EXHIBIT 10.1
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (this "Agreement") is entered
into as of the 12th day of November 2002, by and among PRIME RATE INCOME &
DIVIDEND ENTERPRISES, INC., a Colorado corporation ("PRIDE"); U.S. MEDICAL
SYSTEMS, INC., a Nevada corporation ("USMS"); and the shareholders of USMS
identified on the signature page hereto ("USMS Shareholders").
RECITALS
WHEREAS, USMS Shareholders own 100% of the issued and outstanding common
stock of USMS; and
WHEREAS, PRIDE desires to acquire all of the issued and outstanding common
stock of USMS owned by USMS Shareholders, and USMS Shareholders desire to
exchange all of their shares of common stock in USMS for an aggregate of 15
million shares of PRIDE restricted common stock.
WHEREAS, as a result of the above-referenced transactions, PRIDE will own
100% of the outstanding stock of USMS, USMS will be a wholly-owned subsidiary
of PRIDE.
WHEREAS, because the current business of PRIDE, which is operated through
its wholly-owned subsidiary, Pride, Inc., is not compatible with the current
business of USMS, the parties desire that all of the issued and outstanding
shares of Pride, Inc. shall be spun-off to the shareholders of PRIDE,
excluding the USMS Shareholders.
WHEREAS, the parties desire that upon execution of this Agreement, the
current officers and directors of PRIDE shall resign, and the current officers
and directors USMS shall become the officers and directors of PRIDE.
NOW, THEREFORE, for and in consideration of the mutual covenants and
representations and warranties contained herein and other good and valuable
consideration, the receipt of which is hereby acknowledged, PRIDE, USMS and
USMS Shareholders agree as follows:
1. THE REORGANIZATION.
1.1 Acquisition.
(a) At the Closing (as defined in section 3, below), PRIDE shall
acquire from USMS Shareholders and USMS Shareholders shall sell, transfer,
assign and convey to PRIDE 100% of all the issued and outstanding shares of
common stock of USMS (the "USMS Shares"), in exchange for 15 million shares of
PRIDE's common stock (the "PRIDE Shares"). PRIDE shall cause to be issued 15
million shares to USMS Shareholders immediately upon execution of this
Agreement. The PRIDE Shares to be issued to USMS Shareholders shall have the
rights, restrictions and privileges set forth in PRIDE's Articles of
Incorporation and in the stock certificates therefor. Upon the Closing, USMS
shall become a wholly-owned subsidiary of PRIDE.
(b) PRIDE shall also reserve an additional three million shares of
its common stock for issuance after Closing in connection with capital raising
activities and in connection with a future employee stock plan.
(c) As a result of the issuances of common stock of PRIDE pursuant to
Sections 1.1(a), 1.1(b) and 1.3(h), an aggregate of up to 21 million shares
will be outstanding. For a period of two years following Closing, PRIDE shall
not issue any additional equity securities which would cause the number of
outstanding shares to exceed 21 million except in connection with capital
raising activities.
1.2 Taxes. It is the intent of the parties that this reorganization
will constitute a tax-free reorganization within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended. Each party shall be
responsible for and shall pay any and all taxes, charges or fees attributable
to such party, including individual state and federal income taxes, arising
out of, or by reason of, the exchange of PRIDE Shares for the USMS Shares, or
otherwise in connection with the transactions contemplated hereby. Each party
hereto represents and warrants that it has relied solely on the opinions or
advice of its own professional advisors with respect to the tax consequences
of this transaction, if any, and has not relied on the opinions or advice of
the other parties or its professional advisors in any way with respect to the
tax consequences of this transaction.
1.3 Spin-Off of Pride, Inc.
(a) The parties agree that PRIDE shall spin-off all of the issued and
outstanding shares of PRIDE's wholly-owned subsidiary named Pride, Inc. to all
shareholders of PRIDE, except the USMS shareholders, as of a future record
date to be set as the 10th business day after Closing, unless otherwise agreed
upon between the parties. Certificates representing the shares of Pride, Inc.
to be spun-off will be held by Xxxxxxx X. Xxxxxxxxxx, who shall distribute the
shares once an appropriate registration statement concerning the spin-off has
been declared effective by the U.S. Securities and Exchange Commission (the
"SEC").
(b) In the event that a registration statement has not become
effective with the SEC within twelve (12) months after the Closing, PRIDE will
use its best effects to liquidate all of its assets and liabilities of Pride,
Inc. and then distribute all proceeds pro rata to the shareholders on the
shareholder list being held in escrow.
(c) PRIDE will be responsible for all costs of the spin-off and/or
distribution, including the cost of the registration statement.
(d) The current directors of Pride, Inc. will remain as the directors
of Pride, Inc. until either the spin off of Pride, Inc. stock or the
distribution of the proceeds of liquidation is completed.
(e) Pending the completion of the spin-off of Pride, Inc., PRIDE
shall have no authority to influence the management or operation of Pride,
Inc. or to sell, pledge or otherwise encumber or place at risk the assets of
Pride, Inc.
(f) Pride, Inc. holds 100% of the assets, liabilities and business of
PRIDE. At Closing, PRIDE shall have no business, assets or liabilities at the
time of its acquisition of USMS.
(g) The parties agree that an income tax refund for the previous tax
year that is anticipated to be received by PRIDE following Closing, shall,
upon receipt, be transferred to Pride, Inc.
(h) At Closing, PRIDE shall issue 1,650,000 shares of restricted
common stock of PRIDE to Pride, Inc. Pride, Inc. shall grant a 15 day right-of
first refusal to PRIDE giving PRIDE the first right to repurchase any portion
of the 1,650,000 shares that Pride, Inc. desires to sell. Pride, Inc. shall
also grant to PRIDE an 18 month option to repurchase up to 1 million shares at
$1 per share. Also, Pride, Inc. shall not publicly sell more that the amount
permitted under the volume limitations of Rule 144, regardless of the holding
period. PRIDE agrees that it will cooperate with Pride, Inc. to effect removal
of restrictive legends from stock certificates representing the shares, in a
prompt and commercially reasonable manner, in the proportions permitted under
this Section 1.3(h), so long as Pride, Inc. qualifies to do so at that time
under Rule 144 or 144(k) of the Securities Act of 1933, as amended, and PRIDE
agrees to provide and pay the costs of any legal opinions that may be required
by the transfer agent.
(i) At Closing, PRIDE shall issue a promissory note to Pride, Inc. in
the principal amount of $360,000, bearing interest at 4.25% (current prime
rate), payable at any time within 3 years after Closing, and requiring minimum
monthly installments of $10,000.
(j) The USMS Shareholders shall pledge to Pride, Inc., as collateral
security to secure repayment of the promissory note described in Section
1.3(i), 7.5 million of the 15 million shares of PRIDE common stock being
issued to them in the reorganization. The collateral shall be held by Pride,
Inc.
2. CHANGE IN MANAGEMENT OF PRIDE
2.1 Change in Management of PRIDE. By execution of this Agreement,
Xxxxxxx X. Xxxxxxxxxx hereby resigns as an officer and director of PRIDE,
Xxxxxx Xxxxxx resigns as an officer and a director of PRIDE, and the persons
identified at Closing shall be appointed to serve as the officers and
directors of PRIDE until their successors are duly elected at the next meeting
of shareholders (hereafter identified as the "USMS Management Team").
2.2 Change in Control. The parties contemplate that PRIDE will file a
current report on Form 8-K within 5 days following execution of this Agreement
to report the change in control, the acquisition of assets and the change in
management resulting from the transaction.
3. CLOSING. The closing of the reorganization and the transactions
contemplated in this Agreement (the "Closing") shall be deemed to take place
upon execution of this Agreement by all of the parties hereto, whereupon the
USMS Shareholders shall be deemed to have accepted delivery of the
certificates of PRIDE Shares to be issued in their names, and in connection
therewith, shall make delivery of their USMS Shares to PRIDE.
3.1 Delivery of Shares. Upon execution of this Agreement, USMS
Shareholders shall deliver their respective certificates and/or other
documents representing the USMS Shares duly endorsed in blank, free and clear
of all claims and encumbrances, to PRIDE, and PRIDE shall issue and deliver
the PRIDE Shares to the USMS Shareholders. The PRIDE Shares shall be duly
issued in the name of the USMS Shareholders, and shall be duly recorded on the
books and records of PRIDE. The names of the USMS Shareholders and their
respective addresses, and the number of shares that will be issued to each
respective USMS Shareholder is set forth on the signature page hereto.
3.2 Closing Requirements. Subsequent to Closing, each of the parties
shall execute and deliver such instruments and documents and take such other
actions as may, in the reasonable opinion of counsel for each, be required to
complete the transactions under this Agreement. It is contemplated that within
ten (10) business days after the date of this Agreement, the following
documents shall have been delivered and the following activities shall have
taken place, all of which shall be deemed to have occurred contemporaneously
at the closing:
(a) the securities to be delivered pursuant to section 3.1 have been
delivered to the respective parties, duly endorsed or issued as the case may
be;
(b) delivery of all corporate records of PRIDE to the USMS Management
Team, including without limitation, corporate minute books (which shall
contain copies of the Articles of Incorporation and Bylaws, as amended to the
Closing), stock books, stock transfer books, corporate seals, contracts,
licenses and sub-licenses, non-disclosure and confidentiality agreements, and
such other corporate books and records as may be reasonably requested;
(c) copies of resolutions by USMS's Board of Directors authorizing
this Agreement;
(d) copies of resolutions by PRIDE's Board of Directors authorizing
this Agreement; and
(e) the parties hereto have signed and delivered such other
instruments and documents, if any, relating to and effecting the transactions
contemplated herein.
3.3 Ancillary Documents. In addition to the documents required by
Section 3.2, the following ancillary documents shall be executed and delivered
by the respective parties at Closing:
(a) PRIDE shall issue to Pride, Inc. the promissory note described in
Section 1.3(i).
(b) The USMS Shareholders shall execute and deliver a pledge
agreement relating to the pledge of collateral described in Section 1.3(j).
(c) Xxxxxxx X. Xxxxxxxxxx, Xxxxxxxxxx & Associates, Inc. Money
Purchase Plan & Trust, Xxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx Profit Sharing Plan,
Applegates Landing I, Professional Investors, Xxxxx & Xxxxx Xxxxxxx, Xxx
Xxxxxxxx, and Xxxxx Xxxxxx shall each enter into an agreement with PRIDE
relating to the resale of shares of common stock of PRIDE held by them and
their affiliates, which limits the manner and volume of the resale of shares
over a 15 month period following Closing.
4. REPRESENTATIONS OF USMS SHAREHOLDERS AND USMS. USMS represents and
warrants, and to the best knowledge of the USMS Shareholders, the USMS
Shareholders hereby represent and warrant, that effective this date, the
representations and warranties listed below are true and correct:
4.1 Organization. USMS is a company duly organized, validly existing
and in good standing under the laws of the State of Nevada, with full power
and authority to own and use its properties and conduct its business as
presently conducted by it. USMS shall furnish PRIDE with copies of the
Articles of Incorporation and the Bylaws of USMS, including all amendments
thereto. Such copies are true, correct and complete and contain all amendments
through the date hereof, which, together with this Agreement, are sufficient
to effect the transactions hereunder and evidence the intent of the parties
hereto.
4.2 Capitalization. The authorized stock of USMS consists of (a)
50,000,000 shares of common stock authorized, par value $.001 per share,
15,000,000 of which are issued and outstanding and (b) 5,000,000 shares of
preferred stock, par value $.001 per share, none of which have been issued.
All of the issued and outstanding equity securities of USMS are duly and
validly authorized and issued and are fully paid and non-assessable. Except as
set forth on Schedule 4.2, USMS does not have outstanding any security
convertible into, or any warrant, option or other right to subscribe for or
acquire any equity securities of USMS; nor is USMS under any obligation,
whether written or oral, to issue any of its securities.
4.3 Authority. USMS has the requisite corporate authority to enter
into and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby in accordance with the terms hereof. The
execution and delivery of this Agreement by USMS and the consummation of the
transactions contemplated hereby will not violate or conflict with any
provisions of the Articles of Association, as amended, or contravene any law,
rule, regulation, court or administrative order binding on it, or result in
the breach of or constitute a default in the performance of any material
obligation, agreement, covenant or condition contained in any material
contract, lease, judgment, decree, order, award, note, loan or credit
agreement or any other material agreement or instrument to which USMS is a
party or by which it is bound, the default or breach of which would have a
material adverse effect on the property and assets of USMS, considered as a
whole. USMS has taken all requisite corporate action to authorize and approve
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby. Upon due execution and delivery of
this Agreement, this Agreement will constitute a valid, legal and binding
obligation of USMS and USMS Shareholders enforceable against them in
accordance with its terms.
4.4 USMS Shareholders. USMS Shareholders are the owners of 100% of
the issued and outstanding common stock of USMS. Such USMS Shares are free and
clear from any security interests, claims, liens, or other encumbrances and
USMS Shareholders have the unqualified right to transfer and dispose of their
USMS Shares.
4.5 Due Diligence. USMS shall furnish to PRIDE copies of all
documents requested by PRIDE. No due diligence investigations undertaken by
PRIDE shall in any event relieve USMS or USMS Shareholders of their
responsibilities for the accuracy and completeness of any representation or
warranty of USMS or of USMS Shareholders contained herein or the performance
of any covenant or agreement of USMS or of USMS Shareholders contained herein.
4.6 Approvals and Consent. No approval, authorization or other action
by, or filing with, any third-party, including a governmental authority is
required in connection with the execution, delivery and performance by USMS
and USMS Shareholders of their obligations under this Agreement and their
respective performance of the transactions contemplated hereby.
4.7 Undisclosed Liabilities. USMS has no liabilities or obligations
whatsoever, either accrued, absolute, contingent or otherwise, except as
disclosed herein or on the financial statements to be provided and those
incurred in or as a result of the ordinary course of business of USMS
subsequent to the date of the financial statements.
4.8 Assets. The assets of USMS have been acquired in bona fide
transactions, fully supported by appropriate instruments of assignment, sale,
or transfer, where appropriate, and are offset by no liabilities or
contingencies, contractual or otherwise, except as indicated in its financial
statements.
4.9 Litigation. USMS is not involved in any pending litigation or
governmental investigation or proceeding and, to the best knowledge of USMS
and USMS Shareholders, no litigation, claims, assessments, or governmental
investigation or proceeding is threatened against USMS, its shareholders or
properties.
4.10 Applicable Laws. USMS has complied with all applicable laws in
connection with its formation, issuance of securities, organization,
capitalization and operations, and no contingent liabilities have been
threatened or claims made, and no basis for the same exists with respect to
said operations, formation or capitalization, including claims for violation
of any state or federal securities laws.
4.11 Taxes. USMS has filed all governmental, tax or related returns
and reports due or required to be filed and has paid all taxes or assessments
which have become due as of the date of this Agreement, including any
employment related taxes and withholdings, and USMS, to the best of its
knowledge, is not subject to a tax audit by any federal, state or local tax
authority and its properties are not subject to any tax liens.
4.12 Breach of Contracts. USMS has not breached, nor is there any
pending or threatened claims or any legal basis for a claim that USMS has
breached, any of the terms or conditions of any agreements, contracts or
commitments to which it is a party or is bound and the execution and
performance hereof will not violate any provisions of applicable law of any
agreement to which USMS is subject.
4.13 USMS Disclosure. At the date of this Agreement, USMS has
disclosed all events, conditions and facts materially affecting the business
and prospects of USMS. USMS has not withheld disclosure of any such events,
conditions, and facts which it, through management, has knowledge of, or has
reasonable grounds to know, which may materially affect the business and
prospects of USMS.
4.14 Shareholder Disclosure. USMS Shareholders hereby represent that
the materials prepared and delivered by PRIDE to USMS Shareholders will have
been read and understood by USMS Shareholders, that each is familiar with the
business of PRIDE, that each is acquiring the PRIDE Shares under Section 4(2)
of the Securities Act of 1933, (the "Act"), commonly known as the private
offering exemption, and that the shares are restricted and may not be resold,
except if duly registered or transferred in reliance upon an exemption under
the Act.
5. REPRESENTATIONS OF PRIDE. PRIDE hereby represents and warrants that
effective this date, the representations and warranties listed below are true
and correct:
5.1 Organization. PRIDE is a corporation duly organized, validly
existing and in good standing under the laws of the State of Colorado with
full power and authority to own and use its properties and conduct its
business as presently conducted by it. PRIDE is duly qualified and in good
standing to do business as a foreign corporation in any other jurisdiction
where failure to so qualify would have a material adverse effect on its
business or assets. PRIDE has made available to USMS Shareholders copies of
the Articles of Incorporation and the Bylaws of PRIDE, including all
amendments thereto. Such copies are true, correct and complete and contain all
amendments through the date hereof, together with this Agreement, which are
sufficient to effect the transactions hereunder and evidence the intent of the
parties hereto.
5.2 Capitalization. The authorized stock of PRIDE consists of (a)
200,000,000 shares of common stock authorized, no par value, 1,350,000 of
which are issued and outstanding and (b) 1,000,000 shares of preferred stock,
no par value, none of which have been issued. All of the issued and
outstanding equity securities of USMS are duly and validly authorized and
issued and are fully paid and non-assessable. At the time of their issuance
and delivery pursuant to this Agreement, all PRIDE Shares to be issued
pursuant to the terms hereof shall be duly and validly authorized and issued,
fully paid and nonassessable. PRIDE does not have outstanding any security
convertible into, or any warrant, option or other right to subscribe for or
acquire any equity securities of stock of PRIDE; nor is PRIDE under any
obligation, whether written or oral, to issue any of its securities.
5.3 Authority. PRIDE has the requisite corporate authority to enter
into and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby in accordance with the terms hereof. The
execution and delivery of this Agreement by PRIDE and the consummation of the
transactions contemplated hereby will not violate or conflict with any
provisions of the Articles of Incorporation, as amended, or Bylaws of PRIDE or
contravene any law, rule, regulation, court or administrative order binding on
it, or result in the breach of or constitute a default in the performance of
any material obligation, agreement, covenant or condition contained in any
material contract, lease, judgment, decree, order, award, note, loan or credit
agreement or any other material agreement or instrument to which PRIDE is a
party or by which it is bound, the default or breach of which would have a
material adverse effect on the property and assets of PRIDE, considered as a
whole. PRIDE has taken all requisite corporate action to authorize and approve
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby. Upon due execution and delivery of
this Agreement, this Agreement will constitute a valid, legal and binding
obligation of PRIDE enforceable against it in accordance with its terms.
5.4 Due Diligence. PRIDE has furnished to USMS Shareholders copies of
all documents requested by USMS Shareholders. No due diligence investigations
undertaken by USMS Shareholders shall in any event relieve PRIDE or its
current officers and directors of their responsibilities for the accuracy and
completeness of any representation or warranty of PRIDE contained herein or
the performance of any covenant or agreement of PRIDE contained herein.
5.5 Approvals and Consent. No approval, authorization or other action
by, or filing with, any third-party, including a governmental authority is
required in connection with the execution, delivery and performance by PRIDE
of its obligations under this Agreement and its performance of the
transactions contemplated hereby, except that certain governmental agencies
must be notified, as stated in Section 2.2 above.
5.6 Litigation. PRIDE is not involved in any pending litigation or
governmental investigation or proceeding and, to the best knowledge of PRIDE,
no litigation, claims, assessments, or governmental investigation or
proceeding is threatened against PRIDE, its shareholders or properties.
5.7 Applicable Laws. PRIDE has complied with all state, federal and
local laws in connection with its formation, issuance of securities,
organization, capitalization and operations, and no contingent liabilities
have been threatened or claims made, and no basis for the same exists with
respect to said operations, formation or capitalization, including claims for
violation of any state or federal securities laws.
5.8 Breach of Contracts. PRIDE has not breached, nor is there any
pending or threatened claims or any legal basis for a claim that PRIDE has
breached, any of the terms or conditions of any agreements, contracts or
commitments to which it is a party or is bound and the execution and
performance hereof will not violate any provisions of applicable law of any
agreement to which PRIDE is subject.
5.9 Taxes. PRIDE has filed all governmental, tax or related returns
and reports due or required to be filed and has paid all taxes or assessments
which have become due as of the date of this Agreement, including any
employment related taxes and withholdings, and PRIDE, to the best of its
knowledge, is not subject to a tax audit by any federal, state or local tax
authority and its properties are not subject to any tax liens. PRIDE will
cause to be filed or prepared, as applicable, by the date of this Agreement,
all federal, state, county and local income, excise, property and other tax
returns, forms, or reports, which are due or required to be filed by it prior
to the date of this Agreement.
5.10 PRIDE Disclosure. At the date of this Agreement, PRIDE has
disclosed all events, conditions and facts materially affecting the business
and prospects of PRIDE. PRIDE has not withheld disclosure of any such events,
conditions, and facts which it, through management, has knowledge of, or has
reasonable grounds to know, which may materially affect the business and
prospects of PRIDE.
5.11 Undisclosed Liabilities. Except as disclosed in its periodic
reports filed with the SEC, PRIDE has no material liabilities or obligations
whatsoever, either accrued, absolute, contingent or otherwise.
5.12 SEC Reporting. PRIDE is current in its requirements to file
periodic reports with the SEC. PRIDE will use its best efforts to remain
current in its periodic reports required to be filed with the SEC.
6. AUDIT.
6.1 Audit of USMS Financial Statements. Within 75 days after Closing,
USMS shall obtain and deliver to PRIDE an audit of USMS financial statements
and any other financial statements which may be required by Regulations S-X or
S-B for purposes of complying with the Securities Act of 1933 and the
Securities Exchange Act of 1934. PRIDE shall assist USMS and its auditors as
reasonably requested.
7. MUTUAL COVENANTS OF THE PARTIES. PRIDE, USMS and USMS Shareholders each
covenant and agree to execute any further documents or agreements and to take
any further acts that may be reasonably necessary to effect the transactions
contemplated hereunder, including, but not limited to, obtaining any consents
or approvals of any third-party required to be obtained to consummate the
transactions contemplated by this Agreement.
8. RESTRICTIONS ON TRANSFER OF SHARES. The parties hereto acknowledge that all
securities transferred and/or issued in connection with the transactions
contemplated hereby are restricted as to transfer and the certificates
therefore shall bear legends to such effect and no transfer of any shares may
be effected, except pursuant to an effective registration statement prepared
and filed pursuant to the Act or pursuant to an exemption from registration
thereunder, as evidenced by an opinion of counsel or as otherwise allowed
under the laws of descent and distribution.
9. NATURE AND SURVIVAL OF REPRESENTATIONS. All representations, warranties and
covenants made by any party in this Agreement shall survive the Closing
hereunder and the consummation of the transactions contemplated hereby for two
(2) years from the date hereof. All of the parties hereto are executing and
carrying out the provisions of this Agreement in reliance solely on the
representations, warranties and covenants and agreements contained in this
Agreement or at the Closing of the transactions herein provided for and not
upon any investigation upon which it might have made or any representations,
warranty, agreement, promise or information, written or oral, made by the
other party or any other person other than as specifically set forth herein.
10. MISCELLANEOUS.
10.1 Undertakings and Further Assurances. At any time, and from time
to time, hereafter, each party will execute such additional instruments and
take such action as may be reasonably requested by the other party to carry
out the intent and purposes of this Agreement.
10.2 Waiver. Any failure on the part of any party hereto to comply
with any of its obligations, agreements or conditions hereunder may be waived
in writing by the party to whom such compliance is owed.
10.3 Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and will be effective when
hand-delivered or upon delivery if sent by commercial courier service such as
Federal Express or Airborne or on the day of delivery or first attempted
delivery if sent by first class, postage prepaid, certified United States
mail, return receipt requested (whether or not the return receipt is
subsequently received), and addressed by the sender to the addresses as
designated on the signature page hereof.
10.4 Headings. The paragraph and subparagraph headings in this
Agreement are inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Agreement.
10.5 Governing Law. This Agreement shall be governed by the laws of
the State of Colorado.
10.6 Binding Effect. This Agreement shall be binding upon the parties
hereto and inure to the benefit of the parties, their respective heirs,
administrators, executors, successors and assigns. This Agreement shall not be
assigned by any party hereto, except upon the consent, in writing, of the
other parties hereto.
10.7 Entire Agreement. This Agreement, including any documents
delivered pursuant to the terms hereof, is the entire agreement of the parties
covering everything agreed upon or understood with respect to the transactions
contemplated hereby and supersedes all prior agreements, covenants,
representations or warranties, whether written or oral, by any party hereto.
There are no oral promises, conditions, representations, understandings,
interpretations or terms of any kind as conditions or inducements to the
execution hereof.
10.8 Time. Time is of the essence. The parties each agree to proceed
promptly and in good faith to consummate the transactions contemplated herein.
10.9 Expenses. Each of the parties hereto shall pay its own expenses
incurred in connection with the authorization, preparation, execution and
performance of this Agreement and obtaining any necessary regulatory
approvals, including, without limitation, all fees and expenses of its
respective counsel.
10.10 Severability. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in full force and
effect.
10.11 Counterparts and Facsimile Signatures. This Agreement and any
exhibits, attachments, or documents ancillary hereto, may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument. Execution and delivery of this Agreement by exchange of facsimile
copies bearing the facsimile signature of a party hereto shall constitute a
valid and binding execution and delivery of this Agreement by such party. Such
facsimile copies shall constitute enforceable original documents.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and year
first above written.
PRIME RATE INCOME & DIVIDEND ENTERPRISES, INC.
/s/ Xxxxxxx Xxxxxxxxxx
------------------------------------------
Xxxxxxx Xxxxxxxxxx, President and Director
/s/ Xxxxxx Xxxxxx
------------------------------------------
Xxxxxx Xxxxxx, Vice President and Director
PRIDE address:
0000 - 00xx Xxxxxx, Xxxxx 0X
Xxxxxx, XX 00000
U.S. MEDICAL SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------------
Xxxxx X. Xxxxx, CEO
USMS address:
0000 - 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
USMS SHAREHOLDERS:
SHAREHOLDERS:
NO. OF USMS SHARES NO. OF PRIDE SHARES
NAME TO BE EXCHANGED TO BE RECEIVED
---- ------------------ -------------------
Rangeley Corporation 15,000,000 15,000,000
By: /s/ Xxxxx X. Xxxxx
---------------------------------------
Xxxxx X. Xxxxx, President
c/o Futro & Xxxxxxxxxxx, LLC
0000 - 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
SCHEDULE 4.2
USMS does not have outstanding any security convertible into, or any
warrant, option or other right to subscribe for or acquire any equity
securities of USMS; nor is USMS under any obligation, whether written or oral,
to issue any of its securities or securities of PRIDE, except as set forth
below:
1. In connection with Closing, USMS has arranged an equity investment
of $150,000 for 300,000 shares of common stock of PRIDE, and presently intents
to continue to arrange additional equity investments in common stock of PRIDE.
2. USMS has sold $35,000 in convertible debentures which will be
convertible into shares of common stock of PRIDE, and may continue to sell
additional convertible debentures following Closing.
3. USMS has other obligations to issue securities convertible into
shares of PRIDE to officers, directors and third parties in exchange for
services rendered and to be rendered.
