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EXHIBIT 10.01
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made this ___
day of January 2000, by and among XxxxxxxXxxxxx.xxx, Inc., a Nevada
corporation ("Insider NV"); XxxxxxxXxxxxx.xxx, Inc., a Florida corporation
("Insider FL"); and the persons listed in Exhibit A-1 hereof who are the
owners of record of all ownership interest of Insider FL who shall execute and
deliver the Agreement ("Insider FL Stockholders"), based on the following:
Recitals
Insider NV wishes to acquire all the ownership interest stock of Insider FL in
exchange for the common stock of Insider NV in a transaction intended to
qualify as a tax-free exchange pursuant to section 368(a)(1)(B) of the
Internal Revenue Code of 1986, as amended. The parties intend for this
Agreement to represent the terms and conditions of such tax-free
reorganization, which Agreement the parties hereby adopt.
Agreement
Based on the stated premises, which are incorporated herein by reference, and
for and in consideration of the mutual covenants and agreements hereinafter
set forth, the mutual benefits to the parties to be derived here from, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, it is hereby agreed as follows:
ARTICLE I
EXCHANGE OF STOCK
1.01 Exchange of Interests. On the terms and subject to the conditions set
forth in this Agreement, on the Closing Date (as defined in Section 1.05
hereof), the Insider FL Stockholders shall assign, transfer, and deliver to
Insider NV, free and clear of all liens, pledges, encumbrances, charges,
restrictions, or claims of any kind, nature, or description, all of their
respective ownership interest in Insider FL (the "Insider FL Shares") owned by
the Insider FL Stockholders which interests shall represent one hundred
percent (100%) of the ownership interest in Insider FL, and Insider NV agrees
to acquire such ownership interests on such date by issuing and delivering in
exchange therefor an aggregate of Two Million Four Hundred Eighty Thousand
(2,480,000) restricted shares of Insider NV common stock, par value $0.001 per
share, (the "Insider NV Common Stock"). Such shares of Insider NV Common
Stock shall be issued as set forth opposite the Insider FL Stockholders'
respective names in Exhibit A-1, or pursuant to such other instructions as the
Insider FL Stockholders shall provide Insider NV's registrar and transfer
agent.
1.02 Surrender of Insider NV share Certificates for Cancellation.
Contemporaneous with the Closing and the issuance of the certificates
representing the Insider NV Shares to the Insider FL Stockholders provided
herein, the Insider FL Stockholders shall deliver to Insider NV, certificates
representing Two Million Four Hundred Eighty Thousand (2,480,000) shares of
Insider NV common stock, held by the Insider FL Stockholders prior to the
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Closing Date, endorsed in blank or accompanied by stock powers executed in
blank, with all signatures medallion guaranteed (the "Canceled Insider NV
Shares). The Canceled Insider NV Shares shall then be canceled and returned
to the authorized but unissued shares of common stock of Insider NV. After
giving effect to the issuance of the new Insider NV Common Stock and the
cancellation of the old Insider NV Canceled Shares, the issued and outstanding
shares of Insider NV shall be 5,576,921.
1.03 Delivery of Certificates by Insider FL Stockholders. The transfer of
Insider FL Shares by the Insider FL Stockholders shall be effected by the
delivery to Insider NV at the Closing, certificates representing the Insider
FL Shares endorsed in blank or accompanied by stock powers executed in blank,
with all signatures medallion guaranteed.
1.04 Operation as Wholly-Owned Subsidiary. After giving effect to the
transaction contemplated hereby, Insider NV will own one hundred percent
(100%) of the ownership interest of Insider FL and Insider FL will be a
wholly-owned subsidiary of Insider NV.
1.05 Further Assurances. At the Closing and from time to time thereafter, the
Insider FL Stockholders shall execute such additional instruments and take
such other action as Insider NV may reasonably request, without undue cost to
the Insider FL Stockholders in order to more effectively sell, transfer, and
assign clear title and ownership in the Insider FL Shares to Insider NV.
1.06 Closing and Parties. The Closing contemplated hereby shall be held at a
mutually agreed upon time and place on or before January __, 2000, or on
another date to be agreed to in writing by the parties (the "Closing" or
"Closing Date"). The Agreement may be closed at any time following approval
by a majority of the stockholders of Insider NV Common Stock and the Insider
FL Stockholders. The Closing may be accomplished by wire, express mail,
overnight courier, conference telephone call or as otherwise agreed to by the
respective parties or their duly authorized representatives.
1.07 Closing Events.
(a) Insider NV Deliveries. Subject to fulfillment or waiver of the conditions
set forth in Article IV, Insider NV shall deliver to Insider FL at Closing all
the following:
(i) Incumbency and specimen signature certificates dated the Closing Date
with respect to the officers of Insider NV executing this Agreement and any
other document delivered pursuant hereto on behalf of Insider NV;
(ii)Copies of the resolutions of Insider NV's board of directors and
shareholder minutes or consents authorizing the execution and performance of
this Agreement and the contemplated transactions, certified by the secretary
of Insider NV as of the Closing Date;
(iii) The certificate contemplated by Section 4.02, duly executed by a duly
authorized officer of Insider NV;
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(iv) Certificates for Two Million Four Hundred Eighty Thousand (2,480,000)
shares of Insider NV Common Stock in the names of the Insider FL Stockholders
or their respective designees and in the amounts set forth in Exhibit "A-1."
In addition to the above deliveries, Insider NV shall take all steps and
actions as Insider FL and Insider FL Stockholders may reasonably request or as
may otherwise be reasonably necessary to consummate the transactions
contemplated hereby.
(b) Insider FL Deliveries. Subject to fulfillment or waiver of the conditions
set forth in Article V, Insider FL and/or Insider FL Stockholder's shall
deliver to Insider NV at Closing all the following:
(i) Incumbency and specimen signature certificates dated the Closing Date
with respect to the officers of Insider FL executing this Agreement and any
other document delivered pursuant hereto on behalf of Insider FL;
(ii) Copies of resolutions of the board of directors and of the stockholders
of Insider FL authorizing the execution and performance of this Agreement and
the contemplated transactions, certified by the secretary of Insider FL as of
the Closing Date;
(iii) The certificate contemplated by Section 5.03, executed by a duly
authorized officer of Insider FL; and
(iv) Certificates for Two Million Four Hundred Eighty Thousand (2,480,000)
shares of Insider NV Canceled Shares registered in the name of the Insider FL
Stockholders, which have been or will be marked "Canceled" by the registrar
and transfer agent of Insider NV.
In addition to the above deliveries, Insider FL shall take all steps and
actions as Insider NV may reasonably request or as may otherwise be reasonably
necessary to consummate the transactions contemplated hereby.
1.08. Termination. This Agreement may be terminated by the board of directors
of either Insider NV or Insider FL at any time prior to the Closing Date if:
(a) There shall be any actual or threatened action or proceeding before any
court or any governmental body which shall seek to restrain, prohibit, or
invalidate the transactions contemplated by this Agreement and which, in the
reasonable judgment of such board of directors, made in good faith and based
upon the advice of its legal counsel, makes it inadvisable to proceed with the
transactions contemplated by this Agreement; or
(b) Any of the transactions contemplated hereby are disapproved by any
regulatory authority whose approval is required to consummate such
transactions or in the reasonable judgment of such board of directors, made in
good faith and based on the advice of counsel, there is substantial likelihood
that any such approval will not be obtained or will be obtained only on a
condition or conditions which would be unduly burdensome, making it
inadvisable to proceed with the exchange;
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In the event of termination pursuant to paragraph (a) or (b) of Section 1.08,
no obligation, right, or liability shall arise hereunder, and each party shall
bear all of the expenses incurred by it in connection with the negotiation,
preparation, and execution of this Agreement and the transactions contemplated
hereby.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF INSIDER NV
As an inducement to, and to obtain the reliance of Insider FL, Insider NV
represents and warrants as follows:
2.01 Organization. Insider NV is, and will be on the Closing Date, a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Nevada and has the corporate power and is and will be
duly authorized, qualified, franchised, and licensed under all applicable
laws, regulations, ordinances, and orders of public authorities to own all of
its properties and assets and to carry on its business in all material
respects as it is now being conducted, and there are no other jurisdictions in
which it is not so qualified in which the character and location of the assets
owned by it or the nature of the material business transacted by it requires
qualification, except where failure to do so would not have a material adverse
effect on its business, operations, properties, assets or condition. The
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated by this Agreement in accordance with the terms
hereof will not, violate any provision of Insider NV's articles of
incorporation or bylaws, or other agreement to which it is a party or by which
it is bound.
2.02 Approval of Agreement. Insider NV has full power, authority, and legal
right and has taken, or will take, all action required by law, its articles of
incorporation, bylaws, and otherwise to execute and deliver this Agreement and
to consummate the transactions herein contemplated. The board of directors
and a majority of the shareholders of Insider NV has authorized and approved
the execution, delivery, and performance of this Agreement.
2.03 Capitalization. The authorized capitalization of Insider NV consists of
100,000,000 shares of capital stock all designated as common stock, $0.001
par value, of which 5,576,921 shares are issued and outstanding. All issued
and outstanding shares of Insider NV are legally issued, fully paid, and
nonassessable and not issued in violation of the preemptive or other right of
any person. There are no dividends or other amounts due or payable with
respect to any of the shares of capital stock of Insider NV.
2.04 Financial Statements.
(a) Insider FL and the Insider FL Stockholders have been provided with the
audited balance sheets of Insider NV as of October 31, 1999 and the related
statements of operations, stockholders' equity (deficit), and cash flows for
the fiscal years ended October 31, 1999 and 1998, and from December 26, 1986
(Inception) through October 31, 1999, including the notes thereto, and the
accompanying report of Xxxxx, Xxxxxx & Company, independent certified public
accountants.
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(b) The financial statements of Insider NV delivered pursuant to Section
2.04(a) have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved as explained
in the notes to such financial statements. The Insider NV financial
statements present fairly, in all material respects, as of their respective
dates, the financial position of Insider NV. Insider NV did not have, as of
the date of any such financial statements, except as and to the extent
reflected or reserved against therein, any liabilities or obligations
(absolute or contingent) which should be reflected therein in accordance with
generally accepted accounting principles, and all assets reflected therein
presently fairly the assets of Insider NV in accordance with generally
accepted accounting principles
2.05 Outstanding Warrants and Options. Insider NV has no existing warrants or
options, calls, or commitments of any nature relating to the authorized and
unissued Insider NV Common Stock.
2.06 Information. The information concerning Insider NV set forth in this
Agreement is complete and accurate in all material respects and does not
contain any untrue statement of a material fact or omit to state a material
fact required to make the statements made, in light of the circumstances under
which they were made, not misleading. Insider NV shall cause the schedules
delivered by it pursuant hereto and the instruments delivered to Insider FL
hereunder to be updated after the date hereof up to and including the Closing
Date.
2.07 Absence of Certain Changes or Events. Except as set forth in this
Agreement or the schedules hereto, since the date of the most recent Insider
NV balance sheet described in Section 2.04 and included in the information
referred to in Section 2.06 , there has not been (i) any material adverse
change in the business, operations, properties, level of inventory, assets, or
condition of Insider NV or (ii) any damage, destruction, or loss to Insider NV
(whether or not covered by insurance) materially and adversely affecting the
business, operations, properties, assets, or conditions of Insider NV.
2.08 Litigation and Proceedings. There are no material actions, suits, or
administrative or other proceedings pending or, to the knowledge of Insider
NV, threatened by or against Insider NV or adversely affecting Insider NV or
its properties, at law or in equity, before any court or other governmental
agency or instrumentality, domestic or foreign, or before any arbitrator of
any kind. Insider NV does not have any knowledge of any default on its part
with respect to any judgment, order, writ, injunction, decree, award, rule, or
regulation of any court, arbitrator, or governmental agency or
instrumentality.
2.09 Material Contract Defaults. Insider NV is not in default in any
material respect under the terms of any outstanding contract, agreement,
lease, or other commitment which is material to the business, operations,
properties, assets, or condition of Insider NV, and there is no event of
default or other event which, with notice or lapse of time or both, would
constitute a default in any material respect under any such contract,
agreement, lease, or other commitment in respect of which Insider NV has not
taken adequate steps to prevent such a default from occurring.
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2.10 No Conflict With Other Instruments. The execution of this Agreement and
the consummation of the transactions contemplated by this Agreement will not
result in the breach of any term or provision of, or constitute an event of
default under, any material indenture, mortgage, deed of trust, or other
material contract, agreement, or instrument to which Insider NV is a party or
to which any of its properties or operations are subject.
2.11 Insider NV Schedules. Insider NV has delivered to Insider FL the
following schedules, which are collectively referred to as the "Insider NV
Schedules" and which consist of the following separate schedules dated as of
the date of execution of this Agreement, all certified by a duly authorized
officer of Insider NV as complete, true, and accurate:
(a) A schedule containing copies of resolutions adopted by the board of
directors of Insider NV approving this Agreement and the transactions herein
contemplated;
(b) A schedule setting forth any other information, together with any required
copies of documents, required to be disclosed in the Insider NV Schedules by
Sections 2.01 through 2.10.
Insider NV shall cause the Insider NV Schedules and the instruments delivered
to Insider FL hereunder to be updated after the date hereof up to and
including a specified date not more than three business days prior to the
Closing Date. Such updated Insider NV Schedules, certified in the same manner
as the original Insider NV Schedules, shall be delivered prior to and as a
condition precedent to the obligation of Insider FL to close.
ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF
INSIDER FL AND THE INSIDER FL STOCKHOLDERS
As an inducement to, and to obtain the reliance of, Insider NV, Insider FL and
the Insider FL Stockholders represent and warrant as follows:
3.01 Organization. Insider FL is, and will be on the Closing Date, a
corporation duly organized, validly existing, and in good standing under the
laws of the Florida and has the corporate power and is and will be duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, and there are no other jurisdictions in which it is
not so qualified in which the character and location of the assets owned by it
or the nature of the material business transacted by it requires
qualification, except where failure to do so would not have a material adverse
effect on its business, operations, properties, assets or condition of Insider
FL. The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated by this Agreement in accordance
with the terms hereof will not, violate any provision of Insider FL's articles
of incorporation or bylaws, or other material agreement to which it is a party
or by which it is bound.
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3.02 Approval of Agreement. Insider FL has full power, authority, and legal
right and has taken, or will take, all action required by law, its articles of
incorporation, bylaws, or otherwise to execute and deliver this Agreement and
to consummate the transactions herein contemplated. The board of directors of
Insider FL have authorized and approved the execution, delivery, and
performance of this Agreement and the transactions contemplated hereby;
subject to the approval of the Insider FL Stockholders.
3.03 Capitalization. The authorized capitalization of Insider FL consists of
100,000 shares of capital stock, par value $1.00, of which as of the date
hereof Ten Thousand (10,000) shares are issued and outstanding. All issued
and outstanding share of Insider FL is legally issued, fully paid, and
nonassessable and not issued in violation of the preemptive or other right of
any person. There are no dividends or other amounts due or payable with
respect to any of the shares of capital stock of Insider FL.
3.04 Financial Statements.
(a) Prior to February 14, 2000, Insider FL shall provide Insider NV with the
unaudited balance sheet of Insider FL as of January 31, 2000, and the related
statements of operations, cash flows, and stockholders' equity for the period
from October 1, 1999 (Inception) to January 31, 2000, including the notes
thereto, for purposes of including such financial information on a
consolidated basis with the financial statements of Insider NV, or such other
purposes as Insider NV deems necessary.
(b) The financial statements to be delivered pursuant to Section 3.04(a) shall
be prepared in accordance with United States generally accepted accounting
principles consistently applied throughout the periods involved and have been
presented in accordance with the requirements of Regulation S-X promulgated by
the SEC regarding the form and content of and requirements for financial
statements to be filed with the SEC. The financial statements of Insider FL
will present fairly, as of their respective dates, the financial position of
Insider FL.
3.05 Outstanding Warrants and Options. Insider FL has no issued warrants or
options, calls, or commitments of any nature relating to the authorized and
unissued Insider FL Capital Stock.
3.06 Information. The information concerning Insider FL set forth in this
Agreement and in the schedules delivered by Insider FL pursuant hereto is
complete and accurate in all material respects and does not contain any untrue
statement of a material fact or omit to state a material fact required to make
the statements made, in light of the circumstances under which they were made,
not misleading. Insider FL shall cause the schedules delivered by Insider FL
pursuant hereto to Insider NV hereunder to be updated after the date hereof up
to and including the Closing Date.
3.07 Absence of Certain Changes or Events. Except as set forth in this
Agreement since the date of the most recent Insider FL balance sheet described
in Section 3.04 and included in the information referred to in Section 3.06,
there has not been (i) any material adverse change in the business,
operations, properties, level of inventory, assets, or condition of Insider FL
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or (ii) any damage, destruction, or loss to Insider FL materially and
adversely affecting the business, operations, properties, assets, or
conditions of Insider FL.
3.08 Title and Related Matters. Except as provided herein or disclosed in the
most recent Insider FL balance sheet and the notes thereto, Insider FL has
good and marketable title to all of its properties, inventory, interests in
properties, technology, whether patented or un-patented, and assets, which are
reflected in the most recent Insider FL balance sheet or acquired after that
date (except properties, interests in properties, and assets sold or otherwise
disposed of since such date in the ordinary course of business), free and
clear of all mortgages, liens, pledges, charges, or encumbrances, except (i)
statutory liens or claims not yet delinquent; and (ii) such imperfections of
title and easements as do not, and will not, materially detract from, or
interfere with, the present or proposed use of the properties subject thereto
or affected thereby or otherwise materially impair present business operations
on such properties. To the best knowledge of Insider FL, its technology does
not infringe on the copyright, patent, trade secret, know-how, or other
proprietary right of any other person or entity and comprises all such rights
necessary to permit the operation of the business of Insider FL as now being
conducted or as contemplated.
3.09 Litigation and Proceedings. There are no material actions, suits, or
proceedings pending or, to the knowledge of Insider FL, threatened by or
against Insider FL or adversely affecting Insider FL, at law or in equity,
before any court or other governmental agency or instrumentality, domestic or
foreign, or before any arbitrator of any kind. Insider FL does not have any
knowledge of any default on its part with respect to any judgment, order,
writ, injunction, decree, award, rule, or regulation of any court, arbitrator,
or governmental agency or instrumentality.
3.10 Material Contract Defaults. Insider FL is not in default in any material
respect under the terms of any outstanding contract, agreement, lease, or
other commitment which is material to the business, operations, properties,
assets, or condition of Insider FL, and there is no event of default or other
event which, with notice or lapse of time or both, would constitute a default
in any material respect under any such contract, agreement, lease, or other
commitment in respect of which Insider FL has not taken adequate steps to
prevent such a default from occurring.
3.11 No Conflict With Other Instruments. The execution of this Agreement and
the consummation of the transactions contemplated by this Agreement will not
result in the breach of any term or provision of, or constitute an event of
default under, any material indenture, mortgage, deed of trust, or other
material contract, agreement, or instrument to which Insider FL is a party or
to which any of its properties or operations are subject.
3.12 Governmental Authorizations. Insider FL has all licenses, franchises,
permits, and other governmental authorizations that are legally required to
enable it to conduct its business in all material respects as conducted on the
date of this Agreement. Except for compliance with applicable securities and
corporation laws, as hereinafter provided, no authorization, approval,
consent, or order of, or registration, declaration, or filing with, any court
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or other governmental body is required in connection with the execution and
delivery by Insider FL of this Agreement and the consummation by Insider FL of
the transactions contemplated hereby.
3.13 Insider FL Schedules. Insider FL has delivered to Insider NV the
following schedules, which are collectively referred to as the "Insider FL
Schedules" and which consist of the following separate schedules dated as of
the date of execution of this Agreement, and instruments and Insider NV as of
such date, all certified by the chief executive officer of Insider FL as
complete, true, and accurate:
(a) A schedule containing copies of resolutions adopted by the board of
directors of Insider FL approving this Agreement and the transactions herein
contemplated as referred to in Section 3.02;
(b) A schedule setting forth any other information, together with any required
copies of documents, required to be disclosed in the Insider FL Schedules by
Sections 3.01 through 3.12.
Insider FL shall cause the Insider FL Schedules and the instruments delivered
to Insider NV hereunder to be updated after the date hereof up to and
including a specified date not more than three business days prior to the
Closing Date. Such updated Insider FL Schedules, certified in the same manner
as the original Insider FL Schedules, shall be delivered prior to and as a
condition precedent to the obligation of Insider NV to close.
ARTICLE IV
CONDITIONS PRECEDENT TO OBLIGATIONS OF INSIDER FL
The obligations of Insider FL under this Agreement are subject to the
satisfaction of Insider NV, at or before the Closing Date, of the following
conditions:
4.01 Accuracy of Representations. The representations and warranties made by
Insider NV in this Agreement were true when made and shall be true at the
Closing Date with the same force and affect as if such representations and
warranties were made at and as of the Closing Date (except for changes therein
permitted by this Agreement), and Insider NV shall have performed or complied
with all covenants and conditions required by this Agreement to be performed
or complied with by Insider NV prior to or at the Closing. Insider FL shall
be furnished with certificates, signed by duly authorized officers of Insider
NV and dated the Closing Date, to the foregoing effect.
4.02 Officer's Certificates. Insider FL shall have been furnished with
certificates dated the Closing Date and signed by a duly authorized officer of
Insider NV to the effect that to such officers best knowledge no litigation,
proceeding, investigation, or inquiry is pending or, to the best knowledge of
Insider NV threatened, which might result in an action to enjoin or prevent
the consummation of the transactions contemplated by this Agreement.
Furthermore, based on Insider NV's own documents and information, the
certificate shall represent, to the best knowledge of the officer, that:
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(a) This Agreement has been duly approved by Insider NV's board of directors
and stockholders and has been duly executed and delivered in the name and on
behalf of Insider NV by its duly authorized officers pursuant to, and in
compliance with, authority granted by the board of directors of Insider NV;
(b) There have been no material adverse changes in Insider NV up to and
including the date of the certificate;
(c) All conditions required by this Agreement have been met, satisfied, or
performed by Insider NV;
(d) All authorizations, consents and approvals required in connection with the
execution and delivery of the documents by Insider NV have been obtained and
are in full force and effect or, if not required to have been obtained, will
be in full force and effect by such time as may be required; and
(e) There is no material action, suit, proceeding, inquiry, or investigation
at law or in equity by any public board or body pending or threatened against
Insider NV, wherein an unfavorable decision, ruling, or finding could have an
adverse effect on the financial condition of Insider NV, the operation of
Insider NV, or the acquisition and reorganization contemplated herein, or any
agreement or instrument by which Insider NV is bound or in any way contests
the existence of Insider NV.
4.03 No Material Adverse Change. Prior to the Closing Date, there shall not
have occurred any material adverse change in the financial condition,
business, or operations of Insider NV, nor shall any event have occurred
which, with the lapse of time or the giving of notice, may cause or create any
material adverse change in the financial condition, business, or operations of
Insider NV.
4.04 Other Items. Insider FL shall have received such further documents,
certificates, or instruments relating to the transactions contemplated hereby
as Insider FL may reasonably request.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF INSIDER NV
The obligations of Insider NV under this Agreement are subject to the
satisfaction of Insider FL, at or before the Closing Date, of the following
conditions:
5.01 Stockholder Approval. By and through the execution of this Agreement by
the Insider FL Stockholders, the Insider FL Stockholders have authorize and
approve this Agreement and the transactions contemplated hereby.
5.02 Accuracy of Representations. The representations and warranties made by
Insider FL and the Insider FL Stockholders in this Agreement were true when
made and shall be true at the Closing Date with the same force and affect as
if such representations and warranties were made at and as of the Closing Date
(except for changes therein permitted by this Agreement), and Insider FL shall
have performed or complied with all covenants and conditions required by this
Agreement to be performed or complied with by Insider FL prior to or at the
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Closing. Insider NV shall be furnished with a certificate, signed by a duly
authorized officer of Insider FL and dated the Closing Date, to the foregoing
effect.
5.03 Officer's Certificates. Insider NV shall have been furnished with
certificates dated the Closing Date and signed by the duly authorized officer
of Insider FL to the effect that no litigation, proceeding, investigation, or
inquiry is pending or, to the best knowledge of Insider FL, threatened, which
might result in an action to enjoin or prevent the consummation of the
transactions contemplated by this Agreement. Furthermore, based on
certificates of good standing, representations of government agencies, and
Insider FL's own documents, the certificate shall represent, to the best
knowledge of the officer, that:
(a) This Agreement has been duly approved by Insider FL's board of directors
and stockholders and has been duly executed and delivered in the name and on
behalf of Insider FL by its duly authorized officers pursuant to, and in
compliance with, authority granted by the board of directors of Insider FL
pursuant to a unanimous consent of its board of directors and a majority vote
of its stockholders;
(b) Except as provided or permitted herein, there have been no material
adverse changes in Insider FL up to and including the date of the certificate;
(c) All authorizations, consents, and approvals required in connection with
the execution and delivery of the documents by Insider FL have been obtained
and are in full force and effect or, if not required to have been obtained
will be in full force and effect by such time as may be required; and
(d) Except as otherwise disclosed in Schedule 3.09, there is no material
action, suit, proceeding, inquiry, or investigation at law or in equity by any
public board or body pending or threatened against Insider FL, wherein an
unfavorable decision, ruling, or finding would have an adverse affect on the
financial condition of Insider FL, the operation of Insider FL, or the
acquisition and reorganization contemplated herein, or any material agreement
or instrument by which Insider FL is bound or would in any way contest the
existence of Insider FL.
5.04 No Material Adverse Change. Prior to the Closing Date, there shall not
have occurred any material adverse change in the financial condition, business
or operations of Insider FL, nor shall any event have occurred which, with the
lapse of time or the giving of notice, may cause of create any material
adverse change in the financial condition, business, or operations of Insider
FL.
5.05 Other Items. Insider NV shall have received such further documents
certificates, or instruments relating to the transactions contemplated hereby
as Insider NV may reasonably request.
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ARTICLE VI
SPECIAL COVENANTS
6.01 Board of Directors and Officers. Upon closing of the transactions
contemplated by this Agreement, the board of directors and officers of Insider
FL shall remain the same.
6.02 The Acquisition of Insider NV Common Stock. Insider NV and Insider FL
understand and agree that the consummation of this Agreement including the
issuance of the Insider NV Common Stock to Insider FL in exchange for the
Insider FL Shares as contemplated hereby, constitutes the offer and sale of
securities under the Securities Act and applicable state statutes. Insider NV
and Insider FL agree that such transactions shall be consummated in reliance
on exemptions from the registration and prospectus delivery requirements of
such statutes which depend, among other items, on the circumstances under
which such securities are acquired.
(a) In order to provide documentation for reliance upon exemptions from the
registration and prospectus delivery requirements for such transactions, the
signing of this Agreement and the delivery of appropriate separate
representations shall constitute the parties acceptance of, and concurrence
in, the following representations and warranties:
(i) The Insider FL Stockholders acknowledge that neither the SEC nor the
securities commission of any state or other federal agency has made any
determination as to the merits of acquiring Insider NV Common Stock, and that
this transaction involves certain risks.
(ii) The Insider FL Stockholders have received and read the Agreement and
understand the risks related to the consummation of the transactions herein
contemplated.
(iii) Insider FL Stockholders have such knowledge and experience in business
and financial matters that they are capable of evaluating each business.
(iv) The Insider FL Stockholders have been provided with copies of all
materials and information requested by them or their representatives,
including any information requested to verify any information furnished (to
the extent such information is available or can be obtained without
unreasonable effort or expense), and the parties have been provided the
opportunity for direct communication regarding the transactions contemplated
hereby.
(v) All information which the Insider FL Stockholders have provided to
Insider NV or their representatives concerning their suitability and intent to
hold shares in Insider NV following the transactions contemplated hereby is
complete, accurate, and correct.
(vi) Accept as otherwise provided in Section 7.01, the Insider FL
Stockholders have not offered or sold any securities of Insider NV or interest
in this Agreement and have no present intention of dividing the Insider NV
Common Stock or Insider FL Shares to be received or the rights under this
Agreement with others or of reselling or otherwise disposing of any portion of
such stock or rights, either currently or after the passage of a fixed or
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determinable period of time or on the occurrence or nonoccurrence of any
predetermined event or circumstance.
(vii) The Insider FL Stockholders understand that the Insider NV Common Stock
has not been registered, but is being acquired by reason of a specific
exemption under the Securities Act as well as under certain state statutes for
transactions not involving any public offering and that any disposition of the
subject Insider NV Common Stock may, under certain circumstances, be
inconsistent with this exemption and may make Insider FL or Insider NV an
"underwriter", within the meaning of the Securities Act.
(viii) The Insider FL Stockholders acknowledge that the shares of Insider NV
Common Stock , must be held and may not be sold, transferred, or otherwise
disposed of for value unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. Insider
NV is not under any obligation to register the Insider NV Common Stock under
the Securities Act. If rule 144 is available after one year and prior to two
years following the date the shares are fully paid for, only routine sales of
such Insider NV Common Stock in limited amounts can be made in reliance upon
rule 144 in accordance with the terms and conditions of that rule.
(b) In order to more fully document reliance on the exemptions as provided
herein, Insider FL, the Insider FL Stockholders, and Insider NV shall execute
and deliver to the other, at or prior to the Closing, such further letters of
representation, acknowledgment, suitability, or the like as Insider NV or
Insider FL and their respective counsel may reasonably request in connection
with reliance on exemptions from registration under such securities laws.
(c) The Insider FL Stockholders acknowledge that the basis for relying on
exemptions from registration or qualifications are factual, depending on the
conduct of the various parties, and that no legal opinion or other assurance
will be required or given to the effect that the transactions contemplated
hereby are in fact exempt from registration or qualification.
6.03 Securities Filings. Insider NV shall be responsible for the preparation
of any required filing with the Securities and Exchange Commission and Insider
FL will be responsible for any and all filings in any jurisdiction where its
stockholders reside which would require a filing with a governmental agency as
a result of the transactions contemplated in this Agreement.
ARTICLE VII
MISCELLANEOUS
The covenants set forth in this section shall survive the Closing Date and the
consummation of the transactions herein contemplated.
7.01 Sale of Insider NV Common Stock by Insider FL Shareholder. On the
Closing Date and contemporaneous with the consummation of the transactions
contemplated by this Agreement, NextDigital, Inc., a Insider FL Stockholder,
has entered into a Stock Purchase Agreement with a Millennium Health Products,
Inc., the other Insider FL Stockholder, for the sale and transfer of 1,100,000
shares of the Insider NV Common Stock (the "Shares") to which NextDigital,
Inc. is entitled to be issued hereunder. In connection therewith, and to
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facilitate the sale and transfer of the Shares to Millennium Health Products,
Inc., NextDigital, Inc. shall provide Insider NV's registrar and transfer
agent with a copy of the Stock Purchase Agreement and a stock power, executed
in blank with signature medallion guaranteed.
7.02 No Representation Regarding Tax Treatment. No representation or warranty
is being made by any party to any other regarding the treatment of this
transaction for national, provincial, federal or state income taxation. Each
party has relied exclusively on its own legal, accounting, and other tax
adviser regarding the treatment of this transaction for federal and state
income taxes and on no representation, warranty, or assurance from any other
party or such other party's legal, accounting, or other adviser.
7.03 Governing Law. This Agreement shall be governed by, enforced and
construed under and in accordance with the laws of the State of Nevada.
7.04 Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if personally delivered, if sent by
facsimile or telecopy transmission or other electronic communication confirmed
by registered or certified mail, postage prepaid, or if sent by prepaid
overnight courier to the address of the respective parties or such other
addresses as shall be furnished in writing by any party in the manner for
giving notices, hereunder, and any such notice or communication shall be
deemed to have been given as of the date so delivered or sent by facsimile or
telecopy transmission or other electronic communication, or one day after the
date so sent by overnight courier.
7.05 Attorney's Fees. In the event that any party institutes any action or
suit to enforce this Agreement or to secure relief from any default hereunder
or breach hereof, the breaching party or parties shall reimburse the
nonbreaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
7.06 Schedules; Knowledge. Whenever in any section of this Agreement
reference is made to information set forth in the schedules provided by
Insider NV or Insider FL such reference is to information specifically set
forth in such schedules and clearly marked to identify the section of this
Agreement to which the information relates. Whenever any representation is
made to the "knowledge" of any party, it shall be deemed to be a
representation that no officer or director of such party, after reasonable
investigation, has any knowledge of such matters.
7.07 Entire Agreement. This Agreement represents the entire agreement between
the parties relating to the subject matter hereof. All previous agreements
between the parties, whether written or oral, have been merged into this
Agreement. This Agreement alone fully and completely expresses the agreement
of the parties relating to the subject matter hereof. There are no other
courses of dealing, understandings, agreements, representations, or
warranties, written or oral, except as set forth herein.
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7.08 Survival; Termination. The representations, warranties, and covenants of
the respective parties shall survive the Closing Date and the consummation of
the transactions herein contemplated for a period of six months from the
Closing Date, unless otherwise provided herein.
7.09 Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original and all of which taken together
shall be but a single instrument.
7.10 Amendment or Waiver. Every right and remedy provided herein shall be
cumulative with every other right and remedy, whether conferred herein, at
law, or in equity, and such remedies may be enforced concurrently, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may be amended by a writing signed by all parties hereto, with
respect to any of the terms contained herein, and any term or condition of
this Agreement may be waived or the time for performance thereof may be
extended by a writing signed by the party or parties for whose benefit the
provision is intended.
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement to
be executed by their respective officers, hereunto duly authorized, as of the
date first above written.
XXXXXXXXXXXXX.XXX, INC. XXXXXXXXXXXXX.XXX, INC.
a Nevada corporation a Florida corporation
By:________________________________By:______________________________________
/S/Xxxxxxx X. Xxxxxx, President Xxxxxxx X. Xxxxxx, President
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Exhibit A-1
Insider FL
List of Stockholders
Name of Shareholder Number of Number of Insider
Shares of NV Shares to Be
Insider FL Received in Exchange
Millennium Health
Products, Inc., a
Florida corporation 7,500 1,330,000
By/S/ Xxxxx Xxxxxx
Its Duly Authorized Officer
NextDigital, Inc., a
Florida corporation 2,500 1,150,000
By /S/ Xxxxxx X. Xxxxxxxx
Its Duly Authorized Officer
------ ---------
Total Shares 10,000 2,480,000
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