EXHIBIT 10.1
REORGANIZATION AND STOCK PURCHASE AGREEMENT
This REORGANIZATION AND STOCK PURCHASE AGREEMENT dated as of December
11, 2003 (this "Agreement") is by and between 10Charge, Inc., a Delaware
corporation ("10Charge US" or the "Company"), 10Charge Kft., a company organized
under the laws of Hungary ("10Charge Hungary") and the equity holders of
10Charge Hungary listed on Schedule A hereto.
RECITALS
A. WHEREAS, 10Charge US desires to acquire directly or indirectly 100% of
the equity of 10Charge Hungary;
B. WHEREAS, the equity holders of 10Charge Hungary desire to acquire
equity in the Company in connection with the proposed acquisition;
C. WHEREAS, the parties hereto intend that the transaction contemplated
hereby shall be completed as a tax-free exchange of stock interests for purposes
of U.S. Federal tax laws.
NOW, THEREFORE, the respective Boards of Directors of the Company and
10Charge Hungary deem it advisable and in the best interests of their respective
entities and security holders that the Company acquire 100% of the equity of
10Charge Hungary, in accordance with the terms and conditions of this
Reorganization and Stock Purchase Agreement.
1. Closing Conditions of the Company. As conditions to any Closing as set
forth herein, the Company shall undertake the following actions:
(a) The Board of Directors of the Company (the "Company Board") shall
duly approve and deliver to 10Charge Hungary resolutions with respect to
approving the transactions set forth herein.
(b) The Company shall issue a total of 88,760,000 shares (the "10Charge
US Shares") of common stock, par value $.0001 per share, of the Company ("Common
Stock") to the equity holders of 10Charge Hungary (the "10Charge Hungary Equity
Holders"), to be delivered to such 10Charge Hungary Equity Holders at the
Closing, in the amounts set forth on Schedule A annexed hereto.
2. Closing Conditions of 10Charge Hungary. As conditions to the Closing as
set forth herein, 10Charge Hungary shall undertake the following actions:
(a) The Board of Directors (or similar governing body) of 10Charge
Hungary shall execute and deliver to 10Charge US resolutions unanimously
approving the transactions set forth herein.
(b) The equity holders of 10Charge Hungary shall execute and deliver to
10Charge US resolutions approving the transactions contemplated hereby, if
required.
(c) The equity holders of 10Charge Hungary shall deliver to 10Charge US
at Closing (i) evidence of the transfer of ownership of 10Charge Hungary from
such holders to 10Charge US and (ii) an instrument, in the form annexed hereto
as Exhibit A, including a representation that the shares of Common Stock being
acquired as a result of the transactions contemplated by this Agreement are
being acquired for investment purposes only and not with a view to, or sale in
connection with, any distribution within the meaning of the Securities Act of
1933, as amended.
(d) Upon execution hereof, 10Charge Hungary shall prepare and deliver
business and financial information, and financial statements as may be required
to be included in filings with the US Securities and Exchange Commission
("SEC"), in form and substance satisfactory to 10Charge US.
(e) All third party consents to the transactions contemplated herein
required to be obtained by 10Charge Hungary shall have been obtained.
3. Additional Conditions to Closing.
The parties' obligation to close the transactions set forth herein will
be subject to additional specified conditions precedent as follows:
(a) the representations and warranties of 10Charge US as set forth in
Section 6 herein shall remain accurate as of the Closing Date and no material
adverse change in the business of 10Charge US not previously disclosed to
10Charge Hungary shall have occurred;
(b) the representations and warranties of 10Charge Hungary as set forth
in Section 7 herein shall remain accurate as of the Closing Date and no material
adverse change in the business of 10Charge Hungary not previously disclosed to
10Charge US shall have occurred;
(c) all the documents necessary to be filed with local, state and
federal authorities (including the SEC), are prepared and appropriately filed
with such authorities and all approvals required from such authorities are
granted;
4. At the Closing.
(a) At the Closing, 10Charge US shall issue the 10Charge US Shares to
the 10Charge Hungary Equity Holders.
(b) At the Closing, all equity securities of 10Charge Hungary, duly
endorsed for transfer, and the executed investor representation letter for each
10Charge Hungary Equity Holder in the form annexed hereto as Exhibit A shall be
delivered to 10Charge US.
(c) In addition to the documents expressly required herein, at the
Closing each party hereto shall deliver such further instruments and take such
further action as may reasonably be requested by any other party hereto in order
to carry out the intent and purposes of this Agreement.
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5. Timing of Closing. The consummation of the transactions set forth
herein (the "Closing") shall occur upon the satisfaction of the conditions set
forth in this Agreement. The date of Closing (the "Closing Date") shall occur on
or before December 12, 2003.
6. Representations of 10Charge US. 10Charge US represents and warrants as
follows:
(a) Ownership of Shares. Upon issuance of the 10Charge US Shares, the
10Charge Hungary Equity Holders will become sole owners, respectively, of the
10Charge US Shares. The 10Charge US Shares will be free from claims, liens or
other encumbrances, except as provided under applicable federal and state
securities laws.
(b) Fully paid and Nonassessable. The 10Charge US Shares, upon issuance
pursuant to this Agreement, shall constitute duly and validly issued shares of
10Charge US, and shall be fully paid and nonassessable.
(c) Organization of 10Charge US; Authorization. 10Charge US is a
corporation duly organized, validly existing and in good standing under the laws
of Delaware with full corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary
corporate action of 10Charge US and this Agreement constitutes a valid and
binding obligation of 10Charge US, enforceable against it in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws of general application relating to or affecting the
enforcement of rights hereunder, rights of creditors or general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law). 10Charge US has no subsidiaries.
(d) Capitalization. The authorized capital stock of 10Charge US
consists of 200,000,000 shares of Common Stock and 20,000,000 shares of
preferred stock, par value $.0001. As of the date of this Agreement, 10Charge US
has 8,240,000 shares of Common Stock issued and outstanding and no shares of
preferred stock issued and outstanding. As of the Closing Date, all of the
issued and outstanding shares of Common Stock are validly issued, fully paid and
non-assessable and, there is not and as of the Closing Date there will not be
outstanding any warrants, options or other agreements on the part of 10Charge US
obligating 10Charge US to issue any additional shares of its common or preferred
stock or any of its securities of any kind.
(e) No Conflict as to 10Charge US and Subsidiaries. Neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated herein will (a) violate any provision of the
certificate of incorporation or by-laws (or other governing instrument) of
10Charge US or (b) violate, or be in conflict with, or constitute a default (or
an event which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate the performance
required by, or excuse performance by any person of any of its obligations
under, or cause the acceleration of the maturity of any debt or obligation
pursuant to, or result in the creation or imposition of any encumbrance upon any
property or assets of 10Charge US under, any material agreement or commitment to
which 10Charge US is a party or by which its property or assets is bound, or to
which any of the property or assets of 10Charge US is subject, or (c) violate
any statute or law or any judgment, decree, order, regulation or rule of any
court or other governmental body applicable to 10Charge US except, in the case
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of violations, conflicts, defaults, terminations, accelerations or encumbrances
described in clause (b) of this Section for such matters which are not likely to
have a material adverse effect on the business or financial condition of
10Charge US.
(f) Consents and Approvals of Governmental Authorities. No consent,
approval or authorization of, or declaration, filing or registration with, any
governmental body is required to be made or obtained by 10Charge US in
connection with the execution, delivery and performance of this Agreement by
10Charge US or the consummation of the sale of the 10Charge US Shares.
(g) Other Consents. No consent of any person is required to be obtained
by 10Charge US to the execution, delivery and performance of this Agreement or
the consummation of the sale of the 10Charge US Shares.
(h) Financial Statements. 10Charge US has delivered or otherwise made
available to 10Charge Hungary the financial statements included with its filings
with the SEC (the "10Charge US Financial Statements"). Such 10Charge US
Financial Statements and notes fairly present the consolidated financial
condition and results of operations of 10Charge US as at the respective dates
thereof and for the periods therein referred to, all in accordance with
generally accepted United States accounting principles consistently applied
throughout the periods involved. 10Charge US has delivered or otherwise made
available to 10Charge Hungary copies of all annual, quarterly and other periodic
reports filed by 10Charge US with the SEC in accordance with the Exchange Act.
(i) Title to Properties. Except as set forth in the 10Charge US
Financial Statements, 10Charge US does not own any assets.
(j) Litigation. There is no action, suit, inquiry, proceeding or
investigation by or before any Court or Governmental body pending or threatened
in writing against or involving 10Charge US which is likely to have a material
adverse effect on the business or financial condition of 10Charge US.
(k) No Material Adverse Change. Since the date of the 10Charge US
Financial Statements, there has not been any material adverse change in the
business or financial condition of 10Charge US. The 10Charge US SEC filings
contain all material information with respect to the business, financial
condition and operations of 10Charge US.
(l) Contracts and Commitments. Except as set forth in its filings with
the SEC, 10Charge US is not a party to any contract or agreement, including,
without limitation, any leases, employment agreements, confidentiality
agreements, or other material agreement. 10Charge US has delivered to 10Charge
Hungary copies of any and all material agreements, arrangements, contracts or
other matters relating to 10Charge US.
(m) Labor Relations. 10Charge US is not a party to any collective
bargaining agreement. 10Charge US does not have any employees.
(n) Compliance with Law. The operations of 10Charge US have been
conducted in accordance with all applicable laws and regulations of all
governmental bodies having jurisdiction over them, except for violations thereof
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which are not likely to have a material adverse effect on the business or
financial condition of 10Charge US, or which would not require a payment by
10Charge US in excess of $50,000 in the aggregate, or which have been cured.
(o) Tax Matters. 10Charge US (1) has filed or shall file prior to
Closing all US federal, state and other tax returns ("Tax Returns") required to
be filed through the date hereof and will have paid or contested in good faith
any tax due through the date hereof with respect to the time periods covered by
such Tax Returns and shall timely pay or contest in good faith any such taxes
required to be paid by it after the date hereof with respect to such Tax Returns
and (2) shall prepare and timely file all such Tax Returns required to be filed
after the date hereof and through the Closing Date and pay or contest in good
faith all taxes required to be paid by it with respect to the periods covered by
such Tax Returns. Any such Tax Return filed or required to be filed after the
date hereof shall not reflect the adoption of any new accounting methods or
conventions or other similar items, except to the extent such particular
reflection or adoption is required to comply with any law or regulation.
(p) Transactions with Directors and Officers. 10Charge US does not
engage in business with any person or entity in which any of 10Charge US's
directors or officers has a material equity interest. No director or officer of
10Charge US owns any property, asset or right, which is material to the business
of 10Charge US.
(q) Borrowing and Guarantees. 10Charge US (a) does not have any
indebtedness for borrowed money, (b) is not lending or committed to lend any
money (except for advances to employees in the ordinary course of business), and
(c) is not a guarantor or surety with respect to the obligations of any person.
7. Representations of 10Charge Hungary. 10Charge Hungary and each 10Charge
Hungary Equity Holder, hereby jointly and severally represent and warrant as
follows:
(a) Organization; Authorization. 10Charge Hungary is a limited
liability company duly organized, validly existing and in good standing under
the laws of Hungary with full power and authority to execute and deliver this
Agreement and to perform its obligations hereunder. The execution, delivery and
performance of this Agreement has been duly authorized by all necessary action
of 10Charge Hungary and this Agreement constitutes a valid and binding
obligation, enforceable against 10Charge Hungary in accordance with its terms.
10Charge Hungary has no subsidiaries.
(b) Capitalization. As of the date of this Agreement, 10Charge
Hungary's capitalization is equal to the aggregate amount set forth next to each
equity holder's name on Schedule A hereto. No equity of 10Charge Hungary has
been registered under foreign, state or federal securities laws. All outstanding
equity interests of 10Charge Hungary have been issued pursuant to an appropriate
exemption from the registration requirements of the Securities Act of 1933, as
amended ("Securities Act") and from all applicable registration requirements of
the various U.S. states and foreign jurisdictions. As of the Closing Date, all
of the issued and outstanding equity 10Charge Hungary is validly issued, fully
paid and non-assessable and are free from all claims, rights, liens or other
encumbrances, and there is not, and as of the Closing Date there will not be,
outstanding any warrants, options, other convertible securities or other
agreements on the part of 10Charge Hungary obligating it to issue any additional
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equity or other securities of any kind. 10Charge Hungary will not issue any
equity or other securities from the date of this Agreement through the Closing
Date.
(c) No Conflict as to 10Charge Hungary. Neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
herein will (a) violate any provision of the articles of incorporation or
organization of 10Charge Hungary or (b) violate, or be in conflict with, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or excuse performance by any person of
any of its obligations under, or cause the acceleration of the maturity of any
debt or obligation pursuant to, or result in the creation or imposition of any
encumbrance upon any property or assets of 10Charge Hungary under, any material
agreement or commitment to which 10Charge Hungary are a party or by which any of
their respective property or assets is bound, or to which any of the property or
assets of 10Charge Hungary is subject or (c) violate any statute or law or any
judgment, decree, order, regulation or rule of any court or other governmental
body applicable to 10Charge Hungary except, in the case of violations,
conflicts, defaults, terminations, accelerations or encumbrances described in
clause (b) of this Section for such matters which are not likely to have a
material adverse effect on the business or financial condition of 10Charge
Hungary, taken as a whole.
(d) Consents and Approvals of Governmental Authorities. No consent,
approval or authorization of, or declaration, filing or registration with, any
governmental body is required to be made or obtained by 10Charge Hungary in
connection with the execution, delivery and performance of this Agreement by
10Charge Hungary or the consummation of the transactions contemplated herein.
(e) Other Consents. No consent of any person is required to be obtained
by 10Charge Hungary to the execution, delivery and performance of this Agreement
or the consummation of the transactions contemplated herein, including, but not
limited to, consents from parties to leases or other agreements or commitments,
except for any consent which the failure to obtain would not be likely to have a
material adverse effect on the business and financial condition of 10Charge
Hungary.
(f) Title to Properties. 10Charge Hungary owns all of its material
properties and assets they purport to own (real, personal and mixed, tangible
and intangible), including, without limitation, all the material properties and
assets reflected in 10Charge Hungary's Financial Statements (as defined below)
and all the material properties and assets purchased or otherwise acquired by
10Charge Hungary since the date of 10Charge Hungary's Financial Statements. All
properties and assets reflected in 10Charge Hungary's Financial Statements are
free and clear of all material encumbrances and are not, in the case of real
property, subject to any material rights of way, building use restrictions,
exceptions, variances, reservations or limitations of any nature whatsoever
except, with respect to all such properties and assets, (a) mortgages or
security interests shown on 10Charge Hungary' Financial Statements as securing
specified liabilities or obligations, with respect to which no default (or event
which, with notice or lapse of time or both, would constitute a default) exists,
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(b) mortgages or security interests incurred in connection with the purchase of
property or assets after the date of 10Charge Hungary' Financial Statements
(such mortgages and security interests being limited to the property or assets
so acquired), with respect to which no default (or event which, with notice or
lapse of time or both, would constitute a default) exists, (c) as to real
property, (i) imperfections of title, if any, none of which materially detracts
from the value or impairs the use of the property subject thereto, or impairs
the operations of 10Charge Hungary and (ii) zoning laws that do not impair the
present or anticipated use of the property subject thereto, and (d) liens for
current taxes not yet due. The properties and assets of 10Charge Hungary include
all rights, properties and other assets necessary to permit 10Charge Hungary to
conduct their respective businesses in all material respects in the same manner
as it is conducted on the date of this Agreement.
(g) Financial Statements. 10Charge Hungary's financial statements and
notes previously delivered to 10Charge US (the "10Charge Hungary Financial
Statements") fairly present the consolidated financial condition of 10Charge
Hungary as at the respective dates thereof and for the periods therein referred
to, all in accordance with generally accepted accounting principles consistently
applied throughout the periods involved, except as set forth in the notes
thereto, and shall be utilizable in any SEC filing in compliance with Rule 310
of Regulation S-B promulgated under the Securities Act.
(h) Buildings, Plants and Equipment. The buildings, plants, structures
and material items of equipment and other personal property owned or leased by
10Charge Hungary are in all respects material to the business or financial
condition of 10Charge Hungary, taken as a whole, in good operating condition and
repair (ordinary wear and tear excepted) and are adequate in all such respects
for the purposes for which they are being used. 10Charge Hungary have not
received notification that any of them are in violation of any applicable
building, zoning, anti-pollution, health, safety or other law, ordinance or
regulation in respect of their buildings, plants or structures or their
operations, which violation is likely to have a material adverse effect on the
business or financial condition of 10Charge Hungary, taken as a whole or which
would require a payment by 10Charge Hungary in excess of $50,000 in the
aggregate, and which has not been cured.
(i) No Condemnation or Expropriation. Neither the whole nor any portion
of the property or leaseholds owned or held by 10Charge Hungary is subject to
any governmental decree or order to be sold or is being condemned, expropriated
or otherwise taken by any governmental body or other person with or without
payment of compensation therefor, which action is likely to have a material
adverse effect on the business or financial condition of 10Charge Hungary.
(j) Litigation. There is no action, suit, inquiry, proceeding or
investigation by or before any court or governmental body pending or threatened
in writing against or involving 10Charge Hungary which is likely to have a
material adverse effect on the business or financial condition of 10Charge
Hungary, taken as whole, or which would require a payment by 10Charge Hungary in
excess of $50,000 in the aggregate or which questions or challenges the validity
of this Agreement. 10Charge Hungary is not subject to any judgment, order or
decree that is likely to have a material adverse effect on its business or
financial condition, or which would require a payment by 10Charge Hungary in
excess of $50,000 in the aggregate.
(k) No Material Adverse Change. Since the date of 10Charge Hungary's
Financial Statements, there has not been any material adverse change in the
business or financial condition of 10Charge Hungary taken as a whole, nor has
10Charge Hungary incurred any material indebtedness.
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(l) Contracts and Commitments. 10Charge Hungary is not a party to any:
1. Contract or agreement (other than purchase or sales orders
entered into in the ordinary course of business) involving any
liability of more than $50,000 and not cancelable by it (without
liability to it) within 60 days. 10Charge Hungary has delivered to
10Charge US copies of any and all material agreements, arrangements,
contracts or other matters relating to 10Charge Hungary.
2. Lease of personal property involving annual rental payments
in excess of $50,000 and not cancelable by it (without liability to it)
within 90 days;
3. Employee bonus, stock option or stock purchase, performance
unit, profit-sharing, pension, savings, retirement, health, deferred or
incentive compensation, insurance or other material employee benefit
plan (as defined in Section 2(3) of ERISA) or program for any of the
employees, former employees or retired employees of 10Charge Hungary;
4. Commitment, contract or agreement that is currently
expected by the management of 10Charge Hungary to result in any
material loss upon completion or performance thereof;
5. Contract, agreement or commitment, that is material to the
business of 10Charge Hungary, with any officer, employee, agent,
consultant, advisor, salesman, sales representative, value added
reseller, distributor or dealer; or
6. employment agreement or other similar agreement that
contains any severance or termination pay, liabilities or obligations.
All such contracts and agreements are in full force and effect.
10Charge Hungary is not in breach or violation of, or in default under, any
agreement, instrument, indenture, deed of trust, commitment, contract or other
obligation of any type to which it is a party or is or may be bound that relates
to its business or to which any of its assets or properties is subject, the
effect of which breach, violation or default is likely to materially and
adversely affect the business or financial condition of 10Charge Hungary.
(m) Labor Relations. 10Charge Hungary is not a party to any collective
bargaining agreement. Except for any matter which is not likely to have a
material adverse effect on the business or financial condition of 10Charge
Hungary, (a) 10Charge Hungary is in compliance with all applicable laws
respecting employment and employment practices, terms and conditions of
employment and wages and hours, and 10Charge Hungary is not engaged in any
unfair labor practice, (b) there is no unfair labor practice complaint against
10Charge Hungary pending before the National Labor Relations Board or similar
foreign government agency, (c) there is no labor strike, dispute, slowdown or
stoppage actually pending or threatened against 10Charge Hungary, (d) no
representation question exists respecting the employees of 10Charge Hungary, (e)
10Charge Hungary has not experienced any strike, work stoppage or other labor
difficulty, and (f) no collective bargaining agreement relating to employees of
any of 10Charge Hungary is currently being negotiated.
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(n) Employee Benefit Plans. No material employee pension or welfare
benefit plans covering employees of 10Charge Hungary is (1) a multi-employer
plan as defined in Section 3(37) of ERISA, or (2) a defined benefit plan as
defined in Section 3(35) of ERISA; any listed individual account pension plan is
duly qualified as tax exempt under the applicable sections of the Code, each
listed benefit plan and related funding arrangement, if any, has been maintained
in all material respects in compliance with its terms and the provisions of
ERISA and the Code.
(o) Compliance with Law. The operations of 10Charge Hungary have been
conducted in accordance with all applicable laws and regulations of all
governmental bodies having jurisdiction over them, except for violations thereof
which are not likely to have a material adverse effect on the business or
financial condition of 10Charge Hungary or which would not require a payment by
10Charge Hungary in excess of $50,000 in the aggregate, or which have been
cured. 10Charge Hungary has not received notification of any asserted present or
past failure by any of them to comply with any such applicable laws or
regulations. 10Charge Hungary has all material licenses, permits, orders or
approvals from the governmental bodies required for the conduct of their
businesses, and are not in material violation of any such licenses, permits,
orders and approvals. All such licenses, permits, orders and approvals are in
full force and effect, and no suspension or cancellation of any thereof has been
threatened.
(p) Tax Matters. 10Charge Hungary (1) has filed or shall file prior to
Closing all Tax Returns required to be filed through the date hereof and will
have paid any tax due through the date hereof with respect to the time periods
covered by such Tax Returns and shall timely pay any such taxes required to be
paid by it after the date hereof with respect to such Tax Returns and (2) shall
prepare and timely file all such Tax Returns required to be filed after the date
hereof and through the Closing Date and pay all taxes required to be paid by it
with respect to the periods covered by such Tax Returns. Any such Tax Return
filed or required to be filed after the date hereof shall not reflect any new
elections or the adoption of any new accounting methods or conventions or other
similar items, except to the extent such particular reflection or adoption is
required to comply with any law or regulation. There is no action, suit,
proceeding, investigation, audit, claim, demand, deficiency or additional
assessment in progress, pending or threatened against or with respect to any tax
attributable to 10Charge Hungary or its assets or operations. All amounts
required to be withheld as of the Closing Date for taxes or otherwise have been
withheld and paid when due to the appropriate agency or authority. There shall
be delivered or made available to 10Charge US at or prior to Closing true and
complete copies of all income tax returns (or with respect to consolidated or
combined returns, the portion thereof) and any other tax returns requested by
10Charge US as may be relevant to 10Charge Hungary or its assets or operations
for any and all periods.
(q) Environmental Matters. At all times prior to the date hereof,
10Charge Hungary has complied in all material respects with applicable
environmental laws, orders, regulations, rules and ordinances relating to its
business, properties and assets, the violation of which would have a material
adverse effect on the business or financial condition of 10Charge Hungary or
which would require a payment by 10Charge Hungary in excess of $50,000 in the
aggregate, and which have been duly adopted, imposed or promulgated by any
legislative, executive, administrative or judicial body or officer of any
governmental agency. The environmental licenses, permits and authorizations that
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are material to the operations of 10Charge Hungary are in full force and effect.
(r) Absence of Certain Commercial Practices. 10Charge Hungary has not,
directly or indirectly, paid or delivered any fee, commission or other sum of
money or item of property, however characterized, to any finder, agent,
government official or other party, in the United States or any other country,
which is in any manner related to its business or operations, which it knows or
has reason to believe to have been illegal under any federal, state or local
laws of the United States or any other country having jurisdiction; and 10Charge
Hungary has not participated, directly or indirectly, in any boycotts or other
similar practices affecting any of its actual or potential customers in
violation of any applicable law or regulation.
(s) Proprietary Rights. 10 Charge Hungary owns or possesses or has
adequate licenses or other rights to use, and has taken all action reasonably
necessary to protect, all intellectual property necessary for its business as
now conducted and as proposed to be conducted without, to the best of its
knowledge, any conflict with or infringement of the rights of others. A list of
all intellectual property of 10Charge Hungary has been delivered to 10Charge US.
There are no outstanding options, licenses or agreements of any kind relating to
the foregoing, nor is 10Charge Hungary bound by or a party to any options,
licenses or agreements of any kind with respect to the intellectual property of
any other person or entity. 10Charge Hungary has not received any communications
alleging that it has violated, or by conducting its business would violate, any
of the intellectual property rights of any other person or entity, nor is
10Charge Hungary aware of any basis for the foregoing. 10Charge Hungary is not
aware that any of its employees or contractors are obligated under any contract
(including licenses, covenants or commitments of any nature) or other agreement,
or subject to any judgment, decree or order of any court or administrative
agency, that would interfere with the use of such employee's or contractor's
best efforts to promote its interests, or that would conflict with the business
of 10Charge Hungary as presently conducted.
(t) Borrowing and Guarantees. 10Charge Hungary (a) has no indebtedness
for borrowed money, (b) is not lending or committed to lend any money (except
for advances to employees in the ordinary course of business and as otherwise
previously disclosed in writing to 10Charge US), and (c) is not a guarantor or
surety with respect to the obligations of any person.
(u) Qualification and Registration. 10Charge Hungary is qualified or
licensed as foreign corporations in all jurisdictions where their respective
business or ownership of assets so requires, except where the failure to be
qualified or licensed would not have a material adverse effect on its
businesses. The business of 10Charge Hungary does not require it to be
registered as an investment company or investment adviser, as such terms are
defined under the Investment Company Act of 1940 and the Investment Advisers Act
of 1940, each as amended.
(v) Marketability of Title. Except as provided for in 10Charge
Hungary's Financial Statements, 10Charge Hungary has, and on the Closing Date
will have, good and marketable title to all of their respective furniture,
fixtures, equipment and other assets as set forth in 10Charge Hungary's
Financial Statements, and such assets are owned free and clear of all security
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interests, pledges, liens, restrictions and encumbrances of every kind and
nature.
(w) Payments and Distributions. Through the Closing Date there will be
(i) no bonuses or extraordinary compensation to any of the officers, directors,
members, managers or stockholders of 10Charge Hungary, (ii) no loans made to or
any other transactions with any of the officers, directors, members, managers or
stockholders of 10Charge Hungary or their families (except as previously
disclosed in writing to 10Charge US), and (iii) no dividends or other
distributions declared or paid by 10Charge Hungary.
(x) Related Party Transactions. 10Charge Hungary does not engage in
business with any person or entity in which any of its officers, directors or
other affiliates have a material equity interest. No affiliate of 10Charge
Hungary owns any property, asset or right, which is material to the business of
10Charge Hungary. There are, and on the Closing Date there will be, no loans,
leases or other Contracts outstanding between 10Charge Hungary and any
affiliate, other than such Contracts as have been approved in writing by
10Charge US.
(y) Insurance. 10Charge Hungary has, and on the Closing Date will have,
maintained casualty and liability policies and other insurance policies with
respect to its businesses which are appropriate and customary for businesses
similar in size, industry and risk profile, including but not limited to the
insurance relating to its intellectual property. Copies of all of the policies
of insurance and bonds presently in force with respect to 10Charge Hungary,
including without limitation those covering properties, buildings, machinery,
equipment, worker's compensation, officers and directors and public liability,
have been delivered to 10Charge US. All such insurance is outstanding and in
full force and effect, with all premiums thereon duly paid, and 10Charge Hungary
has not received any notice of cancellation of any such policies.
(z) Since its inception, 10Charge Hungary has, and on the Closing Date
will have, in all material respects operated its businesses and conducted its
affairs in compliance with all applicable laws, rules and regulations, except
where the failure to so comply did not have and would not be expected to have a
material adverse effect on their respective businesses or property.
(aa) During the past five (5) year period none of 10Charge Hungary, nor
any of its officers or directors, nor any person intended upon consummation of
the transactions contemplated herein to become an officer or director of
10Charge US or any successor entity or subsidiary, has been the subject of:
1. a petition under the Federal bankruptcy laws or any other
insolvency or moratorium law or has a receiver, fiscal agent or similar
officer been appointed by a court for the business or property of
10Charge Hungary or such person, or any partnership in which 10Charge
Hungary or any such person was a general partner at or within two years
before the time of such filing, or any corporation or business
association of which 10Charge Hungary or any such person was an
executive officer at or within two years before the time of such
filing;
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2. a conviction in a criminal proceeding or a named subject of
a pending criminal proceeding (excluding traffic violations which do
not relate to driving while intoxicated or driving under the
influence);
3. any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining 10Charge Hungary or any such
person from, or otherwise limiting, the following activities:
(i) acting as a futures commission merchant,
introducing broker, commodity trading advisor, commodity pool
operator, floor broker, leverage transaction merchant, any
other person regulated by the United States Commodity Futures
Trading Commission or an associated person of any of the
foregoing, or as an investment adviser, underwriter, broker or
dealer in securities, or as an affiliated person, director or
employee of any investment company, bank, savings and loan
association or insurance company, or engaging in or continuing
any conduct or practice in connection with such activity;
(ii) engaging in any type of business practice; or
(iii) engaging in any activity in connection with the
purchase or sale of any security or commodity or in connection
with any violation of Federal, state or other securities laws
or commodities laws;
4. any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any Federal, state or local authority barring,
suspending or otherwise limiting for more than 60 days the right of
10Charge Hungary or any such person to engage in any activity described
in the preceding sub-paragraph, or to be associated with persons
engaged in any such activity;
5. a finding by a court of competent jurisdiction in a civil
action or by the SEC to have violated any securities law, regulation or
decree and the judgment in such civil action or finding by the SEC has
not been subsequently reversed, suspended or vacated; or
6. a finding by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to have violated
any federal commodities law, and the judgment in such civil action or
finding by the Commodity Futures Trading Commission has not been
subsequently reversed, suspended or vacated.
(bb) 10Charge Hungary does not have any pension plan, profit sharing or
similar employee benefit plan.
(cc) None of the information supplied or to be supplied by or about
10Charge Hungary for inclusion or incorporation by reference in any information
supplied to holders of Common Stock concerning the transactions contemplated
herein contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary in order to make the
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statements therein, in light of the circumstances under which they are made, not
misleading.
8. Further Assurances of Title.
As and when requested by 10Charge US, 10Charge Hungary, as applicable,
shall execute and deliver, or cause to be executed and delivered, all such deeds
and instruments and will take or cause to be taken all such further action as
10Charge US may deem necessary or desirable in order to vest in and confirm to
10Charge US, as applicable, title to and possession of the property acquired by
10Charge US by reason or as a result of the transactions contemplated hereby,
and otherwise to carry out the intent and purposes hereof, and the officers and
directors of 10Charge US are fully authorized in the name of 10Charge US or
otherwise to take any and all such action.
9. Notices.
Any notice which any of the parties hereto may desire to serve upon any
of the other parties hereto shall be in writing and shall be conclusively deemed
to have been received by the party at its address, if mailed, postage prepaid,
United States mail, registered, return receipt requested, to the following
addresses:
If to 10Charge US: 2080 Pilisjaszfalu
Erdoalja u 12
Hungary
Facsimile No.: x00 (0) 0000000
Attention: Xxxxxx Xxxxx, President
with a copy to: Xxxxxxx Xxxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
If to 10Charge Hungary: 1173 Budapest
508 Utca 23
Hungary
Facsimile No.: x00 (0) 000-0000
Attention: Jozsef Xxxxxxx Xxxx,
General Manager
with a copy to: Kardos, Peto, Torocsik
Address: Szeged Beke utca 5, Hungary
Attention: Xxxxx Xxxx
If to a 10Charge Hungary Equity Holder: to the address of such equity
holder listed on Schedule A.
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10. Miscellaneous.
This Agreement shall be binding upon and inure to the benefit of the
heirs, personal representatives and successors and assigns of the parties. This
Agreement shall be construed and enforced in accordance with the laws of the
State of Delaware. This Agreement may be signed in one or more counterparts, all
of which taken together shall constitute an entire agreement. This Agreement
sets forth the entire agreement and understanding of the parties hereto with
respect to the transactions contemplated hereby, and supersedes all prior
agreements, arrangements and understandings related to the subject matter
hereof. No understanding, promise, inducement, statement of intention,
representation, warranty, covenant or condition, written or oral, express or
implied, whether by statute or otherwise, has been made by any party hereto
which is not embodied in this Agreement or the written statements, certificates,
or other documents delivered pursuant hereto or in connection with the
transactions contemplated hereby, and no party hereto shall be bound by or
liable for any alleged understanding, promise, inducement, statement,
representation, warranty, covenant or condition not so set forth. Except as
otherwise specifically set forth herein, each party will bear its own attorneys,
brokers, investment bankers, agents, and finders employed by, such party. The
parties will indemnify each other against any claims, costs, losses, expenses or
liabilities arising from any claim for commissions, finder's fees or other
compensation in connection with the transactions contemplated herein which may
be asserted by any person based on any agreement or arrangement for payment by
the other party. Should any action be commenced between the parties to this
Agreement concerning the matters set forth in this Agreement or the right and
duties of either in relation thereto, the prevailing party in such action shall
be entitled, in addition to such other relief as may be granted, to a reasonable
sum as and for its attorney's fees and costs. All of the representations,
covenants and warranties contained in this Agreement (including all statements
contained in any certificate or other instrument delivered by or on behalf of
10Charge US or 10Charge Hungary pursuant hereto or in connection with the
transactions contemplated hereby), shall survive the Closing for a period of two
(2) years from the Closing Date. The provisions of this Agreement shall be
severable, so that the unenforceability, validity or legality of any one
provision shall not affect the enforceability, validity or legality of the
remaining provisions hereof. This Agreement shall be deemed to have been drafted
jointly by the parties hereto, and no inference or interpretation against any
party shall be made solely by virtue of such party allegedly having been the
draftsperson of this Agreement.
11. Confidential Information. Each of 10Charge US and 10Charge Hungary
hereby acknowledges and agrees that all information disclosed to each other
whether written or oral, relating to the other's business activities, its
customer names, addresses, all operating plans, information relating to its
existing services, new or envisioned products or services and the development
thereof, scientific, engineering, or technical information relating to the
others business, marketing or product promotional material, including brochures,
product literature, plan sheets, and any and all reports generated to customers,
with regard to customers, unpublished list of names, and all information
relating to order processing, pricing, cost and quotations, and any and all
information relating to relationships with customers, is considered confidential
information, and is proprietary to, and is considered the invaluable trade
secret of such party (collectively "Confidential Information"). Confidential
information provided hereunder shall not include information which must be
14
permitted to be disclosed in order to ensure that the transactions contemplated
hereby do not constitute a "tax shelter" as defined by the Internal Revenue
Service. The parties (and each employee, representative, or other agent thereof)
may disclose to any and all persons, without limitation of any kind, the tax
treatment and tax structure of the transaction and all materials of any kind
(including opinions or other tax analyses) that are provided to the parties
relating to such tax treatment and tax structure.
The parties hereto agree that any disclosure of any Confidential
Information by any party hereto, its employees, or representatives shall cause
immediate, substantial, and irreparable harm and loss to the other. Each party
understands that the other desires to keep such Confidential Information in the
strictest confidence, and that such party's agreement to do so is a continuing
condition of the receipt and possession of Confidential Information, and a
material provision of this Agreement, and a condition that shall survive the
termination of this Agreement. Consequently, each party shall use Confidential
Information for the sole purpose of performing its obligations as provided
herein.
12. Public Announcement. The parties shall make no public announcement
concerning this Agreement, their discussions or any other letters, memos or
other agreements between the parties relating to this Agreement until such time
as they agree to the contents of a mutually satisfactory press release, which
they intend to release on the date of execution of this Agreement. Either of the
parties, but only after reasonable consultation with the other, may make
disclosure if required under applicable law.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
10CHARGE, INC.
By:
----------------------------------------
Name: Xxxxxx Xxxxx
Title: President and CEO
10CHARGE KFT.
By:
----------------------------------------
Name: Jozsef Xxxxxxx Xxxx
Title: Managing Director
10 CHARGE KFT. EQUITY HOLDERS:
--------------------------------------------
Xxxxxx Xxxxx
15
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Jozsef Xxxxxxx Xxxx
[SIGNATURE PAGE CONTINUED]
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Xxxxxx Rozsnyay
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Xxxxxx Xxxx
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Xxxxx Xxxxxxxxx
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Xxxx Xxxx
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Henri Xxxxxxx Xxxxxxxxxxxx
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Zoltan Fauszt
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Xxx Xxxxx
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Xxxxxx Xxxxxx
00
