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EXHIBIT 10.2
CONTRIBUTION AGREEMENT
The undersigned Xxxxxx X. Xxxxxxxxx, Xxxxxxx Xxxxxxxxxxx and Xxxxx
Xxxxxxx (hereinafter jointly and severally referred to as "Shareholders")
hereby tender a total of three thousand (3,000) shares of the capital stock of
Bavarian Dental Instruments, Inc., a California close corporation ("Bavarian"),
to Edudata Corporation, a Delaware corporation ("Edudata") under the following
terms and conditions:
1. Edudata shall deliver forthwith to the Shareholders, in
exchange for their three thousand (3,000) shares of capital stock of Bavarian,
a total of one million (1,000,000) shares of common stock of Edudata. Said
shares of Edudata shall be allocated among the Shareholders in proportion to
their shareholdings in Bavarian.
2. This transaction is expressly conditioned upon the concurrent
issuance by Edudata of a total of four million (4,000,000) shares of common
stock of Edudata to the members of Dental/Medical Diagnostic Systems LLC
("DMD").
3. The Shareholders represent and warrant as follows:
a. The Shareholders are the sole shareholders of
Bavarian and are the owners of three thousand (3,000) shares of the capital
stock of Bavarian, which constitutes all of the issued and outstanding shares
of stock at Bavarian. Xxxxxx X. Xxxxxxxxx owns one thousand six hundred fifty
(1,650) shares, Xxxxxxx Xxxxxxxxxxx owns one thousand two hundred (1,200)
shares, and Xxxxx Xxxxxxx owns one hundred fifty (150) shares. The
Shareholders contributed approximately Eighty-Two Thousand Dollars ($82,000) to
Bavarian for their shares of capital stock or as paid-in-capital.
b. Bavarian is a corporation duly organized, validly
existing, and in good standing under the laws of the State of California, has
all requisite corporate power and authority to own, lease, and operate its
properties and to carry on its business as it is now conducted, and has
authority to enter into this agreement.
c. All issued and outstanding shares of capital stock of
Bavarian have been duly authorized and validly issued and are fully paid and
nonassessable. There are no outstanding rights, options, warrants,
subscriptions, calls, convertible securities, or agreements of any character or
nature under which Bavarian is or may become obligated to issue or to transfer
any shares of its capital stock of any kind.
d. Each Shareholder is acquiring his shares of common
stock of Edudata solely for his own account for investment
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and does not intend to divide his shares with others or to resell or otherwise
dispose of all or any part of said shares.
e. Each Shareholder acknowledges that, unless the
acquired shares are registered or the transaction is qualified under the
appropriate state and federal securities laws, he may not resell, hypothecate,
transfer or assign, or make other disposition of the Edudata shares, except in
transaction excepted or exempted from the registration or qualification
requirements of such laws.
f. Each Shareholder acknowledges that the acquired
shares of Edudata will be "restricted shares" as said term is defined in the
Rules and Regulations promulgated by the Securities and Exchange Commission
under the Securities Act of 1993, as amended. Each Shareholder acknowledges
that the acquired shares shall have a legend upon them stating that the shares
are restricted shares, which legend shall be in such form as is ordinary and
usual for this type of transaction.
g. Each Shareholder: (1) has reviewed this transaction
with a professional advisor (who is unaffiliated with and who is not
compensated by Edudata, or any affiliate or selling agent of Edudata, directly
or indirectly) who by reason of his or her business or professional experience
has the capacity to protect the Shareholder's interests in connection with this
transaction, and/or (2) had during each of the preceding three (3) years:
individual annual income in excess of Two Hundred Thousand Dollars ($200,000);
or joint annual income (together with his spouse) in excess of Three Hundred
Thousand Dollars ($300,000); or net worth (individually or jointly with his
spouse) in excess of One Million Dollars ($1,000,000).
h. Each Shareholder has received a copy of the latest
available financial statements of Edudata and has been afforded (with his
attorneys and investment advisors, if any) to obtain any information related to
the business and financial condition of Edudata or necessary to verify the
accuracy of the financial statements of Edudata.
i. Each Shareholder acknowledges that Edudata is relying
on exemptions from state and federal securities laws for the issuance of the
Edudata shares and is basing its reliance in part upon the foregoing
representations and warranties.
j. To the best of each Shareholder's actual present
knowledge the following is true and correct: There are no contracts or other
transactions between Bavarian, on the one hand, and any Shareholder, on the
other hand, except that Shareholders are employees of Bavarian. The annual
salary paid to Xxxxxx X. Xxxxxxxxx by DMD and Bavarian together was less than
$240,000.
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k. Each Shareholder, separately from the other
Shareholders, believes that the following statements are true and correct and
has no actual present knowledge that they are untrue or not correct:
i. Although no financial statements of Bavarian
have been delivered to Edudata, there have been no material negative changes or
events to Bavarian since December 31, 1995, and the Shareholder does not know
of any event which with the passage of time will cause a material negative
change.
ii. Returns of products sold by Bavarian have not
exceeded three percent (3%) of sales.
iii. Bavarian has no uncollectible receivables.
iv. The budget dated February 2, 1996, fairly
depicts the anticipated results of DMD and Bavarian for the year 1996. Edudata
acknowledges that said budget is an estimate and that the Shareholders are not
warranting that the projections shall be obtained.
v. In the event Bavarian merges into a C
Corporation that is wholly owned by Edudata in accordance with applicable State
law following normal procedures for a tax-exempt merger, Edudata will not incur
any tax liability as a result of said merger.
vi. Bavarian has no tax liability other than such
liabilities as arise from the ordinary course of its business operations.
There are no liabilities, contingent or absolute, that are not disclosed in the
financial statements referred to in (i) above.
vii. Bavarian has all agreements, licenses,
consents and regulatory approval necessary to conduct its business as it is now
conducted, and is in compliance with all material laws, rules or regulations
known to be applicable to such business as it is now conducted.
l. Each Shareholder acknowledges that this agreement was
prepared by the law firm of Xxxxxxxxx & Xxxxxx, a Professional Corporation, who
are counsel for Bavarian and who do not represent the undersigned Shareholders
or Edudata. Each Shareholder further acknowledges that the law firm is
relying upon the above representations of the Shareholders, has not rendered
any tax advice with respect to this transaction and did urge the Shareholders
to obtain independent advice about this transaction from independent attorneys,
tax specialists and financial advisers.
4. Edudata represents and warrants as follows:
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a. Edudata is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware, and has
all requisite corporate power and authority (1) to own, lease, and operate its
properties and to carry on its business as it is now conducted; and (2) to
enter into, perform, and carry out the terms of this Agreement; and (3) to
issue and sell the one million (1,000,000) shares of common stock of Edudata.
b. The one million (1,000,000) shares of common stock of
Edudata to be issued to the Shareholders shall, when issued, have been duly
authorized and validly issued and be fully paid and nonassessable.
c. Edudata has two million five hundred nine thousand
nine hundred (2,509,900) shares of common stock presently outstanding. All of
said shares have been duly authorized and validly issued and are fully-paid and
nonassessable. There are no outstanding rights, options, warrants,
subscriptions, calls, convertible securities, or agreements of any character or
nature under which Edudata is or may become obligated to issue or to transfer
any shares of its securities of any kind.
d. Edudata has cash and cash equivalents on hand of Six
Hundred Fifty Thousand Dollars ($650,000), net of all liabilities.
e. Edudata acknowledges that this agreement was prepared
by the law firm of Xxxxxxxxx & Xxxxxx, a Professional Corporation, who are
counsel for Bavarian and who do not represent the undersigned Shareholders or
Edudata, and further acknowledges that the law firm is relying upon the above
representations of Edudata, has not rendered any tax advise with respect to
this transaction and has urged Edudata to obtain independent advice about this
transaction from independent attorneys, tax specialists and financial advisers.
5. All parties agree on the following provisions that are to
govern Edudata after the issuance of the one million (1,000,000) shares of
Edudata common stock to the Shareholders:
a. Any loan obligation of Edudata payable to any
shareholder or member of Bavarian, Edudata or DMD, or to any affiliate of such
shareholder or member, shall be paid solely from, and to the extent of,
positive cash flow of the combined businesses.
b. Edudata shall not issue options to acquire more than
seven hundred fifty thousand (750,000) shares of common stock of Edudata at any
time prior to March 1, 1997.
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c. No later than March 1, 1996, all three present
members of the Board of Directors of Edudata shall resign or be removed, and
the following four persons shall be elected in their stead: Xxxxxx X.
Xxxxxxxxx, Xxxxxx Xxxxxxx, Xxxxxx X. Xxxxxxxxx, and Xxxxxx X. Xxxxxx.
d. Xxxxxx X. Xxxxxxxxx shall not receive a salary from
Edudata for the twelve-month period ending March 1, 1997, in excess of Two
Hundred Forty Thousand Dollars ($240,000).
e. After the consummation of the purchase contemplated
by this Agreement and until March 1, 1997, Edudata shall not, without the prior
written consent of Sun Equities Corporation or its designee:
i. Make any payment or distribution to a related
party (other than compensation to employees or the repayment of loans as
permitted by paragraph 5 a above) except in a distribution to all shareholders
of Edudata;
ii. Enter into any contract or other transaction
with any related party (other than agreeing to employ such a person);
iii. Pay a salary or any fee to Xxxxxx X.
Xxxxxxxxx or to any affiliate or associate of Xxxxxx X. Xxxxxxxxx, other than
the Shareholders, Members of DMD and Xx. Xxxxxx Xxxxxxx, in excess of $240,000
per annum;
iv. Pay salaries or fees to Xxxxxx X. Xxxxxxxxx,
Xxxxxx Xxxxxxx, Xxxx Xxxxxx, Xxxxx Xxxxxxx and Xx. Xxxxxx Xxxxxxx in the
aggregate in excess of $700,000; and
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v. Issue any securities other than options to
acquire no more than 750,000 shares of Edudata common stock.
6. As soon as practicable after the Closing, Edudata will send to
its shareholders the information statement required by Section 14f of the
Securities Exchange Act of 1934 and make such other filings required under
Federal securities law. This agreement may be executed in counterparts, all of
which taken together shall constitute a single agreement.
Dated: February 29, 1996 /s/ XXXXXX X. XXXXXXXXX
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XXXXXX X. XXXXXXXXX
Dated: February 29, 1996 /s/ XXXXXXX XXXXXXXXXXX
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XXXXXXX XXXXXXXXXXX
Dated: February 29, 1996 /s/ XXXXX XXXXXXX
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XXXXX XXXXXXX
Dated: February 29, 1996 EDUDATA CORPORATION
By: /s/ XXXX X. XXXXXXXX, Xx.
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Its: Treasurer
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