SECOND EXCHANGE AGREEMENT
THIS AGREEMENT made as of this _____ day of June, 2004, by and between
BRITTANY CAPITAL MANAGEMENT LTD., a corporation organized under the laws of the
Bahamas ("Investor"), and HOMECOM COMMUNICATIONS, INC., a Delaware corporation
("HCOM" or the "Company") .
The following terms shall have the specified definitions, unless the
context otherwise requires:
"Common Stock" shall mean the common stock of HCOM, $0.0001 par value
per share.
R E C I T A L S
A. The Investor is the owner of good and marketable title to 5,640,000
shares of the Common Stock of HCOM (the "Securities"), free and clear of all
liens, pledges and encumbrances.
B. HCOM wishes to acquire the Securities for $0.10 per share.
C. In consideration of the transfer to HCOM of certain of the
Securities, the Investor will receive, subject to the terms and conditions set
forth herein, the Series ____Convertible Preferred Stock, (the "Preferred
Stock") and being in the form and having the terms and conditions as set forth
in Annex I attached hereto in exchange for the Securities.
NOW, THEREFORE, for and in consideration of the premises and the mutual
agreement contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. On the Closing Date (as defined below), HCOM agrees to
purchase from the Investor 4,165,000 of the Securities.
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2. In consideration therefore, HCOM agrees to issue to the
Investor, the Preferred Stock.
3. MUTUAL DELIVERIES. (a) On the Closing Date the Investor shall
deliver the Securities to HCOM and HCOM shall deliver to the Investor the
Preferred Stock duly endorsed for transfer (the "Exchange").
4. CLOSING DATE. Subject to the satisfaction (or waiver) of the
conditions thereto set forth in Section 9 and Section 10 below, the date and
time of the Exchange pursuant to this Agreement (the "Closing Date") shall be
12:00 noon Eastern Standard Time on June ___, 2004 or such other mutually agreed
upon time. The closing of the transactions contemplated by this Agreement shall
occur on the Closing Date at the offices of Xxxxxxx & Xxxxxx LLP, 00 Xxxxxxxx,
Xxxxx 0000, Xxx Xxxx, Xxx Xxxx or at such other location as may be agreed to by
the parties.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Investor that:
(a) The Company has the corporate power and authority to enter into
this Agreement, and to perform its obligations hereunder. The execution and
delivery by the Company of this Agreement and the consummation by the Company of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company. This Agreement has been duly
executed and delivered by the Company and constitutes valid and binding
obligations of the Company enforceable against it in accordance with its terms,
subject to the effects of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and to the
application of equitable principles in any proceeding (legal or equitable).
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(b) To the actual knowledge of the Company, the execution,
delivery and performance by the Company of this Agreement, and the consummation
of the transactions contemplated hereby, do not and will not breach or
constitute a default under any applicable law or regulation or of any agreement,
judgment, order, decree or other instrument binding on the Company which breach
or default could reasonably by expected to have a material adverse effect on the
Company taken as a whole.
(c) Other than as disclosed in the Company's reports or
registration statements as filed with the Securities and Exchange Commission
(the "SEC"), including the exhibits thereto (the "SEC Documents"), there is no
pending, or to the actual knowledge of the Company, threatened, judicial,
administrative or arbitral action, claim, suit, proceeding or investigation
which might affect the validity or enforceability of this Agreement or which
involves the Company and which if adversely determined, could reasonably be
expected to have a material adverse effect on the Company.
(d) Except as disclosed in Schedule 5(d) hereto, to the actual
knowledge of the Company, no consent or approval of, or exemption by, or filing
with, any party or governmental or public body or authority is required in
connection with the execution, delivery and performance under this Agreement or
the taking of any action contemplated hereunder.
(e) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation.
(f) The execution, delivery and performance of this Agreement
by the Company, and the consummation of the transactions contemplated hereby,
will not (i) violate any provision of the Company's Certificate of Incorporation
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or By-laws, (ii) violate, conflict with or result in the breach of any of the
terms of, result in a material modification of the effect of, otherwise, give
any other contracting party the right to terminate, or constitute (or with
notice or lapse of time or both constitute) a default under, any contract or
other agreement to which the Company is a party or by or to which the Company or
any of the Company's assets or properties may be bound or subject, (iii) violate
any order, judgment, injunction, award or decree of any court, arbitrator or
governmental or regulatory body by which the Company, or the assets or
properties of the Company are bound, (iv) to the Company's actual knowledge,
violate any statute, law or regulation.
6. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. The Investor hereby
represents and warrants to the Company that:
(a) The Investor has the corporate power and authority to
enter into this Agreement and to perform its obligations hereunder. The
execution and delivery by the Investor of this Agreement, and the consummation
by the Investor of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action on the part of the Investor. This
Agreement has been duly executed and delivered by the Investor and constitutes
valid and binding obligations of the Investor, enforceable against it in
accordance with its terms, subject to the effects of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and to the application of equitable principles in any
proceeding (legal or equitable).
(b) The execution, delivery and performance by the Investor of
this Agreement, and the consummation of the transactions contemplated hereby, do
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not and will not breach or constitute a default under any applicable law or
regulation or of any agreement, judgment, order, decree or other instrument
binding on the Investor.
(c) The Investor is a sophisticated investor (as described in
Rule 506(b)(2)(ii) of Regulation D) and an accredited investor (as defined in
Rule 501 of Regulation D), and the Investor has such experience in business and
financial matters that it is capable of evaluating the merits and risks of an
investment in the Preferred Stock. The Investor acknowledges that an investment
in the Preferred Stock, is speculative and involves a high degree of risk.
(d) Investor has received all documents, records, books and
other information pertaining to Investor's investment in the Company that have
been requested by Investor.
(e) At no time was Investor presented with or solicited by or
through any leaflet, public promotional meeting, television advertisement or any
other form of general solicitation or advertising.
(f) Except as specifically set forth herein, Investor makes no
representations or warranties any other matter.
(g) The Investor has taken no action which would give rise to
any claim by any person for brokerage commissions, finder's fees or similar
payments relating to this Agreement or the transaction contemplated hereby.
(h) The Investor is the owner of good and marketable title to
the Securities, free and clear of all liens, pledges and encumbrances.
7. GOVERNING LAW; MISCELLANEOUS
(a) Governing Law; Jurisdiction. This Agreement shall be
deemed to be made in and in all respects shall be interpreted, construed and
governed by and in accordance with New York law without regard to the conflict
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of law principles thereof, except that matters relating to the corporate
governance of the Company shall be governed by Delaware law. The parties hereby
irrevocably and unconditionally consent to submit to the exclusive jurisdiction
of the courts of the State of New York and of the United States of America
located in the Borough of Manhattan (the "New York Courts") for any litigation
arising out of or relating to this Agreement and the transactions contemplated
by this Agreement (and agree not to commence any litigation relating thereto
except in such New York Courts), waive any objection to the laying of venue of
any such litigation in the New York Courts and agree not to plead or claim in
any New York Court that such litigation brought therein has been brought in an
inconvenient forum. Each party acknowledges and agrees that any controversy
which may arise under this Agreement is likely to involve complicated and
difficult issues, and therefore each party hereby irrevocably and
unconditionally waives any right such party may have to a trial by jury in
respect of any litigation directly or indirectly arising out of or relating to
this Agreement, or the transactions contemplated by this Agreement.
(b) Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other parties.
(c) Headings. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.
(d) Severability. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction.
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(e) Entire Agreement; Amendments. This Agreement and the
instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Investor
make any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be waived other than by an
instrument in writing signed by the party to be charged with enforcement and no
provision of this Agreement may be amended other than by an instrument in
writing signed by the Company and the Investor.
(f) Notices. Any notices required or permitted to be given
under the terms of this Agreement shall be sent by certified or registered mail
(return receipt requested) or delivered personally or by courier, overnight
delivery service or by confirmed telecopy, and shall be effective five days
after being placed in the mail, if mailed, or upon receipt or refusal of
receipt, if delivered personally or by courier, overnight delivery service or
confirmed telecopy, in each case addressed to a party. The addresses for such
communications shall be:
If to the Company:
Xxxxxxx Xxxxxxxx
HCOM Communications Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxx 00, Xxxxx 000
Xxxxxxx, XX 00000
with copy to:
Xxxxx Xxxx LLP
000 Xxxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
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If to the Investor:
c/o Lion Corporate Services
Xxxxxxxxxx Xxxxx
00 Xxxxxxxxxx Xxxxxx
PO Box N-10818
Nassau, New Providence
Bahamas
with a copy to:
Each party shall provide notice to the other parties of any change in
address.
(g) Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and assigns.
Neither the Company, nor the Investor shall assign this Agreement or any rights
or obligations hereunder without the prior written consent of the other.
8. FURTHER ASSURANCES. Each party shall do and perform or cause to be
done and perform, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
9. CONDITIONS TO THE INVESTOR'S OBLIGATION TO EXCHANGE. The obligation
of the Investor to deliver the certificate(s) representing the Securities to
HCOM on the Closing Date is subject to the satisfaction, at or before the
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Closing Date, of each of the following conditions thereto, provided that these
conditions are for the Investor's sole benefit and may be waived by the Investor
at any time in its sole discretion:
(a) HCOM shall have executed this Agreement and delivered the
same to the Investor.
(b) The representations and warranties of HCOM shall be true
and correct in all material respects as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date), and HCOM shall have performed,
satisfied and complied in all material respects with the covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by HCOM on or prior to the Closing Date.
(c) HCOM shall have delivered to the Investor the duly
executed Preferred Stock in accordance with the terms herein.
(d) No litigation, statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by or in any court or governmental authority of competent jurisdiction
or any self-regulatory organization having authority over the matters
contemplated hereby which prohibits the consummation of any of the transactions
contemplated by this Agreement.
10. CONDITIONS TO HCOM's OBLIGATION TO EXCHANGE The obligation of HCOM
hereunder to deliver the Preferred Stock on the Closing Date is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for HCOM's sole benefit and may
be waived by HCOM at any time in its sole discretion.
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(a) The Investor shall have executed this Agreement and
delivered same to HCOM.
(b) The Investor shall have delivered to HCOM the
certificates, duly endorsed for transfer, representing the Securities in
accordance with the terms herein.
(c) The representations and warranties of the Investor shall
be true and correct in all material respects as of the date when made and as of
the Closing Date as though made at such time (except for representations and
warranties that speak as of a specific date) and the Investor shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Investor on or prior to the Closing Date.
(d) No litigation, statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by or in any court or governmental authority of competent jurisdiction
or any self-regulatory organization having authority over the matters
contemplated hereby which prohibits the consummation of any of the transactions
contemplated by this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
HOMECOM COMMUNICATIONS, INC.
By: ________________________________
Name:
Title:
BRITTANY CAPITAL MANAGEMENT LTD.
By: ________________________________
Name: ______________________________
Title: _____________________________
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ANNEX I
Form of Preferred Stock
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