AGREEMENT OF BUSINESS COMBINATION
BY EXCHANGE OF ASSETS FOR
STOCK
AGREEMENT dated this 30th day of June, 1997, by and between X-XXXX DEVELOPMENT
GROUP INC., a Delaware corporation having its principal place of business at 000
Xxxxx Xxxxxx, Xxxx Xxxx XX 00000 ("X-XXXX"), and HEALTH TECHNOLOGIES
INTERNATIONAL INC., a New Jersey corporation having its address at 000 Xxxxx
Xxxxxx, Xxxx Xxxx, XX 00000 (the "COMPANY").
W I T N E S S E T H
WHEREAS, The Company is desirous of exchanging all or substantially all of
it's assets; and
WHEREAS, X-XXXX is desirous of acquiring all of the assets of the Company;
IT IS NOW THEREFORE AGREED that in consideration of the mutual covenants
and agreements hereinafter set forth, the parties hereto agree as follows:
1. Exchange of Assets.
1.1 Subject to the terms and conditions of this Agreement and the
performance by the parties hereto of their respective obligations hereunder,
then Company shall exchange, transfer, convey, assign and deliver to X-XXXX, and
X-XXXX shall receive, acquire and accept on the Closing Date (as such term is
hereinafter defined) all of the right, title and interest of the Company,
including all aspects to the business, assets, goodwill, and rights of Company
as shall exist on the Closing Date, including, without limitation, rights in
tradenames, trademarks and copyrights, all rights relating to or arising out of
the business conducted by the Company under express or implied warranty (as from
the suppliers of the Company with respect to the Assets being transferred to
X-XXXX), all books and records, correspondence, employment records and files of
or relating to the business or Assets of the Company being exchanged with X-XXXX
and all of the Company's right, title and interest in and to each lease,
contract, agreement, purchase order or commitment to which the Company is a
party or in which the Company has rights, except two vehicles (all of such
assets are collectively referred to hereinafter as the "Assets"), free and clear
of all liabilities, obligations, liens and encumbrances, except as expressly
assumed by X-XXXX under Section 2 below.
1.2 The transfer of the Assets as herein provided shall be effected by
bills of sale, endorsements, assignments, drafts, checks, deeds and other
instruments of transfer and conveyance delivered to X-XXXX on the Closing Date
in form sufficient to transfer the Assets as contemplated by this agreement and
as shall be reasonably requested by X-XXXX. Company covenants that (i) it will,
at any time and from time to time after the Closing Date, execute and deliver
such other instruments of transfer and conveyance and do all such further acts
and things as may be reasonably requested by X-XXXX to transfer and deliver to
X-XXXX or to aid and assist X-XXXX in collecting and reducing to possession, any
and all of the Assets; (ii) X-XXXX, after the Closing Date, shall have the right
and authority to collect, for the account of X-XXXX, all checks, notes and other
evidences of indebtedness or obligations to make payment of money and other
items which shall be transferred to X-XXXX as provided herein and to endorse
with the name of Company any such checks, notes or other instruments received
after the Closing Date; and (iii) Company will transfer and deliver to X-XXXX
any cash or other property that Company may receive after the Closing Date in
respect of or arising out of the business conducted by Company. After the
Closing Date, at reasonable times and upon reasonable notice, Company shall have
access to the books and records conveyed to X-XXXX hereunder, and X-XXXX shall
have access to any minute books, stock books and similar corporate records
retained by Company.
1.3 Company covenants that between the date hereof and the Closing Date
and, if reasonably requested by X-XXXX, after the Closing Date, Company shall
use its best efforts to obtain the consent of any parties to any contracts,
licenses, leases, commitments, sales orders, purchase orders or other agreements
being assigned by Company to X-XXXX hereunder as shall be reasonably requested
by X-XXXX. If any such required consent is not obtained, this agreement shall
not constitute an agreement to assign the instrument relating thereto, however
Company shall cooperate with X-XXXX in any reasonable arrangement to provide for
X-XXXX the benefits under any such contract, license, lease, commitment, sales
order, purchase order or other agreement, including enforcement, at the cost and
for the benefit of X-XXXX, of any and all rights of Company against the other
party thereto arising out of the breach or cancellation by such party or
otherwise.
2. Assumption of Liabilities. X-XXXX shall assume no liabilities of
Company, except as specified in the list of liabilities which is attached hereto
as Exhibit II.
3. Closing. The Closing hereunder (the "Closing") shall take place on or
about the 30th day of September, 1997 at the offices of Xxxxx X. Xxxxxx, Esq.
000 Xxxxx xxxxxx, Xxxx Xxxx, Xxx Xxxxxx 00000 or at such other time and place as
may be agreed by X-XXXX and the Company (the "Closing Date") .
4. Exchange Terms; Allocation.
4.1 In consideration of the exchange and transfer of the Assets herein
contemplated, on the Closing Date, X-XXXX shall deliver at Closing to certain
shareholders set forth in Exhibit 4.1 certificates for 8,448,606 shares of said
corporation's common stock. Of this shares 2,000,000 will be sold to Scantek
Medical, Inc. for par value to satisfy one of the terms of the license being
acquired. The balance shall be distributed to the HTI shareholders.
4.2 Upon the conclusion of this transaction, X-XXXX represents that in
addition to the above mentioned shares to be delivered to Company or its
nominees on its behalf, there shall remain outstanding, in addition thereto,
only the following shares held by other shareholders, to wit:
1,551,394.
5. Representations and Warranties of Company. Company hereby represents and
warrants as follows:
5.1 Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of New Jersey and has full power and
authority to own its properties and carry on its business as and in the places
where such properties are now owned or such business is now being conducted. On
or before closing Company shall establish to the satisfaction of X-XXXX that it
has title to the Assets and authority to convey the same in accordance with the
terms of this Agreement. Complete and correct copies of the Certificate of
Incorporation of Company and all amendments thereto, and of the By-Laws of
Company, and all amendments thereto, certified by the Secretary of Company, have
been or will be delivered to X-XXXX on or prior to the Closing Date by Company.
Company is duly qualified to do business and is in good standing in all
jurisdictions in which such qualification is necessary because of the character
of the properties owned by it or the nature of its activities. Company has taken
no action and has not failed to take any action, which action or failure would
preclude or prevent Company from conducting the business of Company in the
manner heretofore conducted.
5.2 Company has no subsidiaries.
5.3 Company has obtained written approval of over two-thirds of its
stockholders and is fully empowered by them to enter into this transaction.
5.4 Company has full power and authority, corporate and otherwise, to enter
into this agreement on behalf of Company and to cause Company to assume and
perform its, his or her obligations hereunder. The execution and delivery of
this agreement and the performance by Company of its obligations hereunder have
been duly authorized by the Board of Directors of Company and no further action
or approval, corporate or otherwise, is required in order to constitute this
agreement as a binding and enforceable obligation of Company. The execution and
delivery of this agreement and the performance by Company of its obligations
hereunder do not and will not violate any provision of the Certificate of
Incorporation or By-Laws of Company and do not and will not conflict with or
result in any breach of any condition or provision of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any of the Assets by reason of the terms of any contract,
mortgage, lien, lease, agreement indenture, instrument, judgment or decree to
which Company is a party or which is or purports to be binding upon Company or
which affects or purports to affect any of the Assets.
5.4 No action, approval, consent or authorization, including but not
limited to any action, approval, consent or authorization by any governmental or
quasi-governmental agency, commission, board, bureau or instrumentality is
necessary as to Company in order to constitute this agreement as a binding and
enforceable obligation of Company in accordance with its terms.
5.5 Company has not incurred any obligation or liability (absolute or
contingent, liquidated or unliquidated, xxxxxx or inchoate) except current
obligations and liabilities incurred in the ordinary course of their businesses
which would act as a lien against the Assets.
5.6 Company has not leased or effected any transfer of any of the Assets;
6. Representations and Warranties of X-XXXX. X-XXXX hereby represents and
warrants that on the closing date all of the following will be true:
6.1 X-XXXX is a corporation duly organized, validly existing and in good
standing under the laws of the state of Delaware. X-XXXX is not conducting any
business in any location. Complete and correct copies of the Certificate of
incorporation of Company and all amendments thereto, certified in each case by
the Secretary of State of the State of Delaware, and of the By-Laws of X-XXXX,
and all amendments thereto, certified by the Secretary of X-XXXX, have been or
will be delivered to Company on or prior to the Closing Date by X-XXXX. X-XXXX
will present at closing a Certificate of good standing for the State of
Delaware. X-XXXX has taken no action and has not failed to take any action,
which action or failure would preclude or prevent Company from conducting the
business of Company in the manner heretofore conducted. X-XXXX is approved for
trading in the over-the-counter market with not less than two market makers.
6.2 X-XXXX has no subsidiaries.
6.3 X-XXXX has no authorized or outstanding securities other than its
common stock, $.001 par value per share (the "Common Stock"), which consists of
50,000,000 authorized shares of which not more than 1,551,394 shares are
currently outstanding. All outstanding Common stock is duly authorized, validly
issued, fully-paid and non-assessable (except for such statutory and
constitutional obligations as may be imposed notwithstanding full payment for
and valid issuance of such shares), and there are no presently issued or
outstanding securities of X-XXXX convertible into common stock nor are there any
outstanding options, warrants, agreements, rights or commitments of any kind
relating to the authorized but unissued Common Stock. All transfer taxes, if
any, with respect to transfers of securities of X-XXXX made prior to the date
hereof have been paid. All of the common stock is owned, both beneficially and
of record, free of any security interests, liens, pledges, claims, charges,
escrows encumbrances, options, rights of first refusal, mortgages, indentures,
security agreements or other contracts (whether or not relating in any way to
credit or the borrowing of money) and the designated owner thereof has the
unrestricted right to vote such Common Stock. X-XXXX also has authorized
50,000,000 shares of Preferred Stock having a par value of $.001 per share, none
of which are issued and/or outstanding.
6.4 X-XXXX'x Board of Director's will recommend to certain controlling
shareholders, as soon as practicable after receipt of Company's certified
financial statements, approval of the transaction contemplated herein and obtain
written consent to take such acts and actions as may be deemed necessary or
advisable by counsel to Company to fully empower X-XXXX and its Board of
Directors to enter into and consummate this transaction, including the giving of
notice to X-XXXX shareholders as required by New York law.
6.5 X-XXXX has full power and authority, corporate and otherwise, to enter
into this agreement and to assume and perform its, his or her obligations
hereunder. The execution and delivery of this agreement and the performance by
X-XXXX of its obligations hereunder have been duly authorized by the Board of
Directors of X-XXXX and no further action or approval, except shareholder
approval, corporate or otherwise, is required in order to constitute this
agreement as a binding and enforceable obligation of X-XXXX. The execution and
delivery of this agreement and the performance by X-XXXX of its obligations
hereunder do not and will not violate any provision of the Certificate of
Incorporation or By-Laws of X-XXXX and do not and will not conflict with or
result in any breach of any condition or provision of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any of its assets by reason of the terms of any contract,
mortgage, lien, lease, agreement indenture, instrument, judgment or decree to
which X-XXXX is a party or which is or purports to be binding upon Company or
which affects its assets.
6.6 No action, approval, consent or authorization, including but not
limited to any action, approval, consent or authorization by any governmental or
quasi-governmental agency, commission, board, bureau or instrumentality is
necessary as to X-XXXX in order to constitute this agreement as a binding and
enforceable obligation of X-XXXX in accordance with its terms.
6.7 X-XXXX has not during the last twelve months, except as may be required
to satisfy the terms of this Agreement:
6.7.1 authorized, issued, sold or converted any securities, or entered into
any agreement with respect
thereto;
6.7.2 declared, set aside or made any dividend or other distribution or
purchased, redeemed or reclassified any of their capital stock or effected any
stock split, stock dividend, exchange or recapitalization or entered into any
agreement in respect of the foregoing;
6.7.3 incurred any damage, destruction or similar loss, whether or not
covered by insurance, materially affecting their businesses or properties;
6.7.4 sold, assigned or transferred. any of their tangible assets or any
patent, trademark, trade name, copyright, license, franchise, design or other
intangible assets or properties;
6.7.5 mortgaged, pledged, granted or suffered to exist any lien or other
encumbrance or charge on any of their assets or properties, tangible or
intangible;
6.7.6 waived any rights of material value or canceled, discharged,
satisfied or paid any material debts or claims;
6.7.7 incurred any obligation or liability (absolute or contingent,
liquidated or unliquidated, xxxxxx or inchoate);
6.7.8 leased or effected any transfer of any of their assets or properties;
6.7.9 entered into, made any amendment of or terminated any lease, material
contract or license;
6.7.10 amended its Certificate of Incorporation or By-Laws;
6.7.11 effected any change in their accounting practices, procedures or
methods;
6.7.12 became obligated to make any payment to any shareholder of X-XXXX in
any capacity, or entered into any transaction of any nature with any shareholder
of X-XXXX in any capacity;
6.7.13 increased the compensation payable to any of their directors,
officers or employees or became obligated to increase any such compensation;
6.7.14 entered into any transaction other than in the ordinary course of
business, or changed in any way any of their business policies or practices.
6.8 X-XXXX is not a party to or has any contract or commitment of any kind
or nature whatsoever, written or oral, formal or informal, including, without
limitation, any lease, license, franchise, employment, maintenance, consultant
or commission agreement, pension, profit-sharing, bonus, stock purchase, stock
option, retirement, severance, hospitalization, accident, insurance or other
plan or arrangement involving employee benefits, contract with any labor union
or contract for services, materials, supplies, merchandise, inventory or
equipment, for the sale or purchase of any of its services, products or assets,
for the borrowing of money or for a line or letter of credit, with any current
or former director, officer or employee of X-XXXX which will be in effect on the
Closing Date, with any government or agency thereof, pursuant to which its right
to compete with any entity or person in the conduct of its business is
restrained or restricted for any reason or in any way, guaranteeing the
performance, liabilities or obligations of any Entity or person, for capital
improvements or expenditures or with any contractor or subcontractor for in
excess of $100.00, for charitable contributions aggregating in excess of
$100.00, or involving in excess of $100.00 in cash over its term (including any
periods covered by any options to renew by any party).
6.9. X-XXXX has no liabilities except as shown on its financial statements,
no contracts or other obligations whatsoever including any contingent
liabilities.
7. Financial Statements and Form 10.
Company shall deliver to X-XXXX, on or before the Closing Date, sufficient
financial information in a form acceptable to the United States Securities and
Exchange Commission for consolidation with X-XXXX'x financial statements and
will be in compliance with generally accepted accounting principles and
Regulation SX promulgated under the Securities Act of 1933, as amended, and as
it applies to corporations which have registered securities upon Form 10 or Form
10SB under the 1934 Securities Exchange Act. After closing, the new management
represents that it will promptly update Company's Form 10SB and timely file the
same and all other forms required by the United States Securities and Exchange
Commission.
8. Miscellaneous.
a) This Agreement shall constitute the entire agreement of the parties
hereto and may not be amended, except by written consent of the parties hereto
in writing executed by them.
b) This Agreement shall be construed according to the laws of the State of
New York and shall be enforceable in any court of competent jurisdiction located
in the State of New York.
c) This Agreement shall inure to the benefit of the parties and their
successors in interest, if any, but shall not otherwise be assignable.
d) Where in this Agreement one gender or the other is used, of the singular
or the plural is used, and if to effect the intent of the parties hereto the use
of the other gender or number is needed then it is understood that such gender
or both or such number or both is implied.
e) This Agreement may be executed in counterparts and receipt of facsimile
transmission of signatures shall be sufficient to effect acceptance of this
Agreement, although the parties hereto agree to submit within a reasonable time
duplicate original signed copies of this Agreement to each other.
9. Indemnification.
Each party to this Agreement shall indemnify and hold harmless each other
party at all times after the date of closing against and in respect of any
liability, damage or deficiency, all actions, suits, proceedings, demands,
assessments, judgments, costs and expenses, including attorney's fees incident
to any of the foregoing, resulting from any misrepresentation, breach of
covenant or warranty for non-fulfillment of any agreement on the part of such
party under this Agreement, or from any misrepresentation in or omission from
any certificate furnished or to be furnished to a party hereunder. Subject to
the terms of this Agreement, the defaulting party shall reimburse the other
party or parties on demand for any reasonable payments made by said parties at
any time after the date of closing, in respect to any liability or claim to
which the foregoing indemnity relates, if such payment is made after reasonable
notice to the other party to defend or satisfy the same, and such party failed
to defend or satisfy the same.
10. Covenant Not to Disclose.
(a) I shall not at any time during or after the termination of my
employment by Company reveal, divulge, or make known to any person (other than
Company or its Affiliates) or use for my own account any confidential
information used by Company or any of its Affiliates during my employment by
Company before and during the term of this Agreement and made known to me by
reason of my employment by Company. I shall retain all such knowledge and
information which I may acquire during my employment by Company in trust for the
sole benefit of Company and its Affiliates and their successors and assigns.
(b) As used in this Agreement, the term "Affiliate" shall mean any
corporation, company, partnership or other person or entity that directly or
indirectly through one or more intermediaries, controls or is controlled by or
is under common control with the person of which such corporation, company,
partnership or other person or entity is an affiliate.
11. Brokers. No brokers have been utilized in connection with this
transaction. X-XXXX shall not be liable for the payment of any finder's or
consultant's fees except as specifically provided herein.
IN WITNESS WHEREOF THE PARTIES HERETO, CORPORATE PARTIES HAVING BEEN DULY
AUTHORIZED BY THEIR RESPECTIVE BOARDS OF DIRECTORS, HAVE SET THEIR HANDS AND
SEALS ON THE DATE FIRST ABOVE WRITTEN.
X-XXXX DEVELOPMENT GROUP, INC. HEALTH TECHNOLOGIES
INTERNATIONAL, INC.
BY:__/s/Xxxxx Fidler___________ BY:_/s/Xxxxx Fidler___________
XXXXX X. XXXXXX XXXXX X. XXXXXX
PRESIDENT PRESIDENT
Exhibit I
List of Assets
From Health Technologies International, Inc.
To Be Exchanged for Stock From
X-Xxxx Development Group, Inc.
License Agreement Between Health Technologies International, Inc. nd Scantek
Medical, Inc.
Exhibit II
List of Liabilities
From Health Technologies International, Inc.
To Be Exchanged for Stock From
X-Xxxx Development Group, Inc.
There are no liabilities being assumed to X-Xxxx.
Exhibit 4.2 List of Shareholders of Health Technologies International, Inc.
Xxxxx Xxxxxx 93%
Kilhan Management S.A. 7%
Pursuant to the License Agreement Health Technologies has the obligation to sell
to Scantek Medical, Inc. 20% of its total issued and outstanding common shares
at par value. To effect this requirement, the Company's shareholders have agreed
to the following division of the shares upon conclusion of the acquisition:
Xxxxx Xxxxxx 6,000,000
Kilhan Management S.A. 448,606
Scantek Medical, Inc. 2,000,000
