SHARE EXCHANGE AGREEMENT
BETWEEN HITCOM CORPORATION AND XXXXX XXXX
For the Purchase of Eighty Percent (80%) of
the Outstanding Common Stock of
ONE PLUS MARKETING, INC.
Dated: April 14, 1997
TABLE OF CONTENTS
ARTICLE I TERMS OF PURCHASE AND SALE
1.0 Exchange of Stock
1.1 Closing
ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS OF
2.0 Organization, Qualification and Authorization
2.1 Capitalization
2.2 No Additional Stock Issuable
2.3 Subsidiaries and Partnership Interests
2.4 Authority; No Conflict
2.5 Financial Statements
2.6 Books and Records
2.7 Title to Properties; Encumbrances
2.8 Condition and Sufficiency of Assets
2.9 Accounts Receivable
2.10 Inventory
2.11 No Undisclosed Liabilities
2.12 Taxes
2.13 No Material Adverse Change
2.14 Labor Agreements, Benefit Plans and Employment
Agreements
2.15 ERISA
2.16 Employees and Consultants
2.17 Overtime, Back Wages, Vacations, and Minimum
Wages
2.18 Discrimination, Occupational Safety,
Environmental Control and Other Statutes and Regulations
2.19 Contracts and Commitments
2.20 Insurance
2.21 Litigation
2.22 Proprietary Rights
2.23 No Breach of Statute, Decree, Order or Contract
2.24 Guaranties
2.25 Transactions With Affiliates, Directors and
Others
2.26 Officers and Directors
2.27 Xxxx Investment Intent
2.28 Brokers or Finders
2.29 Disclosure
2.30 Survival
ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF
3.0 Organization, Qualification and Authorization
3.1 Capitalization
3.2 Derivative Securities
3.3 SEC Requirements.
3.4 Subsidiaries and Partnership Interests
3.5 Authority; No Conflict
3.6 Financial Statements
3.7 Books and Records
3.8 Title to Properties; Encumbrances
3.9 Condition and Sufficiency of Assets
3.10 Accounts Receivable
3.11 Inventory
3.12 No Undisclosed Liabilities
3.13 Taxes
3.14 No Material Adverse Change
3.15 Labor Agreements, Benefit Plans and Employment
Agreements
3.16 ERISA
3.17 Employees and Consultants
3.18 Overtime, Back Wages, Vacations, and Minimum
Wages
3.19 Discrimination, Occupational Safety,
Environmental Control and Other Statutes and Regulations
3.20 Contracts and Commitments
3.21 Insurance
3.22 Litigation
3.23 Proprietary Rights
3.24 No Breach of Statute, Decree, Order or Contract
3.25 Guaranties
3.26 Transactions With Affiliates, Directors and
Others
3.27 Officers and Directors
3.28 Brokers or Finders
3.29 Disclosure
3.30 HitCom Investment Intent
3.31 Survival
ARTICLE IV COVENANTS AND AGREEMENTS
[Intentionally deleted]
ARTICLE V ACTIONS TAKEN AT THE CLOSING BY HITCOM AND
5.0 Actions taken at the Closing by Xxxx
5.1 Actions taken at the Closing by HitCom
ARTICLE VI INDEMNIFICATION
6.1 Indemnification
6.2 Damages
6.3 Notice and Procedures
6.4 Rights of Indemnitor
6.5 Final Claims Statement
6.6 Survival, Calculations and Exclusive Remedy
ARTICLE VII MISCELLANEOUS
7.1 Notices
7.2 Amendment
7.3 Counterparts
7.4 Binding on Successors and Assigns
7.5 Severability
7.6 Waivers
7.7 Cooperation of Parties
7.8 Headings
7.9 Expenses
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT ("Agreement") is made and
entered into this 14th day of April 1997, by and between
HitCom Corporation, Inc., a Delaware corporation ("HitCom")
and Xxxxx Xxxx, an individual currently residing in the
State of Illinois ("Xxxx"), together being the parties to
this Agreement ("Parties").
W I T N E S S E T H:
WHEREAS, Xxxx owns 100 shares of the common stock, no
par value per share, of One Plus Marketing, Inc., an
Illinois corporation ("One Plus"), which constitute all of
the issued and outstanding shares of the capital stock of
the One Plus (the "One Plus Stock"); and
WHEREAS, Xxxx desires to exchange eighty (80) shares of
One Plus Stock, constituting 80% of the currently
outstanding shares of One Plus Stock (the "Subject One Plus
Shares") for Five Million Eight Hundred thirty-seven
Thousand Five Hundred Three (5,837,503) newly issued shares
of the common stock of HitCom, $0.001 par value per share
("HitCom Common Stock") constituting 70% of the currently
outstanding shares of HitCom Common Stock (the "Subject
HitCom Shares"), and HitCom desires to issue and deliver to
Xxxx the Subject HitCom Shares in exchange for the Subject
One Plus Shares; and
WHEREAS, Xxxx requires that he be permitted to maintain
ownership of 70% of all outstanding HitCom Common Stock to
the extent that any "Derivative Securities" (as hereafter
defined) existing on the date hereof are subsequently
exercised or converted and HitCom has agreed to grant to
Xxxx the right to purchase such additional shares of HitCom
Common Stock pursuant to an anti-dilution option; and
WHEREAS, it is the desire of the Parties that the
transactions contemplated hereby constitute a tax-free
reorganization under Section 368(a)(1)(B) of the Internal
Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the premises and of
the covenants and agreements set forth in this Agreement,
the Parties hereby agree as follows:
ARTICLE I
TERMS OF PURCHASE AND SALE
Exchange of Stock.
Upon the terms and subject to the
conditions of this Agreement, immediately following the
execution and delivery of this Agreement:
(a) Xxxx is transferring and delivering to HitCom
all of the Subject One Plus Shares, free and clear of all
options, pledges, security interest, liens, charges, rights
or other encumbrances or restriction on transfer
(collectively, the "Encumbrances") of any kind whatsoever,
other than as may be described herein; and
(b) HitCom is transferring and delivering to Xxxx
(i) the Subject HitCom Shares, free and clear of all
Encumbrances of any kind whatsoever, other than as may be
described herein, and (ii) an anti-dilution option, in the
form attached hereto as Exhibit A (the "Anti-Dilution
Option").
Closing.
The consummation of the exchange described in Section 1.0 above
(the "Exchange") and the other transactions provided for or
contemplated hereby (the "Closing") is being consummated
contemporaneously with the execution and delivery of the
Agreement.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS OF XXXX
Xxxx represents, warrants and covenants to HitCom as
follows:
Organization, Qualification and Authorization.
One Plus is duly organized, validly
existing and in good standing under the laws of the State of
Illinois. One Plus has all requisite corporate power and
authority to own, lease and operate its properties and to
carry on its business as it is now being conducted, and is
not required by law to be qualified as a foreign corporation
to do business in any jurisdiction where the nature of its
business or the ownership or lease of its properties
requires such qualifications, except where the failure to
qualify would not have a materially adverse effect on the
business of One Plus. Xxxx has the full power and legal
capacity to enter into this Agreement and to carry out his
obligations hereunder.
Capitalization.
The authorized stock of One Plus consists
solely of 1,000 shares of common stock, no par value, of
which 100 shares are issued and outstanding. All of One
Plus' issued and outstanding stock is owned beneficially and
of record by Xxxx. The issued and outstanding stock of One
Plus has been duly and validly issued, and is fully paid and
non-assessable. None of such shares is subject to any
Encumbrance.
No Additional Stock Issuable.
One Plus has no outstanding stock purchase warrants or options, nor
securities convertible into any class of the capital stock
of One Plus; it has no shares which it is committed to issue
but which are as yet unissued; and neither One Plus nor the
Xxxx is a party to any agreement obligating either of them
to issue or transfer, or restricting either of them from
transferring, at present or upon the occurrence of any
event, any securities of One Plus.
Subsidiaries and Partnership
Interests.
One Plus has no subsidiaries or interests in
any joint venture, general or limited partnerships.
Authority; No Conflict.
This Agreement constitutes the
legal, valid and binding obligation of Xxxx enforceable
against Xxxx in accordance with its terms. Xxxx has the
absolute and unrestricted right, power, authority and
capacity to execute and deliver this Agreement and to
perform his obligations hereunder. Except as set forth in
Schedule 2.4, neither the execution and delivery of this
Agreement by Xxxx nor the consummation of the Exchange or
any other transaction contemplated hereby will:
(a) violate or conflict with any provision of the
Certificate or Articles of Incorporation or the By-Laws of
One Plus;
(b) violate or conflict with any provision of any law,
rule, regulation, order, permit, certificate, writ,
judgment, injunction, decree, determination, award or other
decision of any court, government, governmental agency or
instrumentality, domestic, or foreign, or arbitrator,
binding upon Xxxx or One Plus;
(c) result in a breach of, or constitute a default
under (or with notice or lapse of time or both would result
in a breach of or constitute a default under) or otherwise
give any person the right to terminate, any lease, license,
contract or other agreement or instrument to which One Plus
is a party or by which it is bound;
(d) result in, or require, the creation or imposition
of, any mortgage, deed of trust, pledge, lien, security
interest or other charge or encumbrance of any nature upon
or with respect to any of the properties now owned or used
by One Plus.
Except as disclosed in Schedule 2.4, neither the Xxxx nor
One Plus are required to give prior notice to, or obtain any
consent, approval or authorization of, any governmental
authority, creditor or other party in connection with the
execution and delivery of this Agreement or the consummation
of the Exchange or any other transaction contemplated by it.
Financial Statements.
Xxxx has delivered to HitCom: (a)
unaudited balance sheets of One Plus as at December 31,
1995 and 1996, and the related unaudited statements of
income, changes in stockholder's equity and cash flows for
each of the fiscal years then ended, and (b) an unaudited
consolidated balance sheet of One Plus as at January 31,
1997 (the "One Plus Interim Balance Sheet") and the related
unaudited statements of income, changes in stockholder's
equity and cash flow for period then ended, including in
each case the notes thereto. Such financial statements and
notes fairly present the financial condition and results of
operations of One Plus as at the respective dates thereof
and for the periods referred to, all in accordance with
generally accepted United States accounting principles
("GAAP"), subject, in the case of interim financial
statements, to normal recurring year-end adjustments (the
effect of which will not, individually or in the aggregate,
be materially adverse) and the absence of notes, which, if
presented, would not differ materially from those included
in the Balance Sheet as at December 31, 1996 (the "1996
Balance Sheet") referred to above. The financial statements
referred to in this Section 2.5 reflect the consistent
application of such accounting principles throughout the
periods involved, except as disclosed in the notes to such
financial statements.
Books and Records.
The books of account, minute books, stock
record books and other records of One Plus, all of which
have been made available to HitCom, are complete and correct
and have been maintained in accordance with sound business
practices.
Title to Properties; Encumbrances.
Schedule 2.7 describes all real property, leaseholds or other real
property interests therein owned by One Plus. One Plus owns
(with good and marketable title in the case of real
property) all the properties and assets (real, personal and
mixed, tangible and intangible) reflected in the 1996
Balance Sheet and the Interim Balance Sheet (except for
assets held under capitalized leases not required to be
disclosed in the 1996 Balance Sheet or One Plus Interim
Balance Sheet and property sold since the date of the 1996
Balance Sheet and the One Plus Interim Balance Sheet, as the
case may be, in the ordinary course of business and
consistent with past practice), and all of the properties
and assets purchased or otherwise acquired by One Plus since
the date of the 1996 Balance Sheet (except for personal
property acquired and sold since the date of the 1996
Balance Sheet in the ordinary course of business and
consistent with past practice). Except as listed on
Schedule 2.7, properties and assets reflected in the 1996
Balance Sheet and the One Plus Interim Balance Sheet are
free and clear of all liens, security interests, and other
encumbrances.
Condition and Sufficiency of Assets.
To the knowledge of Xxxx, the buildings, plants, structures and
equipment of One Plus are structurally sound with no known
defects, are in good operating condition and repair and are
adequate for the uses to which they are being put, and none
of such buildings, plants, structures or equipment is in
need of maintenance or repairs except for ordinary, routine
maintenance and repairs that are not material in nature or
cost. The building, plants, structures and equipment of One
Plus are sufficient for the conduct of its business, as
currently being conducted. Schedule 2.8 lists all items of
machinery and equipment owned by One Plus having a book
value or replacement cost in excess of [$1,000].
Accounts Receivable.
All accounts receivable of One Plus
that are reflected in the Balance Sheet or the One Plus
Interim Balance Sheet arose from sales actually made in the
ordinary course of business. Attached as Schedule 2.9 is a
true, complete and correct aging schedule of all accounts
receivable and trade accounts due One Plus as of the date
hereof.
Inventory.
All inventory of One Plus, whether or not reflected in the
1996 Balance Sheet or the One Plus Interim Balance Sheet,
consists of a quality and quantity usable and salable in the
ordinary course of business, except for obsolete items and
items of below-standard quality, all of which have been
written off or written down to net realizable value in the
1996 Balance Sheet or the One Plus Interim Balance Sheet or
on the accounting records of One Plus as of the Closing
Date, as the case may be. The quantities of each type of
inventory are not excessive, but are reasonable and
warranted in the present circumstance of One Plus.
No Undisclosed Liabilities.
Except as set forth in Schedule 2.11, One Plus has no knowledge of
liabilities or obligations of any nature (absolute, accrued, contingent or
otherwise) that are not fully reflected or reserved against
in the 1996 Balance Sheet or the One Plus Interim Balance
Sheet, except liabilities and obligations incurred in the
ordinary course of business and consistent with past
practice since the respective dates thereof.
Taxes.
One Plus has filed or caused to be filed on a timely basis all
tax returns that are or were required to be filed by it
pursuant to the laws, regulations or administrative
requirements of each governmental body with taxing power
over it or its assets. One Plus has paid, or made
provision for the payment of, all taxes that have or may
have become due pursuant to such tax returns, or otherwise,
or pursuant to any assessment received by One Plus, except
such taxes, if any, as are set forth in Schedule 2.12 and
are being contested in good faith and as to which adequate
reserves (determined in accordance with generally accepted
United States accounting principles consistently applied)
have been provided in the 1996 Balance Sheet and the Interim
Balance Sheet. The United States federal and state income
tax returns of One Plus have been audited by the Internal
Revenue Service or are closed by the applicable statute of
limitations for all taxable years through 199___. All
deficiencies proposed as a result of such audits have been
paid, reserved against, settled, or, as described in
Schedule 2.12, are being contested in good faith by
appropriate proceedings. One Plus has not given or been
requested to give any waivers or extensions of any statute
of limitations relating to the payment of taxes of One Plus
or for which One Plus may be liable. The charges, accruals
and reserves with respect to taxes on the books of One Plus
are adequate (determined in accordance with GAAP) and are at
least equal to One Plus's current and deferred liabilities
for taxes. There exists no proposed tax assessment against
One Plus except as disclosed in the 1996 Balance Sheet, the
One Plus Interim Balance Sheet or in Schedule 2.12. All
taxes that One Plus is or was required by law to withhold or
collect have been duly withheld or collected and, to the
extent required, have been paid to the proper governmental
body or taxing authority. To the knowledge of Xxxx, all tax
returns filed by One Plus are true, correct and complete in
all material respects.
No Material Adverse Change.
Since the date of the 1996 Balance Sheet, there has not been
any material adverse change in the business, operations,
properties, assets or condition of One Plus or any event, condition
or contingency that is likely to result in such a material adverse change.
Labor Agreements, Benefit Plans and Employment Agreements.
Except as set forth in Schedule 2.14, One Plus is not a party to or
otherwise subject to (i) any union, collective bargaining
or similar agreement; (ii) any profit-sharing, deferred
compensation, bonus, stock option, stock purchase, pension,
retainer, consulting, retirement, welfare or incentive plan
or agreement; (iii) any plan providing for "fringe
benefits" to its employees, including but not limited to
vacation, sick leave, medical, hospitalization, life
insurance, automobile, club memberships and other plans and
related benefits; or (iv) any employment agreement not
terminable without penalty on 30 days written notice.
There are no negotiations, demands or proposals which are
pending which concern matters covered by the type of
agreement listed in this paragraph.
ERISA.
All "employee welfare benefit" and "employee pension benefit"
plans, as defined in Sections 3 (1) and 3 (2), respectively,
of the Employee Retirement Income Security Act of 1974, as
amended and in effect ("ERISA"), established or maintained
by One Plus in which employees of One Plus are participating
(singly, a "Plan" and, collectively, the "Plans") are
included in Schedule 2.15. No Plan had an accumulated
funding deficiency (as such term is defined in Section 302
of ERISA) as of the last day of the most recent fiscal year
of such Plan ended prior to the date hereof, and no
liability to the Pension Benefit Guaranty Corporation
("PBGC") has been, or is expected by One Plus to be,
incurred with respect to any such Plan by One Plus. As to
each Plan which is a defined benefit plan with the meaning
of Section 3 (35) of ERISA, the value of the assets thereof
as of December 31, 1996, as determined by such plans
independent actuaries, exceeds the present value, as
determined by such actuaries as of such date, of the
benefits vested under such Plan which are guaranteed by the
Pension Benefit Guaranty Corporation under Title IV of
ERISA. None of the Plans is a multi-employer plan within
the meaning of Section 3(37) of ERISA, and One Plus has not
maintained or sponsored, has not been required to contribute
to, has not terminated or withdrawn, and is not aware of any
withdrawal liability (as defined in Section 4201 of ERISA)
assessed or to be assessed against One Plus with respect to
any defined benefit plan or multi-employer plan in which
employees of One Plus have participated. The Plans have
been administered in substantial compliance with their terms
and with all material filing, reporting, disclosure, and
other requirements of ERISA. Each Plan (together with its
related funding instrument) which is an employee pension
benefit plans qualified under Section 401 of the Code and
each such Plan and its related funding instrument have been
the subject of a favorable determination letter issued by
the Internal Revenue Service holding that such Plan and
funding instrument are so qualified under Section 401(a) of
the Code as in effect prior to the enactment of the Tax
Reform Act of 1986, and nothing has occurred which would
cause such letters to become invalid assuming that One Plus
timely amends such plans to comply with the Code as
presently in effect. Neither One Plus nor any or its
employees or directors, nor to the best of Xxxx'x knowledge
any Plan fiduciary of any of the Plans, has engaged in any
transaction in violation of Section 406 (a) or (b) of ERISA
or any "prohibited transaction" (as defined in Section 4975
(c) (1) of the Code) for which no exemption exists under
000 (x) xx XXXXX xx Xxxxxxx 0000 (x) of the Code or for
which no administrative exemption has been granted under
Section 408 (a) of ERISA, and no "reportable event" (as
defined in Section 4043 of ERISA) for which the 30 day
notice requirement has not been waived, other than such as
may arise out of the consummation of the transactions
contemplated by this Agreement, has occurred in connection
with any Plan. No matter is pending relating to any Plan
before any court or governmental agency, except as otherwise
disclosed herein.
Employees and Consultants.
Set forth on Schedule 2.16 is a list setting forth (i) all
current employees of
One Plus not covered by collective bargaining agreements
whose salary rate exceeds $30,000.00 per year, and (ii) all
consultants (other than lawyers and accountants) performing
services for One Plus since December 31, 1995, together with
the job title of such employees or the services provided by
such consultants and the current compensation rate
(including bonuses) of such employees and the fees paid or
payable to such consultants. Schedule 2.16 also contains a
summary description of any employment or other agreement or
understanding, whether or not written, with any such person
that is not terminable upon 30 days notice without penalty.
Overtime, Back Wages, Vacations, and Minimum Wages.
Except as disclosed on Schedule 2.17, to the knowledge of Xxxx,
no present or former employee of One Plus has any claim against it
(whether under federal or state law, under any employment
agreement or otherwise), on account of or for (i) overtime
pay other than for current payroll; (ii) wages or salary
for any period other than the current payroll; (iii)
bonuses; (iv) vacation, time off or pay in lieu of vacation
or time off, other than vacation or time off (or pay in lieu
thereof) earned in respect of the current fiscal year; (v)
any violation of any statute, ordinance or regulation
relating to minimum wages or maximum hours of work; or (vi)
any rights or claims which would result from consummation
of the transaction contemplated by this Agreement.
Discrimination, Occupational Safety,
Environmental Control and Other Statutes and Regulations.
Except as disclosed in Schedule 2.18, neither Xxxx nor One
Plus have received any notice of any claim or have any
reason to believe that there is any basis for any action or
proceeding against One Plus arising out of any statute,
ordinance or regulation relating to discrimination in
employment, termination of employment, or unemployment
practices, occupational safety and health standards, or
environmental pollution or control, which if upheld would
have a materially adverse effect on its business or
condition, financial or otherwise. To Xxxx'x knowledge, One
Plus has properly disposed of all hazardous waste for which
it is lawfully responsible, and to the knowledge of Xxxx,
there are no hazardous wastes or substances on any property
owned or occupied by One Plus.
Contracts and Commitments.
Except as set forth in Schedule 2.19, the 1996 Balance Sheet or One Plus
Interim Balance Sheet, One Plus does not have outstanding and is not
a party to: (i) any contract or commitment requiring it to
render services or make a payment at a price or in an amount
of over $10,000.00 in the aggregate, other than [a] any
contract or commitment of not more than $25,000.00 entered
into in the ordinary course of business, or [b] any
contract or commitment of not more than $25,000.00 which is
terminable upon not more than one months notice without
penalty; (ii) any lease of any real or personal property
under which it is lessor; (iii) any revocable or
irrevocable power of attorney to any person, firm or
corporation for any purpose whatsoever; or (iv) any loan
agreement, security agreement, indenture, promissory note,
conditional sales agreements or other similar agreement.
All of such contracts and commitments are valid, binding and
in full force and effect in accordance with their terms, and
none require the consent of any other party which has not
been or will not be obtained prior to the consummation of
the transactions contemplated by this Agreement. To the
knowledge of Xxxx, One Plus and the other parties to such
material contracts, have complied or are presently in
compliance with the provisions thereof, and One Plus is not
in default and, to the knowledge of the Xxxx, no other party
is in default in the performance, observation or fulfillment
of any obligation, covenant or condition contained therein,
and no event has occurred which, with or without the giving
of notice, lapse of time or both, would constitute a default
thereunder.
Insurance.
One Plus has been continuously and is presently insured for
reasonable amounts with insurance companies believed by Xxxx
to be responsible and financially sound against such risks
as companies engaged in providing professional and
consulting engineering services are, in accordance with good
business practice, customarily insured, including but not
limited to professional and consulting engineering
professional liability insurance and casualty and fire
insurance. No pending or threatened claim has been made
against any insurer or One Plus on account of any such
policy or policies of insurance, and One Plus has not
received any cancellation notices or indication that the
insurer is unwilling to renew or continue coverage. Within
the past five years, no insurer has canceled or refused to
issue a policy of insurance to One Plus. Set forth on
Schedule 2.20 is a list setting forth the carrier, the
amount and type of coverage, the term, the expiration date,
the premium and the broker for all insurance policies and
bonds in force covering One Plus and its properties,
operations and personnel. Such parties are sufficient for
all requirements of law and all agreements to which One Plus
is a party or by which it is bound, and none of such
policies will in any way be affected by, terminate or lapse
by reason of the transactions contemplated by this
Agreement.
Litigation.
Except as set forth on Schedule 2.21, (i)
neither Xxxx nor One Plus are subject to any judgment,
award, injunction, rule, order, or decree in which relief is
sought involving, affecting, or relating to the ownership,
operation, or use of their assets or the conduct of One
Plus business or which would prevent, delay, or make
illegal the transactions contemplated by this Agreement,
(ii) there are no actions, lawsuits, audits,
investigations, claims, or proceedings pending or, to the
knowledge of Xxxx, threatened against, involving, affecting,
or relating to One Plus or to its ownership, operation or
use of its assets or to the conduct of its business before
any court, arbitrator, or federal, state, municipal, or
other governmental department, board, agency, or
instrumentality, or (iii) to the knowledge of Xxxx, there
exist no facts to serve as a basis, under current laws or
regulations, for the institution of any action, lawsuit,
audit, investigation, claim or proceeding which might affect
materially and adversely the business or the financial
condition of One Plus.
Proprietary Rights.
Except as set forth on Schedule 2.22,
One Plus does not own or use any patents, trademarks,
copyrights, computer programs, software, trade secrets or
other proprietary rights. To the knowledge of Xxxx, One
Plus is not infringing upon or otherwise acting adversely to
any such rights owned by any other party or parties, and
there is no such claim or action pending or, to the
knowledge of Xxxx, threatened.
No Breach of Statute, Decree, Order or Contract.
Except as disclosed in any schedule hereto,
subject to any applicable grace period, One Plus is not in
default under or in violation in any material respect of any
applicable statute, law, ordinance, decree, order, rule or
regulation of any governmental body, or the provisions of
any franchise of license, or in default under or in
violation of any provision of its Certificate or Articles of
Incorporation, By-Laws, any promissory notes, indentures, or
any evidence of indebtedness or security therefor, or any
lease, contract, purchase or other commitment or any other
agreement by which it is bound which could result in a
materially adverse effect on its business or condition,
financial or otherwise.
Guaranties.
Except as set forth on Schedule 2.24 or in
the 1996 Balance Sheet, One Plus is not a guarantor,
indemnitor or otherwise liable for any indebtedness of any
other person, firm or corporation, except as endorser on
checks received by it and deposited in the ordinary course
of business.
Transactions With Affiliates, Directors and Others.
Except as set forth in Schedule
2.25, (i) One Plus is not indebted to Xxxx or to any
director, officer or employee, except for amounts due as
normal salaries, wages and bonuses for the current period at
rates in effect prior to December 31, 1996, or subsequently
accrued for the current fiscal year in accordance with One
Pluss regular past practice, or in reimbursement of
ordinary expenses on a current basis; (ii) neither Xxxx
nor any director, officer or employee of One Plus is
indebted to One Plus except for advance for ordinary
business expenses for which such Xxxx, directors, officers
or employees are accountable; and (iii) neither Xxxx nor
any officer or director has any material financial interest
in any transaction with One Plus in which it is in
competition with One Plus.
Officers and Directors.
Set forth in Schedule 2.26 is a
list of the officers and directors of One Plus.
Xxxx Investment Intent.
Xxxx represents and warrants
that:
(a) he is acquiring Subject HitCom Shares and the
HitCom Common Stock issuable pursuant to the Anti-Dilution
Option for investment, for his own account and not with a
view to the distribution or resale thereof;
(b) he will not sell, hypothecate or otherwise dispose
of all or any part of the Subject HitCom Shares or the
HitCom Common Stock issuable pursuant to the Anti-Dilution
Option unless such Subject HitCom Shares or HitCom Common
Stock issuable pursuant to the Anti-Dilution Option have
been registered under the Securities Act of 1933, as amended
(the "Securities Act"), and applicable state securities
laws or, in the opinion of counsel satisfactory to HitCom,
an exemption from the registration requirements of the
Securities Act and such state securities laws is available,
and he agrees that a legend to the foregoing effect may be
placed upon any certificates or other documents issued to
them representing the Subject HitCom Shares or HitCom Common
Stock issuable pursuant to the Anti-Dilution Option, and the
records of Hitcom may be marked to indicate such
restrictions on transfer;
(c) he has such knowledge and experience in financial
and business matters that he is capable of evaluating the
merits and risks of an investment in HitCom;
(d) he has evaluated and understands the risks and
terms of his investment in HitCom, and he understands the
speculative nature of an investment in HitCom; and
(e) he has had an opportunity to ask questions of
management of HitCom concerning his investment in HitCom and
to obtain such information as he deemed necessary to his
evaluation of his investment in HitCom.
Brokers or Finders.
Xxxx has incurred no obligation or
liability, contingent or otherwise, for brokerage or
finders fees or agents commissions or other like payment
in connection with this Agreement.
Disclosure.
No representation or warranty by Xxxx in this
Agreement, nor any schedule, statement or certificate
furnished or to be furnished to HitCom pursuant hereto, or
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 a material fact
necessary to make the statements contained therein not
misleading.
Survival.
All covenants, representations and warranties made by Xxxx
shall survive the Closing for a period of six (6) months.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF HITCOM
HitCom represents, warrants and covenants to Xxxx as
follows:
Organization, Qualification and Authorization.
HitCom is duly organized, validly existing
and in good standing under the laws of the State of
Delaware. HitCom has all requisite corporate power and
authority to own, lease and operate its properties and to
carry on its business as it is now being conducted, and is
not required by law to be qualified as a foreign corporation
to do business in any jurisdiction where the nature of its
business or the ownership or lease of its properties
requires such qualifications. HitCom has the full power to
enter into this Agreement and to carry out its obligations
hereunder. The execution, delivery and performance of this
Agreement by HitCom has been duly and effectively authorized
and approved by all requisite actions and no other acts or
proceedings are necessary to authorize this Agreement or the
transactions contemplated hereby.
Capitalization.
The authorized capital stock of HitCom
consists of 50,000,000 shares of HitCom Common Stock, $0.001
par value, of which 2,501,787 shares are issued and
outstanding, and 5,000,000 shares of preferred stock, $0.001
par value, of which 1,051,250 shares of 8% convertible
preferred stock are issued and outstanding. The issued and
outstanding stock of HitCom has been duly and validly
issued, and is fully paid, non-assessable and free of
preemptive rights.
Derivative Securities.
As of the date of this Agreement,
except as set forth in Schedule 3.2, HitCom does not have
and is not bound by any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any character
calling for the purchase or issuance of any shares of HitCom
Common Stock or any securities representing the right to
purchase or otherwise receive any shares of HitCom Common
Stock or securities convertible into or exercisable for any
shares of HitCom Common Stock (collectively, "Derivative
Securities"). Except to set forth in Schedule 3.2, neither
the issuance and transfer of the Subject HitCom Shares
pursuant to Section 1.0 hereof nor the consummation of the
Exchange or other transactions contemplated hereunder will
affect the number of shares of HitCom Common Stock covered
by any Derivative Securities or the exercise or purchase
price for the shares covered thereunder. Except as set
forth in Schedule 3.2, since December 31, 1996, HitCom has
not issued or entered into any agreement to issue any shares
of HitCom Common Stock, any securities convertible into or
exercisable for any shares of HitCom Common Stock, or any
other form of Derivative Securities.
SEC Requirements.
HitCom is not registered, and is not
required to register the HitCom Common Stock or any other
class of its securities, under the Securities Exchange Act
of 1934, as amended.
Subsidiaries and Partnership Interests.
HitCom has no subsidiaries or interests in
joint ventures, general or limited partnerships except as
listed on Schedule 3.4 hereto. Schedule 3.4 contains a
description of HitCom's ownership interest in each such
subsidiary, joint venture or partnership.
Authority; No Conflict.
This Agreement constitutes the legal, valid and binding
obligation of HitCom enforceable
against HitCom in accordance with its terms. HitCom has the
absolute and unrestricted right, power, authority and
capacity to execute and deliver this Agreement and to
perform its obligations hereunder. Except as set forth in
Schedule 3.5 neither the execution and delivery of this
Agreement by HitCom nor the consummation of the Exchange or
any other transaction contemplated hereunder will:
(a) violate or conflict with any provision of the
Certificate or Articles of Incorporation of By-Laws of
HitCom;
(b) violate or conflict with any provision of any law,
rule, regulation, order, permit, certificate, writ,
judgment, injunction, decree, determination, award or other
decision of any court, government, governmental agency or
instrumentality, domestic, or foreign, or arbitrator,
binding upon HitCom;
(c) result in a breach of, or constitute a default
under (or with notice or lapse of time or both result in a
breach of or constitute a default under) or otherwise give
any person the right to terminate, any lease, license,
contract or other agreement or instrument to which HitCom is
a party or by which it is bound;
(d) result in, or require, the creation or imposition
of, any mortgage, deed of trust, pledge, lien, security
interest or other charge or encumbrance of any nature upon
or with respect to any of the properties now owned or used
by HitCom.
Except as disclosed in Schedule 3.5, HitCom is not required
to give prior notice to, or obtain any consent, approval or
authorization of, any governmental authority, creditor or
other party in connection with the execution and delivery of
this Agreement or the consummation of the Exchange or any
other transaction contemplated hereby.
Financial Statements.
HitCom has delivered to Xxxx: (a)
audited balance sheets of HitCom as at March 31, 1996, and
the related audited statements of income, changes in
stockholders equity and cash flow (hereinafter referred to
as the "Balance Sheet"), and (b) an unaudited consolidated
balance sheet of HitCom as at December 31, 1996 (the "HitCom
Interim Balance Sheet") and the related unaudited statements
of income, changes in stockholders' equity and cash flow for
the nine months then ended, including in each case the notes
thereto. Such financial statements and notes fairly present
the financial condition and results of operations of HitCom
as at the respective dates thereof and for the periods
referred to, all in accordance with GAAP, subject, in the
case of interim financial statements, to normal recurring
year-end adjustments (the effect of which will not,
individually or in the aggregate, be materially adverse) and
the absence of notes (which, if presented, would not differ
materially from those included in the Balance Sheet); the
financial statements referred to in this Section 3.6 reflect
the consistent application of such accounting principles
throughout the periods involved, except as disclosed in the
notes to such financial statements.
Books and Records.
The books of account, minute books, stock
record books and other records of HitCom, all of which have
been made available to Xxxx, are complete and correct and
have been maintained in accordance with sound business
practices.
Title to Properties; Encumbrances.
Schedule 3.8 describes all real property, leaseholds or other real
property interests therein owned by HitCom. HitCom owns
(with good and marketable title in the case of real
property) all the properties and assets (real, personal and
mixed, tangible and intangible) that it purports to own,
including, but not limited to, all the properties and assets
reflected in the Balance Sheet and the Interim Balance Sheet
(except for assets held under capitalized leases not
required to be disclosed in the Balance Sheet and Interim
Balance Sheet and property sold since the date of the
Balance Sheet and the Interim Balance Sheet, as the case may
be, in the ordinary course of business and consistent with
past practice), and all of the properties and assets
purchased or otherwise acquired by HitCom since the date of
the Balance Sheet (except for personal property acquired and
sold since the date of the Balance Sheet in the ordinary
course of business and consistent with past practice).
Except as listed on Schedule 3.8 properties and assets
reflected in the Balance Sheet and the Interim Balance Sheet
are free and clear of all liens, security interests and
encumbrances.
Condition and Sufficiency of Assets.
To the knowledge of HitCom, the buildings, plants, structures and
equipment of HitCom are structurally sound with no known
defects, are in good operating condition and repair and are
adequate for the uses to which they are being put, and none
of such buildings, plants, structures or equipment is in
need of maintenance or repairs except for ordinary, routine
maintenance and repairs that are not material in nature or
cost. The building, plants, structures and equipment of
HitCom are sufficient for the continued conduct of HitCom's
business. Schedule 3.9 lists all items of machinery and
equipment owned by HitCom having a book value or replacement
cost in excess of $1,000.
Accounts Receivable.
All accounts receivable of HitCom
that are reflected in the Balance Sheet or the HitCom
Interim Balance Sheet represent or will represent valid
obligations arising from sales actually made in the ordinary
course of business, and are current and collectible net of
the respective reserves shown on the Balance Sheet or the
HitCom Interim Balance Sheet or on the accounting records of
HitCom as of the Closing Date.
Inventory.
All inventory of HitCom, whether or not reflected in the
Balance Sheet or the HitCom Interim Balance Sheet, consists
of a quality and quantity usable and salable in the ordinary
course of business, except for obsolete items and items of
below-standard quality, all of which have been written off
or written down to net realizable value in the Balance Sheet
or the HitCom Interim Balance Sheet or on the accounting
records of HitCom as of the Closing Date, as the case may
be. The quantities of each type of inventory are not
excessive, but are reasonable and warranted in the present
circumstance of HitCom.
No Undisclosed Liabilities.
Except as set forth in Schedule 3.12, HitCom has no knowledge
of any liabilities or obligations of any nature (absolute,
accrued, contingent or otherwise) that were not fully reflected
or reserved against in the Balance Sheet or the HitCom Interim
Balance Sheet, except liabilities and obligations incurred in the ordinary
course of business and consistent with past practice since
the respective dates thereof.
Taxes.
HitCom has filed or caused to be filed on a timely basis all tax
returns that are or were required to be filed by it pursuant
to the laws, regulations or administrative requirements of
each governmental body with taxing power over it or its
assets. Hit has paid, or made provision for the payment of,
all taxes that have or may have become due pursuant to such
tax returns, or otherwise, or pursuant to any assessment
received by Hitcom, except such taxes, if any, as are set
forth in Schedule 3.13 and are being contested in good faith
and as to which adequate reserves (determined in accordance
with GAAP) have been provided in the Balance Sheet and the
HitCom Interim Balance Sheet. The United States federal and
state income tax returns of HitCom have been audited by the
Internal Revenue Service or are closed by the applicable
statute of limitations for all taxable years through 199___.
All deficiencies proposed as a result of such audits have
been paid, reserved against, settled, or, as described in
Schedule 3.13, are being contested in good faith by
appropriate proceedings. HitCom has not given or been
requested to give any waivers or extensions of any statute
of limitations relating to the payment of taxes of HitCom or
for which HitCom may be liable. The charges, accruals and
reserves with respect to taxes on the books of HitCom are
adequate (determined in accordance with generally accepted
United States accounting principles consistently applied)
and are at least equal to HitCom's current and deferred
liabilities for taxes. There exists no proposed tax
assessment against HitCom except as disclosed in the Balance
Sheet, the HitCom Interim Balance Sheet or in Schedule 3.13.
All taxes that HitCom is or was required by law to withhold
or collect have been duly withheld or collected and, to the
extent required, have been paid to the proper governmental
body or taxing authority. To the knowledge of HitCom, all
tax returns filed by HitCom are true, correct and complete.
No Material Adverse Change.
Since the date of the
Balance Sheet, there has not been any material adverse
change in the business, operations, properties, assets or
condition of HitCom or any event, condition or contingency
that is likely to result in such a material adverse change.
Labor Agreements, Benefit Plans and Employment Agreements.
Except as set forth in Schedule 3.15, HitCom is not a party to or
otherwise subject to (i) any union, collective bargaining
or similar agreement; (ii) any profit-sharing, deferred
compensation, bonus, stock option, stock purchase, pension,
retainer, consulting, retirement, welfare or incentive plan
or agreement; (iii) any plan providing for "fringe
benefits" to its employees, including but not limited to
vacation, sick leave, medical, hospitalization, life
insurance, automobile, club memberships and other plans and
related benefits; or (iv) any employment agreement not
terminable without penalty on 30 days written notice.
There are no negotiations, demands or proposals which are
pending which concern matters covered by the type of
agreement listed in this Section 3.15.
ERISA.
All Plans established or maintained by HitCom in which employees
of HitCom are participating are included in Schedule 3.16.
No Plan had an accumulated funding deficiency (as such term
is defined in Section 302 of ERISA) as of the last day of
the most recent fiscal year of such Plan ended prior to the
date hereof, and no liability to the Pension Benefit
Guaranty Corporation ("PBGC") has been, or is expected by
HitCom to be, incurred with respect to any such Plan by
HitCom. As to each Plan which is a defined benefit plan
with the meaning of Section 3 (35) of ERISA, the value of
the assets thereof as of December 31, 1996, as determined by
such plans independent actuaries, exceeds the present
value, as determined by such actuaries as of such date, of
the benefits vested under such Plan which are guaranteed by
the Pension Benefit Guaranty Corporation under Title IV of
ERISA. None of the Plans is a multi-employer plan within
the meaning of Section 3(37) of ERISA, and HitCom has not
maintained or sponsored, has not been required to contribute
to, has not terminated or withdrawn, and is not aware of any
withdrawal liability (as defined in Section 4201 of ERISA)
assessed or to be assessed against HitCom with respect to
any defined benefit plan or multi-employer plan in which
employees of HitCom have participated. The Plans have been
administered in substantial compliance with their terms and
with all material filing, reporting, disclosure, and other
requirements of ERISA. Each Plan (together with its related
funding instrument) which is an employee pension benefit
plans qualified under Section 401 of the Internal Revenue
Code of 1986, as amended (the "Code"), and the regulations
issued thereunder, and each such Plan and its related
funding instrument have been the subject of a favorable
determination letter issued by the Internal Revenue Service
holding that such Plan and funding instrument are so
qualified under Section 401(a) of the Code as in effect
prior to the enactment of the Tax Reform Act of 1986, and
nothing has occurred which would cause such letters to
become invalid assuming that HitCom timely amends such plans
to comply with the Code as presently in effect. Neither
HitCom nor any or its employees or directors, nor to the
best of Hitcom's knowledge any Plan fiduciary of any of the
Plans, has engaged in any transaction in violation of
Section 406 (a) or (b) of ERISA or any "prohibited
transaction" (as defined in Section 4975 (c) (1) of the
Code) for which no exemption exists under 000 (x) xx XXXXX
xx Xxxxxxx 0000 (x) of the Code or for which no
administrative exemption has been granted under Section 408
(a) of ERISA, and no "reportable event" (as defined in
Section 4043 of ERISA) for which the 30 day notice
requirement has not been waived, other than such as may
arise out of the consummation of the transactions
contemplated by this Agreement, has occurred in connection
with any Plan. No matter is pending relating to any Plan
before any court or governmental agency, except as otherwise
disclosed herein.
Employees and Consultants.
Set forth on Schedule 3.17 is a list setting forth (i) all
current employees of
HitCom not covered by collective bargaining agreements whose
salary rate exceeds $30,000.00 per year, and (ii) all
consultants (other than lawyers and accountants) performing
services for HitCom or any subsidiary since December 31,
1996, together with the job title of such employees or the
services provided by such consultants and the current
compensation rate (including bonuses) of such employees and
the fees paid or payable to such consultants. Schedule 3.17
also contains a summary description of any employment or
other agreement or understanding, whether or not written,
with any such person that is not terminable upon 30 days
notice without penalty.
Overtime, Back Wages, Vacations, and Minimum Wages.
Except as disclosed on
Schedule 3.18, no present or former employee of HitCom has
any claim against it (whether under federal or state law,
under any employment agreement or otherwise), on account of
or for (i) overtime pay other than for current payroll, (ii)
wages or salary for any period other than the current
payroll, (iii) bonuses, (iv) vacation, time off or pay in
lieu of vacation or time off, other than vacation or time
off (or pay in lieu thereof) earned in respect of the
current fiscal year, (v) any violation of any statute,
ordinance or regulation relating to minimum wages or maximum
hours of work, or (vi) any rights or claims which would
result from consummation of the transaction contemplated by
this Agreement.
Discrimination, Occupational Safety,
Environmental Control and Other Statutes and Regulations.
Except as disclosed in Schedule 3.19, HitCom has not
received any notice of any claim or have any reason to
believe that there is any basis for any action or proceeding
against HitCom arising out of any statute, ordinance or
regulation relating to discrimination in employment,
termination of employment, or unemployment practices,
occupational safety and health standards, or environmental
pollution or control, which if upheld would have a
materially adverse effect on its business or condition,
financial or otherwise. To HitCom's knowledge, HitCom has
properly disposed of all hazardous waste for which it is
lawfully responsible, and to the knowledge of HitCom, there
are no hazardous wastes or substances on any property owned
or occupied by it.
Contracts and Commitments.
Except as set forth in
Schedule 3.20, the Balance Sheet or HitCom Interim Balance
Sheet, HitCom does not have outstanding and is not a party
to: (i) any contract or commitment requiring it to render
services or make a payment at a price or in an amount of
over $10,000.00 in the aggregate, other than [a] any
contract or commitment of not more than $25,000.00 entered
into in the ordinary course of business, or [b] any
contract or commitment of not more than $25,000.00 which is
terminable upon not more than one month's notice without
penalty; (ii) any lease of any real or personal property
under which it is lessor; (iii) any revocable or
irrevocable power of attorney to any person, firm or
corporation for any purpose whatsoever; or (iv) any loan
agreement, security agreement, indenture, promissory note,
conditional sales agreements or other similar agreement.
All of such contracts and commitments are valid, binding and
in full force and effect in accordance with their terms, and
none require the consent of any other party which has not
been or will not be obtained prior to the consummation of
the transactions contemplated by this Agreement. HitCom
and, to the knowledge of HitCom, the other parties to such
material contracts, have complied or are presently in
compliance with the provisions thereof, and HitCom is not in
default and, to the knowledge of HitCom, no other party is
in default, in the performance, observation, or fulfillment
of any obligation, covenant or condition contained therein,
and no event has occurred which, with or without the giving
of notice, lapse of time or both, would constitute a default
thereunder.
Insurance.
HitCom has been continuously and is presently insured for
reasonable amounts with insurance companies believed by
HitCom to be responsible and financially sound against such
risks as companies engaged in providing professional and
consulting engineering services are, in accordance with good
business practice, customarily insured, including but not
limited to professional and consulting engineering
professional liability insurance and casualty and fire
insurance. No pending or threatened claim has been made
against any insurer or HitCom on account of any such policy
or policies of insurance, and HitCom has not received any
cancellation notices or indication that the insurer is
unwilling to renew or continue coverage. Within the past
five years, no insurer has canceled or refused to issue a
policy of insurance to HitCom. Set forth on Schedule 3.21
is a list setting forth the carrier, the amount and type of
coverage, the term, the expiration date, the premium and the
broker for all insurance policies and bonds in force
covering HitCom and its properties, operations and
personnel. Such parties are sufficient for all requirements
of law and all agreements to which HitCom is a party or by
which it is bound, and none of such policies will in any way
be affected by, terminate or lapse by reason of the
transactions contemplated by this Agreement.
Litigation.
Except as set forth on Schedule 3.22, (i)
HitCom is not subject to any judgment, award, injunction,
rule, order, or decree in which relief is sought involving,
affecting, or relating to the ownership, operation, or use
of their assets or the conduct of HitCom's business or which
would prevent, delay, or make illegal the transactions
contemplated by this Agreement, (ii) there are no actions,
lawsuits, audits, investigations, claims, or proceedings
pending or, to the knowledge of HitCom, threatened against,
involving, affecting, or relating to HitCom or to its
ownership, operation, or use of its assets or to the conduct
of its business before any court, arbitrator, or federal,
state, municipal, or other governmental department, board,
agency, or instrumentality, or (iii) to the knowledge of
HitCom, there exist no facts to serve as a basis, under
current laws or regulations, for the institution of any
action, lawsuit, audit, investigation, claim, or proceeding
which might affect materially and adversely the business,
financial condition, or prospects of HitCom.
Proprietary Rights.
Except as set forth on Schedule 3.23,
HitCom does not own or use any patents, trademarks,
copyrights, computer programs, software, trade secrets or
other proprietary rights. To its knowledge, HitCom is not
infringing upon or otherwise acting adversely to any such
rights owned by any other party or parties, and there is no
such claim or action pending or, to the knowledge of HitCom,
threatened.
No Breach of Statute, Decree, Order or Contract.
Except as disclosed in any schedule hereto,
subject to any applicable grace period, HitCom is not in
default under or in violation in any material respect of any
applicable statute, law, ordinance, decree, order, rule or
regulation of any governmental body, or the provisions of
any franchise of license, or in default under or in
violation of any provision of its Certificate or Articles of
Incorporation, By-Laws, any promissory notes, indentures, or
any evidence of indebtedness or security therefor, or any
lease, contract, purchase or other commitment or any other
agreement by which it is bound which could result in a
materially adverse effect on its business or condition,
financial or otherwise.
Guaranties.
Except as set forth on Schedule 3.25 or in
the Balance Sheet, HitCom is not a guarantor, indemnitor, or
otherwise liable for any indebtedness of any other person,
firm or corporation, except as endorser on checks received
by it and deposited in the ordinary course of its business.
Transactions With Affiliates, Directors and Others.
Except as set forth in Schedule
3.26: (i) HitCom is not indebted to any director, officer
or employee, except for amounts due as normal salaries,
wages and bonuses for the current period at rates in effect
prior to December 31, 1996, or subsequently accrued for the
current fiscal year in accordance with HitCom's regular past
practice, or in reimbursement of ordinary expenses on a
current basis; (ii) neither HitCom nor any director,
officer or employee of HitCom is indebted to HitCom except
for advance for ordinary business expenses for which HitCom,
directors, officers or employees are accountable; and (iii)
neither HitCom nor any officer or director has any material
financial interest in any transaction with HitCom in which
it is in competition with HitCom.
Officers and Directors.
Set forth in Schedule 3.27 is a
list of the officers and directors of HitCom.
Brokers or Finders.
HitCom has incurred no obligation or
liability, contingent or otherwise, for brokerage or
finders fees or agents commissions or other like payment
in connection with this Agreement.
Disclosure.
No representation or warranty by HitCom in
this Agreement, nor any schedule, statement or certificate
furnished or to be furnished to Xxxx pursuant hereto, or 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 a material fact
necessary to make the statements contained therein, not
misleading.
HitCom Investment Intent.
HitCom represents and warrants to Xxxx that:
(a) it is requiring the Subject One Plus Shares for
investment, for its own account and not with a view to the
distribution or resale thereof;
(b) it will not sell, hypothecate or otherwise dispose
of all nor any part of the Subject One Plus Shares unless
such Subject One Plus Shares have been registered under the
Securities Act, and applicable state securities laws or, in
the opinion of counsel satisfactory to Xxxx, an exemption
from the registration requirements of the Securities Act and
such state securities laws is available, and it agrees that
a legend to the foregoing effect may be placed upon any
certificate or other documents issued to it representing the
Subject One Plus Shares;
(c) it has such knowledge and experience in financial
and business matters that it is capable of evaluating the
merits and risk of an investment in One Plus;
(d) it has evaluated and understands the risk and
terms of its investment in One Plus, and it understands the
speculative nature of such an investment, and it can afford
to bear the risk of its investment in One Plus; and
(e) it has had an opportunity to ask questions of Xxxx
and other representatives of One Plus concerning its
investment in the Subject One Plus Shares and to obtain such
information as it has deemed necessary to evaluate its
investment in the Subject One Plus Shares.
Survival.
All covenants, representations and
warranties made by HitCom shall survive the Closing for a
period of six (6) months.
ARTICLE IV
COVENANTS AND AGREEMENTS
[Intentionally deleted]
ARTICLE V
ACTIONS TAKEN AT THE CLOSING BY HITCOM AND XXXX
Actions taken at the Closing by Xxxx.
At closing, Xxxx:
(a) delivered to HitCom a good standing certificate
issued by the Illinois Secretary of State with respect to
One Plus, dated not less that three (3) business days
immediately preceding the Closing; and
(b) delivered to HitCom copies of the following
documents, certified as to accuracy and completeness by the
Secretary or President of One Plus:
(i) a certificate signed by Xxxx to the effect
that his representations and warranties set forth in this
Agreement are true and correct in all material respects,
both individually and collectively, as of the date of this
Agreement and (except to the extent such representations and
warranties speak as of an earlier date) and that Xxxx has
performed in all material respects, both individually and
collectively, all of his obligations to be performed by him
under this Agreement; and
(ii) an incumbency certificate of One Plus signed
by the Secretary or President, dated as of the date of this
Agreement and setting forth the identity of the directors
and officers of the One Plus and the offices held by such
officers, certifying the genuineness of the signatures of
the officers executing this Agreement and all instruments
and certificates delivered on behalf of One Plus to HitCom
pursuant hereto.
Actions taken at the Closing by HitCom.
At Closing HitCom:
(a) delivered to Xxxx a good standing certificate
issued by the Delaware Secretary of State with respect to
HitCom, dated not less that three (3) business days
immediately preceding the Closing;
(b) delivered to Xxxx copies of the following
documents, certified as to accuracy and completeness by the
Secretary or President of HitCom:
(i) a certificate signed by the President of
HitCom, dated as of the Closing Date, to the effect that all
of the representations and warranties of HitCom set forth in
this Agreement are true and correct in all material
respects, both individually and collectively, as of the date
of this Agreement and (except to the extent that such
representations and warranties speak as of an earlier date),
and that HitCom has performed in all material respects, both
individually and collectively, all obligations required to
be performed by it under this Agreement;
(ii) the resolutions of the Board of Directors of
HitCom authorizing the execution and delivery of this
Agreement and the consummation of the Exchange and all of
the other transactions contemplated herein (including,
without limitation, the reconstitution of the Board of
Directors as of the Closing, to consist of five directors,
three of whom to be designated by Xxxx and the remaining two
directors of HitCom to be such persons designated by HitCom
and approved by Xxxx, and HitCom's entering into the Anti-
Dilution Option and the Registration Agreement);
(iii) an incumbency certificate signed by the
Secretary or President, dated as to the Closing and setting
forth the identity of the directors and officers of HitCom
and the offices held by such officers, certifying the
genuineness of the signatures of the officers executing this
Agreement and all instruments and certificates delivered on
behalf of HitCom to Xxxx pursuant hereto; and
(c) delivered to Xxxx copies of the Anti-Dilution
Option executed by HitCom.
ARTICLE VI
INDEMNIFICATION
Indemnification
(a) Indemnity by Xxxx. Xxxx
shall indemnify, defend and hold harmless HitCom from and
against any and all losses, liabilities, costs, expenses or
damages (including judgments and settlement payments)
incident to, arising in connection with or resulting from
any material misrepresentation, breach, non-performance or
inaccuracy of any representation, indemnity, warranty,
covenant or agreement by Xxxx made or contained in this
Agreement or in any Exhibit, Schedule, certificate or
document executed and delivered to HitCom by or on behalf of
Xxxx pursuant to or in connection with this Agreement or the
transactions contemplated herein.
(b) Indemnity by HitCom. HitCom shall indemnify,
defend and hold Xxxx harmless from and against any and all
losses, liabilities, costs, expenses or damages incident to,
arising in connection with or resulting from any material
misrepresentation, breach, non-performance or inaccuracy of
any representation, indemnity, warranty, or any covenant or
agreement by HitCom made or contained in this Agreement or
in any Exhibit, Schedule, certificate or document executed
and delivered to Xxxx by or on behalf of HitCom pursuant to
or in connection with this Agreement or the transactions
contemplated herein.
Damages.
Any and all of the items for which HitCom or Xxxx may be
entitled to indemnification pursuant to subsections (a) or
(b) of this Section herein after called "Damages".
Notice and Procedures.
When a Party becomes aware of
facts or a situation which may result in Damages for which
it could be entitled to be indemnified hereunder, such Party
(the "Indemnitee") shall submit a written notice (the
"Initial Claim Notice") to the other Party (the
"Indemnitor") to such effect with reasonable promptness
after it first becomes aware of such matter, and shall
furnish the Indemnitor with such information as it has
available demonstrating its right or possible right to
receive indemnity. If the potential claim is predicated on
the filing by a third party of any action at law or in
equity (a "Third Party Claim"), the Indemnitee shall provide
the Indemnitor with an Initial Claim Notice not later than
ten (10) days prior to the date on which a responsive
pleading must be filed, and shall also furnish a copy of
such claim (if made in writing) and of all documents
received from the third party in support of such claim.
Every Initial Claim Notice shall, if feasible, contain a
reasonable estimate by the Indemnitee of the losses, costs,
liabilities and expenses (including, but not limited to,
costs and expenses of litigation and attorneys fees) which
the Indemnitee may incur. In addition, each Initial Claim
Notice shall name, when known, the person or persons making
the assertions which are the basis for such claim. Failure
by the Indemnitee to deliver an Initial Claim Notice or an
update thereof in a timely manner shall not relieve the
Indemnitor of any of its or his obligations under this
Agreement, except to the extent that actual monetary
prejudice to the Indemnitor can be demonstrated as having
resulted from such failure.
Rights of Indemnitor.
If, prior to the expiration of thirty (30) days from the mailing
of an Initial Claim Notice (the "Claim Answer Period"), the
Indemnitor shall request in writing that such claim not be paid,
the same shall not be paid, and the Indemnitor shall settle, compromise or
litigate in good faith such claim, and employ attorneys of
its or his choice to do so; provided, however, that
Indemnitee shall not be required to refrain from paying any
claim which has matured by court judgment or decree, unless
appeal is taken therefrom and proper appeal bond posted by
Indemnitor, nor shall it or he be required to refrain from
paying any claim where such action would result in the
foreclosure of a lien upon any of its or his assets or a
default in a lease or other contract, except a lease or
other contract which is the subject of the dispute. If the
Indemnitor elects to settle, compromise or litigate such
claim, all reasonable expenses, including but not limited to
all amounts paid in settlement or to satisfy judgments or
awards and reasonable attorney's fees and costs, incurred by
the Indemnitor in settling, compromising or litigating such
claim shall be secured to the reasonable satisfaction of
Indemnitee. Indemnitee shall cooperate fully to make
available to the Indemnitor and its attorneys,
representatives and agents, all pertinent information under
its control. Indemnitee shall have the right to elect to
settle or compromise all other contested claims with respect
to which the Indemnitor has not, within the Claim Answer
Period, acknowledged in writing (i) liability therefor
(should such claim ultimately be resolved against
Indemnitee), and (ii) its election to assume full
responsibility for the settlement, compromise, litigation
and payment of such claim, and to pursue any and all
remedies against Indemnitor for Indemnitor's obligations
under this ARTICLE VI. Indemnitor shall not settle or
compromise any claim for damages or remedies other than
money damages without the prior written consent of
Indemnitee.
Final Claims Statement.
At such time as Damages
for which the Indemnitor is liable hereunder are incurred by
Indemnitee by actual payment thereof or by entry of a final
judgment, Indemnitee shall forward a Final Claims Statement
to the Indemnitor setting forth the amount of such Damages
in reasonable detail on an itemized basis. Indemnitee shall
supplement the Final Claims Statement with such supporting
proof of loss (e.g. vouchers, agreements, etc.) as the
Indemnitor may reasonably request in writing within thirty
(30) days after receipt of a Final Claims Statement. All
amounts reflected on Final Claims Statements shall be paid
promptly by Indemnitor to Indemnitee.
Survival, Calculations and Exclusive Remedy.
The representations and warranties of
the Parties shall survive the Closing Date for a period of
one hundred and eighty (180) days, and no claim may be made
based upon an alleged breach of any such representations and
warranties unless the Initial Claim Notice is submitted to
the Indemnitor on or before the expiration of such one
hundred eighty (180) day period. In no event shall the
aggregate amount of either Party payable under this ARTICLE
VI exceed Five Hundred Thousand Dollars ($500,000). The
amount of indemnity payable hereunder shall be reduced by
proceeds received by the Indemnitee from insurance policies
covering the damages sustained by the Indemnitee. Except
with respect to the willful breach of a Party of any
material provision of this Agreement, this ARTICLE VI sets
forth the exclusive remedy of the Parties against the other
Party for failure to satisfy its obligations with respect to
any representation, warranty, covenant or agreement made by
the Indemnitor.
ARTICLE VII
MISCELLANEOUS
Notices.
Any notices or other communications required or permitted
hereunder (including, by way of illustration and not
limitation, any notice permitted or required under any
Article hereof) to HitCom or Xxxx shall be sufficiently
given if delivered in person or sent by registered mail,
postage prepaid, addressed as follows:
In the case of HitCom:
HitCom Corporation
000 Xxxxx Xxxxxx Xxxxxx
Xxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000-0000
(000) 000-0000
In the case of Xxxx:
One Plus, Inc.
X.X. Xxx 000
Xxxxxxxxxxxx, Xxxxxxxx 00000
(000) 000-0000
or such substitute address as any party shall have given
notice to the other in writing.
Amendment.
This Agreement may be amended or modified in whole or in
part by an agreement in writing executed by each Party in
the same manner as this Agreement and making specific
reference thereto.
Counterparts.
This Agreement may be executed in two or
more counterparts, all of which taken together shall
constitute one instrument.
Binding on Successors and Assigns.
This Agreement shall be binding upon, inure to the benefit of and be
enforceable by and against the Parties and their respective
successors and assigns and, in the case of Xxxx, his
personal representatives and heirs, and shall be assignable
only with the prior written consent of the other Party.
Severability.
In the event that any one or more of the
provisions contained in this Agreement or any application
thereof shall be invalid, illegal or unenforceable in any
respect, the validity, legality or enforceability of the
remaining provisions of this Agreement and any other
application thereof shall not in any way be affected or
impaired thereby; provided, however, that to the extent
permitted by applicable law, any invalid, illegal, or
unenforceable provision may be considered for the purpose of
determining the intent of the parties in connection with
other provisions of this Agreement.
Waivers.
The Parties may, by written agreement, (a) extend the time for
the performance of any of the obligations or other acts of
the parties hereof, (b) waive any inaccuracies in the
representations and warranties contained in this Agreement
or in any document delivered pursuant to this Agreement, (c)
waive compliance with or modify any of the covenants or
conditions contained in this Agreement and (d) waive or
modify performance of any of the obligations of any of the
Parties hereto; provided, that neither such an extension or
waiver nor any failure to insist upon strict compliance with
any obligation, covenant, agreement or upon strict
compliance with any obligation, covenant, agreement or
condition herein shall operate as a waiver of, or an
estoppel with respect to, any subsequent insistence upon
strict compliance.
Cooperation of Parties.
Each Party agrees to undertake any action and execute any contract,
assignment, or other document or documents necessary to carry out the
intent of this Agreement and complete the Exchange and the other
transactions provided for herein. Each Party further agrees
to comply with any reasonable request from the other Party
for such action or execution of documents in a prompt and
reasonable manner.
Headings.
The headings in the Articles and Sections of this Agreement are
inserted for convenience only and in no way alter, amend,
modify, limit or restrict the contractual obligations of the
parties.
Expenses.
Each Party shall be responsible for, and shall pay, all of
the fees, costs and expenses incurred by them in connection
with the negotiation, execution or performance of this
Agreement.
IN WITNESS HEREOF, this Agreement has been duly
executed by HitCom and Xxxx as of the date first above
written.
HITCOM CORPORATION
/s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
President
/s/ Xxxxx X. Xxxx
Xxxxx X. Xxxx
