STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made and entered into as of
March ___, 2003, by and between the individuals listed in Schedule A attached
hereto ("Sellers"), and Thaon Communications, Inc., A Nevada corporation (the
"Purchaser").
W I T N E S S E T H:
WHEREAS, the Sellers own an aggregate of 4,481,250 shares of
the common stock of Practice Xpert Services Corp., a California corporation (the
"Company") which constitutes ninety two and one quarter percent (92.25%) of the
issued and outstanding shares of the Company's common stock; and
WHEREAS, the Sellers wish to sell to the Purchaser all of such
common shares ("Common Shares") of the Company pursuant to the terms and
conditions set forth herein;
AND WHEREAS, the Purchaser is entering into this transaction
with the understanding that upon completion of the Transaction the management of
the Company will become the new management of the Purchaser, and the business of
the Company will become the new business of the Purchaser;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements and covenants hereinafter set forth, the Purchaser and the
Sellers hereby agree as follows:
ARTICLE I.
PURCHASE AND SALE OF STOCK
Section 1.01 Purchase and Sale of Stock. Subject to the terms and conditions
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hereof, on the Closing Date (as defined below) the Sellers agree to sell to the
Purchaser, and the Purchaser agrees to purchase from the Sellers, the Common
Shares of the Company, as follows:
(a) In exchange for each of the Sellers Common Shares, each of the
Sellers shall receive 34.2357 shares of Purchaser's Common Stock, par value
$0.001 per share (the "Common Stock"), and .4117 shares of Purchaser's Preferred
Stock Series C ("Preferred Stock"), for a total of 153,411,925 common shares and
a total of 1,845,000 Series C Preferred shares (as set forth in Schedule B
attached hereto). Collectively, the Common Stock and the Preferred Stock shall
be known as the "Stock".
Section 1.02 Closing Date. The consummation of the purchase and sale of the
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Shares hereunder (the "Closing") shall be held at the offices of Practice Xpert
Services Corp., located at 0000 Xxxxxxxx Xxxx. #000, Xxxxxx Xxxx, Xxxxxxxxxx at
10:00 AM (Local Time) on April 1, 2003, or at such other time and place as the
Sellers and the Purchaser may mutually agree (the "Closing Date").
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Section 2.01 Representations of the Sellers. Each of the Sellers represents and
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warrants to the Purchaser that the following is true and correct as of the date
hereof and shall be true and correct as of the Closing Date: :
(a) Existence. The Company is a corporation duly organized and validly
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existing under the laws of California.
(b) Authorization; No Violation. The execution, delivery and
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performance by each Seller of this Agreement are within such Sellers powers,
have been duly authorized by all necessary action, and do not contravene in any
material respect any Requirement of Law or Contractual Obligation of Sellers. As
used herein, "Requirement of Law" shall mean, as to any Person, the certificate
of incorporation and bylaws or other organizational or governing documents of
such Person, if applicable, and any law, treaty, rule or regulation, or
determination of an arbitrator or any court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject. As used herein,
"Contractual Obligation" shall mean, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of its property is bound. As
used herein, "Person" shall mean an individual or any corporation, association,
partnership, joint venture, estate, trust or other legal entity, including any
Governmental Authority. As used herein, "Governmental Authority" shall mean any
nation or government, any state or other political subdivision thereof, and any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
(c) Government and Other Consents. No authorization or approval or
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other action by, and no notice to or filing with, any Governmental Authority is
required to be obtained or made, and no consent of any third party is required
to be obtained by, each Seller for the due execution, delivery and performance
by each Seller of this Agreement.
(d) Enforceable Obligations. This Agreement has been duly executed and
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delivered on behalf of each Seller and constitutes the legal, valid and binding
obligation of each of the Sellers enforceable against each Seller in accordance
with its terms and conditions, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity.
(e) No Litigation. No claim, action, suit, investigation or proceeding
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of or before any arbitrator or Governmental Authority is pending or, to the
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knowledge of each Seller, threatened by or against each Seller with respect to
the Company, this Agreement or any of the transactions contemplated hereby. To
the best of Sellers' knowledge, no judgment, order, writ, injunction, decree or
award issued by any Governmental Authority is applicable to any Seller which
affects any of the Shares of the Company, this Agreement or any of the
transactions contemplated hereby.
(f) Ownership of the Shares. Each Seller is the owner of record and
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beneficially of the number of issued and outstanding shares listed in Schedule
A. All of the Shares are free and clear of any liens, claims and encumbrances
(collectively, "Encumbrances"). Each Seller has the right to transfer title to
the Shares to the Purchaser. There are no commitments, agreements or rights
relating to the purchase, sale or other disposition of the Shares or any
interest therein (including, without limitation, any subscription agreement,
preemptive right or right of first refusal). None of the Shares are subject to
any voting trust, voting agreement, or other similar agreement or understanding
with respect to the voting or control thereof, nor is any proxy in existence
with respect to any of the Shares. Upon the sale of the Shares to the Purchaser
pursuant to this Agreement, the Purchaser will own the Shares free and clear of
all Encumbrances.
(g) Disclosure. No representation or warranty made by Sellers in this
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Agreement and in any schedule or exhibit hereto, to the best knowledge of
Sellers, contains any untrue statement of material fact or omits any material
fact in order to make the statements made and information contained therein as
of the date hereof not misleading.
(h) Brokers, Finders. The Seller has no liability or obligation to pay
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any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Purchaser could become
liable or obligated.
(i) Investment Intent. The Stock being acquired by the Sellers are for
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their own accounts and not with a view to distribution within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"). The Sellers
acknowledge that no registration statement relating to the Stock has been filed
under the Securities Act or any applicable state securities laws, and that the
Stock must be held by it for an indefinite period of time unless the Stock is
subsequently registered under the Securities Act and state securities laws or
unless an exemption from any such applicable registration requirement is
available, and the Sellers acknowledge that there is no assurance or obligation
as to any such registration or exemption.
Section 2.02 Representations of the Sellers as to the Company. Each Seller
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represents and warrants to the Purchaser that the following is true and correct
with respect to the Company as of the date hereof and shall be true and correct
as of the Closing Date.
(a) Organization, Standing and Qualification of the Company. The
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Company is a corporation duly organized, validly existing and in good standing
under the laws of California and the Company has all necessary corporate power
and authority to engage in the business in which it is presently engaged.
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Sellers have delivered to the Purchaser true, correct and complete copies of the
certificate of incorporation and bylaws of the Company, and all amendments
thereto.
(b) Capital Structure of the Company. The authorized capital stock of
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the Company consists of 50,000,000 shares of common stock without par value and
5,000,000 shares preferred stock without par value, of which 4,857,500 shares of
the Company's common stock are issued and outstanding and 950,000 shares of the
Company's preferred stock are issued and outstanding. No other class or series
of capital stock of the Company is or has been authorized, nor has the Company
authorized or issued, nor does it have outstanding, any other securities
(including, without limitation, options, warrants, conversion privileges or
other rights, contingent or otherwise, to purchase any capital stock or other
securities of the Company). All of the Shares and Preferred Shares are duly
authorized, validly issued, fully paid and non-assessable. All of the Shares and
Preferred Shares were issued in compliance with all applicable Requirements of
Law (including securities laws) and in compliance with the certificate of
incorporation and bylaws of the Company. There are no outstanding subscriptions
for any securities to be issued by the Company.
(c) No Violation of Statute or Breach of Contract. To the best
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knowledge of the Sellers, the Company is not in default under, or in violation
of, (a) any material applicable Requirement of Law, or (b) any material
Contractual Obligation. The Company has not received notice that any Person
claims that the Company has committed such a default or violation.
(d) Government and Other Consents. No consent, authorization, license,
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permit, registration or approval of, or exemption or other action by, any
Governmental Authority is required to be obtained or made, and no consent of any
third party is required to be obtained by the Company in connection with the
execution and delivery of this Agreement or with the consummation of the
transactions contemplated hereby.
(e) Effect of Agreement. The execution and delivery of this Agreement
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by the Sellers, performance of the obligations of the Sellers hereunder and
consummation of the transactions contemplated hereby will not (i) result in a
breach or violation of any Requirement of Law applicable to the Company; (ii)
result in the breach of, or be in conflict with, any term, covenant, condition
or provision of, any Contractual Obligation of the Company; or (iii) result in
the creation or imposition of any Encumbrance upon any assets of the Company.
(f) Financial Statements. The unaudited consolidated balance sheet and
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income statement of the Company as of December 31, 2003, (the "Financial
Statements") (as set forth in Schedule C attached hereto) shall be complete and
accurate and fairly present the assets and liabilities of the Company as of the
dates and for the periods therein specified in accordance with generally
accepted accounting principles, unless otherwise stated or disclosed by the
Company.
(g) Assets and Business. The Company owns the tangible assets listed in
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its Financial Statements (plus tangible assets acquired after the date hereof
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and minus tangible assets disposed of in the ordinary course of business after
the date hereof) free and clear of all Encumbrances except for those created in
the ordinary course of business.
(h) Absence of Undisclosed Liabilities. Except as included in the
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Financial Statements and except for liabilities which arise after the date of
the Financial Statements in the ordinary course of business, to the best of
Sellers' knowledge, the Company does not have any material debt, liability, or
obligation as of the Closing Date of any nature, accrued, absolute or
contingent, due or to become due, liquidated or unliquidated (each, "Undisclosed
Liability"). For purposes of this subsection 2.01(h), a liability shall be
deemed to be material if it exceeds 5% of the Company's assets as shown on the
Financial Statements.
(i) Tax Returns and Payments. All income tax returns, federal, state,
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local, foreign and other, including, without limitation, all federal income tax
returns and reports for each fiscal year of the Company through the fiscal year
ended December 31, 2002 required to be filed by and/or on behalf of the Company
in respect of any income taxes (including without limitation all foreign,
federal, state, county and local income taxes) have been filed, and the Company
has paid all income taxes shown thereon as owing except where the failure to
file or to pay income taxes would not have a material adverse affect on the
financial condition of the Company. There are no deficiency assessments against
the Company with respect to any foreign, federal, state, local or other taxes.
There are no outstanding agreements or waivers extending the period of
limitation applicable for assessment or collection for any federal, state, local
or foreign tax, or for the filing of any tax return, in respect of the Company
for any period. The Sellers have heretofore made available to the Purchaser
copies of all federal, state, local and foreign tax returns or reports of the
Company filed prior to the Closing Date. To Sellers' best knowledge, all tax
returns filed by or on behalf of the Company are materially true, correct and
complete. To the best knowledge of the Sellers, all taxes that the Company is or
was required to withhold or collect (including, without limitation, payroll
taxes) have been duly withheld or collected and paid to the proper Governmental
Authority.
(j) Litigation. No claim, action, suit, or other proceeding against the
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Company is pending or, to the knowledge of Sellers, is threatened before or by
any court, administrative or regulatory body, or other Governmental Authority.
The Sellers know of no investigation of the Company by any administrative agency
of any federal, state or local government. No judgment, order, writ, injunction,
decree or award issued by any Governmental Authority is applicable to the
Company.
(k) Accounts, Powers of Attorney. There are no persons holding a power
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of attorney on behalf of the Company or otherwise holding the right to act as an
agent on behalf of the Company.
(l) Minute Books. All stock books, stock ledgers and minute books
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(collectively the "Minute Books")of the Company have been made available to
Purchaser for review and such Minute books are complete and accurate.
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(m) Permits, Licenses, Etc. No franchise, license, permit, certificate,
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authorization, right or other approval issued or granted by any Governmental
Authority to or for the benefit of the Company is in existence or effect, except
for the Company's incorporation in California and the Company's authorization to
transact business in California.
(n) Officers; Directors. Schedule D contains a complete and correct
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list of all of the officers and directors of the Company.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Section 3.01 The Purchaser hereby represents and warrants to the
Sellers as follows:
(a) Existence. The Purchaser is a corporation duly organized and validly
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existing under the laws of the State of Nevada.
(b) Authorization; No Violation. The execution, delivery and performance by
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the Purchaser of this Agreement are within the Purchaser's corporate powers and
have been duly authorized by all necessary action, and do not contravene in any
material respect any Requirement of Law or Contractual Obligation of the
Purchaser.
(c) Government Authorization. No authorization or approval or other action
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by, and no notice to or filing with, any Governmental Authority is required to
be obtained or made by the Purchaser for the due execution, delivery and
performance by the Purchaser of this Agreement.
(d) Enforceable Obligations. This Agreement has been duly executed and
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delivered on behalf of the Purchaser and constitute the legal, valid and binding
obligations of the Purchaser enforceable against the Purchaser in accordance
with their terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity.
(e) No Litigation. No claim, action, suit, investigation or other
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proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Purchaser, threatened by or against the Purchaser with
respect to this Agreement.
(f) Investment Intent. The Shares are being acquired by the Purchaser for
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its own account and not with a view to distribution within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"). The Purchaser
acknowledges that there is no existing public market for the Shares and that no
registration statement relating to the Shares has been filed under the
Securities Act or any applicable state securities laws, and that the Shares must
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be held by it for an indefinite period of time unless the Shares are
subsequently registered under the Securities Act and state securities laws or
unless an exemption from any such applicable registration requirement is
available, and the Purchaser acknowledges that there is no assurance or
obligation as to any such registration or exemption.
(g) Capital Structure. Schedule E contains a list of the Purchaser's
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authorized stock, all outstanding stock and all stock which the Purchaser may be
obligated to issue in the future under agreements or arrangement currently in
effect, including but not limited to common stock, preferred stock, warrants,
options, stock underlying conversion privileges on debt instruments and stock
obligated to be issued in relation to any transactions other than this
transaction. No other class or series of capital stock of the Purchaser is or
has been authorized, nor has the Purchaser authorized or issued, nor does it
have outstanding, any other securities (including, without limitation, options,
warrants, conversion privileges or other rights, contingent or otherwise, to
issue any capital stock or other securities of the Purchaser). All of the Shares
and Preferred Shares are duly authorized, validly issued, fully paid and
non-assessable. All of the Shares and Preferred Shares were issued in compliance
with all applicable Requirements of Law (including securities laws) and in
compliance with the certificate of incorporation and bylaws of the Purchaser.
There are no outstanding subscriptions for any securities to be issued by the
Company.
(h) Financial Statements. The audited consolidated balance sheet and income
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statement of the Company as of December 31, 2003 and accompanying schedules and
notes, (the "Financial Statements"-- as set forth in Schedule F attached hereto)
shall be complete and accurate and fairly present the assets and liabilities of
the Purchaser as of the dates and for the periods therein specified.
(i) Liabilities. Schedule G contains a detailed list of all of the
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Purchaser's liabilities, including the name of creditor and the amount owed to
that creditor.
(j) Absence of Undisclosed Liabilities. Except as included in the Financial
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Statements and except for liabilities which arise after the date of the
Financial Statements in the ordinary course of business, to the best of
Purchaser's knowledge, the Purchaser does not have any material debt, liability,
or obligation as of the Closing Date of any nature, accrued, absolute or
contingent, due or to become due, liquidated or unliquidated (each, "Undisclosed
Liability"). For purposes of this subsection 3.01(1), a liability shall be
deemed to be material if it exceeds 5% of the Purchaser's assets as shown on the
balance sheet.
(k) Litigation. Other than those listed on Schedule H attached hereto,
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which includes an estimate of the financial exposure presented by such
litigation to the Purchaser, no claim, action, suit or other proceeding against
the Purchaser is pending, or to the knowledge of Purchaser, is threatened before
or by any court, administrative or regulatory body, or other Governmental
Authority. The Purchaser know of no investigation of the Company by any
administrative agency of any federal, state or local government. No judgment,
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order, writ, injunction, decree or award issued by any Governmental Authority is
applicable to the Company.
(l) Officer and Directors. Schedule I contains a complete and correct list
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of all of the officers and directors of the Purchaser.
ARTICLE IV.
CONDITIONS TO CLOSING
Section 4.01 Conditions to Purchaser's Obligations. The obligation of the
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Purchaser to purchase the Shares at the Closing is subject to the fulfillment on
or prior to the Closing Date of the following conditions:
(a) Representations and Warranties Correct; Performance of Obligations. The
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representations and warranties made by the Sellers in Article II hereof shall be
true and correct in all material respects when made, and shall be true and
correct in all material respects on the Closing Date with the same force and
effect as if they had been made on and as of the Closing Date. The Sellers shall
have performed in all material respects all obligations and conditions herein
required to be performed or observed by them on or prior to the Closing Date.
(b) Qualifications. All actions and steps necessary to assure compliance
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with applicable federal and state securities laws shall have been duly obtained
and shall be effective on and as of the Closing, except for such filings as are
required or permitted by state or federal securities laws subsequent to the
Closing.
(c) Dividends. The Company shall not have declared or paid any dividend or
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otherwise changed its capitalization between the date hereof and the Closing
Date.
(d) Financial Statements. Purchaser shall have received and approved the
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Financial Statements of the Company for the period ended December 31, 2002.
Section 4.02 Conditions to Obligations of the Sellers. The Sellers'
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obligation to sell the Shares at the Closing is subject to the fulfillment on or
prior to the Closing Date of the following conditions:
(a) Representations and Warranties Correct; Performance of Obligations. The
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representations and warranties of the Purchaser in Article III hereof shall be
true and correct in all material respects when made, and shall be true and
correct in all material respects on the Closing Date with the same force and
effect as if they had been made on and as of the Closing Date, and the Purchaser
shall have performed in all material respects all obligations and conditions
herein required to be performed by it on or prior to the Closing Date.
(b) Incumbency Certificate of the Purchaser. The Sellers shall have
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received a certificate of the Purchaser in its capacity as Secretary of the
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Purchaser, certifying the names and signatures of officers of the Purchaser
authorized to sign this Agreement and the other documents to be delivered
hereunder on behalf of the Purchaser.
(c) Audited Financial Statements. Sellers shall have received and approved
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the Financial Statements of the Purchaser for the period ended December 31,
2002.
ARTICLE V.
CLOSING DELIVERIES
Section 5.01 Sellers' Deliveries. At the Closing, in addition to any other
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documents or agreements required under this Agreement, the Sellers shall deliver
or cause to be delivered to the Purchaser the following:
(a) Stock certificates evidencing the Shares duly endorsed in blank, or
accompanied by stock powers duly executed in blank, in a form reasonably
satisfactory to the Purchaser.
(b) Copies of all consents and approvals obtained, and all registrations,
qualifications, declarations, filings and notices made, by the Sellers pursuant
to Section 4.01(b) hereof.
(c) Such other documents, assignments, instruments of conveyance and
certificates as reasonably may be required by the Purchaser to consummate this
Agreement and the transactions contemplated hereby.
Section 5.02 Purchaser's Deliveries. At the Closing, in addition to any
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other documents or agreements required under this Agreement, the Purchaser shall
deliver or cause to be delivered to the Sellers, the following:
(a) Stock certificates and Preferred Stock Agreements in accordance with
the instructions of the Sellers.
(b) Resignation letter from each officer of the Purchaser.
(c) Such other documents, assignments, instruments of conveyance and
certificates as reasonably may be required by the Sellers to consummate this
Agreement and the transactions contemplated hereby.
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ARTICLE VI.
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
Section 6.01 Survival of Representations. The parties agree that,
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notwithstanding any right or ability of the Purchaser fully to investigate the
affairs of the Company, any knowledge of facts determinable by the Purchaser
pursuant to such investigations or right of or ability to investigate, the
Purchaser has the right to rely fully upon the representations, warranties,
covenants and agreements of the Sellers contained in this Agreement and on the
accuracy of any schedule, exhibit, document or certificate annexed hereto. All
representations and warranties of the parties contained herein shall survive the
Closing until the expiration of the time periods set forth in Section 6.04.
Section 6.02 Indemnification by the Sellers.
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(a) Subject to the provisions of this Article VI, each Seller shall
indemnify and hold harmless the Company, the Purchaser and their affiliates and
the officers, partners, directors, employees, agents, owners, successors and
assigns thereof from such Seller's Allocable Portion of any loss, damage,
liability or expense, including, without limitation, reasonable expenses of
investigation and reasonable attorneys' fees and expenses incurred in connection
with any action, suit or proceeding against any thereof ("Adverse Consequence")
incurred or suffered by such party and arising out of or resulting from (i) any
material breach of any representation or warranty contained in Article II of
this Agreement, (ii) any material breach of any covenant made by Sellers
hereunder, or (iii) any lawsuit or other proceeding or claim brought by any
third party after the Closing against the Company, the Purchaser, or any of
their respective officers, partners, directors, employees, agents, owners,
successors and assigns with respect to any acts or omissions of the Company
prior to the Closing. For purposes of this Section 6.02(a), the term "material"
means a breach which would have a material adverse effect on the Company's
business, taken as a whole. The term "Allocable Portion" with respect to a
Seller means the number of Shares owned by such Seller divided by the number of
Shares owned by all Sellers.
Section 6.03 Indemnification by the Purchaser.
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(a) Subject to the provisions of this Article VI, the Purchaser shall
indemnify and hold harmless the Sellers, their affiliates and the officers,
partners, directors, employees, agents, owners, successors and assigns thereof
any loss, damage, liability or expense, including, without limitation,
reasonable expenses of investigation and reasonable attorneys' fees and expenses
incurred in connection with any action, suit or proceeding against any thereof
("Adverse Consequence") incurred or suffered by such party and arising out of or
resulting from (i) any material breach of any representation or warranty
contained in Article III of this Agreement, (ii) any material breach of any
covenant made by Purchasers hereunder, or (iii) any lawsuit or other proceeding
or claim brought by any third party after the Closing against the Officers,
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Directors, Sellers, or any of their respective officers, partners, directors,
employees, agents, owners, successors and assigns with respect to any acts or
omissions of the Purchaser prior to the Closing.
(b) Further, should the liabilities of the Purchaser, or the litigation
against the Purchaser, result in the actual liabilities, settlements,
obligations, compensation, amounts due, or payments related thereto exceeding
those stated or estimated herein, the Purchaser will issue to the Sellers, on a
pro rata basis, additional shares of Stock in a value equivalent to the amount
by which the liabilities and litigation were understated, divided by the average
closing price of the Purchaser's common stock during the 20 trading days prior
to such transfer.
(c) If, within the first ninety days following the date of this Agreement,
it is determined that the combined liabilities of the Purchaser and obligations
due under litigation exceed the amount disclosed herein by in excess of fifty
percent (50%), the Sellers may, at their option, rescind this transaction.
Section 6.04 Notice Claim. Purchaser, on the one hand, and each of the
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Sellers, on the other hand, shall promptly notify the other of any claim, suit
or demand of which the notifying party has actual knowledge which entitles it to
indemnification under this Article VI, provided, however, that the delay or
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failure of any party required to provide such notification shall not affect the
liability of the indemnifying party hereunder except to the extent the
indemnifying party is harmed by such delay or failure.
Section 6.05 Defense. If the liability or claim for which indemnification
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under this Article VI is sought is asserted by a third party, the indemnifying
party shall have, at its election, the right to defend any such matter at its
sole cost and expense through counsel chosen by it and reasonably acceptable to
the indemnified party (provided that the indemnifying party shall have no such
right if it is contesting its liability under this Article VI). If the
indemnifying party so undertakes to defend, the indemnifying party shall
promptly notify the indemnified party hereto of its intention to do so. The
indemnifying party shall not, without the indemnified party's written consent,
settle or compromise any claim or consent to an entry of judgment which does not
include as an unconditional term thereof a release of the indemnified party.
Section 6.06 Cooperation and Conflicts. Each party agrees in all cases to
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cooperate with the indemnifying party and its counsel in the defense of any such
liabilities or claims. The indemnifying party and the indemnified party or
parties may be represented by the same counsel unless such representation would
be inappropriate due to conflicts of interest between them. In addition, the
indemnified party or parties shall at all times be entitled to monitor and
participate in such defense through the appointment of counsel of its or their
own choosing, at its or their own cost and expense.
ARTICLE VII.
MISCELLANEOUS
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Section 7.01 Waiver. Any extension or waiver with respect to any agreement
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or condition contained herein or the breach thereof shall be valid only if set
forth in a separate instrument in writing signed by the party to be bound
thereby. Any waiver of any term or condition shall not be construed as a waiver
of any subsequent breach or a subsequent waiver of the same term or condition,
or a waiver of any other term or condition, of this Agreement. The failure of
any party to assert any of its rights hereunder shall not constitute a waiver of
any such rights.
Section 7.02 Further Assurances. The Sellers jointly and severally agree,
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without further consideration, to execute and deliver following the Closing such
other instruments of transfer and take such other action as the Purchaser may
reasonably request in order to put the Purchaser in possession of, and to vest
in the Purchaser, good and valid title to the Shares free and clear of any
Encumbrances in accordance with this Agreement and to otherwise consummate the
transactions contemplated by this Agreement.
Section 7.03 Entire Agreement; Amendment. This Agreement and the other
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documents delivered pursuant hereto constitute the full and entire understanding
and agreement among the parties hereto with regard to the subject matter hereof
and thereof and supersede all prior and contemporaneous agreements and
understandings, oral or written, among the parties hereto with respect to such
subject matter. Any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived only with the written consent of the
parties hereto.
Section 7.04 Severability. If any term or other provision of this Agreement
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is invalid, illegal or incapable of being enforced by any law, rule or
regulation or public policy, all other terms and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby are consummated as
originally contemplated to the greatest extent possible.
Section 7.05 Notices, etc. All notices and other communications required or
------------
permitted hereunder shall be in writing and shall be delivered personally,
mailed by first-class mail, postage prepaid, or sent by reputable overnight
courier service addressed (a) if to the Purchaser, at the address set forth on
Section 1.02 hereto or at such other address as such Purchaser shall have
furnished to the Sellers by 10 days' notice in writing, with a copy to (b) if to
any Sellers, at the addresses set forth on Exhibit A hereto, or such other
address as such Sellers shall have furnished to the Purchaser by 10 days' notice
in writing.
Section 7.06 Expenses. All costs and expenses, including, without
--------
limitation, fees and disbursements of counsel, financial advisors and
accountants, incurred in connection with the negotiation, preparation, execution
12
and delivery of this Agreement and consummation of the transactions contemplated
hereby shall be paid by the party incurring such costs and expenses; however,
the Company shall pay, at the Closing, the legal fees and disbursements of legal
counsel to the Sellers and the Purchaser shall pay for the audit of the Company.
Section 7.07 Governing Law; Jurisdiction. This Agreement shall be governed
---------------------------
in all respects by the laws of the State of California without application of
principles of conflicts of laws. Any action or proceeding seeking to enforce any
provision of, or based on any right arising out of, this Agreement may be
brought against any of the parties in any state or federal court located in the
State of California, County of Los Angeles, and each of the parties consents to
the jurisdiction of such courts in any such action or proceeding and waives any
objection to venue laid therein. Process in any action or proceeding referred to
in the preceding sentence may be served on any party anywhere in the world.
Section 7.08 Benefit of Agreement; Assignment. This Agreement will apply
----------------------------------
to, be binding in all respects upon, and inure to the benefit of the successors
and permitted assigns of the parties. This Agreement may not be assigned by
operation of law or otherwise by the Purchaser without the express written
consent of the Sellers (which consent may be granted or withheld in the sole
discretion of the Sellers). Notwithstanding the foregoing, this Agreement and
the rights hereunder may be (i) assigned as collateral security to any lender of
funds to the Company, and (ii) assigned by the Purchaser after the Closing to
the beneficial owners of the Purchaser or to any subsequent purchaser or other
holder of all or a portion of the Shares, provided that in no event shall the
Purchaser be relieved from its obligations hereunder in connection with any such
assignment.
Section 7.09 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES
--------------------
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY OR AGAINST IT
ON ANY MATTERS WHATSOEVER, IN CONTRACT OR IN TORT, ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS AGREEMENT.
Section 7.10 Titles and Subtitles. The titles of the Sections of this
---------------------
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
Section 7.11 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
Section 7.12 Representation Disclaimer. Sellers shall not be deemed to have
-------------------------
made to Purchaser any representation or warranty other than as expressly made by
Sellers in Article II hereof. Without limiting the generality of the foregoing,
and notwithstanding any otherwise express representations and warranties made by
Sellers in Article II hereof, Seller makes no representation or warranty to
Purchaser with respect to:
13
(a) any projections, estimates or budgets heretofore delivered to or
made available to Purchaser of future revenues, expenses or expenditures or
future results of operations; or
(b) except as expressly covered by a representation and warranty
contained in Article II hereof, any other information or documents (financial or
otherwise) made available to Purchaser or its counsel, accountants or advisers
with respect to the Company.
Section 7.13 Purchaser's Due Diligence Investigation. Purchaser has had
-----------------------------------------
over 60 days (such period, "Purchaser's Due Diligence Period") in which to
conduct its confirmatory due diligence. During such Purchaser's Due Diligence
Period, Purchaser and its accountants, consultants, and advisers have been
permitted to review the premises, facilities, books and records and contracts of
the Company, and to conduct interviews with the Company's senior management
regarding the business, operations, financial condition and results of
operations of the Company, for the purpose of confirming the accuracy of the
representations and warranties of Sellers contained herein. Purchaser had the
right, at any time during the Purchaser's Due Diligence Period, at Purchaser's
sole discretion and without any liability or obligation, to terminate all
negotiations with the Sellers, except for the Purchaser's obligation to pay for
an audit of the Company.
Section 7.14 Sellers' Due Diligence Investigation. Sellers have had over 60
-------------------------------------
days (such period, "Sellers' Due Diligence Period") in which to conduct its
confirmatory due diligence. During such Sellers' due diligence period, Sellers
and their accountants, consultants, and advisers were permitted to review the
premises, facilities, books and records and contracts of the Purchaser, and to
conduct interviews with the Purchaser's senior management regarding the
business, operations, financial condition and results of operations of the
Company, for the purpose of confirming the accuracy of the representations and
warranties of Purchaser contained herein. Sellers had the right, at any time
during the Sellers' Due Diligence Period, at Sellers' sole discretion and
without any liability or obligation, to terminate all negotiations with the
Purchaser.
Section 7.15 Press Releases and Public Announcements. No party shall issue
---------------------------------------
any press release or make any public announcement relating to the subject matter
of this Agreement prior to the Closing without the prior approval of the
Purchaser and the Sellers; provided, however, that any party may make any public
disclosure it believes in good faith is required by applicable law or any
listing or trading agreement concerning its publicly-traded securities (in which
case the disclosing party will use its efforts to advise the other parties prior
to making the disclosure).
Section 7.16 Rule 144. The Parties agree that the Common Stock, the
--------
Preferred Stock and the Shares are restricted securities as defined by
Securities and Exchange Commission Rule 144.
14
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year set forth in the heading hereof.
Thaon Communications, Inc.
By:/s/ Xxxx Xxxxxxx, President
----------------------------
Xxxx Xxxxxxx, President
Practice Xpert Service Corp.
By:
----------------------------
/s/Xxxxxxxx Doctor
----------------------------
Xxxxxxxx Doctor, Shareholder
/s/ Xxxxxx Xxxxxxxx
----------------------------
Xxxxxx Xxxxxxxx, Shareholder
/s/Zima Xxxxx
----------------------------
Zima Xxxxx, Shareholder
/s/ Xxxxxxx Xxxxxxx
----------------------------
Xxxxxxx Xxxxxxx, Shareholder
15
SCHEDULES
A. List of Sellers
B. Distribution of Stock and Preferred Stock to Sellers
C. Financial Statements of Practice Xpert Services Corp.
D. Officers and Directors of Practice Xper Services Corp.
E. Capital Structure of Thaon Communications, Inc.
F. Financial Statements of Thaon Communications, Inc.
G. List of Liabilities of Thaon Communications, Inc.
H. List of Thaon Communcations, Inc. Litigation
I. Officers and Directors of Thaon Communications, Inc.
16
SCHEDULE A - LIST OF XXXXXXX
Xxxxxx Xxxxxxxx
Xxxxxxxx Doctor
Zima Xxxxx
Xxxxxxx Xxxxxxx
SCHEDULE B - DISTRIBUTION OF STOCK TO SELLERS
Name Shares of PXSC Common Shares Preferred Shares
of Thaon of Thaon
--------------- -------------- -------------- ----------------
Xxxxxx Xxxxxxxx 1,062,500 36,373,818 437,448
Xxxxxxxx Doctor 1,303,125 44,611,418 536,517
Zima Xxxxx 1,303,125 44,611,418 536,517
Xxxxxxx Xxxxxxx 812,500 27,815,272 334,519
SCHEDULE C
FINANCIAL STATEMENTS OF PRACTICEXPERT
PRACTICEXPERT SERVICES CORPORATION
CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 2002
Unaudited
CURRENT ASSETS:
Cash 9,774
Restricted Cash 182,362
Accounts Receivable 6,399
Prepaid Expenses 22,478
----------------
Total Current Assets 221,013
----------------
PROPERTY & Equipment:
Furniture & Office Equipment 578,382
Accum Depreciation - Furniture & Office Equip (489,874)
PXSC Software 191,326
Accum Depreciation - Software (18,417)
----------------
Total Property & Equipment 261,417
----------------
OTHER ASSETS:
Goodwill 2,394,647
Patents & Trademarks 2,500
Deposits 7,235
Cash Value Life Insurance 8,263
Organization Costs 30,147
----------------
Total Other Assets 2,442,792
----------------
----------------
TOTAL ASSETS 2,925,222
================
CURRENT LIABILITIES:
Accounts Payable 62,384
Bank Loan Payable 245,476
Curent Portion - LT Notes 220,435
Accrued Liabilities 94,036
----------------
Total Current Liabilities 622,331
----------------
LONG TERM LIABILITIES:
Long Term Notes Payable 372,722
----------------
Total Liabilities 995,053
----------------
EQUITY:
Preferred Stock 950,000
Paid in Capital 1,074,286
Retained Earnings (94,117)
----------------
Total Equity 1,930,169
----------------
----------------
TOTAL EQUITY AND LIABILITIES 2,925,222
================
PRACTICEXPERT SERVICES CORPORATION
INCOME STATEMENT
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2002
Unaudited
Revenue 2,689,250
Expenses
Employee Related Expenses 1,869,184
Computers, Office Equip & Supplies 260,155
Rent/Occupancy Costs 164,772
Communications 137,184
Finance/Interest 101,966
Marketing/Bus. Dev./Travel 87,740
Depreciation 72,360
Legal/Professional/Knowledge 105,261
------------------
Total Expenses 2,731,122
------------------
------------------
Net Income (41,872)
==================
SCHEDULE D
OFFICERS AND DIRECTORS OF PRACTICEXPERT
OFFICERS
Xxxxxxxx Doctor - Chief Executive Officer
Zima Xxxxx - Secretary
Xxxxxxx Xxxxxxx - Chief Financial Officer
DIRECTORS
Xxxxxxxx Doctor
Xxxxxx Xxxxxxxx
Xxxx Xxxxx
Xxxxxxx Xxxxxxx
Xxxxxx Xxxxxx
Schedule E
Capital Structure of Thaon Communications
COMMON STOCK NUMBER CONVERSION RIGHTS VOTING RIGHTS
----------------------- ---------------- ---------------------------- ---------------------
Authorized 200,000,000 N/A 1 vote per share
Outstanding N/A 1 vote per share
PREFERRED STOCK NUMBER CONVERSION RIGHTS VOTING RIGHTS
----------------------- ---------------- ---------------------------- ---------------------
Authorized 50,000,000
Series A Outstanding 500,000 95% of market, 6,000,000 cap 1 vote per share
Series B Outstanding 450,697 10 common for each Pref B As If Converted
Series C Outstanding 0 15 common for each Pref C As If Converted
Series D Outstanding 2,100,000 95% of market, no cap 25 Votes per share
Series E Outstanding 120,000 2 common for each Pref E 1 vote per share
Series F Outstanding 63,000 10 common for each Pref F As If Converted
SCHEDULE F
FINANCIAL STATEMENTS FOR THAON COMMUNICATIONS
SEE FINANCIAL STATEMENTS AS FILED IN THAON COMMUNICATIONS
10KSB FOR YEAR ENDED 2002
Schedule G
List Of Liabilities for Thaon Communications, Inc
Vendor/Payee Amount
-------------------------- -----------
1st Global Stock Transfer 5,212.00
ADP Investor Services 9,168.29
Advanta Bank Corp. 6,712.03
Airborne 195.99
Xxxx Xxxxxxx 1,210.06
Arizona Litho 1119.00
Complex Floor Covering 1,500.00
CT Corporation 204.00
Xxxxx & Associates 14,680.09
Depository Trust Co. 6,420.00
Xxxxxx Corp 2,500.00
Franchise Tax Board 774.47
Global Crossing 154.35
Xxxxxx Xxxxxxx 3,601.50
EdgarEyes, LLC 254.00
Xxxxxx Consultancy 8,565.00
Innovative Concepts 1,127.25
Xxxxx & Xxxxxx 297.00
Xxxxxx Xxxxxxxx 1062.77
Xxxxxxx Communications 218.00
National Financial Comm. 1,190.08
Olympic Town, LLC 72,326.00
Xxxxxx & Yap 4,401.44
Pacific Xxxx 216.48
PR Newswire 7,180.00
Staples 506.25
TCAST Communications 154.07
Xxxxxx Xxxxxxx 135.00
Unishippers 314.40
Urtnowski & Zaharoni 2,917.50
Wantelligent Comm Svs 2,750.00
Xxxxxxx Law Firm 61,628.87
Accrued Payroll: A Xxxxxxx 21,533.08
Note Payable: A Xxxxxxx 19,500.00
Schedule H
List Of Litigation for Thaon Communications, Inc.
1.) Xxxxxxx Law Firm vs. Thaon Communications, Xxxx Xxxxxxx, Xxxx Mondo,
Xxxxx Xxxxxx, Xxxxxx XxXxxxx and Xxxxx Xxxxxxx: Past Due Legal Fees
2.) Olympic Town, LLC vs Thaon Communications: Past Due Rent
Schedule I
List of Officers and Directors for Thaon Communications, Inc.
OFFICERS
President/CEO Xxxx Xxxxxxx
CFO/Secretary/Treasurer Xxxxxxx Xxxxxx
DIRECTORS
Chairman Xxxx Xxxxxxx
Director Xxxxx Xxxxxxx
Director Xxxxx Xxxxxx
