EXHIBIT 6.6
EXCHANGE AGREEMENT
This Exchange Agreement (the "Agreement"), entered into this 23rd day
of March 1999, is by, between, and among Internet International Business
Management, Inc., a Colorado corporation (hereinafter "IIBM"), Imagenetix, a
California corporation (hereinafter "Imagenetix"), and the shareholders of
Imagenetix whose names and signatures are set forth upon the signature page
of this Agreement (the "Shareholders").
RECITALS:
WHEREAS, IIBM wishes to acquire, and the Shareholders are willing to
sell, all of the outstanding stock of Imagenetix in exchange solely for a
part of the voting stock of IIBM whereby the Shareholders would acquire a
controlling interest of IIBM; and
WHEREAS, the parties hereto intend to qualify such transaction as a
tax-free exchange pursuant to Section 368(a)(1)(B) of the Internal Revenue
Code of 1986, as amended;
NOW, THEREFORE, based upon the stated premises, which are incorporated
herein by reference, and for and in consideration of the mutual covenants and
agreements set forth herein, 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, IIBM, Imagenetix, and the Shareholders
approve and adopt this Agreement and mutually covenant and agree with each
other as follows:
1. SHARES TO BE TRANSFERRED AND SHARES TO BE ISSUED; FUNDING
AGREEMENT.
1.1 On the Closing Date the Shareholders shall transfer to
IIBM certificates for the number of shares of the common stock of Imagenetix
described in Schedule "A," attached hereto and incorporated herein, which in
the aggregate shall represent all of the issued and outstanding shares of the
common stock of Imagenetix.
1.2 In exchange for the transfer of the common stock of
Imagenetix pursuant to subsection 1.1. hereof, IIBM shall on the Closing Date
and contemporaneously with such
transfer of the common stock of Imagenetix to it by the Shareholders issue
and deliver to the Shareholders the number of shares of common stock of IIBM
specified on Exhibit "A" hereof such that the Shareholders shall own
approximately 72% of the outstanding common stock of IIBM.
1.3 Upon execution of this Agreement IIBM shall furnish to
Imagenetix an executed funding agreement in form as set forth in Exhibit "B"
attached hereto and incorporated herein, to provide to Imagenetix a line of
credit in an amount up to $100,000 at the time of execution of this Agreement
and an additional amount of up to $200,000 at Closing.
2. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS. Each of
the Shareholders, for himself, herself, or itself, and not for any other
Shareholder, represents and warrants to IIBM as set forth below. These
representations and warranties are made as an inducement for IIBM to enter
into this Agreement and, but for the making of such representations and
warranties and their accuracy, IIBM would not be a party hereto.
2.1 OWNERSHIP OF STOCK.
a. Each of the Shareholders is the record and
beneficial owner and holder of the number of fully paid and nonassessable
shares of the common stock of Imagenetix listed in Exhibit "A" hereto as of
the date hereof and will continue to own such shares of the common stock of
Imagenetix until the delivery thereof to IIBM on the Closing Date and all
such shares of common stock are or will be on the Closing Date owned free and
clear of all liens, encumbrances, charges and assessments of every nature and
subject to no restrictions with respect to transferability. Each of the
Shareholders currently has, and will have at Closing, full power and
authority to dispose, assign, and transfer his, her, or its shares of
Imagenetix in accordance with the terms hereof. Each of the Shareholders
currently has, and will have at Closing, full power and authority to vote
his, her, or its shares of Imagenetix, without restriction of any kind.
b. Except for this Agreement, there are no
outstanding options, contracts, calls, commitments, agreements or demands of
any character relating to the common stock of Imagenetix listed in Exhibit
"A" and owned by each of the Shareholders.
2.2 ACCURACY OF ALL STATEMENTS MADE BY THE SHAREHOLDERS. No
representation or warranty by the Shareholders in this Agreement, nor any
statement, certificate, schedule, or exhibit hereto furnished or to be
furnished by or on behalf of the Shareholders pursuant to this Agreement, nor
any document or certificate delivered to IIBM by the Shareholders pursuant to
this Agreement or in connection with actions contemplated hereby, contains or
shall contain any untrue statement of material fact or omits or shall omit a
material fact necessary to make the statements contained therein not
misleading.
3. Representations and Warranties of Imagenetix. Imagenetix
represents and warrants to IIBM as set forth below. These representations
and warranties are made as an inducement for IIBM to enter into this
Agreement and, but for the making of such representations and warranties and
their accuracy, IIBM would not be a party hereto.
3.1 ORGANIZATION AND AUTHORITY. Imagenetix is a corporation
duly organized, validly existing and in good standing under the laws of the
State of California with full power and authority to enter into and perform
the transactions contemplated by this Agreement. Imagenetix does not have
any subsidiaries or own any interest in any other entity. Imagenetix is duly
qualified as a foreign corporation in each jurisdiction in which it is
required to be so qualified.
3.2 CAPITALIZATION. As of the date of the Closing,
Imagenetix will have a total of no more than 1,300,000 shares of common stock
issued and outstanding. All of the shares will have been duly authorized and
validly issued and will be fully paid and nonassessable. There are no
options, warrants, debentures, conversion privileges, or other rights,
agreements, or commitments obligating Imagenetix to issue or to transfer from
treasury any additional shares of capital stock of any class. Exhibit "A"
accurately sets forth all of the shareholders of record of Imagenetix and the
number of shares held of record by each Shareholder.
3.3 PERFORMANCE OF THIS AGREEMENT. The execution and
performance of this Agreement and the transfer of stock contemplated hereby
have been authorized by the board of directors of Imagenetix.
3.4 FINANCIALS. True copies of the financial statements of
Imagenetix for the period ended February 28, 1999, (unaudited) have been
furnished to IIBM. Said financial statements are true and correct in all
material respects and present an accurate and complete disclosure of the
financial condition of Imagenetix as of February 28, 1999, and the earnings
for the periods covered, in accordance with generally accepted accounting
principles applied on a consistent basis.
3.5 LIABILITIES. There are no material liabilities of
Imagenetix, whether accrued, absolute, contingent or otherwise, which arose
or relate to any transaction of Imagenetix, its agents or servants occurring
prior to February 28, 1999, which are not disclosed by or reflected in said
financial statements. As of the date hereof, there are no known
circumstances, conditions, happenings, events or arrangements, contractual or
otherwise, which may hereafter give rise to liabilities, except in the normal
course of business of Imagenetix.
3.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set
forth in this Agreement, since February 28, 1999, there has not been (i) any
material adverse change in the business, operations, properties, level of
inventory, assets, or condition of Imagenetix, or (ii) any damage,
destruction, or loss to Imagenetix (whether or not covered by insurance)
materially and adversely affecting the business, operations, properties,
assets, or conditions of Imagenetix.
3.7 LITIGATION. There are no legal, administrative or other
proceedings, investigations or inquiries, product liability or other claims,
judgments, injunctions or restrictions, either threatened, pending, or
outstanding against or involving Imagenetix or its subsidiaries, if any, or
their assets, properties, or business, nor does Imagenetix or its
subsidiaries know, or have reasonable grounds to know, of any basis for any
such proceedings, investigations or inquiries, product liability or other
claims, judgments, injunctions or restrictions. In addition, there are no
material proceedings existing, pending or reasonably contemplated to which
any officer, director,
or affiliate of Imagenetix or as to which any of the Shareholders is a party
adverse to Imagenetix or any of its subsidiaries or has a material interest
adverse to Imagenetix or any of its subsidiaries.
3.8 TAXES. All federal, state, foreign, county and local
income, profits, franchise, occupation, property, sales, use, gross receipts
and other taxes (including any interest or penalties relating thereto) and
assessments which are due and payable have been duly reported, fully paid and
discharged as reported by Imagenetix, and there are no unpaid taxes which
are, or could become a lien on the properties and assets of Imagenetix,
except as provided for in the financial statements of Imagenetix, or have
been incurred in the normal course of business of Imagenetix since that date.
All tax returns of any kind required to be filed have been filed and the
taxes paid or accrued. There are no disputes as to taxes of any nature
payable by Imagenetix.
3.9 HAZARDOUS MATERIALS. No hazardous material has been
released, placed, stored, generated, used, manufactured, treated, deposited,
spilled, discharged, released, or disposed of on or under any real property
currently or previously owned or leased by Imagenetix or any of its
subsidiaries.
3.10 LEGAL COMPLIANCE. Imagenetix, its predecessors and
affiliates have substantially complied with all applicable laws (including
rules, regulations, codes, plans, injunctions, judgements, orders, decrees,
rulings, and charges thereunder) of federal, state, local, and foreign
governments (and all agencies thereof), including, but not limited to,
federal and state securities laws.
3.11 NONCONTRAVENTION. Imagenetix is not in breach of a
material provision of any outstanding agreement, contract, lease, license,
instrument, or other arrangement to which Imagenetix is a party or by which
it is bound or to which any of its assets is subject. Neither the execution
and the delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right
to accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to
which Imagenetix is a party or by which it is bound or to which any of its
assets is subject.
3.12 ACCURACY OF ALL STATEMENTS MADE BY IMAGENETIX. No
representation or warranty by Imagenetix in this Agreement, nor any
statement, certificate, schedule, or exhibit hereto furnished or to be
furnished by or on behalf of Imagenetix pursuant to this Agreement, nor any
document or certificate delivered to IIBM by Imagenetix pursuant to this
Agreement or in connection with actions contemplated hereby, contains or
shall contain any untrue statement of material fact or omits or shall omit a
material fact necessary to make the statements contained therein not
misleading.
4. REPRESENTATIONS AND WARRANTIES OF IIBM. IIBM represents and
warrants to Imagenetix and to the Shareholders as set forth below. These
representations and warranties are made as an inducement for Imagenetix and
the Shareholders to enter into this Agreement and, but for the making of such
representations and warranties and their accuracy, Imagenetix and the
Shareholders would not be parties hereto.
4.1 ORGANIZATION AND GOOD STANDING. IIBM is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Colorado with full power and authority to enter into and perform the
transactions contemplated by this Agreement. IIBM does not have any
subsidiaries or own any interest in any other entity.
4.2 CAPITALIZATION. As of the date of the Closing, IIBM
will have a total of no more than 500,000 shares of common stock issued and
outstanding (excluding the shares to be issued pursuant to this Agreement).
All of the shares will have been duly authorized and validly issued and will
be fully paid and nonassessable. Except for IIBM's obligations hereunder
with respect to the shares to be issued pursuant to subsection 1.2 hereof,
there are no options, warrants, debentures, conversion privileges, or other
rights, agreements, or commitments obligating IIBM to issue or to transfer
from treasury any additional shares of capital stock of any class. IIBM has
adopted a 1997 Stock Option Plan (the "Plan") which provides for the issuance
of options to acquire up to 1,000,000 shares of IIBM under the Plan, none of
which options has been granted. As of the Closing, the Articles of
Incorporation, as amended, of IIBM (the "IIBM Articles") and as currently in
effect shall remain unchanged, except as provided herein. The IIBM Articles
provide for 50,000,000 shares of common stock, par value $.001 and 5,000,000
shares of preferred stock, par value $.001. There are presently 5,000 shares
of common stock outstanding and no shares of preferred stock outstanding.
4.3 PERFORMANCE OF THIS AGREEMENT. The execution and
performance of this Agreement and the issuance of stock contemplated hereby
have been authorized by the board of directors of IIBM.
4.4 FINANCIALS. True copies of the financial statements of
IIBM consisting of the balance sheets as of the fiscal years ended December
31, 1998, 1997, and 1996 (unaudited), and statements of income, cash flow and
changes in stockholder's equity for each of the years then ended, have been
delivered by IIBM to Imagenetix. Said financial statements are true and
correct in all material respects and present an accurate and complete
disclosure of the financial condition of IIBM as of December 31, 1998, and
the earnings for the periods covered, in accordance with generally accepted
accounting principles applied on a consistent basis.
4.5 LIABILITIES. There are no material liabilities of IIBM,
whether accrued, absolute, contingent or otherwise, which arose or relate to
any transaction of IIBM, its agents or servants which are not disclosed by or
reflected in said financial statements. As of the date hereof, there are no
known circumstances, conditions, happenings, events or arrangements,
contractual or otherwise, which may hereafter give rise to liabilities,
except in the normal course of business of IIBM.
4.6 LITIGATION. There are no legal, administrative or other
proceedings, investigations or inquiries, product liability or other claims,
judgments, injunctions or restrictions, either threatened, pending, or
outstanding against or involving IIBM or its subsidiaries, if any, or their
assets, properties, or business, nor does IIBM or its subsidiaries know, or
have reasonable grounds to know, of any basis for any such proceedings,
investigations or inquiries, product liability or other claims, judgments,
injunctions or restrictions. In addition, there are no material
proceedings existing, pending or reasonably contemplated to which any
officer, director, or affiliate of IIBM is a party adverse to IIBM or any of
its subsidiaries or has a material interest adverse to IIBM or any of its
subsidiaries.
4.7 TAXES. All federal, state, foreign, county and local
income, profits, franchise, occupation, property, sales, use, gross receipts
and other taxes (including any interest or penalties relating thereto) and
assessments which are due and payable have been duly reported, fully paid and
discharged as reported by IIBM, and there are no unpaid taxes which are, or
could become a lien on the properties and assets of IIBM, except as provided
for in the financial statements of IIBM, or have been incurred in the normal
course of business of IIBM since that date. All tax returns of any kind
required to be filed have been filed and the taxes paid or accrued. There
are no disputes as to taxes of any nature payable by IIBM.
4.8 HAZARDOUS MATERIALS. No hazardous material has been
released, placed, stored, generated, used, manufactured, treated, deposited,
spilled, discharged, released, or disposed of on or under any real property
currently or previously owned or leased by IIBM or any of its subsidiaries.
4.9 LEGAL COMPLIANCE. IIBM, its predecessors and affiliates
have substantially complied with all applicable laws (including rules,
regulations, codes, plans, injunctions, judgements, orders, decrees, rulings,
and charges thereunder) of federal, state, local, and foreign governments
(and all agencies thereof), including, but not limited to, federal and state
securities laws.
4.10 NONCONTRAVENTION. IIBM is not in breach of a material
provision of any outstanding agreement, contract, lease, license, instrument,
or other arrangement to which IIBM is a party or by which it is bound or to
which any of its assets is subject. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions contemplated
hereby, will conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to
which IIBM is a party or by which it is bound or to which any of its assets
is subject.
4.11 LEGALITY OF SHARES TO BE ISSUED. The shares of common
stock of IIBM to be issued by IIBM pursuant to this Agreement, when so issued
and delivered, will have been duly and validly authorized and issued by IIBM
and will be fully paid and nonassessable.
4.12 ACCURACY OF ALL STATEMENTS MADE BY IIBM. No
representation or warranty by IIBM in this Agreement, nor any statement,
certificate, schedule, or exhibit hereto furnished or to be furnished by IIBM
pursuant to this Agreement, nor any document or certificate delivered to
Imagenetix or the Shareholders pursuant to this Agreement or in connection
with actions contemplated hereby, contains or shall contain any untrue
statement of material fact or omits to state or shall omit to state a
material fact necessary to make the statements contained therein not
misleading.
5. COVENANTS OF THE PARTIES.
5.1 CORPORATE RECORDS.
a. Simultaneous with the execution of this Agreement by
Imagenetix, if not previously furnished, such entity shall deliver to IIBM
copies of the articles of incorporation, as amended, and the current bylaws of
Imagenetix, and copies of the resolutions duly adopted by the board of directors
of Imagenetix approving this Agreement and the transactions herein contemplated.
b. Simultaneous with the execution of this Agreement by
IIBM, if not previously furnished, such entity shall deliver to Imagenetix
copies of the IIBM Articles, and the current bylaws of IIBM, and copies of the
resolutions duly adopted by the board of directors of IIBM approving this
Agreement and the transactions herein contemplated.
5.2 ACCESS TO INFORMATION.
a. IIBM and its authorized representatives shall have
full access during normal business hours to all properties, books, records,
contracts, and documents of Imagenetix, and Imagenetix shall furnish or cause to
be furnished to IIBM and its authorized representatives all information with
respect to its affairs and business as IIBM may reasonably request. IIBM shall
hold, and shall cause its representatives to hold confidential, all such
information and documents, other than information that (i) is in the public
domain at the time of its disclosure to IIBM; (ii) becomes part of the public
domain after disclosure through no fault of IIBM; (iii) is known to IIBM or any
of its officers or directors prior to disclosure; or (iv) is disclosed in
accordance with the written consent of Imagenetix. In the event this Agreement
is terminated prior to Closing, IIBM shall, upon the written request of
Imagenetix, promptly return all copies of all documentation and information
provided by Imagenetix hereunder.
b. Imagenetix and its authorized representatives shall
have full access during normal business hours to all properties, books, records,
contracts, and documents of IIBM, and IIBM shall furnish or cause to be
furnished to Imagenetix and its authorized representatives all information with
respect to its affairs and business Imagenetix may reasonably request.
Imagenetix shall hold, and shall cause its representatives to hold confidential,
all such information and documents, other than information that (i) is in the
public domain at the time of its disclosure to Imagenetix; (ii) becomes part of
the public domain after disclosure through no fault of Imagenetix; (iii) is
known to Imagenetix or any of its officers or directors prior to disclosure; or
(iv) is disclosed in accordance with the written consent of IIBM. In the event
this Agreement is terminated prior to Closing, Imagenetix shall, upon the
written request of IIBM, promptly return all copies of all documentation and
information provided by IIBM hereunder.
5.3 ACTIONS PRIOR TO CLOSING. From and after the date of this
Agreement and until the Closing Date:
a. IIBM and Imagenetix shall each carry on its business
diligently and
substantially in the same manner as heretofore, and neither party shall make
or institute any unusual or novel methods of purchase, sale, management,
accounting or operation.
b. Neither IIBM nor Imagenetix shall enter into any
contract or commitment, or engage in any transaction not in the usual and
ordinary course of business and consistent with its business practices.
c. Neither IIBM nor Imagenetix shall amend its
articles of incorporation or bylaws or make any changes in authorized or
issued capital stock, except as provided in this Agreement.
d. IIBM and Imagenetix shall each use its best
efforts (without making any commitments on behalf of the company) to preserve
its business organization intact.
e. Neither IIBM nor Imagenetix shall do any act or
omit to do any act, or permit any act or omission to act, which will cause a
material breach of any material contract, commitment, or obligation of such
party.
f. IIBM and Imagenetix shall each duly comply with
all applicable laws as may be required for the valid and effective issuance
or transfer of stock contemplated by this Agreement.
g. Neither IIBM nor Imagenetix shall sell or dispose
of any property or assets, except products sold in the ordinary course of
business.
h. IIBM and Imagenetix shall each promptly notify
the other of any lawsuits, claims, proceedings, or investigations that may be
threatened, brought, asserted, or commenced against it, its officers or
directors involving in any way the business, properties, or assets of such
party.
5.4 SHAREHOLDERS' APPROVAL. IIBM shall promptly submit this
Agreement and the transactions contemplated hereby for the approval of its
stockholders by majority written consent or at a meeting of stockholders and,
subject to the fiduciary duties of the Board of Directors of IIBM under
applicable law, shall use its best efforts to obtain stockholder approval and
adoption of this Agreement and the transactions contemplated hereby. In
connection with such written action by, or meeting of, stockholders, IIBM
shall prepare a proxy or information statement to be furnished to the
shareholders of IIBM setting forth information about this Agreement and the
transactions contemplated hereby. The Private Party shall promptly furnish
to IIBM all information, and take such other actions, as may reasonably be
requested in connection with any action to be taken by IIBM in connection
with the immediately preceding sentence. Imagenetix shall have the right to
review and provide comments to the proxy or information statement prior to
mailing to the shareholders of IIBM.
5.5 NO COVENANT AS TO TAX OR ACCOUNTING CONSEQUENCES. It is
expressly understood and agreed that neither IIBM nor its officers or agents
has made any warranty or
agreement, expressed or implied, as to the tax or accounting consequences of
the transactions contemplated by this Agreement or the tax or accounting
consequences of any action pursuant to or growing out of this Agreement.
5.6 INDEMNIFICATION. Imagenetix and the Shareholders,
severally and not jointly, shall indemnify IIBM for any loss, cost, expense,
or other damage (including, without limitation, attorneys' fees and expenses)
suffered by IIBM resulting from, arising out of, or incurred with respect to
the falsity or the breach of any representation, warranty, or covenant made
by Imagenetix or the Shareholders herein, and any claims arising from the
operations of Imagenetix prior to the Closing Date. IIBM shall indemnify and
hold Imagenetix and the Shareholders harmless from and against any loss,
cost, expense, or other damage (including, without limitation, attorneys'
fees and expenses) resulting from, arising out of, or incurred with respect
to, or alleged to result from, arise out of or have been incurred with
respect to, the falsity or the breach of any representation, covenant,
warranty, or agreement made by IIBM herein, and any claims arising from the
operations of IIBM prior to the Closing Date. The indemnity agreement
contained herein shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any party and shall
survive the consummation of the transactions contemplated by this Agreement.
5.7 PUBLICITY. The parties agree that no publicity,
release, or other public announcement concerning this Agreement or the
transactions contemplated by this Agreement shall be issued by any party
hereto without the advance approval of both the form and substance of the
same by the other parties and their counsel, which approval, in the case of
any publicity, release, or other public announcement required by applicable
law, shall not be unreasonably withheld or delayed.
5.8 EXPENSES. Except as otherwise expressly provided
herein, each party to this Agreement shall bear its own respective expenses
incurred in connection with the negotiation and preparation of this
Agreement, in the consummation of the transactions contemplated hereby, and
in connection with all duties and obligations required to be performed by
each of them under this Agreement. In the event the Closing of this
Agreement does not occur on or before the date set forth in Section 11(ii)
hereof due to the failure of Imagenetix to perform its obligations hereunder,
or because of a breach of the representations and warranties of Imagenetix
herein, then Imagenetix shall pay the legal fees and out-of-pocket expenses
actually incurred by IIBM in connection with this transaction, which amount
shall be paid to IIBM by Imagenetix within ten days following written demand
by IIBM. In the event the Closing of this Agreement does not occur on or
before the date set forth in Section 11(ii) hereof due to the failure of IIBM
to perform its obligations hereunder, or because of a breach of the
representations and warranties of IIBM herein, then IIBM shall pay the legal
fees and out-of-pocket expenses actually incurred by Imagenetix in connection
with this transaction, which amount shall be paid to Imagenetix by IIBM
within ten days following written demand by Imagenetix. In no event shall
the demand for legal fees and out-of-pocket expenses by either party exceed
$12,500.
5.9 FURTHER ACTIONS. Each of the parties hereto shall take
all such further action, and execute and deliver such further documents, as
may be necessary to carry out the
transactions contemplated by this Agreement.
5.10 NAME CHANGE. On or before the Closing Date IIBM shall
duly authorize an amendment to the IIBM Articles to change the name of IIBM
to "Imagenetix, Inc."
5.11 FORWARD STOCK SPLIT. On or before Closing IIBM shall
forward split its 5,000 outstanding shares of common stock at the rate of 100
shares for each share outstanding such that at Closing IIBM shall have
500,000 shares outstanding.
5.12 AUDIT OF FINANCIALS. Immediately upon execution of this
Agreement, IIBM shall engage and pay an accounting firm to audit as soon as
possible the financial statements of IIBM furnished in connection with this
Agreement. Immediately upon execution of this Agreement, Imagenetix shall
engage and pay an accounting firm to audit as soon as possible the financial
statements of Imagenetix as of March 31, 1999, or such other period as
mutually agreed by the parties in consultation with the auditing firm engaged
by Imagenetix.
5.13 COMPREHENSIVE INVESTOR RELATIONS PROGRAM. Imagenetix
shall implement and maintain a comprehensive investor relations program
during the eighteen months following the Closing Date.
5.14 NO MATERIAL LIABILITIES. At Closing IIBM shall have no
liabilities in excess of an aggregate of $1,000.
5.15 REGISTRATION STATEMENT. Immediately following the
Closing, but in no event later than April 30, 1999, IIBM shall prepare and
file with the Securities and Exchange Commission (the "SEC") a registration
statement to register the offer and sale of shares of common stock of IIBM to
raise a total of $600,000. In connection with such registration statement,
IIBM shall agree to register for sale the shares of common stock of IIBM held
by the present shareholders, the warrants and underlying shares to be issued
in connection with the line of credit set forth in subsection 1.3 above, and
the shares, if any, issued in connection with the conversion of the
promissory notes issued in connection with the line of credit. IIBM shall
cause such registration statement to be filed on Form XX-0, XX-0, or other
appropriate form, with the SEC and shall use its best efforts to cause such
registration statement to become effective.
6. CONDITIONS PRECEDENT TO IIBM'S OBLIGATIONS. Each and every
obligation of IIBM to be performed on the Closing Date shall be subject to
the satisfaction prior thereto of the following conditions:
6.1 TRUTH OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made by Imagenetix and the Shareholders in
this Agreement or given on their behalf hereunder shall be substantially
accurate in all material respects on and as of the Closing Date with the same
effect as though such representations and warranties had been made or given
on and as of the Closing Date.
6.2 PERFORMANCE OF OBLIGATIONS AND COVENANTS. Imagenetix
and the
Shareholders shall have performed and complied with all obligations and
covenants required by this Agreement to be performed or complied with by them
prior to or at the Closing.
6.3 OFFICER'S CERTIFICATE. IIBM shall have been furnished
with a certificate (dated as of the Closing Date and in form and substance
reasonably satisfactory to IIBM), executed by an executive officer of
Imagenetix, certifying to the fulfillment of the conditions specified in
subsections 6.1 and 6.2 hereof.
6.4 NO LITIGATION OR PROCEEDINGS. There shall be no
litigation or any proceeding by or before any governmental agency or
instrumentality pending or threatened against any party hereto that seeks to
restrain or enjoin or otherwise questions the legality or validity of the
transactions contemplated by this Agreement or which seeks substantial
damages in respect thereof.
6.5 NO MATERIAL ADVERSE CHANGE. As of the Closing Date
there shall not have occurred any material adverse change, financially or
otherwise, which materially impairs the ability of Imagenetix to conduct its
business or the earning power thereof on the same basis as in the past.
6.6 SHAREHOLDERS' APPROVAL. The holders of not less than a
majority of the outstanding common stock of IIBM shall have voted for
authorization and approval of this Agreement and the transactions
contemplated hereby.
6.7 SHAREHOLDERS' EXECUTION OF AGREEMENT. This Agreement
shall have been duly executed and delivered by each of the parties owning in
the aggregate all of the outstanding stock of Imagenetix as of the Closing
Date.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF IMAGENETIX AND THE
SHAREHOLDERS. Each and every obligation of Imagenetix and the Shareholders
to be performed on the Closing Date shall be subject to the satisfaction
prior thereto of the following conditions:
7.1 TRUTH OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made by IIBM in this Agreement or given on its
behalf hereunder shall be substantially accurate in all material respects on
and as of the Closing Date with the same effect as though such
representations and warranties had been made or given on and as of the
Closing Date.
7.2 PERFORMANCE OF OBLIGATIONS AND COVENANTS. IIBM shall
have performed and complied with all obligations and covenants required by
this Agreement to be performed or complied with by it prior to or at the
Closing.
7.3 OFFICER'S CERTIFICATE. Imagenetix shall have been
furnished with a certificate (dated as of the Closing Date and in form and
substance reasonably satisfactory to Imagenetix), executed by an executive
officer of IIBM, certifying to the fulfillment of the conditions specified in
subsections 7.1 and 7.2 hereof.
7.4 NO LITIGATION OR PROCEEDINGS. There shall be no
litigation or any proceeding by or before any governmental agency or
instrumentality pending or threatened against any party hereto that seeks to
restrain or enjoin or otherwise questions the legality or validity of the
transactions contemplated by this Agreement or which seeks substantial
damages in respect thereof.
7.5 NO MATERIAL ADVERSE CHANGE. As of the Closing Date
there shall not have occurred any material adverse change, financially or
otherwise, which materially impairs the ability of IIBM to conduct its
business.
8. SECURITIES LAW PROVISIONS.
8.1 RESTRICTED SECURITIES. Each of the parties hereto,
severally and not jointly, represents that he, she, or it is aware that the
shares issued or transferred to him, her, or it will not have been registered
pursuant to the Securities Act of 1933, as amended (the "1933 Act"), or any
state securities act, and thus will be restricted securities as defined in
Rule 144 promulgated by the SEC. Therefore, under current interpretations
and applicable rules, he, she, or it will probably have to retain such shares
for a period of at least one year and at the expiration of such one year
period his, her, or its sales may be confined to brokerage transactions of
limited amounts requiring certain notification filings with the SEC and such
disposition may be available only if the issuer is current in its filings
with the SEC under the Securities Exchange Act of 1934, as amended, or other
public disclosure requirements.
8.2 NON-DISTRIBUTIVE INTENT. Each of the parties hereto,
severally and not jointly, covenants and warrants that the shares received
are acquired for his, her, or its own account and not with the present view
towards the distribution thereof and he, she, or it will not dispose of such
shares except (i) pursuant to an effective registration statement under the
1933 Act, or (ii) in any other transaction which, in the opinion of counsel
acceptable to the issuer, is exempt from registration under the 1933 Act, or
the rules and regulations of the SEC thereunder. In order to effectuate the
covenants of this subsection, an appropriate legend will be placed upon each
of the certificates of common stock issued or transferred pursuant to this
Agreement, and stop transfer instructions shall be placed with the transfer
agent for the securities.
8.3 EVIDENCE OF COMPLIANCE WITH PRIVATE OFFERING EXEMPTION.
Each of the parties hereto, severally and not jointly, hereby represents and
warrants that he, she, or it, either individually or together with his, her,
or its representative, has such knowledge and experience in business and
financial matters that he, she, or it is capable of evaluating the risks of
this Agreement and the transactions contemplated hereby, and that the
financial capacity of such party is of such proportion that the total cost of
such person's commitment in the shares would not be material when compared
with his, her, or its total financial capacity. Each of the Shareholders
hereby acknowledges receipt of the following documents pertaining to IIBM and
this transaction: IIBM's Articles, current bylaws, and tax returns for the
years ended December 31, 1996 and 1997. Upon the written request of the
issuer of the securities issued or transferred pursuant to this Agreement,
any party hereto shall provide such issuer with evidence of compliance with
the requirements of any federal or state exemption from registration. IIBM
and Imagenetix shall each
file, with the assistance of the other and its respective legal counsel, such
notices, applications, reports, or other instruments as may be deemed by each
of them to be necessary or appropriate in an effort to document reliance on
such exemptions, unless an exemption requiring no filing is available in the
particular jurisdiction, all to the extent and in the manner as may be deemed
by such parties to be appropriate.
9. CHANGE OF MANAGEMENT. Upon and as a condition of Closing this
Agreement:
9.1 Prior to Closing IIBM shall authorize an increase in the
number of directors to four persons and will present to its shareholders for
approval the election of Dr. Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xx. Xxxxx
Xxxxxxxx, and Xxxxxxx X. Xxxxxxx as directors of IIBM effective at the
Closing of this Agreement. Prior to Closing Imagenetix will furnish material
information of Dr. Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xx. Xxxxx Xxxxxxxx, and
Xxxxxxx X. Xxxxxxx as nominees to be elected by the shareholders of IIBM. In
connection with the election or nomination of such persons as directors of
IIBM, IIBM shall furnish the resignations of all existing directors and
officers of IIBM to be effective simultaneous with the Closing. IIBM
reserves the right to refuse to cause the nomination of any or all such
persons as directors of IIBM if, after review of the foregoing information
concerning said persons, it is the opinion of IIBM that the election of such
persons would not be in the best interests of IIBM.
9.2 Imagenetix reserves the right to terminate this
Agreement if nominees selected by it are not elected or appointed as set
forth above.
10. CLOSING.
10.1 TIME AND PLACE. The Closing of this transaction
("Closing") shall take place at 00 Xxxx 000 Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx,
Xxxx, at 2:00 pm, on March 26, 1999, or at such other time and place as the
parties hereto shall agree upon. Such date is referred to in this Agreement
as the "Closing Date."
10.2 DOCUMENTS TO BE DELIVERED BY IMAGENETIX AND THE
SHAREHOLDERS. At the Closing Imagenetix and the Shareholders shall deliver
to IIBM the following documents:
a. Certificates for the number of shares of common
stock of Imagenetix in the manner and form required by subsection 1.1 hereof.
b. The certificate required pursuant to subsection
6.3 hereof.
c. A signed consent and/or minutes of Imagenetix's
directors and shareholders approving this Agreement and each matter to be
approved under this Agreement.
d. Such other documents of transfer, certificates of
authority, and other documents as IIBM may reasonably request.
10.3 DOCUMENTS TO BE DELIVERED BY IIBM. At the Closing IIBM
shall deliver
to Imagenetix and the Shareholders the following documents:
a. Certificates for the number of shares of common
stock of IIBM as determined in sub-section 1.2 hereof.
b. The certificate required pursuant to subsection 7.3
hereof.
c. A signed consent and/or minutes of IIBMs's directors
and shareholders approving this Agreement and each matter to be approved under
this Agreement.
d. Such other documents of transfer, certificates of
authority, and other documents as Imagenetix and the Shareholders may reasonably
request.
11. TERMINATION. This Agreement may be terminated by IIBM or
Imagenetix by notice to the other if, (i) at any time prior to the Closing Date
any event shall have occurred or any state of facts shall exist that renders any
of the conditions to its or their obligations to consummate the transactions
contemplated by this Agreement incapable of fulfillment, or (ii) on March 31,
1999, if the Closing shall not have occurred. Following termination of this
Agreement no party shall have liability to another party relating to such
termination, other than any liability resulting from the breach of this
Agreement by a party prior to the date of termination.
12. MISCELLANEOUS.
12.1 NOTICES. All communications provided for herein shall be
in writing and shall be deemed to be given or made when served personally or
when deposited in the United States mail, certified return receipt requested,
addressed as follows, or at such other address as shall be designated by any
party hereto in written notice to the other party hereto delivered pursuant to
this subsection:
IIBM: 00 Xxx Xxxx Xxxxx
Xxxxxxxxx Xxxxx, XX 00000
Attn: Xxxx X. XxXxxx
With Copy to: Xxxxxx X. Xxxxx
Attorney at Law
00 Xxxx 000 Xxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
Imagenetix
and Shareholders: 0000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
With Copy to: Xxxxx X. Xxxxx
Attorney at Law
000 Xxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
12.2 DEFAULT. Should any party to this Agreement default in any
of the covenants, conditions, or promises contained herein, the defaulting party
shall pay all costs and expenses, including a reasonable attorney's fee, which
may arise or accrue from enforcing this Agreement, or in pursuing any remedy
provided hereunder or by the statutes of the State of Utah.
12.3 ASSIGNMENT. This Agreement may not be assigned in whole or
in part by the parties hereto without the prior written consent of the other
party or parties, which consent shall not be unreasonably withheld.
12.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto, their heirs,
executors, administrators, successors and assigns.
12.5 PARTIAL INVALIDITY. If any term, covenant, condition, or
provision of this Agreement or the application thereof to any person or
circumstance shall to any extent be invalid or unenforceable, the remainder of
this Agreement or application of such term or provision to persons or
circumstances other than those as to which it is held to be invalid or
unenforceable shall not be affected thereby and each term, covenant, condition,
or provision of this Agreement shall be valid and shall be enforceable to the
fullest extent permitted by law.
12.6 ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all negotiations, representations, prior discussions,
letters of intent, and preliminary agreements between the parties hereto
relating to the subject matter of this Agreement.
12.7 INTERPRETATION OF AGREEMENT. This Agreement shall be
interpreted and construed as if equally drafted by all parties hereto.
12.8 SURVIVAL OF COVENANTS, ETC. All covenants,
representations, and warranties made herein to any party, or in any statement
or document delivered to any party hereto, shall survive the making of this
Agreement and shall remain in full force and effect until the obligations of
such party hereunder have been fully satisfied.
12.9 FURTHER ACTION. The parties hereto agree to execute and
deliver such additional documents and to take such other and further action
as may be required to carry out fully the transactions contemplated herein.
12.10 AMENDMENT. This Agreement or any provision hereof may
not be changed, waived, terminated, or discharged except by means of a
written supplemental instrument signed by the party or parties against whom
enforcement of the change, waiver, termination, or discharge
is sought.
12.11 FULL KNOWLEDGE. By their signatures, the parties
acknowledge that they have carefully read and fully understand the terms and
conditions of this Agreement, that each party has had the benefit of counsel,
or has been advised to obtain counsel, and that each party has freely agreed
to be bound by the terms and conditions of this Agreement.
12.12 HEADINGS. The descriptive headings of the various
sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
12.13 COUNTERPARTS. This Agreement may be executed in two or
more partially or fully executed counterparts, each of which shall be deemed
an original and shall bind the signatory, but all of which together shall
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto executed the foregoing
Agreement as of the day and year first above written.
IIBM: Internet International Business
Management, Inc.
By /s/ Xxxx X. XxXxxx, President
Imagenetix: Imagenetix
By /s/ Xxxxxxx X. Xxxxxxx, President
SHAREHOLDERS: /s/ Xxxxxxx X. Xxxxxxx, Individually
/s/ Xxxxx X. Xxxxxxx, Individually
EXHIBIT "A"
TO THE
EXCHANGE AGREEMENT
NO. OF SHARES OF NO. OF SHARES OF
NAME OF IMAGENETIX IIBM
SHAREHOLDER TO BE TRANSFERRED TO BE ISSUED
----------- ----------------- ------------
Xxxxxxx & Xxxxx Xxxxxxx 1,300,000 1,300,000
