REGENESIS HOLDINGS, INC.
XXXXXXXXXXXX.XXX January 18, 1999
000 X. Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxx, President
LETTER OF INTENT
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This letter will set forth the terms upon which REGENESIS HOLDINGS, INC.
("REGENESIS") purposes to acquire XxxxxxxXxxxx.xxx Inc., a Texas Corporation,
("XXXXXXXXXXXX.XXX").
WHEREAS, REGENESIS is an Internet & Telecommunications holding company;
WHEREAS, XXXXXXXXXXXX.XXX is an Internet company that has a business plan for
providing the general public with on-line art, antiques, coins and memorabilia
on an auction web site; and
WHEREAS, REGENESIS seeks to acquire 100% of the issued and outstanding shares of
XXXXXXXXXXXX.XXX
NOW THEREFORE, the acquisition will be an exchange of shares, with REGENESIS
Class A Preferred Stock being issued and delivered to the stockholders of
XXXXXXXXXXXX.XXX
1. REGENESIS will acquire all the authorized and outstanding common shares of
XXXXXXXXXXXX.XXX, thereby making XXXXXXXXXXXX.XXX a wholly owned subsidiary of
REGENESIS.
2. REGENESIS will provide a minimum of one million dollars ($1,000,000.00) in
working capital and five thousand (5000) shares of REGENESIS' Class A Preferred
Stock to XXXXXXXXXXXX.XXX.
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000 Xxxxxxxx Xxx. Suite 400 Miami, Florida 33131 Tel: (000)000-0000;
Fax(305)000-0000
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3. XXXXXXXXXXXX.XXX will have no fewer than six (6) and no more than twenty-four
(24) months, calculated from the closing date to produce a "Fairness Opinion"
establishing the value of XXXXXXXXXXXX.XXX. REGENESIS and XXXXXXXXXXXX.XXX will
each nominate three (3) firms from which both parties agree to share one (1) to
produce this Fairness opinion.
4. Based on this Fairness opinion, XXXXXXXXXXXX.XXX will convert its 5,000
shares of REGENESIS Class A Preferred Stock into Common shares of REGENESIS and
REGENESIS shall issue such other common shares as a bonus for the increased
value from the date of the closing. The value of those bonus common shares of
REGENESIS stock will equal the value of XXXXXXXXXXXX.XXX as established by the
Fairness Opinion. These common shares of REGENESIS stock will be valued at the
"lowest closing bid prices" of REGENESIS (NASDAQ:EGNS) for the 90 day period
immediately prior to the date of the Fairness Opinion.
5. At the closing, Strategic Holdings Management Corp. will enter into a
consulting agreement with XXXXXXXXXXXX.XXX for a period of three years. The
annual consulting fee payable under the contract will be determined by the Board
of Directors of XXXXXXXXXXXX.XXX, subject to the foregoing limit on compensation
paid under XXXXXXXXXXXX.XXX employment and consulting agreements. The employees
of Strategic Holdings Management Corp. shall not be entitled to receive any
employee benefits, except as provided herein in Paragraph 4.
6. If and when XXXXXXXXXXXX.XXX receives any bonus shares under Paragraph 4,
XXXXXXXXXXXX.XXX will then convey thirty-five percent (35%) of those common
shares of REGENESIS to Strategic Holdings Management Corp. as payment for
consulting services.
7. Within one (1) year of the acquisition, REGENESIS will use its "best efforts"
to register the REGENESIS shares delivered to the XXXXXXXXXXXX.XXX and a certain
percentage of the estimated bonus REGENESIS shares, under the Federal Securities
Act of 1933, so as to permit sale by them of such shares at the market.
Alternatively, REGENESIS will use its best efforts, subject to underwriter
approval, to "piggyback" the resignation of such underlying stock with any other
stock registration which may occur within a 1-year period of the acquisition.
Following the
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000 Xxxxxxxx Xxx. Suite 400 Miami, Florida 33131 Tel: (000)000-0000;
Fax(305)000-0000
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effective date of the registration statement, REGENESIS will maintain such
registration in effect for a period of not less than six months.
8. REGENESIS shall bear all fees and expenses incurred in preparing, filing and
maintaining the effectiveness of the registration statement, but the
XXXXXXXXXXXX.XXX principals and consultants whose shares are registered will
bear all underwriting form and other expenses of sale of their shares and costs
of any counsel or others experts who represent them in the preparation of the
registration statement or sales of the shares.
9. REGENESIS shall also take any necessary action required to qualify or
register the aforesaid shares, up to a total of five states.
10. For three years following the closing, the principal shareholders of
XXXXXXXXXXXX.XXX, a list of whom is annexed to this letter (the XXXXXXXXXXXX.XXX
Principals), shall elect Xxxxxx as president. REGENESIS will, following the
closing, be entitled to designate a majority of the XXXXXXXXXXXX.XXX directors.
11. Xxxxxx will enter into employment contracts with XXXXXXXXXXXX.XXX for three
years. The annual salary will be determined by the Board of Directors of
XXXXXXXXXXXX.XXX, subject to an overall limit per year on compensation paid
under all employment and consulting contracts to which XXXXXXXXXXXX.XXX is a
party, the amount of such limit being agreeable to REGENESIS. The contract will
also provide for annual increments of 5% per annum i.e. pay. Provision for
reimbursement of expenses reasonably incurred in connection with the business of
XXXXXXXXXXXX.XXX and a monthly car allowance of up to $500 per month. Xxxxxx
will also be entitled to medical benefits provided to all executives of
REGENESIS and its subsidiaries, the cost of which will be paid by
XXXXXXXXXXXX.XXX.
12. Each XXXXXXXXXXXX.XXX principal and consultants shall agree that, so long as
they hold REGENESIS shares (Including the bonus shares), issued for the
transaction, he will vote them as provided in the Voting Agreement dated
_________________ among the principals of REGENESIS, and they will become a
party to that Agreement.
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000 Xxxxxxxx Xxx. Suite 400 Miami, Florida 33131 Tel: (000)000-0000;
Fax(305)000-0000
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13. In order to complete the acquisition, XXXXXXXXXXXX.XXX will provide promptly
the due diligence materials requested by REGENESIS, as listed in the schedule
Annexed hereto. In this connection, XXXXXXXXXXXX.XXX will deliver as soon as
possible to REGENESIS its unaudited financial statement for the prior year
through December 31, 1998 and a detailed projection of ________ expenses for the
year 1999. REGENESIS will cause the XXXXXXXXXXXX.XXX financial statements for
the year 1998 to be audited by REGENESIS'S independent public accountants, at
the expense of REGENESIS.
14. Each party shall bear his or its own costs in connection with implementing
this letter of intent and the transaction contemplated hereby.
15. This letter of intent shall constitute an expression of intent only and
shall not be deemed a binding agreement, except for the provisions of Paragraphs
16 and __.
16. XXXXXXXXXXXX.XXX agrees not to engage in discussion with _____ third party
relating to the acquisition of XXXXXXXXXXXX.XXX until February 15, 1999.
REGENESIS agrees to hold in confidence all information which is delivered to it
by XXXXXXXXXXXX.XXX in connection with this transaction and to return all
documents of the transaction delivered by XXXXXXXXXXXX.XXX in the event the
transaction is not completed. The provisions of this Paragraph 16 shall be
binding on the parties.
Please acknowledge your acceptance by signing and returning a copy of this
Letter to the undersigned.
Very truly yours,
REGENESIS HOLDINGS, INC.
By: /s/ Xxxxxxxx Xxxxxxx
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Xxxxxxxx Xxxxxxx, President
AGREED AND ACCEPTED:
XxxxxxxXxxxx.xxx, Inc.
By: /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx, President
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000 Xxxxxxxx Xxx. Suite 400 Miami, Florida 33131 Tel: (000)000-0000;
Fax(305)000-0000
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