EXHIBIT 2.2
CONTRIBUTION AGREEMENT
The undersigned Xxxxxx X. Xxxxxxxxx, Xxxxxxx Xxxxxxxxxxx and Xxxxx
Xxxxxxx (hereinafter jointly and severally referred to as "Shareholders") hereby
tender a total of three thousand (3,000) shares of the capital stock of Bavarian
Dental Instruments, Inc., a California close corporation ("Bavarian"), to
Edudata Corporation, a Delaware corporation ("Edudata") under the following
terms and conditions:
1. Edudata shall deliver forthwith to the Shareholders, in exchange for
their three thousand (3,000) shares of capital stock of Bavarian, a total of one
million (1,000,000) shares of common stock of Edudata. Said shares of Edudata
shall be allocated among the Shareholders in proportion to their shareholdings
in Bavarian.
2. This transaction is expressly conditioned upon the concurrent
issuance by Edudata of a total of four million (4,000,000) shares of common
stock of Edudata to the members of Dental/Medical Diagnostic Systems LLC
("DMD").
3. The Shareholders represent and warrant as follows:
a. The Shareholders are the sole shareholders of Bavarian and are
the owners of three thousand (3,000) shares of the capital stock of Bavarian,
which constitutes all of the issued and outstanding shares of stock at Bavarian.
Xxxxxx X. Xxxxxxxxx owns one thousand six hundred fifty (1,650) shares, Xxxxxxx
Xxxxxxxxxxx owns one thousand two hundred (1,200) shares, and Xxxxx Xxxxxxx owns
one hundred fifty (150) shares. The Shareholders contributed approximately
Eighty-Two Thousand Dollars ($82,000) to Bavarian for their shares of capital
stock or as paid-in-capital.
b. Bavarian is a corporation duly organized, validly existing, and
in good standing under the laws of the State of California, has all requisite
corporate power and authority to own, lease, and operate its properties and to
carry on its business as it is now conducted, and has authority to enter into
this agreement.
c. All issued and outstanding shares of capital stock of Bavarian
have been duly authorized and validly issued and are fully paid and
nonassessable. There are no outstanding rights, options, warrants,
subscriptions, calls, convertible securities, or agreements of any character or
nature under which Bavarian is or may become obligated to issue or to transfer
any shares of its capital stock of any kind.
d. Each Shareholder is acquiring his shares of common stock of
Edudata solely for his own account for investment
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and does not intend to divide his shares with others or to resell or otherwise
dispose of all or any part of said shares.
e. Each Shareholder acknowledges that, unless the acquired shares
are registered or the transaction is qualified under the appropriate state and
federal securities laws, he may not resell, hypothecate, transfer or assign, or
make other disposition of the Edudata shares, except in transaction excepted or
exempted from the registration or qualification requirements of such laws.
f. Each Shareholder acknowledges that the acquired shares of Edudata
will be "restricted shares" as said term is defined in the Rules and Regulations
promulgated by the Securities and Exchange Commission under the Securities Act
of 1993, as amended. Each Shareholder acknowledges that the acquired shares
shall have a legend upon them stating that the shares are restricted shares,
which legend shall be in such form as is ordinary and usual for this type of
transaction.
g. Each Shareholder: (1) has reviewed this transaction with a
professional advisor (who is unaffiliated with and who is not compensated by
Edudata, or any affiliate or selling agent of Edudata, directly or indirectly)
who by reason of his or her business or professional experience has the capacity
to protect the Shareholder's interests in connection with this transaction,
and/or (2) had during each of the preceding three (3) years: individual annual
income in excess of Two Hundred Thousand Dollars ($200,000); or joint annual
income (together with his spouse) in excess of Three Hundred Thousand Dollars
($300,000); or net worth (individually or jointly with his spouse) in excess of
One Million Dollars ($1,000,000).
h. Each Shareholder has received a copy of the latest available
financial statements of Edudata and has been afforded (with his attorneys and
investment advisors, if any) to obtain any information related to the business
and financial condition of Edudata or necessary to verify the accuracy of the
financial statements of Edudata.
i. Each Shareholder acknowledges that Edudata is relying on
exemptions from state and federal securities laws for the issuance of the
Edudata shares and is basing its reliance in part upon the foregoing
representations and warranties.
j. To the best of each Shareholder's actual present knowledge the
following is true and correct: There are no contracts or other transactions
between Bavarian, on the one hand, and any Shareholder, on the other hand,
except that Shareholders are employees of Bavarian. The annual salary paid to
Xxxxxx X. Xxxxxxxxx by DMD and Bavarian together was less than $240,000.
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k. Each Shareholder, separately from the other Shareholders,
believes that the following statements are true and correct and has no actual
present knowledge that they are untrue or not correct:
i. Although no financial statements of Bavarian have been
delivered to Edudata, there have been no material negative changes or events to
Bavarian since December 31, 1995, and the Shareholder does not know of any event
which with the passage of time will cause a material negative change.
ii. Returns of products sold by Bavarian have not exceeded three
percent (3%) of sales.
iii. Bavarian has no uncollectible receivables.
iv. The budget dated February 2, 1996, fairly depicts the
anticipated results of DMD and Bavarian for the year 1996. Edudata acknowledges
that said budget is an estimate and that the Shareholders are not warranting
that the projections shall be obtained.
v. In the event Bavarian merges into a C Corporation that is
wholly owned by Edudata in accordance with applicable State law following normal
procedures for a tax-exempt merger, Edudata will not incur any tax liability as
a result of said merger.
vi. Bavarian has no tax liability other than such liabilities as
arise from the ordinary course of its business operations. There are no
liabilities, contingent or absolute, that are not disclosed in the financial
statements referred to in (i) above.
vii. Bavarian has all agreements, licenses, consents and
regulatory approval necessary to conduct its business as it is now conducted,
and is in compliance with all material laws, rules or regulations known to be
applicable to such business as it is now conducted.
l. Each Shareholder acknowledges that this agreement was prepared by
the law firm of Xxxxxxxxx & Xxxxxx, a Professional Corporation, who are counsel
for Bavarian and who do not represent the undersigned Shareholders or Edudata.
Each Shareholder further acknowledges that the law firm is relying upon the
above representations of the Shareholders, has not rendered any tax advice with
respect to this transaction and did urge the Shareholders to obtain independent
advice about this transaction from independent attorneys, tax specialists and
financial advisers.
4. Edudata represents and warrants as follows:
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a. Edudata is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Delaware, and has all requisite
corporate power and authority (1) to own, lease, and operate its properties and
to carry on its business as it is now conducted; and (2) to enter into, perform,
and carry out the terms of this Agreement; and (3) to issue and sell the one
million (1,000,000) shares of common stock of Edudata.
b. The one million (1,000,000) shares of common stock of Edudata to
be issued to the Shareholders shall, when issued, have been duly authorized and
validly issued and be fully paid and nonassessable.
c. Edudata has two million five hundred nine thousand nine hundred
(2,509,900) shares of common stock presently outstanding. All of said shares
have been duly authorized and validly issued and are fully-paid and
nonassessable. There are no outstanding rights, options, warrants,
subscriptions, calls, convertible securities, or agreements of any character or
nature under which Edudata is or may become obligated to issue or to transfer
any shares of its securities of any kind.
d. Edudata has cash and cash equivalents on hand of Six Hundred
Fifty Thousand Dollars ($650,000), net of all liabilities.
e. Edudata acknowledges that this agreement was prepared by the law
firm of Xxxxxxxxx & Xxxxxx, a Professional Corporation, who are counsel for
Bavarian and who do not represent the undersigned Shareholders or Edudata, and
further acknowledges that the law firm is relying upon the above representations
of Edudata, has not rendered any tax advise with respect to this transaction and
has urged Edudata to obtain independent advice about this transaction from
independent attorneys, tax specialists and financial advisers.
5. All parties agree on the following provisions that are to govern
Edudata after the issuance of the one million (1,000,000) shares of Edudata
common stock to the Shareholders:
a. Any loan obligation of Edudata payable to any shareholder or
member of Bavarian, Edudata or DMD, or to any affiliate of such shareholder or
member, shall be paid solely from, and to the extent of, positive cash flow of
the combined businesses.
b. Edudata shall not issue options to acquire more than seven
hundred fifty thousand (750,000) shares of common stock of Edudata at any time
prior to March 1, 1997.
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c. No later than March 1, 1996, all three present members of the
Board of Directors of Edudata shall resign or be removed, and the following four
persons shall be elected in their stead: Xxxxxx X. Xxxxxxxxx, Xxxxxx Xxxxxxx,
Xxxxxx X. Xxxxxxxxx, and Xxxxxx X. Xxxxxx.
d. Xxxxxx X. Xxxxxxxxx shall not receive a salary from Edudata for
the twelve-month period ending March 1, 1997, in excess of Two Hundred Forty
Thousand Dollars ($240,000).
e. After the consummation of the purchase contemplated by this
Agreement and until March 1, 1997, Edudata shall not, without the prior written
consent of Sun Equities Corporation or its designee:
i. Make any payment or distribution to a related party (other
than compensation to employees or the repayment of loans as permitted by
paragraph 5 a above) except in a distribution to all shareholders of Edudata;
ii. Enter into any contract or other transaction with any
related party (other than agreeing to employ such a person);
iii. Pay a salary or any fee to Xxxxxx X. Xxxxxxxxx or to any
affiliate or associate of Xxxxxx X. Xxxxxxxxx, other than the Shareholders,
Members of DMD and Xx. Xxxxxx Xxxxxxx, in excess of $240,000 per annum;
iv. Pay salaries or fees to Xxxxxx X. Xxxxxxxxx, Xxxxxx Xxxxxxx,
Xxxx Xxxxxx, Xxxxx Xxxxxxx and Xx. Xxxxxx Xxxxxxx in the aggregate in excess of
$700,000; and
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v. Issue any securities other than options to acquire no more
than 750,000 shares of Edudata common stock.
6. As soon as practicable after the Closing, Edudata will send to its
shareholders the information statement required by Section 14f of the Securities
Exchange Act of 1934 and make such other filings required under Federal
securities law. This agreement may be executed in counterparts, all of which
taken together shall constitute a single agreement.
Dated: February ___, 1996 -----------------------------------
XXXXXX X. XXXXXXXXX
Dated: February ___, 1996 -----------------------------------
XXXXXXX XXXXXXXXXXX
Dated: February ___, 1996 -----------------------------------
XXXXX XXXXXXX
Dated: February 29, 1996 EDUDATA CORPORATION
By: [SIG]
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Name: [SIG]
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Its: TREASURER
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v. Issue any securities other than options to acquire no more than
750,000 shares of Edudata common stock.
6. As soon as practicable after the Closing, Edudata will send to its
shareholders the information statement required by Section 14f of the Securities
Exchange Act of 1934 and make such other filings required under Federal
securities law. This agreement may be executed in counterparts, all of which
taken together shall constitute a single agreement.
XXXXXX X. XXXXXXXXX
Dated: February 29, 1996 -----------------------------------
XXXXXX X. XXXXXXXXX
XXXXXXX XXXXXXXXXXX
Dated: February 29, 1996 -----------------------------------
XXXXXXX XXXXXXXXXXX
XXXXX XXXXXXX
Dated: February 29, 1996 -----------------------------------
XXXXX XXXXXXX
Dated: February ___, 1996 EDUDATA CORPORATION
By:
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Name:
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Its:
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