REORGANIZATION AND STOCK PURCHASE AGREEMENT
by and between
xxxxxxxxx.xxx, inc.
a Nevada corporation,
on the one hand
and
Xxxxx'x International Franchising, Inc.
a Florida corporation
and
Weight Loss Forever International, Inc.
a Virginia corporation
on the other hand
REORGANIZATION AND STOCK PURCHASE AGREEMENT
REORGANIZATION AND STOCK PURCHASE AGREEMENT ("Agreement"), dated as of
September 30, 2001 at 5:00 p.m., by and among xxxxxxxxx.xxx, inc., a Nevada
corporation ("YTIX"), on the one hand, and Xxxxx'x International Franchising,
Inc., a Florida corporation ("Sobiks"), and Weight Loss Forever International,
Inc., a Virginia corporation ("WLF"), on the other hand. Each of YTIX, Sobiks,
and WLF shall be referred to herein as a "Party" and collectively as the
"Parties."
W I T N E S S E T H
WHEREAS, Sobiks owns 100% of the issued and outstanding common stock of WLF
as set forth in Exhibit A attached hereto (the "WLF Shares");
WHEREAS, Sobiks desires to sell and YTIX desires to purchase all of the WLF
Shares in accordance with the terms set forth herein;
WHEREAS, the Parties desire and intend that the transactions contemplated
by this Agreement will be a tax free reorganization under Section 368(a)(1)(A)
of the Internal Revenue Code of 1986, as amended.
NOW THEREFORE, in consideration of the premises and respective mutual
agreements, covenants, representations and warranties herein contained, it is
agreed between the parties hereto as follows:
ARTICLE 1
SALE AND PURCHASE OF THE WLF SHARES
1.1 Sale of the WLF Shares. At the Closing, subject to the terms and
------------------------
conditions herein set forth, and on the basis of the representations, warranties
and agreements herein contained, Sobiks shall sell to YTIX and YTIX shall
purchase from Sobiks, the WLF Shares. YTIX shall pay to Sobiks, or its assigns,
as consideration for the receipt of the WLF Shares, an aggregate of Twenty Six
Million Four Thousand Seven Hundred Sixteen (26,004,716) shares of YTIX common
stock (the "YTIX Shares"). The YTIX Shares shall constitute eighty percent
(80%) of the issued and outstanding common stock of YTIX as of the Closing
(after giving effect to the potential issuance of 2,150,000 shares owed to a
YTIX creditor).
1.2 Position and Title. Effective as early as reasonably possible
------------------ following the filing of all necessary documents
with the Securities and Exchange Commission, the entire Board of Directors and
all of the officers of YTIX shall resign, and Sobiks shall appoint the
individuals identified on EXHIBIT B attached hereto as the officers and
directors of YTIX and WLF.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Sobiks and WLF. To induce YTIX
--------------------------------------------------
to enter into this Agreement and to consummate the transactions contemplated
hereby, Sobiks and WLF represent and warrant, as of the date hereof and as of
the Closing, as follows:
2.1.1 Sobiks and WLF have the full right, power and authority to enter
into this Agreement and to carry out and consummate the transactions
contemplated herein. This Agreement constitutes the legal, valid and binding
obligation of Sobiks and WLF. Sobiks hereby expressly represents and warrants
that the approval of the shareholders of Sobiks is not required in order for
Sobiks to consummate the transactions contemplated herein.
2.1.2 Corporate Existence and Authority of Sobiks. Sobiks is a
------------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Florida. It has all requisite corporate power, franchises,
licenses, permits and authority to own its properties and assets and to carry on
its business as it has been and is being conducted. It is in good standing in
each state, nation or other jurisdiction wherein the character of the business
transacted by it makes such qualification necessary.
2.1.3 Corporate Existence and Authority of WLF. WLF is a corporation
------------------------------------------
duly organized, validly existing and in good standing under the laws of the
State of Virginia. It has all requisite corporate power, franchises, licenses,
permits and authority to own its properties and assets and to carry on its
business as it has been and is being conducted. It is in good standing in each
state, nation or other jurisdiction wherein the character of the business
transacted by it makes such qualification necessary.
2.1.4 Capitalization of WLF. The authorized equity securities of WLF
-----------------------
consists of 50,000,000 shares of common stock with no par value, of which
10,304,200 shares are issued and outstanding as set forth on EXHIBIT A attached
hereto. Except as set forth on SCHEDULE 2.1.4, (i) no other shares of capital
stock of WLF are issued and outstanding; (ii) all of the issued and outstanding
shares have been duly and validly issued in accordance and compliance with all
applicable laws, rules and regulations and are fully paid and nonassessable;
(iii) there are no options, warrants, rights, calls, commitments, plans,
contracts or other agreements of any character granted or issued by WLF which
provide for the purchase, issuance or transfer of any shares of the capital
stock of WLF nor are there any outstanding securities granted or issued by WLF
that are convertible into any shares of the equity securities of WLF, and none
is authorized; (iv) WLF is not obligated or committed to purchase, redeem or
otherwise acquire any of its equity; (v) all presently exercisable voting rights
in WLF are vested exclusively in its outstanding shares of common stock, each
share of which is entitled to one vote on every matter to come before it's
shareholders; and (vi) other than as may be contemplated by this Agreement,
there are no voting trusts or other voting arrangements with respect to any of
WLF's equity securities.
2.1.5 Subsidiaries. "Subsidiary" or "Subsidiaries" means all
------------
corporations, trusts, partnerships, associations, joint ventures or other
Persons, as defined below, of which a corporation or any other Subsidiary of
such corporation owns not less than twenty percent (20%) of the voting
securities or other equity or of which such corporation or any other Subsidiary
of such corporation possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies, whether through ownership of
voting shares, management contracts or otherwise. "Person" means any
individual, corporation, trust, association, partnership, proprietorship, joint
venture or other entity. WLF does not have any subsidiaries.
2.1.6 Execution of Agreement. Except as set forth on SCHEDULE 2.1.6,
------------------------
the execution and delivery of this Agreement does not, and the consummation of
the transactions contemplated hereby will not: (a) violate, conflict with,
modify or cause any default under or acceleration of (or give any party any
right to declare any default or acceleration upon notice or passage of time or
both), in whole or in part, any charter, article of incorporation, bylaw,
mortgage, lien, deed of trust, indenture, lease, agreement, instrument, order,
injunction, decree, judgment, law or any other restriction of any kind to which
either Sobiks or WLF are a party or by which either of them or any of their
properties are bound; (b) result in the creation of any security interest, lien,
encumbrance, adverse claim, proscription or restriction on any property or asset
(whether real, personal, mixed, tangible or intangible), right, contract,
agreement or business of Sobiks or WLF; (c) violate any law, rule or regulation
of any federal or state regulatory agency; or (d) permit any federal or state
regulatory agency to impose any restrictions or limitations of any nature on
Sobiks or WLF or any of their respective actions.
2.1.7 Taxes.
-----
2.1.7.1 Except as set forth on SCHEDULE 2.1.7, all taxes, assessments,
fees, penalties, interest and other governmental charges with respect to WLF
which have become due and payable on the date hereof have been paid in full or
adequately reserved against by WLF, (including without limitation, income,
property, sales, use, franchise, capital stock, excise, added value, employees'
income withholding, social security and unemployment taxes), and all interest
and penalties thereon with respect to the periods then ended and for all periods
thereto;
2.1.7.2 Except as set forth on SCHEDULE 2.1.7 there are no agreements,
waivers or other arrangements providing for an extension of time
with respect to the assessment of any tax or deficiency against WLF, nor are
there any actions, suits, proceedings, investigations or claims now pending
against WLF, nor are there any actions, suits, proceedings, investigations or
claims now pending against WLF in respect of any tax or assessment, or any
matters under discussion with any federal, state, local or foreign authority
relating to any taxes or assessments, or any claims for additional taxes or
assessments asserted by any such authority, and there is no basis for the
assertion of any additional taxes or assessments against WLF, and
2.1.7.3 Except as set forth on SCHEDULE 2.1.7, the consummation of the
transactions contemplated by this Agreement will not result in the imposition of
any additional taxes on or assessments against WLF.
2.1.8 Disputes and Litigation. Except for those matters set forth on
-------------------------
SCHEDULE 2.1.8, there is no suit, action, litigation, proceeding, investigation,
claim, complaint, or accusation pending, threatened against or affecting WLF or
any of its properties, assets or business or to which WLF is a party, in any
court or before any arbitrator of any kind or before or by any governmental
agency (including, without limitation, any federal, state, local, foreign or
other governmental department, commission, board, bureau, agency or
instrumentality), and there is no basis for such suit, action, litigation,
proceeding, investigation, claim, complaint, or accusation; (b) there is no
pending or threatened change in any environmental, zoning or building laws,
regulations or ordinances which affect or could affect WLF or any of its
properties, assets or businesses; and (c) there is no outstanding order, writ,
injunction, decree, judgment or award by any court, arbitrator or governmental
body against or affecting WLF or any of its properties, assets or business.
There is no litigation, proceeding, investigation, claim, complaint or
accusation, formal or informal, or arbitration pending, or any of the aforesaid
threatened, or any contingent liability which would give rise to any right of
indemnification or similar right on the part of any director or officer of WLF
or any such person's heirs, executors or administrators as against WLF.
2.1.9 Compliance with laws. Except as set forth in SCHEDULE 2.1.9, WLF
--------------------
has at all times been, and presently is, in full compliance with, and has not
received notice of any claimed violation of, any applicable federal, state,
local, foreign and other laws, rules and regulations. WLF has filed all
returns, reports and other documents and furnished all information required or
requested by any federal, state, local or foreign governmental agency and all
such returns, reports, documents and information are true and complete in all
respects. All permits, licenses, orders, franchises and approvals of all
federal, state, local or foreign governmental or regulatory bodies required of
WLF for the conduct of its business have been obtained, no violations are or
have been recorded in respect of any such permits, licenses, orders, franchises
and approvals, and there is no litigation, proceeding, investigation,
arbitration, claim, complaint or accusation, formal or informal, pending or
threatened, which may revoke, limit, or question the validity, sufficiency or
continuance of any such permit, license, order, franchise or approval. Such
permits, licenses, orders, franchises and approvals are valid and sufficient for
all activities presently carried on by WLF.
2.1.10 Guaranties. Except as set forth in SCHEDULE 2.1.10, WLF has not
-----------
guaranteed any dividend, obligation or indebtedness of any Person; nor has any
Person guaranteed any dividend, obligation or indebtedness of WLF.
2.1.11 Financial Statements. On or before the Closing Date, WLF shall
---------------------
have delivered to YTIX the unaudited balance sheet of WLF as of September 30,
2001 (the "WLF Financial Statements Date"), and the related statements of income
and cash flows for the nine months then ended, attached hereto as EXHIBIT C.
Such financial statements of WLF (collectively, the "WLF Financial Statements")
have been or will be prepared in accordance with generally accepted accounting
principles, applied on a consistent basis throughout the periods covered
thereby, have or will present fairly the financial condition of WLF as of such
dates and the results of operations of WLF for such periods, are or will be
correct and complete, and are or will be consistent with the books and records
of WLF (which books and records are or will be correct and complete). There are
no liabilities except as expressed on the WLF Financial Statements as of the WLF
Financial Statements Date.
2.1.12 Assets of Company. WLF has acquired, or prior to the Closing
------------------
Date will have acquired, all of the tangible and intangible property and assets
necessary to conduct its business as now conducted and as proposed to be
conducted (the "WLF Assets"). WLF owns all of its property and assets free and
clear of all mortgages, liens, loans, and encumbrances, except such encumbrances
and liens which arise in the ordinary course of business and do not materially
impair WLF's ownership or use of such property or assets. With respect to the
property and assets it leases, WLF is in compliance with such leases and, to the
best of its knowledge, holds a valid leasehold interest free of any liens,
claims, or encumbrances.
2.1.13 Valid Issuance of Securities. The WLF Shares that are being
-------------------------------
sold to YTIX hereunder, when sold, and delivered in accordance with the terms
hereof for the consideration expressed herein, will be duly and validly issued,
fully paid, and nonassessable. Additionally, the WLF Shares shall be free and
clear of all liens, encumbrances or claims of any kind.
2.1.14 Title to WLF Assets and Related Matters. To the best knowledge
-----------------------------------------
of WLF, WLF has good and marketable title to, or valid leasehold interests in,
all of the WLF Assets, free from any Encumbrances except those specified in
SCHEDULE 2.1.14. The use of the WLF Assets is not subject to any Encumbrances
(other than those specified in the preceding sentence), and such use does not
materially encroach on the property or rights of anyone else. All Real Property
and tangible personal property of WLF are suitable for the purposes for which
they are used, in good working condition and reasonable repair, free from any
known defects, except such minor defects that would not in the aggregate exceed
$10,000.
2.1.15 Real Property. SCHEDULE 2.1.15 describes all real estate used
--------------
in the operation of the WLF business as well as any other real estate that is in
the possession of or leased by WLF and the improvements (including buildings and
other structures) located on such real estate (collectively, the "Real
Property"), and lists any leases under which any such Real Property is possessed
(the "Real Estate Leases"). WLF is not currently in Default under any of the
Real Estate Leases. Excepted as listed on SCHEDULE 2.1.15, WLF does not have an
ownership interest in any Real Property.
2.1.16 Certain Personal Property. Except as set forth on SCHEDULE
---------------------------
2.1.16, there are no material items of tangible personal property that were not
included in the WLF Financial Statements, including cash on hand. Since the WLF
Financial Statements Date, WLF has not acquired or disposed of any items of
tangible personal property that have, in each case, a carrying value in excess
of $10,000. All of WLF's tangible personal property is in good operating
condition, reasonable wear and tear excepted.
2.1.17 Non-Real Estate Leases. WLF is not currently in default under
------------------------
any Non-Real Estate Leases, and WLF is not aware of any default by any of the
lessors there under. "Non-Real Estate Leases" refers to any and all leases that
relate to an asset or property (other than Real Property) used in the operation
of the WLF business or otherwise possessed by WLF, including but not limited to
all trucks, automobiles, machinery, equipment, furniture and computers.
2.1.18 Sales Deposits. SCHEDULE 2.1.18 lists all events to be performed
--------------
after the Closing Date for which sales deposits have been received as of the
date hereof.
2.1.19 Inventory. All inventory of WLF consists of items of quality
---------
and quantity saleable in the ordinary course of business at regular sales prices
of WLF in the ordinary course of its business.
2.1.20 Outstanding Debt. Other than as set forth in the WLF
-----------------
financials, attached hereto as Exhibit C, WLF has no outstanding indebtedness or
borrowed money and is not a guarantor or otherwise contingently liable for any
indebtedness for borrowed money (including, without limitation, liability by way
of agreement, contingent or otherwise, to purchase, provide funds for payment,
supply finds or otherwise invest in any debtor or otherwise to insure any
creditor against loss) which is not set forth on the WLF Financial Statements.
2.1.21 Outstanding Accounts Receivable. Except as set forth on
---------------------------------
SCHEDULE 2.1.21, none of the accounts receivable listed on the WLF Financial
Statements (the "Accounts Receivable") is more than sixty (60) days old.
2.1.22 Intellectual Property. Except for those items listed on
----------------------
SCHEDULE 2.1.22, WLF does not have any reason to believe that WLF does not have
sufficient title and ownership of, or hold a valid license to use, all patents,
trademarks, service marks, trade names, copyrights, trade secrets, domain names,
URL's, information, proprietary rights and processes necessary for its business
as now conducted and as proposed to be conducted without any conflict with or
infringement of the rights of others. There are no outstanding options,
licenses or agreements of any kind relating to the foregoing, nor is WLF bound
by or a party to any options, licenses, or agreements of any kind with respect
to the patents, trademarks, service marks, trade names, copyrights, trade
secrets, licenses, information, proprietary rights and processes of any other
person or entity. WLF has not received any communications alleging that WLF has
violated, or by conducting its business, would violate any of the patents,
trademarks, service marks, trade names, copyrights, trade secrets, or other
proprietary rights or processes of any other person or entity. WLF is not aware
that any of its employees is obligated under any contract (including licenses,
covenants, or commitments of any nature) or other agreement, or subject to any
judgment, decree, or order of any court or administrative agency, that would
interfere with the use of his best efforts to promote the interests of WLF or
that would conflict with WLF's business as proposed to be conducted. Neither
the execution nor delivery of this Agreement, nor the carrying on of WLF's
business by the employees of WLF, nor the conduct of WLF's business will
conflict with or result in a breach of the terms, conditions, or provisions of,
or constitute a default under, any contract, covenant, or instrument under which
any of such employees is now obligated.
2.1.23 Employment Relationships. Except for those employees listed on
-------------------------
SCHEDULE 2.1.23, WLF is not aware that any officer or key employee, or that any
group of key employees, intends to terminate their employment with WLF, nor does
WLF have a present intention to terminate the employment of any of the
foregoing. To the best of WLF's knowledge and belief, no employee or advisor of
WLF is, or is now expected to be, in violation of any term of any employment
contract or any other common law obligation to a former employer relating to the
right of any such employee to be employed by WLF because of the nature of the
business conducted or to be conducted by WLF or to the use of trade secrets or
proprietary information of others, and the employment of WLF's employees does
not subject WLF or YTIX to any liability. There is neither pending nor, to
WLF's knowledge and belief, threatened, any actions, suits, proceedings, or
claims, or to its knowledge any basis therefore or threat thereof, with respect
to any contract, agreement, covenant or obligation referred to in the preceding
sentence. WLF does not have any collective bargaining agreement covering any of
its employees.
2.1.24 Incentive Compensation Arrangements. Except as disclosed on
-------------------------------------
SCHEDULE 2.1.24, there are no deferred compensation, incentive, bonus or other
plans, programs or arrangements that provide incentive, bonus, or other similar
emoluments in connection with the employment of WLF's employees. WLF will
prepare and deliver to YTIX a comprehensive listing of all accrued benefits of
each employee of WLF, at a date as of five (5) days before Closing Date and
shall value these benefits at the rates of pay in effect as of that date.
2.1.25 Absence of Certain Changes. Since the WLF Financial Statements
----------------------------
Date, WLF has conducted the WLF business in the ordinary course and there has
not been:
(a) any material adverse change in the WLF business or its liabilities;
(b) any distribution or payment declared or made in respect of its capital
stock by way of dividends, purchase or redemption of shares or
otherwise;
(c) except as disclosed in SCHEDULE 2.1.25, any increase in the
compensation payable or to become payable to any director, officer,
employee or agent, except for merit and seniority increases for
non-officer employees made in the ordinary course of business, nor any
other change in any employment or consulting arrangement;
(d) any sale, assignment or transfer of the WLF Assets, or any additions
to or transactions involving any WLF Assets, other than those made in
the ordinary course of business;
(e) other than in the ordinary course of business, any waiver or release
of any claim or right or cancellation of any debt held; or
(f) any payments to any Affiliate of WLF, except as specified in SCHEDULE
2.1.25.
2.1.26 Previous Sales; Warranties. To the best knowledge of WLF, all
----------------------------
goods sold or distributed and services performed by WLF were of merchantable and
satisfactory quality, and WLF has not breached any express or implied warranties
in connection with the sale or distribution of such goods and performances of
such services.
2.1.27 Events Prior to Closing. Except as set forth in on SCHEDULE
--------------------------
2.1.27, since September 30, 2001 there has not been any material adverse change
in the business, condition (financial or otherwise), operations, results of
operations or, to WLF's knowledge, future prospects of WLF. WLF has not taken
any action since September 30, 2001 outside the ordinary course of business.
WLF is not aware of any customer or group of customers, which together
constitute more than ten percent (10%) of WLF's total net sales, that has
cancelled, or contemplates canceling, any business with WLF.
2.1.28 Finder's Fees. No Person retained by WLF is or will be entitled
-------------
to any commission or finders or similar fee in connection with the transactions
contemplated by this Agreement.
2.1.29 Disclosure. WLF warrants that to the best of its knowledge it
----------
has fully provided YTIX with all the information, which YTIX has requested for
deciding whether to acquire the WLF Shares. This Agreement, the Schedules and
the Exhibits hereto as well as any other document, certificate, schedule,
financial, business or other statement furnished to YTIX by or on behalf of WLF
in connection with the transactions contemplated hereby, do not contain any
untrue statement of a material fact and do not omit to state a material fact
necessary in order to make the statements contained herein or therein not
misleading.
2.1.30 Certain Business Relationships. Other than as disclosed herein,
------------------------------
none of the shareholders of WLF has been involved in any business arrangements
or relationship with WLF, and none of the shareholders owns any asset, tangible
or intangible, which is used in the Business, save for those matters listed on
SCHEDULE 2.1.30.
2.1.31 Sobiks acknowledges that all of the YTIX Shares will be
"restricted securities" (as such term is defined in Rule 144 promulgated under
the Securities Act of 1933, as amended ("Rule 144")), and will include the
restrictive legend set forth in Section 3.2 hereof, and, except as otherwise set
forth in this Agreement, that the shares cannot be sold for a period of one year
from the date of issuance unless registered with the United States Securities
and Exchange Commission ("SEC") and qualified by appropriate state securities
regulators, or unless Sobiks obtains written consent from YTIX and otherwise
comply with an exemption from such registration and qualification (including,
without limitation, compliance with Rule 144).
2.2 Representations and Warranties of YTIX. To induce Sobiks and WLF
----------------------------------------
to enter into this Agreement and to consummate the transactions contemplated
hereby, YTIX represents and warrants, as of the date hereof and as of the
Closing, as follows:
2.2.1 Corporate Existence and Authority of YTIX. YTIX is a corporation
-----------------------------------------
duly organized, validly existing and in good standing under the laws of the
State of Nevada. It has all requisite corporate power, franchises, licenses,
permits and authority to own its properties and assets and to carry on its
business as it has been and is being conducted. It is in good standing in each
state, nation or other jurisdiction in each state, nation or other jurisdiction
wherein the character of the business transacted by it makes such qualification
necessary.
2.2.2 Capitalization of YTIX. The authorized equity securities of YTIX
-----------------------
consists of 100,000,000 shares of common stock, par value $0.001. As of the
date of this Agreement, YTIX has 4,351,179 shares of common stock issued and
outstanding. No other shares of capital stock of YTIX are issued and
outstanding. All of the issued and outstanding shares have been duly and
validly issued in accordance and compliance with all applicable laws, rules and
regulations and are fully paid and nonassessable. All presently exercisable
voting rights in YTIX are vested exclusively in its outstanding shares of common
stock, each share of which is entitled to one vote on every matter to come
before it's shareholders, and other than as may be contemplated by this
Agreement, there are no voting trusts or other voting arrangements with respect
to any of YTIX' equity securities.
2.2.3 Subsidiaries. YTIX does not have any subsidiaries.
-------------
2.2.4 Execution of Agreement. The execution and delivery of this
-------------------------
Agreement does not, and the consummation of the transactions contemplated hereby
will not: (a) violate, conflict with, modify or cause any default under or
acceleration of (or give any party any right to declare any default or
acceleration upon notice or passage of time or both), in whole or in part, any
charter, article of incorporation, bylaw, mortgage, lien, deed of trust,
indenture, lease, agreement, instrument, order, injunction, decree, judgment,
law or any other restriction of any kind to which YTIX is a party or by which it
or any of its properties are bound; (b) result in the creation of any security
interest, lien, encumbrance, adverse claim, proscription or restriction on any
property or asset (whether real, personal, mixed, tangible or intangible),
right, contract, agreement or business of YTIX; (c) violate any law, rule or
regulation of any federal or state regulatory agency; or (d) permit any federal
or state regulatory agency to impose any restrictions or limitations of any
nature on YTIX or any of its actions.
ARTICLE 3
CLOSING AND DELIVERY OF DOCUMENTS
3.1 Closing. The Closing shall occur effective as of September 30,
--------
2001, or such other date as the Parties hereto agree. At the Closing the
following shall occur as a single integrated transaction:
3.2 Delivery by YTIX:
-------------------
(a) YTIX shall deliver to Sobiks the YTIX Shares, fully paid and
non-assessable and subject to no liens, security interests, pledges,
encumbrances, charges, restrictions, demands or claims in any other party
whatsoever, except as set forth in the legend on the certificate(s), which
legend shall provide as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF FOR A PERIOD OF ONE YEAR FROM THE ISSUANCE THEREOF
EXCEPT (i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT AND ANY APPLICABLE STATE LAWS OR (ii) UPON THE EXPRESS
WRITTEN AGREEMENT OF THE COMPANY AND COMPLIANCE, TO THE EXTENT
APPLICABLE, WITH RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE
UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES).
(b) YTIX shall deliver to Sobiks written confirmation of the approval
of the herein described transactions by YTIX's Board of Directors as set forth
in Section 4.1 hereof, as well as the election and appointment of the officers
and directors as set forth in Section 1.2 hereof.
3.3 Delivery by Sobiks:
---------------------
(a) Sobiks shall deliver to YTIX all of the WLF Shares and all
instruments of conveyance and transfer required to vest in YTIX ownership of the
WLF Shares subject to no liens, security interests, pledges, encumbrances,
charges, restrictions, demands or claims in any other party whatsoever.
(b) Sobiks shall deliver to YTIX written confirmation of the approval
of the herein described transactions by Sobiks' Board of Directors as set forth
in Section 4.1 hereof.
ARTICLE 4
CONDITIONS, TERMINATION, AMENDMENT AND WAIVER
4.1 Conditions Precedent. This Agreement, and the transactions
---------------------
contemplated hereby, shall be subject to the approval of the Board of Directors
of YTIX and Sobiks, which shall be delivered at the Closing.
4.2 Termination. Notwithstanding anything to the contrary contained
------------
in this Agreement, this Agreement may be terminated and the transactions
contemplated hereby may be abandoned only by the mutual consent of all of the
parties.
4.3 Waiver and Amendment. Any term, provision, covenant,
----------------------- representation, warranty or condition of
this Agreement may be waived, but only by a written instrument signed by the
party entitled to the benefits thereof. The failure or delay of any party at any
time or times to require performance of any provision hereof or to exercise its
rights with respect to any provision hereof shall in no manner operate as a
waiver of or affect such party's right at a later time to enforce the same. No
waiver by any party of any condition, or of the breach of any term, provision,
covenant, representation or warranty contained in this Agreement, in any one
or more instances, shall be deemed to be or construed as a further or
continuing waiver of any such condition or breach or waiver of any other
condition or of the breach of any other term, provision, covenant,
representation or warranty. No modification or amendment of this Agreement shall
be valid and binding unless it is in writing and signed by all parties hereto.
ARTICLE 5
COVENANTS
5.1 To induce YTIX to enter into this Agreement and to consummate the
transactions contemplated hereby, and without limiting any covenant, agreement,
representation or warranty made, Sobiks and WLF covenant and agree as follows:
5.1.1 Notices and Approvals. Sobiks and WLF agree: (a) to give all
-----------------------
notices to third parties which may be necessary or deemed desirable by YTIX in
connection with the transactions contemplated hereby; (b) to use its best
efforts to obtain all federal and state governmental regulatory agency
approvals, consents, permit, authorizations, and orders necessary or deemed
desirable by YTIX in connection with this Agreement and the consummation of the
transaction contemplated hereby; and (c) to use its best efforts to obtain all
consents and authorizations of any other third parties necessary or deemed
desirable by YTIX in connection with this Agreement and the consummation of the
transactions contemplated hereby.
5.1.2 Information for YTIX's Statements and Applications. Sobiks and
----------------------------------------------------
WLF and their employees, accountants and attorneys shall cooperate fully with
YTIX in the preparation of any statements or applications made by YTIX to any
federal or state governmental regulatory agency in connection with this
Agreement and the transactions contemplated hereby and to furnish YTIX with all
information concerning Sobiks and WLF necessary or deemed desirable by YTIX for
inclusion in such statements and applications, including, without limitation,
all requisite financial statements and schedules.
5.1.3 Access to Information. YTIX, together with its appropriate
-----------------------
attorneys, agents and representatives, shall be permitted to make the full and
complete investigation of Sobiks and WLF and have full access to all of the
books and records of the other during reasonable business hours.
Notwithstanding the foregoing, such parties shall treat all such information as
confidential and shall not disclose such information without the prior consent
of the other.
5.1.4 Audited Financial Statements. Sobiks shall cause to be delivered
----------------------------
YTIX, no later than November 10, 2001, audited financial statements of WLF as
required for SEC filings.
5.2 To induce Sobiks and WLF to enter into this Agreement and to
consummate the transactions contemplated hereby, and without limiting any
covenant, agreement, representation or warranty made, YTIX covenants and agrees
as follows:
5.2.1 Access to Information. Sobiks and WLF, together with their
-----------------------
appropriate attorneys, agents and representatives, shall be permitted to make
the full and complete investigation of YTIX and have full access to all of the
books and records of the other during reasonable business hours.
Notwithstanding the foregoing, such parties shall treat all such information as
confidential and shall not disclose such information without the prior consent
of the other.
ARTICLE 6
MISCELLANEOUS
6.1 Expenses. Except as otherwise specifically provided for herein,
---------
whether or not the transactions contemplated hereby are consummated, each of the
parties hereto shall bear the cost of all fees and expenses relating to or
arising from its compliance with the various provisions of this Agreement and
such party's covenants to be performed hereunder, and except as otherwise
specifically provided for herein, each of the parties hereto agrees to pay all
of its own expenses (including, without limitation, attorneys and accountants'
fees and printing expenses) incurred in connection with this Agreement, the
transactions contemplated hereby, the negotiations leading to the same and the
preparations made for carrying the same into effect, and all such fees and
expenses of the parties hereto shall be paid prior to Closing.
6.2 Notices. Any notice, request, instruction or other document
--------
required by the terms of this Agreement, or deemed by any of the parties hereto
to be desirable, to be given to any other party hereto shall be in writing and
shall be given by prepaid telegram or delivered or mailed by registered or
certified mail, postage prepaid, with return receipt requested, to the following
addresses:
If to Sobiks Xxxxx'x International Franchising, Inc.
or WLF: 000 Xxxxxxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx, President
Facsimile (000) 000-0000
If to YTIX: xxxxxxxxx.xxx, inc.
0000 Xxxxxxx Xxxx, Xxxxx 00-X
Xxx Xxxxx, XX 00000
Attn: President
Facsimile (_____) ______________
The persons and addresses set forth above may be changed from time to time
by a notice sent as aforesaid. If notice is given by hand delivery in
accordance with the provisions of this Section, said notice shall be
conclusively deemed given at the time of such delivery. If notice is given by
mail in accordance with the provisions of this Section, such notice shall be
conclusively deemed given forty-eight (48) hours after deposit thereof in the
United States mail. If notice is given by telegraph in accordance with the
provisions of this Section, such notice shall be conclusively deemed given at
the time that the telegraphic agency shall confirm delivery thereof to the
addressee.
6.3 Entire Agreement. This Agreement, together with the schedules
------------------ and exhibits hereto, sets forth the entire
agreement and understanding of the parties hereto with respect to the
transactions contemplated hereby, and supersedes all prior agreements,
arrangements and understandings related to the subject matter hereof. No
understanding, promise, inducement, statement of intention, representation,
warranty, covenant or condition, written or oral, express or implied, whether by
statute or otherwise, has been made by any party hereto which is not embodied
in this Agreement, or exhibits hereto or the written statements, certificates,
or other documents delivered pursuant hereto or in connection with the
transactions contemplated hereby, and no party hereto shall be bound by or
liable for any alleged understanding, promise, inducement, statement,
representation, warranty, covenant or condition not so set forth.
6.4 Survival of Representations. All statements of fact (including
------------------------------
financial statements) contained in the schedules, the exhibits, the certificates
or any other instrument delivered by or on behalf of the parties hereto, or in
connection with the transactions contemplated hereby, shall be deemed
representations and warranties by the respective party hereunder. All
representations, warranties, agreements, and covenants hereunder shall survive
the Closing and remain effective regardless of any investigation or audit at any
time made by or on behalf of the parties or of any information a party may have
in respect thereto. Consummation of the transactions contemplated hereby shall
not be deemed or construed to be a waiver of any right or remedy possessed by
any party hereto, notwithstanding that such party knew or should have known at
the time of Closing that such right or remedy existed.
6.5 Incorporated by Reference. All documents (including, without
----------------------------
limitation, all financial statements) delivered as part hereof or incident
hereto are incorporated as a part of this Agreement by reference.
6.6 Remedies Cumulative. No remedy herein conferred upon and Party
---------------------
is intended to be exclusive of any other remedy and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.
6.7 Execution of Additional Documents. Each party hereto shall make,
------------------------------------
execute, acknowledge and deliver such other instruments and documents, and take
all such other actions as may be reasonably required in order to effectuate the
purposes of this Agreement and to consummate the transactions contemplated
hereby.
6.8 Governing Law. This Agreement has been negotiated and executed in
---------------
the State of Florida and shall be construed and enforced in accordance with the
laws of such state.
6.9 Forum. Each of the parties hereto agrees that any action or suit
-----
which may be brought by any party hereto against any other party hereto in
connection with this Agreement or the transactions contemplated hereby may be
brought only in a federal or state court in Seminole County, Florida.
6.10 Attorneys' Fees. Except as otherwise provided herein, if a
----------------
dispute should arise between the parties including, but not limited to
arbitration, the prevailing party shall be reimbursed by the nonprevailing party
for all reasonable expenses incurred in resolving such dispute, including
reasonable attorneys' fees exclusive of such amount of attorneys' fees as shall
be a premium for result or for risk of loss under a contingency fee arrangement.
6.11 Binding Effect and Assignment. This Agreement shall inure to the
-------------------------------
benefit of and be binding upon the parties hereto and their respective heirs,
executors, administrators, legal representatives and assigns.
6.12 Counterparts. This Agreement may be executed in counterparts,
-------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. In making proof of this Agreement, it
shall not be necessary to produce or account for more than one such counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as of
the date first written hereinabove.
"YTIX" "Sobiks"
xxxxxxxxx.xxx, inc. Sobiks International Franchising, Inc.
a Nevada corporation a Florida corporation
/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxxxxxx
_____________________________ _____________________________
By: Xxxxxx X. Xxxxxxxx By: Xxxxxx X. Xxxxxxxxx
Its: Chairman Its: President
"WLF"
Weight Loss Forever International, Inc.,
a Virginia corporation
/s/ Xxxx Xxxxxx
_____________________________
By: Xxxx Xxxxxx
Its: President
EXHIBIT A
WEIGHT LOSS FOREVER INTERNATIONAL, INC. SHAREHOLDERS
NO. OF YTIX SHARES
NAME NO. OF WLF SHARES TO BE RECEIVED
---- -------------------- ----------------
Sobiks International
Franchising, Inc. 10,304,200 26,004,716
Totals 10,304,200 26,004,716
EXHIBIT B
DIRECTORS AND OFFICERS OF
YTIX AND WLF
YTIX DIRECTORS AND OFFICERS
---------------------------
NAME POSITION
---- ---------
Xxxxxxxxxxx X. Xxxxxx Chairman of the Board
Xxxx Xxxxxx President
Xxxx Xxxxxxx Director, Secretary and
Chief Financial Officer
WLF DIRECTORS AND OFFICERS
--------------------------
NAME POSITION
---- ---------
Xxxxxxxxxxx X. Xxxxxx Chairman of the Board
Xxxx Xxxxxx President
Xxxx Xxxxxxx Director, Secretary and
Chief Financial Officer
EXHIBIT C
WLF FINANCIAL STATEMENTS
SCHEDULES-2
SCHEDULE 2.1.4
None
SCHEDULE 2.1.6
None
SCHEDULE 2.1.7
None
SCHEDULE 2.1.8
None.
SCHEDULE 2.1.9
None
SCHEDULE 2.1.10
None
SCHEDULE 2.1.14
None.
SCHEDULE 2.1.15
None
SCHEDULE 2.1.16
None
SCHEDULE 2.1.18
None
SCHEDULE 2.1.21
None
SCHEDULE 2.1.22
None
SCHEDULE 2.1.23
None
SCHEDULE 2.1.24
None.
SCHEDULE 2.1.25
None.
SCHEDULE 2.1.30
None.
