AGREEMENT
AGREEMENT, made this 24th day of December 1998, by and among RAD SOURCE
TECHNOLOGIES, INC., a Florida corporation ("Buyer") and persons executing this
agreement (referred to collectively as "Shareholders" and individually as
"Shareholder") who own 100% of the outstanding shares of RAD SOURCE, INC., a
Florida corporation (the "Company").
WHEREAS, Buyer desires to acquire all of the issued and outstanding
shares of common stock of the Company in exchange for unissued shares of the
common stock of Buyer (the "Common Stock") (Exchange Offer"); and
WHEREAS, Shareholders desire to exchange all of their shares of Company
common stock; and
WHEREAS, Buyer desires to assist the Company in a business combination
which will result in the shareholders of the Company owning together 2,278,267
of the then issued and outstanding shares of Buyer's Common Stock and Buyer
holding at least 98% of the issued and outstanding shares of the Company's
common stock;
NOW, THEREFORE, in consideration of the mutual promises, covenants, and
representations contained herein, the parties hereto agree as follows:
ARTICLE 1
EXCHANGE OF SECURITIES
1.1 Issuance of Shares. Subject to all of the terms and conditions of
this Agreement, Buyer agrees to exchange 2,278,267 shares of its common stock in
exchange for the outstanding Company common stock with the holders of such stock
as set forth in Exhibit 1.1 hereto. The Common Stock will be issued directly to
the Shareholders of the Company on the Closing.
1.2 Exemption from Registration. The parties hereto intend that the
Common Stock to be issued by the Company to the Shareholders shall be exempt
from the registration requirements of the Securities Act of 1933, as amended
(the "Act"), and pursuant to applicable state staturts.
1.3 Tax Free Exchange. The parties hereto intend that the exchange
herein be tax-free pursuant to Section 368 of the Internal Revenue Code of 1986.
No revenue ruling or opinion of counsel is being sought in this regard and such
tax treatment is not a condition to closing herein.
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1.4 Balance of Company Xxxxxx.Xx is anticipated that Buyer will acquire
the balance of 26,333 shares of Company common stock outstanding in exchange of
26,333 shares of Buyer common stock, but such transaction is not a condition to
closing herein.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
The Shareholders hereby represent and warrant to Buyer that:
2.1 Organization. The Company is a corporation duly organized, validly
existing, and in good standing under the laws of Florida, has all necessary
corporate powers to won its properties and to carry on its business as now owned
and operated by it, and is duly qualified to do business and is in good standing
in each of the states where its business requires qualification.
2.2 Capital. The authorized capital stock of Company consists of
100,000,000 shares of Common Stock, $.0001 par value, and 20,000,000 shares of
preferred stock, $.0001 par value, of which 2,304,600 shares of common stock and
no shares of preferred stock are currently issued and outstanding. All of the
issued and outstanding shares of Company are duly and validly issued, fully
paid, and nonassessable. There are no outstanding subscriptions, options,
rights, warrants, debentures, instruments, convertible securities, or other
agreements or commitments obligating Company to issue or to transfer from
treasury any additional shares of its capital stock of any class except as
specified in Exhibit A hereto.
2.3 Subsidiaries. As of the date of this Agreement, Company does not
have any subsidiaries or own any interest in any other enterprise (whether or
not such enterprise is a corporation) other than the following Subsidiaries set
forth in Exhibit B hereto.
2.4 Directors and Officers. Exhibit C to this Agreement contains the
names and titles of all directors and officers of Company as of the date of this
Agreement.
2.5 Financial Statements. The financial statements included in Exhibit
D hereto fairly present the financial position of Company as of the date of the
last balance sheet included in the financial statements, and the results of
operation for the periods indicated.
2.6 Absence of Changes. Since the date of the most recent financial
statements included in Exhibit D, there has not been any change in the financial
condition or operations of Company, except for changes in the ordinary course of
business, which changes have not in the aggregate been materially adverse.
2.7 Absence of Undisclosed Liabilities. As of the date of its most
recent balance sheet included in Exhibit D, Company did not have any material
debt, liability, or obligation of any nature, whether accrued, absolute,
contingent or otherwise, and whether due or to become due, that is not reflected
in such balance sheet.
2.8 Tax Returns. Within the times and in the manner prescribed by law,
Company has filed all federal, state and local tax returns required by law and
has paid all taxes, assessments and penalties due and payable. The provisions
for taxes, if any, reflected in the balance sheet included in Exhibit A are
adequate for any and all federal, state, county and local taxes for the periods
ending on the date of the balance sheet and for all prior periods, whether or
not disputed. There are no present disputes as to taxes of any nature payable by
Company.
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2.9 Investigation of Financial Condition. Without in any manner
reducing or otherwise mitigating the representations contained herein, Buyer
and/or its attorneys shall have the opportunity to meet with accountants and
attorneys to discuss the financial condition of Company. Company shall make
available to Buyer and/or its attorneys all books and records of Company. If the
transaction contemplated hereby is not completed, all documents received by
Buyer and/or its attorneys shall be returned to Company and all information so
received shall be treated as confidential.
2.10 Compliance with Laws. Company has complied with, and is not in
violation of, all applicable federal, state or local statues, laws and
regulations (including, without limitation, any applicable building, zoning,
environmental or other law, ordinance or regulation) affecting its properties or
the operation of its business, except for matters which would not have a
material affect on Company or its properties.
2.11 Litigation. Except as set forth in Exhibit 2.11 hereto, Company is
not a party to any suit, action, arbitration or legal, administrative or other
proceeding, or governmental investigation pending or, to the best knowledge of
Company, threatened against or affecting Company or its business, assets or
financial condition, except for matters which would not have a material affect
on Company or its properties. Company is not in default with respect to any
order, writ, injunction or decree of any federal, state, local or foreign court,
department, agency or instrumentality applicable to it. Company is not engaged
in any lawsuits to recover any material amount of monies due to it.
2.12 Ownership of Shares. The delivery of the Company common stock as
contemplated herein will result in Buyer's immediate acquisition of record and
beneficial ownership of all of the Company's capital stock as set forth on
Exhibit 1.1, free and clear of all liens and encumbrances.
2.13 Ability to Carry Out Obligations. The execution and delivery of
this Agreement by the Shareholders and the performance by the Shareholders of
the obligations hereunder in the time and manner contemplated will not cause,
constitute or conflict with or result in (a) any material breach or violation of
any of the provisions of or constitute a material default under any license,
indenture, mortgage, charter, instrument, articles of incorporation, by-laws, or
other agreement or instrument to which Company is a party, or by which it may be
bound, nor will any consents or authorizations of any party other than those
hereto be require. (b) an event that would permit any party to any material
agreement or instrument to terminate it or to accelerate the maturity of any
indebtedness or other obligation of Company, or (c ) an event that would result
in the creation or imposition of any material lien, charge, or encumbrance on
any asset of Company.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Company and the Shareholders that:
3.1 Organization. Buyer is a corporation duly organized, validly
existing, and in good standing under the laws of Florida, has all necessary
corporate powers to own properties and to carry on business. A true and correct
copy of the Articles of Incorporation and By-laws of Buyer is annexed hereto as
Exhibit 3.1. Buyer was originally incorporated as Computer Vending, Inc.
3.2 Capital. The authorized capital stock of Buyer consists of
50,000,000 shares of $.001 par value Common Stock and 10,000,000 of Preferred
Stock of which only 100,000 shares of common stock is outstanding. As of the
closing Buyer will have no more than 2,378,267 shares of common stock
outstanding. All of the issued and outstanding shares are duly and validly
issued, fully paid and nonassessable. There are no outstanding subscriptions,
options, rights, warrants, convertible securities, or other agreements or
commitments obligating Buyer to issue additional shares of its capital stock of
any class. A true and correct list of all outstanding shares of Buyer is annexed
hereto as Exhibit 3.2.
3.3 Subsidiaries. Buyer does not have any subsidiaries or own any
interest in any other enterprise (whether or not such enterprise is a
corporation).
3.4 Directors and Officers. Exhibit 3.4, annexed hereto and hereby
incorporated herein by reference, contains the names and titles of all directors
and officers of Buyer as of the date of this Agreement.
3.5 Financial Statements. Exhibit 3.5, annexed hereto and hereby
incorporated herein by reference, consists of the audited financial statements
of Buyer as of May 28, 1998, containing the balance sheets of Buyer and the
related statements of income and retained earnings for the period then ended,
and the financial statements have been prepared in accordance with generally
accepted accounting principles and practices consistently followed by Buyer
throughout the period indicated, and fairly present the financial position of
Buyer as of the dates of the balance sheets included in the financial
statements, and the results of operations for the period indicated.
3.6 Absence of Changes. Since May 28, 1998, there has not been any
change in the financial condition or operations of Buyer, except for changes in
the ordinary course of business, which changes have not in the aggregate been
materially adverse.
3.7 Absence of Undisclosed Liabilities. As of the date hereof, Buyer
did not have any material debt, liability, or obligation of any nature, whether
accrued, absolute, contingent, or otherwise, and whether due or to become due,
that is not reflected in Buyer's balance sheet as of May 28, 1998. As of the
Closing, Buyer will have no liabilities in excess of $10,000.
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3.8 Tax Returns. Within the times and the manner prescribed by law.
Buyer has filed all federal, state and local tax returns required by law and has
paid all taxes, assessments and penalties due and payable. There are no present
disputes as to taxes of any nature payable by Buyer. There was no taxable income
for 1998.
3.9 Investigation of Financial Condition. Without in any manner
reducing or otherwise mitigating the representations contained herein, Company
shall have the opportunity to meet with Buyer's accountants and attorneys to
discuss the financial condition of Buyer. Buyer shall make available to Company
all books and records of Buyer.
3.10 Compliance with Laws. Buyer has complied with, and is not in
violation of, all applicable federal, state or local statutes, laws and
regulations (including, without limitation, any applicable building, zoning,
environmental or other law, ordinance, or regulation) affecting its properties
or the operation of its business.
3.11 Litigation. Buyer is not a party to any suit, action, arbitration,
or legal, administrative, or other proceeding, or governmental investigation
pending or, to the best knowledge of Buyer, threatened against or affecting
Buyer or its business, assets, or financial condition. Buyer is not in default
with respect to any order, writ, injunction, or decree of any federal, state,
local, or foreign court, department agency, or instrumentally. Buyer is not
engaged in any legal action to recover moneys due to it.
3.12 The Board of Directors of Buyer has authorized the execution of
this Agreement and the transactions contemplated herein, and Buyer has full
power and authority to execute, deliver and perform this Agreement and this
Agreement is the legal, valid and binding obligation of Buyer, is enforceable in
accordance with its terms and conditions, except as may be limited by bankruptcy
and insolvency laws and by other laws affecting the rights of creditors
generally. The approval of Buyer's shareholders is not necessary for this
transaction.
3.13 Ability to Carry Out Obligations. The execution and delivery of
this Agreement by Buyer and the performance by Buyer or conflict with or result
in (a) any material breach or violation of any of the provisions of or
constitute a default under any license, indenture, mortgage, charter,
instrument, certificate of incorporation, bylaw, or other agreement or
instrument to which Buyer is a party, or by which it may be bound, nor will any
consents or authorizations of any party other than those hereto be required, (b)
an event that would permit any party to any material agreement or instrument to
terminate it or to accelerate the maturity of any indebtedness or other
obligation of Buyer, or (c ) an event that would result in the creation or
imposition of any material lien, charge, or encumbrance on any asset of Buyer.
3.14 Validity of Buyer Shares. The shares of Buyer Common Stock to be
delivered pursuant to this Agreement, when issued in accordance with the
provisions of this Agreement, will be duly authorized, validly issued, fully
paid and nonassessable.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
4.1 Share Ownership. The Shareholders hold shares of Company's common
stock as set forth on the signature page hereto. Such shares are owned of record
and beneficially by each holder thereof, and such shares are not subject to any
lien, encumbrance or pledge. Each Shareholder holds authority to exchange such
shares pursuant to this Agreement.
4.2 Investment Intent. Each Shareholder understands and acknowledges
that the shares of Buyer Common Stock (the "Buyer Shares") are being offered for
exchange in reliance upon the exemption provided in Section 4(2) of the
Securities Act of 1933 (the "Securities Act") for nonpublic offerings; and each
Shareholder makes the following representations and warrantees with the intent
that the same may be relied upon in determining the suit-ability of each
Shareholder as a purchaser of securities.
(a) The Buyer Shares are being acquired solely for the account of each
Shareholder, for investment purposes only, and not with a view to, or for sale
in connection with any distribution thereof and with no present intention of
distributing or reselling any part of the Buyer Shares.
(b) Each Shareholder agrees not to dispose of his Buyer Shares or any
portion thereof unless and until counsel for Buyer shall have determined that
the intended disposition is permissible and does not violate the Securities Act
or any applicable state securities laws, or the rules and regulations
thereunder.
(c ) Each Shareholder acknowledges that Buyer has made all
documentations pertaining to all aspects of the Exchange Offer available to him
and to his qualified representatives, if any, and has offered such person or
persons an opportunity to discuss the Exchange Offer with the officers of Buyer.
(d) Each Shareholder is knowledgeable and experienced in making and
evaluating investments of this nature and desires to accept the Exchange Offer
on the terms and conditions set forth.
(e) Each Shareholder is able to bear the economic risk of an
investment, as a result of the Exchange Offer, in the Buyer Shares.
(f) Each Shareholder understands that an investment in the Buyer shares
is not liquid, and each Shareholder has adequate means of providing for current
needs and personal contingencies and has no need for liquidity in this
investment.
(g) Except as set forth on Exhibit A, each Shareholder agrees not to
sell or transfer his, her or its Buyer Shares for a period of 24 months from the
date of Closing herein.
4.3 Indemnification. Each Shareholder recognizes that the offer of the
Buyer shares to him is based upon his representations and warranties set forth
and contained herein and hereby agrees to indemnify and hold harmless Buyer
against all liability, costs or expenses (including reasonable attorney's fees)
arising as a result of any misrepresentations made herein by such Shareholder.
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4.4 Legend. Each Shareholder agrees that the certificates evidencing
the Buyer Shares acquired pursuant to this Agreement will have a legend placed
thereon stating that the securities have not been registered under the Act or
any state securities laws and setting forth or referring to the restrictions on
transferability and sales of the Shares herein.
ARTICLE 5
COVENANTS
5.1 Investigative Rights. From the date of this Agreement until the
Closing Date, each party shall provide to the other party, and such other
party's counsels, accountants, auditors, and advance written notice to all of
each party's properties, books, contracts, commitments, and records for the
purpose of examining the same. Each party shall furnish the other party with all
information concerning each party's affairs as the other party may reasonably
request.
5.2 Conduct of Business. Prior to the Closing, Buyer and Company shall
each conduct its business in the normal course, and shall not sell, pledge, or
assign any assets, without the prior written approval of the other party, except
in the regular course of business. Neither Buyer or Company shall amend its
Articles of Incorporation or Bylaws, declare, dividends, redeem or sell stock or
other securities, incur additional or newly-funded liabilities, acquire or
dispose of fixed assets, change employment terms, enter into any material or
long-term contract, guarantee obligations of any third party, settle or
discharge any balance sheet receivable for less than its state amount, pay more
on any liability than its stated amount, or enter into any other transaction
other than in the regular course of business.
ARTICLE 6
CONDITIONS PRECEDENT TO BUYERS PERFORMANCE
6.1 Conditions. Buyer's obligations hereunder shall be subject to the
satisfaction, at or before the Closing, of all the conditions set forth in this
Article 6. Buyer may waive any or all of these conditions in whole or in part
without prior notice; provided, however, that no such waiver of a condition
shall constitute a waiver by Buyer of any other condition of or any of Buyer's
other rights or remedies, at law or in equity, if Shareholders shall be in
default of any of their representations, warranties, or covenants under this
Agreement.
6.2 Accuracy of Representations. Except as otherwise permitted by this
Agreement, all representations and warranties by Shareholders in this Agreement
or in any written statement that shall be delivered to Buyer by Shareholders
under this Agreement shall be true and accurate on and as of the Closing Date as
though made at that time.
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6.3 Performance. Shareholders shall have performed, satisfied, and
complied with all covenants, agreements, and conditions required by this
Agreement to be performed or complied with by it, on or before the Closing Date.
6.4 Absence of Litigation. No action, suit, or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against Company on or before the Closing Date.
6.5 Acceptance by Company Shareholders.The holders of an aggregate of
not less than 100% of the issued and outstanding shares of common stock of
Company shall have agreed to exchange their shares for shares of Buyer Common
Stock.
6.6 Certificate. Shareholders shall have delivered to Buyer a
certificate, dated the Closing Date, certifying that each of the conditions
specified in Sections 6.2 through 6.5 hereof have been fulfilled.
ARTICLE 7
CONDITIONS PRECEDENT TO SHAREHOLDERS' PERFORMANCE
7.1 Conditions. Shareholders' obligations hereunder shall be subject to
the satisfaction, at or before the Closing, of all the conditions set forth in
this Article 7. Shareholders may waive any or all of these conditions in whole
or in part without prior notice; provided, however, that no such waiver of a
condition shall constitute a waiver by Shareholders of any other condition of or
any of Shareholders' rights or remedies, at law or in equity, if Buyer shall be
in default of any of its representations, warranties, or covenants under this
Agreement.
7.2 Accuracy of Representations. Except as otherwise permitted by this
Agreement, all representations and warranties by Buyer in this Agreement or in
any written statement that shall be delivered to Shareholders by Buyer under
this Agreement shall be true and accurate on and as of the Closing Date as
though made at that time.
7.3 Performance. Buyer shall have performed, satisfied, and complied
will all covenants, agreements, and conditions required by this Agreement to be
performed or complied with by it, on or before the Closing Date.
7.4 Absence of Litigation. No action, suit or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against Buyer on or before the Closing Date.
7.5 Officers Certificate. Buyer shall have delivered to Shareholders a
certificate, dated the Closing Date and signed by the President of Buyer
certifying that each of the conditions specified in Sections 7.2 through 7.4
have been fulfilled.
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7.6 Option. The Buyer has received an option to acquire 94,600 shares
of Buyer's common Stock from Xxxxx Xxxxxxxx for 30 days after the Closing for
$50,000 in a form approved by counsel for the Shareholders.
ARTICLE 8
CLOSING
8.1 Closing. The Closing of this transaction shall be held at the
offices of Buyer, or such other place as shall be mutually agreed upon, on such
date as shall be mutually agreed upon by the parties. At the Closing:
(a) Each Shareholder shall present the certificates representing his
shares of Company being exchanged to Buyer, and such certificates will be duly
endorsed.
(b) Each Shareholder shall receive a certificate or certificates
representing the number of shares of Buyer Common Stock for which the shares of
Company common stock shall have been exchanged.
(c ) Buyer shall deliver an officer's certificate, as described in
Section 7.5 hereof, dated the Closing Date, that all representations,
warranties, covenants and conditions set forth in this Agreement on behalf of
Buyer are true and correct as of, or have been fully performed and complied with
by, the Closing Date.
(d) Buyer shall deliver a signed consent and/or Minutes of the
Directors of Buyer approving this Agreement and each matter to be approved by
the Directors of Buyer under this Agreement.
(e) Shareholders shall deliver a certificate, as described in Section
6.6 hereof, dated the Closing Date, that all representations, warranties,
covenants and conditions set forth in this Agreement on behalf of Shareholders
are true and correct as of, or have been fully performed and complied with by,
the Closing Date.
ARTICLE 9
MISCELLANEOUS
9.1 Captions. The Article and paragraph headings throughout this
Agreement are for convenience and reference only, and shall in no way be deemed
to define, limit, or add to the meaning of any provision of this Agreement.
9.2 No Oral Change. This Agreement and any provision hereof, may not be
waived, changed, modified, or discharged orally, but it can be changed by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modifications, or discharge is sought.
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9.3 Non-Waiver. Except as otherwise expressly provided herein, no
waiver of any covenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressly in writing and signed by the party
against whom such waiver is charged; and (i) the failure of any party to insist
in any or more cases upon the performance of any of the provisions, covenants,
or conditions of this Agreement or to exercise any option herein contained shall
not be construed as a waiver or relinquishment for the future of any such
provisions, covenants, or conditions, (ii) the acceptance of performance of
anything required by this Agreement to be performed with knowledge of the breach
or failure of a covenant, condition, or provisions hereof shall not be deemed a
waiver of such breach or failure, and (iii) no waiver by any party of one breach
by another party shall be construed as a waiver with respect to any other or
subsequent breach.
9.4 Time of Essence. Time is of the essence of this Agreement and of
each and every provision hereof.
9.5 Entire Agreement. This Agreement contains the entire Agreement and
understanding between the parties here to, supersedes all prior agreements and
understandings, and constitutes a complete and exclusive statement of the
agreements, responsibilities, representations and warranties of the parties.
9.6 Choice of Law. This Agreement and its application shall be governed
by the laws of the State of Florida.
9.7 Counterparts. This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
9.8 Notices. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given on the date of service if served personally on the party to whom notice is
to be given, or on the third day after mailing, if mailed to the party to whom
notice is to be given, by first class mail, registered or certified, postage
prepaid, and properly addressed as follows:
Buyer: Rad Source Technologies, Inc.
Shareholders:
9.9 Binding Effect. This Agreement shall inure to and be binding upon
the heirs, executors, personal representatives, successors and assigns of each
of the parties to this Agreement.
9.10 Mutual Cooperation. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement, and shall execute such other and
further documents and take such other and further action as may be necessary or
convenient to effect the transaction described herein.
9.11 Announcements. Buyer and Shareholders will consult and cooperate
with each other as to the timing and content of any announcements of the
transactions contemplated hereby to the general public or to employees,
customers or suppliers.
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9.12 Expenses. Each party will pay its own legal, accounting and any
other out-of-pocket expenses reasonably incurred in connection with this
transaction, whether or not the transaction contemplated hereby is consummated.
9.13 Survival of Representations and Warranties. The representations,
warranties, covenants and agreements of the parties set forth in this Agreement
or in any instrument, certificate, opinion, or other writing providing for in
it, shall survive the Closing irrespective of any investigation made by or on
behalf of any party.
9.14 Exhibits. As of the execution hereof, the parties hereto have
provided each other with the Exhibits provided for hereinabove, including any
items referenced therein or required to be attached thereto. Any material
changes to the Exhibits shall be immediately disclosed to the other party.
9.15 Arbitration of Disputes. Any dispute or controversy arising out of
or relating to this Agreement, any document or instrument delivered pursuant to,
in connection with, or simultaneously with this Agreement, or any breach of this
Agreement or any such document or instrument shall be settled by arbitration to
be held in Miami, Florida in accordance with the rules then in affect of the
American Arbitration Association or any successor thereto. The arbitrator may
grant injunctions or further relief in such dispute or controversy. The decision
of the arbitration shall be final, conclusive and binding on the parties to the
arbitration. Judgment may be entered at the arbitrator's decision in any court
having jurisdiction. Each party in such arbitration shall pay their respective
costs and expenses if such arbitrator and all the reasonable attorneys' fees and
expenses of their respective counsel.
AGREED TO AND ACCEPTED as of the date first above written.
RAD SOURCE TECHNOLOGIES, INC.
By: /s/ Xxxxx Xxxxxxxx, President
---------------------------------
THE COMPANY SHAREHOLDERS
By: /s/ Xxxxxx X. Xxxx, President
---------------------------------
Rad Source 12-24-98
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