EXHIBIT 10.2
Agreement and Plan Of Reorganization dated as of December 20, 2004 by and among
Secured Data, Inc., Northwest Bio-Technic Inc., and the shareholders of
Northwest Bio- Technic Inc.; and Convertible Promissory Note
AGREEMENT AND PLAN OF REORGANIZATION
Secured Data, Inc.
and
Northwest Bio-Technic Inc.
This Agreement and Plan of Reorganization ("Agreement"), dated as of
December 20, 2004, among Secured Data, Inc. (SCRE), a Nevada corporation,
Northwest Bio-Technic Inc. ("NBTI"), a British Virgin Islands corporation, and
the subscribing shareholders of Northwest Bio-Technic Inc. ("NBTI Shareholders")
who will join this Agreement by execution.
W I T N E S S E T H:
A. WHEREAS, NBTI and SCRE are corporations duly organized under the laws
of the British Virgin Islands ("BVI") and the State of Nevada, respectively.
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B. Plan of Reorganization. The subscribing NBTI Shareholders are the
owners of at least 100% of the issued and outstanding common stock of NBTI; and
NBTI solely owns directly the entire issued share capital of Huifeng
Biochemistry Joint Stock Company ("Huifeng"), which is a joint stock company
established under the laws of the People's Republic of China ("PRC") and
responsible for the production and sales of plant extracts, biochemical products
and pharmaceutical raw products in the PRC. It is the intention that 30% of the
issued and outstanding stock of NBTI shall be acquired by SCRE in exchange
solely for its voting stock at the Closing Date; and; subsequently, up to the
remaining 70% of the issued and outstanding stock of NBTI shall be acquired by
SCRE in exchange for a promissory note convertible into SCRE common stock.
C. Exchange of Shares. SCRE and the subscribing NBTI Shareholders agree
that 30% of the 500,000 common shares issued and outstanding of NBTI shall be
exchanged with SCRE for 80,735,590 shares of the common stock of SCRE. The SCRE
shares, on the Closing Date, shall be delivered ratably divided to the
individual subscribing NBTI Shareholders (or their designees) in exchange for
their NBTI shares as hereinafter set forth. Further, SCRE and the subscribing
NBTI Shareholders agree that subsequently, and subject to certain conditions,
the remaining 70% of the 500,000 common shares issued and outstanding of NBTI
shall be exchanged with SCRE for the purchase price of $1,900,000 (the "Purchase
Price"), payable by the issuance by SCRE of a convertible promissory note, the
form of which is set forth in Exhibit A hereof (the "Convertible Note"). The
Convertible Note may be convertible into 10,465,725 shares of SCRE common stock,
subject to effecting a 1:18 reverse split of the common stock.
NOW, THEREFORE, it is agreed among the parties as follows:
ARTICLE I
The Consideration
1.1 Subject to the conditions set forth herein on the "Effective Date" (as
herein defined), the subscribing Shareholders of NBTI ("NBTI Shareholders")
shall exchange 30% of their shares of NBTI (constituting at least 30% of the
issued and outstanding common stock of NBTI) for 80,735,590 shares of SCRE
common stock. The transactions contemplated by this Agreement shall be completed
at a closing ("Closing") on a closing date ("Closing Date") which shall be as
soon as practicable after joinder in this exchange by NBTI Shareholders holding
at least 30% of the outstanding NBTI common shares, except that such transaction
must be completed on or before ____, 2004, or this Agreement shall expire unless
extended in writing.
On the Closing Date, all of the documents to be furnished to SCRE and
NBTI, including the documents to be furnished pursuant to Articles VII and X of
this Agreement, shall be delivered to Xxxx X. Xxxx, Esq., to be held in escrow
until the Effective Date or the date of termination of this Agreement, whichever
first occurs, and thereafter shall be promptly distributed to the parties as
their interests may appear.
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1.2 At the Effective Date, NBTI's shareholders shall receive pro rata
shares of $0.001 par value SCRE common stock as follows:
SCRE shall issue 80,735,590 of its shares of common stock, for 30%
of the outstanding common shares of NBTI, to the subscribing
shareholders of NBTI, ratably according to their interests.
1.3 If this Agreement is duly executed by the holders of 30% of the
outstanding common stock of NBTI, subject to the other provisions
hereof, it shall become effective, and such date of final execution
shall be the "Effective Date" of this Agreement.
1.4 Provided the transaction described in paragraphs 1.2 and 1.3 above
have been consummated, and the conditions described in the
Convertible Note have been effected, SCRE shall, upon conversion of
the entirety of the Convertible Note, issue 10,465,725 (post a 1:18
reverse split) of its shares of common stock for the remaining 70%
of the outstanding common shares of NBTI to the subscribing
shareholders of NBTI, ratably according to their interests.
ARTICLE II
Issuance and Exchange of Shares
2.1 The 80,735,590 shares of $0.001 par value common stock of SCRE shall
be issued by it to the subscribing NBTI Shareholders at Closing.
2.2 SCRE represents that no outstanding options or warrants for its
unissued shares exist.
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2.3 The stock transfer books of NBTI shall be closed on the Effective
Date, and thereafter no transfers of the stock of NBTI shall be made (except
pursuant to the Convertible Note). NBTI shall appoint Xxxx X. Xxxx, Esq. as an
exchange agent ("Exchange Agent"), to accept surrender of the certificates
representing the common shares of NBTI, and to deliver in exchange for such
surrendered certificates, shares of common stock of SCRE. The authorization of
the Exchange Agent may be terminated by SCRE after six months following the
Effective Date.
2.4 No fractional shares of SCRE stock shall be issued as a result of the
Agreement. Shares shall be rounded up to nearest whole share.
2.5 At the Effective Date, each holder of a certificate or certificates
representing common shares of NBTI, upon presentation and surrender of such
certificate or certificates to the Exchange Agent, shall be entitled to receive
the consideration set forth herein, except that holders of those shares as to
which dissenters' rights shall have been validly asserted and perfected pursuant
to BVI law shall not be converted into shares of SCRE common stock, but shall
represent only such dissenters' rights. Upon such presentation, surrender, and
exchange as provided in this Section 2.5, certificates representing shares of
NBTI previously held shall be canceled. Until so presented and surrendered, each
certificate or certificates which represented issued and outstanding shares of
NBTI at the Effective Date shall be deemed for all purposes to evidence the
right to receive the consideration set forth in Section 1.2 of this Agreement.
If the certificates representing shares of NBTI have been lost, stolen,
mutilated or destroyed, the Exchange Agent shall require the submission of an
indemnity agreement and may require the submission of a bond in lieu of such
certificate.
ARTICLE III
Representations, Warranties
and Covenants of Northwest Bio-Technic Inc.
No representations or warranties are made by any director, officer,
employee or shareholder of NBTI as individuals, except as and to the extent
stated in this Agreement or in a separate written statement (the "NBTI
Disclosure Statement"), if any. NBTI hereby represents, warrants and covenants
to SCRE except as stated in the NBTI Disclosure Statement, as follows:
3.1 NBTI is a corporation duly organized, validly existing and in good
standing under the laws of British Virgin Islands, and has the corporate power
and authority to own or lease its properties and to carry on its business as it
is now being conducted. NBTI solely owns directly the entire issued share
capital of Huifeng Biochemistry Joint Stock Company ("Huifeng"), which is a
joint stock company established under the laws of the People's Republic of China
("PRC") and responsible for the production and sales of plant extracts,
biochemical products and pharmaceutical raw products in the PRC. The Certificate
of Incorporation and Bylaws of NBTI are complete and accurate, and the minute
books of NBTI contain a record, which is complete and accurate in all material
respects, of all meetings, and all corporate actions of the shareholders and
board of directors of NBTI.
3.2 The aggregate number of shares which NBTI is authorized to issue is
500,000 shares of common stock of which 500,000 shares are issued and
outstanding.
3.3 NBTI has complete and unrestricted power to enter into and, upon the
appropriate approvals as required by law, to consummate the transactions
contemplated by this Agreement.
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3.4 Neither the making of nor the compliance with the terms and provisions
of this Agreement and consummation of the transactions contemplated herein by
NBTI will conflict with or result in a breach or violation of the Articles of
Incorporation or Bylaws of NBTI.
3.5 The execution, delivery and performance of this Agreement has been
duly authorized and approved by NBTI Board of Directors.
3.6 There are no legal proceedings or regulatory proceedings involving
material claims pending, or to the knowledge of the executive officers of NBTI,
threatened against NBTI or affecting any of its assets or properties, and to the
knowledge of NBTI' officers, NBTI is not in any material breach or violation of
or default under any contract or instrument to which NBTI is a party, or under
its respective Articles of Incorporation or Bylaws, nor is there any court or
regulatory order pending, applicable to NBTI.
3.7 The representations and warranties of NBTI shall be true and correct
as of the date hereof and as of the Effective Date.
3.8 No representation or warranty by NBTI in this Agreement, the NBTI
Disclosure Statement or any certificate delivered pursuant hereto contains any
untrue statement of a material fact or omits to state any material fact
necessary to make such representation or warranty not misleading.
3.9 To the knowledge of the executive officers of NBTI, all trade names,
inventions, discoveries, ideas, research, engineering, methods, practices,
processes, systems, formulae, designs, drawings, products, projects,
improvements, developments, know-how, and trade secrets which are used in the
conduct of NBTI's business, whether registered or unregistered (collectively the
Proprietary Rights) are owned by NBTI. To the knowledge of the executive
officers of NBTI, NBTI created or developed such Proprietary Rights and such
Proprietary Rights are not subject to any restriction, lien, encumbrance, right,
title or interest in others. All of the Proprietary Rights stand solely in the
name of NBTI and not in the name of any shareholder, director, officer, agent,
partner or employee or anyone else known to the executive officers of NBTI, and
none of the same have any right, title, interest, restriction, lien or
encumbrance therein or thereon or thereto. To the knowledge of the executive
officers of NBTI, NBTI's ownership and use of the Proprietary Rights do not and
will not infringe upon, conflict with or violate in any material respect any
patent, copyright, trade secret or other lawful proprietary right of any other
party, and no claim is pending or, to the knowledge of the executive officers of
NBTI, threatened to the effect that the operations of NBTI infringe upon or
conflict with the asserted rights of any other person under any of the
Proprietary Rights, and to the knowledge of the executive officers of NBTI there
is no reasonable basis for any such claim (whether or not pending or
threatened). No claim is pending, or to the knowledge of the executive officers
of NBTI, threatened to the effect that any such Proprietary Rights owned or
licensed by NBTI, or which NBTI otherwise has the right to use, is invalid or
unenforceable by NBTI.
3.10 (i) NBTI has not received notice of any material violation of or
investigation relating to any environmental or pollution law, regulation, or
ordinance with respect to assets now or previously owned or operated by NBTI
that has not been fully and finally resolved; (ii) to the knowledge of the
executive officers of NBTI, all permits, licenses and other authorizations which
are required under United States, federal, state, provincial and local laws with
respect to pollution or protection of the environment ("Environmental Laws"),
including Environmental Laws relating to actual or threatened emissions,
discharges or releases of pollutants, contaminants or hazardous or toxic
materials or wastes ("Pollutants") have been obtained; (iii) to the knowledge of
the executive officers of NBTI, no conditions exist on, in or about the
properties now or previously owned or operated by NBTI or any third-party
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properties to which any Pollutants generated by NBTI were sent or released that
could give rise on the part of NBTI to material liability under any
Environmental Laws, material claims by third parties under Environmental Laws or
under common law or the occurrence of material costs to avoid any such liability
or claim; and (iv) to the knowledge of the executive officers of NBTI, all
operators of Huifeng's assets are in material compliance with all terms and
conditions of such Environmental Laws, permits, licenses and authorizations, and
are also in compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in such laws or contained in any regulation, code, plan, order,
decree, judgment, notice or demand letter issued, entered, promulgated or
approved thereunder, relating to Huifeng's assets.
3.11 NBTI has delivered to SCRE financial statements of Huifeng dated
September 30, 2004. All such statements, herein sometimes called " Huifeng I
Financial Statements," are (and will be) complete and correct in all material
respects and, together with the notes to these financial statements, present
fairly the financial position and results of operations of Huifeng for the
periods indicated. All financial statements of Huifeng will have been prepared
in accordance with generally accepted accounting principles.
3.12 Since the dates of the Huifeng Financial Statements, there have not
been any material adverse changes in the business or condition, financial or
otherwise, of Huifeng, Huifeng does not have any material liabilities or
obligations, secured or unsecured except as shown on the updated financials of
Huifeng dated September 30, 2004 (whether accrued, absolute, contingent or
otherwise).
ARTICLE IV
Representations, Warranties and Covenants of
Secured Data, Inc.
No representations or warranties are made by any director, officer,
employee or shareholder of SCRE as individuals, except as and to the extent
stated in this Agreement or in a separate written statement.
SCRE hereby represents, warrants and covenants to NBTI and its
shareholders, except as stated in the SCRE Disclosure Statement, if any, as
follows:
4.1 SCRE is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada, and has the corporate power and
authority to own or lease its properties and to carry on its business as it is
now being conducted. The Articles of Incorporation and Bylaws of SCRE, copies of
which have been delivered to NBTI, are complete and accurate, and the minute
books of SCRE contain a record, which is complete and accurate in all material
respects, of all meetings, and all corporate actions of the shareholders and
Board of Directors of SCRE.
4.2 The aggregate number of shares which SCRE is authorized to issue is
100,000,000 shares of common stock with $.001 par value per share and 5,000,000
shares of Preferred Stock of which 12,869,368 shares of such common stock are
issued and outstanding, fully paid and non-assessable. SCRE will have, on the
Closing Date, no outstanding options, warrants or other rights to purchase, or
subscribe to, or securities convertible into or exchangeable for any shares of
capital stock. No preferred stock of SCRE is outstanding.
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4.3 SCRE has complete and unrestricted power to enter into and, upon the
appropriate approvals as required by law, to consummate the transactions
contemplated by this Agreement.
4.4 Neither the making of nor the compliance with the terms and provisions
of this Agreement and consummation of the transactions contemplated herein by
SCRE will conflict with or result in a breach or violation of the Articles of
Incorporation or Bylaws of SCRE.
4.5 The execution of this Agreement has been duly authorized and approved
by the Board of Directors of SCRE.
4.6 SCRE has delivered to NBTI audited financial statements of SCRE dated
December 31, 2003 and interim unaudited for September 30, 2004. All such
statements, herein sometimes called "SCRE Financial Statements," are (and will
be) complete and correct in all material respects and, together with the notes
to these financial statements, present fairly the financial position and results
of operations of SCRE for the periods indicated. All statements of SCRE will
have been prepared in accordance with generally accepted accounting principles.
4.7 Since the dates of the SCRE Financial Statements, there have not been
any material adverse changes in the business or condition, financial or
otherwise, of SCRE. SCRE does not have any material liabilities or obligations,
secured or unsecured except as shown on the updated financials of SCRE dated
September 30, 2004 (whether accrued, absolute, contingent or otherwise). SCRE
shall have, at Closing, no outstanding assets or liabilities except as described
in Schedule 4.7 attached hereto.
4.8 There are no legal proceedings or regulatory proceedings involving
material claims pending, or, to the knowledge of the officers of SCRE,
threatened against SCRE or affecting any of its assets or properties, and SCRE
is not in any material breach or violation of or default under any contract or
instrument to which SCRE is a party, and no event has occurred which with the
lapse of time or action by a third party could result in a material breach or
violation of or default by SCRE under any contract or other instrument to which
SCRE is a party or by which they or any of their respective properties may be
bound or affected, or under their respective Articles of Incorporation or
Bylaws, nor is there any court or regulatory order pending, applicable to SCRE.
4.9 SCRE shall not enter into or consummate any transactions prior to the
Effective Date other than in the ordinary course of business and will issue no
securities, pay no dividend, or increase the compensation of officers and will
not enter into any agreement or transaction which would adversely affect its
financial condition except pursuant to the proposed minutes of the Board of
Directors of SCRE presented herewith for approval by NBTI.
4.10 The representations and warranties of SCRE shall be true and correct
as of the date hereof and as of the Effective Date.
4.11 SCRE corporate books and records are true records of its actions.
SCRE will also deliver to NBTI on or before the Closing Date any reports
relating to the financial and business condition of SCRE which occur after the
date of this Agreement and any other reports sent generally to its shareholders
after the date of this Agreement.
4.12 SCRE has no employee benefit plan in effect at this time.
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4.13 SCRE is current in its filing obligations under the federal
securities laws. No report filed by SCRE with the Securities and Exchange
Commission contains any untrue statement of a material fact or omits to state
any material fact necessary to make such representation or warranty not
misleading, and all such reports comply as to form and substance in all material
respects with all applicable SEC requirements.
4.14 SCRE ("Indemnifying Party") hereby agrees to indemnify NBTI, the NBTI
Shareholders and each of the officers, agents and directors of NBTI or the NBTI
Shareholders against any loss, liability, claim, damage or expense (including,
but not limited to, any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever) (each an "Indemnified Party") to which it
or they may become subject arising out of or based on either (i) any breach of
or inaccuracy in any of the representations and warranties or covenants or
conditions made by SCRE and/or its officers or directors herein in this
Agreement; or (ii) any and all liabilities arising out of or in connection with:
(A) any of the assets of SCRE prior to the Closing; or (B) the operations of
SCRE prior to the Closing.
ARTICLE V
1 Obligations of the Parties Pending the Effective Date
5.1 At all times prior to the Effective Date during regular business
hours, each party will permit the other to examine its books and records and the
books and records of its subsidiaries and will furnish copies thereof on
request. It is recognized that, during the performance of this Agreement, each
party may provide the other parties with information which is confidential or
proprietary information. The recipient of such information shall at all times
protect such information from disclosure, other than disclosure required by
rule, regulation, or law, other than to members of its own or affiliated
organizations and its professional advisers, in the same manner as it protects
its own confidential or proprietary information from unauthorized disclosure,
and not use such information to the competitive detriment of the disclosing
party. In addition, if this Agreement is terminated for any reason, each party
shall promptly return or cause to be returned all documents or other written
records of such confidential or proprietary information, together with all
copies of such writings and, in addition, shall either furnish or cause to be
furnished, or shall destroy, or shall maintain with such standard of care as is
exercised with respect to its own confidential or proprietary information, all
copies of all documents or other written records developed or prepared by such
party on the basis of such confidential or proprietary information. No
information shall be considered confidential or proprietary if it is (a)
information already in the possession of the party to whom disclosure is made,
(b) information acquired by the party to whom the disclosure is made from other
sources, or (c) information in the public domain or generally available to
interested persons or which at a later date passes into the public domain or
becomes available to the party to whom disclosure is made without any wrongdoing
by the party to whom the disclosure is made.
5.2 SCRE and NBTI shall promptly provide each other with information as to
any significant developments in the performance of this Agreement, and shall
promptly notify the other if it discovers that any of its representations,
warranties and covenants contained in this Agreement or in any document
delivered in connection with this Agreement was not true and correct in all
material respects or became untrue or incorrect in any material respect.
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5.3 All parties to this Agreement shall take all such action as may be
reasonably necessary and appropriate and shall use their best efforts in order
to consummate the transactions contemplated hereby as promptly as practicable.
ARTICLE VI
Procedure For Exchange
6.1 At the Closing Date, the exchange shall be effected within 4 business
days after receipt by Xxxx X. Xxxx, Esq., as attorney for SCRE, of the NBTI
common stock certificates representing 30% of the issued and outstanding common
stock of NBTI, by instructing the transfer agent of SCRE to issue the new
certificates and sending the certificates of SCRE by Federal Express to the
exchanging NBTI Shareholders.
ARTICLE VII
Conditions Precedent to the Consummation of the Exchange
The following are conditions precedent to the consummation of the
Agreement on or before the Effective Date:
7.1 NBTI and SCRE shall have performed and complied with all of its
respective obligations hereunder which are to be complied with or performed on
or before the Effective Date and SCRE and NBTI shall provide one another at the
Closing with a certificate to the effect that such party has performed each of
the acts and undertakings required to be performed by it on or before the
Closing Date pursuant to the terms of this Agreement.
7.2 This Agreement, the transactions contemplated herein shall have been
duly and validly authorized, approved and adopted, at meetings of the
shareholders of NBTI duly and properly called for such purpose in accordance
with the applicable laws.
7.3 No action, suit or proceeding shall have been instituted or shall have
been threatened before any court or other governmental body or by any public
authority to restrain, enjoin or prohibit the transactions contemplated herein,
or which might subject any of the parties hereto or their directors or officers
to any material liability, fine, forfeiture or penalty on the grounds that the
transactions contemplated hereby, the parties hereto or their directors or
officers, have violated any applicable law or regulation or have otherwise acted
improperly in connection with the transactions contemplated hereby, and the
parties hereto have been advised by counsel that, in the opinion of such
counsel, such action, suit or proceeding raises substantial questions of law or
fact which could reasonably be decided adversely to any party hereto or its
directors or officers.
7.4 All actions, proceedings, instruments and documents required to carry
out this Agreement and the transactions contemplated hereby and the form and
substance of all legal proceedings and related matters shall have been approved
by counsel for NBTI and SCRE.
7.5 The representations and warranties made by NBTI and SCRE in this
Agreement shall be true as though such representations and warranties had been
made or given on and as of the Closing Date.
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7.6 Securities Laws Compliance. Each shareholder of NBTI ("NBTI
Shareholder"), by executing this Agreement hereby represents and warrants to
SCRE as follows: (a) Ownership of the NBTI shares. The NBTI Shareholder owns,
beneficially and of record, good and marketable title to its NBTI shares, free
and clear of all security interests, liens, adverse claims, encumbrances,
equities, proxies, options or stockholders' agreements. At the Closing, the NBTI
Shareholder will convey to SCRE good and marketable title to the NBTI shares,
free and clear of any security interests, liens, adverse claims, encumbrances,
equities, proxies, options, stockholders' agreements or restrictions.
(b) Authority Relative to this Agreement. The execution, delivery and
performance of this Agreement by the NBTI Shareholder and the consummation by
the NBTI Shareholder of the transactions contemplated hereby have been duly
authorized by the NBTI Shareholder, and no other actions on the part of the NBTI
Shareholder are necessary to authorize this Agreement or the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by the NBTI Shareholder and constitutes a valid and binding agreement
of the NBTI Shareholder, enforceable against the NBTI Shareholder in accordance
with its terms, except as such enforcement may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
generally or by general principles of equity.
(c) Consents and Approvals; No Violations. Except for requirements of
applicable laws, no filing with, and no permit, authorization, consent or
approval of, any public body or authority is necessary for the consummation by
the NBTI Shareholder of the transactions contemplated by this Agreement. Neither
the execution and delivery of this Agreement by the NBTI Shareholder nor the
consummation by the NBTI Shareholder of the transactions contemplated hereby,
nor compliance by the NBTI Shareholder with any of the provisions hereof, will
(a) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, license, contract,
agreement or other instrument or obligation to which the NBTI Shareholder is a
party or by which the NBTI Shareholder or his property may be bound or (b)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to the NBTI Shareholder, except in the case of clauses (a) and (b)
for violations, breaches or defaults which are not in the aggregate material to
the NBTI Shareholder.
(d) Restricted Securities. The NBTI Shareholder acknowledges that the SCRE
shares will not be registered pursuant to the Securities Act of 1933, as amended
(the "Securities Act") or any applicable state securities laws, that the SCRE
shares will be characterized as "restricted securities" under federal securities
laws, and that under such laws and applicable regulations the SCRE shares cannot
be sold or otherwise disposed of without registration under the Securities Act
or an exemption therefrom. In this regard, the NBTI Shareholder is familiar with
Rule 144 promulgated under the Securities Act, as currently in effect, and
understands the resale limitations imposed thereby and by the Securities Act.
(e) Accredited Investor. The NBTI Shareholder is either an "Accredited
Investor" as that term is defined in Rule 501 of Regulation D promulgated under
the Securities Act, or, if not, the NBTI Shareholder is a sophisticated investor
and is able to bear the economic risk of acquiring the SCRE Shares pursuant to
the terms of this Agreement, including a complete loss of the NBTI Shareholder's
investment in the SCRE shares.
(f) Legend. The NBTI Shareholder acknowledges that the certificate(s)
representing the SCRE shares shall each conspicuously set forth on the face or
back thereof a legend in substantially the following form:
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THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS
TO THE SECURITIES UNDER SAID ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED.
7.7 SCRE shall furnish NBTI with a certified copy of a resolution or
resolutions duly adopted by the Board of Directors of SCRE, approving this
Agreement and the transactions contemplated by it.
ARTICLE VIII
Termination and Abandonment
8.1 Anything contained in this Agreement to the contrary notwithstanding,
the Agreement may be terminated and abandoned at any time prior to the Effective
Date:
(a) By mutual consent of NBTI and SCRE;
(b) By NBTI, or SCRE, if any condition set forth in Articles VII or
X relating to the other party has not been met by the Effective Date or has not
been waived in writing by the other party;
(c) By NBTI, or SCRE, if any suit, action or other proceeding shall
be pending or threatened by the federal or a state government before any court
or governmental agency, in which it is sought to restrain, prohibit or otherwise
affect the consummation of the transactions contemplated hereby;
(d) By any party, if there is discovered any material error,
misstatement or omission in the representations and warranties of another party;
(e) By any party if the Effective Date is not within 15 days from
the date hereof, or if the Closing Date passes without performance.
8.2 Any of the terms or conditions of this Agreement may be waived in
writing at any time by the party which is entitled to the benefit thereof, by
action taken by its Board of Directors provided; however, that such action shall
be taken only if, in the judgment of the Board of Directors taking the action,
such waiver will not have a materially adverse effect on the benefits intended
under this Agreement to the party waiving such term or condition.
ARTICLE IX
Termination of Representation and
Warranties and Certain Agreements
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9.1 The respective representations and warranties of the parties hereto
shall expire with, and be terminated and extinguished four years after the
Effective Date of the Agreement; provided, however, that the covenants and
agreements of the parties hereto shall survive in accordance with their terms.
ARTICLE X
Miscellaneous
10.1 This Agreement embodies the entire agreement between the parties, and
there have been and are no agreements, representations or warranties among the
parties other than those set forth herein or those provided for herein.
10.2 To facilitate the execution of this Agreement, any number of
counterparts hereof may be executed, and each such counterpart shall be deemed
to be an original instrument, but all such counterparts together shall
constitute but one instrument.
10.3 All parties to this Agreement agree that if it becomes necessary or
desirable to execute further instruments or to make such other assurances as are
deemed necessary, the party requested to do so will use its best efforts to
provide such executed instruments or do all things necessary or proper to carry
out the purpose of this Agreement.
10.4 This Agreement may be amended upon approval of the Board of Directors
of each party provided that the shares issuable hereunder shall not be amended
without approval of the requisite shareholders of NBTI.
10.5 Any notices, requests, or other communications required or permitted
hereunder shall be delivered personally or sent by overnight courier service,
fees prepaid, addressed as follows:
To Northwest Bio-Technic Inc.:
c/o Law Offices of Xxxx X. Xxxx
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxx, Esq.
Facsimile: 213-381-7450
To: Secured Data, Inc.:
000 Xxxxx Xxx Xxxxx, Xxxxx 000-000
Xxxxxxxxx, XX 00000
Attn: President
Facsimile: 000-000-0000
39
or such other addresses as shall be furnished in writing by any party, and any
such notice or communication shall be deemed to have been given as of the date
received.
10.6 No press release or public statement will be issued relating to the
transactions contemplated by this Agreement without prior approval of NBTI and
SCRE. However, either NBTI or SCRE may issue at any time any press release or
other public statement it believes on the advice of its counsel it is obligated
to issue to avoid liability under the law relating to disclosures, but the party
issuing such press release or public statement shall make a reasonable effort to
give the other party prior notice of and opportunity to participate in such
release or statement.
10.7 The Parties to this Agreement hereby agree as follows: (a) Subsequent
to the Closing, and as a condition of the effectiveness of the Convertible Note
and purchase of the remaining 70% of the issued and outstanding stock of NBTI,
SCRE shall effect the 1) name change to a name selected by NBTI and 2) a reverse
split of one for eighteen (1:18) shares of the issued and then outstanding
shares of common stock of SCRE, which reverse split will become effective at the
same time as the name change; and further, SCRE shall , within 48 hours of
filing, provide NBTI with time stamped file copies of duly authorized Articles
of Amendment as filed with the Secretary of the State of Nevada, which effects
the reverse split and name change.
10.8 Any controversy arising out of, connected to, or relating to any
matters herein of the transactions with the Parties hereto on behalf of the
undersigned, or this Agreement, or the breach thereof, including, but not
limited to any claims of violations of federal and/or state securities laws,
banking statutes, consumer protection statutes, federal and/or state
anti-racketeering (e.g. RICO) claims as well as any common law claims and any
state law claims of fraud, negligence, negligent misrepresentations, and/or
conversion, or the laws of any territory, country or jurisdiction, shall be
settled by arbitration; and in accordance with this paragraph any judgment on
the arbitrator's award may be entered in any court having jurisdiction thereof.
In the event of such a dispute, each party agrees to arbitration conducted
through the auspices of American Arbitration Association. Venue for any action
shall lie in Los Angeles, California.
40
IN WITNESS WHEREOF, the parties have entered into this Agreement this 20th
day of December, 2004.
Secured Data, Inc.
By: /s/ Xxxx Xxxx An
--------------------------------
President & CEO
Northwest Bio-Technic Inc.
By: /s/ Xxxx Xxxx An
--------------------------------
President
NORTHWEST BIO-TECHNIC INC. SHAREHOLDERS
Signatures Please Print Names
1_________________________ Xxxx Xxxx An: 250,000 NBTI shares
2_________________________ Hou Xxx Xxx: 50,000 NBTI shares
3_________________________ Xxxxx Xxxxx: 50,000 NBTI shares
4_________________________ Xxxx Xxxxx: 50,000 NBTI shares
5_________________________ Xxxx Xxxxxx: 50,000 NBTI shares
6_________________________ Wang Xugang: 50,000 NBTI shares
41
SCHEDULE 4.7
CHANGES IN FINANCIAL CONDITION
List of Liabilities and Amount:
EXHIBIT A
CONVERTIBLE PROMISSORY NOTE
DUE JUNE 3O, 2005
THIS CONVERTIBLE PROMISSORY NOTE is issued by Secured Data, Inc., a Nevada
corporation (the "Company"), designated as its Convertible Promissory Note, due
June 30, 2005 (the "CONVERTIBLE NOTE") issued pursuant to the Agreement And Plan
of Reorganization dated December 20, 2004 between Northwest Bio-Technic Inc.
("NBTI"), a British Virgin Islands corporation, its shareholders
("Shareholders") and the Company (the "Reorganization Agreement").
FOR VALUE RECEIVED, the Company promises to pay (ratably as per their
shareholdings in NBTI) to the Shareholders or their registered assigns (the
"HOLDERS"), the principal sum of $1,900,000 on June 30, 2005 or such earlier
date as the Convertible Note is required or permitted to be repaid as provided
hereunder (the "MATURITY DATE"), and to pay interest to the Holders on the
aggregate unconverted and then outstanding principal amount of this Convertible
Note at the rate of 5% per annum, payable on the Maturity Date as set forth
herein. Interest shall be calculated on the basis of a 360-day year and shall
accrue on the Maturity Date. On the Maturity Date, the Company may, in its sole
discretion, pay the principal sum (and interest accrued) by issuing to the
Holder 10,465,725 shares of the Company's restricted common stock at $0.1815 per
share, provided a required 1 for 18 reverse stock split of the common stock has
been effected.
This Convertible Note is subject to the following additional provisions:
1. SUBJECT TO REORGANIZATION AGREEMENT. This Convertible Note has been issued
subject to certain investment representations of the original Holders set forth
in the Reorganization Agreement and may be transferred or exchanged only in
compliance with the Reorganization Agreement and applicable federal and state
securities laws and regulations. Prior to due presentment to the Company for
transfer of this Convertible Note, the Company and any agent of the Company may
treat the persons in whose names this Convertible Note is duly registered on the
Convertible Note Register as the owners hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or not this
Convertible Note is overdue, and neither the Company nor any such agent shall be
affected by notice to the contrary.
42
2. EVENTS OF DEFAULT.
(a) "EVENT OF DEFAULT", wherever used herein, means any one of the
following events (whatever the reason and whether it shall be voluntary or
involuntary or effected by operation of law or pursuant to any judgment, decree
or order of any court, or any order, rule or regulation of any administrative or
governmental body):
(i) any default in the payment of the principal of, interest on, or
liquidated damages in respect of, any Convertible Note, free of any claim of
subordination, as and when the same shall become due and payable (whether on a
Conversion Date or the Maturity Date or by acceleration or otherwise) which
default is not cured, if possible to cure, within 30 days of notice of such
default sent by the Holder;
(ii) the Company or any of its subsidiaries shall commence, or there
shall be commenced against the Company or any such subsidiary a case under any
applicable bankruptcy or insolvency laws as now or hereafter in effect or any
successor thereto, or the Company commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to the Company or any subsidiary thereof or there
is commenced against the Company or any subsidiary thereof any such bankruptcy,
insolvency or other proceeding which remains undismissed for a period of 60
days; or the Company or any subsidiary thereof is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Company or any subsidiary thereof suffers any
appointment of any custodian or the like for it or any substantial part of its
property which continues undischarged or unstayed for a period of 60 days; or
the Company or any subsidiary thereof makes a general assignment for the benefit
of creditors; or the Company shall fail to pay, or shall state that it is unable
to pay, or shall be unable to pay, its debts generally as they become due; or
the Company or any subsidiary thereof shall call a meeting of its creditors with
a view to arranging a composition, adjustment or restructuring of its debts; or
the Company or any subsidiary thereof shall by any act or failure to act
expressly indicate its consent to, approval of or acquiescence in any of the
foregoing; or any corporate or other action is taken by the Company or any
subsidiary thereof for the purpose of effecting any of the foregoing.
(b) REMEDIES UPON DEFAULT. If any Event of Default occurs and is
continuing, the full principal amount of this Convertible Note, together with
interest and other amounts owing in respect thereof, to the date of acceleration
shall become at the Holders' election, immediately due and payable in cash. The
Holder need not provide and the Company hereby waives any presentment, demand,
protest or other notice of any kind, and the Holders may immediately and without
expiration of any grace period enforce any and all of its rights and remedies
hereunder and all other remedies available to it under applicable law. Such
declaration may be rescinded and annulled by Holders at any time prior to
payment hereunder and the Holders shall have all rights as Convertible Note
holders until such time, if any, as the full payment under this Section shall
have been received by it. No such rescission or annulment shall affect any
subsequent Event of Default or impair any right consequent thereon.
43
3. CONVERSION.
(a) CONVERSION RIGHT. At any time after the Original Issue Date until this
Convertible Note is no longer outstanding, this Convertible Note shall be
convertible into shares of Common Stock at the option of the Holder, in whole
(and not in part) at any time and from time to time (subject to the limitations
on conversion set forth in this Section 3(a) hereof). The Holders shall effect
conversions by delivering to the Company the form of Notice of Conversion
attached hereto as ANNEX A (a "NOTICE OF CONVERSION"), specifying therein the
principal amount of Convertible Note to be converted and the date on which such
conversion is to be effected (a "CONVERSION DATE"). If no Conversion Date is
specified in a Notice of Conversion, the Conversion Date shall be the date that
such Notice of Conversion is provided hereunder. Conversions hereunder shall
have the effect of lowering the outstanding principal amount of this Convertible
Note in an amount equal to the applicable conversion. The Holders and the
Company shall maintain records showing the principal amount converted and the
date of such conversion. The Holders and any assignee, by acceptance of this
Convertible Note, acknowledge and agree that, by reason of the provisions of
this paragraph, following conversion of this Convertible Note, the principal
amount of this Convertible Note may be less than the amount stated on the face
hereof.
(b) UNDERLYING SHARES ISSUABLE UPON CONVERSION AND PURSUANT TO THE
CONVERSION OF PRINCIPAL AMOUNT. The number of shares of Common Stock issuable
upon conversion shall be 10,465,725 (post a required 1 for 18 reverse stock
split) shares of the Company's restricted common stock (the "Underlying
Shares").
(d) DELIVERIES UPON CONVERSION. Not later than 10 Business Days after any
Conversion Date, the Company will deliver to the Holders a certificate or
certificates representing the Underlying Shares representing the number of
shares of Common Stock being acquired upon the conversion of Convertible Note
(including, if so timely elected by the Company, shares of Common Stock
representing the payment of accrued interest).
(f) ADJUSTMENTS.
(i) If the Company, at any time while the Convertible Note is
outstanding: (A) shall pay a stock dividend or otherwise make a distribution or
distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock (which, for avoidance of
doubt, shall not include any shares of Common Stock issued by the Company
pursuant to this Convertible Note, including interest thereon), (B) subdivide
outstanding shares of Common Stock into a larger number of shares, (C) combine
(including by way of reverse stock split) outstanding shares of Common Stock
into a smaller number of shares, or (D) issue by reclassification of shares of
the Common Stock any shares of capital stock of the Company, then the number of
Underlying Shares into which this Convertible Note is convertible into shall be
correspondingly adjusted by multiplying such number of shares by a fraction of
which the numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding before such event and of which the
denominator shall be the number of shares of Common Stock outstanding after such
event. Any adjustment made pursuant to this Section shall become effective
immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or
re-classification.
44
(ii) All calculations under this Section 3 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 3, the number of shares of Common Stock deemed to be outstanding
as of a given date shall be the sum of the number of shares of Common Stock
(excluding treasury shares, if any) outstanding on a fully diluted basis.
(g) The Company covenants that all shares of Common Stock that shall be so
issuable shall, upon issue, be duly and validly authorized, issued and fully
paid, nonassessable.
(h) The issuance of certificates for shares of the Common Stock on
conversion of the Convertible Note shall be made without charge to the Holders
thereof for any documentary stamp or similar taxes that may be payable in
respect of the issue or delivery of such certificate, provided that the Company
shall not be required to pay any tax that may be payable in respect of any
transfer involved in the issuance and delivery of any such certificate upon
conversion in a name other than that of the Holder of such Convertible Note so
converted and the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
4. DEFINITIONS. For the purposes hereof, in addition to the terms defined
elsewhere in this Convertible Note: (a) capitalized terms not otherwise defined
herein have the meanings given to such terms in the Reorganization Agreement,
and (b) the following terms shall have the following meanings:
"BUSINESS DAY" means any day except Saturday, Sunday and any day which
shall be a federal legal holiday in the United States or a day on which banking
institutions in the State of New York are authorized or required by law or other
government action to close.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the common stock, $0.001 par value per share, of the
Company and stock of any other class into which such shares may hereafter have
been reclassified or changed.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"ORIGINAL ISSUE DATE" shall mean the date of the first issuance of the
Convertible Note regardless of the number of transfers of any Convertible Note
and regardless of the number of instruments which may be issued to evidence such
Convertible Note. "SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
45
"UNDERLYING SHARES" means the shares of Common Stock issuable upon
conversion of Convertible Note or as payment of interest in accordance with the
terms hereof.
5. DEBT OBLIGATION. This Convertible Note is a direct debt obligation of the
Company. This Convertible Note ranks PARI PASSU with all other Convertible Notes
now or hereafter issued under the terms set forth herein.
6. REPLACEMENT OF NOTE. If this Convertible Note shall be mutilated, lost,
stolen or destroyed, the Company shall execute and deliver, in exchange and
substitution for and upon cancellation of a mutilated Convertible Note, or in
lieu of or in substitution for a lost, stolen or destroyed Convertible Note, a
new Convertible Note for the principal amount of this Convertible Note so
mutilated, lost, stolen or destroyed but only upon receipt of evidence of such
loss, theft or destruction of such Convertible Note, and of the ownership
hereof, and indemnity, if requested, all reasonably satisfactory to the Company.
7. INTERPRETATION; CHOICE OF LAW. All questions concerning the construction,
validity, enforcement and interpretation of this Convertible Note shall be
governed by and construed and enforced in accordance with the internal laws of
the State of California, without regard to the principles of conflicts of law
thereof. Each party hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Convertible Note or the
transactions contemplated hereby. If either party shall commence an action or
proceeding to enforce any provisions of this Convertible Note, then the
prevailing party in such action or proceeding shall be reimbursed by the other
party for its reasonable attorneys' fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action or
proceeding.
8. WAIVER. Any waiver by the Company or the Holders of a breach of any provision
of this Convertible Note shall not operate as or be construed to be a waiver of
any other breach of such provision or of any breach of any other provision of
this Convertible Note. The failure of the Company or the Holders to insist upon
strict adherence to any term of this Convertible Note on one or more occasions
shall not be considered a waiver or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of this
Convertible Note. Any waiver must be in writing.
9. MISCELLANEOUS. If any provision of this Convertible Note is invalid, illegal
or unenforceable, the balance of this Convertible Note shall remain in effect,
and if any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances. If it
shall be found that any interest or other amount deemed interest due hereunder
violates applicable laws governing usury, the applicable rate of interest due
hereunder shall automatically be lowered to equal the maximum permitted rate of
46
interest. The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law or other
law which would prohibit or forgive the Company from paying all or any portion
of the principal of or interest on the Convertible Note as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this indenture, and the Company (to the extent
it may lawfully do so) hereby expressly waives all benefits or advantage of any
such law, and covenants that it will not, by resort to any such law, hinder,
delay or impeded the execution of any power herein granted to the Holder, but
will suffer and permit the execution of every such as though no such law has
been enacted. Whenever any payment or other obligation hereunder shall be due on
a day other than a Business Day, such payment shall be made on the next
succeeding Business Day.
IN WITNESS WHEREOF, the Company has caused this Convertible Note to be
duly executed by a duly authorized officer as of the date first above indicated.
SECURED DATA, INC.
By:
--------------------------------
Name: Xxxx Xxx An
Title: Chief Executive Officer
47
