EXHIBIT 10.2
SHARE-FOR-SHARE EXCHANGE AGREEMENT
SHARE-FOR-SHARE EXCHANGE AGREEMENT made this ___ day of August, 2005 by and
among XXXX MORTGAGE DEPOT, INC. a Florida corporation (the "Corporation"), XXXXX
XXXX ("Xxxx"), and MEDICAL CONNECTIONS, INC., a Florida Corporation ("Medical"),
together with each of the Medical Shareholders (as hereinafter defined).
RECITALS:
A. The Corporation has offered to issue 444,600 shares of its common stock,
$.001 par value (the "Common Stock), to the holders of shares of the capital
stock of Medical (the "Medical Shareholders") in exchange for their contribution
to the Corporation of all of the issued and outstanding capital stock of Medical
(the "Medical Shares").
B. The respective Boards of Directors of the Corporation and Medical have
determined that, subject to the terms, conditions, agreements, representations
and warranties set forth herein, the exchange contemplated herein will serve the
general welfare and advantage of their respective businesses.
C. Subject to the terms and conditions set forth herein, the Medical
Shareholders desire to contribute all of the shares of Medical capital stock for
shares of Common Stock in the manner hereinafter set forth herein.
D. The exchange is intended to comply with the requirements of Section 368 of
the Internal Revenue Code of 1986, as amended, the Treasury Regulations
promulgated thereunder and the interpretive rulings issued pursuant thereto.
NOW, THEREFORE, in consideration of the foregoing recitals, as well as the
mutual covenants hereinafter set forth, the parties hereto, intending to be
legally bound, hereby agree as follows:
ARTICLE I
EXCHANGE PROVISIONS
1.1 Contribution.
Subject to the terms and conditions hereinafter set forth:
(a) Each Medical Shareholder agrees to contribute, transfer,
assign and convey at Closing all of their Medical Shares to the Corporation,
together with all other rights, claims and interests he or she may have with
respect to Medical or its respective assets, and all claims he may have against
its officers and directors, including, but not limited to, all rights to unpaid
dividends and all claims and causes of action arising from or in connection with
the ownership of Medical Shares or its issuance, excluding any right, claim or
interest of same arising under this Agreement or in connection with the
transaction contemplated by this Agreement. Each Medical Shareholder shall
deliver to Medical all of his stock certificates representing the Medical
Shares, together with a stock power therefore, duly executed in blank, to be
held by Medical for delivery at Closing; and
(b) The Corporation agrees to issue to each Medical
Shareholder the Shareholder's pro rata portion of the total number of shares to
be issued to the Medical Shareholders.
Schedule 1.1 will set forth the name of each Medical Shareholder, the number of
shares each owns as of the date of this Agreement and the number of shares of
Common Stock each will receive at Closing.
1.2 Xxxxx Xxxx.
(a) At Closing, Medical shall pay to Xxxx $200,000 and Xxxx
shall surrender to the Corporation for cancellation a total of 1,831,000 Shares
of capital stock he owns in the Corporation, said shares representing all of the
issued and outstanding shares of the Corporation owned by Xxxx at Closing.
1. No Registration.
(a) Each of the Medical Shareholders acknowledges and agrees
that:
(i) The Common Stock to be issued to the Medical
Shareholders (the "Exchanged Corporation Stock") is being issued to Medical
Shareholders without registration under applicable federal and state securities
laws in reliance upon certain exemptions from registration under such securities
laws;
(ii) He has had the opportunity to ask questions of and
receive answers from the Corporation, Medical and their respective executive
officers concerning their businesses and the Exchanged Corporation Stock and all
such inquiries have been completed to his satisfaction;
(iii) Each certificate representing shares of the
Exchanged Corporation Stock will bear a legend restricting its transfer, sale,
conveyance or hypothecation, unless such Exchanged Corporation Stock is either
registered under applicable securities laws or an exemption from such
registration is applicable, and provided that if an exemption from registration
is claimed, the Corporation may require an opinion of legal counsel that, as a
result of such exemption, registration under the securities laws is not required
to transfer, sell, convey or hypothecate such Exchanged Corporation Stock;
(iv) He shall not transfer any Exchanged Corporation
Stock except in compliance with all applicable securities laws;
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(v) He has a pre-existing personal or business
relationship with Medical or its officers, directors, agents or controlling
persons, and has relied, if at all, on the advice of such persons in electing to
participate in the transaction herein contemplated and not on any
representations of the Corporation other than those expressly set forth herein,
or by reason of his business or financial experience could be reasonably assumed
to have the capacity to protect his own interest in connection with the
transaction;
(vi) He is acquiring the Exchanged Corporation Stock for
his own account, for investment purposes only and not with a view to the sale or
distribution thereof;
(vii) He has not received any general solicitation or
general advertising regarding the acquisition of the Exchanged Corporation
Stock; and
(viii) He is capable of evaluating the merits and risks
of an investment in the Common Stock because he is a sophisticated investor by
virtue of his prior investments and has experience in investments similar in
nature to the Common Stock, including investments in unlisted and unregistered
securities, and has knowledge and experience in financial and business matters
in general.
(b) The Corporation acknowledges and agrees that:
(i) The Medical capital stock is being transferred to the
Corporation without registration under applicable securities laws in reliance
upon certain exemptions from registration from such securities laws;
(ii) All certificates representing the Medical capital
stock bear legends restricting its transfer, sale, conveyance or hypothecation,
unless such Medical capital stock is either registered under the applicable
securities laws, or an exemption from such registration is applicable;
(iii) The Corporation shall not transfer any Medical
capital stock except in compliance with
all applicable securities laws; and
(iv) The Corporation is acquiring the Medical capital
stock for its own account for investment purposes only and not with a view to
the sale or distribution thereof.
1.6 Closing. Consummation of the contemplated transaction shall take
place on the date that all the conditions set forth herein are satisfied or
waived by the appropriate parties at the offices of Xxxxxxx X. Xxxxx, P.A., 0000
Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000 Xxxx Xxxxx, XX 00000 or at another time or place
that is mutually agreeable to the parties hereto, or on such other date at such
other time as may be mutually agreed upon in writing by the parties hereto (the
"Closing").
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ARTICLE II
THE CORPORATION'S REPRESENTATIONS AND WARRANTIES
The Corporation hereby makes the following representations and warranties to the
Medical Shareholders and Medical, each of which the Corporation represents to be
true and correct on the date hereof and (except as the Corporation may notify
Medical in writing prior to the Closing) shall be deemed made again as of the
Closing and represented by the Corporation to be true and correct at the time of
the Closing.
2.1 Organization. The Corporation is a corporation duly organized,
validly existing and in good standing under the laws of the State of Florida and
is qualified or licensed as a foreign corporation in any other jurisdiction
where said licensing is required. The Corporation has the full power and
authority to conduct the business in which it will engage upon completion of the
transaction contemplated herein. Except as set forth in the Corporation's
filings with the Securities and Exchange Commission, the Corporation does not
have any subsidiary or equity interest in any entity. Accurate, current and
complete copies of the Articles of Incorporation and Bylaws of the Corporation
to be provided prior to Closing and attached as Schedule 2.1.
2.2 Stock Ownership. The authorized capital stock of the Corporation
consists of twenty five million shares of Common Stock, of which 4,209,144 are
issued and outstanding (excluding the Exchanged Corporation Stock).
Notwithstanding the above, the Corporation shall adjust its capital structure
such that, at closing, it shall have no more than 24,000 shares of common stock
issued and outstanding after giving effect to a contemplated 100:1 reverse
split.
All the issued and outstanding shares of capital stock of the Corporation are
duly authorized, validly issued, fully paid and nonassessable. Upon the issuance
of the Exchanged Corporation Stock, the Common Stock included in the Exchanged
Corporation Stock shall, on a fully diluted basis, constitute approximately 5%
of all the issued and outstanding Common Stock. Upon tender of the Medical
capital stock to the Corporation in the manner contemplated in Section 1.1
hereof, legal and beneficial ownership of the Exchanged Corporation Stock shall
be transferred to and vested in the Medical Shareholders free and clear of all
encumbrances,except those required by Rule 144 of the Securities Act,and all the
Exchanged Corporation Stock shall be duly authorized, validly issued, fully paid
and nonassessable. There are no outstanding bonds, debentures, notes or other
indebtedness or other securities of the Corporation having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matters on which shareholders of the Corporation may vote. Except as set
forth above, there are no outstanding securities, options, warrants, calls,
rights, commitments, agreements, arrangements or undertakings of any kind to
which the Corporation is a party or by which it is bound obligating the
Corporation to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or other equity or voting securities of the
Corporation or obligating the Corporation to issue, grant, extend or enter into
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any such security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. There are no outstanding contractual obligations,
commitments, understandings or arrangements of the Corporation to repurchase,
redeem or otherwise acquire or make any payment in respect of any shares of
capital stock of the Corporation.
2.3 Authority and Approval of Agreement.
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(a) The execution and delivery of this Agreement by the
Corporation and the performance of all the Corporation's obligations hereunder
have been duly authorized and approved by all requisite corporate action on the
part of the Corporation pursuant to applicable law. The Corporation has the
power and authority to execute and deliver this Agreement and to perform all its
obligations hereunder.
(b) This Agreement and any other documents, instruments and
agreements executed by the Corporation in connection herewith constitute the
valid and legally binding agreements of the Corporation, enforceable against the
Corporation in accordance with their terms, except that (i) enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws of general application affecting the enforcement of the rights and
remedies of creditors; and (ii) the availability of equitable remedies may be
limited by equitable principles.
2.4 No Violations.
Neither the execution, delivery nor performance of this Agreement or
any other documents, instruments or agreements executed by the Corporation in
connection herewith, nor the consummation of the transactions contemplated
hereby: (i) constitutes a violation of or default under (either immediately,
upon notice or upon lapse of time) the Articles of Incorporation or Bylaws of
the Corporation, any provision of any contract to which the Corporation may be
bound, any judgment or any law; or (ii) will or could result in the creation or
imposition of any encumbrance upon, or give to any third person any interest in
or right to, the Exchanged Corporation Stock or any other capital stock of the
Corporation; or (iii) will or could result in the loss or adverse modification
of, or the imposition of any fine or penalty with respect to, any license,
permit or franchise granted or issued to, or otherwise held by or for the use
of, the Corporation.
2.5 Financial Statements. Schedule 2.5 will set forth the audited
financial statements of the Corporation ("Financial Statements"), including
balance sheets, statements of operations, statements of changes in shareholders'
equity and statements of cash flows for the fiscal year ended December 31, 2004
and the quarter ended June 30, 2005, the balance sheet as of June 30, 2005 being
hereinafter referred to as the "Balance Sheet". The Financial Statements and
Balance Sheet are true, correct and complete, were prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods indicated, and accurately
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reflect the Corporation's financial condition and the results of the
Corporation's operations for the periods and as of the dates which they purport
to cover.
2.6 Conduct Since Date of Balance Sheet. Except as disclosed in
Schedule 2.6 hereto or as otherwise set forth herein none of the following has
occurred since the date of the Balance Sheet:
(a) Any material adverse change in the financial condition,
obligations, capitalization, business, prospects or operations of the
Corporation, nor are there any circumstances known to the Corporation which
might result in such a material adverse change or such an effect;
(b) Any increase of indebtedness of the Corporation other than
in the ordinary course of business;
(c) Any settlement or other resolution of any dispute or
proceeding other than in the ordinary course of business;
(d) Any cancellation by the Corporation, without payment in
full, of any obligation to the Corporation of any shareholder, director, officer
or employee of the Corporation (or any member of their respective families), or
any entity in which any shareholder, director or officer of the Corporation (or
any member of their respective families) has any direct or indirect interests;
(e) Any obligation incurred by the Corporation other than in
the ordinary course of business;
(f) Any payment, discharge or satisfaction of any obligation
or judgment, other than in the ordinary course of business; or
(g) Any agreement obligating the Corporation to do or take any
of the actions referred to in this Section 2.7 outside the ordinary course of
business.
2.7 Contracts. Schedule 2.7 will set forth an accurate, current
and complete list and description of each material contract and agreement,
whether written or oral ("Contract"), (other than this Agreement) to which the
Corporation is a party or by which the Corporation or any of its assets are
bound. An accurate, current and complete copy of each Contract described on
Schedule 2.7 hereto has been made available to Medical for inspection and
copying.
2.8 Offers. There are no outstanding offers, bids, proposals or
quotations made by the Corporation which, if accepted, would create a Contract
with the Corporation.
2.9 Officers, Directors, Agents, etc. Set forth on Schedule 2.9
annexed hereto is a complete list of all officers (with office held), directors,
contractors and agents of the Corporation, and the compensation and all vacation
and other benefits they are entitled to receive from the Corporation.
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2.10 Labor Matters. The Corporation is not and has never been
a party to: (i) any profit sharing, pension, retirement, deferred compensation,
bonus, stock option, stock purchase, retainer, consulting, health, welfare or
incentive plan or agreement or other employee benefit plan, whether legally
binding or not; or (ii) any plan providing for "fringe benefits" to its
employees, including, but not limited to, vacation, disability, sick leave,
medical, hospitalization and life insurance and other insurance plans, or
related benefits; or (iii) any employment agreement other than with Xxxxx Xxxx.
No former employee of the Corporation has any claim against the Corporation
(whether under federal or state law, any employment agreement or otherwise) on
account of or for: (i) overtime pay; (ii) wages or salary for any period; (iii)
vacation, time-off or pay in lieu of vacation or time-off; or (iv) any violation
of any statute, ordinance or regulation relating to minimum wages or maximum
hours of work. No person or party (including, but not limited to, governmental
agencies of any kind) has any claim or basis for any action or proceeding
against the Corporation arising out of any statute, ordinance or regulation
relating to discrimination in employment or to employment practices or
occupational safety and health standards.
2.11 Environmental Matters. Except as set forth on Schedule 2.11,
the Corporation has not generated any hazardous wastes or engaged in activities
which are or could be interpreted to be potential violations of laws or judicial
decrees in any manner regulating the generation or disposal of hazardous waste.
There are no on-site or off-site locations where the Corporation has stored,
disposed or arranged for the disposal of chemicals, pollutants, contaminants,
wastes, toxic substances, petroleum or petroleum products; there are no
underground storage tanks located on property owned or leased by the
Corporation, and no polychlorinated biphenyls are used or stored at any property
owned or leased by the Corporation.
2.12 Books and Records. The Corporation's books and records are
and have been properly prepared and maintained in form and substance adequate
for preparing audited financial statements in accordance with generally accepted
accounting principles, and fairly and accurately reflect all of the
Corporation's assets, obligations and accruals, and all transactions (normally
reflected in books and records in accordance with generally accepted accounting
principles) to which the Corporation is or was a party or by which the
Corporation or any of its assets are or were affected.
2.13 Taxes. Except as otherwise disclosed in this Agreement, or
any applicable SEC filings, all taxes due, owing and payable by the Corporation
have been fully paid. The amounts set up as provision for taxes on the Balance
Sheet are sufficient for the payment of all accrued and unpaid taxes of the
Corporation, whether or not disputed. The amount set up as provision for taxes
on the Corporation's books and records for the current fiscal year through the
Closing shall be sufficient for the payment of all accrued and unpaid taxes of
the Corporation, whether or not disputed, for such period. No claim for any tax
due from or assessed against the Corporation is being contested by the
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Corporation. None of the Corporation's tax returns or reports has been audited
by the Internal Revenue Service or any state or local tax authority, and the
Corporation has not received any notice of deficiency or other adjustment from
the Internal Revenue Service or any state or local tax authority. There are no
agreements, waivers or other arrangements providing an extension of time with
respect to the assessment of any tax against the Corporation, nor are there any
tax proceedings now pending or threatened against the Corporation. No state of
facts exists or has existed, nor has any event occurred, which would constitute
grounds for the assessment of any further tax against the Corporation.
2.14 Litigation. The Corporation is not a party to, the subject
of, or threatened with any litigation nor, to the best of the Corporation's
knowledge, is there any basis for any litigation. The Corporation is not
contemplating the institution of any litigation.
2.15 Other Liabilities. No claim of breach of contract, tort,
product liability or other claim, contingent or otherwise, has been asserted or
threatened against the Corporation nor, to the best of the Corporation's
knowledge, is capable of being asserted by any employee, creditor, claimant or
other person against the Corporation. No state of facts exists or has existed,
nor has any event occurred, which could give rise to the assertion of any such
claim by any person.
2.16 Consents. Subject to the submission of this matter to a vote
of the Corpoartion's shareholders, the execution, delivery and performance by
the Corporation of this Agreement and the consummation by the Corporation of the
transactions contemplated hereby do not require any consent that has not been
received prior to the date hereof.
2.17 Judgments. There is no outstanding judgment against the
Corporation. There is no health or safety problem involving or affecting the
Corporation. There are no open workers compensation claims against the
Corporation, or any other obligation, fact or circumstance which would give rise
to any right of indemnification on the part of any current or former
shareholder, director, officer, employee or agent of the Corporation, or any
heir or personal representative thereof, against the Corporation or any
successor to the businesses of the Corporation.
2.18 Improper Payments. Neither the Corporation, nor any of its
current or former shareholders, directors, officers or employees or agents, nor
any person acting on behalf of the Corporation, has, directly or indirectly,
made any bribe, kickback or other payment of a similar or comparable nature,
whether lawful or not, to any person, public or private, regardless of form,
whether in money, property or services, to obtain favorable treatment for
business secured or special concessions already obtained. No funds or assets of
the Corporation were donated, lent or made available directly or indirectly for
the benefit of, or for the purpose of supporting or opposing, any government or
subdivision thereof, political party, candidate or committee, either domestic or
foreign. The Corporation has not maintained and does not maintain a bank
account, or any other account of any kind, whether domestic or foreign, which
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account was not or is not reflected in the Corporation's books and records, or
which account was not listed, titled or identified in the name of the
Corporation.
2.19 Full Disclosure. All the representations and warranties made
by the Corporation herein or in any Schedule, and all of the statements,
documents or other information pertaining to the transaction contemplated herein
made or given by the Corporation, its agents or representatives, are complete
and accurate, and do not omit any information required to make the statements
and information provided, in light of the transaction contemplated herein,
non-misleading, accurate and meaningful.
ARTICLE III
MEDICAL'S REPRESENTATIONS AND WARRANTIES
Medical hereby makes the following representations and warranties to the
Corporation, each of which Medical represents to be true and correct on the date
hereof and (except as Medical may notify the Corporation in writing prior to the
Closing) shall be deemed made again as of the Closing and represented by Medical
to be true and correct at the time of the Closing.
3.1 Organization. Medical is a corporation duly organized,
validly existing and in good standing under the laws of the State of Florida and
is not required to be qualified or licensed as a foreign corporation in any
other jurisdiction. Medical has the full power and authority to own all its
assets and to conduct its business as and where its business is presently
conducted. Accurate, current and complete copies of the Articles of
Incorporation and Bylaws of Medical are to be attached hereto as Schedule 3.1.
Medical has no subsidiaries or equity interest in any entity.
3.2 Stock Ownership. The authorized capital stock of Medical
consists of 25 million shares of common stock, $.001 par value of which
8,109,414 are currently issued and outstanding. All the issued and outstanding
capital stock of Medical is duly authorized, validly issued, fully paid and
nonassessable. There are no outstanding bonds, debentures, notes or other
indebtedness or other securities of Medical having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matters on which shareholders of Medical may vote. Except as set forth
above, there are no outstanding securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to which
Medical is a party or by which it is bound obligating Medical to issue, deliver
or sell, or cause to be issued, delivered or sold, additional shares of capital
stock or other equity or voting securities of Medical or obligating Medical to
issue, grant, extend or enter into any such security, option, warrant, call,
right, commitment, agreement, arrangement or undertaking. There are no
outstanding contractual obligations, commitments, understandings or arrangements
of Medical to repurchase, redeem or otherwise acquire or make any payment in
respect of any shares of capital stock of Medical. Notwithstanding the
foregoing, if prior to closing, Medical Connections shall issue additional
shares of common stock, Medical Connections shall so advise the Corporation.
However, the total number of shares of the Exchanged Corporation Stock to be
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delivered to the Medical shareholders shall not be adjusted as a result of any
increase or decrease in the issued and outstanding common stock of Medical
Connections.
3.3 Authority and Approval of Agreement.
(a) The execution and delivery of this Agreement by Medical
and the performance of all Medical's obligations hereunder have been duly
authorized and approved by all requisite corporate action on the part of Medical
pursuant to applicable law. Medical has the power and authority to execute and
deliver this Agreement and to perform all its obligations hereunder.
(b) This Agreement and each of the other documents,
instruments and agreements executed by Medical in connection herewith constitute
the valid and legally binding agreements of Medical, enforceable against Medical
in accordance with their terms, except that: (i) enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
of general application affecting the enforcement of the rights and remedies of
creditors; and (ii) the availability of equitable remedies may be limited by
equitable principles.
3.4 No Violations. Neither the execution, delivery nor
performance of this Agreement or any other documents, instruments or agreements
executed by Medical in connection herewith, nor the consummation of the
transactions contemplated hereby: (i) constitutes a violation of or default
under (either immediately, upon notice or upon lapse of time) the Articles of
Incorporation or Bylaws of Medical, any provision of any Contract to which
Medical or its assets may be bound, any judgment to which Medical is bound or
any law applicable to Medical; or (ii) result in the creation or imposition of
any encumbrance upon, or give to any third person any interest in or right to,
any other capital stock of Medical or any of the assets of Medical; or (iii)
result in the loss or adverse modification of, or the imposition of any fine or
penalty with respect to, any license, permit or franchise granted or issued to,
or otherwise held by or for the use of, Medical.
3.5 Consents. Subject only to the consents of the Medical
Connections shareholders, the execution, delivery and performance by Medical of
this Agreement and the consummation by Medical of the transactions contemplated
hereby do not require any consent that has not been received prior to the date
hereof.
3.6 Medical Financial Statements. Schedule 3.6 sets forth the
financial statements of Medical ("Medical Financial Statements"), including the
audited balance sheet, statements of operations, statements of changes in
stockholders' equity and statements of cash flows for the period ended December
31, 2004, and the fiscal quarter ending June 30, 2005 (the balance sheet as of
September 30, 2005 being hereinafter referred to as the "Medical Balance
Sheet"). The Medical Financial Statements are true, correct and complete, were
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods indicated, and accurately reflect
Medical's financial condition and the results of Medical's operations for the
periods and as the dates which they purport to cover.
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3.7 Conduct Since Date of Medical Balance Sheet. Except as
disclosed in Schedule 3.7 hereto or as otherwise set forth herein, none of the
following have occurred since the date of the Medical Balance Sheet:
(a) Any material adverse change in the financial condition,
obligations, capitalization, business, prospects or operations of Medical, nor
are there any circumstances known to Medical which might result in such a
material adverse change or such an effect;
(b) Any increase of indebtedness of Medical other than in the
ordinary course of business;
(c) Any settlement or other resolution of any dispute or
proceeding including Medical other than in the ordinary course of business;
(d) Any cancellation by Medical, without payment in full, of
any obligation to Medical of any shareholder, partner, director, officer or
employee of Medical (or any member of their respective families), or any person
in which any shareholder, partner, director or officer of Medical (or any member
of their respective families) has any direct or indirect interest;
(e) Any obligation incurred by Medical other than in the
ordinary course of business;
(f) Any payment, discharge or satisfaction of any obligation
or judgment of or against Medical, other than in the ordinary course of
business; or
(g) Any Contract obligating Medical to do or take any of the
actions referred to in this Section 3.7 outside the ordinary course of business.
3.8 Contracts. Schedule 3.8 will set forth an accurate, current
and complete list and description of each material Contract (other than this
Agreement) to which Medical is a party or by which Medical or any of its assets
are bound. An accurate, current and complete copy of each material Contract
described in Schedule 3.8 hereto has been furnished to the Corporation.
3.9 Offers. There are no outstanding offers, bids, proposals or
quotations made by Medical which, if accepted, would create a Contract with
Medical.
3.10 Officers, Directors, Agents, etc. Set forth on Schedule 3.10
to be annexed hereto is a complete list of all officers (with office held),
directors, contractors and agents of Medical, and the compensation and all
vacation and other benefits they are entitled to receive from Medical.
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3.11 Labor Matters. Medical is not and has never been a party to:
(i) any profit sharing, pension, retirement, deferred compensation, bonus, stock
option, stock purchase, retainer, consulting, health, welfare or incentive plan
or agreement or other employee benefit plan, whether legally binding or not; or
(ii) any plan providing for "fringe benefits" to its employees, including, but
not limited to, vacation, disability, sick leave, medical, hospitalization and
life insurance and other insurance plans, or related benefits; or (iii) any
employment agreement. No former employee of Medical has any claim against
Medical (whether under federal or state law, any employment agreement or
otherwise) on account of or for: (i) overtime pay; (ii) wages or salary for any
period; (iii) vacation, time-off or pay in lieu of vacation or time-off; or (iv)
any violation of any statute, ordinance or regulation relating to minimum wages
or maximum hours of work. No person or party (including, but not limited to,
governmental agencies of any kind) has any claim or basis for any action or
proceeding against Medical arising out of any statute, ordinance or regulation
relating to discrimination in employment or to employment practices or
occupational safety and health standards.
3.12 Environmental Matters. Except as set forth in Schedule 3.12
Medical has not generated any hazardous wastes or engaged in activities which
are or could be interpreted to be potential violations of laws or judicial
decrees in any manner regulating the generation or disposal of hazardous waste.
There are no on-site or off-site locations where Medical has stored, disposed or
arranged for the disposal of chemicals, pollutants, contaminants, wastes, toxic
substances, petroleum or petroleum products; there are no underground storage
tanks located on property owned or leased by Medical.
3.13 Books and Records. Medical's books and records are and have
been properly prepared and maintained in form and substance adequate for
preparing audited financial statements in accordance with generally accepted
accounting principles, and fairly and accurately reflect all of Medical's
assets, obligations and accruals, and all transactions (normally reflected in
books and records in accordance with generally accepted accounting principles)
to which Medical is or was a party or by which Medical or any of its assets are
or were affected.
3.14 Taxes. Except as otherwise disclosed in this Agreement, all
taxes due, owing and payable by Medical have been fully paid. The amounts set up
as provision for taxes on the Medical Balance Sheet are sufficient for the
payment of all accrued and unpaid taxes of Medical, whether or not disputed. The
amount set up as provision for taxes on Medical's books and records for the
current fiscal year through the Closing shall be sufficient for the payment of
all accrued and unpaid taxes of Medical, whether or not disputed, for such
period. No claim for any tax due from or assessed against Medical is being
contested by Medical. None of Medical's tax returns or reports has been audited
by the Internal Revenue Service or any state or local tax authority, and Medical
has not received any notice of deficiency or other adjustment from the Internal
Revenue Service or any state or local tax authority. There are no agreements,
waivers or other arrangements providing an extension of time with respect to the
assessment of any tax against Medical, nor are there any tax proceedings now
pending or threatened against Medical. No state of facts exists or has existed,
nor has any event occurred, which would constitute grounds for the assessment of
any further tax against Medical.
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3.15 Litigation. Except as set forth in Schedule 3.15, Medical is
not a party to, the subject of, or threatened with any litigation nor, to the
best of Medical's knowledge, is there any basis for any litigation. Medical is
not contemplating the institution of any litigation.
3.16 Other Liabilities. No claim of breach of contract, tort,
product liability or other claim (whether arising from Medical's business
operations or otherwise), contingent or otherwise, has been asserted or
threatened against Medical nor, to the best of Medical's knowledge, is capable
of being asserted by any employee, creditor, claimant or other person against
Medical. No state of facts exists or has existed, nor has any event occurred,
which could give rise to the assertion of any such claim by any person.
3.17 Consents. The execution, delivery and performance by Medical
of this Agreement and the consummation by Medical of the transactions
contemplated hereby do not require any consent that has not been received prior
to the date hereof.
3.18 Judgments. There is no outstanding judgment against Medical.
There is no health or safety problem involving or affecting Medical. There are
no open workers compensation claims against Medical, or any other obligation,
fact or circumstance which would give rise to any right of indemnification on
the part of any current or former shareholder, partner, director, officer,
employee or agent of Medical, or any heir or personal representative thereof,
against Medical or any successor to the business of Medical.
3.19 Compliance with Laws. Medical and its business are in full
compliance with all laws.
3.20 Improper Payments. Neither Medical, nor any of its current or
former shareholders, partners, directors, officers or employees or agents, nor
any person acting on behalf of Medical, has, directly or indirectly, made any
bribe, kickback or other payment of a similar or comparable nature, whether
lawful or not, to any person, public or private, regardless of form, whether in
money, property or services, to obtain favorable treatment for business secured
or special concessions already obtained. No funds or assets of Medical were
donated, lent or made available directly or indirectly for the benefit of, or
for the purpose of supporting or opposing, any government or subdivision
thereof, political party, candidate or committee, either domestic or foreign.
Medical has not maintained and does not maintain a bank account, or any other
account of any kind, whether domestic or foreign, which account was not or is
not reflected in the Medical corporate books and records, or which account was
not listed, titled or identified in the name of Medical.
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3.21 Full Disclosure. All the representations and warranties made
by Medical herein or in any Schedule hereto, and all of the statements,
documents or other information pertaining to the transaction contemplated herein
made or given by Medical, its agents or representatives are complete and
accurate, and do not omit any information required to make the statements and
information provided, in light of the transaction contemplated herein,
non-misleading, accurate and meaningful.
ARTICLE IV
MEDICAL SHAREHOLDERS' REPRESENTATIONS,
WARRANTIES AND AGREEMENTS
Each Medical Shareholder hereby makes the following representations and
warranties to the Corporation, each of which such Medical Shareholder represents
to be true and correct on the date hereof and (except as such Medical
Shareholder may notify the Corporation in writing prior to the Closing) shall be
deemed made again as of the Closing and represented by such Medical Shareholder
to be true and correct at the time of the Closing.
4.1 Title to Stock. He is the sole owner, legally and
beneficially, of the Medical capital stock set forth on Schedule 1.1 hereto
opposite his name, the consideration payable by him therefore has been paid and
such stock is fully paid and nonassessable and free and clear of all
encumbrances of every kind. He has full legal right, power and authority to
enter into this Agreement and to sell, assign and transfer such stock to the
Corporation. The delivery to the Corporation of such stock pursuant to the
provisions of this Agreement will transfer to the Corporation valid title
thereto, free and clear of all encumbrances of every kind except any created by
the Corporation. The Medical capital stock represents his entire interest in
Medical. He has no other rights, claims or interest to, against or in Medical,
or its officers and directors.
4.2 Enforceability. This Agreement and each of the other
documents, instruments and agreements executed by him in connection herewith
constitute the valid and legally binding agreements of him, enforceable against
him in accordance with their terms, except that: (i) enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws of general application affecting the enforcement of the rights and
remedies of creditors; and (ii) the availability of equitable remedies may be
limited by equitable principles.
4.3 Brokerage Fees. There is no person acting on behalf of him
who is entitled to or has any claim for any brokerage or finder's fee or
commission in connection with the execution of this Agreement or the
consummation of the transactions contemplated hereby.
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ARTICLE V
INTERPRETATION AND SURVIVAL OF
REPRESENTATIONS AND WARRANTIES
5.1 Interpretation. Each warranty and representation made by a
party in this Agreement or pursuant hereto is independent of all other
warranties and representations made by the same party in this Agreement or
pursuant hereto (whether or not covering identical, related or similar matters)
and must be independently and separately satisfied. Exceptions or qualifications
to any such warranty or representation shall not be construed as exceptions or
qualifications to any other warranty or representation.
5.2 Survival. All representations and warranties made in this
Agreement or pursuant hereto shall survive the date hereof, the Closing, the
consummation of the transaction contemplated hereby and any investigation.
ARTICLE VI
OBLIGATIONS PRIOR TO CLOSING
6.1 Conduct of the Corporation and Medical Pending Closing.
During the period from the date hereof until the Closing Date, except with the
express prior written consent of the other party, the Corporation and Medical
hereby covenant and agree that:
(a) each shall maintain its existence in good standing in the
state of its incorporation and each other jurisdiction where it is required to
be licensed or qualified as a foreign corporation, and shall not alter or amend
its Articles of Incorporation or Bylaws;
(b) each shall duly and timely file all returns and reports
required by any law to be filed by it, shall promptly pay when due all taxes
assessed against it or any of its assets, and shall conform to and fully comply
with all the laws pertaining to its assets or the conduct of its business; and
(c) each shall not take any action, or enter into any
agreement that would cause a breach of any of the representations and warranties
made herein by the Corporation or Medical, as applicable.
ARTICLE VII
CONDITIONS PRECEDENT TO MEDICAL'S AND THE
MEDICAL SHAREHOLDERS' OBLIGATIONS
Notwithstanding the execution and delivery of this Agreement or the performance
of any part hereof, Medical's and each of the Medical Shareholders' respective
obligations to consummate the transaction contemplated by this Agreement shall
be subject to the satisfaction of each of the conditions set forth in this
Article VII, except to the extent that such satisfaction is waived in writing by
Medical and a majority in interest of the Medical Shareholders.
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7.1 Representations and Warranties of the Corporation. All
representations and warranties made by the Corporation in this Agreement and the
Schedules hereto shall be true and correct in all respects on the date hereof,
and shall be true and correct in all respects at the time of the Closing as
though such representations were again made, without exception or deviation, at
the time of the Closing.
7.2 Performance of this Agreement. The Corporation shall have
duly performed or complied with all the obligations under this Agreement to be
performed or complied with by the Corporation on or prior to the Closing.
7.3 Absence of Litigation. No litigation shall have been
instituted on or before the time of the Closing by any person, the result of
which did or could prevent or make illegal the consummation of the transaction
contemplated by this Agreement, or which had or could have a material adverse
effect on the business of the Corporation.
7.4 Deliveries at Closing. At or prior to Closing, in addition to
all other deliveries to be made by the Corporation, the Corporation shall
deliver or cause to be delivered to Medical and the Medical Shareholders a
certificate signed by Xxxxx Xxxx, President of the Corporation, dated the
Closing, certifying that: (a) all of the terms and conditions of this Agreement
to be satisfied or performed by the Corporation on or before the time of the
Closing have been satisfied or performed; (b) no litigation has been instituted
or, to the best knowledge of Xx. Xxxx, there is no threatened on or before the
time of the Closing by any person (other than Medical), the result of which did
or could prevent or make illegal the consummation of the transaction
contemplated by this Agreement, or which had or could have a material adverse
effect on the business of the Corporation; and (c) there has not been any
material adverse change in or affecting the Corporation between the date of this
Agreement and the time of the Closing.
7.5 Schedules. The Corporation shall have provided to Medical and
its Shareholders all referenced schedules.
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ARTICLE VIII
CONDITIONS PRECEDENT TO THE
CORPORATION'S OBLIGATIONS
Notwithstanding the execution and delivery of this Agreement or the performance
of any part hereof, the Corporation's obligations to consummate the transaction
contemplated by this Agreement shall be subject to the satisfaction of each of
the conditions set forth in this Article VIII, except to the extent that such
satisfaction is waived by the Corporation in writing.
8.1 Representations and Warranties of Medical and the Medical
Shareholders. All representations and warranties made by Medical and the Medical
Shareholders contained in this Agreement and the Schedules hereto shall be true
and correct in all respects on the date hereof, and shall be true and correct in
all respects at the time of the Closing as though such representations were
again made, without exception or deviation, at the time of the Closing.
8.2 Performance of this Agreement. The owners of 100% of the
issued and outstanding shares of common stock of Medical shall have executed
this Agreement. Medical and the Medical Shareholders shall have duly performed
or complied with all of the covenants and obligations under this Agreement to be
performed or complied with by them on or prior to the Closing.
8.3 Absence of Litigation. Except as otherwise disclosed in this
agreement, no litigation has been instituted on or before the time of the
Closing by any person, the result of which did or could prevent or make illegal
the consummation of the transaction contemplated by this Agreement.
8.4 Deliveries at Closing. At Closing, in addition to all other
deliveries to be made to the Corporation hereunder, the Corporation shall
receive a certificate signed by Xxxxxx Xxxxxx, the CEO of Medical, dated as of
the Closing, certifying that: (a) all of the terms and conditions of this
Agreement to be satisfied or performed by Medical on or before the time of the
Closing have been satisfied or performed; (b) except as set forth in this
Agreement, there is no other litigation has been instituted or, to the best of
Xx. Xxxxxx'x knowledge, threatened on or before the time of the Closing by any
person (other than the Corporation), the result of which did or could prevent or
make illegal the consummation of the transaction contemplated by this Agreement,
or which had or could have a material adverse effect on the business of Medical;
and (c) there has not been any material adverse change in or affecting Medical
between the date of this Agreement and the time of the Closing.
8.5 Schedules. Medical shall have provided to the Corporation
all referenced schedules.
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ARTICLE IX
OBLIGATIONS AT CLOSING
9.1 Obligations of the Corporation and Xxxx to Medical and the
Medical Shareholders at Closing. The Corporation hereby covenants and agrees to
deliver or cause to be delivered to Medical and Medical Shareholders at the
Closing the following:
(a) Duly issued certificates (legended as provided in Section
1.5(a)(iii) hereof) representing all the Exchanged Corporation Stock, together
with any documentary stamps required in connection with such transfer and such
other appropriate documents and instruments of transfer as Medical may
reasonably request.
(b) An Active Status Certificate for the Corporation, dated no
earlier than ten (10) days before the Closing, from the State of Florida.
(c) A copy of the resolutions adopted by the Board of
Directors of the Corporation, certified by its corporate secretary, which
resolutions authorize it to execute, deliver and perform this Agreement and
consummate the transactions contemplated hereby.
(d) Such corporate resolutions, resignations and other
documents as shall be required to remove all officers and directors of the
Corporation and to replace them with the following officers and directors:
Xxxxxx Xxxxxx
Xxxxxxx X. Xxxxxxxx
(e) Xxxx shall cancel all of his share ownership in the
Corporation as set forth in paragraph 1.2 above
9.2 Medical's Obligations to the Corporation and Xxxx at Closing.
Medical agrees to deliver or cause to be delivered to the Corporation (paragraph
(a)-(c) only) and Xxxx (paragraph (d) only) at the Closing the following:
(a) A Good Standing Certificate for Medical dated no earlier
than ten (10) days before the Closing, from the State of Florida.
(b) A copy of the resolutions adopted by the Board of
Directors of Medical, certified by its corporate secretary, which resolutions
authorize it to execute, deliver and perform this Agreement and consummate the
transactions contemplated hereby.
(c) All outstanding Medical capital stock certificates to be
exchanged for shares of Exchanged Corporation Stock free and clear of all
encumbrances, together with all certificates evidencing the same and stock
powers therefore, in a form acceptable to the Corporation, duly executed in
blank.
(d) $200,000 to Xxxx as set forth in paragraph 1.2 above
9.3 Medical Shareholders' Obligations to the Corporation at
Closing. Each Medical Shareholder hereby covenants and agrees to deliver to the
Corporation at the Closing the following:
(a) If not previously delivered to Medical for such purposes,
all his Medical capital stock certificates, free and clear of all encumbrances,
together with all certificates evidencing same and stock powers therefore, in a
form acceptable to the Corporation, duly executed in blank.
(b) Such other documents and instruments as counsel to the
Corporation may reasonably request.
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ARTICLE X
TERMINATION
10.1 Termination on Default. If, prior to the Closing, a party hereto
shall materially breach or default in the full and timely performance and
satisfaction of any of its representations and warranties or obligations under
this Agreement, and such breach or default is not cured on or before the fifth
(5th) day after the date notice is given by the non-defaulting party to the
defaulting party specifying the nature of such breach or default (or at or
before the time of the Closing if sooner), then the non-defaulting party may
terminate this Agreement immediately upon notice to the defaulting party;
provided, however, that no Medical Shareholder may terminate this Agreement.
10.2 Termination at Closing. If any of the conditions set forth in
Article VII hereof are not satisfied at or before the time of the Closing, then
Medical may terminate this Agreement by notifying the Corporation at the
Closing. If any of the conditions set forth in Article VIII hereof are not
satisfied at or before the time of the Closing, then the Corporation may
terminate this Agreement by notifying Medical and all the Medical Shareholders
at the Closing.
ARTICLE XI
OTHER AGREEMENTS
11.1 Name Change. Contemporaneously with the consummation of this
transaction, the Corporation shall change its name to Medical Connections, Inc.
ARTICLE XII
MISCELLANEOUS
12.1 Notices. All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given if the same shall be in
writing and shall be delivered personally or sent by registered or certified
mail, postage prepaid, and addressed as set forth below:
If to the Corporation:
000 Xxxxxx Xxxx
Xxxx, Xxxxxxxxxxx, XX 00000
ATTN: XXXXX XXXX
If to Medical or the
Medical Shareholders:
0000 Xxxxxx Xxxx Xxxxx 000 X
Xxxx Xxxxx, XX 00000
Attn: Xxxxxx Xxxxxx
12.2 Entire Agreement. This Agreement, including the Schedules
attached hereto and the documents delivered pursuant hereto, sets forth all the
promises, covenants, agreements, conditions and understandings among the parties
hereto with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements, understandings, inducements or conditions, expressed
or implied, oral or written, except as herein contained. No changes of or
modifications or additions to this Agreement shall be valid unless same shall be
in writing and signed by the parties hereto.
12.3 Binding Effect; Assignment. This Agreement shall be binding
upon the parties hereto, their beneficiaries, heirs and administrators. No party
may assign or transfer its interests herein, or delegate its duties hereunder,
without the written consent of the other parties.
12.4 Amendment. The parties hereby irrevocably agree that no
attempted amendment, modification or change (collectively, "Amendment") of this
Agreement shall be valid and effective, unless the parties shall unanimously
agree in writing to such Amendment.
12.5 No Waiver. No waiver of any provision of this Agreement shall
be effective unless it is in writing and signed by the party against whom it is
asserted, and any such written waiver shall only be applicable to the specific
instance to which it relates and shall not be deemed to be a continuing or
future waiver.
12.6 Gender and Use of Singular and Plural. All pronouns shall be
deemed to refer to the masculine, feminine, neuter, singular or plural, as the
identity of the party or parties or their personal representatives, successors
and assigns may require.
12.7 Counterparts. This Agreement and any Amendments may be
executed in one or more counterparts, each of which shall be deemed an original
and all of which together shall constitute one and the same instrument.
12.8 Headings. The article and section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of the Agreement.
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12.9 Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Florida.
12.10 Further Assurances. The parties hereto shall execute and
deliver such further instruments and do such further acts and things as may be
reasonably required to carry out the intent and purposes of this Agreement.
12.11 Litigation. If any party hereto is required to engage in
litigation or arbitration against any other party hereto, either as plaintiff or
as defendant, in order to enforce or defend any of its or his rights under this
Agreement, and such litigation results in a final judgment in favor of such
party (the "Prevailing Party"), then the party or parties against whom said
final judgment is obtained shall reimburse the Prevailing Party for all direct,
indirect or incidental expenses incurred by the Prevailing Party in so enforcing
or defending its or his rights hereunder, including, but not limited to, all
attorneys' fees, paralegals' fees, court costs and other expenses incurred
throughout all negotiations, trials or appeals undertaken in order to enforce
the Prevailing Party's rights hereunder.
12.12 Confidentiality. Except for discussions of the transactions
contemplated by this Agreement among the parties hereto and their respective
representatives and counsel participating in this transaction, and except as may
be required of the Corporation pursuant to federal securities laws, each party
hereto shall, unless all other parties hereto shall otherwise agree, keep
confidential and not, directly or indirectly, disclose to any person the
existence of this Agreement, the transaction contemplated by this Agreement or
any of the terms thereof, or the fact that the Corporation and Medical have
entered into discussions or negotiations for any purpose whatsoever, and each
party hereto shall use its good faith efforts to cause its employees, agents,
officers, directors and representatives to abide by the foregoing restrictions
on disclosure.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date and year set forth above.
XXXX MORTGAGE DEPOT, INC.
By: /s/Xxxxx Xxxx
-------------------------------------
Name: Xxxxx Xxxx
Title: President
MEDICAL CONNECTIONS, INC.
By: /s/Xxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxx
Title: CEO
/s/ Xxxxx Xxxx
-------------------------------------
Xxxxx Xxxx, individually
MEDICAL CONNECTIONS, INC.
SHAREHOLDERS:
-------------------------------------
-------------------------------------
-------------------------------------
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