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Exhibit 10.8
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (this "Agreement") is made this 30th of November,
1998, by and among XXXXX TECHNOLOGY LICENSING, INC., a Florida corporation
("TTL"); INTERSOURCE HEALTH CARE, INC., a Florida ("IHC"); and the persons
listed in Exhibit "A-1" hereof who are the owners of record of all the issued
and outstanding stock of IHC who execute and deliver the Agreement ("IHC
Stockholders"), based on the following:
Recitals
TTL wishes to acquire all the issued and outstanding stock of IHC in
exchange for stock of TTL in a transaction intended to qualify as a tax-free
exchange pursuant to section 368(a)(l)(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 transaction, 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 herefrom, and other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, it is hereby agreed as follows:
DEFINITIONS
1. InterSource Health Care, Inc., incorporated in Florida, USA on November 4,
1996 with offices at 0000 Xxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxx, Xxxxxxx
00000 XXX ("IHC").
2. Xxxxx Technology Licensing, Inc. incorporated in Florida, USA on August
29, 1997 with offices at 0000 Xxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxx, Xxxxxxx,
00000 XXX ("TTL").
ARTICLE I - EXCHANGE OF STOCK
1.01 Exchange of Shares and Rights to Shares. On the terms and subject to the
conditions set forth in this Agreement; on the Closing Date, the IHC
Stockholders shall assign, transfer, and deliver to TTL, free and clear of
all liens, pledges, encumbrances, charges, restrictions, or claims of any
kind, nature, or description, all issued and outstanding shares of common
stock and any rights, warrants, programs or agreements for the purchase of
common and/or preferred stock of IHC (the "IHC Share Rights") held by
IHC's existing Stockholders or in light of any rights, warrants, programs
or agreement for the purchase of common and/or preferred stock, proposed
IHC shareholders, which shares, rights, warrants, programs and/or
agreements to purchase IHC stock shall represent all issued and
outstanding shares of IHC and any and all rights to acquire or obligations
to sell IHC stock and TTL agrees to acquire such shares and share rights
on
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such date by issuing and delivering in exchange therefore aggregate of
1,203,241 one million, two hundred and three thousand, two hundred and
forty-one) unregistered shares of TTL common stock, par value $.0.001 per
share, (the "TTL Common Stock"). Such shares of TTL unregistered Common
Stock shall be issued according to the number of IHC Share Rights held and
as set forth opposite the IHC Stockholder's respective names in Exhibit
"A-1".
1.02 Delivery of Certificates or Rights to acquire by IHC Stockholders. The
transfer of IHC Share Rights by the IHC Stockholders shall be effected by
the delivery to TTL at the Closing (as set forth in Section 1.05 hereof)
of a certificate issued to TTL representing all of the issued and
outstanding shares of IHC. The transfer of any rights to acquire or
obligations to sell IHC stock shall be effected in the form of a statement
provided by IHC setting forth all such rights and/or obligations including
a statement that there are no other rights to acquire nor obligations to
sell IHC common and/or preferred stock which are not contained in the
statement required in fulfillment of this Article 1.02.
1.03 Operation as Wholly-Owned Subsidiary. After giving effect to the
transaction contemplated hereby, TTL will own all the issued and
outstanding shares of IHC and IHC shall be merged with TTL.
1.04 Further Assurances . At the Closing and from time to time thereafter, the
IHC Stockholders shall execute such additional instruments and take such
other action as TTL may reasonably request without undue cost to the IHC
Stockholders in order to more effectively sell, transfer, and assign clear
title and ownership in the IHC Shares to TTL.
1.05 Closing and Parties. The Closing contemplated hereby shall be held at the
principal office of TTL at Xxxxx 000, 0000 Xxxxx Xxxxx Xxxx, Xxxxx,
Xxxxxxx on 10:00 a.m. November 30, 1998, or on another date to be agreed
to in writing by the parties (the "Closing Date"). The Agreement may be
closed at any time following approval by a majority of the stockholders of
TTL Common Stock as set forth in Section 4.02 hereof and the IHC
Stockholders as set forth in Section 5.02. 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.
1.06 Closing Events.
(a) TTL Deliveries. Subject to fulfillment or waiver of the conditions
set forth in Article IV, TTL shall deliver to IHC at Closing all the
following:
(i) A certificate of good standing from the secretary of State of
Florida, certifying that TTL is in good standing as a
corporation in the State of Florida;
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(ii) Incumbency and specimen signature certificates dated the
Closing Date with respect to the officers of TTL executing
this Agreement and any other document delivered pursuant
hereto on behalf of TTL;
(iii) Copies of the resolutions of TTL'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 or an assistant
secretary of TTL as of the Closing Date;
(iv) Instructions to TTL's Transfer Agent for the issuance of
certificates for 1,203,241 shares of TTL unregistered Common
Stock in the names of the IHC Stockholders and in the amounts
set forth in Exhibit "A-1" which shall be issued by TTL's
transfer agent immediately following Closing or as
expeditiously as possible thereafter; and
(v) The certificate contemplated by Section 4.03, executed by the
chief operating officer of IHC: and
(vi) The certificate contemplated by Section 4.04, dated the
Closing Date, signed by the chief operating officer of IHC.
In addition to the above deliveries, TTL shall take all steps and
actions as IHC and IHC Stockholders may reasonably request or as may
otherwise be reasonably necessary to consummate the transactions
contemplated hereby.
(b) IHC Deliveries. Subject to fulfillment or waiver of the conditions
set forth in Article V, IHC and/or IHC Stockholder's shall deliver
to TTL at Closing all the following:
(i) A certificate of good standing from the secretary of state of
Florida certifying that IHC is in good standing as a
corporation in the State of Florida;
(ii) Incumbency and specimen signature certificates dated the
Closing Date with respect to the officers of IHC executing
this Agreement and any other document delivered pursuant
hereto on behalf of IHC;
(iii) Copies of resolutions of the board of directors and of the
stockholders of IHC authorizing the execution and performance
of this Agreement and the contemplated transactions, certified
by the secretary or an assistant secretary of IHC as of the
Closing Date;
(iv) The certificate contemplated by Section 5.03, executed by the
chief operating officer of IHC; and
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(v) The certificate contemplated by Section 5.04, dated the
Closing Date, signed by the chief operating officer of IHC.
In addition to the above deliveries, IHC shall take all steps and
actions as TTL may reasonably request or as may otherwise be reasonably
necessary to consummate the transactions contemplated hereby.
1.07 Termination.
(a) This Agreement may be terminated by the board of directors of either
TTL or IHC at any time prior to the Closing Date if:
(i) 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;
(ii) 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;
In the event of termination pursuant to this paragraph (a) of
Section 1.07, 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.
(b) This Agreement may be terminated at any time prior to the Closing
Date by action of the board of directors of TTL if
(i) IHC shall fail to comply in any material respect with any of
its covenants or agreement contained in this Agreement or if
any of the representations or warranties of IHC contained
herein shall be inaccurate in any material respect or
(ii) TTL determines that there has been or is likely to be any
material adverse change in the financial or legal condition of
IHC.
In the event of termination pursuant to this paragraph (b) of
this Section 1.07, no obligation, right, remedy, or liability shall
arise hereunder. All parties shall
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bear their own costs incurred in connection with the negotiation,
preparation, and execution of this Agreement and the transactions
contemplated hereby.
(c) This Agreement may be terminated at any time prior to the Closing
Date by action of the board of directors of IHC if:
(i) TTL shall fail to comply in any material respect with any of
its covenants or agreement contained in this Agreement or if
any of the representations or warranties of TTL contained
herein shall be inaccurate in any material respect, or
(ii) IHC determines that there has been or is likely to be any
adverse change in the financial or legal condition of TTL.
In the event of termination pursuant to this paragraph (c) of
this Section 1.07. no obligation, right, remedy, or liability shall
arise hereunder. All parties shall each bear their own costs
incurred in connection with the negotiation, preparation, and
execution of this Agreement and the transactions contemplated
hereby.
1.08 Restriction on TTL Common Stock. The unregistered TTL Common Stock will,
when so issued, be validly issued and outstanding, fully paid and
non-assessable. Said Common Stock shall be issued as "restricted shares"
as that term is defined in Rule 144, as amended, and shall bear a legend
in the following manner:
THESE SECURITIES CANNOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY
ANY HOLDER TO ANY OTHER PERSON OR ENTITY UNLESS SUBSEQUENTLY REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND UNDER APPLICABLE LAW OF
THE STATE OR STATES WHERE SOLD, TRANSFERRED OR DISPOSED OF UNLESS SUCH
SALE, TRANSFER OR DISPOSITION SHALL QUALIFY UNDER AN ALLOWED EXEMPTION TO
SUCH REGISTRATION. ANY REQUEST FOR THE SALE, TRANSFER OR OTHER DISPOSITION
OF THESE SHARES SHALL BE ACCOMPANIED BY AN OPINION OF COUNSEL ACCEPTABLE
TO THIS CORPORATION.
ARTICLE II- REPRESENTATIONS, COVENANTS, AND WARRANTIES OF TTL
As an inducement to, and to obtain the reliance of IHC, TTL represents and
warrants as follows:
2.01 Organization. TTL 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 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
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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 TTL'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. TTL has full power, authority, and legal right and
has taken, or will taken 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 of TTL has authorized and approved the execution, delivery, and
performance of this Agreement and the transactions contemplated hereby;
subject to the approval of the TTL stockholders and compliance with state
and federal corporate and securities laws.
2.03 Capitalization The authorized capitalization of TTL consists of 50,000,000
shares of common stock, $0.001 par value, of which 18,064,383 shares are
issued and outstanding. All issued and outstanding shares of TTL are
legally issued, fully paid, and non-assessable and are 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 TTL.
2.04 Financial Statements.
(a) Included in Schedule 2.04 are the financial statements which were
filed by TTL in connection with TTL's Form 10-SB, as well as
quarterly audited financial statements for the periods ending March
31, 1998, June 30, 1998 and September 30, 1998 (collectively
"10Qs"), which financial statements have been duly filed with the
Securities and Exchange Commission ("SEC") as required by the 0000
Xxx.
(b) The financial statements of TTL 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
TLL financial statements present fairly, in all material respects as
of their respective dates, the financial position of TTL. TTL 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 present fairly the
assets of TTL in accordance with generally accepted accounting
principles.
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(c) TTL has filed or will file as of the Closing Date all tax returns
required to be filed by it from inception to the Closing Date. All
such returns and reports are accurate and correct in all material
respect. TTL has no material liabilities with respect to the payment
of any federal, state, county, local, or other taxes (including any
deficiencies, interest, or penalties) accrued for or applicable to
the period ended on the date of the most recent balance sheet of
TTL, except to the extent reflected on such balance sheet and all
such dates and years and periods prior thereto and for which TTL may
at said date have been liable in its own right or as transferee of
the assets of, or as successor to, any other corporation or entity,
except for taxes accrued but not yet due and payable, and to the
best knowledge of TTL, no deficiency assessment or proposed
adjustment of any such tax return is pending, proposed or
contemplated. To the best knowledge of TTL, none of such income tax
returns has been examined or is currently being examined by the
Internal Revenue Service and no deficiency assessment or proposed
adjustment of any such return is pending, proposed or contemplated.
TTL has not made any election pursuant to the provisions of any
applicable tax laws (other than elections that relate solely to
methods of accounting, depreciation, or amortization) that would
have a material adverse affect on its financial condition, its
business as presently conducted or proposed to be conducted, or any
of its respective properties or material assets. There are no
outstanding agreements or waivers extending the statutory period of
limitation applicable to any tax return of TTL.
2.05 Outstanding Warrants and Options. TTL has no existing warrants or options,
calls, or commitments of any nature relating to the authorized and
unissued TTL Common Stock, except as disclosed in documents which are
publicly filed or otherwise by TTL.
2.06 Information. The information concerning TTL 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.
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 TTL
balance sheet described in Section 2.04 and included in the information
referred to in Section 2.06:
(a) There has not been (i) any material adverse change in the business,
operations, properties, level of inventory, assets, or financial
condition of TTL or (ii) any damage, destruction, or loss to TTL
(whether or not covered by insurance) materially and adversely
affecting the business, operations, properties, assets, or
conditions or;
(b) To the best knowledge of TTL, it has not become subject to any law
or regulation which materially and adversely affects, or in the
future would be reasonably expected to adversely affect, the
business, operations,. properties, assets, or condition of TTL.
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2.08 Litigation and Proceedings. . There are no material actions, suits, or
administrative or other proceedings pending or, to the knowledge of TTL,
threatened by or against TTL or adversely affecting TTL or its properties,
at law or in equity, before any court or other governmental agency or
instrumentality, domestic or foreign, or before an arbitrator of any kind.
TTL 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 Compliance With Laws and Regulations. TTL has complied with all applicable
statutes and regulations of any federal, state, or other governmental
entity or agency thereof, except to the extent that noncompliance (i)
could not materially and adversely affect the business, operations,
properties, assets, or condition of TTL or (ii) could not result in the
occurrence of any material liability for TTL. To the best knowledge of
TTL, the consummation of this transaction will comply with all applicable
statutes and regulations, subject to the preparation and filing of any
form required by state and federal securities laws.
2.10 Compliance with Securities Laws. TTL has complied with all applicable
security statutes and regulations. of any federal, state or other
governmental entity or agency thereof, including the filing of any
required documents in regards to all sales of TTL Stock. TTL makes the
additional following securities disclosures as a material inducements to
IHC to enter into this transaction:
(a) TTL's common stock is currently traded on the OTC Bulletin Board
("OTC" or "Over-the Counter") and TTL is in compliance with all
applicable securities rules and regulations regarding the OTC
trading of its securities; and
(b) TTL voluntarily became a reporting company pursuant to section 12(g)
of the Securities Exchange Act o 1934 by virtue of filing a Form
10-SB registration statement which was approved by the SEC and is
currently effective; and
(c) TTL has filed for and been approved for a manual filing exemption
with Standard & Poor's (S&P) for 1998 and to the best of TTL's
knowledge, its securities have been and are currently trading in
compliance with applicable federal and state blue sky securities
laws; and
(d) TTL, through its approved market maker(s), has filed a current Form
211 with the N.A.S.D. pursuant to Rule 15c-211, and has otherwise
maintained and updated the Form 211 as required by applicable
securities laws and;
(e) TTL has met all current reporting requirements of Rule 12(g) and any
other applicable securities law and regulation applicable to TTL's
trading market.
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2.11 Material Contract Defaults. TTL 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 TTL, 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 TTL has not taken adequate steps
to prevent such a default from occurring.
2.12 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 TTL is a
party or to which any of its properties or operations are subject.
2.13 TTL Schedules. TTL has delivered to IHC the following schedules, which are
collectively referred to as the "TTL 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 TTL as complete,
true, and accurate of the date of this Agreement;
(a) A schedule including copies of the articles of incorporation and
bylaws of TTL in effect as of the date of this agreement;
(b) A schedule containing copies of resolutions adopted by the board of
directors of TTL approving this Agreement and the transactions
herein contemplated.
(c) A schedule setting forth the financial statements required pursuant
to Section 2.04(a) hereof,
(d) A schedule setting forth any other information, together with any
required copies of documents, required to be disclosed within the
TTL Schedules by Sections 2.01 through 2.13.
ARTICLE IV - REPRESENTATIONS, COVENANTS, AND WARRANTIES OF IHC
As an inducement to, and to obtain the reliance of, TTL, IHC represents
and warrants as follows:
3.01 Organization. IHC 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 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
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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 IHC 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 IHC's articles of incorporation
or bylaws, or other material agreement to which it is a party or by which
it is bound.
3.02 Approval of Agreement. IHC 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 IHC have authorized and approved the execution, delivery, and
performance of this Agreement and the transactions contemplated hereby;
subject to the approval of the IHC Stockholders and compliance with state
and federal corporate and securities laws.
3.03 Capitalization. The authorized capitalization of IHC consists of
100,000,000 shares of common stock $0.000l par value, of which as of the
date hereof 8,882,000 shares are issued and outstanding. All issued and
outstanding shares of IHC 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 IHC.
3.04 Financial Statements.
(a) Included in Schedule 3.04 are the unaudited Balance Sheets of IHC as
of November 30, 1998 and Statements of Income for the period then
ended.
(b) The financial statements of IHC present fairly, as of their
respective dates, the financial position of IHC. IHC did not have,
as of the date of any such balance sheets, except as and to the
extent reflected or reserved against therein, any liabilities or
obligations (absolute or contingent) which should be reflected in
any financial statements or the notes thereto and all assets
reflected therein present fairly the assets of IHC.
(c) IHC has filed or will have filed as of the Closing Date all tax
returns required to be filed by it from inception to the Closing
Date. All such returns and reports are accurate and correct in all
material respect IHC has no material liabilities with respect to the
payment of any federal, state, county, local, or other taxes
(including any deficiencies, interest, or penalties) accrued for or
applicable to the period ended on the date of the most recent
unaudited balance sheet of IHC, except to the extent reflected on
such balance sheet and adequately provide for, and all such dates
and years and periods prior thereto and for which IHC may at said
date have been liable, its own right or as transferee of the assets
of, or as successor to, any other corporation or entity, except for
taxes accrued but not yet due and payable, and to IHC's knowledge no
deficiency assessment or proposed
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adjustment of any such tax return is pending, proposed or
contemplated. Proper and accurate amounts of taxes have been
withheld by or on behalf of IHC with respect to all material
compensation paid to employees of IHC for all periods ending on or
before the date hereof, and all deposits required with respect to
compensation paid to such employees have been made in complete
compliance with the provisions of all applicable federal, state, and
local tax and other laws. To the best of IHC's knowledge, none of
such income tax returns has been examined or is currently being
examined by the Internal Revenue Service, and no deficiency
assessment or proposed adjustment of any such return is pending,
proposed or contemplated. IHC has not made any election pursuant to
the provisions of any applicable tax laws (other the elections that
relate solely to methods of accounting, depreciation, or
amortization) that would have a material adverse affect on IHC, its
financial condition, its business as presently conducted or proposed
to be conducted, or any of its properties or material assets. There
are no tax liens upon any of the assets of IHC. There are no
outstanding agreements or waivers extending the statutory period of
limitation applicable to any tax return of IHC.
3.05 Outstanding Warrants and Options. IHC has no issued warrants or options,
calls, or commitments of any nature relating to the authorized and
unissued IHC Common Stock which have not been disclosed herein as a part
of Article I, item 1.01 hereinabove.
3.06 Information. The information concerning IHC set forth in this Agreement
and in the schedules delivered by IHC pursuant hereto is complete and
accurate in all material respects and does not contain any 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. IHC shall cause the schedules delivered by IHC pursuant
hereto to TTL 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 IHC balance sheet described in
Section 3.04 and included in the information referred to in Section 3.OC:
(a) There has not been (i) any material adverse change in the business,
operations, properties level of inventory, assets, or condition of
IHC or (ii) any damage, destruction, or loss to IHC materially
adversely affecting the business, operations, properties, assets, or
conditions of IHC; and
(b) IHC has not
(i) amended its articles of incorporation or bylaws;
(ii) declared or made, or agreed to declare or make, any payment of
dividends or distributions of any assets of any kind
whatsoever to stockholders or
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purchased or redeemed, or agreed to purchase or redeem, any of
its capital stock;
(iii) waived any rights of value which in the aggregate are
extraordinary and material considering the business of IHC;
(iv) made any material change in its method of accounting;
(v) entered into any other material transactions other than those
contemplated by this Agreement;
(vi) made any material accrual or material arrangement for or
payment of bonuses or special compensation of any kind or any
severance or termination pay to any present or former officer
or employee; or
(vii) made any material increase in any profit-sharing, bonus,
deferred compensation, insurance, pension, retirement, or
other employee benefit plan, payment, or arrangement made to,
for, or with their officers, directors, or employees; and
(c) IHC has not
(i) granted or agreed to grant any options, warrants, or other
rights for its stocks, bonds, or other corporate securities
calling for the issuance thereof,
(ii) borrowed or agreed to borrow any funds or incurred, or become
subject to, any material obligation or liability (absolute or
contingent) except liabilities incurred in the ordinary course
of business;
(iii) paid any material obligation or liability (absolute or
contingent) other than current liabilities reflected in or
shown on the most recent IHC balance sheet and current
liabilities incurred since that date in the ordinary course of
business;
(iv) sold or transferred, or agreed to sell or transfer, any of its
material assets, properties, or rights, or agreed to cancel,
any material debts or claims;
(v) made or permitted any amendment or termination of any
contract, agreement, or license to which it is a party if such
amendment or termination is material, considering the business
of IHC; or
(vi) issued, delivered, or agreed to issue or deliver any stock,
bonds, or other corporate securities including debentures
(whether authorized and unissued or held as treasury stock);
and
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(d) To the best knowledge of IHC, it has not become subject to any law
or regulation which materially and adversely affects, or in the
future would be reasonably expected to adversely affect, the
business, operations, properties, assets, or condition of IHC.
3.08 Title and Related Matters. Except as provided herein or disclosed in the
most recent IHC balance sheet of its properties, inventory, interests in
properties, technology, whether patented or unpatented and assets, which
are reflected in the most recent IHC 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 e operations on such properties. To the best
knowledge of IHC, 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 IHC 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 IHC, threatened by or against
IHC or adversely affecting IHC, at law or in equity, before any court or
other governmental agency or instrumentality domestic or foreign, or
before any arbitrator of any kind IHC 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. IHC is not in default in any material respect
under the terms of outstanding contract, agreement, lease, or other
commitment which is material to the business, operations, assets, or
condition of IHC, 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 IHC 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 or, or constitute an
event of default under, any material indenture, mortgage, deed of trust,
or other material contract, agreement, or instrument to which IHC is a
party or to which any of its properties or operations are subject.
3.12 Governmental Authorizations. IHC 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 federal and state
securities and corporation laws, as hereinafter
JD IHC Initials 13 TTL Initials LHT
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provided, no authorization, approval, consent, or order of, or
registration, declaration, or filing with, any court or other governmental
body is required in connection with the execution and delivery by IHC of
this Agreement and the consummation by IHC of the transactions
contemplated hereby.
3.13 Compliance With Laws and Regulations. IHC has complied with all applicable
statutes and regulations of any federal, state, or other governmental
entity or agency thereof, except to the extent that noncompliance would
not materially and adversely affect the business, operations, properties,
assets, or condition of IHC or except to the extent that noncompliance
would not result in the occurrence of any material liability for IHC. To
the best knowledge of IHC, the consummation of this transaction will
comply with all applicable statutes and regulations, subject to the
preparation and filing of any forms required by state and federal security
laws.
3.14 Subsidiary. IHC does not own, beneficially or of record, any equity
securities in any other entity.
3.15 IHC Schedules. IHC has delivered to TTL the following schedules, which are
collectively referred to as the "IHC Schedules" and which consist of the
following separate schedules dated as of the date of execution of this
Agreement, and instruments as of such date, all certified by the chief
executive officer of IHC as complete, true, and accurate:
(a) A schedule including copies of the articles of incorporation and
bylaws of IHC and all amendments thereto in effect as of the date of
this Agreement;
(b) A schedule containing copies of resolutions adopted by the board of
directors of IHC approving this Agreement and the transactions
herein contemplated as referred to in Section 3.02:
(c) A Schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or
condition of IHC since the most recent IHC balance sheet, required
to be provided pursuant to Section 3.04 hereof,
(d) A schedule setting forth the financial statements required pursuant
to Section 3.01al hereof,
(e) A schedule setting forth any other information, together with any
required copies of documents, required to be disclosed in the IHC
Schedules by Sections 3.01 through 3.14.
IHC shall cause the IHC Schedules and the instruments delivered
to TTL 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 IHC Schedules, certified in
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15
the same manner as the original IHC Schedules, shall be delivered prior to
and as a condition precedent to the obligation of TTL to close.
ARTICLE IV - CONDITIONS PRECEDENT TO OBLIGATIONS OF IHC
The obligations of IHC under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions.
4.01 Shareholder Approval. TTL shall obtain the written consent of a majority
of its stockholders to approve the transactions contemplated by this
Agreement, including the acquisition of IHC through the issuance of TTL
common stock for all of the issued and outstanding Shares. Said written
consent shall be provided to IHC at closing.
4.02 Accuracy of Representations. The representations and warranties made by
TTL 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 TTL shall have performed or
complied with all covenants and conditions required by this Agreement to
be performed or complied with by TTL prior to or at the Closing. IHC shall
be furnished with certificates, signed by duly authorized officers of TTL
and dated the Closing Date, to the foregoing effect.
4.03 Officer's Certificates. IHC shall have been furnished with certificates
dated the Closing Date and signed by the duly authorized chief executive
officer of TTL to the effect that to such officers best knowledge no
litigation, proceeding, investigation, or inquiry is pending or, to the
best knowledge of TTL 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 TTL's own documents and
information, the certificate shall represent, to the best knowledge of the
officer, that:
(a) This Agreement has been duly approved by TTL's board of directors
and stockholders and has been duly executed and delivered in the
name and on behalf of and by its duly authorized officers pursuant
to, and in compliance with, authority granted by the board of
directors of TTL pursuant to a unanimous consent;
(b) There have been no material adverse changes in TTL up to and
including the date of the certificate;
(c) All conditions required by this Agreement have been met, satisfied,
or performed by TTL;
(d) All authorizations, consents, approvals, registrations, and/or
filings with any governmental body agency, or court required in
connection with the execution
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16
and delivery of the documents by TTL 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 TTL, wherein an unfavorable decision,
ruling, or finding could have an adverse effect on the financial
condition of TTL, the operation of TTL, or the acquisition and
reorganization contemplated herein, or any agreement or instrument
by which TTL is bound or in any way contests the existence of TTL.
4.04 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 TTL, 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 TTL.
4.05 Good Standing. IHC shall have received a certificate of good standing from
the secretary of the State of Florida, certifying that TTL is in good
standing as a corporation in the State of Florida.
4.06 Other Items. IHC shall have received such further documents, certificates,
or instruments relating to the transactions contemplated hereby as IHC may
reasonably request.
ARTICLE V - CONDITIONS PRECEDENT TO OBLIGATIONS OF TTL
The obligations of TTL under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions.
5.01 Shareholder Approval. IHC shall obtain through a majority written consent
of its stockholders authorization and approval for this Agreement and the
transactions contemplated hereby.
5.02 IHC Stockholders. Holders of all of the issued and outstanding IHC Shares
or rights to acquire IHC Shares shall agree to this Agreement and the
exchange of shares contemplated by this Agreement.
5.03 Accuracy of Representations. The representations and warranties made by
IHC and the IHC Stockholders in this Agreement were correct 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 IHC
shall have performed or compiled with all covenants and conditions
required by this Agreement to be performed or complied with by IHC prior
to
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17
or at the Closing. TTL shall be furnished with a certificate, signed by a
duly authorized officer of IHC and dated the Closing Date, to the
foregoing effect.
5.04 Officer's Certificates. TTL shall have been furnished with certificates
dated the Closing Date and signed by the duly authorized chief operating
officer of IHC to the effect that no litigation, proceeding,
investigation, or inquiry is pending or, to the best knowledge of IHC,
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 IHC's own documents, the certificate shall
represent, to the best knowledge of the officer, that:
(a) This Agreement has been duly approved by IHC's board of directors
and stockholders and has been duly executed and delivered in the
name and on behalf of IHC by its duly authorized officers pursuant
to, and in compliance with, authority granted by the board of
directors of IHC pursuant to a unanimous consent of its board of
directors and a majority consent of its stockholders or any holders
of rights to acquire IHC stock;
(b) Except as provided or permitted herein, there have been no material
adverse changes in IHC up to and including the date of the
certificate;
(c) All authorizations, consents, approvals, registrations, and/or
filing with any governmental, body, agency, or court required in
connection with the execution and delivery of the documents by IHC
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) 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 IHC, wherein an unfavorable decision,
ruling, or finding would have an adverse affect on the financial
condition of IHC, the operation of IHC, or the acquisition
contemplated herein, or any material agreement or instrument by
which IHC is bound or would in any way contest the existence of IHC.
5.05 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 IHC, 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 IHC.
5.06 Good Standing. TTL shall have received a certificate of good standing from
the appropriate authority in the State of Florida certifying that IHC is
in good standing as a corporation in the State of Florida.
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5.07 Other Items. TTL shall have received such further documents certificates
or instruments relating to the transactions contemplated hereby as TTL,
may reasonably request.
ARTICLE VI - SPECIAL COVENANTS
6.01 Indemnification by IHC. IHC will indemnify and hold harmless TTL and its
directors and Officers, and each person, if any, who controls within the
meaning of the Securities Act, from and against any' and all losses,
claims, damages, expenses, liabilities, or actions to which any of them
may become subject under applicable law (including the Securities Act and
the Securities Exchange Act) and will reimburse them for any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any claims or actions, whether or not resulting
in liability, insofar as such losses, claims, damages, expenses,
liabilities, or actions arise out of or are based upon any untrue
statement or alleged untrue statement of material fact contained in any
application or statement file with a governmental body or arising out of
or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary in order to make
the statements therein not misleading, but only insofar as any such
statement or omission was made in reliance upon and in conformity with
information furnished in writing by IHC expressly for use therein. The
indemnity agreement shall remain in full force and effect, regardless of
any investigation made by or on behalf of TTL and shall survive
consummation of the transactions contemplated by this Agreement for a
period of one year.
6.02 Indemnification by TTL. TTL will indemnify and hold harmless IHC and the
directors and Officers, and each person, if any, of IHC who controls
within the meaning of the Securities Act, from and against any and all
losses, claims, damages, expenses, liabilities, or actions to which any of
them may become subject under applicable law (including the Securities Act
and the Securities Exchange Act) and will reimburse them for any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any claims or actions, whether or not resulting
in liability, insofar as such losses, claims, damages, expenses,
liabilities, or actions arise out of or are based upon any untrue
statement or alleged untrue statement of material fact contained in any
application or statement file with a governmental body or arising out of
or are based upon the omission or alleged omission to state therein a
material: fact required to be stated therein, or necessary in order to
make the statements therein not misleading, but only insofar as any such
statement or omission was made in reliance upon and in conformity with
information furnished in writing by TTL expressly for use therein. The
indemnity agreement shall remain in full force and effect, regardless of
any investigation made by or on behalf of IHC and shall survive
consummation of the transactions contemplated by this Agreement for a
period of one year.
6.03 The Acquisition of TTL Common Stock. TTL and IHC understand and agree that
the consummation of this Agreement including the issuance of the TTL
Common Stock to IHC in exchange for the IHC Shares as contemplated hereby,
constitutes the offer and sale of securities under the Securities Act and
applicable state statutes. TTL and IHC
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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 in
that
(i) The IHC 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 TTL
Common Stock, and that this transaction involves certain
risks.
(ii) IHC Shareholders have such knowledge and experience in
business and financial matters that they are capable of
evaluating such business risks.
(iii) All information which the IHC Stockholders have provided to
TTL or the representatives concerning their suitability and
intent to hold shares in TTL following the transactions
contemplated hereby is complete accurate and correct.
(iv) The IHC Stockholders understand that the TTL 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 TTL
Common Stock: may, under certain circumstances, be
inconsistent with this exemption and may make IHC or TTL an
underwriter within the meaning of the Securities Act. It is
understood that the definition of "underwriter" focuses upon
the concept of "distribution" and that any subsequent
disposition of the subject TTL Common Stock can only be
effected in transactions which are not considered
distributions. Generally, the term "distribution" is
considered synonymous with "public offering" or any other
offer or sale involving general solicitation or general
advertising. Under present law, in determining whether a
distribution occurs when securities are sold into the public
market, under certain circumstances one must consider the
availability of public information regarding the issuer, a
holding period for the securities sufficient to assure that
the persons desiring to sell the securities without
registration first bear the economic risk of their investment,
and a limitation on the number of securities which the
stockholder is permitted to sell and on the manner of sale,
thereby reducing the potential impact of the sale on the
trading markets. These criteria are set forth specifically in
rule 144 promulgated under the Securities Act, and, one year
after the date
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20
the TTL Common Stock or IHC Shares are fully paid for, as
calculated in accordance with rule 144(d) sales of securities
in reliance upon rule 144 can only be made in limited amounts
in accordance with the terms and conditions of that Rule and
after two years from the date the securities are fully paid
for, as calculated in accordance with rule 144(d) may
generally be sold without meeting those conditions, provided
the holder is not (and has not been for the preceding three
months) an affiliate of the issuer.;
(v) The IHC Stockholders acknowledge that the shares of TTL 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. TTL is not under any obligation to
register the TTL 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 TTL Common Stock in limited amounts can be made
in reliance upon rule 144 in accordance with the terms and
conditions of that rule TTL is not under any obligation to
make rule 144 available except as set forth in this Agreement
and in the event rule 144 is not available, compliance with
Regulation A or some other disclosure exemption may be
required before IHC Stockholders can sell, transfer, or
otherwise dispose of such TTL Common Stock without
registration under the Securities Act. Subject to compliance
with federal and state securities laws, TTL's registrar and
transfer agent will maintain a stop transfer order against the
registration or transfer of the TTL Common Stock held by IHC;
Stockholders and the certificates representing the TTL Common
Stock will bear a legend in substantially the form hereinabove
set forth so restricting the sale of such securities:
(vi) TTL. will require IHC Stockholder to provide an opinion of
counsel reasonably acceptable to TTL stating that the transfer
is proper. TTL agrees to provide IHC with assistance and
cooperation in good faith when IHC seeks to sell any shares
which are free from restrictions or exempt therefrom
(b) In connection with the transactions contemplated by this Agreement,
TTL shall file with the assistance of its legal counsel, such
notices, applications, reports, or other instruments as may be
deemed by it to be necessary or appropriate in an effort to document
reliance on such exemptions, and with the appropriate regulatory
authority in the states where the IHC Stockholders reside unless an
exemption requiring no filing is available in such jurisdictions,
all to the extent and in the manner as may' be deemed by TTL to be
appropriate.
(c) The IHC Stockholders acknowledge that the basis for relying on
exemptions from registration or qualifications are factual,
depending on the conduct of the various
JD IHC Initials 20 TTL Initials LHT
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21
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.
6.04 Securities Filings. TTL shall be responsible for the preparation and
filing of any required forms, or documents, deemed necessary by TTL and
its legal counsel, with the Securities and Exchange Commission and in
jurisdictions which would require a filing with a governmental agency as a
result of the transactions contemplated in this Agreement.
6.05 Sales of Securities Under Rule 144 if Applicable.
(a) TTL will use its best efforts to at all times satisfy the current
public information requirements of rule 144 promulgated under the
Securities Act so that its stockholders can sell restricted
securities that have been held for one year or more or such other
restricted period as required by rule 144 as it is from time to time
amended.
(b) Upon being informed in writing by any person holding restricted
stock of TTL as of the date of this Agreement that such person
intends to sell any shares under rule 144 promulgated under the
Securities Act (including any rule adopted in substitution or
replacement thereof), TTL will certify in writing to such person
that it is in compliance with rule 144 current public information
requirements to enable such person to sell such person's restricted
stock under rule 144, as may be applicable under the circumstances.
(c) If any certificate representing any such restricted stock is
presented to TTL's transfer agent for registration or transfer in
connection with any sales theretofore made under rule 144, provided
such certificate is duly endorsed for transfer by the appropriate
person(s) or accompanied by a separate stock power duly executed by
the appropriate person(s) in each case with reasonable assurances
that such endorsements are genuine and effective, and is accompanied
by an opinion of counsel satisfactory to TTL and its counsel that
such transfer has complied with the requirements of rule 144, as the
case may be, TTL will use its best efforts to cooperate with the
shareholder and/or transfer agent with the registration or transfer
in connection with any sales made under rule 144.
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 Brokers. TTL and IHC agree that there were no finders or brokers involved
in bringing the parties together or who were instrumental in the
negotiation, execution, or consummation of this Agreement. Further, TTL
and IHC each agree to indemnify the other against any claim by any third
person for any commission, brokerage, or finder's
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22
fee or other payment with respect to this Agreement or the transactions
contemplated hereby based on any alleged agreement or understanding
between such party and such third person whether express or implied, from
the actions of such party.
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 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 Florida.
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 addressed as follows:
If to TTL at 0000 Xxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000
If to IHC at 0000 Xxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000
or such other addresses as shall be furnished in writing by any
party 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 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 TTL or IHC,
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
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23
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.
7.08 Survival of 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.
XXXXX TECHNOLOGY INTERSOURCE HEALTHCARE, INC.
LICENSING, INC.
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxxx Xxxxxxxxx
------------------------------- --------------------------------
Xxxx X. Xxxxx Xxxxx Xxxxxxxxx
Chief Executive Officer Chief Executive Officer
Chairman of the Board Director
Executed November 30, 1998
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Exhibit A
InterSource Health Care, Inc.
Shareholder Register
.113:1 1:1
Shareholder IHC Shares PPM Shares TTL Shares
Xxxxx Xxxxxxxxx 2,440,000 275,720
Xxxx X. Xxxxx 2,360,000 266,680
Xxxxxxx X. Xxxxx 1,180,000 133,340
Xxxx Xxxxxx 1,180,000 133,340
Xxxx Xxxxxxxxx 400,000 45,200
Xxxxxxxx Xxxxx 250,000 28,250
Xxxx Xxxxxxxx 212,000 23,956
Xxxxxxxx X. Xxxxx 200,000 22,600
Xxxxxx Xxxxxx 100,000 11,300
Xxxx Xxxxxx 50,000 5,650
Xxxxxx X. Xxxxxx, III 50,000 5,650
Xxxxx X. & Xxxxxx X. Xxxxxxxxx Living Trust 50,000 5,650
Xxxxxx X. Xxxxxxxxx 40,000 4,520
Xxxx X. Xxxxxxxxx 25,000 2,825
Xxxxxx Xxxxx 25,000 2,825
Xxxxxx Xxxxxxxxxx 25,000 2,825
Xxxxxxx Xxxxxxxxxx 20,000 2,260
Xxxxxxx Xxxxxxxxx 20,000 2,260
Xxxxxxxx Xxxxx 20,000 2,260
Xxxx Xxxxxxxxx 10,000 1,130
Xxxxxxx X. Xxxx and Xxxxx X. Xxxx 30,000 30,000
Xxxxxxx X. Xxxxxxxxx 30,000 30,000
Xxxxxx Xxxx & Xxxxxxx Xxxx, Joint Tenant with
Right of Survivorship 30,000 30,000
Xxxx X. & Xxxxx Xxxxx as Tenants by the Entirety 30,000 30,000
Xxxx X. and Xxxxx Xxxxx Irrevocable Childrens
Trust for: (1/3) Elliot Xxxxxxxx Xxxxx, (1/3)
Xxxxxx Xxxx Xxxxx, (1/3) Xxxxxxx Xxxx Xxxxx 15,000 15,000
Xxxxxx Xxxxxxx 15,000 15,000
Revocable Living Trust of Xxxx & Xxxxxxxxx Xxxxx 15,000 15,000
Xxxxxxx X. Xxxxx 15,000 15,000
Xxxxx X. Xxxxxxx, Trustee, U.T.A., DTD. 3-3-98 15,000 15,000
Xxxxxx X. Xxxxxx & Xxxxxx X. Xxxxxx 15,000 15,000
Xxxxx X. Xxxx 15,000 15,000
Total 8,657,000 225,000
Total InterSource 8,882,000 Total TTL 1,203,241
25
Exhibit A
InterSource Health Care, Inc.
Shareholder Register
.113:1 1:1
Shareholder IHC Shares PPM Shares TTL Shares
Xxxxx Xxxxxxxxx 2,440,000 275,720
Xxxx X. Xxxxx 2,360,000 266,680
Xxxxxxx X. Xxxxx 1,180,000 133,340
Xxxx Xxxxxx 1,180,000 133,340
Xxxx Xxxxxxxxx 400,000 45,200
Xxxxxxxx Xxxxx 250,000 28,250
Xxxx Xxxxxxxx 212,000 23,956
Xxxxxxxx X. Xxxxx 200,000 22,600
Xxxxxx Xxxxxx 100,000 11,300
Xxxx Xxxxxx 50,000 5,650
Xxxxxx X. Xxxxxx, III 50,000 5,650
Xxxxx X. & Xxxxxx X. Xxxxxxxxx Living Trust 50,000 5,650
Xxxxxx X. Xxxxxxxxx 40,000 4,520
Xxxx X. Xxxxxxxxx 25,000 2,825
Xxxxxx Xxxxx 25,000 2,825
Xxxxxx Xxxxxxxxxx 25,000 2,825
Xxxxxxx Xxxxxxxxxx 20,000 2,260
Xxxxxxx Xxxxxxxxx 20,000 2,260
Xxxxxxxx Xxxxx 20,000 2,260
Xxxx Xxxxxxxxx 10,000 1,130
Xxxxxxx X. Xxxx and Xxxxx X. Xxxx 30,000 30,000
Xxxxxxx X. Xxxxxxxxx 30,000 30,000
Xxxxxx Xxxx & Xxxxxxx Xxxx, Joint Tenant with
Right of Survivorship 30,000 30,000
Xxxx X. & Xxxxx Xxxxx as Tenants by the Entirety 30,000 30,000
Xxxx X. and Xxxxx Xxxxx Irrevocable Childrens
Trust for: (1/3) Elliot Xxxxxxxx Xxxxx, (1/3)
Xxxxxx Xxxx Xxxxx, (1/3) Xxxxxxx Xxxx Xxxxx 15,000 15,000
Xxxxxx Xxxxxxx 15,000 15,000
Revocable Living Trust of Xxxx & Xxxxxxxxx Xxxxx 15,000 15,000
Xxxxxxx X. Xxxxx 15,000 15,000
Xxxxx X. Xxxxxxx, Trustee, U.T.A., DTD. 3-3-98 15,000 15,000
Xxxxxx X. Xxxxxx & Xxxxxx X. Xxxxxx 15,000 15,000
Xxxxx X. Xxxx 15,000 15,000
Total 8,657,000 225,000
Total InterSource 8,882,000 Total TTL 1,203,241
26
Exhibit A to the
Exchange of Share Agreement by and between
Xxxxx Technology Licensing, Inc. and InterSource Health Care, Inc.
InterSource Health Care, Inc.
Shareholder Register
.113:1 1:1
Shareholder IHC Shares PPM Shares TTL Shares
Xxxxx Xxxxxxxxx 2,440,000 275,720
Xxxx X. Xxxxx 2,360,000 266,680
Xxxxxxx X. Xxxxx 1,180,000 133,340
Xxxx Xxxxxx 1,180,000 133,340
Xxxx Xxxxxxxxx 400,000 45,200
Xxxxxxxx Xxxxx 250,000 28,250
Xxxx Xxxxxxxx 212,000 23,956
Xxxxxxxx X. Xxxxx 200,000 22,600
Xxxxxx Xxxxxx 100,000 11,300
Xxxx Xxxxxx 50,000 5,650
Xxxxxx X. Xxxxxx, III 50,000 5,650
Xxxxx X. & Xxxxxx X. Xxxxxxxxx Living 50,000 5,650
Trust
Xxxxxx X. Xxxxxxxxx 40,000 4,520
Xxxx X. Xxxxxxxxx 25,000 2,825
Xxxxxx Xxxxx 25,000 2,825
Xxxxxx Xxxxxxxxxx 25,000 2,825
Xxxxxxx Xxxxxxxxxx 20,000 2,260
Xxxxxxx Xxxxxxxxx 20,000 2,260
Xxxxxxxx Xxxxx 20,000 2,260
Xxxx Xxxxxxxxx 10,000 1,130
Xxxxxxx X. Xxxx and Xxxxx X. Xxxx 30,000 30,000
Xxxxxxx X. Xxxxxxxxx 30,000 30,000
Xxxxxx Xxxx & Xxxxxxx Xxxx, Joint
Tenant with
Right of Survivorship 30,000 30,000
Xxxx X. & Xxxxx Xxxxx as Tenants by 30,000 30,000
the Entirety
Xxxx X. and Xxxxx Xxxxx Irrevocable
Children's
Trust for: (1/3) Elliot Xxxxxxxx Xxxxx,
(1/3) Xxxxxx Xxxx
Xxxxx, (1/3) Xxxxxxx Xxxx Xxxxx 15,000 15,000
Xxxxxx Xxxxxxx 15,000 15,000
Revocable Living Trust of Xxxx & 15,000 15,000
Xxxxxxxxx Xxxxx
Xxxxxxx X. Xxxxx 15,000 15,000
27
Xxxxx X. Xxxxxxx, Trustee, U.T.A., DTD. 15,000 15,000
3-3-98
Xxxxxx X. Xxxxxx & Xxxxxx X. Xxxxxx 15,000 15,000
Xxxxx X. Xxxx 15,000 15,000
Total 8,657,000 225,000
Total InterSource 8,882,000 Total TTL 1,203,241
28
INTERSOURCE HEALTH CARE, INC.
STATEMENTS OF OPERATIONS
For the eleven-month period ended November 30, 1998 (Unaudited)
(Unaudited)
Eleven-Month
Period ended
November
1998
----------
Sales $2,438,158
Cost of Goods Sold 658,778
----------
Gross Income from Operations 1,779,380
----------
Expenses:
Salaries 434,149
Consulting Fees 61,392
Other Operating Costs 191,208
----------
Total Expenses 686,749
----------
Net income (loss) from operations 1,092,631
----------
Other Income:
Other Income 128,712
Interest Income 165
----------
128,877
Other Expenses:
Interest Expense 7,447
----------
Net Income (Loss) $1,214,061
==========
Weighted average number of
shares outstanding 8,882,000
Net income per share $ 0.1367
==========
29
INTERSOURCE HEALTH CARE, INC.
BALANCE SHEET
November 30, 1998 (Unaudited)
(Unaudited)
November 30
1998
-----------
Assets:
Cash $ 3,247
Accounts Receivable, net of allowance
for doubtful accounts of $5000 1,576,201
Inventory, at cost 37,923
Prepaid royalty expenses 0
Deferred Charges 0
Property and Equipment, net of
accumulated depreciation of $4,750 15,122
Other Assets 67,741
-----------
Total Assets $ 1,700,234
===========
Current Liabilities:
Current portion long-term liabilities 0
Accounts payable and accrued liabilities 379,374
Notes payable 0
Customer deposits 0
Capital Lease Obligation 0
Other Current Liabilities 0
-----------
Total Current Liabilities 379,374
-----------
Long-Term Liabilities, less current portion 0
Total Liabilities $ 379,374
-----------
Stockholders' equity:
Common Stock 888
Additional paid-in capital 224,812
Retained Earnings (118,901)
Net Income 1,214,061
-----------
Total Stockholders' equity $ 1,320,860
-----------
-----------
Total liabilities and stockholders' equity $ 1,700,234
===========