STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT (the "Agreement") is made and entered
into effective May 2, 2005, by and among KIRSHNER ENTERTAINMENT & TECHNOLOGIES,
INC., a Florida corporation ("Kirshner"), XXXX XXXXXXX, an individual
("Verdier"), LINKWELL TECH GROUP, INC., a Florida corporation ("Linkwell"), and
the shareholders of Linkwell listed on the signature page and Schedule A hereto,
constituting all of the shareholders of Linkwell (collectively, the
"Shareholders").
RECITALS:
A. The Shareholders own all of the issued and outstanding capital stock of
Linkwell, consisting of 8,000,000 shares of common stock, $.001 par value per
share (the "Linkwell Shares").
X. Xxxxxxxx desires to acquire the Linkwell Shares from the Shareholders in
exchange for 36,273,470 shares of restricted common stock, $.0005 par value per
share, of Kirshner (the "Kirshner Shares") to be issued to the Shareholders.
C. The Shareholders desire to exchange their Linkwell Shares for the Kirshner
Shares upon the terms and conditions set forth herein.
D. In connection with this Agreement and pursuant to the terms and conditions of
the Escrow Agreement dated April 29, 2005 attached hereto as Exhibit A ("Escrow
Agreement"), in order to satisfy all outstanding obligations and indebtedness
owed by Kirshner to Verdier and certain third parties, Linkwell will provide
Kirshner $175,000 and Kirshner has agreed to pay to Verdier at the Closing (as
hereinafter defined), the $175,000, to be used by Verdier to pay Kirshner's
third party creditors, and issue to Verdier at the Closing1,400,000 shares of
its restricted common stock.
E. It is the intention of the parties hereto that: (i) Kirshner shall acquire
the Linkwell Shares solely for the consideration set forth below (the
"Exchange"); (ii) the Exchange shall qualify as a transaction exempt from
registration or qualification under the Securities Act of 1933, as amended (the
"Securities Act"), and (iii) the Exchange shall qualify as a "tax-free"
transaction within the meaning of Section 368 of the Internal Revenue Code of
1986.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties hereto
agree as follows:
SECTION 1. EXCHANGE OF SHARES AND OTHER TRANSACTIONS
1.1 Exchange of Shares. On the Closing (as hereinafter defined), the
Shareholders shall tender the Linkwell Shares to Kirshner and Kirshner shall
issue the Kirshner Shares to the Shareholders in exchange therefor. The
Shareholders shall each execute an Investment Letter at or prior to the receipt
of the Kirshner Shares substantially in the form of Exhibit B hereto.
1.2 Delivery of Linkwell Shares. On the Closing date, the Shareholders will
deliver to Kirshner the certificates representing the Linkwell Shares, duly
endorsed for transfer (or with executed stock powers) so as to convey good and
marketable title to the Linkwell Shares to Kirshner, and, promptly thereafter,
Kirshner will cause its transfer agent to deliver certificates evidencing the
Kirshner Shares to the Shareholders in accordance with written instructions
received from Linkwell to Kirshner prior to the closing.
1.3 Issuance of Cash and Stock to Verdier. At the Closing and pursuant to the
terms of the Escrow Agreement, Kirshner will pay to Verdier the sum of $175,000
for which he will assume responsibility for paying certain third party creditors
of Kirshner, and will issue to Verdier 1,400,000 shares of restricted common
stock of Kirshner, all of which shall be used to satisfy the obligations of
Kirshner to Verdier and third parties, the intention and commitment being that
at the time of consummation of the Exchange, there will be no material
liabilities, debts or obligations of Kirshner to Verdier or any of such third
parties, except as set forth on Schedule 4.11 hereto and the Escrow Agreement.
1.4 Escrow of Funds to Satisfy certain Indebtedness of Kirshner. On the Closing
Date, certain liabilities will be satisfied pursuant to the terms of the Escrow
Agreement.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Each of the Shareholders represents and warrants to Kirshner as
follows:
2.1 Information on Shareholders. Each of the Shareholders is an "accredited
investor," as such term is defined in Regulation D promulgated under the
Securities Act, or is otherwise experienced in investments and business matters,
has made investments of a speculative nature and has such knowledge and
experience in financial, tax and other business matters as to enable him to
evaluate the merits and risks of, and to make an informed investment decision
with respect to, this Agreement. Each of the Shareholders understands that his
acquisition of the Kirshner Shares is a speculative investment, and each of the
Shareholders represents that he is able to bear the risk of such investment for
an indefinite period, and can afford a complete loss thereof.
2.2 Investment Intent. Shareholders understand that the Kirshner Shares have not
been registered under the Securities Act, and may not be sold, assigned,
pledged, transferred or otherwise disposed of unless the Kirshner Shares are
registered under the Securities Act or an exemption from registration is
available. Shareholders represent and warrant that each is acquiring the
Kirshner Shares for his/its own account, for investment, and not with a view to
the sale or distribution of the Kirshner Shares except in compliance with the
Securities Act. Each certificate representing the Kirshner Shares will have the
following or substantially similar legend thereon:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act") or any state securities laws. The shares
have been acquired for investment and may not be sold or
transferred in the absence of an effective Registration
Statement for the shares under the Securities Act unless, in
the opinion of counsel satisfactory to the Company,
registration is not required under the Securities Act or any
applicable state securities laws."
2.3 Ownership of Linkwell Shares and Authorization of Agreement. Shareholders
are the sole record and beneficial owners of the Linkwell Shares, all of which
shares are owned free and clear of all rights, claims, liens and encumbrances,
and have not been sold, pledged, assigned or otherwise transferred except
pursuant to this Agreement. There are no outstanding subscriptions, rights,
options, warrants or other agreements obligating Shareholders to sell or
transfer to any third person any of the Linkwell Shares owned by Shareholders,
or any interest therein. Shareholders have the power to enter into this
Agreement and to carry out his, her or its obligations hereunder. This Agreement
has been duly executed by Shareholders and constitutes the valid and binding
obligation of Shareholders, enforceable against Shareholders in accordance with
its terms.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF LINKWELL
Linkwell, to the best of its knowledge, hereby represents and warrants
to Kirshner as follows, with any exceptions thereto being denoted on the
applicable schedule to this Agreement:
3.1 Organization and Good Standing. Linkwell is a corporation, duly organized,
validly existing and in good standing under the laws of the State of Florida,
and is entitled to own or lease its properties and to carry on its business as
and in the places where such properties are now owned, leased or operated and
such business is now conducted. Linkwell is qualified to do business as a
foreign corporation in each jurisdiction, if any, in which its property or
business requires such qualification. Linkwell is the record and beneficial
owner of 90% of the issued and outstanding shares of Shanghai Likang
Disinfectant Co., Ltd. ("Likang"), which shares are owned free and clear of all
rights, claims, liens and encumbrances, and have not been sold, pledged,
assigned or otherwise transferred. There are no outstanding subscriptions,
rights, options, warrants or other agreements obligating Linkwell to sell or
transfer to any third person any of the shares of Likang owned by Linkwell, or
any interest therein
Likang is a corporation, duly organized, validly existing and in good
standing under the laws of China, and is entitled to own or lease its properties
and to carry on its business as and in the places where such properties are now
owned, leased or operated and such business is now conducted. Likang is
qualified to do business as a foreign corporation in each jurisdiction, if any,
in which its property or business requires such qualification
3.2 Authorization; Enforceability; No Breach. Linkwell has all necessary
corporate power and authority to execute this Agreement and perform its
obligations hereunder. This Agreement constitutes the valid and binding
obligation of Linkwell enforceable against Linkwell in accordance with its
terms, except as may be limited by bankruptcy, moratorium, insolvency or other
similar laws generally affecting the enforcement of creditors' rights. The
execution, delivery and performance of this Agreement by Linkwell and the
consummation of the transactions contemplated hereby will not:
(a) violate any provision of the Charter or By-Laws of Linkwell;
(b) violate, conflict with or result in the breach of any of the terms of,
result in a material modification of, otherwise give any other contracting party
the right to terminate, or constitute (or with notice or lapse of time or both
constitute) a default under, any contract or other agreement to which Linkwell
is a party or by or to which it or any of its assets or properties may be bound
or subject;
(c) violate any order, judgment, injunction, award or decree of any court,
arbitrator or governmental or regulatory body against, or binding upon,
Linkwell, or upon the properties or business of Linkwell; or
(d) violate any statute, law or regulation of any jurisdiction applicable
to the transactions contemplated herein which could have a Material Adverse
Effect (as hereinafter defined) on the business or operations of Linkwell.
3.3 Compliance with Laws. Linkwell and Likang have each complied with all
federal, state, county and local laws, ordinances, regulations, inspections,
orders, judgments, injunctions, awards or decrees applicable to it or its
business which, if not complied with, would materially and adversely affect the
business or financial condition of Linkwell or Likang.
3.4 Consents and Approvals. No filing with, and no permit, authorization,
consent, or approval of, any public body or authority or any third party is
necessary for the consummation by Linkwell of the transactions contemplated by
this Agreement.
3.5 Litigation. There is no action, suit or proceeding pending or threatened, or
any investigation, at law or in equity, before any arbitrator, court or other
governmental authority, pending or threatened, nor any judgment, decree,
injunction, award or order outstanding, against or in any manner involving
Linkwell or any of Linkwell's properties or rights, or Likang or any of Likang's
properties or rights which (a) could reasonably be expected to have a material
adverse effect on Linkwell or Likang taken as a whole, or (b) could reasonably
be expected to materially and adversely affect consummation of any of the
transactions contemplated by this Agreement (collectively, a "Material Adverse
Effect").
3.6 Brokers or Finders. No broker's or finder's fee will be payable by Linkwell
in connection with the transaction contemplated by this Agreement, nor will any
such fee be incurred as a result of any actions by Linkwell.
3.7 Real Estate. Linkwell neither owns real property nor is a party to any
leasehold agreement.
3.8 Assets. Linkwell and Likang each own all rights, title and interest in and
to its assets, free and clear of all liens, pledges, mortgages, security
interests, conditional sales contracts or any other encumbrances.
3.9 Financial Statements. The consolidated unaudited balance sheets of Linkwell
and Likang at December 31, 2004 and 2003 (the "Linkwell Financial Statements")
fairly present in all material respects the financial position of Linkwell and
Likang as of the respective dates thereof, and the other related statements
included therein fairly present in all material respects the results of
operations, changes in shareholders' equity and cash flows of Linkwell and
Likang for the respective periods or as of the respective dates set forth
therein,. The Linkwell Financial Statements are a compilation of internal
accounting software reports that have not been generated or reviewed by a
certified public accountant. Accordingly, Linkwell cannot represent that the
Linkwell Financial Statements have been prepared in accordance with U.S.
generally accepted accounting principles ("GAAP") applied on a basis consistent
throughout all periods presented. However, to the best of Linkwell's knowledge,
the Linkwell Financial Statements present fairly in all material respects the
financial position of Likang as of the date and for the periods indicated.
Linkwell hereby represents and warrants to Kirshner that it has no
reason to believe that the Linkwell Financial Statements cannot be audited and
prepared in accordance with GAAP and SEC requirements, including the
instructions to Form 8-K. Linkwell further represents and warrants that it has
no reason to believe that it will not have the necessary financial statements
and disclosure for inclusion in all required Securities Exchange Act of 1934
(the "Exchange Act") reports when due following the Closing as the accounting
survivor as a result of the transactions contemplated hereby.
3.10 Absence of Changes; No Undisclosed Liabilities. Except as set forth on
Schedule 3.10, since December 31, 2004, neither Linkwell nor Likang have
incurred any liability material to Linkwell or Likang on a consolidated basis,
except in the ordinary course of its business, consistent with past practices;
suffered a change, or any event involving a prospective change, in the business,
assets, financial condition, or results of operations of Linkwell or Likang
which has had, or is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect, (other than as a result of changes or
proposed changes in federal or state regulations of general applicability or
interpretations thereof, changes in generally accepted accounting principles,
and changes that could, under the circumstances, reasonably have been
anticipated in light of disclosures made in writing by Linkwell to Kirshner
pursuant hereto); or subsequent to the date hereof, conducted its business and
operations other than in the ordinary course of business and consistent with
past practices. Neither Linkwell nor Likang have any liability (and Linkwell is
not aware of any basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand against any of them
giving rising to any liability which individually or is in the aggregate are
reasonably likely to have a Material Adverse Effect on Linkwell or Likang)
except for (a) liabilities set forth on the face of the most recent balance
sheet included in the Linkwell Financial Statements or the Likang Financial
Statements, and (b) liabilities which have arisen after the date of such balance
sheet in the ordinary course of business (none of which results from, arises out
of, relates to, is in the nature of, or was caused by any breach of contract,
tort, infringement, or violation of law).
3.11 Capitalization. The authorized capital stock of Linkwell consists of
200,000,000 shares of common stock of which 8,000,000 shares are presently
issued and outstanding, and 20,000,000 shares of preferred stock, no shares of
which have been issued or designated. Linkwell has not granted, issued or agreed
to grant, issue or make available any warrants, options, subscription rights or
any other commitments of any character relating to the unissued shares of
capital stock of Linkwell. All of the Linkwell Shares are duly authorized and
validly issued, fully paid and non-assessable.
3.12 Contracts. A copy of each of the material contracts, instruments,
mortgages, notes, security agreements, leases, agreements, or understandings,
whether written or oral, to which Linkwell and or Likang is a party that relates
to or affects the assets or operations of Linkwell or Likang or to which
Linkwell's or Likang's assets or operations may be bound or subject
(collectively, the "Contracts"), has been provided to Kirshner. Each of the
Contracts is a valid and binding obligation of Linkwell or Likang and in full
force and effect, except for where the failure to be in full force and effect
would not, individually or in the aggregate, have a Material Adverse Effect. For
purposes of this Agreement a material contract shall be any contract or
agreement involving consideration in excess of $10,000. There are no existing
defaults by Linkwell or Likang thereunder or, to the knowledge of Linkwell, by
any other party thereto, which defaults, individually or in the aggregate, would
have a Material Adverse Effect.
3.13 Taxes. All required tax returns or federal, state, county, municipal,
local, foreign and other taxes and assessments have been properly prepared and
filed by Linkwell and Likang for all years for which such returns are due unless
an extension for filing any such return has been properly prepared and filed.
Any and all federal, state, county, municipal, local, foreign and other taxes,
assessments, including any and all interest, penalties and additions imposed
with respect to such amounts have been paid or provided for. Neither Linkwell
nor Likang have been audited by any local, state or federal tax authority.
3.14 (a) Except to the extent that any inaccuracy of any of the following (or
the circumstances giving rise to such inaccuracy), in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on Linkwell or Likang:
(i) Linkwell and Likang each own, or is licensed or otherwise has the legally
enforceable right to use (in each case, clear of any liens or encumbrances of
any kind), all Intellectual Property (as hereinafter defined) used in or
necessary for the conduct of its business as currently conducted; (ii) no claims
are pending or, to the knowledge of Linkwell, threatened that Linkwell or Likang
is infringing on or otherwise violating the rights of any person with regard to
any Intellectual Property used by, owned by, and/or licensed to Linkwell or
Likang or any of its subsidiaries; (iii) as of the date of this Agreement, to
the knowledge of Linkwell, no person is infringing on or otherwise violating any
right of Linkwell or Likang with respect to any Intellectual Property owned by
and/or licensed to Linkwell or Likang; and (iv) as of the date of this
Agreement, neither Linkwell nor Likang have received any notice of any claim
challenging the ownership or validity of any Intellectual Property owned by
Linkwell or Likang or challenging Linkwell's or Likang's license or legally
enforceable right to use any Intellectual Property licensed by it.
(b) For purposes of this Agreement, "Intellectual Property"
means trademarks (registered or unregistered), service marks, brand names,
certification marks, trade dress, assumed names, trade names, and other
indications of origin, the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any jurisdiction to
register, the foregoing, including any extension, modification or renewal of any
such registration or application; inventions, discoveries and ideas, whether
patented, patentable, or not in any jurisdiction; trade secrets and confidential
information and rights in any jurisdiction to limit the use or disclosure
thereof by any person; writings and other works of authorship, whether
copyrighted, copyrightable, or not in any jurisdiction; registration or
applications for registration of copyrights in any jurisdiction, and any
renewals or extensions thereof; any similar intellectual property or proprietary
rights and computer programs and software (including source code, object code,
and data); licenses, immunities, covenants not to xxx, and the like relating to
the foregoing; and any claims or causes of action arising out of or related to
any infringement or misappropriation of any of the foregoing.
3.15 Labor and Employment Matters. (a) Linkwell and Likang each are and have
been in compliance in all respects with all applicable laws respecting
employment and employment practices, terms, and conditions of employment and
wages and hours, including, such laws respecting employment discrimination,
equal opportunity, affirmative action, worker's compensation, occupational
safety, and health requirements and unemployment insurance and related matters,
and are not engaged in and have not engaged in any unfair labor practice; (b) no
investigation or review by or before any governmental entity concerning any
violations of any such applicable laws is pending nor, to the knowledge of
Linkwell is any such investigation threatened or has any such investigation
occurred during the last three years, and no governmental entity has provided
any notice to Linkwell or Likang or otherwise asserted an intention to conduct
any such investigation; (c) there is no labor strike, dispute, slowdown, or
stoppage actually pending or threatened against Linkwell; (d) no union
representation question or union organizational activity exists respecting the
employees of Linkwell or Likang; (e) no collective bargaining agreement exists
which is binding on Linkwell or Likang; (f) Linkwell and Likang hve experienced
no work stoppage or other labor difficulty; and (g) in the event of termination
of the employment of any of the current officers, directors, employees, or
agents of Linkwell or Likang, neither Xxxxxxxx xxx Likang shall, pursuant to any
agreement or by reason of anything done prior to the closing by Linkwell or
Likang be liable to any of said officers, directors, employees, or agents for
so-called "severance pay" or any other similar payments or benefits, including,
without limitation, post-employment healthcare (other than pursuant to COBRA) or
insurance benefits, except to the extent that any matter in Items (a), (b), (f)
and (g) could reasonably be expected individually or in the aggregate to have a
Material Adverse Effect on Linkwell or Likang.
3.16 Employee Benefit Plans. Neither Linkwell nor Likang are a party to any
written or formal employee benefit plan (including, without limitation, any
"employee benefit plan" as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) policy or agreement that is
maintained (all of the foregoing, the "Benefit Plans"), or is or was contributed
to by Linkwell or Likang or pursuant to which Linkwell or Likang or any trade or
business, whether or not incorporated (an "ERISA Affiliate"), which together
with Linkwell or Likang would be deemed a "single employer" within the meaning
of Section 4001 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), is still potentially liable for payments, benefits, or
claims.
3.17 State Anti-Takeover Statutes. The Linkwell Board of Directors has approved
this Agreement and the transactions contemplated hereby and thereby such
approval constitutes approval of the Agreement and other transactions
contemplated hereby and thereby by the Linkwell Board of Directors as required
under Florida law. To the knowledge of Linkwell, no state anti-takeover statute
is applicable to the Exchange.
3.18 Absence of Certain Business Practices. Neither Linkwell or Likang nor any
director, officer, employer, or agent of the foregoing, nor any person acting on
their behalf, directly or indirectly has to Linkwell's knowledge given or agree
to give any gift or similar benefit to any customer, supplier, governmental
employee or other person which (a) might subject Linkwell to any damage or
penalty in any civil, criminal, or governmental litigation or proceeding, (b) if
not given in the past, might have had a Material Adverse Effect on Linkwell or
Likang, or (c) if not continued in the future, might have a Material Adverse
Effect on Linkwell or Likang or which might subject Linkwell or Likang to suit
or penalty in any private or governmental litigation or proceeding.
3.19 Internal Accounting Controls. Linkwell and Likang each maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
3.20 Full Disclosure. No representation or warranty by Linkwell in this
Agreement or in any document or schedule to be delivered by them pursuant
hereto, and no written statement, certificate or instrument furnished or to be
furnished to Kirshner pursuant hereto or in connection with the negotiation,
execution or performance of this Agreement contains, or will contain, any untrue
statement of a material fact or omits, or will omit, to state any fact necessary
to make any statement herein or therein not materially misleading or necessary
to a complete and correct presentation of all material aspects of the businesses
of Linkwell.
SECTION 4. REPRESENTATIONS AND WARRANTS OF KIRSHNER AND VERDIER.
Kirshner and Verdier, to the best of his knowledge, hereby represent
and warrant to Linkwell and the Shareholders as follows, with any exceptions
thereto being denoted on the applicable schedule to this Agreement:
4.1 Organization and Good Standing. Kirshner is a corporation duly organized,
validly existing and in good standing under the laws of Florida, and is entitled
to own or lease its properties and to carry on its business as and in the places
where such properties are now owned, leased or operated and such business is now
conducted. Kirshner is qualified to do business as a foreign corporation in each
jurisdiction, if any, in which its property or business requires such
qualification.
4.2 Authorization; Enforceability; No Breach. Kirshner has all necessary
corporate power and authority to execute this Agreement and perform its
obligations hereunder. This Agreement constitutes the valid and binding
obligation of Kirshner enforceable against Kirshner in accordance with its
terms, except as may be limited by bankruptcy, moratorium, insolvency or other
similar laws generally affecting the enforcement of creditors' rights. The
execution, delivery and performance of this Agreement by Kirshner and the
consummation of the transactions contemplated hereby will not:
(a) violate any provision of the Charter or By-Laws of Kirshner;
(b) violate, conflict with or result in the breach of any of the terms of,
result in a material modification of, otherwise give any other contracting party
the right to terminate, or constitute (or with notice or lapse of time or both
constitute) a default under, any contract or other agreement to which Kirshner
is a party or by or to which it or any of its assets or properties may be bound
or subject;
(c) violate any order, judgment, injunction, award or decree of any court,
arbitrator or governmental or regulatory body against, or binding upon,
Kirshner, or upon the properties or business of Kirshner; or
(d) violate any statute, law or regulation of any jurisdiction applicable
to the transactions contemplated herein which could have a Material Adverse
Effect on the business or operations of Kirshner.
4.3 The Kirshner Shares. The Kirshner Shares to be issued to the Shareholders
have been, or on or prior to the Closing will have been, duly authorized by all
necessary corporate and shareholder actions and, when so issued in accordance
with the terms of this Agreement, will be validly issued, fully paid and
non-assessable and will not be issued in violation of the pre-emptive or similar
rights of any person.
4.4 Compliance with Laws. Kirshner has complied with all federal, state, county
and local laws, ordinances, regulations, inspections, orders, judgments,
injunctions, awards or decrees applicable to it or its business which, if not
complied with, would materially and adversely affect the business or financial
condition of Kirshner.
4.5 Consents and Approvals. No filing with, and no permit, authorization,
consent or approval of any public body or authority or any third party is
necessary for the consummation by Kirshner of the transactions contemplated by
this Agreement.
4.6 Litigation. Other than as set forth on Schedule 4.6 and in its publicly
filed documents with the Securities and Exchange Commission ("SEC"), there is no
action, suit or proceeding pending or threatened, or any investigation, at law
or in equity, before any arbitrator, court or other governmental authority,
pending or threatened, nor any judgment, decree, injunction, award or order
outstanding, against or in any manner involving Kirshner or any of Kirshner's
properties or rights which (a) could reasonably be expected to have a material
adverse effect on Kirshner taken as a whole, or (b) could reasonably be expected
to materially and adversely affect consummation of any of the transactions
contemplated by this Agreement.
4.7 Brokers or Finders. No broker's or finder's fee will be payable by Kirshner
in connection with the transaction contemplated by this Agreement, nor will any
such fee be incurred as a result of any actions by Kirshner.
4.8 Real Estate. Kirshner neither owns real property nor is a party to
any leasehold agreement.
4.9 Assets. Kirshner owns all rights, title and interest in and to its assets,
free and clear of all liens, pledges, mortgages, security interests, conditional
sales contracts or any other encumbrances.
4.10 Financial Statements. The audited balance sheet of Kirshner at December 31,
2004 and 2003 and related statements of operations, cash flow and shareholders'
equity (the "Kirshner Financial Statements") fairly present in all material
respects the financial position of Kirshner as of the respective dates thereof,
and the other related statements included therein fairly present in all material
respects the results of operations, changes in shareholders' equity and cash
flows of Kirshner for the respective periods or as of the respective dates set
forth therein, all in conformity with generally accepted accounting principles
consistently applied during the periods involved, except as otherwise noted
therein.
4.11 Absence of Changes; No Undisclosed Liabilities. Except as disclosed in its
Form 10-KSB for fiscal year ended December 31, 2004, since December 31, 2004,
Kirshner has not incurred any liability material to Kirshner on a consolidated
basis, except in the ordinary course of its business, consistent with past
practices; suffered a change, or any event involving a prospective change, in
the business, assets, financial condition, or results of operations of Kirshner
which has had, or is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect, (other than as a result of changes or
proposed changes in federal or state regulations of general applicability or
interpretations thereof, changes in generally accepted accounting principles,
and changes that could, under the circumstances, reasonably have been
anticipated in light of disclosures made in writing by Kirshner to Linkwell
pursuant hereto); or subsequent to the date hereof, conducted its business and
operations other than in the ordinary course of business and consistent with
past practices. Kirshner has no liability (and Kirshner is not aware of any
basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any of them giving
rising to any liability which individually or is in the aggregate are reasonably
likely to have a Material Adverse Effect on Kirshner) except for (a) liabilities
set forth on the face of the most recent balance sheet included in the Kirshner
Financial Statements, and (b) liabilities which have arisen after the date of
such balance sheet in the ordinary course of business (none of which results
from, arises out of, relates to, is in the nature of, or was caused by any
breach of contract, tort, infringement, or violation of law). Schedule 4.11 sets
forth all liabilities and incurred expenses of Kirshner as of the date of this
Agreement. Verdier will assume responsibility for paying all the liabilities and
expenses of Kirshner set forth on Schedule 4.11 and will pay such amounts out of
the $175,000 delivered to Verdier pursuant to the terms of the Escrow Agreement
or otherwise.
4.12 Capitalization. The authorized capital stock of Kirshner consists of
150,000,000 shares of common stock of which 3,625,655 (post-split) shares are
presently issued and outstanding, and 10,000,000 shares of preferred stock, no
shares of which have been issued or designated. Kirshner has not granted, issued
or agreed to grant, issue or make available any warrants, options, subscription
rights or any other commitments of any character relating to the unissued shares
of capital stock of Kirshner except as set forth in Schedule 4.12 hereto or as
disclosed in its public filings with the SEC. All of the Kirshner Shares are
duly authorized and validly issued, fully paid and non-assessable.
4.13 Contracts. A copy of each of the material contracts, instruments,
mortgages, notes, security agreements, leases, agreements, or understandings,
whether written or oral, to which Kirshner is a party that relates to or affects
the assets or operations of Kirshner or to which Kirshner's assets or operations
may be bound or subject (collectively, the "Contracts"), has been provided to
Linkwell. Each of the Contracts is a valid and binding obligation of Kirshner
and in full force and effect, except for where the failure to be in full force
and effect would not, individually or in the aggregate, have a Material Adverse
Effect. For purposes of this Agreement a material contract shall be any contract
or agreement involving consideration in excess of $10,000. There are no existing
defaults by Kirshner thereunder or, to the knowledge of Kirshner, by any other
party thereto, which defaults, individually or in the aggregate, would have a
Material Adverse Effect.
4.14 Taxes. All required tax returns or federal, state, county, municipal,
local, foreign and other taxes and assessments have been properly prepared and
filed by Kirshner for all years for which such returns are due unless an
extension for filing any such return has been properly prepared and filed. Any
and all federal, state, county, municipal, local, foreign and other taxes,
assessments, including any and all interest, penalties and additions imposed
with respect to such amounts have been paid or provided for. Kirshner has never
been audited by any local, state or federal tax authority.
4.15 (a) Except as may be disclosed in its public filings with the SEC and to
the extent that any inaccuracy of any of the following (or the circumstances
giving rise to such inaccuracy), in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on Kirshner: (i) Kirshner owns, or is
licensed or otherwise has the legally enforceable right to use (in each case,
clear of any liens or encumbrances of any kind), all Intellectual Property (as
hereinafter defined) used in or necessary for the conduct of its business as
currently conducted; (ii) no claims are pending or, to the knowledge of
Kirshner, threatened that Linkwell is infringing on or otherwise violating the
rights of any person with regard to any Intellectual Property used by, owned by,
and/or licensed to Kirshner or any of its subsidiaries; (iii) as of the date of
this Agreement, to the knowledge of Kirshner, no person is infringing on or
otherwise violating any right of Kirshner with respect to any Intellectual
Property owned by and/or licensed to Kirshner; and (iv) as of the date of this
Agreement, neither Kirshner nor any of its subsidiaries have received any notice
of any claim challenging the ownership or validity of any Intellectual Property
owned by Kirshner or challenging Kirshner's license or legally enforceable right
to use any Intellectual Property licensed by it.
(b) For purposes of this Agreement, "Intellectual Property"
means trademarks (registered or unregistered), service marks, brand names,
certification marks, trade dress, assumed names, trade names, and other
indications of origin, the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any jurisdiction to
register, the foregoing, including any extension, modification or renewal of any
such registration or application; inventions, discoveries and ideas, whether
patented, patentable, or not in any jurisdiction; trade secrets and confidential
information and rights in any jurisdiction to limit the use or disclosure
thereof by any person; writings and other works of authorship, whether
copyrighted, copyrightable, or not in any jurisdiction; registration or
applications for registration of copyrights in any jurisdiction, and any
renewals or extensions thereof; any similar intellectual property or proprietary
rights and computer programs and software (including source code, object code,
and data); licenses, immunities, covenants not to xxx, and the like relating to
the foregoing; and any claims or causes of action arising out of or related to
any infringement or misappropriation of any of the foregoing.
4.16 Labor and Employment Matters. (a) Kirshner is and has been in compliance in
all respects with all applicable laws respecting employment and employment
practices, terms, and conditions of employment and wages and hours, including,
such laws respecting employment discrimination, equal opportunity, affirmative
action, worker's compensation, occupational safety, and health requirements and
unemployment insurance and related matters, and are not engaged in and have not
engaged in any unfair labor practice; (b) no investigation or review by or
before any governmental entity concerning any violations of any such applicable
laws is pending nor, to the knowledge of Kirshner is any such investigation
threatened or has any such investigation occurred during the last three years,
and no governmental entity has provided any notice to Kirshner or otherwise
asserted an intention to conduct any such investigation; (c) there is no labor
strike, dispute, slowdown, or stoppage actually pending or threatened against
Kirshner; (d) no union representation question or union organizational activity
exists respecting the employees of Kirshner; (e) no collective bargaining
agreement exists which is binding on Kirshner; (f) Kirshner has experienced no
work stoppage or other labor difficulty; and (g) in the event of termination of
the employment of any of the current officers, directors, employees, or agents
of Kirshner, Kirshner shall not, pursuant to any agreement or by reason of
anything done prior to the closing by Kirshner be liable to any of said
officers, directors, employees, or agents for so-called "severance pay" or any
other similar payments or benefits, including, without limitation,
post-employment healthcare (other than pursuant to COBRA) or insurance benefits,
except to the extent that any matter in Items (a), (b), (f) and (g) could
reasonably be expected individually or in the aggregate to have a Material
Adverse Effect on Kirshner.
4.17 Employee Benefit Plans. Except as may be disclosed in its public filings
with the SEC, Kirshner is not a party to any written or formal employee benefit
plan (including, without limitation, any "employee benefit plan" as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) policy or agreement that is maintained (all of the foregoing, the
"Benefit Plans"), or is or was contributed to by Kirshner or pursuant to which
Kirshner or any trade or business, whether or not incorporated (an "ERISA
Affiliate"), which together with Linkwell would be deemed a "single employer"
within the meaning of Section 4001 of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), is still potentially liable for payments,
benefits, or claims.
4.18 State Anti-Takeover Statutes. The Kirshner Board of Directors has approved
this Agreement and the transactions contemplated hereby, and thereby such
approval constitutes approval of the Agreement and other transactions
contemplated hereby and thereby by the Kirshner Board of Directors as required
under Florida law. To the knowledge of Kirshner, no state anti-takeover statute
is applicable to the Exchange.
4.19 Absence of Certain Business Practices. Neither Kirshner nor any director,
officer, employer, or agent of the foregoing, nor any person acting on its
behalf, directly or indirectly has to Kirshner's knowledge given or agree to
give any gift or similar benefit to any customer, supplier, governmental
employee or other person which (a) might subject Linkwell to any damage or
penalty in any civil, criminal, or governmental litigation or proceeding, (b) if
not given in the past, might have had a Material Adverse Effect on Kirshner, or
(c) if not continued in the future, might have a Material Adverse Effect on
Kirshner or which might subject Kirshner to suit or penalty in any private or
governmental litigation or proceeding.
4.20 Internal Accounting Controls. Kirshner maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
4.21 SEC Reports. Except as may be disclosed in its public filings with the SEC,
Kirshner has filed all reports required to be filed by it under the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof (the foregoing
materials, including the exhibits thereto, being collectively referred to herein
as the "SEC Reports"). The SEC Reports comply in all material respects with the
requirements of the Exchange Act and the rules and regulations of the SEC
promulgated thereunder, and none of the SEC Reports, when filed, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the SEC with respect thereto as in effect at the time of filing.
4.22 SEC Inquiry. In January 2004, the SEC commenced an informal inquiry
("Investigation") of Kirshner. Kirshner is not certain of the status of the
investigation. Having considered the communications, written and oral, between
Kirshner, Verdier and the SEC since January 2004, Kirshner has not received any
indication from the SEC that the SEC has continued to focus the Investigation on
Kirshner or has pursued further proceedings against Kirshner or deems Kirshner's
acts and practices described in the Investigation to be in violation of the
Securities Act or the Exchange Act.
4.23 Full Disclosure. No representation or warranty by Kirshner in this
Agreement or in any document or schedule to be delivered by them pursuant
hereto, and no written statement, certificate or instrument furnished or to be
furnished to Linkwell pursuant hereto or in connection with the negotiation,
execution or performance of this Agreement contains, or will contain, any untrue
statement of a material fact or omits, or will omit, to state any fact necessary
to make any statement herein or therein not materially misleading or necessary
to a complete and correct presentation of all material aspects of the businesses
of Kirshner.
SECTION 5. COVENANTS
5.1. Examinations and Investigations. Prior to the Closing, the parties
acknowledge that they have been entitled, through their employees and
representatives, to make such investigation and verification of the assets,
properties, business and operations, books, records and financial condition of
the other, including communications with suppliers, vendors and customers, as
they each may reasonably require. No investigation by a party hereto shall,
however, diminish or waive in any way any of the representations, warranties,
covenants or agreements of the other party under this Agreement. Consummation of
this Agreement shall be subject to the fulfillment of due diligence procedures
to the reasonable satisfaction of each of the parties hereto and their
respective counsel.
5.2. Expenses. Each party hereto agrees to pay its own costs and expenses
incurred in negotiating this Agreement and consummating the transactions
described herein.
5.3. Satisfaction of Kirshner Indebtedness. On the Closing and pursuant to the
terms and conditions of the Escrow Agreement, Kirshner will pay to Verdier and
other creditors of Kirshner the sum of $175,000 and issue to Verdier 1,400,000
shares of Kirshner restricted common stock to satisfy and discharge all debts,
liabilities and obligations of Kirshner to Verdier and to other creditors of
Kirshner, the intention and commitment being that at the Closing, there shall be
no material debts, claims, indebtedness, obligations or liabilities owing to
Verdier and such third parties.
5.4. Issuances to Employees. On or prior to the Closing, Kirshner will issue
150,000 shares of its common stock, as previously committed, pursuant to
Kirshner's equity compensation plan.
5.5. Further Assurances. The parties shall execute such documents and other
papers and take such further action as may be reasonably required or desirable
to carry out the provisions hereof and the transactions contemplated hereby.
Each such party shall use its best efforts to fulfill or obtain in the
fulfillment of the conditions to the Closing, including, without limitation, the
execution and delivery of any documents or other papers, the execution and
delivery of which are necessary or appropriate to the Closing.
5.6. Confidentiality. In the event the transactions contemplated by this
Agreement are not consummated, each of the parties hereto agree to keep
confidential any information disclosed to each other in connection therewith;
provided, however, such obligation shall not apply to information which:
(a) at the time of disclosure was public knowledge;
(b) after the time of disclosure becomes public knowledge (except due to the
action of the receiving party); or
(c) the receiving party had within its possession at the time of disclosure.
5.7 Stock Certificates and Consideration. At the Closing, the
Shareholders shall have delivered the certificates representing the Linkwell
Shares duly endorsed (or with executed stock powers) so as to make Kirshner the
sole owner thereof. At such Closing, Kirshner shall issue the Kirshner Shares to
the Shareholders, as provided herein.
5.8 Management of Linkwell and Kirshner. On the Closing date, the
directors and officers of Kirshner shall resign and the designees of Linkwell
shall, from and after the Closing, be the directors and officers of Kirshner.
5.9 Aerisys Incorporated. Kirshner has one wholly owned operating
subsidiary, Aerisys Incorporated, a Florida corporation ("Aerisys"). Kirshner
and Linkwell agree that during the six (6) months following the Closing,
Kirshner will not sell or transfer any of its ownership interest in or a
substantial amount of the assets of Aerisys or otherwise encumber the assets of
Aerisys.
SECTION 6. THE CLOSING
The closing (the "Closing") shall take place contemporaneous with the
execution of this Agreement, or at such other time and place as is mutually
agreed upon by Kirshner, Verdier, Linkwell and the Shareholders, following
satisfaction or waiver of all conditions precedent to Closing. At the Closing,
the parties shall provide each other with such documents as may be necessary or
appropriate and customary in transactions of this sort in order to consummate
the transactions contemplated hereby, including evidence of due authorization of
the Agreement and the transactions contemplated hereby.
SECTION 7. CONDITIONS PRECEDENT TO CLOSING
7.1 Conditions Precedent to the Obligation of Kirshner to Issue the
Kirshner Shares. The obligation of Kirshner to issue the Kirshner Shares to the
Shareholders and to otherwise consummate the transactions contemplated hereby is
subject to the satisfaction, at or before the Closing, of each of the conditions
set forth below. These conditions are for Kirshner's sole benefit and may be
waived by Kirshner at any time in its sole discretion.
(a) Accuracy of Linkwell's and the Shareholders' Representations and
Warranties. The representations and warranties of Linkwell and the Shareholders
will be true and correct in all material respects as of the date when made and
as of the Closing, as though made at that time.
(b) Performance by Linkwell and the Shareholders. Linkwell and the
Shareholders shall have performed all agreements and satisfied all conditions
required to be performed or satisfied by them at or prior to the Closing.
(c) No Injunction. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction which prohibits
the consummation of any of the transactions contemplated by this Agreement.
(d) No Material Adverse Changes. Linkwell shall have suffered no Material
Adverse Effect.
(e) Miscellaneous. Linkwell and the Shareholders shall have delivered to
Kirshner such other documents relating to the transactions contemplated by this
Agreement as Kirshner may reasonably request.
7.2 Conditions Precedent to the Obligation of the Shareholders to
Exchange Linkwell Shares. The obligation of the Shareholders to exchange their
Linkwell Shares for the Kirshner Shares and to otherwise consummate the
transactions contemplated hereby is subject to the satisfaction, at or before
the Closing, of each of the conditions set forth below. These conditions are for
the Shareholders' sole benefit and may be waived by Linkwell at any time in its
sole discretion.
(a) Accuracy of Kirshner's and Verdier's Representations and Warranties.
The representations and warranties of Kirshner and Verdier will be true and
correct in all material respects as of the date when made and as of the Closing,
as though made at that time.
(b) Performance by Kirshner and Verdier. Kirshner and Verdier shall have
performed all agreements and satisfied all conditions required to be performed
or satisfied by them at or prior to the Closing.
(c) No Injunction. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction which prohibits
the consummation of any of the transactions contemplated by this Agreement.
(d) No Material Adverse Changes. Kirshner shall have suffered no Material
Adverse Effect.
(e) Satisfaction of Kirshner Indebtedness. At Closing, Kirshner's material
indebtedness, obligations, debts, claims and liabilities, as referred to in
Section 5.3 hereof, shall be fully discharged and settled.
(f) Stock Issuances. The issuance of Kirshner common stock to employees, as
described in Section 5.4 hereof, shall have been made.
(g) Miscellaneous. Kirshner shall have delivered to the Shareholders such
other documents relating to the transactions contemplated by this Agreement as
the Shareholders may reasonably request.
SECTION 8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF KIRSHNER AND VERDIER
Notwithstanding any right of Linkwell and the Shareholders fully to
investigate the affairs of Kirshner, Linkwell and the Shareholders shall have
the right to rely fully upon the representations, warranties, covenants and
agreements of Kirshner and Verdier contained in this Agreement or in any
document delivered by Kirshner or any of its representatives, in connection with
the transactions contemplated by this Agreement. All such representations,
warranties, covenants and agreements shall survive the execution and delivery
hereof and the Closing hereunder for 12 months following the Closing.
SECTION 9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF LINKWELL
AND THE SHAREHOLDERS
Notwithstanding any right of Kirshner and Verdier fully to investigate
the affairs of Linkwell, Kirshner and Verdier have the right to rely fully upon
the representations, warranties, covenants and agreements of Linkwell and the
Shareholders contained in this Agreement or in any document delivered to
Kirshner by Linkwell or any of its representatives, in connection with the
transactions contemplated by this Agreement. All such representations,
warranties, covenants and agreements shall survive the execution and delivery
hereof and the Closing hereunder for 12 months following the Closing.
SECTION 10. INDEMNIFICATION
10.1 Obligation of Kirshner and Verdier to Indemnify. Subject to the limitations
on the survival of representations and warranties contained in Section 8,
Kirshner and Verdier hereby agree to indemnify, defend and hold harmless the
Shareholders and Linkwell, to the extent provided for herein, from and against
any losses, liabilities, damages, deficiencies, costs or expenses (including
interest, penalties and reasonable attorneys' fees and disbursements) (a "Loss")
based upon, arising out of, or otherwise due to any inaccuracy in or any breach
of any representation, warranty, covenant or agreement of Kirshner and Verdier
contained in this Agreement or in any document or other writing delivered
pursuant to this Agreement.
10.2 Obligation of the Linkwell and the Shareholders to Indemnify. Subject to
the limitations on the survival of representations and warranties contained in
Section 9, Linkwell and the Shareholders agree to indemnify, defend and hold
harmless Kirshner and Verdier to the extent provided for herein from and against
any Loss based upon, arising out of, or otherwise due to any inaccuracy in or
any breach of any representation, warranty, covenant or agreement made by any of
them and contained in this Agreement or in any document or other writing
delivered pursuant to this Agreement.
SECTION 11. MISCELLANEOUS
11.1 Waivers. The waiver of a breach of this Agreement or the failure of any
party hereto to exercise any right under this Agreement shall in no event
constitute a waiver as to any future breach whether similar or dissimilar in
nature or as to the exercise of any further right under this Agreement.
11.2 Amendment. This Agreement may be amended or modified only by an instrument
of equal formality signed by the parties or the duly authorized representatives
of the respective parties.
11.3 Assignment. This Agreement is not assignable except by operation of
law.
11.4 Notices. Until otherwise specified in writing, the mailing addresses
of both parties of this Agreement shall be as follows:
Linkwell Linkwell Tech Group, Inc. (U.S. Address)
Xx. 000 Xxxxx Xxxxxx Xxxx 0000 Xxxxxx Road, #213
Baoshan District Xxxx Xxxxx, Xxxxxxx 00000
Xxxxxxxx, Xxxxx 000000
The Shareholders: c/o XxxXxxx Xxxx
0000 Xxxxxx Xxxx, #000
Xxxx Xxxxx, Xxxxxxx 00000
With a copy to: Xxxxx X. Xxxxxxxxx, Esq.
Xxxxxxxxx Xxxxxxxxxx & Beilly LLP
0000 Xxxxxxxxx Xxxxxxxxx, X.X., Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Kirshner: Kirshner Entertainment & Technologies, Inc.
0000 XX 00xx Xxxxxx, Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Verdier: c/o Kirshner Entertainment & Technologies, Inc.
0000 XX 00xx Xxxxxx, Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
With a copy to: Xxxxxxxx Xxxxxxx Xxxx, Esq.
Kain & Xxxxxxxx, P.A.
000 X.X. Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Any notice or statement given under this Agreement shall be deemed to have been
given if sent by registered mail addressed to the other party at the address
indicated above or at such other address as may be furnished in writing to the
addressor.
11.5 Governing Law; Venue. This Agreement shall be governed and construed in
accordance with the laws of the State of Florida, without regard to the
conflicts of law provisions thereof. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the County
of Palm Beach, State of Florida, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
If any provision of this agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this agreement in that jurisdiction or the
validity or enforceability of any provision of this agreement in any other
jurisdiction. EACH PARTY HERETO IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY.
11.6 Publicity. No publicity release or announcement concerning this Agreement
or the transactions contemplated hereby shall be issued by either party hereto
at any time from the signing hereof without advance approval in writing of the
form and substance thereof by the other party.
11.7 Entire Agreement. This Agreement (including the Exhibits and Schedules
hereto) and the collateral agreements executed in connection with the
consummation of the transactions contemplated herein contain the entire
agreement among the parties with respect to the Exchange and related
transactions, and supersede all prior agreements, written or oral, with respect
thereto.
11.8 Headings. The headings in this Agreement are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement.
11.9 Severability of Provisions. The invalidity or unenforceability of any term,
phrase, clause, paragraph, restriction, covenant, agreement or other provision
of this Agreement shall in no way affect the validity or enforcement of any
other provision or any part thereof.
11.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when so executed, shall constitute an original copy
hereof, but all of which together shall consider but one and the same document.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
KIRSHNER ENTERTAINMENT &
TECHNOLOGIES, INC.
By:/s/ Xxxx Xxxxxxx
----------------------
Name:
----------------------
Title: CEO
----------------------
/s/ Xxxx Xxxxxxx
XXXX XXXXXXX
LINKWELL TECH GROUP, INC.
By:/s/ XxxXxxx Xxxx
------------------------
XxxXxxx Xxxx, President
SHAREHOLDERS
/s/ XxxXxxx Xxxx
------------------------
XxxXxxx Xxxx
/s/Xxx Xxxx
------------------------
Xxx Xxxx
SCHEDULE A
EXCHANGE WITH KIRSHNER ENTERTAINMENT & TECHNOLOGIES, INC.
Shares of Shares of
Xxxxxxxx Xxxxxxxx
Name of to be to be
Shareholder Exchanged Received
Bian, XueLian 5,000,000 22,670,919
Xxxx, Xxx 3,000,000 13,602,551
-------------------------------- --------------- --------------
Total Linkwell Tech Group, Inc. 8,000,000 36,273,470
EXHIBIT A
ESCROW AGREEMENT
ESCROW AGREEMENT ("Escrow Agreement") dated as of April 29, 2005, by and
among KIRSHNER ENTERTAINMENT & TECHNOLOGIES, INC. (the "KETI"), LINKWELL TECH
GROUP, INC. ("LTGI") and XXXXXXXXX XXXXXXXXXX & BEILLY LLP. (the "Escrow
Agent").
W I T N E S S E T H
WHEREAS, KETI and LTGI have executed a letter of intent in
contemplation of a stock exchange agreement pursuant to which KETI would issue
shares of its common stock to acquire common shares of LTGI through a share
exchange (the "Acquisition"); and
WHEREAS, LTGI and/or certain parties associated with LTGI are willing
to deposit the sum of $350,000 (the "Funds") in a special segregated account to
be maintained by the Escrow Agent at Mellon United National Bank, which Funds
are to be disbursed to KETI and other parties as described below solely upon
consummation of the Acquisition; and
WHEREAS, KETI AND LTGI have requested the Escrow Agent to receive and
hold the Funds in escrow pending the closing of the Acquisition (the "Closing")
and to disburse the Funds in the manner hereinafter provided; and
WHEREAS, the Escrow Agent is willing to act as escrow agent hereunder,
upon the terms and conditions set forth herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged by each of the parties hereto, the
parties hereto agree as follows:
1. Appointment of Escrow Agent. KETI and LTGI hereby appoint the Escrow
Agent as escrow agent upon the terms and conditions set forth herein, and the
Escrow Agent hereby accepts such appointment.
2. Delivery of Funds. Following the date hereof, the Funds will be
delivered to the Escrow Agent. The Funds shall be delivered by (a) check payable
to " Escrow Account of Xxxxxxxxx Xxxxxxxxxx & Beilly LLP as Escrow Agent" or (b)
wire transfer to the special account of the Escrow Agent at the following
coordinates:
Bank: Mellon United National Bank
ABA: 000000000
Address: 0000 Xxxxx Xxxxxxxx Xxxxx
Xxxx Xxxxx, XX 00000
Amount: $350,000.00
To the benefit of: Xxxxxxxxx Xxxxxxxxxx & Beilly LLP
IOTA Trust Account
Account No.: 0225001221
Re: Linkwell
The Funds shall be maintained on deposit by the Escrow Agent in the special
segregated account ("Special Account") in accordance with the terms and
conditions hereof.
3. Investment of the Funds. The Escrow Account shall not bear interest and
no investment of the Funds shall be made while held by the Escrow Agent.
4. Release of Escrow Property. Provided the Acquisition is consummated as
evidenced by a written agreement by KETI and LTGI, the Escrow Agent shall
disburse the Funds as follows:
(a) $175,000 to Xxxx Xxxxxxx.
(b) $35,000 to Sherb & Co., LLP.
(c) $35,000 to Xxxxxxxxx Xxxxxxxxxx & Beilly LLP.
(d) $105,000 to Xxxxxxx Xxxxxxxx in consideration of prior and current
services provided in connection with the transaction.
(e) If the Closing of the Acquisition has not occurred on or prior to
5/2/05, the Escrow Agent shall return all the Funds then under its control to
LTGI.
(f) Upon disbursement of the Funds as set forth in this Section 4, the
obligations of the Escrow Agent under this Agreement shall terminate.
5. Disbursement Into Court. At any time, the Escrow Agent, in its sole
discretion, may commence an action in the nature of interpleader in any court it
deems appropriate, to determine ownership or disposition of the Funds or it may
deposit the Funds with the clerk of any appropriate court or it may retain the
Funds pending receipt of a final, non-appealable order of a court having
jurisdiction over all of the parties hereto directing to whom and under what
circumstances the Funds are to be disbursed and delivered. During the pendency
of any such action, the Escrow Agent may suspend the performance of any of its
obligations under this Escrow Agreement until such dispute or uncertainty shall
be resolved to the sole satisfaction of Escrow Agent or until a successor Escrow
Agent shall have been appointed (as the case may be). The Escrow Agent shall
have no liability to KETI or LTGI or any other person with respect to any such
suspension of performance or disbursement into court, specifically including any
liability or claimed liability that may arise, or be alleged to have arisen, out
of or as a result of any delay in the disbursement of funds held in the Escrow
Accounts or any delay in or with respect to any other action required or
requested of Escrow Agent.
6. Limitation of Responsibility and Liability and Duties of the Escrow
Agent. The acceptance by the Escrow Agent of its duties as such under this
Escrow Agreement is subject to the following terms and conditions, which all
parties to this Escrow Agreement hereby agree shall govern and control with
respect to the rights, duties, liabilities and immunities of the Escrow Agent:
(a) The Escrow Agent shall not be liable for any error in judgment or
mistake of law or fact, or for any action taken or omitted to be taken by it, or
any action suffered by it to be taken or omitted by it, in good faith and in the
exercise of its own best judgment. The Escrow Agent shall not be liable for any
delay in delivering the Funds as required hereby, absent its own gross
negligence or willful misconduct.
(b) The Escrow Agent may rely conclusively and shall be protected in acting
upon any order, notice, demand, certificate, opinion or advice of counsel
(including counsel chosen by the Escrow Agent other than itself), statement,
instrument, report or other paper or document (not only as to its due execution
and validity and effectiveness of its provisions, but also as to the truth and
acceptability of any information therein contained) which is believed by the
Escrow Agent to be genuine and to be signed or presented by the proper person or
persons.
(c) The Escrow Agent shall not be bound by any notice or demand, or any
waiver, modification, termination or rescission of this Escrow Agreement unless
evidenced by a writing delivered to the Escrow Agent signed by KETI and/or LTGI
and, if the duties or rights of the Escrow Agent are affected by any such
modification of or waiver under this Escrow Agreement unless the Escrow Agent
shall have given its prior written consent thereto.
(d) The Escrow Agent acts hereunder as a depositary only, and shall not be
responsible for the sufficiency or accuracy, the form of, or the execution,
validity, value or genuineness of any document or property received, held or
delivered by it hereunder, or of any signature or endorsement thereon, or for
any lack of endorsement thereon, or for any description therein, nor shall the
Escrow Agent be responsible or liable in any respect on account of the identity,
authority or rights of the persons executing or delivering or purporting to
execute or deliver any document or property paid or delivered by the Escrow
Agent pursuant to the provisions hereof.
(e) The Escrow Agent shall have the right to assume, in the absence of
written notice to the contrary from KETI and LTGI, that a fact or an event by
reason of which an action would or might be taken by the Escrow Agent does not
exist or has not occurred, without incurring liability for any action taken or
omitted, in good faith and in the exercise of its own best judgment, in reliance
upon such assumption.
(f) The Escrow Agent shall be indemnified and held harmless by KETI and
LTGI, upon demand by the Escrow Agent, from and against any claims, demands,
losses, damages, liabilities, costs and expenses, including counsel fees and
disbursements, (collectively, "Damages") suffered by the Escrow Agent in
connection with any action, suit or other proceeding involving any claim, or in
connection with any claim or demand, which in any way directly or indirectly
arises out of or relates to this Escrow Agreement, the services of the Escrow
Agent hereunder, the monies or other property held by it hereunder or any such
Damages. Promptly after the receipt by the Escrow Agent of notice of any demand
or claim or the commencement of any action, suit or proceeding, the Escrow Agent
shall, if a claim in respect thereof shall be made against the other parties
hereto, notify such parties thereof in writing; but the failure by the Escrow
Agent to give such notice shall not relieve any party from any liability which
such party may have to the Escrow Agent hereunder, except to the extent of
actual prejudice demonstrated by such party. The obligations of KETI and LTGI
under this Section 6(f) shall survive any termination of this Escrow Agreement
and the resignation or removal of the Escrow Agent.
(g) From time to time on and after the date hereof, the parties shall
deliver or cause to be delivered to the Escrow Agent such further documents and
instruments and shall do or cause to be done such further acts as the Escrow
Agent shall reasonably request (it being understood that the Escrow Agent shall
have no obligation to make such request) to carry out more effectively the
provisions and purposes of this Escrow Agreement, to evidence compliance
herewith or to assure itself that it is protected in acting hereunder.
(h) The Escrow Agent may resign at any time and be discharged from its
duties as Escrow Agent hereunder by its giving the other parties hereto prior
written notice of at least seven business days. As soon as practicable after its
resignation, the Escrow Agent shall turn over to a successor escrow agent
appointed by the other parties hereto, jointly, all of the Funds held hereunder
upon presentation of the document appointing the new escrow agent and its
acceptance thereof. If no new escrow agent is so appointed within the 20-day
period following the giving of such notice of resignation, the Escrow Agent may
deposit the Funds with any court it deems appropriate.
(i) The Escrow Agent may consult with, and obtain advice from, legal
counsel in the event of any dispute or question as to the construction of any of
the provisions hereof or its duties hereunder, and it shall incur no liability
and shall be fully protected in acting in good faith in accordance with the
opinion and instructions of such counsel, other than itself.
(j) The Escrow Agent is authorized, in its sole discretion, to comply with
orders issued or process entered by any court with respect to the Funds, without
determination by the Escrow Agent of such court's jurisdiction in the matter. If
any portion of the Funds is at any time attached, garnished or levied upon under
any court order, or in case the payment, assignment, transfer, conveyance or
delivery of any such property shall be stayed or enjoined by any court affecting
such property or any part thereof, then and in any such event, the Escrow Agent
is authorized, in its sole discretion, to rely upon and comply with any such
order, writ, judgment or decree which it is advised by legal counsel selected by
it (other than itself) is binding upon it without the need for appeal or other
action; and if the Escrow Agent complies with any such order, writ, judgment or
decree, it shall not be liable to any of the parties hereto or to any other
person or entity by reason of such compliance even though such order, writ,
judgment or decree may be subsequently reversed, modified, annulled, set aside
or vacated.
7. Governing Law; Jurisdiction, Venue. This Escrow Agreement shall be
governed by and construed and enforced in accordance with the law (other than
the law governing conflict of law questions) of the State of Florida. Except as
otherwise set forth herein, any suit, action or proceeding arising out of or
relating to this Escrow Agreement shall be brought in State Circuit Court or
Federal District Court located in Palm Beach County, Florida, and the parties
hereby (a) submit to the exclusive jurisdiction of such courts, (b) waive any
objection to the laying of venue in such courts, and (c) agree that service of
process in any such suit, action or proceeding, in addition to any other method
permitted by applicable law, may be effected by certified mail, return receipt
requested, to a party at its address set forth in Section 8 hereof.
8. Notices. All notices and communications shall be deemed to have been
duly given: at the time (a) delivered by hand, if personally delivered; (b) when
received, if deposited in the mail, postage prepaid, addressed as provided
below; (c) when transmission is verified, if telecopied; and (d) on the next
business day, if timely delivered to a courier service guaranteeing overnight
delivery; provided that the Escrow Agent shall have no obligation hereunder
unless notice is actually received by it;
If to the KETI: 0000 X.X. 00xx Xxxxxx
Xxxx Xxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
Fax: (000) 000-0000
If to LTGI: 0000 Xxxxxx Xxxx, #000
Xxxx Xxxxx, Xxxxxxx 00000
Attn: XxxXxxx Xxxx, President
Fax: (000) 000-0000
And
Xx. 000 Xxxxx
Xxxxxx Xxxx,
Xxxxxxx Xxxxxxxx,
Xxxxxxxx, China,
200436 Attn.:
XxxXxxx Xxxx, President
Fax: 0000-00000000
If to the Escrow Agent: 0000 X.X. Xxxxxxxxx Xxxx.,
Xxxxx 000
Xxxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxx
Fax: (000) 000-0000
Any party may change its address by providing written notice of such change to
the other parties hereto. All notices and communications provided by KETI and
LTGI to the Escrow Agent shall be signed by duly authorized persons of each.
9. Termination of Escrow Agreement. The Escrow Agent's responsibilities
hereunder shall terminate upon the earliest to occur of (a) the Escrow Agent's
receipt of written notice of termination of the Acquisition, signed by duly
authorized representatives of KETI and LTGI; (b) the disbursement of the Funds,
including into court under Section 5 hereof, as contemplated hereby; (c) the
resignation of the Escrow Agent under Section 6(h) hereof; or (d) failure to
complete the Acquisition by May 2, 2005.
10. Entire Escrow Agreement. This Escrow Agreement contains the entire
understanding by and among the parties hereto with respect to the subject matter
hereof; there are no promises, agreements, understandings, representations or
warranties, other than as herein set forth. No change or modification of this
Escrow Agreement shall be valid or effective unless the same is in writing and
is signed by each of the parties hereto.
11. Counterparts. This Escrow Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused their respective
hands to be set hereto with the intention of being bound effective in all
respects as of the date and year first hereinabove written.
KIRSHNER ENTERTAINMENT AND
TECHNOLOGIES, INC.
By: /s/ Xxxx Xxxxxxx
-----------------------
Xxxx Xxxxxxx, President
LINKWELL TECH GROUP, INC.
By: /s/ XxxXxxx Xxxx
----------------------
XxxXxxx Xxxx , President
XXXXXXXXX XXXXXXXXXX & BEILLY LLP
By: /s/Xxxxx Xxxxxxxxx
-----------------------
Xxxxx Xxxxxxxxx, Partner
EXHIBIT B
INVESTMENT LETTER
Kirshner Entertainment & Technologies, Inc.
0000 XX 00xx Xxxxxx, Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
In connection with the receipt of the Kirshner Shares from KIRSHNER
ENTERTAINMENT & TECHNOLOGIES, INC., a Florida corporation ("Company") pursuant
to the terms and conditions of the Stock Exchange Agreement dated May 2, 2005,
the undersigned hereby represents, warrants, covenants and agrees as set forth
below.
1. Purchase Entirely for Own Account. The Shares will be acquired for
investment for the Undersigned' own account, not as a nominee or agent, and not
with a view to the resale or distribution of any part thereof, and the
undersigned has no present intention of selling, granting any participation in,
or otherwise distributing the Kirshner Shares or any portion thereof. Further,
the undersigned does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participations to such
person or to any third person, with respect to all or any portion of the
Kirshner Shares.
2. No Securities Act Registration. The undersigned understands that the
Kirshner Shares have not been registered under the Securities Act of 1933, as
amended (the "Securities Act"), by reason of a specific exemption or specific
exemptions from the registration provisions of the Securities Act which depend
upon, among other things, the bona fide nature of The undersigned' investment
intent as expressed herein.
3. Restricted Securities. The undersigned acknowledges that, unless the
undersigned has been advised by the Company that a current registration
statement is in effect covering the resale of the Kirshner Shares, because the
Kirshner Shares have not been registered under the Securities Act, the Kirshner
Shares must be held by the undersigned indefinitely unless subsequently
registered under the Securities Act or an exemption from such registration is
available. The undersigned is aware of the provision of Rule 144 promulgated
under the Securities Act that permits the limited resale of shares purchased in
a private placement subject to the satisfaction of certain conditions,
including, among other things, the satisfaction of having held the Kirshner
Shares for a certain duration of time, the availability of certain current
public information about the Company, the sale being through a "broker's
transaction" (as provided by Rule 144(f)), and the volume of shares sold not
exceeding specified limitations (unless the sale is within the requirements of
Rule 144(k)).
4. Accredited and Sophisticated Investor. The undersigned: (a) is an
accredited investor as defined in Rule 501(a) of Regulation D of the Securities
and Exchange Commission; (b)(i) either alone or with the undersigned's
professional advisor or advisors, has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of
acquiring the Kirshner Shares, (ii) either alone by reason of the undersigned'
business or financial experience or together with the undersigned' professional
advisor or advisors, has the capacity to protect the undersigned' interests in
connection with acquisition of the Kirshner Shares; and (c) is able to bear the
economic risk of the investment in the Kirshner Shares, including a complete
loss of the investment.
5. Opportunity to Ask Questions. The undersigned has had an opportunity
to ask questions of and receive answers from the Company or its representatives
concerning the terms of the undersigned' investment in the Kirshner Shares, all
such questions have been answered to the full satisfaction of the undersigned,
and the undersigned has had the opportunity to request and obtain any additional
information the undersigned deemed necessary to verify or supplement the
information contained therein. The undersigned has reviewed and understands the
disclosure provided in the Company's Form 10-KSB for the year end December 31,
2004.
6. Investment Risks. The undersigned recognizes that an investment in
the Kirshner Shares involves substantial risks, and is fully aware of and
understands all of the risk factors related to the acquisition of the Kirshner
Shares. The undersigned has determined that the acquisition of the Kirshner
Shares is consistent with the undersigned's investment objectives. The
undersigned is able to bear the economic risks of an investment in the Kirshner
Shares, and at the present time could afford a complete loss of such investment.
7. Limitation on Manner of Offering. The Kirshner Shares were not
offered to the undersigned by any means of general solicitation or general
advertising.
8. Tax and Other Matters. The undersigned is not relying on the Company
with respect to tax and other economic considerations involved in the
acquisition of the Kirshner Shares. The undersigned has carefully considered and
has, to the extent the undersigned believes such discussion necessary, discussed
with the undersigned' professional, legal, tax, accounting and financial
advisors the suitability of an investment in the Kirshner Shares for the
undersigned's particular tax and financial situation and the undersigned has
determined that the Kirshner Shares are a suitable investment for him.
9. Restrictive Legends. The undersigned understands that the Kirshner
Shares shall bear one or more of the following restrictive legends:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED OR
QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") OR THE SECURITIES LAWS OF ANY
STATE. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH
RESPECT TO THE SECURITIES UNDER THE ACT OR AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT
THAT SUCH REGISTRATION AND QUALIFICATION UNDER THE
ACT AND SUCH LAWS IS NOT REQUIRED"
(b) Any legend required by applicable state law.
10. Successors. The representations and warranties contained herein
shall be binding upon the heirs, executors, administrators, personal
representatives and other successors of the undersigned and shall inure to the
benefit of and be enforceable by the Company.
11. Address. The address, telephone number and facsimile number set
forth at the end of this letter are the undersigned's true and correct address.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the securities covered thereby until
the end of such period.
SHAREHOLDER
(Signature)
Address:
Telephone:
------------------------
Social Security Number___________
SCHEDULE 3.10
None.
SCHEDULE 4.6
In January 2004, the SEC commenced an informal inquiry of Kirshner Entertainment
& Technologies, Inc. ("KETI"). As of the date of this Agreement, KETI has not
received any further information on this matter and are therefore uncertain of
the status of the SEC's informal investigation.
SCHEDULE 4.11
Date Vendor Amount
1/29/2004 Xxxxxxxxx Xxxxxxxxxx LLP 5,201.50
6/7/2004 Xxxxxx & Xxxx 38,498.57
7/20/2004 Business Wire 120.00
1/13/2005 Akerman Senterfitt 274.78
2/28/2005 Gemisys 199.50
4/6/05 Kain & Xxxxxxxx, P.A. 15,222.61*
3/7/05 Xxxxxx Xxxxxxxxx, CPA 1,000.00
3/15/2005 ADP 126.14
3/18/2005 Gemisys 185.38
3/19/2005 Florida Department of Revenue 300.00
3/22/2005 Gemisys 397.84
3/24/2005 Georgia Department of Labor 422.30
3/25/2005 Software Consultative Solutions, Inc. 5,962.50
3/31/2005 Broward County Revenue Collector 1,839.25
4/1/2005 Rackspace 1,150.00
4/4/2005 Xxxxxxxxx, Lago & Company, LLP 7,861.71
Total $78,762.08
2000-2005 Due Xxxx X. Xxxxxxx $ 201,482**
* Through 3/31/05
** Estimated net due after payment to third party creditors
SCHEDULE 4.12
None.
