relating to or
affecting its assets, properties and business;
(v) maintain and preserve its business organization intact, to
retain its key employees and to maintain its relationship with its
material suppliers and customers; and
19
(vi) fully comply with and perform in all material respects
all obligations and duties imposed on it by all federal and state laws
and all rules, regulations and orders imposed by federal or state
governmental authorities.
(b) From and after the date of this Agreement until the Closing Date,
neither OneClass nor ABCI will, without the prior consent of the other party:
(i) except as otherwise specifically set forth herein, make
any change in their respective certificates or articles of
incorporation or bylaws;
(ii) declare or pay any dividend on its outstanding shares of
capital stock, except as may otherwise be required by law, or effect
any stock split or otherwise change its capitalization, except as
provided herein;
(iii) enter into or amend any employment, severance or similar
agreements or arrangements with any directors or officers;
(iv) grant, confer or award any options, warrants, conversion
rights or other rights not existing on the date hereof to acquire any
shares of its capital stock; or
(v) purchase or redeem any shares of its capital stock, except
as disclosed herein.
SECTION 4.7 INDEMNIFICATION.
(a) ABCI hereby agrees to indemnify OneClass and each of the officers,
agents and directors of OneClass as of the date of execution of this Agreement
against any loss, liability, claim, damage or expense (including, but not
limited to, any and all expense whatsoever reasonably incurred in investigating,
preparing or defending against any litigation, commenced or threatened or any
claim whatsoever), to which it or they may become subject arising out of or
based on any inaccuracy appearing in or misrepresentation made in this
Agreement. The indemnification provided for in this paragraph shall survive the
Closing and consummation of the transactions contemplated hereby and termination
of this Agreement for a period of 24 months.
(b) OneClass and its officers and directors hereby agrees to indemnify
ABCI and each of the officers, agents, directors and current shareholders of
ABCI as of the Closing Date against any loss, liability, claim, damage or
expense (including, but not limited to, any and all expense whatsoever
reasonably incurred in investigating, preparing or defending against any
litigation, commenced or threatened or any claim whatsoever), to which it or
they may become subject arising out of or based on any inaccuracy appearing in
or misrepresentation made in this Agreement and particularly the representation
regarding no liabilities referred
20
to in Section 2.4(b). The indemnification provided for in this Section shall
survive the Closing and consummation of the transactions contemplated hereby and
termination of this Agreement for a period of 24 months.
SECTION 4.8 UNDERTAKINGS OF ABCI. Management of ABCI, some of whom will
assume the management of OneClass upon Closing, hereby undertakes to OneClass
and its shareholders as follow:
(a) to exercise good faith in their efforts to file all reports
required to be filed by the surviving company herein with the Securities and
Exchange Commission or any other governmental agency, in a timely manner; and
(b) to exercise all due diligence in causing the surviving company to
list its common stock for trading on any national stock exchange for which the
surviving company may then qualify for such listing.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS
OF ONECLASS
The obligations of OneClass under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
SECTION 5.1 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by ABCI in this Agreement were true when made and shall be true
at the Closing Date with the same force and effect as if such representations
and warranties were made at the Closing Date (except for changes therein
permitted by this Agreement), and ABCI shall have performed or complied with all
covenants and conditions required by this Agreement to be performed or complied
with by ABCI prior to or at the Closing. OneClass shall be furnished with a
certificate, signed by a duly authorized officer of ABCI and dated the Closing
Date, to the foregoing effect.
SECTION 5.2 STOCKHOLDER APPROVAL. The stockholders of ABCI shall have
approved this Agreement and the transactions contemplated thereby in accordance
with the laws of the State of California.
SECTION 5.3 OFFICER'S CERTIFICATE. OneClass shall have been furnished
with a certificate dated the Closing Date and signed by a duly authorized
officer of ABCI to the effect that, except as disclosed to OneClass by ABCI
herein or in the ABCI Schedules, no litigation, proceeding, investigation or
inquiry is pending or, to the best knowledge of ABCI, threatened, which might
result in an action to enjoin or prevent the consummation of the transactions
contemplated by this Agreement or, to the extent not disclosed in the ABCI
Schedules, by or against ABCI which might result in any
21
material adverse change in any of the assets, properties, business or operations
of ABCI.
SECTION 5.4 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date,
there shall not have occurred any material adverse change in the financial
condition, business or operations of nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business or operations of ABCI.
SECTION 5.5 OPINION OF COUNSEL TO ABCI. OneClass shall receive an
opinion dated the Closing Date from counsel to ABCI, in substantially the
following form:
(a) ABCI is a corporation duly organized, validly existing, and in good
standing under the laws of the State of California and has the corporate power
and is duly authorized, qualified, franchised and licensed under all material
applicable laws, regulations, ordinances and orders of public authorities to own
all of its properties and assets and to conduct its business as now conducted,
including qualification to do business as a foreign corporation in the states in
which the character and location of the assets owned by it or the nature of the
business transacted by it requires qualification.
(b) To the best knowledge of such legal counsel, the execution and
delivery by ABCI of this Agreement and the consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof will not
conflict with or result in the breach of any term or provision of ABCI's
articles of incorporation or bylaws or violate any court order, writ, injunction
or decree applicable to ABCI, or its properties or assets.
(c) The authorized capitalization of ABCI consists of 20,000,000 Common
Shares, no par value per share. As of the date of Closing, as defined
hereinbelow, there will be no more than 7,800,000 Common Shares issued and
outstanding, including but not limited to 800,000 common shares reserved for
issuance pursuant to outstanding convertible notes in an aggregate amount of
approximately $1.2 million. All issued and outstanding shares are legally
issued, fully paid and nonassessable and are not issued in violation of the
preemptive or other rights of any person. To the best knowledge of such legal
counsel, there are no outstanding subscriptions, options, rights, warrants,
convertible securities or other agreements or commitments obligating ABCI to
issue any additional shares of any class of its capital stock prior to closing
of the transactions contemplated herein.
(d) This Agreement has been duly and validly authorized, executed and
delivered by ABCI.
(e) To the best knowledge of such legal counsel, except as set forth in
the ABCI Schedules, there are no actions, suits or
22
proceedings pending or threatened by or against or affecting ABCI or its
properties, at law or in equity, before any court or other governmental agency
or instrumentality, domestic or foreign or before any arbitrator of any kind.
(f) ABCI has taken all actions required by the applicable laws of the
State of California to permit the transfer of the ABCI Common Shares to
OneClass.
(g) There are no more than 35 non-accredited shareholders (as that term
is defined under the Securities Act) holding shares of ABCI's issued and
outstanding securities.
SECTION 5.6 OTHER ITEMS. OneClass shall have received such further
documents, certificates or instruments relating to the transactions contemplated
hereby as OneClass may reasonably request.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF ABCI
The obligations of ABCI under this Agreement are subject to the
satisfaction, at or before the Closing Date (unless otherwise indicated herein),
of the following conditions:
SECTION 6.1 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by OneClass in this Agreement were true when made and shall be
true as of the Closing Date (except for changes therein permitted by this
Agreement) with the same force and effect as if such representations and
warranties were made at and as of the Closing Date, and OneClass shall have
performed and complied with all covenants and conditions required by this
Agreement to be performed or complied with by OneClass prior to or at the
Closing. ABCI shall have been furnished with a certificate, signed by a duly
authorized executive officer of OneClass and dated the Closing Date, to the
foregoing effect.
SECTION 6.2 OFFICER'S CERTIFICATE. ABCI shall be furnished with a
certificate dated the Closing Date and signed by a duly authorized officer of
OneClass to the effect that, except as disclosed to ABCI, there is no
litigation, proceeding, investigation or inquiry is pending or, to the best
knowledge of OneClass, threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this Agreement or,
to the extent not disclosed in the OneClass Schedules, by or against OneClass
which might result in any material adverse change in any of the assets,
properties, business or operations of OneClass.
SECTION 6.3 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date,
there shall not have occurred any material adverse change in the financial
condition, business or operations of nor shall any event have occurred which,
with the lapse of time or the
23
giving of notice, may cause or create any material adverse change in the
financial condition, business or operations of OneClass.
SECTION 6.4 OPINION OF COUNSEL TO ONECLASS. ABCI shall receive an
opinion dated the Closing Date of legal counsel to OneClass, in substantially
the following form:
(a) OneClass is a corporation duly organized, validly existing, and in
good standing under the laws of the state of Delaware and has the corporate
power and is duly authorized, qualified, franchised, and licensed under all
applicable laws, regulations, ordinances and orders of public authorities to own
all of its properties and assets and to carry on its business in all material
respects as it is now being conducted, including qualification to do business as
a foreign corporation in the states in which the character and location of the
assets owned by it or the nature of the business transacted by it requires
qualification.
(b) To the best knowledge of such legal counsel, the execution and
delivery by OneClass of this Agreement and the consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof will not
conflict with or result in the breach of any term or provision of OneClass's
articles of incorporation or bylaws or constitute a default or give rise to a
right of termination, cancellation or acceleration under any material mortgage,
indenture, deed of trust, license agreement or other obligation or violate any
court order, writ, injunction or decree applicable to OneClass or its properties
or assets.
(c) The authorized capitalization of OneClass consists of 50,000,000
shares of Common Stock, $0.0001 par value per share and 10,000,000 shares of
Preferred Stock, $0.001 par value per share. As of the date hereof there are
17,236,411 common shares of ONCL issued and outstanding. There will be 439,179
common shares of OneClass issued and outstanding post reverse split. There are
no preferred shares issued or outstanding. All issued and outstanding shares are
legally issued, fully paid and nonassessable and not issued in violation of the
preemptive rights of any person.
(d) The OneClass Common Shares to be issued to the ABCI stockholders
pursuant to the terms of this Agreement will be, when issued in accordance with
the terms hereof, legally issued, fully paid and non-assessable.
(e) This Agreement has been duly and validly authorized, executed, and
delivered and constitutes the legal and binding obligation of OneClass, except
as limited by bankruptcy and insolvency laws and by other laws affecting the
rights of creditors generally.
(f) To the best knowledge of such counsel, except as set forth in the
OneClass Schedules, there are no actions, suits or
24
proceedings pending or threatened by or against OneClass or affecting OneClass's
properties, at law or in equity, before any court or other governmental agency
or instrumentality, domestic or foreign or before any arbitrator of any kind.
(g) OneClass has taken all actions required by the applicable laws of
the state of Delaware to permit the issuance of the OneClass Common Shares to
the ABCI stockholders.
SECTION 6.5 COMPLIANCE WITH REPORTING REQUIREMENTS. As of the Closing
Date, OneClass shall be current in, and in compliance with all requirements of,
all filings required to be tendered to the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended. Said filings
contain all of the information required pursuant to the Securities Exchange Act
of 1934, as amended and, to the best knowledge of OneClass, do not fail to state
any material facts which were required to be so stated.
SECTION 6.6 OTHER ITEMS. ABCI shall have received such further
documents, certificates, or instruments relating to the transactions
contemplated hereby as ABCI may reasonably request.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 BROKERS AND FINDERS. Except as set forth in Schedule 7.1,
each party hereto hereby represents and warrants that it is under no obligation,
express or implied, to pay certain finders in connection with the bringing of
the parties together in the negotiation, execution, or consummation of this
Agreement. The parties each agree to indemnify the other against any claim by
any third person not listed in Schedule 7.1 for any commission, brokerage or
finder's fee or other payment with respect to this Agreement or the transactions
contemplated hereby based on any alleged agreement or understanding between the
indemnifying party and such third person, whether express or implied from the
actions of the indemnifying party.
SECTION 7.2 LAW; FORUM AND JURISDICTION. This Agreement shall be
construed and interpreted in accordance with the laws of the State of Delaware,
except as US federal law may be applicable.
SECTION 7.3 NOTICES. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered to it or
sent by registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows:
If to OneClass: Xx. Xxxxx Xxx, President
OneClass Synergy Corp.
0000 XX Xxxxxxx 0
Xxxxxxxx, X.X. 00000
25
If to ABCI: Mr. Xxx Xxxxxx, President
American Boardsports Company, Inc.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered, mailed, or
telegraphed.
SECTION 7.4 ATTORNEYS' FEES. In the event that any party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parties shall reimburse the
non-breaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
SECTION 7.5 CONFIDENTIALITY. Each party hereto agrees with the other
parties that, unless and until the reorganization contemplated by this Agreement
has been consummated, they and their representatives will hold in strict
confidence all data and information obtained with respect to another party or
any subsidiary thereof from any representative, officer, director or employee,
or from any books or records or from personal inspection, of such other party,
and shall not use such data or information or disclose the same to others,
except: (i) to the extent such data is a matter of public knowledge or is
required by law to be published; and (ii) to the extent that such data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement.
SECTION 7.6 SCHEDULES; KNOWLEDGE. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
SECTION 7.7 THIRD PARTY BENEFICIARIES. This contract is solely among
OneClass and ABCI and, except as specifically provided, no director, officer,
stockholder, employee, agent, independent contractor or any other person or
entity shall be deemed to be a third party beneficiary of this Agreement.
SECTION 7.8 ENTIRE AGREEMENT. This Agreement represents the entire
agreement between the parties relating to the subject matter hereof. This
Agreement alone fully and completely expresses the agreement of the parties
relating to the subject matter hereof. There are no other courses of dealing,
understandings, agreements, representations or warranties, written or oral,
except as set forth herein. This Agreement may not be amended or modified,
except by a written agreement signed by all parties hereto.
26
SECTION 7.9 SURVIVAL; TERMINATION. The representations, warranties and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for 18 months.
SECTION 7.10 COUNTERPARTS FACSIMILE EXECUTION. For purposes of this
Agreement, a document (or signature page thereto) signed and transmitted by
facsimile machine or telecopier is to be treated as an original document. The
signature of any party thereon, for purposes hereof, is to be considered as an
original signature, and the document transmitted is to be considered to have the
same binding effect as an original signature on an original document. At the
request of any party, a facsimile or telecopy document is to be re-executed in
original form by the parties who executed the facsimile or telecopy document. No
party may raise the use of a facsimile machine or telecopier machine as a
defense to the enforcement of the Agreement or any amendment or other document
executed in compliance with this Section.
SECTION 7.11 AMENDMENT OR WAIVER. Every right and remedy provided
herein shall be cumulative with every other right and remedy, whether conferred
herein, at law, or in equity, and may be enforced concurrently herewith, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may be amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance hereof may be extended by a
writing signed by the party or parties for whose benefit the provision is
intended.
SECTION 7.12 INCORPORATION OF RECITALS. All of the recitals hereof are
incorporated by this reference and are made a part hereof as though set forth at
length herein.
SECTION 7.13 EXPENSES. Except as provided hereinabove, each party
herein shall bear all of their respective costs and expenses incurred in
connection with the negotiation of this Agreement and in the consummation of the
transactions provided for herein and the preparation therefor.
SECTION 7.14 HEADINGS; CONTEXT. The headings of the sections and
paragraphs contained in this Agreement are for convenience of reference only and
do not form a part hereof and in no way modify, interpret or construe the
meaning of this Agreement.
SECTION 7.15 BENEFIT. This Agreement shall be binding upon and shall
inure only to the benefit of the parties hereto, and their permitted assigns
hereunder. This Agreement shall not be assigned by any party without the prior
written consent of the other party.
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SECTION 7.16 PUBLIC ANNOUNCEMENTS. Except as may be required by law,
neither party shall make any public announcement or filing with respect to the
transactions provided for herein without the prior consent of the other party
hereto.
SECTION 7.17 SEVERABILITY. In the event that any particular provision
or provisions of this Agreement or the other agreements contained herein shall
for any reason hereafter be determined to be unenforceable, or in violation of
any law, governmental order or regulation, such unenforceability or violation
shall not affect the remaining provisions of such agreements, which shall
continue in full force and effect and be binding upon the respective parties
hereto.
SECTION 7.18 FAILURE OF CONDITIONS; TERMINATION. In the event any of
the conditions specified in this Agreement shall not be fulfilled on or before
the Closing Date, either of the parties have the right either to proceed or,
upon prompt written notice to the other, to terminate and rescind this Agreement
without liability to any other party. The election to proceed shall not affect
the right of such electing party reasonably to require the other party to
continue to use its efforts to fulfill the unmet conditions.
SECTION 7.19 NO STRICT CONSTRUCTION. The language of this Agreement
shall be construed as a whole, according to its fair meaning and intendment, and
not strictly for or against either party hereto, regardless of who drafted or
was principally responsible for drafting the Agreement or terms or conditions
hereof.
SECTION 7.20 EXECUTION KNOWING AND VOLUNTARY. In executing this
Agreement, the parties severally acknowledge and represent that each: (a) has
fully and carefully read and considered this Agreement; (b) has been or has had
the opportunity to be fully apprised of its attorneys of the legal effect and
meaning of this document and all terms and conditions hereof; and (c) is
executing this Agreement voluntarily, free from any influence, coercion or
duress of any kind.
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IN WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly authorized,
and entered into as of the date first above written.
ONECLASS SYNERGY CORPORATION
By: /s/ Xxxxx Xxx
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Xxxxx Xxx, President
AMERICAN BOARDSPORTS COMPANY, INC.
By: /s/Xxx Xxxxxx
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Xxx Xxxxxx, President
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