EXHIBIT 2.2
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.
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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.
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(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:
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(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.
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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
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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
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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.
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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.
[SIGNATURE PAGE FOLLOWS]
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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
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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.
