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EXHIBIT 10.1
FORMATION AGREEMENT
This Formation Agreement (this "Agreement") is made as of the 15th day
of October, 1996, by and between BIOFACTORS, INC., a Delaware corporation
("BFI"), and VOICE PLUS, INC., a California corporation ("VPI").
WITNESSETH:
WHEREAS, BFI is the developer and marketer of a system to assess
performance readiness called the FACTOR 1000(R) system;
WHEREAS, VPI is a systems integrator and national distributor of voice
processing equipment;
WHEREAS, BFI and VPI have determined that it would be desirable to
combine the marketing, distribution and service capabilities of VPI with the
experienced product and business development skills of BFI management and BFI's
proprietary FACTOR 1000 technology;
WHEREAS, to effect such combination, BFI and VPI have determined that
BFI and VPI should become wholly-owned subsidiaries of a newly formed Delaware
corporation ("Parent");
WHEREAS, BFI and VPI have also determined that, as part of such
combination, Parent should undertake an underwritten initial public offering of
its common stock ("Parent Common Stock") pursuant to a registration statement
filed under the Securities Act of 1933, as amended (the "IPO"); and
WHEREAS, BFI and VPI intend that the foregoing steps be accomplished
pursuant to an integrated transaction which constitutes a Section 351
transaction for federal income tax purposes.
THEREFORE, in consideration of the foregoing and of the mutual promises
and agreements herein contained, and intending to be legally bound, the parties
hereby agree as follows:
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1. Formation of Parent. BFI and VPI shall cause the formation of Parent
as a corporation under the laws of the State of Delaware pursuant to a
Certificate of Incorporation substantially in the form attached hereto as
EXHIBIT A. Initially, for purposes of effecting the transactions described
herein, BFI and VPI each shall own 50 percent of the issued and outstanding
shares of capital stock of Parent.
2. Formation of Merger Subsidiaries. To facilitate the mergers
described in Section 3, Parent shall cause the formation of two corporations
under the laws of the State of Delaware (the "Merger Subs"), and shall acquire
all of the issued and outstanding shares of their capital stock.
3. Mergers. In furtherance of the intent of the parties that BFI and
VPI become wholly-owned subsidiaries of Parent, pursuant to agreements
substantially in the forms attached hereto as EXHIBITS B and C, the Merger Subs
shall be merged with and into BFI and VPI, respectively, the separate corporate
existence of the Merger Subs shall cease, and BFI and VPI shall be the surviving
corporations.
4. Public Offering. The parties hereby agree to use all commercially
reasonable efforts to cause Parent to file a registration statement
("Registration Statement") with the Securities and Exchange Commission to
initiate the IPO and to cause the Registration Statement to be declared
effective on or before March 31, 1997. It is further agreed that BFI shall
advance to Parent sufficient funds to pay all costs, fees and expenses of the
IPO (except the underwriting discount and fees in connection with the concurrent
registration and sale of shares of Parent Common Stock owned by the sole
stockholder of VPI), which advance shall be repaid upon completion of the IPO.
5. Section 351 Treatment. The obligation of each of BFI and VPI to
consummate each of the transactions described in Sections 3 and 4 in which it is
a participant shall be contingent upon all of the transactions described in
Sections 3 and 4 being consummated. The parties intend that such transactions
shall be integrated for federal income tax purposes and shall together
constitute a single transaction described in Section 351 of the Internal Revenue
Code of 1986, as amended, as a transfer of property to Parent.
6. Miscellaneous.
a. This Agreement constitutes the entire understanding between the
parties with respect to the subject matter contained herein and in the Exhibits
hereto and supersedes any prior understandings and agreements among them
respecting such subject matter. This Agreement may be amended, supplemented, or
terminated only by a written instrument duly executed by both parties.
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b. This Agreement may not be assigned by either party.
c. This Agreement shall be governed by and construed under the law
of the State of Colorado, disregarding Colorado principles of conflicts of laws
which would otherwise provide for the application of the substantive laws of
another jurisdiction.
d. This Agreement may be executed in one or more counterparts, each
of which shall for all purposes be deemed to be an original and all of which
shall constitute the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
BIOFACTORS, INC.
By: /s/ XXXXXX X. XXXX
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Xxxxxx X. Xxxx, President, CEO
and Chairman
VOICE PLUS, INC.
By: /s/ XXXXX X. XXXXXXXXX
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Xxxxx X. Xxxxxxxxx, President
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