EXCHANGE AGREEMENT
This Exchange Agreement is made this 25th day of June, 1994 by and between:
VANCOUVER TAX SHELTER AND INVESTMENT SEMINARS INC., a company formed under the
laws of the British Columbia, Canada, hereafter ("VTS), its assignee, designee,
or nominee and the shareholders of the said VTS ("VTS SHAREHOLDERS").
WHEREAS, VTS desires to exchange (the "EXCHANGE") the shares VTS owns
in its wholly owned subsidiary U.S. MEDICAL SERVICES, INC., ("USM") a Nevada
corporation, with the shares currently held by VTS SHAREHOLDERS in VTS, on a
share for share basis in accordance with the terms and conditions of this
Agreement: and
WHEREAS, the VTS SHAREHOLDERS desire the said EXCHANGE in accordance
with the terms and conditions of this Agreement: and
WHEREAS, VTS and VTS SHAREHOLDERS 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. VTS shall deliver to the VTS SHAREHOLDERS,
ONE MILLION NINE HUNDRED AND THREE THOUSAND, TWO HUNDRED AND
THREE (1,903,203) SHARES of VTS, in EXCHANGE for ONE MILLION
NINE HUNDRED AND THREE THOUSAND TWO HUNDRED AND THREE
(1,903,203) SHARES of VTS, for the cancellation and the
winding-up of VTS.
2. CLOSING DATE. This transaction shall be closed pursuant to the
terms and conditions herein on the date of execution of this
Agreement at midnight on June 25, 1994 at Vancouver, British
Columbia. 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 seven (7) days of the closing
date are as follows.
3. CLOSING. At Closing, the parties shall take the following
actions:
3.1. Transfer of Shares. VTS shall deliver to the VTS
SHAREHOLDERS the VTS SHARES, upon the terms and
subject to the conditions set forth in this
Agreement. VTS shall deliver to the VTS SHAREHOLDERS
the VTS SHARES free and clear of all claims and
encumbrances, and any restrictive legends. The VTS
SHARES will be registered in the name of each
individual VTS SHAREHOLDER.
3.2 Transfer Agent Instructions. VTS will instruct its
Transfer Agent to issue the said VTS share
certificates in exchange for the VTS SHARES without
restrictive legend in the name of each individual VTS
SHAREHOLDERS pursuant to this Agreement.
4. SECURITIES ACT OF 1933 AND RESTRICTIONS. VTS covenants and
agrees to the VTS SHAREHOLDERS as follows:
a) VTS understands that the SHARES acquired pursuant to
this Agreement do not require to be restricted under
the 1933 Act with the Securities and Exchange
Commission in reliance upon the exemption from such
restriction requirements afforded by the
reorganization provisions of the 1933 Act, governing
the replacement of shares of an original offering:
(the 1991 offering).
b) VTS hereby represents and warrants that it is a
company duly formed under the laws of the British
Columbia with principal executive and administrative
offices located outside the U.S.
c) VTS represents and warrants that USM, is a
corporation duly formed under the laws of the State
of Nevada, U.S.A., on June 6, 1994 and that it is a
wholly owned subsidiary of VTS.
5. CONDITIONS OF BOTH PARTIES OBLIGATIONS TO CLOSE. For the
purposes of paragraph 5 through 15 only of this Agreement:
(i) "VTS" SHALL INCLUDE BOTH VTS AND ITS WHOLLY
OWNED SUBSIDIARY USM, and
(ii) the following shall be the conditions of VTS
and VTS SHAREHOLDERS ("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 Agreement. 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 BOTH PARTIES.
BOTH PARTIES represent and warrant to the other that the
statements contained in Sections 6.1 through 6.9 are true and
correct on the date hereof.
6.1 Corporate Standing. VTS is a corporation duly
organized, validly existing, and in good standing
under the laws of British Columbia, 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 VTS
does not, and the consummation of the transactions
contemplated hereby will not, violate or result in a
breach of any provisions of VTS'S Charter of Bylaws.
6.2 Capital Stock. The authorized capital stock of the
VTS consists of Two Million Five Hundred Thousand
(2,500,000) shares of Common Stock without par value
of which the amount nine hundred and ONE MILLION NINE
HUNDRED AND THREE THOUSAND TWO HUNDRED AND THREE
THOUSAND (1,903,203) SHARES of Common Stock have been
validly issued and are outstanding, fully paid and
nonassessable as of June 25, 1994.
6.3 Authority. VTS 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
and the execution and delivery on behalf of VTS, of
any and all instruments necessary or appropriate in
order to effectuate fully the terms and conditions of
this Agreement. Upon delivery of the shares and
payment of the purchase price, good title to the VTS
SHARES will pass, free and clear of all restrictions
on transfer, liens, encumbrances, security interest
and claims whatsoever, to the VTS SHAREHOLDERS. Other
than as may be required under the laws of any country
other than the United States of America, or Canada,
no consent or approval of any court, governmental
agency or other public authority, or of any other
person, corporation or entity with any actual or
alleged interest in VTS is required as a condition to
(a) the validity or enforceability of this Agreement
or any other instruments to be executed by VTS to
effectuate this Agreement, or (b) the completion or
validity of any of the transactions contemplated by
this Agreement. This Agreement has been properly
executed and delivered by the duly authorized officer
of VTS, and constitutes the valid and legally binding
agreement of VTS and is enforceable against VTS in
accordance with its terms.
6.4 Financial Condition. VTS furnished, or made available
to the VTS SHAREHOLDERS, the financial statements
(the "Financial Statements") contained in the VTS'S
records and all 15C2-11 reports filed to date
(collectively, hereafter, the "Reports"). There has
been no material adverse change in, material loss or
destruction of, or material amount of damage to, the
financial condition or business of VTS since the
filing of the most recent Report arising from
transactions whether or not in the ordinary course of
business. The regular books of account of VTS fairly
and accurately reflect all transactions since the
filing of the most recent Report are true, correct
and complete, and are maintained and kept in
accordance with generally accepted accounting
principles consistently applied. VTS has no
liabilities or obligations, whether accrued,
absolute, contingent or otherwise, which would
materially and adversely affect the condition
(financial and otherwise) of VTS, except and to the
extent reflected or reserved against in the balance
sheets included in the Financial Statements or
otherwise disclosed in the Reports. No dividends are
due or unpaid by VTS.
6.5 Lawsuits and Proceedings. Except as disclosed in the
Financial Statements and Reports, there are no
material actions at law or in equity, governmental
proceedings or investigations pending or to the
knowledge of VTS threatened against the VTS or
against or with respect to the business or assets of
the VTS, and VTS is not in material default with
respect to any decree, injunction or the order of any
court or government authority. Except as disclosed in
the Financial Statements or Reports, VTS is in
substantial compliance with and has not received any
notice of any claimed violation of, any material
federal, state, county or municipal laws, ordinances,
and regulation, and there is no action at law or in
equity, arbitration proceeding, governmental
proceeding or investigation, or motion or request to
any court, pending or to the knowledge of VTS
threatened, against or with respect to VTS with
respect to this Agreement or any of the transactions
contemplated hereby.
6.6 Taxes. VTS knows of no outstanding claims against VTS
for taxes which constitute a lien on the shares being
sold hereunder.
6.7 Extraordinary Transactions. Since the filing of the
VTS's most recent Report, VTS has not:
(i) mortgaged, pledged or subjected to lien,
charge or any other encumbrance any of its
assets;
(ii) except in the ordinary course of business,
sold or transferred any of its assets;
(iii) made any management decisions involving any
material change in itspolicies with regard
to the provision of services, sales,
purchasing or the business, financial,
accounting (including reserves and the
amounts thereof) or tax policies or
practices; or
(iv) declared or paid any dividends on, or made
any distributions in respect of any
outstanding shares of capital stock of VTS.
6.8. Adverse Circumstances. Except as disclosed in the
Reports or described herein, to the best knowledge of
VTS, there are o 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 VTS.
7. COVENANTS AND AGREEMENTS OF VTS SHAREHOLDERS. The VTS
SHAREHOLDERS hereby Covenants and agrees as follows:
7.1 Action. As of the execution of this Agreement by the
VTS SHAREHOLDERS the VTS SHAREHOLDERS shall take all
action necessary or appropriate to authorize the
execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby
7.2 Impairment - Representation and Warranties. VTS
SHAREHOLDERS shall not take any action or fail to
take any action without prior written approval of VTS
which might cause any representation or warranty of
VTS SHAREHOLDERS made herein not to be true on the
Closing Date, or impair VTS SHAREHOLDER'S ability to
carry out its obligations under this Agreement.
7.3 Due Diligence. VTS SHAREHOLDERS or their agents, have
had a full opportunity to conduct their due diligence
of VTS in connection with this Agreement to their
complete satisfaction. The VTS SHAREHOLDERS are
familiar with VTS in connection with this Agreement
to its complete satisfaction. The VTS SHAREHOLDERS
are familiar with VTS, its financial condition,
business and prospects, has been provided with the
Reports and with such other information concerning
VTS'S financial and other affairs as VTS SHAREHOLDERS
deem necessary to enter into and perform this
Agreement, has had sufficient opportunity to review
such material and to ask questions and receive
answers to verify the accuracy of such information,
and is not in any way relying upon any information,
representation or warranty (without implying that the
supplying of any such information or the making of
any such representation or warranty has occurred)
that VTS or its officers, directors, employees,
agents and attorneys have provided, or have failed to
provide, to the VTS SHAREHOLDERS in entering into or
performing this Agreement.
8. DELIVERY OF DOCUMENTS BY VTS. At the Closing, and in addition
to all other documents and instruments which VTS is required
to deliver pursuant to this Agreement, VTS shall deliver to
the VTS SHAREHOLDERS the following documents duly executed by
VTS or the directors, officers, or employees of, or counsel to
VTS or appropriate governmental officials, in form and
substance satisfactory to the VTS SHAREHOLDERS and their
counsel.
8.1. Good Standing. A Certificate of good standing from
the Secretary of State of the State of Nevada for
USM.
8.2. Other Documents. Such other documents, certificates
and instruments relating to the transactions
contemplated by this Agreement as the VTS
SHAREHOLDERS or its counsel may reasonable request or
deem necessary.
9. INDEMNIFICATION. VTS and the VTS SHAREHOLDERS mutually agree
to indemnify and to hold 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
Damage 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
for 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 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.
10. 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, and VTS
SHAREHOLDERS will hold VTS harmless against any claim for such
commission fee or similar type of payment.
11. TERMINATION OF AGREEMENT. This Agreement and the transactions
contemplated hereby may be terminated by the VTS SHAREHOLDERS
without liability of any kind to VTS by written instrument,
signed by the VTS SHAREHOLDERS 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 VTS in the representations and warranties
set forth herein or in any Exhibit hereto or
in any share certificate delivered pursuant
hereto or in any share certificate delivered
pursuant hereto, or VTS shall have failed to
perform or comply with, in any material
respect, any covenant, agreement or
condition to be performed or complied with
prior xxx or at the Closing.
(b) In the reasonable judgment of the VTS
SHAREHOLDERS 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 an
investigation of or litigation or
proceedings against VTS which may have a
material and adverse effect on VTS, 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 VTS, which may have
a material and adverse effect upon the
authority or ability of VTS to consummate
the transactions contemplated hereby; or,
(c) the business, assets, results of operations,
financial condition or future prospects of
VTS have been significantly and adversely
affected by reason of changes or
developments in operations, other than in
the ordinary course of business, since the
filing of VTS'S most recent Report as
provided to VTS SHAREHOLDERS.
12. 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.
13. 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.
14. MISCELLANEOUS PROVISIONS.
14.1 Survival of Representations, Warranties and
Covenants. The respective representations,
warranties, covenants and agreements made in this
Agreement by the BOTH PARTIES shall survive Closing
for a period of one (1) year.
14.2. 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.
14.3 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:
If to VTS delivered and mailed to:
Xxxxxxx Xxxxxx
Barristers and Solicitors
110 - 5769 000 X Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx, X0X 0X0
If to VTS SHAREHOLDERS, delivered and mailed to:
Xxxxx & Co.
Barristers and Solicitors
0000 Xxxx Xxxxx
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx, X0X 0X0
14.4 Section Headings. Section headings are for the
convenience only and shall not limit or otherwise
affect any provision of this Agreement.
14.5 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 relating to
the subject matter of this Agreement are merged
herein and are superseded and canceled by this
Agreement.
14.6. 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 e amended or
modified, in whole or in part, only by Agreement in
writing, executed by all parties to this Agreement.
14.7. Governing Law. This Agreement shall be construed and
enforced in accordance with the laws of British
Columbia, Canada, without regard to conflict of law.
14.8 Counterparts. This Agreement may be executed in two
or more counterparts, 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 at the date first mentioned above in
Vancouver, British Columbia.
VANCOUVER TAX SHELTER AND INVESTMENT SEMINARS, INC.
/s/ Xxx Xxxxx June 25, 1994
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By: Xxx Xxxxx, President
U.S. MEDICAL SERVICES, INC.
/s/ Xxx Xxxxx June 25, 1994
-------------
By: Xxx Xxxxx, President
SHAREHOLDERS OF
VANCOUVER TAX SHELTER AND INVESTMENT SEMINARS, INC.
/s/ Xxxxxx Xxxxx June 25, 1994
----------------
By: Xxxxxx Xxxxx, Spokesperson
SHAREHOLDERS OF VANCOUVER TAX SHELTER
AND INVESTMENT SEMINARS, INC.
