EXCHANGE AGREEMENT
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THIS Exchange Agreement is made this 10th day of September, 1996 by and between:
U.S. MEDICAL SERVICES, INC.
A Nevada Corporation
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▇▇▇ ▇▇▇▇▇, Nev.
(hereinafter "USMS")
and
FORTUNE 21, INC. (Hereinafter "FORTUNE 21")
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ 434
Ste. 112
Longwood, Fla. 32750
WHEREAS, USMS desires to enter the financial and business education and
services business, by exchanging (the "EXCHANGE") new common shares in USMS, in
exchange for all the issued shares in FORTUNE 21, INC. In accordance with the
terms and conditions of this Agreement.
AND WHEREAS, FORTUNE 21 is involved in the financial and business
education and services business, and the shareholders in FORTUNE 21, INC. desire
to invest in USMS and desire the said EXCHANGE in accordance with the terms and
conditions of this Agreement.
AND WHEREAS, USMS and FORTUNE 21, INC., desire to facilitate the
EXCHANGE provided for herein.
NOW THEREFORE, in consideration of the mutual promises, covenants and
agreements of the parties contained herein, the parties, intending to be legally
bound hereby, agree as follows:
1. EXCHANGE OF SHARES. USMS shall deliver to the FORTUNE 21
shareholders, six million twenty five thousand shares
(6,025,000) common shares of USMS ("USMS SHARES") in EXCHANGE
for six million twenty five thousand shares (6,025,000) common
shares of FORTUNE 21, INC. ("FORTUNE 21 SHARES") as at closing
date as outlined in Section 2. This exchange shall be a tax
free exchange pursuant to Section 368 of the Internal Revenue
Code.
2. CLOSING DATE. This transaction shall be closed pursuant to the
terms and conditions herein on the date of execution of this
Agreement at Orlando, Florida. The date of execution of this
transaction is herein called the "Closing Date". The actions
outlined in Section 3, which are to take place within ten (10)
days of the closing date are as follows.
3. CLOSING. At closing, the parties shall take the following
actions:
3.1 Transfer of Shares. Upon receipt of FORTUNE 21 SHARES
by USMS, USMS will effect the delivery to the FORTUNE
21 shareholders the USMS SHARES, as outlined herein
in Section 3.2, along with an updated shareholder
list which is certified by the transfer agent to be
true and correct.
3.2 Transfer Agent Instructions. USMS will instruct its
Transfer Agent to issue the said USMS share
certificates, with restrictive legend, in exchange
for the FORTUNE 21 SHARES received in the name of
each individual FORTUNE 21 shareholder or their
assigns or nominees pursuant to this Agreement.
3.3 Delivery of Books. USMS will deliver all of the
original corporate books and records of USMS to the
corporate offices of FORTUNE 21 immediately following
the closing of this Agreement and the filing of the
15c2-11 with the NASD. USMS shall assist in the
preparation and filing of the 15c2-11.
3.4 Delivery of Legal Opinion. USMS will deliver an
opinion of its legal counsel certifying to the
accuracy of the affirmations set forth herein and an
opinion as to the free trade ability of all
outstanding stock held by the current shareholders of
USMS.
4. SECURITIES ACT OF 1933. USMS covenants and agrees to the
FORTUNE 21 shareholders, who understand that the SHARES
acquired pursuant to this Agreement do require to be
restricted under Section 144 of the Securities Act of 1933 and
may not be sold or otherwise transferred unless in compliance
with the provisions thereof.
5. CONDITIONS OF BOTH PARTIES OBLIGATIONS TO CLOSE. For the
purposes of paragraph 5 through 13 only of this Agreement: (i)
the following shall be the conditions of USMS and FORTUNE 21
("BOTH PARTIES") obligations to close hereunder:
5.1 Representations and Warranties of Both Parties.
Representations and Warranties made by BOTH PARTIES
to this Agreement shall be true and correct as of the
Closing Date.
5.2 No Default - Covenants and Agreements. BOTH PARTIES
shall not be in material default with respect to any
obligation under this Agreement and both shall have
performed or complied with all covenants, agreements,
and conditions to be performed or complied with prior
to, or at, the Closing.
6. REPRESENTATIONS AND WARRANTIES OF USMS. USMS represents and
warrants to AUTOMOTIVE ONE that the statements contained in
Section 6.1 through 6.6 are true and correct on the date of
this Agreement.
6.1 Corporate Standing. USMS is a corporation duly
organized, validly existing, and in good standing
under the laws of Nevada, and it has full power and
authority to enter into this Agreement and to carry
out the transactions contemplated hereby. The
execution and delivery of this Agreement by USMS does
not, and the consummation of the transactions
contemplated hereby will not violate or result in a
breach of any provisions of USMS's Charter of Bylaws.
6.2 Capital Stock. The authorized capital stock of USMS
consists of twenty five million (25,000,000) shares
of Common Stock without par value of which amount one
million nine hundred three thousand two hundred and
three (1,903,203) shares of Common Stock have been
validly issued and are outstanding, fully paid and
nonassessable as of the date of this Agreement. The
outstanding shares are held by more than four hundred
(400) shareholders and are freely tradeable under the
governing security laws.
6.3 Authority. USMS has full power and authority to enter
into this Agreement and has taken all action or will
use its best efforts to take all action, corporate
and otherwise, necessary to authorize the execution,
delivery and performance of this Agreement, the
completion of the transactions contemplated hereby.
6.4 Lawsuits and Proceedings. There are no material
actions at law or in equity, governmental proceedings
or investigations pending or to the knowledge of
USMS, and USMS is not in material default with
respect to any decree, injunction or the order of any
court or government authority.
6.5 Taxes. USMS knows of no outstanding claims against
USMS for taxes which constitute a lien on the shares
being sold hereunder. USMS has filed all required
Federal and State tax returns, and has paid any taxes
due thereon.
6.6 Adverse Circumstances. Except as disclosed herein, to
the best knowledge of USMS, there are no facts,
developments or circumstances, existing or
threatened, of a special or unusual nature that may
be materially adverse to the assets, business,
financial condition or future prospects of USMS.
6.7 Publicly Held Company. USMS represents that it is a
publicly held company and has filed any documents
necessary to maintain such status with the regulatory
authorities.
7. REPRESENTATIONS AND WARRANTIES OF FORTUNE 21
FORTUNE 21 represents and warrants to USMS that the statements
contained in Sections 7.1 through 7.6 are true and correct on
the date of this Agreement.
7.1 Corporate Standing. FORTUNE 21 is a corporation duly
organized, validly existing, and in good standing
under the laws of Florida, and it has full power and
authority to enter into this Agreement and to carry
out the transactions contemplated hereby. The
execution and delivery of this Agreement by FORTUNE
21 does not, and the consummation of the transactions
contemplated hereby will not, violate or result in a
breach of any provisions of FORTUNE 21's Charter or
Bylaws.
7.2 Capital Stock. The authorized capital stock of
FORTUNE 21 of twenty five million (25,000,000) shares
of Common Stock without par value of which six
million twenty five thousand (6,025,000) shares of
Common Stock have been validly issued and are
outstanding, fully paid and nonassessable as of the
date of this Agreement.
7.3 Authority. FORTUNE 21 has full power and authority to
enter into this Agreement and has taken all action or
will use its best efforts to take all action,
corporate and otherwise, necessary to authorize the
execution, delivery and performance of this
Agreement, the completion of the transactions
contemplated hereby.
7.4 Lawsuits and Proceedings. Except as disclosed herein
there are no material actions at law or in equity,
government proceedings or investigations pending or
to the knowledge of FORTUNE 21 threatened against
FORTUNE 21 or against or with respect to the business
or assets of FORTUNE 21, and FORTUNE 21 is not in
material default with respect to any decree,
injunction or the order of any court or government
authority.
7.5 Taxes. FORTUNE 21 knows of no outstanding claims
against FORTUNE 21 for taxes which constitute a lien
on the shares being sold hereunder.
7.6 Adverse Circumstances. Except as disclosed herein, to
the best knowledge of FORTUNE 21, there are no facts,
developments or circumstances, existing or
threatened, of a special or unusual nature that may
be materially adverse to the assets, business,
financial condition or future prospects of FORTUNE
21.
8. INDEMNIFICATION. USMS and FORTUNE 21 mutually agree to
indemnify and to hld the other harmless from and against all
material damages, losses, costs, liabilities, expenses and
deficiencies, including, without limitation, additional taxes,
and reasonable interest, attorney, accountant and expert
witness fees and expenses (collectively "Material Damages")
that result from or arise out of any misrepresentation, breach
of warranty, or nonfulfillment of any agreement, covenant or
obligation of the other under this Agreement. Each party
agrees to give the other prompt written notice of any event or
assertion of which it has knowledge concerning any Material
Damages to which it may request indemnification hereunder.
Each party will cooperate with the other in determining the
validity of any such claim or assertion. The indemnifying
party hereunder shall have the right to defend with counsel
reasonably satisfactory to the indemnified party any claims
Material Damages for which the indemnified party has requested
indemnification hereunder, and after notice from the
indemnifying party regarding its assumption of the defense
thereof, the indemnifying party shall not be liable to the
indemnified party for any legal or other expenses subsequently
incurred by the reasonable costs of investigation. Each party
agrees not to settle or compromise any claims for Material
Damages without the prior written consent of the other. The
obligation of each party to indemnify the other under this
section, shall terminate on the anniversary of the Closing
Date, except as to matters to which such party had made a
claim for indemnification or given written notice of a
possible claim for indemnification on or prior to such date.
9. BROKERAGE FEES. No broker, finder or intermediary is entitled
to receive any brokerage or similar type of commission, fee,
or payment arising out of this transaction.
10. TERMINATION OF AGREEMENT. This Agreement and the transactions
contemplated hereby may be terminated by either party to this
Agreement without liability of any kind to the other party
hereto by written instrument, signed by either party and
delivered at any time on or prior to the Closing Date, giving
notice of termination, if:
(a) There has been a material misrepresentation or
material breach of warranty on the part of either
party in the representations and warranties set forth
herein, or either party shall have failed to perform
or comply with, in any material respect, any
covenant, agreement or condition to be performed or
complied with prior to, or at the closing.
(b) In the reasonable judgment of either party the
transactions contemplated by this Agreement have
become inadvisable or impracticable by reasons of:
(i) the announcement or the institution by federal,
state or local authorities of any investigation of or
litigation or proceedings against either party which
may have a material and adverse effect on either
party, or the transactions contemplated hereby; or
(ii) the commencement since the date of this
Agreement by any other person, corporation or entity
of litigation or proceedings against or in regard to
either party, which may have a material and adverse
effect upon the authority or ability of either party,
which may have a material and adverse effect upon the
authority or ability of either party to consummate
the transactions contemplated hereby.
11. AFFECT AFTER TERMINATION. In the event that this Agreement
shall be terminated in accordance with the provisions of this
Agreement, then all further obligations of each party to the
other under this Agreement shall terminate without further
liability.
12. EXPENSES. All legal, accounting and other costs and fees
incurred by BOTH PARTIES, in connection with the transactions
contemplated by this Agreement shall be borne and paid for by
the party incurring the same.
13. MISCELLANEOUS PROVISIONS.
13.1 Survival of Representations, Warranties and
Covenants. The respective representations,
warranties, covenants and agreements made in this
Agreement by BOTH PARTIES shall survive Closing for a
period of one (1) year.
13.2 Assignment. This Agreement and all rights and
obligations hereunder may be assigned by BOTH
PARTIES, in whole or in part, without prior knowledge
and/or written consent of the other party.
13.3 Notices. Any notice, request, instruction or other
document or communication required or permitted to be
delivered in person or by deposit in the mail,
postage prepaid, for mailing by certified or
registered mail, will be made as follows:
U.S. Medical Services, Inc.
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If to the FORTUNE 21 shareholders, delivered and mailed to:
FORTUNE 21, INC.
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▇▇▇▇▇▇▇▇, ▇▇▇. 32750
13.4 Section Headings. Section headings are for the
convenience only and shall not limit or otherwise
affect any provisions of this Agreement.
13.5 Entire Agreement. This Agreement and any Exhibits
hereto, constitute the entire agreement and
understanding of the parties hereto with respect to
the matters herein set forth, and all prior
negotiations, writings and understandings related to
the subject matter of this Agreement are merged
herein and are superseded and canceled by this
Agreement.
13.6 Waivers - Amendments. Any of the terms or conditions
of this Agreement may be waived, but only in writing
by the party which is entitled to the benefit
thereof, and this Agreement may be amended or
modified, in whole or in part, only by agreement in
writing, executed by all parties to this Agreement.
13.7 Governing Law. This Agreement shall be construed and
enforced in accordance with the laws of Florida,
without regard to conflict of law.
13.8 Counterparts. This Agreement may be executed in two
or more counter parts, each of which shall be deemed
original as well as by facsimile, but all of which
together shall constitute one and the same
instrument.
This Agreement is hereby executed on the date first mentioned above in
Orlando, FL.
U.S. MEDICAL SERVICES, INC. FORTUNE 21, INC.
/s/ ▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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By: ▇▇▇ ▇▇▇▇▇ By: ▇▇▇▇▇ ▇. ▇▇▇▇
Its: PRESIDENT Its: PRESIDENT
