Exhibit 10.1
EXCHANGE AGREEMENT
This Exchange Agreement (the "Agreement") dated June 3, 2005, is made by
and among Remedent USA, Inc., a Nevada corporation ("Remedent"); Remedent N.V.,
a Belgian company (the "Subsidiary"), Lausha NV, a Belgian company ("Lausha")
and Xxxxx List ("List") ("List and Lausha" collectively referred to herein as
"Exchanging Stockholders" and individually as an "Exchanging Stockholder").
RECITALS
A. Remedent currently owns 2,200 shares of common stock representing
twenty-two percent (22%) ownership interest of the Subsidiary and the Exchanging
Stockholders individually own the number of shares of common stock of the
Subsidiary as set forth in Exhibit A, and collectively own 7,800 shares of
common stock of the Subsidiary representing a seventy-eight percent (78%)
ownership interest of the Subsidiary.
B. Remedent desires to acquire all of the issued and outstanding capital
stock of the Subsidiary owned by the Exchanging Stockholders, and the Exchanging
Stockholders desire to exchange all of their shares of the Subsidiary for shares
of Remedent authorized but unissued and restricted common stock as hereinafter
provided.
C. It is the intention of the parties that: (i) Remedent shall acquire
all of the issued and outstanding common stock of the Subsidiary owned by the
Exchanging Stockholders in exchange solely for the number of shares of Remedent
authorized but unissued shares of common stock, par value $0.0001, set forth
below; and (ii) the Exchange shall qualify as a transaction in securities exempt
from registration or qualification under the Securities Act of 1933, as amended
(the "Securities Act"), and under the applicable securities laws of each state
or jurisdiction where the Exchanging Stockholders reside, with the Subsidiary
becoming a wholly-owned subsidiary of Remedent.
D. The board of directors of Remedent deems it to be in the best interest
of Remedent and its stockholders to acquire all of the issued and outstanding
capital stock of the Subsidiary owned by the Exchanging Stockholders; and the
Exchanging Stockholders deems it to be in their best interest to exchange all of
the capital stock of the Subsidiary owned by them for shares of common stock of
Remedent, as hereinafter provided.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties hereto
agree as follows.
1. EXCHANGE OF SHARES
1.1 Exchange of Shares. Remedent, and the Exchanging Stockholders hereby
agree that the Exchanging Stockholders shall, subject to the effectuation of the
reverse stock split (the "Reverse Stock Split"), as currently contemplated under
the Definitive Information Statement filed
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with the U.S. Securities and Exchange Commission ("SEC") pursuant to Section
14(c) of the Securities Exchange Act of 1934, at the time or place as may be
agreed upon by the parties hereto which shall be no earlier than the effective
date of the Reverse Stock Split ("Closing Date"), exchange an aggregate of 7,800
shares of common stock of the Subsidiary for 7,715,703 restricted shares of
Common Stock of Remedent (the "Exchange"). The 7,800 shares of common stock
represent all of the issued and outstanding capital stock of the Subsidiary
owned by the Exchanging Stockholders. The common stock of the Subsidiary owned
by each of the Exchanging Stockholders and the number of shares of common stock
of Remedent which each Exchanging Stockholder will receive in the Exchange are
set forth in Exhibit A hereto.
1.2 Delivery of Exchange Stock. On the Closing Date, the Exchanging
Stockholders will deliver or caused to be delivered to Remedent the certificates
representing all of the outstanding common stock of the Subsidiary owned by the
Exchanging Stockholders, duly endorsed (or with executed stock powers) so as to
make Remedent the sole owner thereof. Upon delivery of the Exchanging
Stockholders' shares, Remedent will deliver or cause to be delivered
certificates representing an aggregate of 7,715,703 restricted shares of common
stock of Remedent (the "Exchanging Stock"), as set forth in Exhibit A, resulting
in the Exchanging Stockholders collectively owning seventy-eight (78%) of
Remedent at the time of such Closing Date.
1.3. Tax Treatment of Exchange. The parties acknowledge and agree that the
Exchange is being conducted in order to facilitate the raising of capital of
Remedent pursuant to the Confidential Private Placement Memorandum of Remedent
dated May 27, 2005 (the "Private Placement"). In connection therewith, it is the
intention of the parties that the Exchange be integrated with the Private
Placement for purposes of determining "control" under Xxxxxxx 000 xx xxx Xxxxxx
Xxxxxx Internal Revenue Code.
2. REPRESENTATIONS AND WARRANTIES OF SUBSIDIARY AND EXCHANGING STOCKHOLDERS
Each Exchanging Stockholder and the Subsidiary, to the extent applicable,
as of the date of this Agreement and of the Closing Date, hereby represent and
warrant as follows.
2.1 Ownership of Shares. The Exchanging Stockholders are the owners of
record and beneficially of all of the issued and outstanding common stock of
Subsidiary as set forth in Exhibit A. Each Exchanging Stockholder represents and
warrants that it owns such shares free and clear of all rights, claims, liens
and encumbrances, and the shares have not been sold, pledged, assigned,
transferred or otherwise disposed of except pursuant to this Agreement.
2.2 Access to Corporate Information; Independent Investigation. Xxxxx
List, as a director and Chief Executive Officer of Remedent, and Lausha, as an
entity controlled owned by Guy De Vresse who is Chairman of Remedent, each
Exchanging Stockholder acknowledges that, it has all material knowledge of the
business, operations and finance of Remedent, and has been given access to and
opportunity to examine all financial statements, contracts and documents of
Remedent; and in making the decision to exchange the Subsidiary common stock for
Shares of common stock of Remedent, it is and will solely rely upon its
knowledge and independent investigations made by it or its representatives.
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2.3 Risks. Each Exchanging Stockholder executing this Agreement
acknowledges and understands that the exchange for the shares of Remedent
involves a high degree of risk and is suitable only for persons of adequate
financial means who have no need for liquidity in this investment. In addition,
each Exchanging Stockholder acknowledges that (i) the Exchanging Stockholder may
not be able to liquidate the investment in the event of an emergency; (ii)
transferability is extremely limited; and (iii) the Exchanging Stockholder could
sustain a complete loss of its entire investment. The Exchanging Stockholder is
sufficiently experienced in financial and business matters to be capable of
evaluating the merits and risks of an investment in Remedent; has evaluated such
merits and risks, including risks particular to the Exchanging Stockholder's
situation; and the Exchanging Stockholder has determined that this investment is
suitable for the Exchanging Stockholder. The Exchanging Stockholder has adequate
financial resources and can bear a complete loss of the Exchanging Stockholder's
investment.
2.4 Investment Intent. Each Exchanging Stockholder hereby represents that
the shares of Remedent are being acquired for the Exchanging Stockholder's own
account with no intention of distributing such securities to others. The
Exchanging Stockholder has no contract, undertaking, agreement or arrangement
with any person to sell, transfer or otherwise distribute to any person or to
have any person sell, transfer or otherwise distribute the shares of Remedent
for the Exchanging Stockholder. The Exchanging Stockholder is presently not
engaged, nor does the Exchanging Stockholder plan to engage within the presently
foreseeable future, in any discussion with any person regarding such a sale,
transfer or other distribution of the shares of Remedent or any interest
therein.
2.5 Compliance with Federal and State Securities Laws. The Exchanging
Stockholder understands that the shares of common stock of Remedent have not
been registered under the Securities Act. The Exchanging Stockholder understands
that the shares of common stock of Remedent must be held indefinitely unless the
sale or other transfer thereof is subsequently registered under the Securities
Act or an exemption from such registration is available, and the Company is
required to refuse any transfer of the Exchanging Stock that is not in
compliance with the foregoing. Moreover, each Exchanging Stockholder understands
that its right to transfer the shares of common stock of Remedent will be
subject to certain restrictions, which include restrictions against transfer
under the Securities Act and applicable state securities laws. In addition, each
Exchanging Stockholder represents that it will only sell the Exchanging Stock in
compliance with the Securities Act, including the provisions of Regulation S of
the Securities Act ("Regulation S"), pursuant to registration under the
Securities Act or pursuant to an available exemption from such registration. In
addition to such restrictions, each Exchanging Stockholder realizes that it may
not be able to sell or dispose of the shares of common stock of Remedent as
there may be no public or other market for them. Each Exchanging Stockholder
understands that certificates evidencing the Exchanging Stock shall bear a
legend substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY APPLICABLE STATE LAW. THEY MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED OR PLEDGED TO ANY U.S. PERSON OR
IN THE U.S. UNLESS REGISTERED UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE LAW OR PURSUANT TO AN EXEMPTION FROM SUCH
REGISTRATION
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REQUIREMENTS. HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
2.6 Approvals. Each Exchanging Stockholder represents no approval,
authorization, consent, order or other action of, or filing with, any person,
firm or corporation or any court, administrative agency or other governmental
authority is required in connection with the execution and delivery of this
Agreement by it and for the consummation of the transactions described herein.
2.7 Not a U.S. Person. Each Exchanging Stockholder represents that it is
not a U.S. Person within the meaning of Regulation S of the Securities Act and
is not acquiring the Exchanging Stock for the account or benefit of any U.S.
Person. In addition, each Exchanging Stockholder represents that it is or was
not in the U.S. at the time of the offer or sale of the Exchanging Stock.
2.8 No Hedging. Each Exchanging Stockholder represents that it will not
engage in hedging transactions with regard to the Exchanging Stock unless it is
in accordance with the Securities Act.
2.9 Foreign Compliance. Each Exchanging Stockholder acknowledges,
represents and agrees that no action has been or will be taken in any
jurisdiction outside the U.S. by Remedent that would permit an offering of the
Exchanging Stock, or possession or distribution of offering materials in
connection with the issue of the Exchanging Stock, in any jurisdiction outside
the U.S. where legal action by Remedent for that purpose is required. Each
Exchanging Stockholder outside the U.S. will comply with all applicable laws and
regulations in each foreign jurisdiction in which it purchases, offers, sells or
delivers Exchanging Stock or has in its possession or distributes any offering
material, in all cases at its own expense.
2.10 Authorization. Each Exchanging Stockholder further represents and
warrants to, and covenants with, the Company that (i) the it has full right,
power, authority and capacity to enter into this Agreement and to consummate the
transactions contemplated hereby and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement, and (ii) this
Agreement constitutes a valid and binding obligation of the Exchanging
Stockholder enforceable against the respective Exchanging Stockholder in
accordance with its terms.
2.11 Independent. Each Exchanging Stockholder understands that nothing in
this Agreement or any other materials presented to each Exchanging Stockholder
in connection with the purchase and sale of the Exchanging Stock constitutes
legal, tax or investment advice. Each Exchanging Stockholder has consulted such
legal, tax and investment advisors, as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of the Exchanging
Stock.
2.12 Non-contravention. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Exchanging Stockholder or the Subsidiary
is subject or, if Exchanging Stockholder is an entity, any provision of its
charter, bylaws, or other governing documents, (ii) conflict with, result in a
breach of, constitute a default under, result in the
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acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any material agreement, contract, lease,
license, instrument, or other arrangement to which Exchanging Stockholder or the
Subsidiary is a party or by which it is bound or to which any of its assets are
subject, or (iii) result in the imposition or creation of a lien upon or with
respect to the Subsidiary or the Subsidiary shares of common stock.
3. REPRESENTATIONS AND WARRANTIES OF REMEDENT
Remedent hereby represents and warrants as of the date of this Agreement
and as of the Closing Date as follow:
3.1 The Exchanging Stock. At the closing, the Remedent shares of common
stock to be issued and delivered to the Exchanging Stockholders hereunder will
when so issued and delivered in accordance with the terms of this Agreement and
Articles of Incorporation, as amended, and currently in effect, constitute valid
and legally issued shares of Remedent Common Stock fully paid and nonassessable
and free and clear of all pledges, liens and encumbrances.
3.2 No Direct Selling Efforts. The Company represents that there "directed
selling efforts" in connection with the Exchanging Stock were or are being made
in the U.S. by the Company, an affiliate or any person acting on their behalf.
For purposes of this Section, directed selling efforts means any activity
undertaken for the purpose of, or that could reasonably be expected to have the
effect of, conditioning the market in the U.S. for any of the securities being
offered in reliance on Regulation S.
3.3 No Solicitation. The Company did not conduct any general solicitation
(as that term is used in Rule 502(c) of Regulation D of the Securities Act, or
general advertising with respect to the sale of the Securities, or make any
offers or sales of any security or solicited any offers to buy any security
under any circumstances that would require registration of the Securities under
the Securities Act.
4. CONDITIONS PRECEDENT
4.1 Conditions Precedent to the Obligation of Exchanging Stockholders and
Remedent. All obligations of the Exchanging Stockholders and Remedent under this
Agreement are subject to the fulfillment, prior to or as of the Closing Date, as
indicated below, of each of the following conditions:
(i) The Reverse Stock Split shall become effectuated; and
(ii) Remedent shall have sufficient shares of Remedent Common Stock
authorized but unissued to complete the Exchange.
5. INDEMNIFICATION
Exchanging Stockholders and the Subsidiary, to the extent applicable, agree
to indemnify and hold harmless Remedent, its officers, directors and
stockholders; and Remedent agrees to indemnify and hold harmless the Exchanging
Stockholders, at all times against and in respect of any liability, damage, or
deficiency, all actions, suits, proceedings, demands, assessments, judgments,
costs and expenses, including attorneys' fees, incident to any of the foregoing,
resulting from any
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material misrepresentation made by any indemnifying party to an indemnified
party, an indemnifying party's breach of a covenant or warranty or an
indemnifying party's nonfulfillment of any agreement hereunder.
6. MISCELLANEOUS
6.1 Certain Taxes. All transfer, documentary, sales, use, stamp,
registration and other such taxes and fees (including any penalties and
interest) incurred in connection with this Agreement shall be paid by the
Exchanging Stockholders when due, if any, and the Exchanging Stockholders shall,
at their own expense, file all necessary tax returns and other documentation
with respect to all such transfer, documentary, sales, use, stamp, registration
and other taxes and fees, and, if required by applicable law.
6.2 Further Assurances. The parties shall execute such documents and other
papers and take such further actions 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 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.
6.3 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 way
constitute waiver as to future breach whether similar or dissimilar in nature or
as to the exercise of any further right under this Agreement.
6.4 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.
6.5 Assignment. This Agreement is not assignable except by operation of
law.
6.6 Notice. Any notice or statement given under this Agreement shall be
deemed to have been given if sent by mail addressed to the other party at the
address indicated above or at such other address which shall have been furnished
in writing to the addressor.
6.7 Governing Law. This Agreement shall be construed, and the legal
relations between the parties determined, in accordance with the laws of
California, thereby precluding any choice of law rules which may direct the
application of the laws of any other jurisdiction.
6.8 Entire Agreement. This Agreement (including the Exhibit attached
hereto) contains the entire agreement among the parties with respect to the
exchange and issuance of the shares and related transactions, and supersede all
prior agreements, written or oral, with respect thereto.
6.9 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.
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6.10 Severability of Provisions. The invalidity or unenforceability of any
term, phrase, clause, paragraph, restriction, covenant, agreement or provision
of this Agreement shall in no way affect the validity or enforcement of any
other provision or any part thereof.
6.11 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.
6.12 Binding Effect. This Agreement shall be binding upon the parties
hereto and inure to the benefit of the parties, their respective heirs,
administrators, executors, successors and assigns.
6.13 Tax Treatment. Remedent and Subsidiary and the Exchanging Stockholders
acknowledge that they each have been represented by their own tax advisors in
connection with this transaction; that none of them has made a representation or
warranty to any of the other parties with respect to the tax treatment accorded
this transaction, or the effect individually or corporately on any party under
the applicable tax laws, regulations, or interpretations; and that no opinion of
counsel or private revenue ruling has been obtained with respect to the effects
of this transaction under the appropriate tax laws.
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IN WITNESS WHEREOF, the parties have executed this Exchange Agreement on
the date first above written.
REMEDENT USA, INC.
By: /s/ Xxxxx List
-----------------------------------
Xxxxx List, Chief Executive Officer
XXXXX LIST
By: /s/ Xxxxx List
-----------------------------------
Xxxxx List
LAUSHA N.V.
By: /s/ Guy De Vreese
-----------------------------------
Its: CEO
-----------------------------------
REMEDENT, N.V.
By: /s/ Guy De Vreese
-----------------------------------
Its: COO
-----------------------------------
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EXHIBIT A
LIST OF EXCHANGING STOCKHOLDER
=======================================================================================
Name of Stockholder Approximate Number of Shares Number of Shares of
Percentage of Holding of Subsidiary held of Restricted Remedent
In Subsidiary Common Stock to be
Issued
---------------------------------------------------------------------------------------
Lausha, N.V. 71.71% 7,171 7,093,501
Xxxxx List 6.29% 629 622,202
---------------------------------------------------------------------------------------
Total 78.00% 7,800 7,715,703
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