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AGREEMENT
AGREEMENT (the "Agreement"), dated as of May 27, 2004, by and between
Encompass Group Affiliates, Inc., a Delaware corporation ("Encompass"), and
Hy-Tech Technology Group, Inc., a Delaware corporation ("Hy-Tech Technology"),
and Hy-Tech Computer Systems, Inc., a Delaware corporation ("Hy-Tech Computer
Systems" and together with Hy-Tech Technology, "HYTT").
Recitals
WHEREAS, HYTT has been engaged in the business of supplying computer
systems, components and peripherals; and
WHEREAS, Xxxxxx Xxxxxxx is the Chairman and Chief Executive Officer of
Hy-Tech Technology ("Xxxxxxx"); ------- and
WHEREAS, HYTT has entered into a (i) memorandum of understanding (the "C-T
Memorandum") with Cyber-Test, Inc. ("C-T") to acquire the assets of C-T, (ii) a
memorandum of understanding (the "BCD Memorandum") with BCD 2000, Inc. ("BCD")
to acquire the assets of BCD, and (iii) a memorandum of understanding (the "PMIC
Memorandum" and together with the C-T Memorandum and BCD Memorandum, the
"Memoranda") with Pacific Magtron International, Inc. ("PMIC") whereby PMIC
would acquire the assets of HYTT; and
WHEREAS, HYTT no longer desires to consummate the transactions
contemplated under the Memoranda; and
WHEREAS, Encompass desires to enter into negotiations with each of C-T,
BCD and PMIC; and
WHEREAS, in connection with the negotiations with each of C-T, BCD and
PMIC, Encompass desires to employ Xxxxxxx as its President and Chief Executive
Officer upon consummation of the transactions contemplated by the negotiations
(the "Contemplated Transactions"); and
WHEREAS, in connection with the Contemplated Transactions, Encompass
desires to obtain certain rights and license certain assets from HYTT on the
terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and intending to be legally bound hereby, the parties hereto agree as
follows:
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ARTICLE I. MEMORANDA OF UNDERSTANDING;
LICENSE AGREEMENTS
1.1 Memoranda of Understanding
(a) HYTT and its affiliates hereby (i) acknowledge that they no
longer desire to consummate the transactions contemplated by the Memoranda and
have ceased all negotiations in furtherance thereof and (ii) waive any and all
rights they may have, if any, with respect to Encompass' and its affiliates'
pursuit of the Contemplated Transactions.
(b) HYTT and its affiliates hereby further acknowledge that
Encompass and its affiliates desire to initiate negotiations with, and pursue
inquiries and solicit offers from, each of C-T, BCD and PMIC in furtherance of
the Contemplated Transactions; and Encompass and its affiliates shall have the
right to initiate, solicit, negotiate or pursue any such inquiry, proposal or
offer relating to the Contemplated Transactions.
(c) Neither HYTT nor any of its affiliates shall attempt to
initiate, solicit, negotiate or pursue any inquiry, proposal or offer with any
of C-T, BCD and PMIC relating to any acquisition and/or financing of any of the
foregoing, whether by purchase of assets or stock, by merger, by consolidation
or other reorganization or by any other transaction.
1.2 Offer of Employment. Upon consummation of the Closing (as defined
below), Encompass shall have the sole and exclusive right to extend an offer of
employment to Xxxxxxx, to become an executive officer of Encompass and its
affiliates as of the Closing, substantially on the terms and conditions
contained in an employment agreement to be entered into among Xxxxxxx, and
Encompass and its affiliates, the form of which is attached hereto as Exhibit
"A" (the "Employment Agreement"). Prior to the Closing, HYTT shall not engage in
any activity that would dissuade Xxxxxxx from accepting employment with
Encompass and its affiliates. Prior to the Closing, HYTT shall release Xxxxxxx
from any and all obligations under his employment agreement with HYTT, or at
law. At Closing, HYTT shall waive any and all rights with respect to Xxxxxxx'x
employment, or the termination of Xxxxxxx'x employment, including, without
limitation, any restriction on his employment or his activities. On and after
the Closing Date, HYTT shall not solicit, directly or indirectly, Xxxxxxx to
leave the employ of Encompass or any of its affiliates. At Closing, Xxxxxxx
shall resign from any and all positions as an officer and/or director of HYTT,
except that Executive may remain solely as an outside director of Hy-Tech
Technology, but not as Chairman of the Board.
1.3 Non-Compete. At the Closing, Encompass and HYTT shall enter into a
Non-Compete Agreement, substantially in the form of Exhibit "B" hereto (the
"Non-Compete Agreement"), whereby HYTT shall agree not to compete, directly or
indirectly, with the businesses of Encompass or its affiliates; provided that,
for a period of three (3) months after the Closing, HYTT shall be permitted to
sell, in the ordinary course of its business, any inventory of HYTT not sold on
or prior to the Closing.
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The rights of Encompass and its affiliates contained in Section 1.1, Section 1.2
and Section 1.3 hereof shall be collectively referred to as the "Rights".
1.4 License Agreements. On the Closing Date,
(a) HYTT shall enter into a license agreement, substantially in the
form of Exhibit "C" hereto (the "Customer Lists License Agreement"), with
Encompass pursuant to which HYTT shall grant to Encompass an exclusive,
worldwide, royalty-free, fully paid up, perpetual, non-terminable and
irrevocable right and license to use, in any manner determined by Encompass or
its affiliates, the customer lists of HYTT (the "Customer Lists"); and
(b) HYTT shall enter into a license agreement, substantially in the
form of Exhibit "D" hereto (the "Websites License Agreement" and together with
the Customer Lists License Agreement, the "License Agreements"), with Encompass
pursuant to which HYTT shall grant to Encompass an exclusive, worldwide,
royalty-free, fully paid up, perpetual, non-terminable and irrevocable right and
license to use, in any manner determined by Encompass, the following websites
and any and all derivatives thereof and intellectual property related thereto
(the "Websites"):
(i) xxx.x-xxxxxx.xxx;
(ii) xxx.xx-xxxx.xxx;
(iii) xxx.xx-xxxxxx.xxx;
(iv) xxx.XXXX.xxx; and
(v) xxx.xxxxxxxxxxxxxxxxxxx.xxx.
1.5 Assumption of Liabilities. Subject to the terms and conditions of this
Agreement, at the Closing, Encompass shall assume and agree to perform, pay or
discharge all liabilities and obligations of HYTT under those certain
convertible debentures (the "Convertible Debentures") set forth in Schedule 1.5
hereto (the assumption of such liabilities shall be referred to herein as the
"Consideration") up to an amount not to exceed $503,300, pursuant to the
Assumption Agreement, substantially in the form of Exhibit "E" hereto (the
"Assumption Agreement"). Except as set forth in this Section 1.5 and the
Assumption Agreement, Encompass shall not assume or be responsible for any
liabilities or obligations of HYTT. On and after the Closing, HYTT shall
perform, pay or discharge all liabilities and obligations relating to the
Rights, the License Agreements, the Release and Waiver (as defined in Section
4.1 below), and any other rights and assets of HYTT, other than the Assumed
Liabilities.
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ARTICLE II. CLOSING
2.1 Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Xxxxxx Xxxxxxx
Xxxxxx & Xxxxxxx, LLC, 0000 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000, at 10:00 A.M., on June 1, 2004 or such other time and date as Encompass
and HYTT may agree. The date on which the Closing actually occurs is referred to
herein as the "Closing Date."
2.2 Deliveries by HYTT.
(a) At the Closing, HYTT shall deliver to Encompass the following:
(i) an executed counterpart to each License Agreement;
(ii) the Customer Lists (which shall be delivered on CD Rom
media in a file format that is compatible with Microsoft Excel);
(iii) an executed counterpart of the Non-Compete Agreement;
(iv) a certificate, dated the Closing Date, executed by the
Secretary of Hy-Tech Technology, certifying as to Hy-Tech Technology's
certificate of incorporation (which shall be certified by the secretary of state
of the state of its jurisdiction of incorporation), bylaws or other governing
documents and resolutions adopted by Hy-Tech Technology's board of directors
with respect to the transactions contemplated hereby attached thereto;
(v) a certificate, dated the Closing Date, executed by the
Secretary of Hy-Tech Computer Systems, certifying as to Hy-Tech Computer
Systems' certificate of incorporation (which shall be certified by the secretary
of state of the state of its jurisdiction of incorporation), bylaws or other
governing documents and resolutions adopted by Hy-Tech Computer Systems' board
of directors with respect to the transactions contemplated hereby attached
thereto;
(vi) a certificate of good standing for each of Hy-Tech
Technology and Hy-Tech Computer Systems from its jurisdiction of incorporation;
(vii) an opinion of Gottbetter & Partners, LLP, counsel to
HYTT, dated the Closing Date, in the form attached hereto as Exhibit "F";
(viii) all consents, approvals and authorizations of all third
parties and governmental bodies that are necessary in connection with (A) the
execution and delivery by HYTT of this Agreement or the Related Instruments, and
(B) the consummation by HYTT of the transactions contemplated hereby or thereby;
and
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(ix) all other previously undelivered documents, instruments
and writings required to be delivered by HYTT to Encompass at or prior to the
Closing pursuant to this Agreement or otherwise required in connection herewith.
2.3 Deliveries by Buyer. At the Closing, Encompass shall deliver to HYTT
the following:
(a) the Assumption Agreement;
(b) an opinion of Xxxxxx Xxxxxxx Xxxxxx & Xxxxxxx, LLC, counsel to
Encompass, dated the Closing Date, in the form attached hereto as Exhibit "G";
and
(c) all other previously undelivered documents, instruments and
writings required to be delivered by Encompass to HYTT at or prior to the
Closing pursuant to this Agreement or otherwise required in connection herewith.
ARTICLE III. REPRESENTATIONS AND
WARRANTIES
3.1 Each party represents and warrants to the other as follows:
(a) Organization, Etc. Each party is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation. Each party has the power and authority to conduct its business as
it is currently being conducted and to own and lease the property and assets
that it now owns and leases.
(b) Authorization. Each party has all requisite corporate power and
authority to enter into, execute, deliver and consummate the transactions
contemplated by this Agreement and any instruments and agreements contemplated
herein required to be executed and delivered by it pursuant to this Agreement
(collectively, the "Related Instruments"). The board of directors of each party
has taken all action required by law, the certificate of incorporation, bylaws
or other governing documents of each such party or otherwise to authorize the
execution and delivery of this Agreement and the Related Instruments and the
consummation of the transactions contemplated hereby and thereby.
(c) No Violation. Neither the execution and delivery by such party
of this Agreement or any of the Related Instruments, nor the consummation by
such party of the transactions contemplated hereby or thereby, will (i) violate
any provision of the laws of its jurisdiction of incorporation, or the
certificate of incorporation, bylaws or other governing documents of such party,
or (ii) violate, conflict with, or constitute a default (or an event or
condition 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 cause the acceleration of the maturity of any liability or
obligation pursuant to, or result in the creation or imposition of any security
interest, lien, charge or other encumbrance upon any of such party's assets
under any note, bond, mortgage, indenture, deed of trust, license, lease,
contract, commitment, understanding, arrangement, agreement or restriction of
any kind to which such party is a party or by which such party may be bound or
affected or to which any of such party's assets may be subject, or violate any
statute or law or any judgment, decree, order, writ, injunction, regulation or
rule of any court or governmental authority, except, in the case of clause (ii)
above, for any such event that would not, individually or in the aggregate, have
a material adverse effect or prohibit or restrict the consummation of the
transactions contemplated by this Agreement or the Related Instruments.
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(d) Litigation, Orders. There are no claims, actions, suits,
proceedings, investigations or inquiries pending before any court, arbitrator or
governmental or regulatory official or office, or, to such party's knowledge,
threatened against or affecting such party that questions the validity of this
Agreement, the transactions contemplated hereby or any action taken or to be
taken by such party pursuant to this Agreement, at law or in equity, before or
by any federal, state, local or foreign governmental authority; nor, to the
knowledge of such party, is there any valid basis for any such claim, action,
suit, proceeding, inquiry or investigation.
(e) Consents and Approvals. Other than consents previously obtained,
no party is required to obtain, transfer or cause to be transferred any consent,
approval, license, permit or authorization of, or make any declaration, filing
or registration with, any third party or any governmental authority in
connection with (a) the execution and delivery by such party of this Agreement
or the Related Instruments, or (b) the consummation by such party of the
transactions contemplated hereby or thereby.
(f) No Injunction. There is no effective injunction, writ,
preliminary restraining order or other order issued by a court of competent
jurisdiction restraining or prohibiting the consummation of the transactions
contemplated hereby.
3.2 Each of Hy-Tech Technology and Hy-Tech Computer Systems represents and
warrants to Encompass as follows:
(a) Websites.
(i) At Closing, upon release by the holders of the Convertible
Debentures (the "Holders") of the liens on the assets of HYTT, HYTT shall own,
free and clear of all liens, mortgages, security interests, charges and
encumbrances and has good and merchantable title to, or otherwise possesses all
rights necessary to use and license all Websites and all other intellectual
property related thereto.
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(ii) No notice has been received by HYTT, and no claims have
been asserted by any person, challenging or questioning the ownership, validity,
enforceability or use by HYTT or any license thereof of any of the Websites and,
to HYTT's knowledge, there is no valid basis for any such claim, and the use or
other exploitation of the Websites by HYTT or Encompass and its affiliates does
not infringe on or dilute the rights of any person; and, to HYTT's knowledge, no
other person is infringing on the rights of HYTT with respect to any of the
Websites.
(b) Customer Lists.
(i) At Closing, upon release of the liens on the assets of
HYTT by the Holders, HYTT shall own, free and clear of all liens, mortgages,
security interests, charges and encumbrances and has good and merchantable title
to, or otherwise possesses all rights necessary to use and license the Customer
Lists and all rights related thereto.
(ii) The Customer Lists constitute true and accurate lists of
all customers of HYTT's business; HYTT has received no notice or other
communication from, and there has been no indication by, any such customer of an
intention to discontinue or change the terms of its relationship with HYTT.
(c) Convertible Debentures. The aggregate amount outstanding under
the Convertible Debentures set forth on Schedule 1.5 attached hereto represents
the entire amount due and owing to the Holders.
(d) Fair Value. Each of Hy-Tech Technology's and Hy-Tech Computer
Systems' boards of directors has determined that the Consideration represents
fair value for the Rights, the License Agreements and the Release and Waiver.
(e) No Brokers. Other than its engagement of Altos Bancorp, Inc.,
HYTT has not taken any action that would give rise to any claim by any person
for brokerage commissions, finder's fees or similar payments relating to this
Agreement or the transactions contemplated hereby.
(f) Note Payable. That certain Promissory Note in the original
principal amount of $105,000, issued in April 2002 by HYTT to Xxxxxxx Xxxxxxx,
Xxxxxxxx Xxxxxxx and Xxxxx XxXxxx (collectively, the "Note Holders"), has been
paid in full and HYTT has no further obligations, and the Note Holders have no
further rights, thereunder, payment or otherwise.
(g) Disclosure.
(i) No representation or warranty by HYTT contained in this
Agreement, and no statement contained in any document, list, certificate or
other writing furnished or to be furnished by or on behalf of HYTT to Encompass
or any of its representatives in connection with the transactions contemplated
hereby, contains or will contain any untrue statement of a material fact, or
omits or will omit to state any material fact necessary, in light of the
circumstances under which it was or will be made, in order to make the
statements herein or therein not misleading.
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(ii) HYTT does not have knowledge of any fact that has
specific application to HYTT (other than general economic or industry
conditions) that may materially adversely affect the Rights, the License
Agreements and the Release and Waiver, which has not been set forth in this
Agreement.
(iii) No investigation by, or knowledge of, Encompass or its
agents shall affect the representations and warranties given by HYTT.
3.3 Encompass represents and warrants to HYTT as follows:
(a) Brokers. Other than its engagement of Maximum Ventures, Inc.
("Maximum"), Encompass has not taken any action that would give rise to any
claim by any person for brokerage commission, finder's fees or similar payments
relating to this Agreement or the transactions contemplated hereby.
ARTICLE IV. GENERAL RELEASE
4.1 Full Release and Waiver. Each of Hy-Tech Technology and Hy-Tech
Computer Systems, on behalf of itself and each of its current and former
parents, subsidiaries, affiliates, officers, shareholders, directors, members,
predecessors, successors, employees, agents, attorneys, assigns, heirs,
executors, receivers, trustees, personal representatives and administrators
(collectively, the "Related Persons"), hereby releases, waives, acquits and
forever discharges Encompass and each of its Related Persons from any and all
manner of actions and causes of action, lawsuits, charges, complaints,
liabilities, promises, covenants, agreements, judgments, damages, expenses,
suits, debts, claims and demands whatsoever in law or in equity, whether known
or unknown, direct or indirect, absolute or contingent (including, but not
limited to, claims for attorneys' fees and expenses whatsoever), which either of
Hy-Tech Technology and Hy-Tech Computer Systems and/or its Related Persons has
ever had, now has, or hereafter may have against Encompass and/or its Related
Persons arising out of, due to, or in any way related to this Agreement, the
Related Instruments and the transactions contemplated hereby and thereby, except
for Encompass' failure to perform, pay and/or discharge the Assumed Liabilities
or breach of this Agreement or the License Agreements (the "Release and
Waiver").
4.2 Covenant Not to Xxx. Each of Hy-Tech Technology and Hy-Tech Computer
Systems, on behalf of itself and each of its Related Persons hereby covenants
that neither it nor any of its Related Persons will xxx Encompass or any of its
Related Persons due to, or in any way related to this Agreement, the Related
Instruments and the transactions contemplated hereby and thereby, except for
Encompass' failure to perform, pay and/or discharge the Assumed Liabilities or
for breach of this Agreement or the License Agreements.
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4.3 Additional Documents. Each of Hy-Tech Technology and Hy-Tech Computer
Systems hereby agrees to cooperate fully and execute any and all supplementary
documents and to take any and all additional actions which may be necessary or
appropriate to give full force and effect to the terms and intent of the Release
and Waiver.
4.4 Third Party Beneficiaries. This Agreement shall inure to the benefit
of Encompass and its Related Persons, and each of their successors and assigns,
all of which are intended to be third-party beneficiaries hereunder.
4.5 C-T, BCD, PMIC. In the event Encompass and/or its affiliates
consummate a transaction with each of C-T, BCD and PMIC, effective upon the
closing of each such transaction with C-T, BCD and PMIC, respectively, each of
Hy-Tech Technology and Hy-Tech Computer Systems on behalf of itself and each of
its Related Persons hereby releases, waives, acquits and forever discharges C-T,
BCD and PMIC and each of their Related Persons from any and all manner of
actions and causes of action, lawsuits, charges, complaints, liabilities,
promises, covenants, agreements, judgments, damages, expenses, suits, debts,
claims and demands whatsoever in law or in equity, whether known or unknown,
direct or indirect, absolute or contingent (including, but not limited to,
claims for attorneys' fees and expenses whatsoever), which either of Hy-Tech
Technology and Hy-Tech Computer Systems and/or its Related Persons has ever had,
now has, or hereafter may have against C-T, BCD and PMIC and/or any of their
Related Persons arising out of, due to, or in any way related to the Memoranda
and the transactions contemplated thereby.
ARTICLE V. OTHER OBLIGATIONS OF HYTT AND ENCOMPASS
5.1 Prohibited Actions. Between the date of this Agreement and the Closing
Date, in the conduct of its business, HYTT shall not, except as otherwise agreed
by Encompass in writing:
(a) Incurrence of Liens. Subject to lien, security interest or any
other encumbrance any of the Websites or Customer Lists.
(b) Publicity; Advertisement. Except as required by law or in
accordance with Section 8.1 hereof, publicize, advertise or announce to any
third party, except as required pursuant to this Agreement to obtain the consent
of such third party, the entering into of this Agreement, the terms of this
Agreement or the transactions contemplated hereby.
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5.2 Additional Covenants. On and after the date hereof:
(a) Customer Lists; Websites. HYTT shall not sell, encumber or grant
a license or other right in and to, the Customer Lists and/or the Websites to
any third party.
(b) Dissolution. Neither of Hy-Tech Technology nor Hy-Tech Computer
Systems will voluntarily dissolve or file for bankruptcy.
(c) Brokers.
(i) HYTT shall pay, or cause to be paid, all fees and other
amounts due and owing to Altos Bancorp, Inc. and its affiliates in connection
with the Agreement.
(ii) Encompass shall pay, or cause to be paid, all fees and
other amounts due and owing to Maximum in accordance with that certain Advisory
Agreement, dated April 1, 2004, between and affiliate of Encompass and Maximum.
ARTICLE VI. CONDITIONS TO OBLIGATIONS OF EACH PARTY
6.1 The obligations of Encompass under this Agreement are subject to the
satisfaction, at or before the Closing, of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of HYTT contained herein, and the statements contained in any
schedule, instrument, list, certificate or writing delivered by HYTT pursuant to
this Agreement shall be true, complete and accurate as of the date when made and
as of the Closing Date as though such representations and warranties were made
at and as of such dates, except for any changes expressly permitted by this
Agreement.
(b) Performance. HYTT shall have performed and complied in all
material respects with all covenants, agreements, obligations and conditions
required by this Agreement to be performed or complied with by HYTT at or prior
to the Closing.
(c) Cyber Test, Inc. Encompass or an affiliate of Encompass shall
have simultaneously closed the acquisition of all, or substantially all, of the
assets of C-T on terms mutually agreeable to C-T and Encompass.
(d) Employment Matters. Xxxxxxx shall have entered into the
Employment Agreement.
(e) Debenture Holders. The holders of the Convertible Debentures
(the "Holders") (i) shall have agreed upon the exchange of the Convertible
Debentures for preferred stock of Encompass and cash, on terms mutually
agreeable to Encompass and the Holders, and (ii) shall have authorized Encompass
to file financing statements with the applicable governmental authority(ies)
filing offices to terminate the liens placed on the assets of HYTT by the
Holders.
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(f) Other Acquisitions. In the event the BCD Memorandum and the PMIC
Memorandum shall not have already expired by their respective terms, HYTT shall
have terminated each of the BCD Memorandum and PMIC Memorandum and waived any
and all rights it may have thereunder; and PMIC shall have executed a letter of
intent with Encompass or an affiliate of Encompass.
(g) Consulting Agreements. Encompass and Maximum shall have agreed
on a mutually acceptable arrangement for advisory services to be provided by,
and fees to be paid to, Maximum which such arrangement shall supersede any prior
arrangements between Encompass and Maximum. AltosBanCorp., Inc. shall have
released Encompass from any obligation with respect to the transactions
contemplated by this Agreement.
(h) Landlord; Noteholders. Each of Xxx Coast Enterprises, Inc., Xxxx
Xxxxxxx, Xxxxxxxx Xxxxxxx and Xxxxx XxXxxx shall have delivered a release and
waiver, substantially in the form of Exhibit "H" attached hereto.
6.2 The obligations of HYTT under this Agreement are subject to the
satisfaction, at or before the Closing, of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Encompass contained herein, and the statements contained in any
schedule, instrument, list, certificate or writing delivered by Encompass
pursuant to this Agreement shall be true, complete and accurate as of the date
when made and as of the Closing Date as though such representations and
warranties were made at and as of such dates, except for any changes expressly
permitted by this Agreement.
(b) Performance. Encompass shall have performed and complied in all
material respects with all covenants, agreements, obligations and conditions
required by this Agreement to be performed or complied with by Encompass at or
prior to the Closing.
ARTICLE VII. TERMINATION
7.1 Termination of Agreement. This Agreement may be terminated:
(i) by the mutual consent of HYTT and Encompass;
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(ii) by HYTT or Encompass if the Closing has not taken place on or
before June 8, 2004; provided, however, that no Party then in breach of any
obligations hereunder shall have the right to terminate;
(iii) by Encompass if any of the representations and warranties of
HYTT contained in Article III hereof were incorrect in any material respect when
made or become incorrect in any material respect; and
(iv) by HYTT if any of the representations and warranties of
Encompass contained in Article III hereof were incorrect in any material respect
when made or become incorrect in any material respect.
7.2 Limitations on Remedies. If this Agreement is terminated by HYTT or
Encompass as permitted under Section 7.1 and not as a result of a breach of a
representation or warranty or the failure of any party to perform its
obligations hereunder, such termination shall be without liability of any party.
If a party terminates this Agreement as a result of a breach of a representation
or warranty by the other party or the failure of the other party to perform its
obligations hereunder, the nonbreaching party shall, in addition to other
remedies provided by this Agreement, at law, or in equity, be entitled to
reimbursement from the breaching party for all expenses incurred by the
nonbreaching party in connection with this Agreement and the transactions
contemplated hereby.
ARTICLE VIII. MISCELLANEOUS
8.1 Press Releases and Public Announcements. Neither Encompass, on the one
hand, nor HYTT, on the other hand, shall issue any press release or make any
public announcement relating to the subject matter of this Agreement without the
prior written approval of the other parties. Encompass and HYTT shall agree upon
the text of, and jointly issue, a press release or other public communication
announcing the consummation of the transactions contemplated hereunder, a form
of which is attached hereto as Exhibit "I".
8.2 Further Assurances. From time to time, at Encompass' request and
without further consideration, HYTT shall execute and deliver to Encompass such
documents and take such other action as Encompass may reasonably request in
order to consummate more effectively the transactions contemplated hereby.
8.3 Parties in Interest. This Agreement shall be binding upon, inure to
the benefit of, and be enforceable by the respective successors and permitted
assigns of the parties hereto. The rights and obligations of HYTT hereunder may
not be assigned without the prior written consent of Encompass.
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8.4 Entire Agreement, Amendments and Waiver. This Agreement, the exhibits,
the schedules and other writings referred to herein or delivered pursuant hereto
that form a part hereof contain the entire understanding of the parties with
respect to its subject matter. This Agreement supersedes all prior
understandings and agreements. This Agreement may be amended only by a written
instrument duly executed by the parties. Any condition to a party's obligations
hereunder may be waived in writing by such party to the extent permitted by law.
8.5 Headings. The Article and Section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
8.6 Notices. All notices, claims, certificates, requests, demands and
other communications hereunder shall be in writing and shall be deemed to have
been received (i) on the same business day if delivered personally or by
confirmed facsimile transmission, (ii) on the next business day if delivered by
a reputable and nationally recognized overnight courier, and (iii) on the third
business day if mailed (registered or certified mail, postage prepaid, return
receipt requested), as follows:
If to Encompass : c/o Advanced Communications Technologies, Inc.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Facsimile No.: 000-000-0000
with a copy to: Xxxxxx Xxxxxxx Xxxxxx & Xxxxxxx, LLC
0000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Esquire
Facsimile No.: 215-851-8383
and
Xxxxxxxx & Xxxxxxxx, LLP
000 X. Xxxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxxx, Esquire
Facsimile No.: 000-000-0000
If to HYTT: Hy-Tech Technology Group, Inc.
0000 Xxx Xxxxx Xxxxx
Xx. Xxxxx, Xxxxxxx
Attention: Xxxxxx Xxxxxxx
Facsimile No.: __________________
with a copy to: Gottbetter & Partners, LLP
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx Xxxxxxxxxx, Esquire
Facsimile No.: 000-000-0000
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or to such other address as the person to whom notice is to be given may have
previously furnished to the others in writing in the manner set forth above,
provided that notice of a change of address shall be deemed given only upon
receipt.
8.7 Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to its or any other jurisdiction's conflicts of laws principles. Any legal
action or proceeding with respect to this Agreement or for recognition and
enforcement of any judgment in respect hereof brought by any party hereto or its
successors or assigns may be brought and determined in the courts of the State
of Delaware or the federal district court for the District of Delaware, and each
party hereto submits with regard to any such action or proceeding for itself and
in respect to its property, generally and unconditionally, to the exclusive
jurisdiction of such courts, and agrees that service of process in any such
action or proceeding shall be effective if mailed to such party at the address
specified herein. Each party hereto irrevocably waives, and agrees not to
assert, by way of motion, as a defense, counterclaim or otherwise, in any action
or proceeding with respect to this Agreement (i) any claim that it is not
personally subject to the jurisdiction of such courts for any reason, (ii) that
it or its property is exempt or immune from jurisdiction of any court or from
any legal process commenced in such courts (whether through service of notice,
attachment prior to judgment, attachment in aid of execution of judgment,
execution of judgment or otherwise), and (iii) to the fullest extent permitted
by applicable law, that (a) the suit, action or proceeding in any such court is
brought in an inconvenient forum, (b) the venue of such suit, action or
proceeding is improper and (c) this Agreement, or the subject matter hereof, may
not be enforced in or by such courts.
8.8 Third Parties. Nothing herein expressed or implied is intended or
shall be construed to confer upon or give to any person, other than the parties
hereto and their successors or permitted assigns, any rights or remedies under
or by reason of this Agreement.
8.9 Counterparts. This Agreement may be executed simultaneously in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and such counterparts may
be delivered by facsimile transmission.
8.10 Expenses. Each party hereto will bear its own costs and expenses
(including fees and expenses of legal counsel, accountants, investment bankers,
brokers or other representatives or consultants) incurred in connection with
this Agreement and the transactions contemplated hereby.
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8.11 Construction. Encompass and HYTT have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement will be construed as
if drafted jointly by the parties hereto and no presumption or burden of proof
will arise favoring or disfavoring any party by virtue of the authorship of any
of the provisions of this Agreement. Any reference to any federal, state, local
or foreign statute or law will be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of each of the parties hereto on the date first
written above.
ENCOMPASS GROUP AFFILIATES, INC.
By:
--------------------------------------
Name:
Title:
HY-TECH TECHNOLOGY GROUP, INC.
By:
--------------------------------------
Name:
Title:
HY-TECH COMPUTER SYSTEMS, INC.
By:
--------------------------------------
Name:
Title:
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EXHIBIT A
EMPLOYMENT AGREEMENT
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EXHIBIT B
NONCOMPETITION AND NONDISCLOSURE AGREEMENT
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EXHIBIT C
CUSTOMER LISTS LICENSE AGREEMENT
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EXHIBIT D
WEBSITES LICENSE AGREEMENT
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EXHIBIT E
ASSUMPTION AGREEMENT
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EXHIBIT F
GOTTBETTER OPINION
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EXHIBIT G
ESCM OPINION
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EXHIBIT H
RELEASE AND WAIVER
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EXHIBIT I
PRESS RELEASE
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SCHEDULE 1.5
CONVERTIBLE DEBENTURES
Name and Address Principal amount of Debenture
--------------------------------------------------------------------------------
KT Capital, LP $100,000
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxx, Managing Partner
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx & Xxxxxxxxx X. Xxxxxxx $100,000
0000 Xxxxxxx Xxxx Xxxxxx, Xx. 00
Xxxx Xxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx, Xxxxx X. Xxxxxxx & $100,000
Xxxxxxx Xxxxx-Hoagsberg
0000 Xxxxxxx Xxxx Xxxxxx, Xx. 00
Xxxx Xxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx $100,000
0000 Xxxxxxx Xxxx Xxxxxx, Xx. 00
Xxxx Xxxxx, XX 00000
--------------------------------------------------------------------------------
Maximum Ventures, Inc. $103,300
0000 Xxxx Xxxxxxx Xxxx
Xxxx Xxxxx, XX 00000
--------------------------------------------------------------------------------
Total $503,300
--------------------------------------------------------------------------------
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SCHEDULE 1.6
ALLOCATION OF PURCHASE PRICE
Rights and Release and Waiver-$103,300
Customer Lists License Agreement-$300,000
Websites License Agreement-$100,000
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