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AGREEMENT FOR PURCHASE AND SALE OF STOCK
AND PLAN OF REORGANIZATION
THIS AGREEMENT IS MADE this 30th day of September, 2006 by and among
PATIENT PORTAL TECHNOLOGIES, INC.. a Delaware Corporation with its principal
office at 0000 XX 00xx Xxx., Xxxx Xxxxx, XX 00000 (hereinafter referred to as
"Purchaser"); PATIENT PORTAL CONNECT, INC., a Delaware Corporation with its
principal office at Palm Beach Gardens, FL (hereinafter referred to as "Acquired
Company"); and the Selling Shareholders of Acquired Company set forth in Exhibit
"A" attached hereto (hereinafter "Selling Shareholders").
WITNESSETH:
WHEREAS, the parties desire that Purchaser shall acquire 100% of the issued
and outstanding capital stock of the Acquired Company from the Selling
Shareholders, in exchange for the capital stock of Purchaser in the amount and
series as set forth in Exhibit "A" attached hereto; and
WHEREAS, it is the intention of all parties that the exchange of the
capital stock contemplated herein shall constitute a "reorganization" as defined
in Section 368(a)(1)(B) of the Internal Revenue Code of 1986;
NOW, THEREFORE, in consideration of these premises, the parties hereto
agree as follows:
1. EXCHANGE OF SHARES. The Selling Shareholders and the Acquired Company
agree to exchange with the Purchaser 100% of the issued and outstanding capital
stock of the Acquired Company in exchange of 14,000,000 Shares of fully-paid and
non-assessable Common Stock of the Purchaser which, upon issuance, will
represent not less than 75% of the issued and outstanding Common Stock of the
Purchaser.
2. TAX-FREE EXCHANGE. It is intended by all parties hereto that the
exchange of capital stock contemplated herein shall constitute a
"reorganization" as defined in Section 368(a)(1)(B) of the Internal Revenue Code
of 1986.
3. DELIVERY OF THE STOCK AT CLOSING.
(i) At the time of the closing of this transaction, the Selling Shareholders
and the Acquired Company shall deliver to Purchaser the stock certificates
representing the Shares purchased herein duly issued to Purchaser together with
such Revenue Stamps as may be required. Purchaser shall deliver to Selling
Shareholders written instructions in the form of a "window ticket" to Liberty
Stock Transfer Company, as Transfer Agent for the Purchaser, for the issuance
and delivery of the Shares of Common Stock of the Purchaser to the Selling
Shareholders.
(ii) At the time of the closing of this transaction, Purchaser shall enter
into a Security Agreement and Stock Pledge Agreement pursuant to which the
Shares purchased herein shall be held in escrow for a period of one year from
the date of Closing in order to assure the performance and representations of
the Purchaser as set forth in Section "8" herein and the completion and filing
of the Purchaser's Annual Report on Form 10KSB for the fiscal year ended
December 31, 2005 as required by the Securities Act of 1933, as amended.
4. REPRESENTATIONS OF THE ACQUIRED COMPANY. The Acquired Company represents
and warrants to the Purchaser as follows:
4.1. That the Acquired Company was duly organized in the manner set
forth below and that the Certificates of Incorporation have not been revoked or
canceled nor has the Corporation been dissolved;
4.2. There there are no lawsuits pending against the Acquired Company or
its Officers or Directors, nor are there any such lawsuits threatened or
anticipated, nor are there any judgments, warrants, or levies outstanding
against the Acquired Company, its subsidiaries, or its property, nor are there
any tax examinations or proceedings pending relating to taxes or other
assessments against the Acquired Company, nor has the Acquired Company at any
time taken any insolvency or bankruptcy actions;
4.3. That the Acquired Company has entered into certain lease(s) of real
and personal property, which lease(s) are attached hereto as an Exhibit, and
that said lease(s) are in full force and effect and that there are no defaults
thereunder, and that all payments require to be made thereunder have been made
as of the date of this Agreement;
4.4. That all of the chattels, trade fixtures, motor vehicles, and
equipment owned or utilized by the Acquired Company are free and clear of all
liens and encumbrances, except for such liens or security agreements as are set
forth in the Balance Sheet of the Acquired Company heretofore provided to
Purchaser;
4.5. The Consolidated Balance Sheet of the Acquired Company as of
September 30, 2006, a copy of which has heretofore been provided to Purchaser,
has been prepared in accordance with generally accepted accounting principles
consistently applied and accurately and fairly presents the financial condition
and liabilities of the Acquired Company as of such date;
4.6. The Acquired Company is duly qualified and entitled to own or lease
its respective properties and to carry on its business all as and in the places
where such properties are now owned or such businesses are conducted;
4.7. The Acquired Company has good marketable title to all of the
property and assets (including title in fee simple to all real property)
included in the Balance Sheet of the Acquired Company, except, however, property
and assets in non-material amounts sold in the ordinary course of business since
the date of such Balance Sheet, and that all of the properties and assets are
free of all liens, encumbrances, or claims except as set forth in the Balance
Sheet;
4.8. The Acquired Company is not party to any pending or threatened
litigation which might adversely affect the financial condition, business
operations, or properties of the Acquired Company, nor to the knowledge of the
Acquired Company is there any threatened or pending governmental or regulatory
investigation, inquiry, or proceeding involving the Acquired Company except as
disclosed herein;
4.9. All returns for income taxes, surtaxes, and excess profits taxes of
the Acquired Company for all periods up to and including the calendar year 2006
have been duly prepared and filed in good faith and all taxes and assessments
shown thereon have been paid or accrued on the Acquired Company's books; all
state franchise taxes and real and personal property taxes have been paid as of
the dates due; and no proceeding or other action has been taken for the
assessment or collection of additional taxes for any such periods;
4.10. The business, properties and assets of the Acquired Company have
not, since the date of the Balance Sheet, been materially and adversely affected
as the result of any fire, explosion, natural disaster, governmental act,
cancellation of contracts, or any other event;
4.11. No representation by the Acquired Company, the Selling
Shareholders or by its Officers made in this Agreement and no statement made in
any certificate furnished in connection with this transaction contains or will
contain any knowingly untrue statement of a material fact or omits or will omit
to state any material fact necessary to make such statement, representation or
warranty not misleading to a prospective purchaser of the stock of the Acquired
Company who is seeking full information as to the Acquired Company and its
business affairs.
4.12. The Acquired Company is a corporation duly organized and existing
under the laws of the State of Delaware, with an authorized capitalization as
set forth in its Certificate of Incorporation attached hereto as an Exhibit;
that at the time of Closing it will have issued and outstanding capital stock as
set forth in Exhibit "A" attached hereto; it does not have authorized, issued,
or outstanding any other shares of stock of any class or any subscription or
other rights to the issuance or receipt of shares of its capital stock; all
voting rights are vested exclusively in such capital stock.
5. DELIVERY OF CORPORATE RECORDS AT CLOSING. The Selling Shareholders and
the Acquired Company shall cause to be delivered to Purchaser at the time of
closing the Corporate Minute Books, Stock Certificate Ledgers and unissued
Certificates, and the Corporate Seals of the Acquired Company.
6. RESIGNATION OF OFFICERS AND DIRECTORS OF PURCHASER. At the time of
closing, the Purchaser shall provide to the Board of Directors of the Acquired
Company written resignations of the Directors and Officers of the Purchaser,
effective immediately, and shall cause to be nominated as Directors of the
Purchaser and submitted to the shareholders of the Company approval those
persons nominated by the Board of Directors of the Acquired Company.
7. UNDERTAKINGS BY THE ACQUIRED COMPANY AND PURCHASER.
7.1. The Officers and Directors of the Acquired Company and of the
Purchaser shall not cause, suffer or permit the Acquired Company or the
Purchaser, subsequent to the date hereof and prior to the delivery of the Shares
as contemplated hereunder, to issue any additional shares or securities; make
any distribution to its shareholders; mortgage, pledge, or subject to lien or
encumbrance any of its properties or assets except in the ordinary course of its
business; sell or transfer any of its assets, tangible or intangible, except in
the ordinary or usual course of business; incur or become liable for any
obligations or liabilities except for current liabilities incurred in the
ordinary and usual course of business; or increase the rate of compensation of
its Officers;
7.2. During the period prior to the closing date hereunder the Acquired
Company and the Purchaser shall conduct its business operations in the usual and
normal course.
8. REPRESENTATIONS BY THE PURCHASER. The Purchaser represents and warrants
to the Acquired Company as follows:
8.1. The Purchaser was incorporated in 2002 pursuant to the laws of the
State of Delaware, with an authorized capitalization of 50,000,000 Shares of
Common Stock ($.001 par value) and 1,000,000 Shares of unclassified Preferred
Stock ($.01 par value).
8.2. The audited financial statements for the year ended December 31,
2004 and the unaudited financial statements for the quarter ended September 30,
2005 heretofore provided to the Acquired Company fully and accurately set forth
the stockholdings, capitalization, obligations, management structure, business
operations, and financial condition of the Purchaser, and no material changes
have occurred that would materially affect said statements.
8.3. The Purchaser's securities have been registered for public sale
pursuant to a Registration Statement filed under the Securities Act of 1933, as
amended, and declared effective by the Securities and Exchange Commission, and
that all reports required to be filed by the Purchaser pursuant to the
requirements of the Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934 will have been duly filed as of the date of the Closing,
with the exception of the Annual Report on Form 10KSB for the fiscal year ended
December 31, 2005 and subsequent Quarterly Reports.
8.4. That on the date of Closing the Purchaser shall have issued and
outstanding not more than 4,000,000 Shares of Common Stock. The Purchaser shall
also have issued and outstanding not more than 800,000 Common Stock Purchase
Warrants at an exercise price of $10.00 per Share.
8.5. That on the date of Closing the Purchaser shall have not more than
$100,000 in current or long term liabilities.
9. CONDITIONS PRECEDENT TO CLOSING. All obligations of Purchaser under this
Agreement are subject to the fulfillment, on or prior to the closing date, of
each of the following conditions:
9.1. That the representations of the Acquired Company and of the
Purchaser shall be true at and as of the closing date as though such
representations were made at and as of such time;
9.2. That Purchaser shall have received a written opinion, dated on the
closing date, of counsel representing the Acquired Company, to the effect that
the Acquired Company has been duly incorporated and is in good standing under
the laws of the State of its organization with a capitalization as represented
in this Agreement; that the Acquired Company is duly licensed or qualified to do
business in any and all States or jurisdictions in which it does business or
where in the opinion of Counsel such qualification is required; that such
counsel knows of no litigation, investigation, or governmental proceeding
pending or threatened against the Acquired Company which might result in any
material adverse change in the business, properties, or financial condition of
the Acquired Company or in any liability on the part of the Acquired Company;
and that the assignment and delivery of the Shares of the Acquired Company
pursuant to this Agreement will vest in Purchaser all right, title and interest
in and to such Shares, free and clear of all liens, encumbrances and equities.
9.3. That Purchaser shall have received a certificate dated on the
closing date and signed by the President of the Acquired Company, that since the
date of this Agreement the Acquired Company has not done or permitted to be done
any of the acts or things prohibited by this Agreement;
9.4. That the auditors and accountants appointed by the Acquired Company
to examine the books and records of the Acquired Company shall not as of the
closing date have rendered a report to Purchaser stating that the financial
condition of Acquired Company is not substantially as represented herein or that
in their opinion the Acquired Company has contingent liabilities material in
amount beyond that described in the Balance Sheet annexed hereto or as disclosed
herein;
9.5. That no claim or liability not fully covered by insurance shall
have been asserted against the Acquired Company nor has it suffered any loss on
account of fire, flood, accident or other calamity of such a character as to
materially adversely affect their financial condition, regardless of whether or
not such loss shall have been insured, and that Purchaser shall have received on
the closing date a certificate signed by the President of the Acquired Company
so stating;
9.6. That all covenants and indemnifications made herein by the Acquired
Company which are to be performed at or prior to closing shall have been duly
performed;
10. APPROVALS AND RATIFICATIONS. All transactions contemplated by this
Agreement shall be subject to the approval and ratification of the Boards of
Directors and Shareholders of the Acquired Company and of the Purchaser, and to
the approval of Counsel for the Acquired Company and Purchaser.
11. CLOSING DATE. The closing under this Agreement shall take place at the
offices of Purchaser on or about October 15, 2006, and that all other required
approvals and ratifications shall be obtained by the respective parties at least
48 hours prior thereto.
12. NOTICES. All notices under this Agreement shall be in writing and
addressed to the parties at the addresses hereinabove set forth, and shall be
mailed by certified mail, return receipt requested.
13. SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective legal representatives,
successors and assigns, provided, however, that this Agreement cannot be
assigned by any party except by or with the written consent of all parties
hereto. Nothing herein expressed or implied is intended or shall be construed to
confer upon or give any person, firm or corporation other that the parties
hereto and their respective legal representatives, successors and assigns any
rights or benefits under or by reason of this Agreement.
14. LAW GOVERNING. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SIGNATURES
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IN WITNESS WHEREOF, the parties hereto have respectively executed this
Agreement as of the day and year first written above.
PURCHASER:
PATIENT PORTAL TECHNOLOGIES, INC.
By: /s/ XXXXXXX X. XXXXXX
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President
ACQUIRED COMPANY:
PATIENT PORTAL CONNECT, INC.
By: /S/ XXXXX XXXXX
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President
SELLING SHAREHOLDERS: Attached Hereto as Exhibit "A"
"EXHIBIT "A"
LIST OF SELLING SHAREHOLDERS
Name No. of Shares Signature
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SHARES TO BE ISSUED TO SELLING SHAREHOLDERS:
Name No. of Shares
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