10.1.5 Xxxxxxxxx International, Inc.
Letter of Intent
This letter this 8th day of Sept 2000 is meant to express the intentions
of the collective parties. The parties to this binding Letter of Intent are
xxxxxxxx.xxx, Inc. hereby referred to as COMPANY and Xxxxxxxxx International,
Inc. hereby referred to as CANDIDATE.
Background:
The COMPANY hereby agrees to purchase and the CANDIDATE hereby agrees to sell
90% of their interest in Xxxxxxxxx International, Inc.
Terms and Conditions:
COMPANY xxxxxx agrees to pay and CANDIDATE xxxxxx agrees to accept 3.0 million
shares of xxxxxxxx.xxx Restricted Common Stock.
Both parties agree COMPANY will register 25% of xxxxxxxx.xxx common stock for
CANDIDATE. The application for registration of the first 25% will be filed
within 30 days of the closing of the transaction Further, within 30 days of
FDA approval an application will be made to register 25% of the balance of the
xxxxxxxx.xxx common stock.
COMPANY will make available $5 million of media credits that it secured
through its media venture transaction with Sivla, Inc. to be spent on
promotion of the Biosil breast implant. These funds will be spent upon FDA
approval.
COMPANY will fund up to $880,000 of expenses for the CANDIDATE until such time
as the FDA approval is secured. This funding will begin upon official closing
of the transaction.
The Chief Executive Officer of the CANDIDATE will receive a bonus of 1 % of
gross sales on Breast Implant sales that it generates as part of a special
management contract. This bonus excludes revenue generated through COMPANY'S
affiliate Doctors. In order for the 1% bonus to qualify the CANDIDATE must be
producing a profit based on its operations.
Closing Date
On or before December 23rd, 2000.
Contingencies
1.Satisfaction of the Board of Directors of COMPANY.
Representations have been made by the CANDIDATE to the COMPANY'S Chief
Executive Officer. Those representations have been relayed to the Board of
Directors of the COMPANY. The Board must receive an opinion letter from the
CANDIDATE'S FDA Consultant that will satisfy them as to the likelihood of a
forthcoming FDA approval for the Biosil implant. If, for any reason, the Board
of Directors is not satisfied with the CANDIDATE'S FDA Consultant's opinion
COMPANY is not obligated to close.
2. Financing.
The COMPANY is in the process of securing $5 million worth of equity financing
to perpetuate its own business. A separate tranche of $880,000 must be raised
prior to the closing of this transaction; scheduled for December 23, 2000. If
in fact, said funds are not raised neither COMPANY nor CANDIDATE will be
required to close.
3. Breast Implant Contract
CANDIDATE must produce for COMPANY'S Board of Directors an agreement with the
Biosil manufacturer that satisfies the Board of Directors that the Biosil
contract will be in place for a period of five (5) years with at least one
five (5) year extension. If it is not to the satisfaction of COMPANY, COMPANY
is not obligated to close.
4. Due Diligence
Due Diligence as expressed in Exhibit `A' of this Agreement must be prepared
by the CANDIDATE to the satisfaction of the COMPANY and be presented at least
three weeks prior to the closing of this transaction. If this is not produced
in accordance with Exhibit A, COMPANY is not obligated to close.
By evidence of the signatures below, both parties confirm that they are in
agreement with the above-mentioned terms and conditions of this binding Letter
of Intent.
/s/ Xxxx Xxxxxxxxx 9/8/00
---------------------- -------------
Xxxx Xxxxxxxxx, CEO Date
Xxxxxxxxx International, Inc.
/s/ Xxxxxx X. Xxxxxx 9/8/00
------------------------- -------------
Xxxxxx X. Xxxxxx, President and CEO Date
Xxxxxxxx.xxx,Inc
Exhibit A
Due Diligence Review
In connection with the proposed purchase of 90% of Xxxxxxxxx International,
Inc. by xxxxxxxx.xxx, Inc. set forth below is our standard list of certain
documents and information, which we would like to examine. Unless otherwise
noted, reference to year's means completed fiscal years plus any subsequent
periods. Kindly arrange responsive material according to the corresponding
section numbers below.
Corporate and Organizational Records
1.1 The Company's Certificate of Incorporation, as amended to date.
1.2 By-laws of the Company as currently in effect.
1.3 A list of all states in which the Company is licensed or otherwise
qualified to do business, owns or leases facilities or has employees
and Certificates of Authority to do business in such states, as currently in
effect.
1.4 Copies of certificates authorizing the Company to operate under
any fictitious name.
1.5 All Minutes of meetings of the Company's Board of Directors,
committees of the Board of Directors and shareholders.
1.6 Copies of all materials (including financial projections) distributed to
board and committee members in connection with meetings
described in item 1.5 above.
1.7 Current Stockholders list
1.8 All reports and any written communications to stockholders
1.9 All press clippings and releases for the past three years.
1.10 Organizational charts, listing (a) all directors, officers and key
employees and (b) all partnerships and joint ventures.
2. Governmental Regulations and Filings
2.1 All reports filed and significant correspondence with any federal,
state and local regulatory agencies including, without limitation,
securities regulation and environmental protection agencies.
2.2 A list and copies of all material federal, state and local governmental
permits, licenses, authorizations, filings or approvals and all correspondence
or other materials indicating any actual or threatened or possible
termination, revocation, suspension, fine, default or violation thereof or
problems with respect thereto within the past five years.
3. Financings
3.1 A list of all documents and agreements evidencing all current borrowings
and financings to which the Company is bound.
3.2 Bank letters or agreements confirming current lines of credit and
repayment plans.
3.3 Correspondence with lenders including all compliance reports
submitted and waivers and computations regarding compliance
with covenants in existing financing documents.
4. Material Agreements
4.1 Information, including copies of agreements, relating to any prior
merger, acquisition or divestiture including any filings made with
federal or state governmental authorities relating to such
acquisitions.
4.2 All licensing agreements (either as licensor or licensee).
4.3 A schedule and copies of all contracts relating to securities of the
Company (including stock options, warrants, rights, calls, voting
trusts, irrevocable proxies, stockholder, registration rights, and
purchase agreements) or under which the Company has continuing
obligations or liability.
4.4 All contracts, agreements, arrangements, or documents relating to
transactions with or pertaining to the Company and to which any director,
officer, employee or stockholder is a party (including all documents
pertaining to any receivables or payables involving such persons).
4.5 All advertising, public relation and promotional agreements.
4.6 All contracts for the purchase or lease of equipment, materials,
supplies or services.
4.7 All mortgages, pledges, security agreements or other similar agreements
purported to create liens on the property of the Company currently in effect.
4.8 List of companies in which the Company actively participates or
manages.
4.9 All secrecy or non-competition agreements, including
non-competition agreements with key employees.
5. Management/Employee Matters
5.1 All Employment, consulting or advisory agreements, severance
and collective bargaining agreements, list of employees earning in
excess of $25,000 per year, and schedules of (i) interlocking
relationships between the Company and its principals (ii) loans to
insiders and (iii) litigation affecting insiders, if any.
6. Litigation
6.1 A schedule of all litigation, claims (including without limitation
alleged discrimination or other employment matter claims),
administrative proceedings and governmental investigations and
inquiries, currently pending or threatened, stating for each matter:
(a) names and addresses of parties, (b) court in which pending, (c)
date instituted, (d) status, (e) brief description of the nature of the
claim, and (f) name, address, and telephone number of attorney
handling the matter.
6.2 All pleadings in any material litigation involving the Company.
6.3 All consent decrees, judgments, injunctions, other decrees or
orders, settlement agreements and other agreements requiring or
prohibiting any future activities.
7. Property
7.1 All documents relating to real property owned or sold within the
past year, such as deeds, mortgages and title insurance policies.
7.2 All leases relating to real property that is leased.
7.3 A schedule of all major capital expenditures and contracts, capital
expenditure commitment sand plans for present or future capital
expenditures.
8. Financial and Tax Matters
8.1 All financial statements (i.e., balance sheets, income statements,
changes in financial position and cash flow statements).
8.2 Quarterly and other interim financial statements since the date of
the last statement provided pursuant to item 8.1.
8.3 All projections, budgets, and financial forecasts including those
prepared by the Company.
8.4 Copies of all federal, state, city and foreign income tax returns for
the past three years and evidence of payment of same.
8.5 List of any tax audits in progress or completed and all audit papers and
communications with the IRS.
8.6 Three (3) years of audited financials.
9. Intellectual Property
9.1 All documents relating to pending and existing patents,
trademarks, trade names, copyrights and other intellectual
property, including, without limitation, confidentiality agreements
executed by employees and consultants upon the commencement
of their relationships with the Company.
10. Insurance
10.1 Schedules detailing current levels of insurance coverage's in all areas
where insurance is maintained.
10.2 If the Company does not maintain adequate insurance on all insurable
property and all reasonable risks, list of significant events, which have
occurred with respect to any uninsured property risks.
11. Miscellaneous
11.1 An opinion letter from Company's consultant regarding the likelihood of
FDA approval.
11.2 Any recent analysis of the Company, prepared by investment bankers,
management consultants, accountants or others within the past year, including
credit reports and other types of reports, financial or otherwise.
11.3 Copies of any agreements (excluding Certificates of Incorporation and
By-Laws), which provide for the indemnification of any officer, director,
employee or agent of the Company.
11.4 Any other documents or information which, in your judgment, are
significant with respect to the business of the Company or which should be
considered and reviewed in connection with the proposed purchase.
The above list is extensive and all of the requested information does not need
to be made immediately available but as previously stated in the attached
Letter of Intent, review of said documents must be complete and approved three
weeks prior to the closing of the transaction.
