EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (the "Agreement") is made this 23rd day of
December, 1999 by and between The Hartcourt Companies Inc., a Utah corporation
("Hartcourt") and GoCall Inc., a Delaware corporation ("GoCall")
WHEREAS, GoCall and Hartcourt wish to form a strategic alliance for
the development of certain common interests of the two corporations, including
but not limited to the development of GoCall's internet related
development-stage businesses and software; and
WHEREAS, Hartcourt and GoCall wish to effect the proposed strategic
alliance by exchanging shares of the two respective corporations' common stock.
IN CONSIDERATION of the mutual promises contained herein, the benefits
to be derived by each party hereunder and other good and valuable consideration,
the receipt and sufficiency of which are hereby expressly acknowledged,
Hartcourt and GoCall agree as follows:
1. EXCHANGE
On the basis of the representations and warranties herein contained,
subject to the terms and conditions set forth herein, GoCall agrees to
exchange One Million (l,000,000) shares of its Convertible Preferred
Stock (par value @ $5.00) stock (the GoCall Shares") exercisable to 10
shares of GoCall Common Stock (Restricted under Rule 144 for 12 months)
for each share of Convertible Preferred Shares so exchanged for all of
the shares as set forth in Schedule "A" attached hereto and made a part
hereof ("Hartcourt Shares").
2. CLOSING
A. CLOSING DATE. The closing of the exchange contemplated by this
Agreement (the "Closing") shall occur upon the transfer of the
GoCall Shares to Hartcourt (the Transfer Date"), on December 29,
1999 at 4:00 PM of that day at the offices of Hartcourt. At the
Closing, Hartcourt shall deliver its consideration to GoCall and
GoCall shall deliver its consideration to Hartcourt in a
simultaneous transaction. Notwithstanding the date of Closing, the
Effective Date shall be December 29, 1999.
3. REPRESENTATIONS AND WARRANTIES OF GOCALL
GoCall hereby represents and warrants to Hartcourt that:
A. ORGANIZATION. GoCall is a corporation validly existing and in
good standing under the laws of Delaware with the power and
authority to carry on its business as now being conducted. The
execution and delivery of this Agreement and the consummation of
1
laws of Delaware. with the power and authority to carry on its
business as now being conducted. The execution and delivery of this
Agreement and the consummation of the transaction contemplated in
this Agreement have been, or will be prior to Closing, duly
authorized by all requisite corporate action on the part of GoCall,
including but not limited to Board of Director Resolutions
ratifying this transaction and that this Agreement has been duly
executed and delivered by GoCall and constitutes a binding and
enforceable obligation of GoCall. On Closing, a single five (5)
member Board of Directors shall be formed having three (3) members
appointed by Hartcourt and two (2) members appointed by GoCall.
B. THIRD PARTY CONSENT. No authorization, consent, or approval of,
or registration or filing with, any governmental authority or any
other person is required to be obtained or made by GoCall in
connection with the execution, delivery or performance of this
Agreement, or if required, GoCall has or will obtain same prior to
Closing;
C. LITIGATION. GoCall is not a defendant or a plaintiff against
whom a claim has been made or reduced to judgement in any
litigation or proceedings before any local, state or U.S. foreign
government, or any department, board, body or agency thereof, which
could result in a claim against the GoCall Shares or any of
GoCall's assets;
D. STATUS OF GOCALL SHARES. The GoCall Shares will be validly
issued by GoCall and it shall deliver same to Hartcourt at Closing,
as well as resolutions of GoCall's Board of Directors wherein
GoCall agrees not to issue or demand a "stop transfer" be put into
effect or against any of the GoCall Shares, or otherwise attempt to
restrict the transfer or exchange of the GoCall Shares issued to
Hartcourt hereunder. Further. GoCall represents that it has not
created any option, security interest or encumbrance upon the
GoCall Shares that would give rise to any claims by third parties
or otherwise conflict with or preclude the exchange as contemplated
herein; and
E. AUTHORITY. This Agreement has been duly executed by GoCall, and
the execution and performance of this Agreement will not violate,
or result in a breach of, or constitute a default in any agreement,
instrument, judgement, order or decree to which GoCall is a party
or to which the GoCall Shares may be subject.
4. REPRESENTATIONS AND WARRANTIES OF HARTCOURT
Hartcourt hereby represents and warrants to GoCall that:
A. ORGANIZATION. Hartcourt is a corporation validly existing and in
good standing under the laws of Utah with the power and authority
to carry on its business now being conducted. The execution and
delivery of this Agreement and the consummation of the transaction
contemplated in this Agreement have been, or will be prior to
Closing, duly authorized by all requisite corporate action on the
part of Hartcourt. This Agreement has been duly executed and
delivered by Hartcourt and constitutes a binding, and enforceable
obligation of Hartcourt;
B. THIRD PARTY CONSENT. No authorization, consent, or approval of,
or registration or filing with, any governmental authority or any
other person is required to be obtained or made by Hartcourt in
connection with the execution, delivery or performance of this
Agreement, or if required, GoCall has or will obtain same prior to
Closing;
2
C. LITIGATION. Hartcourt is not a defendant or a plaintiff against
whom a counterclaim has been made or reduced to judgement in any
litigation or proceedings before any local, state U.S. or foreign
government, or any department, board, body or agency thereof, which
could result in a claim against Hartcourt enacting this
transaction.
D. STATUS OF HARTCOURT OWNED SHARES. The Shares constituting
Hartcourt's consideration Schedule "A" annexed hereto and
incorporated herein by reference will be validly endorsed by
Hartcourt or released to GoCall by written authorization duly
executed by Hartcourt which it shall deliver to GoCall at Closing.
Further, Hartcourt represents that it has not created any option,
security interest or encumbrance upon the Shares that would give
rise to any claims by third parties or otherwise conflict with or
preclude the exchange as contemplated herein; and Hartcourt has
never been an affiliate of any of the companies in Schedule "A."
E. AUTHORITY. This Agreement has been duly executed by Hartcourt,
and the execution and performance of this Agreement will not
violate, or result in a breach of, or constitute a default in any
agreement, instrument, judgement, order or decree to which
Hartcourt is a party or to which the Hartcourt Shares may be
subject.
5. CONDITIONS PRECEDENT TO OBLIGATIONS OF HARTCOURT AND GOCALL
All obligations of Hartcourt and GoCall under this Agreement are
subject to the fulfillment, prior to or as of the Closing Date, of
each of the following conditions:
A. TRANSFER AND DELIVERY OF THE SECURITIES. Hartcourt shall have
endorsed or assigned or delivered the Shares to GoCall and GoCall
shall have issued and delivered the GoCall Shares to Hartcourt
pursuant to this Agreement.
B. ACCEPTANCE OF DOCUMENTS. All instruments and documents delivered
to the parties hereto, pursuant to the provisions of this
Agreement, and the terms and conditions of the agreement(s) shall
be satisfactory to Hartcourt and GoCall.
6. AVAILABILITY OF INFORMATION
Hartcourt and GoCall each represent that, by virtue of their
respective business activities and economic bargaining power or
otherwise, they have been able to conduct their own due diligence and
have had access to or have been furnished with, prior to or
concurrently with the execution hereof, the information which they
consider to be adequate to make a decision to exchange the GoCall
Shares for the Hartcourt owned Shares.
7. PRIVATE TRANSACTION
A. PRIVATE OFFERING. GoCall and Hartcourt each understand that the
exchange contemplated herein constitutes a private, arms-length
transaction between the parties without the use or reliance upon a
distribution or securities underwriter.
3
B. PURCHASE FOR OWN ACCOUNT. Neither GoCall nor Hartcourt are
underwriters of, or dealers in, the respective securities to be
exchanged hereunder, and neither party is acting as such or
participating pursuant to a contractual agreement, in the
distribution of such securities.
C. INVESTMENT RISK. Hartcourt and GoCall acknowledge the exchange
contemplated by this Agreement may involve a high degree of
financial risk, including the risk that one or both parties may
lose its entire investment.
D. ACCESS TO INFORMATION. GoCall and Hartcourt and their advisors
each have been afforded the opportunity to discuss the transaction
contemplated herein with legal and accounting professionals, and to
examine and evaluate the financial impact of such exchange.
E. This Agreement has been duly executed by Hartcourt, and the
execution and performance of this Agreement will not violate, or
result in a breach of, or constitute a default in any agreement,
instrument, judgement, order or decree to which Hartcourt is a
party or to which the Hartcourt Shares may be subject.
8. TERMINATION
This Agreement may be terminated at anytime prior to the date of
Closing by either party if (a) there shall be any actual or threatened
action or proceeding by or before any court or any other governmental
body which shall seek to restrain, prohibit, or invalidate the
transaction contemplated by this Agreement, and which, in the judgment
of such party giving notice to terminate and based upon the advice of
legal counsel, makes it inadvisable to proceed with the transaction
contemplated by this Agreement.
9. MISCELLANEOUS
A. AUTHORITY. The officers of Hartcourt and GoCalI executing this
Agreement are duly authorized to do so and each party has taken all
action required by law or otherwise to properly and legally execute
this Agreement.
B. NOTICES. Any notice under this Agreement shall be deemed to have
been sufficiently given if sent by registered or certified mail,
postage prepaid, addressed as follows:
To GoCall Inc. GoCall Inc.
00 Xxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
4
To Hartcourt: The Hartcourt Companies Inc.
0000 X. Xxxxxx Xx.
Xxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to any other address which may hereafter be designated by
either party by notice given in such manner. All notices
shall be deemed to have been given as of the date of receipt.
C. ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding between the parties hereto and no other prior written
or oral statement or agreement shall be recognized or enforced.
D. SEVERABILITY. If a court of competent jurisdiction determines
that any clause or provision of this Agreement is invalid, illegal
or unenforceable, the other clauses and provisions of the Agreement
shall remain in full force and effect and the clauses and
provisions which are determined to be void, illegal or
unenforceable shall be limited so that they shall remain in effect
to the extent permissible by law.
E. None of the parties hereto may assign this Agreement without the
express written consent of the other parties and any approved
assignment shall be binding on and inure to the benefit of such
successor or, in the event of death or incapacity on assignor s
heirs, executors, administrators and successors.
F. APPLICABLE LAW. This Agreement bas been negotiated and is being
contracted for in the State of California, and it shall be governed
by the laws of California, County of Los Angeles, notwithstanding
any conflict-of-law provision to the contrary.
G. LITIGATION. If any legal action or other preceding
(non-exclusively including arbitration) is brought for the
enforcement of or to declare any right or obligation under this
Agreement or as a result of a breach, default or misrepresentation
in connection with any of the provisions of this Agreement, or
otherwise because of a dispute among the parties hereto, the
prevailing party will be entitled to recover actual attorney's fees
(including for appeals and collection) and other expenses incurred
in such action or proceeding, in addition to any other relief to
which such party may be entitled.
H. NO THIRD PARTY BENEFICIARY. Nothing in this Agreement, expressed
or implied, is intended to confer upon any person, other than the
parties hereto and their successors, any rights or remedies under
or by reason of this Agreement, unless this Agreement specifically
states such intent.
I. It is understood and agreed that this Agreement may be executed
in any number of identical counterparts, each of which may be
deemed an original for all purposes.
J. FURTHER ASSURANCES. At any time, and from time to time after the
Closing, each party hereto will execute such additional instruments
and take such action as may be reasonably requested by the other
party to confirm or perfect title to the securities being exchanged
pursuant to this Agreement, or otherwise to carry out the intent
and purposes of this Agreement.
5
K. BROKER'S OR FINDER'S FEE: EXPENSES. GoCall and Hartcourt each
warrant that they have not incurred any liability, contingent or
otherwise, for brokers' or finders fees or commissions relating to
this Agreement for which the other party shall have responsibility.
Except as otherwise provided herein, all fees, costs and expenses
incurred by either party relating to this Agreement shall be paid
by the party incurring same.
L. AMENDMENT OR WAIVER. Every right and remedy provided herein
shall be cumulative with every other right and remedy, whether
conferred herein, at law, or in equity, and may be enforced
concurrently herewith, and no waiver by any party of the
performance of any obligation by the other shall be construed as a
waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to Closing,
this Agreement may be amended by a writing signed by all parties
hereto.
M. HEADINGS. The section and subsection headings in this Agreement
are inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Agreement.
N. FACSIMILE. A facsimile, telecopy or other reproduction of this
instrument may be executed by one or more parties hereto and such
executed copy may be delivered by facsimile or similar
instantaneous electronic transmission device pursuant to which the
signature of or on behalf of such party can be seen, and such
execution and delivery shall be considered valid, binding and
effective for all purposes. At the request of any party hereto, all
parties agree to execute an original of this instrument as well as
any facsimile, telecopy or other reproduction hereof.
O. ANNOUNCEMENTS. Except as required by law, no announcements shall
be made by either party with respect to the receipt or acceptance
of this agreement, or the transaction proposed herein without the
prior written permission of the other.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed the day and year first above written.
"GoCall" "Hartcourt"
GoCall, Inc. The Hartcourt Companies, Inc.
By: By:
/s/ Xxxxxxx Xxxx /s/ Xxxx X. Xxxx
------------------------- -------------------------
Xxxxxxx Xxxx, CEO Xxxx X. Xxxx, Chairman
6
SCHEDULE "A"
1. 2,850,000 Common Stock Shares in Dega Technology, Inc.,
symbol: DEGA 500000 Restricted, Balance without legend
2. 2,400,000 Preferred Shares in NuOasis Resorts, Inc.
symbol: NUOA Without legend
3. 1,500,000 Common Stock Shares in Oasis Resorts International Inc.
symbol: OAIS Without legend
4. 192,000 Common Stock Shares in Electronic Components & Systems, Inc
symbol: ECSX Without legend
AS TO ALL OF THE ABOVE SHARES, HARTCOURT REPRESENTS AND WARRANTS THAT IT IS
RELYING UPON THE REPRESENTATIONS OF ITS PREDECESSOR IN TITLE CONCERNING
"LEGENDS" AND IT CANNOT ITSELF CONFIRM THIS INFORMATION NOR IS IT HEREIN
REPRESENTING AS TO THE TRUTH OR VALIDITY OF SUCH CLAIMS.
